top of page

Collection: Warren Buffett - #270 'How To Get Better At Accounting'



My name is Johann Freudenberg (PH). I come from Germany.

I would like to know the accounting book you like best. Thank you. (Laughter)


Well, it’s been a long time since I’ve read an accounting book. I read Finney back when I was in college, I remember that. And I always liked accounting. And for any of you in business, you know, you basically can’t get enough accounting.

But I don’t — you know, I am not really up to date on accounting books. Maybe Charlie’s been reading some of those lately.

I would hope, actually, that if you read the Berkshire reports over time that you get certain, perhaps, lessons on accounting.

But I think you learn more accounting, probably, in terms of — well I mean, once you know the basics of it, by reading good business articles that deal with accounting issues, accounting scandals, that sort of thing.

I mean, what you really need to know is you need to know how the figures are put together, the underlying principles of it, and then you have to know what can be done with those.

And — you start with the accounting figures as the raw material of understanding a business, but you have to bring something additional to that.

And I can’t think of any good books on that subject. I think I’ve read a lot of good magazine articles that contributed to my knowledge over the years.

And I’ve just, you know, I’ve read a lot of annual reports, and seen what people can do with accounting.

And as I’ve said before, if I don’t understand it, I figure it’s probably because the management doesn’t want me to understand it.

And if the management doesn’t want me to understand it, there’s probably something wrong going on. I mean, people don’t obfuscate with numbers, usually, without a purpose. And when you run into that the best thing to do is you stay away.



Yeah, asking Warren, you know, what good books he knows about accounting would be — it’s like asking him what good books does he have about breathing. (Laughter)

And — (applause) — what the implication of that is, is that you start by learning the basic rules of bookkeeping, which are sort of like the basic rules of addition and subtraction. And then you have to spend a lot of time before that accounting gets related to the larger reality, and that’s a lifelong process.


OK, we’re going to try to go to the Music Hall. Number 9. Is this working?

~ Please visit the site above for full video of Berkshire Hathaway Annual Meeting.


[YAPSS Takeaway]

If you don't understand a company's reporting, just move on to the next.

"And as I’ve said before, if I don’t understand it, I figure it’s probably because the management doesn’t want me to understand it." ~Warren Buffett

bottom of page