When Kyocera was founded, Inamori had an engineering background and knew virtually nothing about management or accounting. However, he soon faced situations where subordinates came to him for management decisions on all types of issues.
He spent countless days and nights worrying and wondering what criteria he should use to make these decisions. He decided to always ask himself, "What is the right thing to do as a human being?"
He applied the same criteria to accounting. When he came across an accounting matter that he did not agree with, he insisted on understanding the essence of the matter and tried to make decisions based on "What is the right thing to do as a human being?"
This process gave rise to the Kyocera Accounting Principles, which are rooted in understanding the fundamental principles of accounting rather than following common practices.
Accounting figures are like the instrument panel in an airplane. A pilot is able to fly the plane by looking at the instruments and judging altitude, speed and bearing. In like manner, successful managers look at accounting figures to judge the state of the enterprise and navigate the way forward to attain the company's performance targets.
If an aircraft's instrument panel is not working properly, the pilot will not be able to fly the plane correctly. In the same way, if accounting figures are inaccurate, the company will, at the very least, fly off course.
In other words, accounting is a compass for the company's managers. This is why accounting is so essential.