A Counting School - Hardcore Chartered Accountancy

Is Stolen Property taxable income? It is in the US! Amazing US tax law "Fail"/"Win"

 There's actually a rule on how to treat "stolen property" on your US tax return:

"Stolen property.   If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner."

Someone reported a robbery? 

As usual, I remind you that I'm not offering you any tax advice here - hire a professional if you need any of that. Of course, I don't think the target audience for this bit of tax law would even care about my disclaimer - they probably have other issues they should instead be dealing with.

What makes this funnier is seeing this featured on Failblog, although I stumbled upon it courtesy CPASuccess - thank guys, that's just epic. Possibly be an epic win rather than a fail depending on how you look at it, though.

I was going to say "I don't have the US tax code on hand to verify if this is in fact real," when I first saw it on their blog, but then I skipped back to the start of their post and then I realized CPASuccess actually linked to it, it's right there in Publication 17 - here's the hotlink. Yes, the Americans did decide to publish their tax code online.

Sweet!

The legends were true. I love how the US Government cleverly includes this "Other Income" line, which allows them to nail people for tax evasion if they somehow can't arrest them for the theft itself. How they would prove this is another matter altogether, but it makes you smile knowing that this is actually on the books.

Wouldn't it just be fitting to see a grassroots movement to declare certain US government 'subsidies' to be considered "theft" for this purpose to round out the tragic comedy here?

Can you get your 51 CA credits in a year and a half?

If you started, say, an engineering program at one given university, could you switch partway through to a Chartered Accountant prep program instead in the same university's business school, and quickly get all the credits you need to graduate in a mere year and a half?

One of the regular CA 'commentators' on the blogs and forums, sardaukar - who does an excellent public service in opening people's eyes to the "hell years" that await them as CA students, incidentally - did just that, and people wondered how this is even possible.

Since I'm not really into Sudoku, and this is just the sort of "puzzle" I enjoy solving, I'll answer the question for the writer of comment #427.

The funny thing about this exercise is that when you review the list of courses needed - I include links at the end of this article - many courses will count for "3 hours" even though they're full year, or half year. That means you can't divide 51 by 3 and decide that means you have to take 17 full year courses. Neither does it mean you need 17 half credits - you have to review the whole list. In addition, the University of Toronto requires that you take 20 credits in total to graduate, unless you started in 2000, the last year I'm aware of where they allowed you to finish with a three year degree.

Remember that the example we're dealing with involves someone who took electrical engineering - doing a quick edit before hitting "publish", yes I do that, made me realize I missed one assumption on my first run. I left my mistake in the post, but you'll see my correction at the end of the post.

The army of Chinese elementary school students leaving class just before the clock struck 6 p.m. is an image that somehow pops up when thinking back to the Commerce program. Very strange reason given the distinct lack of jumpsuits and long days in the classroom.

Your typical engineer faces a situation where the extra credits to hit 20 are already accounted for - let's take a look at what you need year-by-year, along with comments.

• First year: Economics, Intro Commerce and Math.

An engineer will have math accounted for no problem, and it'll be "hard math", not the "easier" Commerce math course with which you can squeak by, and still end up learning more than you will ever end up actually using. Running tally: 2 full year credits - excluding the math credit I presume you already got prior to deciding to become a CA. I was happy to get into the Commerce program without having to take the "Intro Commerce" full year program. I'm sure it's quite useful and helps give you a "big picture" of what you're getting yourself into, but I managed just fine without having my hand held by the Commerce administration in first year, thank you.

• Second year: For the ECO side, Microeconomics and Stats. For the Commerce side, Financial Accounting, Intermediate Financial Accounting I, Management ("Cost") Accounting and the Legal Environment of Business ("Krupo's other favorite").
  
• Plus add choice of side salad, fries or baked potato (translation: Financial Markets, Marketing, or Organizational Behaviour)
  

The "ECO" credits are both full year, the "MGT" credits (they call the course codes "RSM" after the wealthy Mr. Rotman's generous donation to the program, but like hell I'm going with the new taxonomy, I'm a product of the Old School) are all half credits. If I can still add despite being a CA, that's 4.5 more full year credits in total - running tally: 6.5 full year credits. Second year, if you were not rushing, would involve a nearly-full plate of courses in the Commerce program.

Two other fun facts about second year: the "Legal" course, which I loved, was previously a third year course, but for whatever reason they bumped it up earlier in the schedule, perhaps to encourage students to get to it sooner. Macroeconomics, to my dismay, is "strongly encouraged" but not required. That's a pity, and no doubt explains why someone in this stream would no longer be an automatic Economics Major. I find one of the strengths of becoming a CA is the strong background you get in Economics, which is why this development is such a shame.

• Third year: Intermediate Financial Accounting II, Advanced Financial Accounting Topics, Managerial Accounting and Decision Making ("Advanced Cost Accounting"), Auditing I ("Welcome to AuditLand"), and Canadian Income Taxation I ("Personal Tax. Those of you at Big Four firms may never again touch this topic after the UFE unless you leave for a smaller firm or do your own/friends taxes later"). The Finance MGTs: Capital Market Theory and Intro to Corporate Finance

There you go - 3.5 MGT credits plus an ECO of your choice* - total 4.5, running tally 11 full year credits.

A few more observations are in order - shoving the fourth year taxation course into third year is pretty clever, as it makes Rotman's students more competitive when applying for summer jobs with accounting firms, having some formal tax learning under their belts. Good call there. Advanced Financial Accounting is another fourth year course moved up in the queue. Presumably to also get those interns and summer co-ops in a stronger position in their summer jobs, I guess.

Splitting the full year Finance course into two halves was a surprise to me. Perhaps the ICAO's requirements were behind this. If anyone knows I'd be happy to know more behind that split, but nothing shocking there.

*There's that little asterisk popping up like a delightful footnote warning you that we've stumbled upon something that mildly infuriates me more than dropping Macroeconomics from the "required" list, and that's the list of courses you can't take towards your requirement. That "your choice" excludes what looks like the entire list of third and fourth year Economic History courses, it seems. Perhaps one or two snuck through, but my quick review suggests that this is not the case. Maybe this was always the case; the Economic History credit I took perhaps not doubt counted only towards my history minor and economics major, but I consider discouraging Commies from studying the lessons of the past an idiotic path to embark upon.

My friends agreed that the Economic History course we happened to take - Canada's, in case you're curious - was one of the biggest eye-openers throughout university. The amount of intellectual maturity a course like that can bestow upon you is simply amazing - it's one of those courses you hope to experience. The kind that makes you challenge everything you're taught in the other "this is how things work, don't question it and you'll do fine" courses.

If anything, taking something that makes you really think should be made mandatory. Anyway, let's climb off the soapbox and check out what lies ahead.

Let's not even get me started on taking the third year "Business Information Systems" course down from "required" to "strongly recommended." CAs need to be strong on their IT skills. Or at least not laughably deficient. Removing this course from the "required" list is a poor choice, although it definitely brings you a half credit closer to your target of rushing through the courses to get your "51 hour requirement" with a minimum of fuss.

• Fourth Year:  Management Control, Auditing II ("Going deeper into Auditland"), Canadian Income Taxation II ("Welcome to the Suck"), Critical Thinking, Analysis and Decision Making ("U of T's UFE Prep course. Please do well here, and can one several of you please then get on the Honour Roll to get us to stop looking bad compared to Laurier?"), and Auditing and Information Systems ("Krupo's favourite")
  

Six more half credits, equal three full year courses. Running tally: 14 full year credits.

It would be 15, but as I stated above, but we'll assume you already nailed the first math requirement as an engineering student.

Come to think of it, an engineer would probably already have taken a "hard stats" course, so you're down to the need to take 13. Missing "Stats" is the mistake I alluded to at the start of my post - did you catch it? If so, you win five bonus points, now add them to your Hello Kitty scorebook.

Is the 1.5 Year Thunder Run possible?

So can you do it in 1.5 years? Last time I checked, you can take 2 courses per summer term - and possibly 3 with special permission, if they still allow you to apply for that option - and 6 credits per winter.

Let's hold off on the "special beg" and see what we get as a "normal" student: start in "summer one" with 2, take a "full winter" of 6, and "summer two" with another 2. That's 10 credits right there. Then take your last three credits during half a winter term.

Boom, CA credits accounted for in a "long" year and a half.

Definitely doable, albeit at the cost of a couple of your summers: you're ready to graduate since I've assumed your engineering courses gave you math, stats and the other five credits you needed, no doubt including the "science breadth requirement".

In fact, if you could petition to "overload" your schedule and take 3 courses in summer and 7 in the winter term, you could start the process in September and finish it in August the next year - basically one calendar year!

Even hardcore Engies used to killing themselves with long hours of coursework might, however, find that a bit on the ridiculous side. Not that I doubt they could handle the load, but the more realistic argument for "spreading" things out over the extra half year or so is the schedule of "pre-requisite" courses which would conspire to slow down your sprint through the course catalog.

Edit: after I finished writing up this post I saw a follow-up post by Sardaukar explaining that the economics course were done as the "Engineering electives" prior to entering commerce. That reduces the load of courses even further, with the first, second and third year courses off the radar - all you then need is 10 credits, done with two summers and a winter term.

Source?

If you're wondering where all this information came from, you just need to search for the ICAO's 51 course credit requirements, or just skip that step and check out my links to the ICAO's webpage for the Rotman Commerce program, which then leads you to the Rotman page itself. There's also a detailed ICAO page for people who don't feel like getting a "Specialist in Accounting" designation, but they'll be one course short of the full 51 credits - that list is here.

The ICAO is quite helpful for everyone in Ontario, mind you - a list of all other schools is also available here if you're attempting this from any other place in the province.

To answer one question I already heard, the secret to this approach is doing it at the same university. Generally speaking 100% of your credits are transferable within the same school. When you start jumping from school to school you encounter limits on the number of "transfer" credits which are eligible for your degree - some limit you to 5 which would make the above strategy, which relies on 7 credits, less feasible.

Is this approach insane? Well I didn't it, but it's both doable and has been done - I welcome your comments - click here to start leaving them.

If you got all the way to the bottom of this admittedly lengthy post you must be a superfan - so it's worth mentioning to you that I somehow got listed a while ago on the top accounting sites "magazine rack" at Alltop. Thanks, readers, for following along the adventure.

How much do first year CA students make in Canada?

If there's one question students in university may find hard to ask - even though it echoes in their mind all the time - it's "how much am I going to earn if I get hired by a CA firm?"

If you're bold and outgoing and have friends who are already employed, this can be easier to find out. Otherwise, hopefully you'll stumble across either this post or the next forum as you turn to the all-knowing internet for answers.

Stefano at mycasite took it upon himself to contribute to our collective knowledge by conducting a public survey - you can see the results here and comment on the outcome in this dedicated forum.

He reports that the range of median salaries runs from $29,300 in Winnipeg to $45,000 in Toronto, with the size of the firm - big four or regional - playing less of a role than some might expect.

A fair question you may ask, though, is why there's a 50% increase just for moving over one province. This is explained by the fact that regional pay depends on the cost of living in various places across Canada, with Toronto being arguably the most expensive place.

Since we'll talk about quality of life, note that pretty much any CA student has it made, compared to people in most jobs in most of the world, unless you happent o enjoy pulling your own cargo rickshaw through insanely smoggy air.

The only area where the "cost of living" explanation falters is with the notable exception of Vancouver, which is notorious for being as expensive as Toronto - if not moreso - but with a market for CA students that ends up paying six thousand less.

Commerce and business students contemplating their future will not doubt weigh their options with this in mind. Chartered Accountants, having to take enough credits to earn a major in economics, no doubt keep in mind the fact that other professions compete for their strongest potential candidates, so wages have to track that accordingly.

Factors no doubt considered include the fact that knowledgeable students are aware that they'll be getting some significant benefits, both educational and financial from picking this route - you can roughly estimate the support an average CA student receives on their first UFE attempt in the neighbourhood of ten thousand dollars - as long as you pass on your first shot those costs are usually covered by your employer. Repeat writers suffer the burden of their additional attempts, which of course can add an additional level of stress to the exam writing attempts if you fixate yourself on it.

Money isn't everything though - a career in high finance will be more to your liking if you disagree though!

If you value your spare time, the quality of life you'll be enjoying in and outside of work is worth considering. Thinking back to the case of Vancouver, who wouldn't want to live with a milder climate, oceans, mountains and this year a Winter Olympiad too? Combine the higher population of people willing to live and work there with the conditions of the local economy and you get a more detailed explanation as to why average starting compensation is relatively lower there.

Chinese sales tactics: questionably awesome

One of the many fun things about travelling around the world is finding out the rather different way people do common tasks.

Surprises abound, even with something as prosaic as saying "Back in 5 Minutes."

At least, that's what I assume this meant in a Chinese mall. 

Hard ball haggling

At most markets and stores were haggling can happen, it's traditional for salespeople to lower their last price if you're walking away after a bit of haggling.

How odd to have the staff who will play hardball. You try and get a better price, but they don't want to budge.

So you leave - and they call after you twice, each time saying, "no, I'm not lowering the price any lower."

Sure, well thanks. Your sales pitch adds nothing to the conversation, bye. You walk away a third time only to get called again. "Ok, fine, we'll lower it."

Yay for persistence, I suppose. But on whose part in this case?

I've heard "no matter what, they're still making money." And that's no doubt true. But knowing that fact doesn't diminish the feeling of experiencing pure "win" when you are proved to be sufficiently stubborn to force some savings out of an immovable vendor.

Also pure win: the mandatory Santa Hat deployments in many stores.

Unexpected persuasion

When you're a male buying just about anything, you'll eventually encounter something a bit bizarre: the sales ladies' unique brand of flattery.

Big accounting firms talk a big story about the value you get from their consulting services. And sure, they do important, valuable work, but they're simply unable to compare with the tactics used to sell a jacket.

"You could be a model," they say.

Uh, sure.

That's not enough, of course.

They'll back up their words by smoothing out any wrinkles, and then - wait, what?

You feel a bit weird - "that was suspiciously close to feeling like a massage rather than a mere smoothing out of wrinkles. Do you not think this very pretty young woman I'm standing with who happens to be translating your Cantonese sales pitch into English for me might get a little jealous or something?"

Maybe she would be jealous too, if it wasn't for the fact that she almost fell over laughing so hard at what followed next.

Ignoring your prattling in English about how weird this is all getting, the expert sales staff continue to point out how nice you look in the mirror.

Next, they'll open up their product catalog, point to the model wearing the same outfit, and add "no really, you look great, just like this model in the photo."

Perhaps I do look great. But my judgment is now horribly clouded, so how should we continue?

Particularly if this is one of those stores where haggling isn't even permitted? Where's the fun in that?

Perhaps by fleeing with our wallet unopened?

Yes.

You've successfully escaped what you later realize was an excellent sales tactic to use on people who aren't paying attention to their own thoughts.

To answer your question, I didn't end up buying that particular jacket. That's because I was paying attention to the oddly effective sales pitch they were attempting.

Picking up on "subtle hard sells" is no doubt a skill you gain as you complete your CA training, or which you naturally acquire as an achievement from going on a few dozen such missions. Another skill an experienced CA gains when they hit the rank of senior managers is the ability to walk through walls, I'm told, but that's an urban legend to discuss another day.

The search for a good jacket ended well though: we found a much better one in an outlet store in Hong Kong a week later. And it being an outlet store, the sales staff only had one function: to discourage you from trying on the clothes.

Don't worry, it'll fit

Aside from being treated like a living mannequin, the third strangest quirk on display was the phenomenon of stores where "Fitting is forbidden."

Perhaps it's not unique to the region, but rather something I'm simply not used to, having been raised and spoiled in decadent Canada.

Fortunately, I immediately learned about one of the crucial loopholes: the rule does not apply, of course, if you're sneaky enough to find a corner to try on the item where they can't see you.

"Oh good it fits and I didn't get scolded for confirming that fact, time to buy," is hopefully the end state of this exercise.

I managed just that, found deals which were, of course, fantastic, and just this past weekend the jacket kept me toasty warm in -19 weather, which means that this inadvertent cultural immersion program was a great success.

My Life is Polish: rocks

Completely random promotion: check out My Life is Polish - the site is hilarious, particularly if you are of Polish descent.

If you're not, I recommend keeping a bookmark to Google Translate's Polish to English engine to get some of the jokes painfully true stories.

Example: Today, my mom poured water into our shampoo bottle and said "no to wystarczy do konca tygodnia". MLIP"

The "punchline", automatically translated by Google is "no it is sufficient to the end of the week".

Close, Google, but the correct translation would be "now it will last until the end of the week."

You get the idea regardless, but I submitted a correction to Google anyway. It'll be interesting to see if they fix it down the road.

Some work even if you don't speak the language though: "Today, I realized that all of my closest friends have been forced to memorize at least 3 words in polish. By me. I quiz them every couple of weeks and get angry when they don't get them right. MLIP".

And others will teach you a little about how the language works: "Today, I realized my cats names all magically turned Polish even after giving them Americanized names. Marley has turned into Marlenka and Ivan is now Ivanek Gegusz Malutki, there's also one named Bushka. MLIP"

Yet another set of categories serves to highlight the wonderful customs people have come to know and love: "Today, i was sleeping over at my friends house and i kept saying im not hungry. 10 mins later her mom brings in a plate of little kanapki. Never underestimate a polish woman when it comes to food. MLIP"

Is this a classier Polish version of FML? Absolutely. And it works marvelously.

Bonus "better translation by me" for you to enjoy:  "Today, My friend asked me out to "studniowka" ( POLISH PROM) . Excited i told my mom about it. Her response " jak to ciebie zaprosil? nie zna innej dziewczyny!!!" Thanks mom for caring :) MLIP"

The response was, "Why did he invite you? Does he not know any other girls?"

Stay classy.

Saving the world with smart meters

I once alluded to instances of ignorant rants being granted precious space in newspapers. The most recent guilty party was written by a Toronto Sun columnist who misunderstands what "smart meters" are supposed to accomplish.

Before you ask why I bothered with the Sun, I must explain that I'm willing to read pretty much any newspaper if you give it to me for free. It's in some ways a bad habit, although I've learned to fight it by skimming over the worst whiners.

I'm exposed to enough poorly thought out thought processes as it stands when I travel by air.

Closer to home, an angry letter writer lauded this column, blasting the provincial government of Ontario for having the audacity to try and get people to conserve energy for all the right reasons. The angry protests about forthcoming doom caused by power prices going up by a fraction of a penny was simply too much to take.

Let's not talk about whether we're under-paying for our electricity in Ontario, though, I have a more important point to make: we're often overpaying for power, and smart meters are here to help.

Columnist Lorrie Goldstein should instead have realized that the "smart meters", by charging you different amounts of money depending on the time of day you are using electricity, shine a spotlight on a simple fact: many of us are paying too much for our electricity.

His false condemnations, and the collapse of his argument, stems from his failure to understand the basic principles of how our electricity system works. Try to avoid reading the comments to his post, where people feel free to prance along on his merry dance of ignorance, because it's depressing.

We all pay for power plants that are not used at their full capacity for the majority of the year.

The following links provide the real life facts, from a couple of the many websites that track, manage and operate our power grids.

• First, the New York's ISO - kind people running New York State's power grid presents information in the bottom right corner with the current price of NY's power, plus how much power is being used. Late at night when people are already asleep, New York State uses around 14,000 MW - megawatts. This shoots up to over 20,000 MW later in the day. If you have friends who study or work in this field, you can easily learn to interpret the technical data that's publicly shared on the site.
  
• Ontario has its own equivalent of the NYISO, the IESO (Independent Electricity System Operator) which provides an even more elegant graph which presents the same kind of stats on power demand. You may note that, interestingly enough, that Ontario's load happens to be similar to that of New York State. The IESO page also shows a demand graph for the entire day - both the forecasts, and the actual demand. Dig a little and you'll find many more graphs, showing trends in pricing too.
  

When you're done digging through those stats, remember that you've learned something very important: there is a very obvious "peak" period when most, if not all power plants in a given region have to run to keep up with our demand.

But, it represents only a short period out of the entire day.

And this is where Goldstein fell on his face: he neglected to address the fact that there is a difference of sometimes double the amount of power being used between the low and high use periods.

As you can imagine, we keep a giant reserve of spare power plants that are idle during low demand periods, which then fire up during the "peak" demand period when everyone's lighting up their lamps and computers, or working in factories.

Does that "spare capacity" cost us? Naturally, yes it does.

If we got more people to use power earlier in the day - and therefore reduce the size of that "peak" - would it mean we would need less power plants?

Yes, exactly.

So how do you save money? By building fewer new plants, not having as many people staffing them, and not having to sell off so much of your power at "discount" prices because you're using it more consistently throughout the day.

With "smart" appliances the near future promises us devices which will work harder when power is cheaper and cut back on their compressors, motors and chargers when costs are high. Having your air conditioner work at a lower speed or simply shut off while power prices are at a "high point" would go a long way towards helping power producers manage their supplies more effectively. This being a free society, no one's going to stop you from running your A/C at full blast if you really insist, but you'll be charged a fair price for putting a strain on the system when it can least handle it.

Would this create a "new" peak period? Not likely: although you would see a "smoother" demand curve, there will always be plenty of activities which we'll all tend to perform during peak periods - like firing up stoves to cook dinner and running those aforementioned air conditioners - which simply can't be "shifted" to low demand periods.

Will it take time for those savings to percolate through?

Yes - but you're old enough to know that there wouldn't be an automatic magic change in everything, right?

All those fantastic concepts will take time to take effect: we don't blow up a hundred power plants overnight, nor do we replace all our appliances in a a few days simply because we have a great new idea.

The changes take time, and there will be growing pains as people shift and adapt their power consumption habits.

Before anyone at the Sun starts yelping that this is in some way "unfair," tell me this: how is it fair that people who use power late at night - when the price of power is as cheap as a penny or less - have to still pay the full 5 or 8 cent price for their power?

It's not.

It's shameful that people chose to score cheap political points over trying to help the planet - and local economies - by instead making intellectually bankrupt arguments such as the following quote from his column: "In a sane world, we’d be paying less for electricity now because the recession has blunted demand and when demand goes down and supply goes up, prices should fall."

By this point you realize why that shallow sentence makes no sense: anyone with a basic knowledge of economics - or common sense - knows that power plants have "fixed costs." Yes, you're burning less coal when the power plants are not running at 100% or even if they're off, but you still have employees who keep that building operational. You still have repairs and maintenance bills even if it's turned off! And nuclear reactors simply don't get turned on and off like a light switch. Starting those generators up is a messy, complicated and expensive process which operators avoid as much as possible.

The power mix in Ontario, which the IESO website displays on its main page as well as in handy chart form, is composed of different types of generators that are easier and harder to "control". So the neat and tidy "sane" world which Goldstein calls for is indeed on the way - but it'll take time to get there: the province has long term plans to introduce more 'fleixible' power plants which can switch on and of at lower costs, but our desire to control costs and deficits also means construction will not take place overnight either.

Now you inadvertently know the basics about smart meters - so if a question on this topic appears on the UFE, and this being a popular topic in the news, it very well could! - don't get bogged down in these details.

You'll just need to explain the accounting issues. Which'll be simple since they all started to pop up in the back of your mind as your read through this, right?

Stupid angry letters from ignorant people are an excellent source of vitamins

And by "vitamins" I mean, "topics to write about."

I had a very good university professor who shared opinion pieces and rants to the editor which were full of flaws - usually due the fact that the people submitting the articles did not have a clue about what they were talking about.

After we saw one particularly egregious example, I asked if he considered writing a letter to the editor pointing out the mistakes.

The answer was no, "life's too short."

And once you're a professor with tenure, flying to your country's capital on a weekly basis to testify before Senate committees on This Important Topic and That Giant Failure Committee, it makes sense.

As a student, I had time to complain, and writing poured forth.

These days I'm starting to pick my battles more, but sometimes you'll see that completely insane rant that screams to you, "this is stupid, and the many levels of "wrong" must be exposed with the burning light of knowledge and wisdom."

Kind of the like the Bat of Knowledge and the "You will learn" catchphrase from this site.

I've decided it makes sense, in terms of writing style, it makes sense to separate the introductory rant from the intelligent arguments, so look forward to an electrifying part two, where the failure is exposed in a cascade of knowledge.

Hope for 2009's unsuccessful UFE writers

Every December, about a quarter or a fifth of the UFE writers from the previous September get the bad news - despite their best efforts, they didn't pass the exam.

It sucks, but there's no reason to give up.

Much advice will then flow forth, and one of the most repeated points - "figure out what went wrong" - will mean more than just asking yourself, "what happened during the three days of the exam?"

Equally important, if not moreso, if figuring out what happened before the exam.

Speaking very broadly, you have two groups - the people who studied the "right way", and people who studied the "wrong way."

Figuring out which group you 'belong' to can help you debrief what went wrong.

I'm not really sure what they're trying to warn you about doing with that cable car.

If you studied the "right way" - with a study buddy marking your cases, following a well-planned schedule up to the exam, avoiding spending too much or too little time, refreshing your "learning points" from earlier mistakes - and still failed, then odds are something went wrong during the exam. Reviewing what you did at the exam hall itself - were you distracted or just plain unlucky? - will probably be the focus of your debriefing.

On the other hand, if you studied the "wrong way" it can be both easier fix the more 'obvious' structural programs, and sometimes harder to admit.

Ask yourself if you did all the things the "right way" first: and be brutally honest with yourself, because lying to yourself, to paraphrase the cliche goes, doesn't help you at all.

If you studied too hard and burned out, was that because your plan was too aggressive, you didn't follow the plan, or didn't have one in the first place?

Did other factors interrupt your studying - were you too worried about work, personal issues or other problems? Solve those problems before you try and study - if you can't, this will be a difficult stumbling block to overcome. The solution will of course depend on what kind of problem you're facing. If you lost your job, accept the fact it's gone, and focus on the exam. If you can't, it might actually be best to defer writing the exam and focus on resolving your problems first, instead of mixing your attention, which is just a recipe for catastrophe, of UFE-tastic-proportions.

Or did you just not study hard enough - not take the exam seriously enough?

These questions were inspired by the the discussion board at My CA Site discussing for more details on re-writing the UFE - check out that conversation for more details, or feel free to click here to leave comments.

Shopping and Christmas in "Communist" China

One of my friends scoffed when I said I was visiting "Communist China", and this photo is a good illustration of why the reaction is appropriate.

I'm not sure what's more impressive, really - the number of malls you'll find, or the scale of these shopping centres! Hong Kong is far more sophisticated in terms of how its shopping centres look and feel, but the mainland Chinese are definitely learning "how it's done."

The only thing missing here, really, are the crowds. No doubt because I arrived in the middle of working hours for most people - and this mall is relatively pricier than the street-front markets and the discount mall next door.

You'll notice, however, that Christmas-bunting tinsel is draped along the handrails. The commercialization of Christmas is bemoaned back in the West, but it's simply The Thing to do in China. In many stores and restaurants the staff (must?) wear Santa hats or other costumes. I wasn't surprised by this in Hong Kong, where the British influence left Christianity's mark in place - but the acceptance of the "Santa" aspect of Christmas in China is rather mind-blowing.

You'll be hard pressed to find proper Nativity scenes or other actual references to Jesus or any other religious aspects of Christmas in China, unless you're actually recording video: because the photos won't capture all the Christmas Carols being played over the PA systems.

Some of the Carols are the standard bland JIngle Bells tunes without any spiritual meaning, but you could also hear Silent Night and O Come O Come Emmanuel - which made me smile at the "subtle yet blatant" missionary work being inadvertently, likely being done a randomly selected CD.

Since it's Christmas season - and I'd like you to sort of hear what I heard - here's a randomly selected rendition O Come O Come Emmanuel.

Crispy Whitebait with peanuts

Is triggered by Junior Deputy Accountant, who seemed to enjoy my Bernanke photo - awesome.

I've just returned from a three week adventure in Hong Kong, including trips to mainland China and Macau, which explains why I've been so quiet lately.

As usual, I took tons of photos which tell the stories better than I could in most cases - I mean, how else can you explain Crispy Whitebait to someone?

Perhaps I should've actually bought it but I didn't really feel like eating chips that day.

I did write a bit of a micro-journal documenting my observations since I didn't feel like dragging my laptop along with me when I crossed the border.

China's ridiculously fast transformation into some sort of capitalist-ish economy under a one-party state is obvious to anyone who sees the construction of high speed rail lines and the rapid development of formerly sleepy towns into bustling cities - I'll share more of that soon. Looking at this through the eyes of a CA which means I'll have some vaguely "on-topic" observations.

Until then, in case you're wondering, Whitebait is a fish, not a distraction to a bombing run.

UFE 2009 Results are up!

 As I mentioned earlier, I was slow in checking results this year as I'm far from home - but Ontario candidates can find the ICAO's UFE 2009 results on this page.

[Edit - summary of all Canadian UFE 2009 results is up here.]

Congratulations to all those who passed. The ICAO has stopped disclosing the pass rates since I suppose they don't like the statistic viewed in isolation - but I never minded whether Ontario had a higher or lower rate. It's a tougher program to pass on your first shot because you get to write the exam much faster than in most other provinces - the CASB process may prepare you for a longer period of time, but if you're like me, you just want to go and write as soon as you're done the CKE and SOA.

You can read details regarding the ICAO's logic on this page and you'll see that 15% more people passed than last year in Ontario. If you're really clever you can probably deduce the actual pass rate. My company did fairly well yet again, and I suspect the increase in the pass rate may owe to at least two factors for everyone overall:

1. The new 2-day SOA exam no doubt helped prepare people!
2. Perhaps there were more writers overall?

If I was engaging in some full-on journalism I'd contact them to find out but I'm on vacation and giving people an easier way to find the results and congratulating my friends who passed - have fun celebrating - you should be out living it up right now. Or nursing post-pre-party excesses.

Edit: I hope the ICAO isn't going to change the links to their website yet again - above links updated as of Dec 23, 2009.

November hits 302, the waiting continues

This week the 2009 UFE results come out and I'll try and follow along - as long as you are in touch with CA students, there'll be people you care about who are waiting for CA exam results at the end of November, or beginning of December.

I'll no doubt be slow in conveying my congratulations though, as I'll be on vacation starting tomorrow, far away from here. This may give me time to catch up on my writing here, maybe not. We'll see how relaxing the trans-Oceanic flight will be.

And when you find out you passed, go celebrate, in whatever way you choose.

There are stories of adventures in CA volunteerism and other fun topics coming.

In the meantime, some Statistical Adventure news: spam filters must be getting increasingly effective - traffic has fallen to what must be an all-time low - and 332 in October wasn't bad either.

Suitably Epic Goodbyes: the Legendary Philadelphia PwC Resignation Letter

If you're working with well-connected people you may have seen this already.

I've received multiple copies: it's been uploaded to one site specializing on the topic and it was also shared by Life of an Auditor. the latter being the first to publish it, on August 31, 2009.

Forwarded copies, rather than those found on websites, interestingly enough, always feature a different chain of "Big Four plus More" e-mail addresses, identifying scores of people who were CC'd, and a silent mass of BCC'd people whose privacy is left intact.

What is this artefact?

A simple farewell.

A farewell to an office from someone who wanted to let it all out. Whether this was only shared with close friends as an inside joke or was a nasty bomb can best be answered by going to the source - but we won't start a hunt right now.

Getting these e-mails is in some ways, a rite of passage - as denizens of AuditLand receive an Epic forward, they spread it virally - just like a chain letter without the cheesy "make a wish after sending it to five people" closing challenge.

I'll assume for the sake of the person apparently burning all their bridges that this was meant to be a joke - it starts off strong but then sort of withers away. Like a jaded auditor's career? Who knows. Regardless, hopefully it won't come back to bite him the way the revolutionary methods of late 18th century France came back to ironically circled around to take down those very same revolutionaries.

A metaphorical representation of burning your bridges.

PricewaterhouseCoopers Philadelphia Farewell Letter

 As many of you now know this friday will be my last day with PwC so I wanted to say good bye and thank you for everything. My decision to leave was not a snap decision as it may have seemed but a well thought out process. It started one night in the audit room as I was helplessly attempting to focus on some inane, completely irrelevant task so I could leave when the green card carrying cleaning lady came into my cage to empty my garbage when my decision was made. I realized that I was actually jealous of her job. I would have gladly emptied the garbage cans in the whole building over any of the nonsense I was doing on my computer. See, at the end of her shift she has made a difference, she has added value, be it minimal, of removing the refuse from the employees cubes. At the end of the day she sees the empty garbage cans and knows that she accomplished something. When trying to apply this mindset to my own work I found it to be impossible. At the end of my shift, I will have documented a control, that was only created for the sake of having a control, and my work will get picked apart by anal retentive managers, but ultimately find a home in a cabinet somewhere, only to see the light of day again when it is thrown out in 7 years when it is deemed to be irrelevant. I have added zero value to the client, zero value to my own company, and it has made me routinely daydream about ways to off myself.  I find it very hard to be motivated when I know the end result of my work has no impact on anything but simply must be completed because PwC audit guide says it must be completed. What makes this entire process worse is the fact that those around you insist that this work is crucial to the world's existence and it is essential that you never use abbreviations, that your sheets must be as colorful as possible, and all lines must be drawn with a ruler or else it is clear that PwC will come apart from its hinges. I must have missed out on the brainwashing session that PwC provided all senior associate and managers that taught them how to turn obsessive compulsive up a notch.
Anyway...that was how I came to decide that public accounting was not really for me. A couple other pieces of advice for my coworkers and the company as I part: I would greatly encourage some kind of weight loss challenge to be implemented firm wide. The herd of water buffalo you call your work force is embarrassing and a bit gross. When I call a co worker over from 2 cubes down and they are legitimately out of breath when they get to my cube it may be time to knock off 10 or 80 pounds. The company seems to encourage this obesity; each busy season we get a giant package full of pixie sticks, chocolate and assorted sweets. As much as I would enjoy type 2 diabetes, I think I'll pass.
Do not ever, ever, ever put one male on a team with all females unless you want him to quit and or commit a hate crime. This is inhumane. One can only endure so many conversations about greys anatomy, weddings, and handbags before they wish for a cancerous tumor in their armpit.
I think the joke is old already, enough with the sarbanes oxley. It was fun while it lasted but there is no way anybody can honestly think that this bullshit is necessary. Oh you want me to pull a sample of the HR file to make sure everyone’s birthday and hire date is accurate? Yea ill jump right on that, and trust me I'll definitely let you know if there is an exception and not just make up answers that result in me doing less work.
You can easily cut some costs and get rid of the HR department. I'm pretty sure you can train a monkey to send out the available list and a timesheet reminder every two weeks.

Ernst & Young layoffs are being watched while the job rollercoaster continues to careen madly

Hot on the heels of the PwC discussion regarding people getting "packaged off", comes another eye-opening post - this courtesy of Going Concern, which discusses layoffs at Ernst & Young.

The post primarily concerns the E&Y offices in the USA, though there's a growing thread of commentary including updates concerning offices from across the globe. And it currently tails off with rumours of upcoming cuts at KPMG in January, though that timing makes absolutely no sense to me considering that's the start of "busy season" for almost everyone!

As you can imagine from my own interjection, the comment thread is a rich trove of unverified but plausible and rather civil reports: a careful readthrough reveals that it includes comments about cuts made last summer, right now, and expected in the near future. Ironically the people responding to those comments aren't naive and challenged the KPMG rumour on the spot, asking for proof which didn't feel like appearing yet.

Other anonymous commentors discussed the fate of a small US office getting shut down completely, this first being Manchester, NH. Going Concern started another article even earlier regarding this rumour, quickly asking for confirmation and details to support the initial report received by Francine - and a series poured in. Ironically the global EY homepage still lists the Manchester NH location as of right now despite the news trickling out almost a month ago, but that'll no doubt get updated at some point. Given that the office only had about 60 people - a small set got to transfer to nearby Boston - the official line will no doubt be that things were "reorganized" and "centralized" - and it may even make business sense on some level, but it's always a shame when a smaller community suffers a loss.

Job situation in weak markets: significantly less secure than the mountain goat's footing an loose rocks.

An interesting topic came up in the Going Concern discussion thread though: why do firms continue to hire when cuts are happening?

The subsequent visitors answered the question for me, by stating that it is "always going to be like that. the big four can't lose face with the schools that they recruit from. it makes them look good. if they stop recruiting altogether, they lose face and when the economy picks up in the future, people will remember the firm's tactics and decide to go to another firm instead."

The comment goes on to pick on another firm as a place to avoid - I avoid taking sides myself, because it's a known fact that any office around the world can be a tough place to work depending on the local culture based on the little universe of personalities you'll find yourself working with.

You may love working for a Big Four firm in one place, only to move to another city where you don't get the same culture or camaraderie which makes you feel disillusioned or just simply bored. That's why it's valuable to learn as much as you can about firms through your older friends already working there or through the campus recruiting events - if you find someone like me there, you can get some disarmingly honest fats about what it's like in a given office, or even in the sub-departments people get assigned to.

Ironically some comments of the other are invitations from people working in busy regions of the country where work is plentiful and transfers are welcome. Looking at those sorts of posts can make you feel confused: wait you're busy, but you're laying off people at the same time?

This thought is common, but particularly among those who haven't worked very long, if at all, in AuditLand. The strange nature of these firms in a rough economy is that some departments do poorly simply because clients don't have the money or inclination to spend precious resources on added professional services.

But even while that's hammering one side of the company, other groups may be doing very well. After all - what happens in a recession? More bankruptcies. Who comes in to assist when companies crash and burn? The same firms, with their "crash and burn recovery unit" departments that specialize in restructuring failed companies.

So what can you appreciate with all this uncertainty flitting about?

It pays to be nimble. If you see demand shifting away from your field of work to another specialization, figure out if you can change paths and go where people are needed. That ability is essentially what passes for job security these days, and the better you get at it, the less you'll have to worry about layoffs and severance packages.

That last post I mentioned led to a small flood of visitors, partially courtesy of the layoff tracker page at Businessweek. If you're new here and would like to leave a comment go ahead - just click here to let yourself login and start writing about how wildly off-base this news is. Or how accurate it turns out to be - whatever's right. Upcoming posts will discuss what to do when you don't join the Big Four in the first place, and will showcase at least one epic resignation letter.

Dark days at PwC advisory: word of layoffs leaked, chaos ensues

PriceWaterhouseCoopers Advisory has made some significant cuts to their US workforce, as mentioned off-hand by Francine and discussed in detail here

Skip down to comment 4 in the post for an interesting dissection of firm revenue math and the possible impact it'll have on partner income. It's a topic everyone seems to be curious about knowing more about, gets very little information about, and is often to afraid ask questions about - so go check out "TT"'s breakdown and the follow up if you want to know more. Or skim all the way down to comment 114, which points out that while the cut of roughly 300 people is small compared to the size of the entire US firm, the internal PwC webcast apparently stated that this represents a cut of 6% of the affected group - one value provided by a commenter is 260 of about 4300 people.

I spent way too much type going through all the other comments, and things did in fact get kind of dark. Consider this post - it's anonymous, but let's play along and assume there's no false identities at play, particularly with what follows.

"Francine - Current Pwc Director here in another line of service. I can only tell you that my Advisory friends are “freaking out” by what has been published by you. You have definitely made your mark with this posting. The level of unrest that you have caused should make you proud. One of my friends told me last night that he heard that one of the Advisory Directors is so stressed out that he was talking about taking his life if he loses his job. If that happens, the sky is the limit for you and your little blog!"

Nothing to make light of, sadly - this is dark stuff. At least that's what it sounds like when the commenter goes on to add:

"Had you let this RIF run its normal course, it would have been done confidentially and all affected parties would be notified on the same day and only those impacted would have the stress. But you like to cause unrest and panic…as it is obviously what drives you. You were like a little kid announcing this on your blog Tuesday morning….”look at what I know….I’m am so important!”"

I appreciate the sentiment expressed, but I think it's a little naive to think that the plan as described above really would work as claimed. Any major layoff causes unrest and panic, in the firm affected, and in competing firms, even among people who feel their positions are secure. "If it can happen there, it can happen here," can cross peoples' minds.

Is it really beneficial to bury this news and leave people blissfully unaware?

No, it's not.

Starting off with university students, you need to take your intelligent young professionals, open their eyes, and make them realize that they're starting off on careers at highly respected firms which will give them lots of opportunities. But they also need to know and understand the risks that are tightly linked to the rewards which they are pursuing. Your better university professors may point this out to you, but these warnings can sound empty and hollow without facts to back them up.

Clever young Commerce students may think they're dodging bullets by avoiding the General Motors of the world. But even the Big Four can be perilous places - sure you can prepare yourself by saving up your salary, keeping your resume up to date and making yourself an indispensable member of your team. But you're never truly secure, unless you live in a country like France which has renowned job security rules. Out in Canada and the US the realities of "at will" employment are something you should never overlook, and sharing news like this is an uncomfortable but also equally indispensable way to educate people.

Given all this turmoil, entrepreneurial types may roll their eyes, but is it any wonder that the Government of Canada is considered a top employer of choice by risk-averse students around here?

The other bonus to reading about these posts is to be reminded about your rights - including avoiding being pressured into signing the severance agreement until you've had a chance to review it with an independent adviser!

And if you're just starting out as a student, you see eye-opening comments such as this:

"I got a whiff that I dodged the cut. And honestly, I feel cheated. I want my severance and an excuse to leave this place on good terms."

Contrast that with someone who didn't dodge the cut:

"Confirmed. I was axed today and appreciated the advanced notice from the blog so I could bring in an extra bag this morning to take things home.

Folks, the blog is like listening to the weather forecast the night before……."

Finally, just scroll down to comment 103 which offers advice for people trying to get their final paycheque - and which also provides this handy link to the USA's state regulations on final paycheques.

At least if people were writing their UFE exam they got that out of the way before these announcements came out, but that's probably the only bitter ray of sunshine available. Well that, and the fact that many of the people who are laid off manage to find more interesting jobs. Wel, if they've already achieved their professional designation in accounting or audit - be it the CA, CPA, CIA or CISA. I feel worst for people who have to start looking for work with only a year or so of experience under their belts.

Good luck - if there's any consolation, recruiters have suddenly ramped up their efforts - my voicemail was getting hit daily this week as I'm often away from my desk for extended stretches auditing this, analyzing that - so there seems to be a ready supply of jobs for clever experienced people out there and available.

And what exactly does this arrow symbolize? The recent frequency of posting? I really should take detailed notes about all the clever topics that come to mind for me to write about, as it'll probably be far too easy to forget lots of intelligent tips and tricks as time goes on. I would share them now, but the typical excuses associated with busy season are still present. Which is why it took me an entire week to note that I got hit 332 times last month, a fall from September's count of 376. I try to be prompt in reporting that total, so at least I won't lose track of it - anyway, that's your statistic for October nestled in with a much more substantial post.