Where is Don Draper when you need him? I need an attention-grabbing title for top accounting books all of us should consider reading. I need his help because this is a topic where I need help on getting you past the headline.
I started with a list of 10 books, but I was forcing myself after the fifth title. Plus, I wanted books that were both mind-bending and interesting. Steven Bragg did not make the list, although I love his books. I didn’t want an owner’s manual on my list, which is what his insightful and instructional books generally are.
I will go in reverse order as follows:
Is it really an accounting book, or just a great book by an internal auditor who hooks you into the story at the very beginning?
I was once an internal auditor, and if I had a do-over in my career, I’d be tempted to spend my time working in forensic accounting. Perhaps that’s why I liked Extraordinary Circumstances by Cynthia Cooper so much.
Sadly, this story which seems like fiction is very real. Cynthia was the whistleblower of the WorldCom financial fraud, which led to that company’s bankruptcy and the loss of thousands of jobs.
Who was behind the fraud? A CFO and a few others, as well as the CEO. This book should be mandatory reading in every college and university accounting program. If you haven’t read it, make it a priority.
Weighing in at number 4 is I May Be Wrong, But I Doubt It. The title alone gets Mr. Douglas Hicks on my shortlist. I tried giving this book to my wife when it arrived in the mail–no such luck.
This is not the first book I read by the author. In the early ’90s, I enjoyed (actually devoured) Activity-Based Costing: Making It Work for Small to Mid-Sized Companies.
I May Be Wrong, But I Doubt It is a collection of essays on accounting, costing, analysis, and reporting. You’ll love the chapters on depreciation and the profit % to sales fallacy. Hicks writes with a little bit of an edge along with wit and wisdom–a much-needed style for what is typically
I’m a fan of anything that Jean Cunningham writes. She has a deep accounting background and was a global thought leader in Lean. Her book Real Numbers may be geared toward those working in Lean environments, but the book is applicable to all industries, including service firms. I’ve read it more than once, and it needs to be in your collection.
Call me weird or crazy, but I had difficulty putting down The End of Accounting. My biggest takeaway from the book is that GAAP-based financial reporting is becoming meaningless.
GAAP reporting is supposed to help investors make decisions. The authors argue the opposite is happening. Through their research, they state that only about 5% of reporting is useful and relevant to investors.
The authors include a remedy with a strategic business canvas that can be modified depending on the industry. The canvas includes narrative and facts on strategic resources, key business stats, and value created by the firm, among other relevant information.
I read this in 1992, right before I read The Goal. You couldn’t pick a better book to set the stage for Goldratt’s classic. However, you might find Johnson’s book on the pitfalls of management and cost accounting a bit dated in today’s SaaS- and subscription-centric economies.
If you like history, then you’ll probably enjoy reading about the origins of cost accounting. Johnson and his co-author Richard Kaplan (The Balanced Scorecard) take us on a cost accounting journey from New England’s young textile mills to the growing railroad industry. We also learn how management and cost accounting adapted to decentralized organizations like Dupont and General Motors.
While the book is heavier on criticism than prescription, the writing was a paradigm-shifter for me because, at that point, I started to question everything in business. I wanted to know the ‘why’ behind every management decision or practice, especially regarding accounting and reporting.
Young financial leaders may not get as much out of the book as those of us who started our careers decades earlier. I’d still suggest you add this to your growing library of business books.
If you get your hands on this book, get Relevance Regained, his 2002 follow-up. When you do, notice he’s the sole author of the book. Your job is to find out why.
The problem with a top-five list is the ones left out. For instance, take More Than a Numbers Game by Thomas King. I bought and read this book in 2015, and I love it. And he gets a huge high five for mentioning The Whiz Kids, which is a brick of a book and a favorite of mine. Any student of business with an accounting background should pair this book with Relevance Lost (mentioned above) and Profit Beyond Measure.
Since writing this post, I’ve purchased a copy of Throughput Economics by Schragenheim, Camp, and Surace. It’s not an accounting book per se. It’s what you’d expect to study in a management accounting course had it been taught by the late Eli Goldratt. I’ve skimmed much of the book – get it. It belongs in your library.
The next book is written by someone I respect and admire. It’s not because he’s from my home state of Missouri, either.
Many of the CEOs I work with do not have a degreed accounting manager running the finance department. That’s where the book Accounting Made Simple comes in handy. There’s a reason Mike Piper has more than 1,000 reviews with an average 4.5 rating.
Mike, keep writing. Actually, he is – I look forward to reading his weekly newsletter each time it hits my inbox.
Two More Noteworthy Titles
I’m going to leave you with two more titles to consider. The first one is not an accounting book per se, but every financial leader should read it.
Earlier, I mentioned Jean Cunningham’s book, Real Numbers. Art Byrne’s book, The Lean Turnaround, is phenomenal and congruent with the message found in Jean’s book. Chapter 8 is a breath of fresh air.
The next title is not an accounting book, but it’s one of the few titles I recommend to CEOs who want to increase their financial statement acumen – Warren Buffett and the Interpretation of Financial Statements by Mary Buffett.
Did You Know We’ve Interviewed Jean Cunningham?
Should you get Jean’s book above, consider listening to our discussion with her. This is the first interview she’s done since retiring in early 2020 – great discussion.
If you want to learn more about the WorldCom fiasco, the former CFO of HealthSouth joined me in an interview to talk about Cynthia’s book mentioned above.