Accountancy for Democracy

It almost goes without saying that we should be delighted to have the opportunity to vote in the UK today. That is even true in the Buckingham constituency where the Accounting and Bookkeeping College is based which has neither Labour Party nor Liberal Democrat candidates at this election because of the British parliamentary convention that other parties do not stand against the Speaker of the House of Commons.

There are too many good reasons for voting to list them in this blog and, in an authentic democracy, I can think of no good reasons for not voting. Some people, though, are choosing not to vote because they don't approve of any of the parties. That sort of disapproval has greatly increased since we found out last year what MPs were claiming in expenses. Disappointing though it was to learn about moats, duck houses and mortgage claims on non-existent second homes, we should reflect that we get the politicians that we deserve and we will never deserve any better if we don't vote. Other potential voters sometimes despair and conclude that the same scoundrels and crooks will always be elected because their vote is only one amongst thousands in their constituency and millions across the country.

There is a kind of analogy, though, with double-entry bookkeeping. When we choose to use credits and debits for our accounts, and many totalitarian regimes would probably prefer that we didn't, we are making a commitment to record for every transaction where the movement of value is coming from and where it is going. At first sight voting seems much more one-sided because every effort is made to ensure that nobody knows who cast each vote leaving only an anonymous record to be counted which seems to reinforce the sense that a single vote is a drop lost in an enormous ocean.  That may be the bigger picture, and it may be the reason behind the difference between opinion polls and election results, but it isn't true of the individual voter. Each one of us can have the satisfaction when we vote that we not only had a preference about who should represent us but that we took part and actively registered that choice: the vote went to the candidate of our choice but the mandate came from us.

Unless we vote we don't have a democracy and, in the end, Winston Churchill was right, "Democracy is the worst form of government, except for all those other forms that have been tried from time to time."

Today's important news for accountants

In a world where we are all connected over the Internet it has long been clear that traditional double-entry bookkeeping that you might learn from the Accounting and Bookkeeping College is no longer secure enough for online applications.

It seems that intelligent algorithms devised by Internet hackers can deduce the other side of most accounting entries which would normally appear single-sided in a typical web form. Putting these two pieces of double-entry  information together can give the hacker access to a small  part of a trader's accounts. Accountants and bookkeepers are increasingly concerned about the extent of that access and whether it might include more sensitive items such as bank and credit card accounts. Given the spread of financial information on the web there would seem to be no limit to where that accounting information could end up.

Today's answer to this alarming possibility is "triple-entry" bookkeeping. Accountants using this new method create an entirely random third entry in their books of account alongside the authentic double-entry transactions that are generated for each sale, purchase or other accounting movement. The random entry is effectively impossible for hackers to guess even using the strongest algorithms available today. The trader's books are, to all intents and purposes, scrambled in the process.

This technique is extremely new as it has to be to keep ahead of the Internet security 'arms race'. We will be watching very closely to see how rapidly it catches on.