Accounting Quote by Charlie Munger
“Proper accounting is like engineering. You need a margin of safety. Thank God we don't design bridges and airplanes the way we do accounting.”
About This Quote
Source Speech: Berkshire Hathaway Annual Meeting, 2015
Accounting must include safety margins, unlike engineering where failures are catastrophic.
In simple terms: Accounting needs safety buffers like engineering.
Key Takeaway
Build safety margins into financial decisions.
Themes
risk management
financial prudence
engineering analogy
Mood
cautious
analytical
Type
philosophical
inspirational
When to use this quote
- investment analysis
- budget planning
- project financing
- regulatory compliance
- audit processes
Key Concepts
margin of safety
systemic risk
accounting standards
Questions to Reflect On
- How much safety is enough?
- When does caution hinder growth?
A Different Perspective
Over‑cautious margins can reduce profitability.
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