As I sent my son to preschool for the first time this week, I had a momentary pang of regret that he should feel so apprehensive about being away from me in a new environment with a bunch of strangers. I wished I could spare him from the feelings of anxiety and uncertainty that we all have when leaving a comfortable and familiar environment. Then I realized that if I did take those feelings away for him, I would be doing him a great disservice.
It is said that nothing worthwhile is easy, and it is absolutely true. If I sheltered my child from every challenging social situation or academic gauntlet, he would never know the thrill of rising to the occasion to conquer his fear and succeed in making new friends or learning new things.
We need to approach our careers with the same eagerness for a challenge if we are to experience professional growth. I've never met anyone who does not experience that momentary panic right before a job interview or public speaking engagement. But it is feelings such as these that help us perform our best. Beyond such short term challenges that end relatively quickly, it's also good for our professional health to experience regular rushes of adrenaline when asked by our boss to perform a task we've never done, or to give a presentation in a meeting through which we would normally sit silently. If you don't have the type of job where you regularly feel a mix of excitement and nervousness when faced with a new challenge, perhaps you should consider moving out of your comfort zone and looking for something new.
Even though I am currently taking a break from my full-time accounting career to raise a family, I still challenge myself in order to avoid losing my professional edge. I work part-time as an online tutor for several accounting courses, and I find my heart races with a mix of eagerness and nervousness every time a student asks me for assistance with a technical accounting topic. I meticulously research their question and review my solution over and over again before submitting it, for fear that I guide a student in the wrong direction. I constantly check my classroom to ensure I address any new questions in a timely manner, and I schedule out the due dates of items on the syllabus so I am aware of when questions might arise on particular subjects or assignments. Managing my tutoring obligations and course deadlines while trying to raise a toddler and infant who make a regular schedule impossible to keep provides just the challenge I need right now to keep me on my professional toes. As the semesters go by, if I find myself losing that bit of nervousness and getting comfortable, perhaps I will need to tutor a new course or play a different role in the classroom.
If you are completely comfortable with each and every professional responsibility you have right now, it may be time to rekindle your adrenaline and take on a new challenge. After all, nothing worthwhile is easy.
Thursday, September 15, 2011
Tuesday, September 13, 2011
Are you biased toward your clients?
In a recent speech by the PCAOB, the organization noted that they are willing to consider auditor term limits to overcome the inherent bias in auditing. James R. Doty, Chairman of the PCAOB asked questions that all audit firms need to consider: "Do auditors read the literature? Do young auditors learn to hold onto skepticism and look for fraud regardless of long association with management?" If the answer is more frequently "no," then perhaps there is a loss of professional skepticism in the culture of the audit profession.
When I started as an auditor with one of the Big Four, some of my first clients were among the largest financial institutions in the country. This was in the early 2000's, before our current financial crisis. Many of my audit team members considered the length of our firm's association with certain members of management to be adequate audit evidence that the accounting decisions they made were valid. New audit team members were often intimidated by the confidence management exuded about their areas of accounting expertise, backed by decades of experience in the industry. However, as we now know what these financial institutions were hiding, we can appreciate the importance of pushing back when sufficient audit evidence is not provided, or if management's explanations to your inquiries as an auditor raise concerns.
Does anyone have an experience in which they or a colleague allowed their professional skepticism to wane in the face of a long-standing relationship with client management?
When I started as an auditor with one of the Big Four, some of my first clients were among the largest financial institutions in the country. This was in the early 2000's, before our current financial crisis. Many of my audit team members considered the length of our firm's association with certain members of management to be adequate audit evidence that the accounting decisions they made were valid. New audit team members were often intimidated by the confidence management exuded about their areas of accounting expertise, backed by decades of experience in the industry. However, as we now know what these financial institutions were hiding, we can appreciate the importance of pushing back when sufficient audit evidence is not provided, or if management's explanations to your inquiries as an auditor raise concerns.
Does anyone have an experience in which they or a colleague allowed their professional skepticism to wane in the face of a long-standing relationship with client management?
Tuesday, July 26, 2011
Being Bullied at Work
You may have rejoiced the day you graduated from high school, elated at the thought of never having to deal with bullies again. Little did you know that bullying still goes on in the adult world, especially in the workplace. A recent study conducted by CareerBuilder reports that 27% of 5,600 full-time workers surveyed have felt bullied at work. I was surprised that the figure was only roughly a quarter of the survey respondents, because I saw a lot of bullying during my four year tenure in public accounting alone. In my experience, victims of bullying seemed most often to be nontraditional experienced hires who found themselves working with inexperienced campus hires. Given the age, maturity, and experience differentials between the two groups, it often seemed to me that the experienced hires found themselves intentionally isolated from the rest of the audit team. Their job performance also seemed to be held to a higher standard than their colleagues who were recent college graduates. 37% of the survey respondents who had reported being bullied felt that their work was judged by a different measure than their colleagues.
Another form of bullying I have seen is when a person's input in a meeting or among team members is completely dismissed. This was the most common form of bullying reported by the CareerBuilder report. I recall a meeting with more than a dozen audit team members at all levels sitting around the conference room table. The discussion was dominated by two senior managers who were personally attacking each others' ideas as if they were brothers in the backseat of the family car. They completely disregarded others in the room, and in the end, the more senior person turned his back to his opponent, told him no one was going to accept his approach, and changed the subject, effectively closing the book on further discussion. From that point on, everyone was afraid to challenge this person, no matter the size of the issue, for fear of being publicly humiliated themselves. Anonymous upward feedback is a useful tool to combat such behaviors. Most large public accounting firms use such procedures to evaluate anyone in a supervisory role. By reporting consistently stubborn and insensitive behavior on the part of your supervisors, you can make them aware that their attitude causes more harm than good to both the firm and their own potential for promotion.
27% of survey respondents claiming to have been bullied said that their coworkers gossiped about them. I suspect such incidents are even more common than reported, since not everyone is aware when they are the subject of gossip. I find this to be the most harmful of all professional bullying, because it is often baseless and the victim is ignorant of it. I once worked on an audit team that "roasted" teammates on their off days when they weren't around to hear what their coworkers really thought of them. I tried to combat this type of venomous talk by challenging my colleagues to put themselves in the other person's shoes, defending the person who was being attacked, or just telling the culprits to back off. I'm sure it didn't stop them from gossiping, but at least they refrained from doing it while I was around, so that I would not be considered a part of it.
As an auditor, you have probably already realized that it takes some thick skin just to stand your ground with clients, but you may not have expected how much harder it is to withstand an affront from an office bully within your firm. If you are being bullied by your immediate supervisor, talk to your performance adviser or mentor about it. You don't want to risk looking petty and tattling on someone every time you hear gossip, but sticking up for what you know is right. Also, refraining from joining in can help you win a small battle in the big war against workplace bullies.
Another form of bullying I have seen is when a person's input in a meeting or among team members is completely dismissed. This was the most common form of bullying reported by the CareerBuilder report. I recall a meeting with more than a dozen audit team members at all levels sitting around the conference room table. The discussion was dominated by two senior managers who were personally attacking each others' ideas as if they were brothers in the backseat of the family car. They completely disregarded others in the room, and in the end, the more senior person turned his back to his opponent, told him no one was going to accept his approach, and changed the subject, effectively closing the book on further discussion. From that point on, everyone was afraid to challenge this person, no matter the size of the issue, for fear of being publicly humiliated themselves. Anonymous upward feedback is a useful tool to combat such behaviors. Most large public accounting firms use such procedures to evaluate anyone in a supervisory role. By reporting consistently stubborn and insensitive behavior on the part of your supervisors, you can make them aware that their attitude causes more harm than good to both the firm and their own potential for promotion.
27% of survey respondents claiming to have been bullied said that their coworkers gossiped about them. I suspect such incidents are even more common than reported, since not everyone is aware when they are the subject of gossip. I find this to be the most harmful of all professional bullying, because it is often baseless and the victim is ignorant of it. I once worked on an audit team that "roasted" teammates on their off days when they weren't around to hear what their coworkers really thought of them. I tried to combat this type of venomous talk by challenging my colleagues to put themselves in the other person's shoes, defending the person who was being attacked, or just telling the culprits to back off. I'm sure it didn't stop them from gossiping, but at least they refrained from doing it while I was around, so that I would not be considered a part of it.
As an auditor, you have probably already realized that it takes some thick skin just to stand your ground with clients, but you may not have expected how much harder it is to withstand an affront from an office bully within your firm. If you are being bullied by your immediate supervisor, talk to your performance adviser or mentor about it. You don't want to risk looking petty and tattling on someone every time you hear gossip, but sticking up for what you know is right. Also, refraining from joining in can help you win a small battle in the big war against workplace bullies.
AICPA Launches IFRS Certificate Program
Accounting students or professionals looking to build their technical expertise and enhance their value to potential employers should consider enrolling in the AICPA’s IFRS Certificate Program. With the SEC set to announce their decision regarding the convergence of U.S. GAAP and IFRS later this year, accounting professionals with a working knowledge of IFRS have an enormous professional advantage. The AICPA notes that “current and potential clients and employers will look to the certificate as a measurable standard of IFRS competence.”
You do not need to be a CPA to enroll in this 42 credit hour curriculum, but you do need to have at least an undergraduate accounting degree or obtain relevant work experience that requires the practical application of accounting principles and concepts. Non-CPAs and non-CAs completing the program will receive an IFRS Award of Educational Achievement. All courses are presented via a self-study webcast and are available on-demand, covering specific topics such as inventories, PP&E, investment property, intangible assets, revenue recognition, EPS, and the IASB’s governance and conceptual framework. To learn more about the AICPA’s IFRS Certificate Program, visit http://www.ifrs.com/certificate/index.html.
Career Advice from the Capital Markets
In the Summer 2011 issue of the Pennsylvania CPA Journal, a regular contributor takes an interesting approach to building a professional life. Author David Maturo addresses the disconnect between accounting professionals relying on their technical knowledge to advance their career, when they really need to build their careers as one would think about building a company. In The Company of You: Building Your Professional Life, Maturo observes that the corporation provides a model for successfully functioning in the capitalist markets, and can provide us with a similar form for structuring a satisfying career. In summary, our career path should have the following aspects of a corporation:
- Board and Direction - You need a mission statement and goals to "channel your efforts and focus on an achievable target." You also need a board of investors, bosses, mentors, colleagues who invest in you. Surround yourself with mentors who work outside of your industry or firm, and who aren't afraid to give you constructive criticism or alternative suggestions for your career. Reach out to supervisors and colleagues that are willing to invest in you, by providing you with an opportunity to work on a new client, acquire a new skill, or campaign for your promotion.
- The Revenue Line -Apart from serving external clients in public accounting, we also have internal clients we must answer to, such as partners, managers, and staff. Building good relationships with those we work with on an ongoing basis can support our career progress. We also need to have a strong sales and marketing department, promoting ourselves with a solid resume, professional network, online presence, and self-confidence. Your personal brand is your own PR department. The way you interact with others, dress, communicate via email or over the phone, and deal with mistakes, make up your professional presentation. All these subtle daily behaviors are used by other to judge your competence and potential for leadership. So be careful what your actions say about you.
- The Expense Line - Managing your Finance Department is key to alleviating stress and avoiding being forced to make professional decisions based on salary alone. Effectively managing your personal finances will enable you to focus your attention on more important career decisions other than the size of your paycheck. It's also important for you to invest in yourself to keep up on the latest trends in information technology that can help you stay ahead of the professional curve. I have a friend who is a clinical cardiologist and researcher. He is one of the youngest doctors in his practice, and the only one who has effectively managed his use of IT to the point that it saves him countless hours a week. He has synced his iPad, iPhone, and work computer so that all notes taken during exams, conferences, and meetings are immediately filed on his computer, and can be accessed anywhere from his phone or iPad. He uses his electronic calendar to organize files, reminders, and schedules. IT should be a priority if it can save you many wasted hours on non-value added activities. It's also key for you to have a system of self audit and controls to ensure the quality of your work is consistently good. Lastly, a wellness program for managing your own mental and physical health will keep your work life balance in check, giving you time with family, as well as a chance to relax and creatively think about your future.
Thursday, June 30, 2011
The CPA Exam Goes Abroad
In August 2011, the U.S. CPA exam will be offered outside of the U.S. for the first time. The countries in which the exam will be offered include Japan, Bahrain, the United Arab Emirates, Kuwait, and Lebanon. Given the accelerating demand by foreign nationals for taking the exam, the American Institute of CPAs (AICPA), the National Association of State Boards of Accountancy (NASBA), and Prometric have agreed to offer the same CPA exam in the aforementioned countries during a one month window each calendar-year quarter. The exam will be offered in English, and will be open to citizens, permanent residents, and long-term residents of the host countries that have satisfied the requirements to sit for the U.S. CPA exam. International exam candidates will need to select and apply to a U.S. state board of accountancy to validate that they have satisfied the requirements to sit for the exam in their chosen state of jurisdiction. The NASBA is now accepting applications for international exam candidates. For more information, visit the AICPA’s website at http://www.aicpa.org/BecomeACPA/CPAExam/Pages/CPAExam.aspx.
Tuesday, June 28, 2011
PCAOB Releases Potential Changes to Auditor's Report
Last week, the PCAOB issued a concept release presenting four potential changes to the auditor's report on public company financial statements. The changes, open for public comment, include the following:
Given that investors feel they have been duped by public companies, auditors, and hedge funds when so much market capitalization evaporated in the recent recession, I understand the legal concerns of the auditing profession and their regulators. If we audit more and disclose more, how could investors ever be duped again? They would have no excuse for making bad investments, right? The information was all there in front of them. Unfortunately, a clean audit opinion is not equivalent to an analyst's recommendation to buy or hold a security. Perhaps auditors do have it a little too easy only having to issue a pass/fail audit report right now, but I fear that the addition of some of the information suggested by the PCAOB, particularly the AD&A, would confuse investors into thinking that an auditor was making an investment recommendation. We need to be careful not to overwhelm investors. It is not the volume of information, but the relevance of it that investors are in need of.
- Auditor's Discussion and Analysis (AD&A) - Presented as a narrative intended to "facilitate an understanding of the auditor's opinion of the financial statements taken as a whole," according to the PCAOB. This section might include a discussion of audit risks identified, significant management judgments, and critical accounting policies.
- Expanded and requisite use of emphasis paragraphs - While emphasis paragraphs are currently optional, they might be required in a standard auditor's report to point the reader's attention to where significant financial statement items can be found in the financials and related footnotes.
- Auditor assurance on information outside the financial statements - Auditor's may be required to issue an opinion on information such as the management discussion and analysis (MD&A), press releases, or other published financial information.
- Clarification of standard language in the auditor's report - The auditor's report might also clarify the auditor's role and concepts mentioned in a standard auditor's report, such as reasonable assurance, and auditor's responsibilities vs. management's responsibilities.
Given that investors feel they have been duped by public companies, auditors, and hedge funds when so much market capitalization evaporated in the recent recession, I understand the legal concerns of the auditing profession and their regulators. If we audit more and disclose more, how could investors ever be duped again? They would have no excuse for making bad investments, right? The information was all there in front of them. Unfortunately, a clean audit opinion is not equivalent to an analyst's recommendation to buy or hold a security. Perhaps auditors do have it a little too easy only having to issue a pass/fail audit report right now, but I fear that the addition of some of the information suggested by the PCAOB, particularly the AD&A, would confuse investors into thinking that an auditor was making an investment recommendation. We need to be careful not to overwhelm investors. It is not the volume of information, but the relevance of it that investors are in need of.
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