Sunday, 18 August 2013

Computers and Accountants lie

An accountant is someone who reconciles finances, a computer is a machine which runs programs, both have a beginning and an end in their task, even if the task is iterative. Both have a trait which is overlooked and denied. They both lie. A computer is only as good as the information and variables put into it, it is only as good as the programmers who input the code, a computer therefore is fallible. Either to the extent of it's creators or it's users. In the end what is churned out is then interpreted by a human (highly fallible). Accountants are interested in the bottom line only, the figures they are given and then the process of reconciling those figures. If you were to think there was only one way to add things up and to subtract them you'd be wrong. There are multiple ways depending on how they are to be interpreted. Which may have been something arising from a term called creative accounting. There is nothing artistic about it, rather it's about defining variables. 

The lie is in not knowing how the data was collected and the stories behind the data. Consequently the saying:
"lies, damned lies and statistics"

I know a lot about statistics, or more accurately, I used to know a lot about statistics. Their frequent use as a tool by politicians is like the double edged sword of discovery. Every new thing in the world which is made or discovered has at least two purposes of use. A use for good or a use for bad. Nuclear energy for example. As a source of energy for the population or as technology used in the deadliest of bombs. In this same way politicians pick and use specific statistics to make arguments which they generalise.  They bolster their own image of themselves and try to fool the populace into thinking things are going well. Sometimes it may work, but a lot of time politicians are now being understood for what they are, and it is not as saints. Yet when I pick up a newspaper and read it the paper will have a biased view of the world and also deliver articles leaning in the same direction. There is no neutral ground. When I've wanted to read pure news with less bias, I'd purchase a financial newspaper. Yes, it happens maybe once every couple of years. You can tell it's a financial newspaper because of it's orange colour. However, like accountants and computers financial papers fail to provide the human element. The story behind the figures, the story which motivates the figures.

Where there is human interaction fallibility exists and always will exist, but to believe there is such a thing as pure facts, such as those from a computer or an accountant is grossly ignorant. I used to read company reports. These were wonderful financial statements of loss and profit, the reports are always keyed to give the impression although the environment is tough the company is fairing well. There would always be a statement by the CEO to this effect. They can not give a pessimistic statement by their very nature, if they did then they would not be CEO for long, shares in the company would drop like a stone and it could then no longer exist. The reports are compiled by accountants, they are signed off as true and valid by qualified accountants. Yet there are companies who have given out glowing reports of their future and have become failures. A lot of story telling has taken place. It is only by knowing the human element a better Gestalt like view can be understood. The human element is always missing.

Politicians do not give speeches on how the unintended consequences of a law or action they took resulted in poverty of injustice.  They will elaborate on all the good points. Even if those good points are insignificant. A policy statement comes out and the repercussions for the country are enormous, yet two or three years pass and the policy has been ineffective. This is proof it was a lie from the start. But they would not of know it at the time. They hoped it would work and have the effects they hoped. Unfortunately hope is not a variable used by computers and accountants. Hope is an emotion or desire a human being holds. Something can therefore only be measured by the end result, but again only providing the figures for the end result have used all of the relevant and even some of the irrelevant details.  An interesting book called Freakonomics by Levitt and Dubner gives examples where unplotted variables were plotted by an economist and how these unrelated items had huge end result effects.  They were not things which politicians had done either.  So it goes to say, you can not make sense of things unless you have all the facts. Accountants don't, therefore they should not be put on high stalls and kowtowed, or worshipped.

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