What else in the accounting business can not be replaced by computer software?

I will explain in terms of accounting standards why accounting cannot, at least for now, be replaced

Reason for a word:

Because accounting judgment is in some way an art, it cannot be fully quantified and mechanized.

For a long time, around the accounting measurement is a science or an art problem, there are quite a lot of controversy. People who tend to "science" say that accounting is a "few beans" of the work, meaning that this live scrupulous, no difficulty. But the chairman of the International Accounting Standards Board (IASB), Mr. Hans Hoogervorst, delivered a speech at the end of 2012.--IASB President Hans Hoogervorst at the International Association for Accounting Education and Research (IAAER) conference-Financial Accounting 2012 12, that accounting measurement is not only a science, but also an art.

He said this because the IASB's guidelines, namely IFRS and IAS, are principle-oriented (principle Based), which means that the guidelines give "basic principles" but do not give a clear standard of judgment.

The advantage of this approach is to focus on substance rather than form and to be more concise. US GAAP is a rule-oriented, but it's not as "automated" as it is.

In the case of IFRS, some of the most concerned accounting standards, especially financial accounting standards, actually involve a lot of accounting judgments, which can be said to be "art."

First, financial instruments accounting Standards IFRS 9, which is divided into financial instruments classification and measurement, financial instruments, such as the reduction of the value and the hedging. Among them, the classification and measurement of financial instruments, judge how to distinguish between "fair value measurement" and "amortization cost measurement" one of the basis, is its "business model (business model)", that is, to judge the purpose of holding financial instruments to collect principal and interest cash flow or to sell. Is this computer difficult to judge?

Next, financial instruments impairment accounting standards are abnormal in metamorphosis. This section introduces the expected loss model (expect loss models). Unlike the actual loss model currently in IAS 39 (incurred loss models), which is to see the actual impairment of financial assets to reduce value, the expected loss model requires the initial confirmation of financial instruments, it is necessary to estimate the future amount of credit risk loss of this asset. The IASB has asked to confirm that US GAAP is more exaggerated in the next 12 months, requiring an initial confirmation of the loss of its entire life-cycle credit risk. Do you think this computer can work? Even if you design a model, you have to consider the company.

The condition of qualifying hedging in hedging accounting also involves determining whether the mismatch risk can be significantly reduced. This is a very subjective judgment.

The second is the fair value Accounting standard IFRS 13. IASB specializes in an entire accounting standard. The measurement of fair value in the case of inactive or no quotation, the core content is three levels of fair value measurement. The first level is that the enterprise can obtain the same assets or liabilities in the active market on the day of measurement, and to determine the fair value on the basis of the quoted price. The second level is that the enterprise can obtain similar assets or liabilities in the active market on the day of measurement, or the same or similar assets or liabilities in the inactive market price, with the quotation as the basis for the necessary adjustments to determine fair value. The third level is that the enterprise can not obtain the same or similar assets than the market transaction price, and other reflect the market participants on assets or liabilities used in the pricing of the basis for the determination of fair value. So, if you can't find a very approximate reference to how to adjust the valuation, all the parameters, even if the risk-free rate how to choose, will require countless subjective judgments.

The third is the insurance accountant, and I don't know what the date is. The new core content of insurance accounting is to discount the current interest rate of insurance liabilities. Well, we're back to the third level of fair value measurement. What is the current interest rate? What is the nominal amount of liabilities in the future expected cash outflows?

There are also disclosure statements. What I'm talking about here is just a few of the rules of the careless backbone. The IASB and the FASB have a basic meeting every month, and the details are noisy. If you look at their minutes, you'll know.

IFRS 13 has been in operation for more than a year, this year, IFRS 9 will launch the final draft, insurance accounting for the two years also should be released. According to the "road map" issued in 09, the accounting standards issued by our Ministry of Finance are consistent with IFRS. This means that China's accounting standards will always remain the guiding principle, but also more and more.

So, what I want to say is that even if we do not consider "making rules" and not considering "combining investment and financing", the accounting standards themselves contain the use of finance (especially discounting), which contains many subjective judgments (especially the choice of discount rate). You can deal with the art (Jiao) (Hua), which can also be handled in a very mechanical (Yu) Weapon (cun). Perhaps the accounting of a manufacturing industry may be simple, perhaps the measurement of assets and liabilities by historical cost method, may even adopt the system of receipts and payments. But in a large volume of banking, no matter how many computers you buy, you still have to find people who really know accountants to make accounting judgments-but this person is not necessarily the accounting department.