1.6 Limitations of Accounting

Now here’s something important—not everything can be solved by accounting.

Yes, accounting is powerful. But it has limits.

For example:

  • It shows past performance, not the future
  • It depends on estimates (like depreciation)
  • It doesn’t measure things like:
    • Customer satisfaction
    • Employee morale

As an accounting manager, I don’t rely on numbers alone.

As a CPA, I apply professional judgment—because numbers can be correct but still misleading if misunderstood.

   One thing I always remind people:
Accounting is a guide—not a guarantee.


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