March 2008 - Posts
Some really keen young CA students have been asking me if they should start studying now for the School of Accountancy - our beloved SOA. The 2006 edition is visible in the below photo featuring the wonderful national treasure, Mick Norgrove.
And they don't mean just peeking at the CICA handbook every now and then, but really diving head first into case writing and extensive studying.
Oh dear no.
After one of the harshest winters in Toronto's history, spring is almost here. The next two months are not time to start cramming for the School of Accountancy.
It's time to wrap up your big clients, deal with your remaining work, and relax as much as possible.
Enjoy some sunlight! See your long lost friends. Get some exercise.
For Ontario writers the SOA is next - other provinces have different systems with varying numbers of exams at different times of the year.
Sticking with what I know, some advice about the SOA: relax!
June is far away.
You have three weeks of the School before you write the End of School Exam. During the SOA you will write two full practice exams with marker's comments. And before that, you have firm-sponsored training programs at most large and medium sized firms - and I hope at all the small ones too.
The firm-sponsored training is enough to get you moving - you'll learn the basics about reading and writing basic cases.
If you have a light workload and really want to study, practice your basic reading and writing - forming intelligent thoughts for fun. If that's not enough, I'll shamelessly self-promote and tell you to read my 'UFE exam and school related' ASX posts to at least keep you awake between diving into sections of the CICA handbook you're unfamiliar with. The CICA handbook is where the rules are found, but it's also a strong sleep aid and shouldn't be consumed in heavy doses.
Above all, don't study too hard right now.
There are many good reasons. Here's three:
- You have a limited supply of exams to practice on - 'save' them for when you know what you're doing.
- When you're studying by yourself - you probably won't have a study buddy right now - you're not getting effective feedback, so you're not learning as much from the cases as you would with a formal marking scheme.
- You're going to burn out and stop caring by the time you're supposed to be psyched up.
Burnout may be the most important reason to calm down and relax right now.
The big CA exams require that you be able to read complex scenarios, identify both obvious and hidden issues, and then write about them in one nice big intelligent response - pure case writing.
Burning out means doing cases for so long and so hard that you stop caring.
It's like training for a sport so much that you're no longer swinging your gear the right way, or practicing music so much you stop using the correct form with your instrument - you end up developing bad habits or worse.
Getting ready for the exam is like a steady warm-up. Don't move so fast that you cramp up and fall over.
You don't need a wish of good luck right now.
You just need to chill, so do just that.
In other news: the other end of the cycle is complete!
In happy - now you can really relax news - congratulations to Neil for getting his CA!
The scene at the winter 2007 UFE Ball reception area.
I've left him a congratulatory comment and encourage you to do the same. He, jokingly I presume, said that his blog now "has no purpose."
In response, I say, "If anything, you're building your "personal brand", to use that horribly cliched term, and have a sufficiently decent readership to encourage you to keep sharing the path you're on."
Although the temptation for authors is to only care about the latest and greatest writings they put out, a rich archive combined with occasional updates is a valuable resource of its own. I'm already sharing links to this site to current writers to give them pointers. It's unlikely that I'll always be adding exam tips - over time you lose touch with the nuances of the exam - but for the next while my knoweldge is at least fresh enough to be useful.
And as for my CA?
I submitted my paperwork a few days after him, swimmingly missing making the March deadline - as if I didn't want to steal his spotlight at this happy moment. Yes, I'm really that selfless.
Anyway, it looks like it's all scheduled to "go official" for me a month from now instead.
That's okay, though - I'm going on vacation for most of the month anyway.
Who flashes around their CA papers when they're on vacation?
The US is paying Iraqis to fight Al Qaeda. Smart move.
The men are complaining, however, that they're not getting paid now.
This is, in its own way, a continuation of two posts - the one I wrote about unions and strikes, and on pervasive qualities.
If anyone deserves to get their fair pay, it's these folks.
, for pointing out this, sadly, horrible and tragic story
It's bad enough to be an employer who skimps on paying their employees for showing up to a standard 9 to 5 job. These guys are risking their lives.
The November elections can't come fast enough.
This is what I think of when you say consulting.
The link pops up straight to a chart outlining a ten point scale showing how close someone is to quitting. Despite what you're about to read below, this is one scenario where you can actually replace many of the
instances of the word "consultant" with "auditor" in the above linked
will argue it's a matter of semantics between to distinguish between
"advisory" and "consulting" work, as the Big 4 - aside from Deloitte -
have largely shed their consulting practices.
Yes, "just legalistic semantics."
Until you identify the mindset present somewhat satirically presented by Getting Drunk in First Class.
Above: And they also often stay in posh downtown hotels.
Aside from being a way of doing business where you're actually setting up and running things versus just testing and suggesting, consulting has also acquired a kind of a bad rep from what I've seen. Just pick any Dogbert strip where he's consulting, really. The extreme satirical view is that someone shows up, points out what you already know - by asking the questions "what's going on" of your staff - then runs off while pocketing a big fee.
Are auditors special? Well, in the sense that they are supposed to actually dig a little deeper and often point out things you don't already know, yes. And in many other professional senses.
Not the least of which is that auditors are supposed to show impartiality and independence when checking out how a company is operating. CAs likewise have to be a breed apart, considering ethics in all decisions they make.
If you're found guilty of doing something unethical, you'll be brought up to the local CA tribunal, tried, and if convicted, will face penalties and possible expulsion from the profession. Ontario CAs can read about it quarterly in their institute's newsmagazine. It makes for some interesting reading sometimes.
Consultants don't really have this kind of oversight. And hence the reputation.
How does this all vaguely tie back Pervasive Qualities and to my study plans for the UFE?
The CICA positively loves to test you on your ability to identify ethical quagmires. Although the marking scheme is if anything, full of endless twists and complications, it's absolutely true that the difference between a pass and a fail can be as simple as managing to identify the Pervasive Qualities questions on the exam.
"PQ" is a generic term that can be described as "stuff you won't learn in most accounting textbooks". It's the ability to say, "hey, the professors are using their textbook expense account to buy furniture and clothing from the university bookstore, that's against policy and Wrong". Or to say, "tricking people into buying franchises which you now are doomed to failure so you can buy them back from them at a steep discount" is not only mean, but potentially criminal and reputation-harming. Or trying to pass of non-organic products as organic is Not a Good Business Strategy and yet another Very Bad Idea again for both moral and legal reasons.
As tempting as it is to say, "there's no way to prepare for PQ questions", that's a bit dispiriting, not to mention misleading. Reading the above paragraph is a strong step in the right direction, as is reading other past exams.
PQ questions are generally sprinkled throughout a few of the 7 cases you write during the 3 days of the UFE. They're truly easy marks if you can 1. notice them and 2. have a healthy conscience. Hopefully you succeed in the latter category.
The former is a little trickier, though. The good news is that you won't get something absoultely insane. The CICA won't force you to settle once and for all the debate on stem cells or the proper withdrawal strategy for Iraq - although if something along those lines appeared one day on the exam you should be ready to give it a go regardless, no matter how absurd the idea sounds, I mean my exam had a Bird Flu question on it!
They won't give you a brain-dead connect-the-dots picture. Your clue will often come in the form of an 'accidental' find, like a note or e-mail you stumble across with revealing facts, or some off-the-cuff remarks from an interview which seem have nothing to do with your primary accounting topic - but which do in fact offer you a rich window into someone's morally bankrupt universe.
The 2008 UFE will probably have an issue on it which was big in 2007 or maybe even 2006 - questions are written about a year in advance, often based on what was big in the news at the time. They can sometimes be updated a little to deal with current events, but I wouldn't expect a drastic last-minute change.
This leads to a fun little parlour game - well, fun if you're sick enough to keep talking about this exam a year and a half after having finished with it (my excuse is I'm helping this year's writers, so there) - I wonder what kind of general topics might appear this year?
This game is best played by people not studying for the exam, ironically. They need to focus on their question writing skills and firming up any weak areas in their technical knowledge of accounting and audit rules.
Having said that, the fruits of this kind of thinking could prove useful to them.
So what would I expect to see on this year's UFE?
Debt Covenants, and potential breaches. And similar topics.
They're easy exam fodder and having to calculate the relevant debt:equity ratios is an easy way to panic the ill-prepared.
Credit crunch stuff is huge and they've been talking about it since last summer, and even earlier, really. We had it on our papers even before this stuff was huge. I wouldn't be surprised to see it on an exam.
And of course, why would they just make it a boring, "audit a company with credit trouble" question? They could, but they know that's the "expected scenario". Be equally prepared for the scenario where you're a CA working as a controller or internal auditor and you're reporting not in an audit statement, but to the company's CFO or perhaps its audit committee and they want to know if they can build another factory or if the extra debt they need to take on will sink them.
I think I'll finish my idle speculation now, lest I coincidentally write up a scenario which ends up landing me in the same kind of trouble that occurred fictionally at St. Cedd's in Cambridge.
The TTC's workers are threatening to go on strike again next month, the CBC reports. The rather angry comments left in response jive with me to some extent, though my reaction is muted by the fact I've seen how much idiocy the drivers have to put up with.
Part of the TTC union's campaign is to divide the public transit service's economic value by the number of employees and to settle on the result as the employee's value added. Before the economists in the audience bust a gut laughing or just have an aneurysm explode all over their monitors, this quote from the above page's comment list nails the fault in that logic:
Do the TTC employees honestly beleive that they are
each worth a million dollars? Who are they kidding? I work for a
company that has revenues of 346 Billion. With 40,000 employees, does
that make me worth $8,650,000.00?
Having said that, some of the TTC's employees do a hard job while still showing customers a polite and friendly face as they deal with varying levels of incompetence from management and abuse from passengers. Yes, your streetcar is delayed, but the government bought vehicles over 20 years ago which have an unfortunate tendency to freeze their air valves when it's -10 degrees Celsius outside. You can't blame the drivers for that, but rather some idiots in charge of purchasing 20 odd years ago.
Still, is shutting down the city for a few days the most effective way to deal with the fact that the raise you're being offered is a paltry 2 to 4%? I'm not so sure, especially given the relatively low level of inflation we're enjoying in Canada right now thanks to our strong dollar and the fact that the union pretty much guarantees you employment for life.
Subway dropping off the 'riche' at Rosedale station.
As much as I could be annoyed by the upcoming strike, the last one didn't affect me aside from making me laugh since I was biking to work that day, and the next strike won't begin until April 1, which means the snow will be
mostly gone and it should once more be easy to bike to work again.
Hot on the heels of Toronto's union issue, I hear of more strike actions, this time in New York, New York, as Francine reports.
I wish I could say that I'm shocked to hear that yet another union drive is facing intimidation from management, but Aramark has a pretty lousy track record. I still recall the many, many union and student actions against Aramark and Sodexho in my university days.
Although my sentiment may be justly called arbitrary, I find I'm much more sympathetic when someone earning $10 or less per hour is fighting for a better wage versus someone who is already getting almost $20 an hour.
What does shock me is the amount of "stick to blogging about accounting, unions have nothing do with the topic" responses that arose in response to Francine's article.
If your accountant thinks unions don't have anything to do with accounting, fire him for gross incompetence. And more than a little inhumanity to their fellow man.
One of America's most celebrated industrialists made a Big Deal about paying his workers a decent wage.
Although there's plenty of nuance behind the economic theories regarding whether or not this works in an economic sense - yes, figure out your productivity and profit levels and all that - but on a human level, if you can't pay your employees a decent wage, you suck.
I mean, you may be a very nice person and all, but if your company has nothing but dead-end $20/k a year jobs to offer because that's all you can afford, you're not doing a very good job of contributing to the economy, and as a result, suck on the nation's resources more than you contribute.
And if you can pay your employees a decent wage but choose not to, you're scum. Record labels get tons of scorn - and suffer the indignities of online piracy - in at least part because they have a very nasty reputation for abusing the artists they ostensibly support.
The Big 4 have managed to escape most of the bad press by actually treating their employees relatively well. No, not perfectly - insane busy seasons and related sins do exist to various degrees - but in most areas, ranks and positions you'll probably find yourself at least earning a wage at or above the GNP per capita, and in many cases doing quite well for yourself.
So it's sad to see it fall apart in this instance with contracted services, and considering how expensive NYC is, it's probably the most appropriate place to pull a labour action.
This leads to two questions that haven't really been fully addressed, but are nevertheless definitely accounting related - if you're going to pedantically pull everything back to this topic of accounting and all:
- How much should you be paying your cafeteria staff?
- What's the level of quality you want for the food you're serving your professional employees?
Note the cute but important trick employed in the above questions - I'm mixing a dash of social justice for your poorest staff, with a dollop of creature comforts for your well paid "stars."
Do you really think the food you're serving is going to be any good if you're shortchanging the food preparers?
If you want to attract the best and brightest to serve your clients, don't you also want to attract the best support staff as well? I don't think anybody expects a short order cook to end up driving a 2007 luxury car, but is having cash on hand to support a young family too much to ask?
So why satisfy yourself with pay that just barely matches the industry 'floor' - why not get staff who want to work at your company because they enjoy the job and know it's better than that offered by the competition in the given area?
So there you have it: my long-winded response to the anonymous comment which went as follows:
... the story is relevant to the cafeteria workers that are
affected and what Aramark is doing is completely unfair to them, but
trying to link the controversy to PwC is lame.
The linkage between ugly union fight and the importance to the company that outsourced the work in the first place is clear, and it marches gamely.
If you have a decent workplace, the risk of unionization is relatively low to non-existent. If not, you have a red flag.
And red flags simpy don't fade away just because they're being waved a few "degrees of outsourcing" away from the top company.
A happy event I alluded to earlier has finally come to pass - people have started sending me things with the hope that I will give them some word of mouth attention.
Having been a student journalist, I'm an exceedingly easy target, I must admit.
My plan was that I wasn't going to write about it right away, but it's a slow night and I had fun playing with it already - which is a coded way of saying I'm a sucker for anything with a blinking blue light.
What you see there is a portable iPod charger. Note the clever alignment which allows you to use the audio plug while charging. To design it any other way would, of course, be insane.
My relationship with that piece of Mac hardware is a funny one. I got the iPod for free, and now I got my first ever accessory for it for free too. I think the accountant in me would've said, "but your cell phone can also play mp3s for you" is what kept me from ever actually buying the player. That, and the fact that it seems like everywhere I turn there's a contest where I can win one, so buying one seemed to be - and was - unnecessary.
So what's the deal with the charger? So far, it works as advertised. It only connects to 'modern' units - 1st generation pods need not apply, sadly. It comes with a couple of batteries, and I got a cute little mini-travel speaker which doesn't seem to be part of the 'regular' kit. Going back to the industrial design aspect, yes, they made sure you can plug the travel speakers - which are in fact larger than the iPod nano - while using the charger. The whole combination can actually stand up on a desk. Clever.
The only immediate negative is the "Energi to Go" slogan which hurts my fingers when I type it. Yes, I get your branding. Replacing the "y' with an "i" in Energy is just cloying, though.
Using disposable batteries to recharge another rechargeable battery - that of the music player itself - is, however, the height of wanton profligacy.
I do, however, have a handy supply of rechargeable AA's. I'm already curious to see how well they'll work.
My plan is to put the device through its paces with the included lithium disposables and see how much playtime I get out of them. I get to keep the review device - something that separates this exercise in so-called "consumer journalism" from a normal 'real' review. That and the fact that I qualified for getting the device by virtue of being a chatty online type of the target demographic - so I'm sure I'll have plenty of chances to torture the rechargeable batteries.
Of course, the obvious question that has gone unanswered is, why don't you just plug it into a travel USB charger instead of using this thing? Excellent idea, if you have one.
As I don't - and I leave my charger cable at home - this is one piece of geek hardware that might actually come in handy.
I'll end on the observation that I really respect matchstick's style. Viral marketing has gotten a bad rep - one of my friends immediately sort of joked that he has to close his eyes and run away screaming when he witnesses it - but the little 'thanks for trying out our stuff' letter mentions that they'd like you to openly mention that you've scored their swag by way of their program - no secret promotion which will only end up biting you when people realize you haven't given them full disclosure.
Well done on that front.
And the fact that they also sent a giant pink bunny with drum and sunglasses - yeah, the big mascot - was a nice cherry on top.
Seriously, the last thing I expected was to receive a cubic metre of toys at work today.
(They were scheduled to arrive next week.)
It led to some funny conversations in the office. Especially as people frisked the toy rabbit to find the battery compartment. They figured it should actually walk around and bang its drum. Many were disappointed when they learned it's just a static toy.
There's nothing wrong with it on the level of a stuffed animal, but it's hilarious to see how strongly people have been conditioned into expecting that the rabbit should move the way the one in the commercials does.
.ǝɹǝɥ ʇɥbıɹ sı
.ʇı ǝzıʇǝuoɯ puɐ ʎɹʇ p1noʍ ʎǝɥʇ ʇɐɥʇ ǝsuǝs sǝʞɐɯ .spɐ ǝ1boob ɥʇıʍ ʎʇ1ǝʌou sʇı ɟɟo ʎǝuoɯ sǝʞɐɯ ǝʇıs ǝɥʇ pǝɔıʇou ı
Two links to share today. First, some more of my writing at a place other than www.krupo.ca - I was invited by Nancy Zimmerman to write a guest post on taxes and was happy to share some tips. Go here to check it out.
Another interesting article is this essay from the CEO of Stardock on piracy. One of his most clever points is a stark admonishment of the pirates running amok in China and other countries where intellectual property laws are a complete failure. A quote:
We also don't make games targeting the Chinese market
When you make a game for a target market, you have to look at how
many people will actually buy your game combined with how much it will
cost to make a game for that target market. What good is a large number
of users if they're not going to buy your game? And what good is a
market where the minimal commitment to make a game for it is $10
million if the target audience isn't likely to pay for the game?
If the target demographic for your game is full of pirates who won't
buy your game, then why support them? That's one of the things I have a
hard time understanding. It's irrelevant how many people will play
your game ... . It's
only relevant how many people are likely to buy your game.
Stardock doesn't make games targeting the Chinese market. If we
spent $10 million on a PC game explicitly for the Chinese market and we
lost our shirts, would you really feel that much sympathy for us? Or
would you think "Duh."
How long before this actually begins to affect what gets published, though? I wonder.
Galactic Civilizations II is well worth the money. And when I have time, I should really check out Sins of a Solar Empire. But I have quite a backlog of games to catch up on, including GCII!
The developers, aside from knowing how to make a smart game, have the Right Attitude on how to work with their customers - as opposed to "dealing with" customers. Another quote:
The reason why we don't put copy protection on our games isn't because
we're nice guys. We do it because the people who actually buy
games don't like to mess with it. Our customers make the rules, not the
pirates. Pirates don't count. We know our customers could pirate our
games if they want but choose to support our efforts. So we return the
favor - we make the games they want and deliver them how they want it.
This is also known as operating like every other industry outside the
PC game industry.
Kudos to them for identifying the fact that users don't like being treated like criminals, and are rewarding a company that delivers what they want.
Unfortunately you won't learn how to pass most exams with this knowledge, but applying the rules or tips in Dave Pollard's "When not to use e-mail" posting will make you a much better communicator.
This list applies to all people, but there are specific insights for auditors. Especially when you're starting out, and you find yourself thinking, "this is great, I can just e-mail everything and wait for answers to come back."
Although it can, funnily enough, often work in spite of Pollard's list, it's important to know how this can and will fail.
Above: there are media other than e-mail which you can use for communication, more successfully too
Remember, that time is precious, and e-mail can unfortunately waste it. Consider these two 'rules'.
3. When you are seeking information that is not simple and straight-forward
4. When you're sending a few people complicated instructions
The rules are tightly linked - the more confusing something gets, the more likely the response to your request will either be delayed or completely ignored.
If I'm short and to the point, my writing will be better. My better posts here are the ones where I go back and expand my confusing points and kill my weak ones. The same is true for my e-mails - you need time to make it truly concise.
But what those points don't address explicitly are scenarios where something is actually simple, but looks complicated. Yes, you can try to explain it better when you write it, but if it's too long it's inevitable that you'll miss a point or say something that someone can interpret differently, leading to misunderstandings.
Given a moment to explain a problem in person, you can react to people's questions immediately, avoid weeks of back-and-forth chasing, and finish everything it in 5 minutes flat. Similarly, if it's a long list, you can break it down into small pieces that are easy to digest.
You don't necessarily have to take things to the extreme of showing up in person every time you need something - follow-up requests, even for relatively 'complicated' things ' - will be much easier once you've had a chance to gain an understanding about how things work.
Simple instructions with no ambiguity work great though: if you can
summarize a process in a few simple points, then e-mail is probably a
good medium to distribute the instruction.
What about proof?
The other caveat levelled at the list is the idea of doing more verbally rather than by e-mail is, for auditors especially, you will have scenarios where you definitely need some kind of "paper trail" to document your conversations and activities. This isn't a deal-breaker though - if your Important Conversation was verbal, promptly document what you talked about, and retain any key evidence.
If it's a Big Deal that you need confirmation of, take things a step forward - instead of calling it a memo, call it the minutes of your meeting and send it out by e-mail to the other persons requesting approval. It's both polite and formal way to receive confirmation that what you talked about is agreed to by all participants. If someone sends you "minutes" and you disagree, do send your response back saying what the correct wording should be!
I noticed this list when Dave referred to it in his discussion of how to work without e-mail. What he describes can easily be accomplished by using the Calendar function in the big e-mail suites. It's an interesting idea - and without getting into details he says the technology exists to do this. And I agree that it does - the crux of his idea is that you should only send out invitations for in-person meetings or "FYI" messages which you think are useful. To apply this to existing systems, you can just use the Calendar function to set up all those meeting invitations, and mark your 'other' FYI stuff, as "FYI" materials sent with "return receipt" enabled. Some systems will then automatically notify you when your colleague reads the message you sent - no need for them to write an acknowledgement. If they delete it or ignore it, you don't get the return receipt and it serves as a handy function of how useful people think the information you're sending them will be - or whether they simply read everything you send, of course.
Speaking of reading everything that shows up, there are people who do read everything, and the others who selectively or often ignore e-mails. This leads to the last point on the list.
10 .To send news, interesting documents, links, policies, directory updates and other 'FYI' stuff
I couldn't agree with this more. RSS readers are one of the greatest modern data management inventions. Why stuff people's inboxes with information they won't read?
If you think it's important, encourage everyone in your firm to sign up for a "mandatory" RSS feed, including the key newsletters you hope everyone will read.
It won't guarantee that people won't just hit "skip" or "mark all as read", but then, there's nothing stopping people from deleting your newsletter when it arrives either!
One of the key benefits for the Top People to consider is that when They send out an e-mail with a Very Important Occasional Announcement, the chance that it will also be ignored will be significantly reduced because it won't be one of 40 newsletters that arrived that week all promising other important Company news.
If your company has or is considering using RSS feeds for these sorts of things I think you should consider yourself very lucky.
Even before I started my current job, I ran into the phenomenon of people - young people - who can't handle complicated e-mails well.
When I was less experienced I had the naive idea that everyone understood that if you saw the following ...
>>> Let's get pizza.
>> No let's get wings
But you're buying
... you would know that the "pizza" and "okay" lines were written by one person, and the "wings" and "you're buying" lines were written by another person. I love the idea of threaded conversations, but then again, I spent well over a decade getting used to this method of communication.
Of course, some people didn't spend any portion of the 20th century online and as a result the above exchange would look baffling.
The choice was adapt or continue to confuse increasing numbers of people.
It's still true, actually that for some people, the e-mail medium is much more nuanced than Dave gives it credit for. Of course, his points deal with the 'average' user, whereas grizzled veterans can turn long-winded e-mails into a sort of art form, much like the letters people used to exchange in earlier centuries which ended up being published in fabulous volumes.
How much of a geek does it make you if you believe you're turning e-mail into "art"?
Now here's an interesting accounting-world related question - don't roll your eyes at the sight of "accounting-world" and "interesting" in the same sentence - if you were to almost reduce the sales-side of the equation and focus only on the cost of delivering audits, with a small profit margin to keep things running smoothly, could you deliver quality audits? Of course, it happens all the time with smaller firms that have lower overhead - which is why sole proprietor CAs can serve many small clients and charge lower fees to scoop up business from entrepreneurs.
I wonder, though, if this approach is applicable to big firms too?
I haven't given this too much detailed though but the big thinkers are all over this all the time it seems. Something that definitely deserves some more attention and information. Like knowing what proportion of revenue is used to cover sales and administrative costs, for example
It'd be interesting to see what would happen following removal of "traditional" marketing from large tiers of the market - not just in audit/accounting, for that matter - and if it would improve matters.
At one extreme, you have ad-free Cuba. At the other extreme, well, look outside.
That Google search in the previous link is actually very interesting - it points you to this article about Sao Paolo - where they've banned billboards. Check out, the photos are beautiful. Makes me wish our city had the guts to do something this cool.
My aunt's delicious cakes would sell themselves, if you could find them in stores.
There's another 'extreme', or at least fad, of course - viral marketing. Word of mouth and all that.
I'm prompted to think about all this perhaps less because
I'm about to overthrow the capitalist system, but rather witness
another delicious byproduct of it - some swag is headed my way. Full
disclosure will accompany it the moment it arrives, as I'll treat it
the same way I would treat the CDs and movie passes that showed up at
my newspaper's offices back in the school days - with ruthless
critical attention, or praise, if earned.
In a way, the old newspaper industry is the original 'viral' marketing, as is old media, in it's broadcast itself to the millions and billions mode, generating 'buzz'. Buzz is harder to create these days, so small firms pop up to try and create a new process to catch all those people who have given up on newspapers and TV. Oh, like me.
One of my arts editors and friends was an early-blooming culture warrior, vowing to sell the free stuff for beer money and to cover more off-beat stuff. We did a bit of both - taking the review-worthy goodies and bashing the heck out of them or singing their praises as appropriate
So it doesn't matter if a star appears on a late night show, and
promotes upcoming h/er book or movie. Or that when a newspaper gets
free samples, it reviews said products. If I don't see it on Videosift
or somewhere on my way to work, I'll say "huh" or, more appropriatley,
"eh?" when you mention it to me.
But what I've really done is wandered off on a massive tangent. There is a connection here, though, and it's glaringly obvious: audit firms, in their classic incarnation, are the original progenitors of the "viral" phenomenon, or its more well known ancestors, "word of mouth" and "networking".
Any decent audit professor will spend some lecture time teaching the class about how, in Canada at least, CA firms can't advertise their services in an overt fashion.
Or else what? You lose you CA, that's what.
The whole idea being that tacky ads will tarnish the profession. Think of SNL's ambulance chasing lawyer commercials, and the real deals for that matter too.
So, since time immemorial, the antiquated, "I know someone who knows someone who's good with taxes" and the "I went to school with her and her firm sounds good" system has reigned supreme.
The, "this person on myspace is promoting their band, come listen to them" system, then, is just another market's way of doing the same thing.
Given some of the recruiting videos I've seen online, it's almost as if the big firms are even aware of this too, and given the above thinking, I'm not surprised. Now if they could only dial back on the cheesiness in many of the productions and increase the, production values, then it might even look like they know how to do it well too.
Will sales forces have to stay in their current incarnation for some time to come? I know they will - but will it be a waste of resources? I'm intrigued.
Here's something post that Growth, Nancy
and just about any Canadian should care about: a quick look at the
current status of interest rates paid for small cash investments.
Let's see how three banks measure up on 1 year GICs, as of right now:
TD Canada Trust: 2.05% or 3% (poorly defined money market version)
ING Direct: 3.75%
I didn't do an exhaustive search because there are charts available at baystreet.ca and redflagdeals.com, among, no doubt, a few other places too that do the job for you.
I figure banks must have decided that people are so sufficiently lazy that they'll take whatever product they're offering instead of moving their cash over to another bank.
Only that can explain the over roughly 2% difference between the lower TD rate and the over 4% rates on redflag.
What I like about redflag's site is that you can sort by any column, making it easy to identify who gives the best 1-year or 5-year rate. I had trouble confirming the 4.4% rate offered by PCCU, but seeing as how I don't live in Saskatechewan it might be hard to bank there in the first place.
Then again, maybe you can.
Achieva is another credit union, this one in Manitoba, offering even higher rates than ING, 4% for their GIC and 3.85% for their savings account. Their FAQ doesn't mention, however, whether you need to live in Manitoba to bank with them. It'd be nice if they just told you, rather than making you wonder and google for an answer.
Sounds like you can definitely use them even if you live outside Manitoba. A shame they don't make that more obvious.
Unless things have changed in the last three and a half years, the Manitoban Credit Union option has a major drawback - online transfers aren't as sophisticated as at ING and other banks. And there are fees involved for doing various types of transactions. But the interest rates are best.
The "straight" rates, anyway.
Once your savings program has hit a point where you can swing around $5000 or more - congratulations to you on your diligent saving - don't forget that those abysmal rates at the Big Banks are negotiable.
How to get the best interest rate on your investment.
If I'm ever going to offer some valuable free advice, it's this: print out the list of rates from whichever online bank appeals to you, and go down to your local bank branch, and say, "entice me to keep my money here."
If you have more than one branch to choose from, you live in a town of more than 10,000 people.
Now once the first bank you've gone to has matched (ha!) or beat (good start) the competing rate, get the offer in writing - they'll usually promise it for a few days or more - and go to the competition.
Oh yes, capitalism can work for you.
Repeat the exercise until you get bored or have completed the exercise of canvassing your street.
Take your cash to whoever has offered you the best rate.
In case of ties, select the most convenient bank with the lowest fees, best service and cutest staff. This will, of course, vary according to your locale. And the deal you're offered will, of course, be most generous the more cash you pile on, so try and get all your pennies in one big bundle before you start on this exercise. If you have less than five grand, this exercise won't be as effective - you're better off using one of those high interest daily savings accounts until you reach the sweet over-five spot.
Bonus Advanced tip: if you're a Telus Mobility subscriber you may get a perk to use a concierge service for free. If you're feeling particularly crafty, explain your plan to them and have them call a few banks for you.
Concierge services are fun that way.
By phoning around instead of walking into branches, though, the "cutest staff" test is unavailable.
Whichever method you choose, good luck.
Last fall I was ready to write up a little article about the lack of glamorous in business travel. Well, then I got busy, put writing on hold, got to travel to Europe for a couple of weeks of work, and found the idea had shelved itself but quickly and quietly.
Having said that, check out Gelato baby's account of a 36 hour trip home from Helsinki with an emergency stop in Glasgow to see how quickly things can go sour. It's a very amusing article.
It also reveals how quickly travel can go wrong. All you need is one big missed flight to throw you for a loop.
Which segues to the fact that it's been almost a year since my last vacation. It's about time to start planning the next one.
This time it's going to be the West Coast. I'm not done going through the list of friends who have put down roots out there, but at the moment it's looking like I'll be able to see 15 or more people in 7 cities over a 10 day period. Wait, I just thought of another three. Make it possbily 18 people.
We'll see who's free.
This will, of course be an epic road trip.
I won't be taking my car. Instead I'll be skipping across the country by plane, and then taking a rental down the coast. Should be fun.
My rental will probably be an "American" car, as contrasted with my "Japanese" Mazda.
It's funny how people identify cars by their brand. It makes perfect sense, until you start to think about it. Mazda is partially owned by Ford. As a result, many of the metal parts are stamped FOMOCO. One of my friends told me the seat belt assembly is built by a Canadian factory. I imagine there are components from more than just Canada, US and Japan too.
So is it truly a Japanese car? From the quality angle, it sure is. From the 'provenance of its contents', it's more Canadian than anything - that is, a cosmopolitan "citizen of the world".
Except that it still apparently included a 6.1% import duty in its cost. Ouch.
While doing some research to determine if the rate is in fact 6.1% - seems like it is - I found this very interesting study prepared by Industry Canada.
It talks about the effect of opening an automobile free trade agreement with Korea. Apparently the economic analysis shows that Koreans would increase there market share in Canada while Canada would double the number of cars it sells in Korea.
Of course, that would be an increase from 57 to 106 cars. I re-read that carefully to make sure I saw the number correctly.
We apparently sell more cars to Guam than Korea.
Everyone loves Guam. The name of that nation just sounds fun. And Guam loves Canadian cars more than Koreans do.
A funny side effect of the WTO - Canada used to only charge the 6.1% duty for cars produced by non-North American companies. North American companies with subsidiaries overseas, like Saab, were exempt. The WTO said that's not fair, and it wasn't
Canada could either repeal the 6.1% duty, or nail all cars produced outside with the duty.
Faced with constant turmoil from any negative action against domestic automobile production, Canada applied the 6.1% against all 'foreign' cars.
If I end up getting something like a Mazda 6 as my rental car I guarantee you that I will break out in a fit of gleeful laughter when I they hand me the keys.
Insane time pressures are nothing new to auditors. It's the reason staff slave away from the break of dawn until close to midnight.
If you're on a well-scheduled job, though, you may actually enjoy 8 to 5 or 9 to 7 hours during busy season - and not just if you're an IT auditor like me.
Who do you thank if you do end up on one of those wonderful jobs?
Your resource/scheduling coordinator, immediately, of course.
But who do you thank for allowing the job to proceed at such a 'leisurely' pace in the first place?
The answer? As you'll see below, it's the same person who can also cause you to end up racing until midnight every day for weeks to finish before an insanely tight deadline.
A new cfo.com article entitled "Common Auditing Screw-ups", discusses the results of a survey of European Big Four audit partners who describe ways clients make audits difficult.
There are several high level issues, but what stands out for staff are the ways clients' decisions impact their lives. A few examples:
- "Insisting on tight deadlines but being late in preparing for the audit."
There were several points on the same theme and this is the most obvious way staff are affected. If a company has a year end on December 31 and wants to release its audited financial statements in a month or less, the staff are going to be working insane hours. Guaranteed.
Assuming that the audit team didn't do plenty of advance work in the last few months of the year before December 31. But even that won't allow the whole job to be done with speed unless the client's systems allow for production of financial reports near instantly.
Systems that can do that do exist, but in many companies it still takes a couple of weeks to get the raw trial balance information processed.
- "Assume that the auditor can work in a vacuum; the best results are achieved by working together."
- "Not dealing with our request list."
- "Unscheduled absences of key client personnel, both in the accounting department and other functions."
I'll just make a general observation on the above list: it's key that once you set yourself up on a certain schedule, that you give the audit team enough support to get things done on time. That means making sure that everyone you need to explain things to the audit team is either present, or has an alternate person who can explain how things worked. It's very helpful if people do have an unavoidable vacation, though, to at least inform the audit team in advance so they can ask all the questions they have in advance.
Another point in the article's list is about penny-pinching on logistical support, IT hook-ups and work space. Although it's not always easy when your office is cramped, if there's any large unoccupied room, do plan on surrendering it to the audit team for all or most of the audit if possible. It's funny but true: the large the audit team, the smaller the audit room. Audit teams won't work faster if they're all crammed into a tiny space.
The less space you have, the harder it is organize your work, especially if you're dealing lots of messy paper files.
- "Lack of senior management sponsorship of the importance of audit – 'tone from the top.'"
When the staff of the company being audited know they need to cooperate with the auditors, "for the good of the company" - or at least, their jobs - they're generally much more helpful. I've been blessed by going to clients where almost everyone is always willing to drop everything to help me answer my questions.
These are, of course, the same places where the vice presidents and general managers are likely to greet you in the hall and ask if you're getting all the help you need. It's a wonderful feeling to be asked that question.
Try to return the favour, of course.
Whether or not the client's personnel are willing to drop everything to help, my colleagues and will try to make sure we're showing up at a good time - sometimes they'll ask for us to return later in the day - and it's only more than logical to be happy to oblige.
But most people adopt the attitude that "this has to get done, so let's just do it".
Either way, work should move along smoothly.
- "Making claims of improvements in processes or controls that turn out to be inaccurate."
This is a bad idea - because auditors can't just take your word for it. They're going to have to investigate any errors or problems identified in the prior year to see if they've been fixed.
And not only that, but auditors will staff the job based on the claims made by management. If the client says everything was fixed, then that means the auditor won't need to send in, say, a 10-person team to do detailed work. Instead, the staff are reassigned to other clients.
As a result a smaller team shows up, only to find that the now 5-person team still has to do a 10-person job if things still aren't working in the new and improved fashion.
This is a somewhat extreme example - I haven't personally experienced the 5 vs 10 scenario - but I wouldn't be surprised to hear of other people who have nevertheless suffered this kind of trouble, as this happens on a smaller scale too frequently.
- "Poor audit trails and documentation of key accounting decisions."
Auditors can't assume anything. Which makes sense, really. What's the point of an audit, other than to say, "yes, we checked out the claims management made and found that there's evidence to back up their claims."
That also means you need to have evidence that you did things you said you did.
- "Improperly document the 'thought process' in arriving at certain estimates/judgements inherent in the preparation of the financial statements and the sensitivity to alternative options/accounting choices."
Same idea as above, except for a different scenario.
- "Not providing us well thought-out documentation as to management's conclusions. These don't need to be set in stone but at least provide a basis to have quality discussions. We can't audit by 'interview.'"
You can tell that cfo.com really didn't bother to condense the interview responses into a single general point, as this is the third time they said almost the same thing on this topic.
- "Underinvestment in high-quality technical accounting expertise. The result is that issues are either not identified at all or are identified too late, and are not properly documented with high-quality technical analysis and solutions."
This ties in nicely into a related cfo.com article which recommends beefing up your internal audit department. Since internal people are generally less expensive than auditors, you get additional staff to help in various ways. This can work well, as long as you structure your IA function in a way that external auditors can rely on their work. That is, you have to make sure your IA group is in sufficiently way independent - the details on how to do this properly are a bit more technical and too try for general readers - this is definitely one of Dennis' "20% value points".
Thanks to Dennis' "accounting news widget" for pointing out the link. And yes, at the risk of creating a circular reference - I hate it when that happens in Excel because I click on the wrong cell - I was also inspired by the anonymous accountant to revisit this topic, this time more from the client rather than the auditor's side.
The table's starting to fill up.
I've been slowly updating my little link list lately, adding in more sites. After noting earlier with Neil that it's awfully quiet out there, anonymous accountant is suddenly back and Life of an auditor is brimming with lively conversations and topics.
Which is perfect.
Couple that with more experienced people like Bill, Dennis and Francine - who is enjoying a huge traffic spike of her own - and this is a pretty healthy community. There's several other sites brimming with useful information, of course, but it's late - you can find them on my link list or on the other sites' link lists.
More than enough to keep you busy.
Wow, I'm rather impressed, shocked, and maybe even a little confused.
Spam fell down to 965 in February. With a grand total of 29 days, that's almost a full month, but it's less than a third of the 3097 from last month.
Zach noted a drastic fall back then too. Interesting.
I'm obviously pleased that some kind of crack down has decreased the amount of spam clogging up my little corner of the internet. Let's hope this happy state of affairs persists.
I just realized that every happy thought needs a dark cloud - it's time to reset all the non-leap-year compatible time pieces.
I can live with that, but it'll be annoying when I mix up a date two weeks from now because I forgot to change a date on a fax machine somewhere.
Would you like to:
- go to work and meet people who smile at you and are genuinely pleased to see you, or
- show up at work and find people ducking and hiding when they hear you approach?
Unless you suffer from some odd psychological condition, you'll probably pick #1.
Now if you're an auditor, ask yourself - which of those scenarios describes how people treat you?
Anonymous Accountant abandoned writing over a year ago, yet there's an incredibly long discussion on how much "audit sucks" and how miserable people feel in the audit profession. Sounds like there's far too many offices where:
- Staff receive too little guidance;
- Petty office politics rule the day;
- Every day feels like agony;
- Accounting students run away from your company before even applying; and
- People are either leaving as soon as they can, or have already left.
Reading sites like that is eye-opening. Although I hear horror stories from some of my friends, I can't personally vouch for living all those scenarios, as I've found myself a happy little niche in the audit world where a group of intelligent friendly people do good work and leave people happy.
Which is to say, my colleagues and I experience "scenario 1" most of the time.
One of the respondents to the comments summarized things quite nicely, though:
Remember, client personnel are only used to dealing with PITA, unhappy
auditors. It takes a certain personality to be happy, cheerful and
pleasant, while dealing with 1) something as idiotic as auditing 2)
getting information from and giving out extra, unpaid work to
already-over-worked-client-staff. (I’ve already had a client manager
who wanted to offer me a job; his entire staff treat me like I’m one of
them, by inviting me to lunch, and generally chewing the fat/joking
around about movies/books/food/family, and I’ve only been there 2
weeks) I hope this helps you guys a little bit. But I hear you about
the disillusionment and disappointment.
I find those words very wise. Those are words written by someone who understands how audits can go Horribly Wrong, but who also knows how to do things properly - in a decent, humane way.
Not everyone believes you can pull this off. I once heard a visiting manager say "you can't please everyone all the time." This was one of the few depressing ideas I ever confronted in a workplace. Well, yes, some people are curmudgeons who seem to take pleasure in making your life tough, but aside from those outliers, most people are genuinely helpful, proud of the work they do, and willing to help you get your audit work done so they can back to their day job.
Adopting a positive attitude, you can get a lot done. Thinking that you're doomed to deal with unhappy people so you might as well be a jerk to them is the message I read from the above idea, and I've fiercely resisted it all along. I feel like I'm repeating myself - I may have very well written about this before - maybe I've just said it before.
Aside from not stressing out over life, are there any other ways to make an audit experience smoother? Certainly.
And there's only one idea worth sharing: prepare.
There are two ways to prepare.
First, figure out what you're going to do before you talk to your client. Yes, you can have a "planning event" in your office, but just sitting there while the partner and manager talk won't prepare you.
Make your own list of things you need to do your job. Patient charts, derrick inventory, list of credit memos.
When I have to rush out to a client without studying everything there is to know about what I'm about to do, I know things are going to be difficult. People are busy, and they don't want to have to explain basic concepts to you.
So the second way to prepare is to make sure that you understand the things you're asking for in the first place.
If you're dealing with a health care company, learn basic health care concepts. If you don't know what a patient chart is, what exactly do you think a hospital uses to track patient records? If you don't know what an HMO is, google it fast.
Energy companies? Make sure you know the difference between a derrick and a rig.
Banks or any finance department for that matter? Oh sweet mother, don't mix up credits memos and debits cards.
If you don't do these things, the client will laugh at you. Later, when you leave, they will. Legends will be formed if you're really unprepared.
Where will you find all this wonderful information? Last year's files! Examine them, skim through the esoteric parts at first, and get a handle on what's going on. Your colleagues should also know - ask them!
Supplement any gaps - perhaps there is no prior year file because it's a new client and nobody you're working with knows a thing - scary thought! - with some web searches so you understand the basics about the business you're auditing.
There's a cultural barrier that prevents a lot of people from asking for help.
Rip that barrier down like the Berlin wall, now.
Above: famous last words: "It's not the Berlin wall, but it'll do."
"Asking for help" takes many forms, and includes, but is not limited to:
- Asking your manager or senior to explain the work you're supposed to perform. Even if they already told you how to do it, ask again if the explanation was unclear.
- Asking those same people if you find something unexpected. Doing this sooner rather than later is universally acknowledged as a Good Thing
- Asking your client to clarify something that was unclear. They may given you the wrong information, or maybe the process changed since last year, so maybe now Bob the VP signs cheques, not Ed from accounting. These things happen.
- Telling your manager that you don't have enough time to get the job done without killing yourself.
I myself have even been asked, "do you have enough time to do this job?"
I've confidently said yes. I've laughed hysterically - and then said no.
Asking for more help is important. If you're booked to work 40 or 50 hours, and it looks like it'll take 60 hours of work, make it known that either your schedule is wrong, or you'll need help.
The former scenario's a bit tricky - in 'crunch' situations you may indeed have to pull some long days.
But you can only work as many hours as your health allows.
I'll gladly put in a 60 hour week if I have to finish a tight deadline. I did it in university, and I'll do it for my job when it's needed.
But if you expect me to operate that way for more than a week or two in any given season or year, you're insane.
People burn out. And as much as it's the fault of Big Companies and Big Bosses for working people too hard, you have to be able to say, "um, no, this doesn't work", otherwise you're also victimizing yourself more than just a little bit.
And if you're burning out your client won't love you as much, because you'll become bitter and angry, and that's a Bad Thing.
So relax, follow the above advice, be nice to others, expect the same, and if you don't get a positive reaction, keep at it until things improve.