Practical Accounting and Payroll Settlements with Płatnik Software

Over the years, Charlie [Munger, Berkshire Hathaway Vice Chairman] and I have observed many accounting-based frauds of staggering size. Few of the perpetrators have been punished; many have not even been censured. It has been far safer to steal large sums with pen than small sums with a gun.

How can it be that we have so much software that is reliable enough for us to use it? The answer is simple; programming is a trial and error craft. People write programs without any expectation that they will be right the first time. They spend at least as much time testing them and correcting errors as they spent writing the initial program. Large concerns have separate groups of testers to do quality assurance. Programmers cannot be trusted to test their own programs adequately. Software is released for use, not when it is known to be correct, but when the rate of discovering new errors slows down to one that management considers acceptable. Users learn to expect errors and are often told how to avoid the bugs until the program is improved.

It’s simply to say that managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.