What Is Open-Book Accounting?

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Open-book accounting is the business practice of allowing investors or creditors to view and analyze accounting books in order to ensure that everything is being properly recorded and utilized. Establish honest relationships with vendors through open-book accounting with information from an accounting professor in this free video on accounting.

Part of the Video Series: Accounting Careers & Information
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Video Transcript

Hi my name is Shawn Jones, adjunct professor here at Argosy University. Today we're talking about the theory or practice of open book accounting. That is simply a principle or a business practice that businesses use to be able to establish relationships with their vendors, with their customers, even their shareholders. It's an idea that whatever we're recording or whatever transactions are going on at anytime you as an investor, or as a creditor, or as a vendor can come and look at our books. It's an open book policy or an open book principle so that you can feel comfortable, gain confidence in what we're doing that it is being recorded accurately. That the reports that you are receiving are accurate. Perhaps that the money that you've invested is soundly invested. That the business as a whole is on sound financial footing. So basically the theory is that whatever is going on in the company, others have access to it, and can know what's going on and understand it. For information about this topic, please visit our website argosy.edu. There you can find our phone number or an address to come and visit our Salt Lake City campus.

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