Accountants are made, not born. (Or, How to become an Accountant.)

The challenge to someone who has made a career decision to become an accountant is: How do I become one?

A critical area of importance in becoming an accountant is education. Choosing the right university degree and right accounting designation is not an easy process.

Once you have decided the educational path to take, it is important to consider what career path to take. The most difficult question for someone starting their career is: How do I get my first job?

This question is difficult to answer, because most companies looking to hire want someone who can do the job and not have to be trained. So where does this leave the first time job seeker?

Co-Op Programs: The best way to get your first job is to have already had some experience. Co-op programs at universities are an excellent way to get that critical first job experience.


Clerical Office Work: Another way is to find an office clerical summer job. Accounting is more than just office work, but it is office work. Getting a summer job where you will help out with clerical tasks in an office can give you a feel for some of the key components of work life in an office. If you've graduated school and have never worked in an office environment, do you really know what you're getting yourself into? An Office is certainly a very different place then Campus.


Volunteer: Volunteering to do accounting tasks for a non-profit is an excellent way to get a leg up on starting your career. Many non-profits in your town have limited funds to pay for salaries, but do have many accounting tasks that need to get done. It can be a great way to learn the job of accountant.

Who you know: Don't forget calling on family and friends. Someone you know (or someone that knows someone you know) runs a small business. It could even be a home based business. Offer to help an entrepreneur with their accounting (for a small fee) - they will be very grateful for the help and you can learn about accounting for a business.

Another point to keep in mind – there is no better time than now to start building your career network. As you begin your transition from university or college to your career, it is very important to start using LinkedIn. Facebook is great for college life, but has limits in its value in your future career life. (Read our blog post: Is Facebook a Career Killer?) The earlier you get your 'friends' into a career focused networking tool like LinkedIn, the more opportunity you will have to add value to your future career and future employers. In the business world, who you know is as important as what you know. You will want to have your network you have developed at school work for you in your career.

So, how did you get your first accounting career opportunity?

Social Media Accountants

The Accounting Profession is going through an evolution, and maybe even a revolution. This Group is for you if you are a Social Media Accounting (R)evolutionary.

Social Media tools are changing how Accounting Professionals learn and communicate with their clients, employers, the general public and their fellow professionals.

I believe there is value in having a forum for Accountants to discuss the W5s of Social Media and how it affects them. This has led me to create a new LinkedIn Group call Social Media Accountants.

If you believe that there is value in having a forum for this topic, please join and participate in the group, and ask others that are social media active to do the same.

I’m looking forward to your participation.

Are you ready to give up your CA for a CPA?

If you are a Canadian CA, there is a good chance you worked hard for it, and are quite proud of the designation. I know I worked hard for it, and I am proud CA.

Buried in my emails recently I found a letter from Bill MacKinnon, FCA, Chair of the CICA Board of Directors discussing two points of concern for the future of our profession that came up out of a recent meeting of leaders’ of our profession.

The first point of concern for our leaders, which addresses “Pathways into the CA Profession in Canada” is continuing down the slippery slope that was created when the CICA started accepting training for new professionals outside of an audit firm environment. While I do have concerns in this area, this is currently overshadowed the 2nd point of concern – A Canadian CPA. (Click here to view the new logo).

Yes. That’s right. The leaders of our profession are considering a Canadian CPA designation.

As a CA, I have been proud of the efforts in past years to brand the CA designation as the premier accounting designation in Canada (and the world). Now it seems that globalization of the accounting profession (which most recently has Canadian GAAP being replaced by International GAAP – IFRS) has made our leaders hedge our bets on our historic name and brand, just in case we need to “start consolidating into one or two global professions”.

What the future holds for Canadian CAs and the constituents we serve is currently unclear. It is not clear as to whether we can currently call ourselves CA, CPA or both together.

A few years back when the profession in its wisdom wanted to merge with the other accounting professions in Canada, our members were very clear that it was not what the grass roots members wanted.

My initial reaction to this development is: “I’m not interested, but I am willing to listen - you’ll have to convince me.” I believe that many CAs will have the same reaction. I hope that the leaders of our profession ensure that they properly consult with the CA members across the country, and not just make an administrative decision that deeply affects our attachment to our profession and to our brand.

What is your reaction?

Growing Businesses and the Accounting Function

A Visionary Entrepreneur has the talent to build an amazing business from scratch, while overcoming multiple obstacles along the way. Many visionaries do not give enough attention to the accounting function as they grow their business into a successful enterprise.

A small business as it grows needs to ensure that it manages its cash - accrual accounting and month end closes are not critical - focusing on building your business is.

As a small business becomes a big business, it is time to stop treating the accounting function as a necessary evil or as a means to an end, but as a critical and crucial part of your business.

Successful businesses need accurate and timely information from their accounting department that will allow them to make appropriate and profitable business decisions. Receiving incomplete and possibly inaccurate accounting information 45 days after month-end does not benefit the business.

As companies grow, they classically underhire in their accounting department. Thinking that they are saving money, they are delaying the inevitable.

Process. Procedures. Controls.

Companies that have not focused on these three words while they were growing had better start. These three words are the basis of accounting for larger companies. These three words will provide managers and owners with accurate, reliable and relevant information to be able to make appropriate, timely and profitable decisions.

If you find yourself in the situation as I described, do not despair. Your accounting department can deliver. You need to you put in place a plan to quickly to remedy the current situation.

How?

While many companies believe that hiring people to fix an accounting department is the right approach, it may not be the first step to take.

From my experience, when a company needs to fix its accounting department, the first step to take is to bring in a team of accounting consultants to put in process, procedures and controls. This can be very effective in ensuring the growth of their company. Companies that fix this problem first, and then hire the right people for their department, are in a much better situation.

The challenge of being a Visionary continues as your business grows. Building an effective and efficient accounting department will allow you to have the information necessary to continue being that successful Visionary.

The Hottest Opportunity in Accounting?

Being that I speak to a lot of people in accounting, I continue to get asked "what is the best opportunity in accounting today".

There are a few now. Treasury is hot. So is Accounts Receivable and Collections. This shouldn't be a surprise, especially in the era of "Cash is King".

However, one area that continues to be hot, and is at an ideal time to enter into, is Starting your own accounting practice.

While this area is not for everyone, I highly recommend you read this article if you are considering (or would potentially consider) starting your own practice.

If you feel that this could be an opportunity for you, please feel free to contact me directly.

Have a successful day....
Samuel

Collateral Damage? US GAAP’s use in Canada may no longer be accepted

In November 2007, the United States Securities and Exchange Commission (SEC) accepted foreign issuers to prepare their financial statements using IFRS. This will allow Canadian companies, once IFRS compliant, to file their financial statements for SEC purposes without any additional changes or reconciliations.

(Read our previous article on IFRS here).

In February, The Canadian Securities Administration (CSA) released a Concept Paper on the possible changes to Securities Rules relating to IFRS. In this Concept Paper, they are considering no longer allowing Canadian companies to report in US GAAP for Canadian Securities purposes. Having heard about this, we thought we would let our comments known to the CSA. Attached is the Question from the Concept Paper, as well as our response.

If this subject is of interest to you, we highly recommend that you read the Concept Paper. Should this concern you, we recommend that you let your thoughts known to the CSA – the deadline for comments is April 13, 2008.

__________________________________________________________________

Question: Do you agree we should not allow a SEC issuer to use US GAAP for financial years beginning on or after January 1, 2009, with the exception that a SEC issuer filing US GAAP financial statements in Canada for its most recent financial year ending on or before December 31, 2008, could continue doing so until 2013? If not, why do you disagree, and how, if at all, would you modify existing rules?

Answer:

No, we do not agree.

Reason 1. We disagree for sound business reasons. While Canada is choosing an honourable position to converge accounting standards internationally, Canadian companies continue to access significant capital in the Unites States. Companies currently choose to report in US GAAP for business reasons – mostly because investors in the United States prefer to invest in companies that report in US GAAP. Taking away the opportunity for Canadian companies to report only in US GAAP would only be increasing their costs by having to report in IFRS for Canadian purposes and US GAAP (chosen for appropriate access to capital markets).

Reason 2. We have found the SEC decision to accept IFRS for foreign issuers a great step towards the admirable goal of one GAAP acceptable worldwide. It is important to note that winds of change continue to blow through the United States, from internationalist to protectionist and back again. Considering the speed in which the SEC has moved towards acceptance of IFRS for foreign issuers, we are concerned that political events could cause the SEC to change its mind just as quickly on the acceptance of IFRS for foreign issuers. Because of this risk, Canadian companies must be able to choose to continue to report in US GAAP.

We would not propose to modify existing rules for reporting in US GAAP.

Accounting for Overtime

From the beginning of time in Accounting, Overtime has been a requirement.

This weekend, KPMG advertised in major newspapers across Canada to inform their current and ex employees that they are offering them additional compensation for their Overtime. They are not doing this out of the goodness of their heart, but as a response to a class action suit launched by one of their former employees in 2007. (I'm curious as to how long it will take the other Big 4 in Canada to make the same offer.)

KPMG is being reactive rather than proactive, and I’m sure this will be a topic for discussion when it comes time to recruit staff, whether out of university or experienced staff, not only for KPMG, but all accounting firms, especially the Big 4.

Accounting firms have always had a reputation for requiring Overtime. Prospective Accounting graduates wanting to work at an accounting firm have always been aware of this requirement. So what’s changed?

It seems that Generation Y is not so interested in working too hard. And who could blame them? They don’t need to. Especially in Accounting, accountants with a few years of experience are in demand, and if they don’t like the conditions of their employer, they can find greener pastures elsewhere.

Accounting is a time sensitive business. Deadlines are always around the corner, and for work to get done in accounting, both at firms and at companies, overtime will be required. How companies manage the overtime they require their staff to work is how they will be rated by their employees, both current and prospective.

As I mentioned in a previous blog, Progressive companies are compensating their staff for the overtime worked, either in cash or in time off. For Generation Y employees, giving them flexibility will be helpful in keeping them motivated and retained.

The most overlooked skill in Accounting

Little boys and girls who want to be accountants when they grow up are usually interested in accounting because they LOVE numbers. They love adding, subtracting, number puzzles and like the idea of counting money.

This may have been the ideal profile for an accounting career in the past, but accountants today are required to be much more than analyzers of numbers. Accountants today are looked up to by business people to assist in making business decisions, preferably profitable ones. Successful accountants are not only able to analyze the decision options and make recommendations, but also have strong communication abililities, specifically written communication.

The accountant's involvement with the corporate MD&A (Management Discussion & Analysis) is a great example of how accountants are relied upon to provide analysis that need to be expressed clearly.

From my experience, accounting professionals with solid written communication abilities will have better career opportunities. While looking for your next career opportunity (or your next hire), keep in mind that a resume showcases written communication, a key success indicator.

Economic Outlook 2008: Effects on the Accounting & Finance Job Market

I have always looked at Economic forecasting as something of a voodoo science. Many economists and pundits have opinions of where the economy is going, and the beginning of a new year is always a good time to predict the future.

Thankfully, I’m neither an Economist nor a Fortune Teller. However, the general economic opinion on the North American market for 2008 ranges from “Cautious” to “Pessimistic”. I haven’t come across an opinion that says that 2008 is going to be a gangbuster year.

Being directly involved in the Job market for Accounting & Finance and subjectively watching trends, I do believe the following: No matter the economy in 2008, the Job Market in Accounting & Finance will stay strong.

I am confident in this prediction for the following reasons.

1) If the economy contracts, companies may cut people in core areas of the business directly related to revenue. However, companies, whether profitable or not, still need to produce and prepare their financial information on a timely basis. This still needs competent, intelligent and hard working accounting and finance professionals.

2) Accounting departments are not currently overstaffed. No one we speak to (either client or candidate) will admit to their accounting departments having too many people.

3) There may be fewer companies doing transactions, but I don’t believe that these transactions will grind to a halt. I do believe that companies with strong cash positions may acquire struggling companies at better prices than they could have bought them for in 2006/2007.

4) The strong economy has created a lack of work for Restructuring professionals. Many I have spoken to in 2007 are waiting for their turn for growth. This could be a great area to get new experience for candidates looking for something new and challenging.

One thing I am sure of – 2008 will be an interesting year. And as the Chinese Proverb says, “May you live in interesting times”.

Wishing you a successful 2008…

Samuel

Accounting Standards: USA vs. World (rest of the)

Convergence is the name of the game for standards in many industries, and the Accounting industry is no different.

Up till now, different countries around the world have had their own accounting standards, reflecting an introspective view of the world. As economies around the world focus more on globalization, the ability to understand financial information from different countries has taken on a greater significance.

GAAP (Generally Accepted Accounting Principles) are the standards by which accountants prepare financial information. GAAP is converging, and is on the road to being one GAAP worldwide.

IFRS (International Financial Reporting Standards) is the global accounting standard that is being accepted in more and more countries around the world. Europe integrated their standard to IFRS in 2005. Canada is set to accept IFRS to replace their accounting standards in 2011, and other countries around the world, including Japan and India, are getting with the program.

The major holdout, no surprise, is the USA.

However, something shocking happened a few weeks ago. The SEC (Securities and Exchange Commission) in the United States said that they will accept IFRS reporting for foreign private issuers (public companies from outside of the USA listed in the USA).

Not only that, but the FASB (the US Accounting Standards Board) and the IASB (makers of IFRS), are working jointly on some projects of significance, ensuring that some standards will be the same worldwide.

As Canada is getting ready for IFRS for 2011, we are too. Some of our clients are hiring right now for this convergence project. We are talking about IFRS, and are presenting at conferences across Canada in 2008 - We presented earlier this week in Toronto.

You may be asking yourself (or me) “who cares”. And that’s fair. GAAP isn’t an exciting topic (at least it is not supposed to be). Accountants care. Their world is converging.

Is this a good thing? I think so, because I’m a believer in the positive impact of economic globalization. More convergence on standards means less confusion on understanding others financial information. And this small part can assist in growing global economic health, which in the end makes the world a better place.

The Welcome Posting.

Welcome to CFO2Grow's Blog. Written by Samuel Dergel, Founder and Senior Partner of CFO2Grow, The Financial Statement should be of interest to:

1) Those that hire in accounting and finance.
2) Those looking to be hired in accounting and finance

The blog entries are Samuel's thoughts, in his search to provide information relevant to cfo2grow's clients, candidates and friends.

You may agree. You may disagree. And that's ok. Your comments on this blog are appreciated.