Ledger
A "list" and a "ledger" are not the same thing.
A ledger is a computational substrate.
A list is a collection of items. A ledger stores state. A list is inert. A ledger is dynamic: every ledger entry changes the state of the system. A list is descriptive. A ledger is computational. A ledger is essentially a model of financial reality, not just a record of items contained in a list.
A list is just an ordered collection of items but there is no description of the relationship between the items in the list. A ledger is a governed, rule‑bound, balanced record of financial events with the relationship between the financial events explained/described. A list has no semantics, no structure, and no logic. A ledger has semantics, structure, and logic baked in.
A ledger is a sequenced append-only committed formal record.
A ledger is more than a database you query for current state. A ledger is an immutable record of what changed, when it changed, and under what authorization the change was made.
Think of a ledger less as a “dataset” and more as “the audit trail that makes the ledger trustworthy.” Accounting governs the ledger, it is the set of rules that the events tracked by the ledger must obey. Bookkeeping is the model the ledger itself follows, bookkeeping produces the ledger. General recordkeeping's notion of a "list" is not equivalent to a "ledger".
Bookkeeping produces the ledger; accounting governs what the ledger must obey; a financial reporting framework specifies the accounting rules and metadata used for the accounting and entered as part of the bookkeeping.
Traditionally, ledgers were maintained in a paper book or books. This began to change in the 1950s when the computer was introduced. But what was computerized was the dataset, not the business event information, the bookkeeping model, or the accounting. They computerized the book. They computerized the ledger artifact, not bookkeeping or accounting.
Early programmers were automating what they deemed to be the existing manual processes, they designed software to mimic the paper artifacts exactly. The digital screens and printouts were formatted to look identical to the T-accounts, journals, and columnar ledgers that accountants had used for centuries. But what the programmers did not recognize was what the bookkeepers and accountants where actually doing. This is explained in, Pacioli in the Computer Age. The programmers did not start at the beginning of the chain. The beginning of the change is the business event that spawned the need for a financial transaction.
You cannot explain the behavior of a system by analysis. You can reveal the system's structure and explain how the system works; but you cannot explain WHY a system works the way it does. If you want to understand why a system works the way it does, you use synthases. Analysis tells you how. Synthases tells you why. Both analysis and synthases are important; but you do need to use the right tool for the job you are performing.
As explained by Dr. Edwards Deming in the video, A Theory of a System for Educators and Managers, "It all goes back to understanding a system." Those implementing accounting systems in the 1950s got it wrong and we have continued to build on that incorrect foundation for 75 years.
Additional Information:
Comments
Post a Comment