Script Accountant

I guess question would be if someone had to do a major trip to get recertified, how could it look? Would it be a business expense? And how much could a wandering accountant be expected to reimburse being a hero as part of the travel expense (like looting bandits as a part of being a caravan guard).

Hello!

I love your Barbarian already and I may need him in my campaign because right now I'm keeping the general ledger for my players.

Travel for work related training is absolutely tax deductible. There are two ways to do this, if he is self-employed (seems likely), he can list it as a regular part of his business expenses when determining his self-employment income. If he's employed by an accounting firm, AND they don't pay for or reimburse him for this travel, then he can deduct it as a business related expense. Either way, he needs to make sure and keep receipts and records that prove these expenses are related to doing business. Lunch with a client where he discusses business matters? Make sure it's noted and deduct that! Lunch on his own during a business day? Not a business expense. Travel and room and board to stay in another city for recertification or continuing education seminars to maintain certification? Keep records and receipts and deduct that! Going to a festhall and snorting magic substances while there? Going to a spa and getting a mani/pedi? Not a business expense. That's not part of the job.

It sounds like he actually has two jobs. An accountant and an adventurer. Guard duty, etc isn't really in the job description of an accountant. One, both, or neither of these may be self-employment situations. For the adventuring job, if he's working for someone else, he needs to know if he is supposed to report any looted items/coins as earned income (like tips), in which case he'd be expected to pay taxes on it. Probably the adventurer's guild or whomever he is working for will take the taxes out of his base pay, but if he doesn't have that, then he may need to make quarterly payments on it. And regardless of beliefs about the ethics of taxes in different societies, typically the taxing authority wants their cut no matter how the money is made and if he has a lot of money to throw around on magic weapons, they're gonna be suspicious if he hasn't been reporting that kind of income. He should definitely report that income, then write off the magic weapon as a business expense for the adventurer business. If he's self-employed, basically the same situation, he'll report the amounts earned from specific clients as well as looted amounts as revenues, deduct expenses such as health potions used, repair and maintenance on his weapons etc, depreciation on major assets like magic weapons, revivification costs if it comes to that. He might be able to claim a spa day or trip to a festhall under these expenses, but he probably shouldn't be surprised if he gets audited and will want to have good records proving that the spa day was recuperative and vital to his ability to perform as an adventurer and the festhall was a legitimate business event to meet the needs of a client.

Depending on your location (setting), he may need to make monthly or quarterly estimated tax payments for self-employment taxes, which will then be reconciled against the actual final form when he submits his yearly tax form.

I hope this helps! Good luck with your campaign.

Hello.

Sorry I got so busy after I posted that question!This is the only response that I got. But this is a great example of how daily bookkeeping and accounting tasks can be used in stories. If your characters have a business where they take cash or checks, they need to visit a bank regularly or they risk theft. They need to make sure they vary their route, and if the business is more than a one or two person situation, they probably need to have some controls in place to make sure the person taking the deposit isn’t stealing some of it. Even owners can be guilty of theft from their own business if it isn’t actually recorded as a disbursement to the owner.

But I’ve also been trying to think and I think that Ben Wyatt from Parks and Rec is pretty much the only recurring accountant that I remember from popular media, and his accounting job seems....weird. Like for one, he shows up and he’s a governmental accountant and the work he does seems to be focused on budgeting and cost-benefit analysis. Those are both managerial accountant items. 

No biggie, except then an accounting firm keeps trying to hire him as an in house accountant. Generally accountants will get into either governmental or private company accounting and then they won’t switch between them. There are just a lot of different concerns, like governments have set budgets from tax revenue which may be earmarked and can only be used for certain projects. 

The other thing is that, it’s insinuated that he’s being hired as a financial accountant. In a lot of smaller companies like the one I work for, the controller does pretty much all of the managerial and financial accounting. I’m not saying that a person can’t decide to get back into doing more financial accounting. If they are a CPA then they have to have tested on financial accounting and keep up with ongoing education requirements for it. (If they are a CMA, certified managerial accountant, they may not have been tested on financial accounting or had to continue classes on that, instead focusing on managerial accounting). It’s more likely that he’d be a CGFM, Certified Governmental Financial Manager, since he’s been working in governmental accounting, but it is possible to have more than one designation, just difficult and costly. 

But why would an accounting firm headhunt so relentlessly for a governmental managerial accountant to be their in house private company financial accountant? He probably hasn’t prepared financial statements in years, maybe decades. Why is he the top choice? (Plot). 

These are the things that pull me out of stories. Is it believable that this happened? What could be changed to make it believable?

It’s believable that a woman was supposed to take a daily deposit to the bank and got distracted, causing all sorts of problems for a small business. Cash flow is very important.

It is not necessarily believable that an accounting firm would headhunt a governmental accountant to be their in house accountant. Change it to they want to have a governmental accountant on staff to market towards small communities that don’t have the tax revenue to support a full time accountant on staff. Change it so that another town (Eagleton? Somewhere far away?) is the one headhunting him trying to get him as their regular managerial accountant.

I currently work as an accounting clerk. I work for a small company with fewer than 50 employees, but it’s a manufacturing company, so there’s quite of lot of invoices we receive in for me to process. It’s actually a bit more than a full time job worth of work. We outsource our payroll functions. Someone else figures out all the taxes and everything else. If we didn’t, we’d probably need someone with that as their sole function. My point is, accounting and payroll take a lot of time. How many books have you read, or movies have you watched where the main character has a business and they never do any accounting or payroll work? Now, if they have no other employees at all, we can ignore the payroll, but still, we are usually lucky if they do more than count the register at night, and they might not mention the fact that money needs to be taken to the bank. These people get busy solving mysteries, or doing paranormal things, or whatever their plotline is about, and they make comments about needing to tend their bookstore, or flowershop, or bakery. But they are never found in the office late at night just trying to get the month closed out. They never have Mr Jones, the bookkeeper, or Ms Oliver, the CPA, show up at just the wrong time. Sales people, private detectives, and spies never file their expense reports or check their per diem. 

Hi there!

This is kind of difficult because thanks to accounting/finance scandals over the past 3 decades, a lot of things that are unethical are also illegal, or potentially illegal in some cases. 

If the company is publicly traded on a stock exchange, the financial statements are going to be audited by another, unrelated accounting firm. This audit should find any unethical behavior and report it if it is material (of a sufficient amount to matter, basically). But this is only required for publicly traded companies. 

Publicly traded companies are required to follow Generally Accepted Accounting Principles (GAAP) in the US, and what’s considered unethical and illegal varies from country to country, so I’m basing this on the US since it’s what I know best. For these companies, the audited financial statements are filed with the Securities and Exchange Commission (SEC) and available for public viewing. So, it’s definitely more difficult to do it for one of those. 

But if Big Company is actually not publicly traded and is looking for other private investors, there are a few things that could be done that are against GAAP, but not quite illegal since they aren’t required to follow GAAP (they just should).

 Shifting revenue from one period to another.

 This can be done by recording transactions in the wrong period. If the company is a manufacturer, this means invoicing shipments as sent the last day of the month when they actually didn’t get picked up by the shipping company until the next day. Similar changes can be done for other industries.

Shifting cash flows from one period to another.

Accounts Receivable payments should be recorded in the month they are received, and really on the day they are received. However, if checks are received in, or credit cards which take a few days to process, the accountant might record those transactions at the end or start of the period in the wrong period, either claiming processing time, or no processing time as needed. 

Shifting expenses from one period to another.

Expenses should also be recorded in the month that they were incurred. But, especially for things paid by credit card, they may be recorded in a later month. 

Allocating expenses to the wrong accounts

Some expenses are considered more worthwhile to investors. If your raw materials expenses are high, it looks like your expenses are for production, but that also may make them question why you would hold on to excess raw material inventory if you don’t have matching amounts of finished goods going out. That would indicate a lot of waste in the process, which isn’t good. 

Changing valuation methods

Inventories are recorded based on certain valuation methods: LIFO, FIFO, Weighted Average and Specific Identification.

LIFO - Last In First Out. If prices are increasing for inventory, this makes on hand inventory lower (lowers an asset) and increases the Cost of Goods Sold (COGS), showing lower contribution margin (CM), and therefore lower income. If prices for new inventory are decreasing, the opposite happens.

FIFO - First In First Out. Just like LIFO but in reverse.

Weight Average - Just like it says, the average price for inventory is used to determine inventory value and COGS.

Specific Identification - This is usually high-end or specialty items or items with a serial number on each unit when received in by Big Company. The COGS and inventory are based on the cost of the actual units used in the goods sold and inventory respectively.

As you can see, LIFO and FIFO can be used to make assets and income look better, but companies aren’t supposed to change them without really good cause.

I’m sure there are some other things, but those are the ones that stand out to me right now. As you can see, a lot of them involve recording things in the wrong time period. This allows higher expenses to be offset by higher revenues, and to smooth out big changes in expenses and revenue. It’s kind of like if someone beats their quota one month and saves some of the excess back to claim for the next month to make sure they met quota that month too.

Definitely don’t do these things in real life, but maybe it will work for your character. Happy Writing!

Hi there. Thank you for your patience on this ask.

Hedge Fund managers (HFM) have two primary responsibilities.

Recruiting investors

Managing the investments

They will spend most of their time on the second part as this involves tracking stock prices, looking for trends, searching media for clues about things that might change prices, etc. Hedge Funds also are limited to traditional securities like stocks and bonds, so they will also be tracking derivatives prices (futures and options) and working on long and short sales. This isn’t usually a 9-5 job because they will track markets in other countries as well so they may put in 100 hours a week. When quarterly and annual reports come out, they would be getting stacks of them each day brought up from the file room at their company.

The first responsibility is important too though, since investors in hedge funds will need to be companies or fairly wealthy people as there are income and net worth requirements, and the funds tend to be rather risky compared to other investment options. That means there’s a chance for a high payout for investors, but there’s a much better chance of losing some or all of the money. The HFM needs to mitigate any losses or their wealthy clients will be looking elsewhere.

HFMs should be charismatic and personable because they need to interact with wealthy clients and with different industry contacts to try to get good deals. They also need to be detail oriented and able to pick up quickly on trends and changes in data and be able to decipher meaning from company reports, but the financials and the written state of the company information, to determine if the company is a good investment or not.

A HFM would have at least a 4-year degree in a Business related field (BBA, BS Accounting, BS Finance, etc) and potentially a graduate degree such as an MBA or MS in a business related field and/or a professional certification such as CPA or CFA. They would likely have worked as an intern at an investment firm. Then they would work as an analyst, reviewing a lot of the same information, but on a smaller scale and providing recommendations to the manager of their group. Some companies will want this experience to come from one of the Big 4 accounting firms, or a large bank working with specific items such as treasury funds. After they’ve got years of experience, they can move up to manage the group and be considered the hedge fund manager and make the final decisions for the fund.

Your character is going to be pretty busy. Good Luck!

Hi there.

I’ve been thinking about your ask for a bit and I’m not sure I can help you just yet. There are so many different types of accountants as far as what their day would entail and how they’d be viewed by coworkers. Here are some questions to narrow down what type of accountant he is so that we can figure out the rest.Where does he work? 

Does he work for one of the Big 4 CPA firms? Does he work for a small town CPA firm which could have as few as 1 or 2 employees? Or somewhere in the middle?

Does he work for a government? Or a private company?

Does he work for a manufacturing company or a retail company? What does the company he works for do?

What is his work like?

Is he an auditor?

Is he focused on income tax prep?

Is he the CFO or Controller? Or is he an AR Clerk? Or a mid-level accountant?

Are there a lot of accountants at his company? Or is it just him? or him and one or two others?

Is he a financial accountant (balancing the books, recording AP and AR transactions, creating the financial statements, etc)? Or is he a managerial accountant (determining the Cost of Goods Sold, making decisions such as to make or buy components, etc)?

It’s tempting for me to answer this based on my personal experience, but if he doesn’t work for a small privately owned manufacturing company, his experience will be completely different. If you can write back in with some details about what he’s doing, I can try to give you the answers you are seeking. 

Hi there.

There are a lot of things that will determine how easy or difficult this will be for your pilfering character.

Is he a co-signer on the account? - Depending on the bank he might not be able to access the funds at all unless he’s a cosigner, joint account holder, or otherwise has permission to withdraw funds. My bank won’t even let people deposit funds unless they are attached to my account somehow, like my mother being my beneficiary in case of death (which is rude because I expressly told them to let anyone give me money, just don’t let anyone take money).Does the bank have a maximum limit that can be withdrawn per day? - Most US banks have a maximum that can be withdrawn from an ATM or spent on a debit card. Some also have a maximum withdrawal of any sort per day, and most will also require forewarning before extremely large sums of money are withdrawn so they can be sure they have enough cash on hand. In the US, banks only have to keep 10% of deposits on hand, so if it’s a smaller bank they might not have enough if he’s withdrawing 6+ figures. 

Is it an account she uses regularly? - If he completely wipes her out and she gets declined when she’s buying her morning Mermaidbucks coffee, then she’s going to notice pretty fast that something’s wrong. If he’s wiping out a savings account that she can’t access from a debit card, or if he leaves a bit of a buffer for normal purchases, it might take longer.

How meticulous is she about checking her balances? - Does she check her balance every day? Once a week? Does she routinely use online banking? Even if she doesn’t she might go to the bank on a regular basis to check with them (my mother does this). He can only go undetected as long as she doesn’t check her balance.

Does her bank offer alerts? - Her bank might alert her that she’s dropped below a certain threshold or confirm large withdrawals by email, text, phone call or post. Your character would need to know what might trigger an alert so that he can avoid any she has set up. 

Hi!

I actually dragged @scripteconomist away from exams long enough to discuss this. There are a few things that you are going to need to consider, but hopefully we have some options that might work for you.

First, how wealthy is she? There are levels to being rich that are sometimes difficult to conceptualize if you aren’t rich. I personally follow this adage regarding the difference between “rich” and “wealthy” “Rich people work for wealthy people.” That means, your CEOs, CFOs, etc are Rich, and people that own large corporations are Wealthy. Wealthy people don’t have to work for their money. But other people have different ways of defining the words. The reason I bring this up is, I did a quick google of “Millionaires who lost it all” and most of the results talk about professional athletes, musicians and lottery winners. Those are all people whose money depended on a short-lived source. If they mismanage it and spend it all, then there’s no source for new income (some musicians have a longer career than others, and can make a comeback, but it’s difficult for athletes to do the same). But a lot of those stories also talk about how they’ve rebounded since and what they are doing now. Maybe they aren’t worth the same amount, but many aren’t in poverty.

But if you consider people with generational wealth, that money is self-replicating. Their parents and grandparents and so on have already set up the structures needed for the money to continue. The people in the super wealthy tier tend to be from generational wealth (old money, if you like), though a lucky few have managed to get there in their own lifetimes. Now consider “losing it all” when talking about billions of dollars. How much is all? If you inherited 8 Billion and lost 4 Billion, you’re still very wealthy. So you need to consider, how much is she worth, how much does she actually have to lose in order to consider it “losing it all”? How low do you want her to be at the end? Does she literally only have the clothes on her back? Is she learning what it’s like to struggle to pay bills each month? Is she still pretty well off without having to worry as long as she manages her money, but no more buying yachts?

Second, how do you want her to lose the money? Is this something you want another character to be responsible for enacting? Do you want her to be the agent of her own downfall? Do you want it to be something out of anyone’s control?

In order to lose it all, she needs to lose three things:

her company

her personal assets (including shares in other companies)

her reputation (so that she can’t work back up from another company).

If she has her own company and is wealthy, she most likely has it set up as a corporation to limit her liability. That means that if the company has to liquidate to pay debtors, only the company assets can be touched and her personal assets are safe. So her liability is limited to what she put into the company and she is protected from losing more than that.

Out of anyone’s control: You say she’s well diversified. That’s definitely something that she would do. She would own stocks in different companies, different industries, and different areas. All of this lowers her risk of losing all her money. But there is also non-diversifiable risk, or market risk. This is the risk that the market as a whole will drop out in its best recreation of late 1929. This could happen from war, extreme natural disasters that hit a large number of major companies in different industries, alien invasion, and bubble situations like the build up to 1929 and 2008. This could make her lose her company. This could make some of the companies that she’s on the board of have to close. But some companies will rebound better than others and she might survive it. Also, unless she’s overextended herself by using personal loans to purchase the shares that plummet in worth, she’ll still have her personal, non-stock related, assets to fall back on. Of course, you could have the natural disaster/war/aliens destroy those as well. She’ll at least be hurting for awhile.

The agent of her own demise: She’s involved in some shady dealings. Maybe she embezzled, Maybe she ran a Ponzi scheme. Maybe she did insider trading. Maybe she made really bad decision for her company that causes it to fail. Maybe she did all of the above. Maybe she set up a Ponzi scheme to get money to pay for a new venture with her company based on faulty projections or just because she ignored what her advisors said and overextended herself. Then when the return on investment wasn’t what she expected, she embezzled from the other companies that she’s involved with and used information from being on the boards to perform insider trading both to try to rescue her company and pay off the people in her Ponzi scheme. But then she’s caught. The Ponzi scheme collapses because that’s what they do, the embezzlement and insider trading is found out and she’s in a load of trouble. Her company is already in trouble from the bad business move.

She’s now facing criminal and civil charges that compound so she can’t save it. The company is liquidated (it’s generally easier to find a buyer for the assets of a company and then pay the debts, even though it’s better for the current owner if they can sell the company as liabilities will be assumed as well, but let’s say she has to do the first).

Let’s look at the charges she’s facing:

Insider trading: 

Criminal penalties- up to 20 years in prison, up to $5M in fines per charge (if she traded as an individual; if the shares were traded under her corporation then up to $25M per charge). 

Civil penalties - up to 3 times the amount gained or loss avoided from the trade made with the information. She may also be banned from trading (which will stop her from rebounding once she’s out of prison).

Pyramid or Ponzi scheme: 

Criminal penalties - depend on where she lives. The US does not have a federal law covering these, but the FTC may push for prosecution as fraud. For reference, Madoff pled guilty to securities fraud, wire fraud, and mail fraud and was sentenced to 150 years in prison. 

Other examples of Ponzi schemes for research can be found on the link in this sentence.

Civil penalty - may have to pay restitution.

Embezzlement: 

Criminal penalties - there is a statute of limitations of 5 years. The penalties will vary depending on how much she stole, but the maximum rating is for over $400M and will likely include fines of at least $250K per charge and 20-30 years in prison (maybe more if multiple counts are brought). The exact penalties may vary by state. 

Civil penalties - restitution to victim(s). 

Here is some more information about embezzlement and some example cases for research. 

Here is a link to information about the US Federal laws for embezzlement including the different types. 

 As you can see, those combined could not only drain quite a bit of cash, but also land her with some pretty serious jail time even if she can manage plea bargains.

Brought down by someone else: Divorce and theft. Maybe combined. If she didn’t have a prenup, she could lose half of her worth in a divorce, depending on location (for example some states don’t consider assets from before the marriage to be marital property and divisible, in the past a married woman could not own property so it would all be her husband’s). If her ne’er do well spouse used her trust to empty her accounts, sell her company and stocks, move it to an offshore account not linked to them, and maybe even set her up for one of the above to get her in trouble legally but that’s not necessary, and then divorces her for half of whatever she has left.

For any of these that require selling the company, or liquidating it, you need to consider what type of company it is. Construction or property can change fortunes very quickly. Liquidating a retail company is easier because most of the assets will be in inventory that is fairly liquid. While liquidating a manufacturing company that has a lot of capital tied up in expensive and specialized machinery will be more difficult. It’s usually easier to find someone willing to buy the assets in a liquidation than to buy a company, so they may get more money selling the assets, especially if there has been a scandal tied to the company.

I hope this gives you some ideas and things to consider and places to start researching. Good luck!

Journal Entry - 

Debit - 

Credit - 

C-Corporation -