Open Source Accounting

September 29th, 2008 by Eric Cope

If you are unfamilar with Open Source Software, have a read here and then continue. Open source software is open to allow full unbridled auditing of software anytime, any place. If you are using a program, and are unsure of its true function, you can look at the source code and see. That is why open source software has fewer bugs than proprietary software. And, when it does have a bug, its fixed sooner. There are more eyes on the code. The result is better code.

Why don’t we apply this to accounting principles? Open Source Accounting is the idea of opening the books of corporations to stockholders and customers. For example, a bank would show customers their investment portfolio, their reserves, and other pertinent information. Then customers could decide where they spend or save their money. We don’t need the SEC, the FDIC, or any other federal regulations, we need open source accounting.

I know the answer to my first question. CxOs love to hide the accounting. GAAP (Generally Accepted Accounting Principles or Practices) are cryptic in what they allow accountants to do. They can move funds, rename them, expense this, all in the name of GAAP. This means they can hide their costs ands accentiate their profits to make themselves look better in the short run.

Wouldn’t you rather invest your money where you see fit, under your own decisions of risk? Or rely on the government to back you?

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