Style and Delivery in Corporate Accounting

Mr. Brown is an accountant working for a public firm. The time has come to prepare the financial statements for the year. He knows that these statements are what those outside the company will judge the company based upon, so he strives to comply with the highest standards for style set forth in his field. The highest virtue of style here is that of clarity. While there are many figures of reasoning that help to clarify a point, Mr. Brown recognizes that he need not show why the company selected a certain way of doing something. He only needs to state the way they did it, thus concise clarity is the ultimate goal. For example, when describing the Inventory account, he might write something like this:

“The cost of materials and supplies, coal stocks and fuel oil is determined primarily using the average cost method. The cost of stored gas is determined using the last-in-first-out ("LIFO") method.”

The reasoning behind it is not stated because the stockholders just want to know how they classify it, not why. It is the auditors who care about why.

When talking with the auditors to show why the company selected the methods they did, clarity is still the ultimate goal. But in this case time allows for the use of figures of reasoning so that there is no ambiguity in the communication. A few figures that he would use when talking with the auditor are those of expeditio and apophasis (both are ways of showing why one option is the best one). He might say to the auditor:

Accountants will clearly explain the
methods they use to the auditor.

“The cost of fuel can be shown either by first-in-first-out (FIFO), last-in-first-out (LIFO), or average cost. Since we place all the fuel in the same tank, it gets mixed up. FIFO wouldn’t be appropriate because the first fuel bought isn’t necessarily the first sold. Similarly LIFO wouldn’t work because the last fuel isn’t necessarily sold first. It is an average of oldest and newest, thus the average method is what we use.”