Margins Of Error In Accounting

Margins of Error in Accounting Also by D. R. Myddelton ACCOUNTING AND FINANCIAL DECISIONS (1993) ACCOUNTING DECISIONS (1983) ACCOUNTANTS WITHOUT STANDARDS? (1994) DENATIONALISATION: The Problem of Recapitalising (1970) THE ECONOMY AND BUSINESS DECISIONS (1983) ESSENTIAL MANAGEMENT ACCOUNTING (1983, 1992) (with M.W. Allen) FINANCIAL DECISIONS (1983) MANAGING BUSINESS FINANCE (2000) THE MEANING OF COMPANY ACCOUNTS (8th ed. 2006) (with Walter Reid) ON A CLOTH UNTRUE: Inflation Accounting, The Way Forward (1984) THE POWER TO DESTROY: A Study of the British Tax System (1969, 1994) THEY MEANT WELL: Government Project Disasters (2007) UNSHACKLING ACCOUNTANTS (2005) WE’RE ALL NAZIS NOW (1970) Margins of Error in Accounting D. R. Myddelton © D.R. Myddelton 2009 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2009 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN-13: 978-0-230-21991-5 ISBN-10: 0-230-21991-8 hardback hardback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Myddelton, David Roderic. Margins of error in accounting / D. R. Myddelton. p. cm. Includes bibliographical references and index. ISBN 978-0-230-21991-5 1. Accounting. 2. Errors. I. Title. HF5636.M93 2009 657–dc22 10 18 9 17 8 16 7 15 6 14 5 13 4 12 3 11 2 10 1 09 Printed and bound in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne 2008037606 Contents List of Figures viii List of Tables ix Acronyms x Preface xii Postscript xiv 1. Introduction 1. 2. 3. 4. 5. 6. 2. Accounting rules Inputs and outputs Is too much expected of accounts? Quantifying margins of error Causes and types of error Simple mistakes The ‘Interim-ness’ of Accounts 1. 2. 3. 4. 5. 6. 7. 8. 3. 1 Introduction Fixed assets – tangible Current assets Liabilities Sale