Tax Lawyer's Blog

In Accounting for Lawyers Eugene Volokh of Volokh Conspiracy talks about the need for lawyers to understand the language of accounting:

You can’t read the front page of the Times or the Post these days without having a good chance of encountering the words “balance sheet.” Very often the term is being used in an extended policy sense – referring, for example, to the balance sheet of the Fed or even the US government.

Unless my law students have had some undergraduate class in the subject, typically they would not have the faintest idea what that meant or why – even in a largely metaphorical sense (e.g., when the Economist magazine talks about the world’s balance sheet) – it is a relevant or important or meaningful way to express certain ideas.

Leave aside the numbers, they simply have no idea what the vocabulary or underlying concepts are.

In tax and business matters I as a CPA and an Attorney have an edge over tax lawyers who are not CPAs. And I don’t believe this to be true because I am a CPA and an Attorney, but rather I became a CPA and Attorney because I believed it was true.

In addition to giving my clients a more knowledgeable and well-rounded advocate, my involvement in the case almost always allows them to save money that otherwise would have been spent on an outside CPA to be part of the team.

Professor Volokh has high praise for the study of accounting and articulates it better than I ever could:

Uninitiated law students often believe that accounting is merely about counting things and sticking them in predetermined categories.

In fact accounting is a rich intellectual endeavor in which the determination of what categories matter and why, and how one should interpret this item of income or whatever as going in this or that category – whether it presents an accurate representation of an enterprise – is as much interpretation and nuance and all that as law. It is as much about a deep representation of the world as law is. (I started out in tax law, and rapidly grew to have deep respect for tax accounting’s intellectual enterprise.)

People often ask me which is more difficult, the study of Accounting or the study of Law – or to put it another way, the CPA exam or the Bar Exam.

Here is my stock answer (and it hasn’t changed in 20 years of practicing law and accounting):

I could take a CPA, give him a good set of bar exam review books and 3 months in which to study and I feel confident he’d be able to pass the bar exam.

I could take a lawyer and give him a good set of CPA exam review books and 3 years in which to study and I don’t believe he’d be able to pass the CPA exam.

Some lawyers are smart and some are not so smart.

All CPAs are smart.

Bookmark & Share: