I am not sure how many times I have had to say over the last two days that accounting data is CRAP, which stands for:
The context was the amazing two day seminar on creating a database on country-by-country reporting organised by Open Data for Tax Justice.
Time and again I was asked if it was possible to aggregate data from different countries, sometimes prepared on different bases, and sometimes on what looked to be quite different assumptions. As I had to make clear, this was simply indicative of three things.
The first is that all accounting data is, at best, very approximate because of the vast number of (usually unspecified) assumptions inherent in it.
Second, even if the extent of these assumptions within a set of accounts were known the assumptions underpinning different sets of accounts can be substantially different, meaning that even when both will claim to be prepared within one accounting framework (e.g. IFRS) they can adopt quite significantly differing positions on some issues.
Third, there are far too many generally accepted accounting principles in the world: even the UK offers a choice of two, and they are, of course, different.
The result is that vast quantities of accounting data is technically not comparable but the reality is that we ignore this within the accounting profession, and more generally. The fact only becomes starkly apparent when a bunch of really quite experienced data users are confronted with what appear to be glaring anomalies and I had to assure them that to carry on is acceptable despite this, and that dealing with this CRAP is what we have to do all the time when using accounting data because the fact is that this CRAP is all we've got to work with.