Chapter 13: Double-Entry Bookkeeping, Triple-Entry Bookkeeping, and Audit Reform—The Beginning of Audrey's Training
His expression remained calm, but in a profound tone, he slowly said:
"The truth of history is far more complex than the legends."
"Knowing certain things will not bring you any benefit."
An ambiguous sentence that neither admitted nor denied anything, yet it successfully established an air of mystery, leaving the three to their wild imaginations.
Zhou Mingrui felt that Nairn was implying that the secrets of the Blasphemy Slates and the pathways of the godss involved high-level power plays, and at their current sequences, they weren't qualified to know.
Alger, on the other hand, believed that this gentleman was warning them not to pry too much into the domain of the gods, lest they invite calamity.
Only Audrey felt that this gentleman was protecting them.
He must know all the secrets, but because they were too weak, he was unwilling to tell them to prevent them from getting into trouble.
Mhm, this gentleman... he really... I'm so touched?
That didn't seem wrong... However, Nairn soon brought up a new topic, interrupting her thoughts.
"Miss, for the additional cost, I need you to promise me one thing."
"Please, speak," Audrey nodded obediently.
"I need you to learn something."
"Now, as our first lesson, I will first teach you a most basic and important concept."
He extended a finger and traced it lightly in the void, as if writing something.
"Remember this: all the wealth and transactions in this world can be summarized and recorded with one most basic formula."
"That is: Assets equal Liabilities plus Owner's Equity."
"Assets = Liabilities + Equity."
Nairn said it once in standard Loen and once in Ancient Hermes.
This concise and elegant formula, like a bolt of lightning, instantly cleared Audrey's chaotic thoughts and left the eavesdropping Alger and Zhou Mingrui stunned in place.
What was this? Some kind of ancient alchemy formula? Or some mysterious incantation?
It sounded like it was related to wealth?
However, Zhou Mingrui was fine; after all, he was a history graduate and had some understanding of the bookkeeping methods of this era. He could tell that this table seemed to be a clearer and more standardized recording method.
He had also encountered the concept of "Double-Entry Bookkeeping" in modern times.
Fortunately, Roselle had not fully integrated all modern knowledge. Nairn still saw many opportunities to use modern professional knowledge as a dimensional strike to achieve his goals.
So to speak, for those who copy literature or science, as long as they haven't sprinted into a modern society, there will always be room for a modern transmigrator to show off their skills.
But wait, Old Roselle's own grades weren't that great, were they?
That's understandable; the Emperor was just an Emperor... If this were a steam age without supernatural powers, there would still be plenty of opportunities to leave a name for oneself.
(Note: The original text didn't mention content related to Double-Entry Bookkeeping. Given the era's background, assume these concepts are not yet mature.)
(Even if they were mature, there's still the Triple-Entry Bookkeeping mentioned in this chapter, audit reform, and more professional knowledge like credit ratings, asset depreciation, brand marketing, or other deeper knowledge that can't be exhausted—unless you tell me Roselle mastered every modern academic discipline.)
On the other side.
"Assets equal Liabilities plus Owner's Equity?"
Audrey repeatedly chewed over this unfamiliar formula in her mind, her emerald eyes filled with confusion.
She knew all three words, but combined, they formed a brand-new concept full of logical beauty that she had never encountered before.
Although she was a noble lady, she had been exposed to her family's industries and accounts, yet the formula before her was completely different from any bookkeeping method she knew.
Her family had vast industries and specialized accountants responsible for managing finances. She had curiously flipped through those thick ledgers, which were densely packed with various incomes, expenditures, loans, inventories... chaotic and complex, giving her a headache at a glance.
But now, Mr. Nairn actually said that all of this could be summarized by such a simple formula?
How was that possible?
"I know it's hard for you to understand right now," Nairn continued to explain in his persuasive tone, as if seeing through her thoughts.
"Let me give you an example. Your family owns a manor; this manor is your 'Asset.' But to buy this manor, you might have borrowed a large sum of money from a bank; this loan is a 'Liability.' And the value of the manor minus the bank loan, the remaining part, is the wealth that truly belongs to your family, which is 'Owner's Equity.'"
"Any transaction will cause the numbers on both sides of this formula to change, but in the end, the equation is always balanced. For example, if you use cash to buy a batch of goods, your 'Cash' asset decreases, but your 'Inventory' asset increases, and the total of the formula remains unchanged. If you borrow money from a bank, your 'Cash' asset increases, but at the same time, your 'Liability' also increases. Both sides of the formula increase simultaneously, remaining balanced."
Nairn explained the core principles of "Double-Entry Bookkeeping" in the simplest language.
These were just basic introductory accounting facts on Earth, but in this era, they were nothing short of a heavy bombshell.
Audrey was mesmerized; she felt as if she were seeing a door to a brand-new world.
So, those complex and chaotic accounts could actually be organized in such a clear and logical way!
If she mastered this method, wouldn't she be able to see through the true financial state of her family at a glance? Wouldn't she be able to easily find loopholes and problems in the accounts?
This wasn't just some bookkeeping method; this was clearly a form of "Power"! A power that could see through the essence of wealth flow!
"This... this is amazing!" Audrey couldn't help but praise, "Mr. Nairn, what is the name of this bookkeeping method?"
"It's called 'Double-Entry Bookkeeping'," Nairn said with a smile. "It can help you establish a 'balance sheet' and an 'income statement' using a standardized format to clearly show your family's financial status at a specific point in time, as well as the operating results over a period. With these two tables, any financial problem will have nowhere to hide."
"I understand!" Audrey's eyes grew brighter and brighter. "If I learn this, I can help my father manage the family's industries. I can let him see my value!"
She would no longer be just a pretty vase who only attended balls and drank afternoon tea; she would become an indispensable core member who could create actual value for the family!
"Exactly." Nairn was very satisfied with her perception. "This is only the first step. Once you have mastered 'Double-Entry Bookkeeping,' I can teach you more advanced knowledge, such as how to analyze financial statements, how to improve audit systems, how to perform budget management, how to assess investment risks... and even a theory more advanced than Double-Entry Bookkeeping called 'Triple-Entry Bookkeeping.'"
"After all, 'Double-Entry Bookkeeping' is not perfect. It can only record transactions that have already occurred, reflecting a static slice of the past. It cannot tell you what the future will be like."
"Cannot... tell the future?" Audrey was somewhat puzzled. In her view, being able to clearly reflect the financial situation was already a very remarkable thing.
"Mhm, and 'Triple-Entry Bookkeeping' adds a third dimension—'Budget' or 'Capital Change'—on top of the double-entry dimension of recording 'where funds come from and where they go.'"
Nairn's voice became slightly more serious.
"Every transaction needs to record three aspects of information simultaneously: first, the source and destination of funds; second, the expected impact of this transaction on future value; and third, the deviation between this expectation and the goal you originally set."
"Through this method, you not only know what you did in the 'past,' but you can also clearly see how far you are from your 'future' goals, and you can adjust your business strategy in a timely manner based on the 'deviation.'"
If "Double-Entry Bookkeeping" allowed Audrey to see a clear "present," then "Triple-Entry Bookkeeping" unfolded before her a dynamic scroll leading to the "future"!
This was no longer a simple accounting technique; it was a comprehensive thinking system that integrated budgeting, management, and strategic planning!
Audrey felt as if her brain didn't have enough capacity to process it all.
She strove to digest every word Nairn spoke, feeling as if a door to a new world was slowly opening before her.
Beside her, Zhou Mingrui was even more shocked as he listened.
He could still understand Double-Entry Bookkeeping, as he had come across it in his previous life.
But as for this "Triple-Entry Bookkeeping," he had never even heard of it.
The way he looked at Nairn became increasingly complex—filled with expectation, curiosity, and a trace of... admiration for a fellow transmigrator.
Nairn continued, "The essence of 'Triple-Entry Bookkeeping' lies in its introduction of the concepts of 'time' and 'credit.' It's not just recording; it's a form of forecasting and management. Mastering it is equivalent to possessing a crystal ball that can glimpse the future fate of an enterprise."
He even added half-jokingly, "If this ideology were combined with certain mystical powers, it could even give rise to a brand-new, decentralized value exchange system based on 'consensus' and 'timestamps.' But that's getting too far ahead of ourselves."
What he was describing was, naturally, the embryonic form of blockchain and virtual currency.
These advanced concepts left Audrey and Alger in a fog, completely unable to understand.
But Zhou Mingrui understood!
Decentralization! Consensus! Timestamps!
Isn't this just Bitcoin?!
Zhou Mingrui felt his worldview being rocked once again.
His gaze toward Nairn shifted from seeing a "high-level transmigrator" to seeing a "humanoid cheat code."
Nairn had no idea that his "plagiarism" had already caused Zhou Mingrui's imagination to stray ten thousand miles off course.
He threw out another hook.
"Once you master all this, you will be more than just your father's capable assistant. In all of Backlund, and even the entire Loen Kingdom, you will become the most sought-after 'Wealth Consultant.' Your wisdom will become your most powerful weapon, bringing you influence and a voice far beyond your imagination."
The blueprint Nairn painted made Audrey's heart throb.
She could almost see herself using this knowledge that transcended the era to talk eloquently before those self-important gentlemen and nobles, impressing everyone and eventually standing at the center of her family's power.
And all of this stemmed from the mysterious gentleman before her.
Her gaze toward Nairn had changed from initial curiosity and awe to include a deep sense of reliance, admiration, and—affection.
Just how many secrets was this gentleman still hiding?
"I... I will definitely study hard!" Audrey promised solemnly.
Nairn then introduced the structure and function of the income statement, as well as its relationship with the balance sheet.
How to replace chaotic old ledgers with clear concepts of capital, liabilities, and net worth.
How to introduce the essence of an auditing system alongside Double-Entry Bookkeeping—a systematic verification mechanism designed to resolve information asymmetry, reduce principal-agent risks, and thereby protect property rights and optimize resource allocation.
This knowledge, for Nairn who came from modern Earth, was merely mandatory general knowledge for his hobby of stirring up trouble for excitement.
But in this era, in this world where steam and the Beyonder intertwined, things had not yet progressed to this stage.
His purpose for teaching this knowledge to Audrey was very clear.
First, to cultivate a qualified "money bag" for himself.
Audrey was the daughter of an Earl and already had a great opportunity to access or even manage her family's vast industries.
By mastering these financial management tools that transcended the era, she could quickly establish prestige within her family, gaining a significant voice and financial power.
When the time came and Nairn wanted to do something that required financial support, Audrey would be able to provide him with a steady stream of help.
Second, to pave the way for Audrey's "Spectator" path.
The persona of a "smart and beautiful noble lady" who is proficient in finance and auditing and skilled at discerning the truth from numbers was itself a very good way to "act" as a Spectator.
This would help her digest the potion faster and stabilize her foundation.
Third, and most importantly, this was a pure achievement of human civilization's wisdom.
It did not involve Beyonder powers or touch the realm of the gods, yet it could generate an influence more powerful than many Beyonder abilities.
Furthermore—unlike the civil service system mentioned later.
It was very safe and did not involve specific personnel distribution.
Instead, under this cloak, it held the greatest power of this era's savage development—capital.
Using this method to cultivate Audrey was both safe and allowed for a very deep foreshadowing, laying a solid foundation for her future operations within high society.
Nairn was already imagining a grand play for the future—
When Audrey, relying on this financial system, became the "Financial Steward" of the House Hall, all of Backlund, and even the entire Loen Kingdom;
When she held the economic lifeblood of countless people in her hands;
As a "Spectator," she would truly possess the qualifications to "direct" one great show after another.
However.
"Heavy is the head that wears the crown."
Now that he was giving her some cultivation, just how well could she do?
He was similarly looking forward to variables and the occurrence of the unexpected.
But Nairn didn't like things that required too much of his own interference.
He hoped Audrey wasn't just a decorative character.
Alger listened from the side, and although there were many terms he didn't understand, he roughly grasped the significance of it all.
He began to wonder if this method could be applied to his pirate crew... no, to the management of his fleet.
If he could precisely calculate the costs and revenues of every voyage and optimize the unreasonable parts through auditing, wouldn't his rate of wealth accumulation increase significantly?
...The subsequent plot didn't have many waves.
The proposal for regular gatherings and the naming of the Tarot Club were passed.
Seeing the topic become increasingly "high-end," Audrey felt they should return to a more "realistic" level, so she proposed:
"Shouldn't we all choose a code name for ourselves? We can't keep calling each other 'you,' 'me,' and 'him.' Communicating with real names is too dangerous."
So, everyone chose a code name for themselves.
"The Fool," "Justice," "The Hanged Man"... it was all filled with a sense of mystical ritual, making Audrey feel as if she had truly become a Beyonder walking in the shadows of history.
Just then, she suddenly remembered something and turned to look at Nairn, who had been smiling without speaking.
"Ah, right, and this gentleman! You don't have a code name yet!"
Her gaze finally landed on Nairn, full of expectation and curiosity.
As Audrey's voice fell, Zhou Mingrui's and Alger's gazes also focused on Nairn simultaneously.
They were all curious about what kind of code name this mysterious, powerful, yet more proactive and "grounded" existence than "The Fool" would choose for himself.
"Me?"
Nairn reached out a finger, tapped his chin, and put on a look of serious thought.
What should he choose?
"Wheel of Fortune"?
This card represented opportunity, the change of fate, and endless cycles, which fit the essence of his "Chaos Theater" quite well.
It also symbolized his arrival as a "variable."
However... someone already had the "Wheel of Fortune" card.
Then let it be "Lovers."
This card represented choice, union, relationships, and opposition; its meaning was very rich.
Moreover, thinking about the "Angel of Time" Amon he might encounter in the future, that fellow who liked playing pranks—playing with him while using the code name "Lovers" seemed... quite exciting?
Perhaps, even without the requirements of the [Chaos Theater], he was a fellow who pursued excitement and fun at his core.