Category Archives: Accounting & Auditing

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How to elude most common tax mistakes?

By Morgan International Staff Writers

Unlike any individual, large corporations and businesses need to maintain tax records so that they never get into any hassle. There are many factors that contribute towards tax hiccups and companies always want to avoid them. Following are the top 9 mistakes that are to be avoided to overcome the costly tax returns:

 

  1. Retention failure

Quality of people is always correlated to the work they perform. For corporations one of the main reasons for large tax imposition is the fact that they fail to retain the top level staff. Good tax and accounting professionals are necessary and should always be retained no matter what.

 

  1. Botch of financial files to personal devices

Financial files are very sensitive in nature and corporations know about this fact. However at times some top level employees use their personal devices to save such files. Data security is a menace and by applying stricter file policies the breach and the related tax can be avoided with ease.

 

  1. Inefficient use of excel

This also leads to disaster. Regular sharing of excel and accounting files might end up in deleting the custom made excel formulae. If the creator does not work with the company then hours have to be spent in reconciling vivacious tax information.

 

  1. Figure estimation outside of the system

Companies spend millions of dollars in tax systems. However the tax department might calculate the figures and returns outside of this system just to ease the workload. This is a malicious mistake that leaves no audit trail or log for any auditor to figure out what happened.

 

  1. Wi-Fi Security breach

Using secured Wi-Fi networks is once again a menace that should be avoided. Such devices are prone to attacks by the intruders if the Wi-Fi is public or keyless system is being accessed. Proper Wi-Fi security and avoiding public networks can put an end to this issue.

 

  1. Closing the books impulsively

Closing the year books impulsively not only leave out important process data but can also lead to mismatched balance sheets at the end. This issue has been faced by enterprises all over the world that ultimately leads to surprising fines and future number skew.

 

  1. Unawareness of the top management

It is a dilemma that the top management of most organizations does not put their time and effort in going through the basic level tax processing. The result is that they never invest in top quality tools and people putting entire process at risk.

 

  1. Misunderstanding city level tax regulations

In accounting there is no shortage of laws. Tax departments often miss the important information about the city level regulations that can result in huge tax exemptions. The effect can be seen at the year end when huge returns are filed which could have been avoided easily.

 

  1. Tax tool investment elusion

Companies often make no to trivial investment in tax and accounting systems. Free or half functioning tools can never give the desired results and it’s a fact. Proper accounting and financial controls can only be implemented if tools are paid for and are up to the mark.

 

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Internal Audit: a growing demand

By Fahad I

The demand of the internal audit is on the rise worldwide and organizations are now implementing best practices that require strict controls, effective risk management and corporate governance. Even regulatory requirements are becoming stricter with every passing day.

Recent fraud cases and the sudden collapse of top companies resulted in the substantial losses for investors. External auditors had failed to identify these fraudulent acts and control lapses were primarily due to scope, nature and timeline limitations. Such incidents have put pressure on regulatory bodies to reconsider corporate structures and to ensure that specialised and knowledgeable professionals assume auditing roles within organizations.

As a result, internal auditors are becoming a significant resource for companies and are required to identify control slip ups, manage risks and ensure that the governance structure is operating effectively. They are not just responsible for overseeing the financial and operational aspects, but are asked to provide strategic advice for more effective decisions within the company.

The corporate world dynamics have changed significantly, organizations are in drastic need of employees with specialized knowledge and qualifications to occupy certain roles.  Certified Internal Auditors are an essential resource and considered of equal importance as  CFOs and COOs.

Regulatory authorities have acknowledged the value of the CIA qualification and have made it a requisite within their corporate legislature. The CIA certification provides an in-depth understanding of systems, business culture and processes. It will enable its holder to identify control flaws, potential risks, and to evaluate alternative measures for best practices in mitigating risks.

Stand out in your career and consider pursuing your CIA credential. Checkout Morgan’s CIA review course to optimize your exam preparation.

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IFRS – What’s Next?

 

By Fahad I

The International Accounting Standard Board (IASB) developed International Financial Reporting Standards (IFRS) as the global standards for the world economy. These are part of a vision for global accounting standards and have been publicly supported by many international organisations, including the World Bank, G20, IMF, IOSCO, Basel Committee, and IFAC.

To assess the progress towards that goal, the IFRS Foundation is developing and posting profiles about the use of IFRS Standards in individual jurisdictions on an ongoing basis. Currently, profiles are completed for 149 jurisdictions including the Middle East.

Recently, IASB has published its five-year work plan. The plan is focused, properly prioritized and centred towards the stakeholders. New standards on financial instruments, Revenue and Leases have already been finalized and the insurance contract standards are at the final stages. IFRS are now considered as the standard language of accounting for the preparation of the annual financial statements.

The future holds more demand for IFRS reporting due to the impact of globalization. Many large US entities with significant international operations are willing to move to IFRS. Countries without any local accounting standards are also expecting the IFRS as the wise solution. It is expected that in the future, the SEC might consider making an option available to major US companies to report under IFRS rather than US GAAP.

The change in the business environment dynamics will establish accountancy as a more challenging profession. With the increasing adoption of IFRS by countries across the globe, it is now becoming essential for the Accounting, Auditing and Finance professionals to remain up to date with the IFRS developments. Even the internal auditors are also required to remain well versed with IFRS to cope with the complex transactions that may lead to fraud. IFRS adoption will also create career opportunities within these fields.

Group entity structures and cross country alliances within companies will help maintain IFRS’s importance as a global reporting language. Even in jurisdictions where IFRS are not currently applicable, accountants are expected to remain well-versed with IFRS knowledge in order to understand group transactions and prepare  financial statements accordingly.

Accounting, auditing and finance professionals lacking IFRS knowledge need to bridge that gap and start considering professional qualifications in order to stay informed. The CertIFR equips individuals with a basic understanding of International Financial Reporting while the DipIFR offers in depth knowledge of IFRS and its application. Consider our qualifications in order to say ahead in an ever changing and complex reporting environment.

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A CPA’s Role in Business Process Management

By Rebecca Langdon

There is a good reason why a high proportion of CEO’s and board members are accountants. Accountancy equips individuals with the skills to deliver results within a business, primarily because attention to the finances is always a strategic priority. Business process management (BPM) is a technique used to increase operational efficiency and performance by optimizing business process.

BPM Explained

Within organizations processes develop over time and very often they may become overly cumbersome, inefficient, and costly. BPM seeks to review those processes and make them more efficient where possible. There is a fairly simple model which is used which is depicted as a continuous loop:

 

The contribution of a CPA

CPAs contribute to business process management in a number of ways:

  1. Design

Within the design stage the current business processes are reviewed. The analysis requires financial acumen to understand the cost of undertaking the current process. In all likelihood this will be very complex and may involve many different types of cost such as resource, cost of stock, overheads, etc. There will also be a requirement to understand the costs in the short, medium and long term. For some assets which are depreciated, a CPA will understand the basis of the depreciation and be able to model the costs appropriately. This skill set will also be required as new processes are being designed, so that the costs can be articulated.

  1. Modelling

The proposed designs will be modelled at this point to understand the potential efficiencies and effectiveness. It may also include techniques such as what-if analysis. It is likely at some of the computations will be complex, and therefore a CPA has the right competencies to assist that this stage.

  1. Execution

Whilst the changes are implemented, it may be that the CPA takes an oversight or management role.

  1. Monitoring
    The way in which the new processes will be monitored will need to be designed with agreed metrics, and analytical techniques. Again a CPA would be able to take a leading role in designing the methods and parameters for monitoring.
  1. Optimization

At this stage the output and learning from the monitoring phase will be used to optimize and improve the recently implemented new business process. Once again an accountant would be well positioned to use the quantitative and qualitative output to design optimizations.

In Summary

Business process management is quite a hot topic and has been hailed by some as a technique to drive widespread operational efficiencies. The basis of these efficiencies is rooted in financial terms and therefore an accountant or financial professional is a key part of any BPM team. If you are interested in pursuing a CPA qualification, take a moment to explore the course information here.

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What Are the Career Opportunities for CMAs?

By Rebecca Langdon

Accredited management accountants hold various roles within organisations. It is not the case that a CMA will always be a Management Accountant for life. The combination of skills including accounting, finance, and management, opens up a wide range of career opportunities. Within this article we look at the top 6 career choices for CMA’s.

Management Accountant

The most obvious starting position is that of a Management Accountant. This may include reporting, analysis, forecasting, and budgeting. You may also get involved with project level accounting.

Management Consultant

The skill set of a CMA lends itself very well to the role of a Management Consultant. In this role you will be often get to meet a variety of different clients, and you may even travel internationally.

Financial Trader

Many ‘Bankers’ and financial traders have an accounting qualification such as the CMA. Having a strong grasp of maths is essential to being a successful trader.

Business Strategist

The CMA equips candidates with the skill set they need to produce and test the feasibility of organizational strategies.

Auditor

Many accountants become auditors. This may be an internal auditor or it would be working for an audit practice who are responsible for auditing the financial statements of their clients.

Longer term call – CEO, Managing Director or Executive Board Member

Did you know that around 25% of FTSE 100 CEO’s are qualified accountants? Qualified accountants make for very successful leaders.

In Summary

It is a really exciting time to be an accountant, particularly one that is CMA accredited. There are a whole host of exciting professions that are calling out for qualified professionals. If you would like to undertake the CMA, or just know more, simply visit our website where you will find lots of useful information.

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CPA versus CMA: Which one is for you?

 

By Morgan International Staff Writers

The two professional designations CPA (Certified Professional Accountant) and CMA (Certified Management Accountant) both offer a route to higher earnings and a career path with great prospects, so knowing which one to pursue can feel confusing. While they share some things in common, they are also quite different – read on to find out what sets them apart and which one could be right for you.

Who’s who

CPA is a globally recognized certification to practice public accounting and auditing but is licensed by US state boards of accountancy. Students from abroad generally choose which US state they want to apply through, and each state has its own requirements to meet. The CPA is an in-demand certification in the accountancy field.

CMA is a global credential, which indicates that its holder is versed in areas such as financial planning and analysis, cost accounting, budgeting and forecasting, and financial reporting. Generally it distinguishes professionals with a finance and accounting background as suitable for positions such as financial, business or systems analyst.

Similar, but…

What the two designations have in common is both involve passing a series of exams, as well as requiring the completion of educational and professional experience.

The CPA consists of an exam in four parts - Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG) - all of which must be passed for success. In total they represent 16 hours of testing and must all be taken within an 18-month timeframe after taking and passing the first part.

The CMA is a two-part exam spread over eight hours and all parts must be taken within three years of joining the CMA Program. Although at least two years of professional experience in management accounting or financial management are required, you can sit the exam prior to satisfying these requirements. Proof of work experience must be provided before CMA certification is granted, though.

What’s your background?

To qualify for the CMA a bachelor’s degree is required. This makes it somewhat of an easier option to those who have a background in finance, marketing or economics but who don’t meet the CPA requirement of a substantial number of accounting hours/courses needed to sit the exam. Most US states require a total of 120 credits hours to be able to sit for the exam, or 150 hours of coursework to obtain the license (in addition to a bachelor's degree).

How easy is it to pass?

In the Middle East the CPA has an approximate pass rate of 40% depending on the section taken (the FAR and REG sections have a pass rate slightly above that). Globally the 2015 pass rates for CPA ranged from 47.28% for AUD up to 56.48%for BEC.

CPA pass rates may sound disheartening but they’re actually much higher than those for CMA. According to the Institute of Certified Management Accountants, pass rates for the CMA in the Middle East and Africa were 20% for Part 1 and 34% for Part 2 in the period September 1, 2013 through June 30, 2014. That compares with a respective pass rate of 34% and 45% globally over the same period.

How will certification boost your earnings?

If you are wondering whether the investment of pursuing CPA accreditation is worth it, one answer lies in the salary expectations. Research shows that professionally certified accountants can expect to earn anything from 5% to 15% more than uncertified accountants.

Following two comprehensive surveys in 2012 and 2015 of current and prospective CMAs in the Middle East, the IMA revealed some interesting figures. Firstly, it noted that annual basic salaries for CMAs had risen by 51% since 2015. The median annual basic salary came in at US$43,652 in 2012, but with a wide disparity when looked at on a country by country basis. In the UAE, for example, this salary had an average of US$53,371, while in Egypt the average salary was US$12,632. Putting geography aside, perhaps the most eye-catching piece of information is that CMAs in the Middle East can earn 30% more in salary than non-CMAs. According to the report, “the benefits of CMA certification can be very substantial” and “the difference in pay between CMAs and non-CMAs is even more striking when work experience is considered”.

Which is more popular?

Just a look at the numbers will indicate that CMAs are much rarer than CPAs: there are around 50,000 CMAs worldwide, a small drop in the ocean compared to the more than 300,000 CPAs in the United States alone. But the accreditation should not be looked at in terms of popularity, as either of the two signifies that its title holder is distinguished in his or her field. Whichever you choose, you can be sure you are pursuing a certification that opens up growing opportunities in professional fields that are increasingly in demand.

Benefit from Morgan's one-on-one career guidance to determine the best certification for you. Contact us today!

 

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Get ready for ACCA

By Morgan International Staff Writers

If you’ve ever considered pursuing an accountancy certification, there’s some great news lined up for you.

ACCA, which stands for the Association of Chartered Certified Accountants, is one of many accountancy bodies that offer accountancy qualifications around the world, but there are compelling reasons why any potential accountancy student should consider selecting this particular one. These include the organization’s more than one hundred years of reputation and truly global span with over 162,000 members and 426,000 students in 173 countries around the world. Once you are ACCA accredited you posses an internationally recognized certification that allows you to practice any accountancy role and to enjoy greater job prospects.

From a student’s perspective, ACCA also offers a relatively accessible and flexible set of entry requirements. For starters, it is not mandatory to have a university degree to take the ACCA program. And even if you don’t meet the entry requirements for the professional level exams, the beauty of ACCA is you can start with the Foundations in Accountancy qualifications which will help you step up to the full ACCA qualification. The good news if you have a degree is that you may find that it exempts you from some of the exams  - it is possible to have up to nine of the 14 exams waived based on a candidate’s existing academic and professional background.

One of the many plus points of choosing to pursue your ACCA qualification through Morgan International is its choice of Becker Professional Education study materials. Becker is an ACCA Approved Content Provider and as such offers a complete approach that goes beyond textbooks to include a diverse range of support designed to optimally prepare you for your exam while ensuring you get the most out of the study materials.

Wherever you are in the region, you will be able to connect to Morgan International’s ACCA study program through our self-study learning format. And, if you are located in a country where Morgan has a training centre, you will also have the option of choosing to take one-on-one tutoring sessions with a Morgan instructor. This is a highly effective way to pursue your studies and set yourself well on the way to exam success.

Whichever study option you choose, you can rest assured that you are one of a record number of students around the world sitting their ACCA exams in the pursuit of a stellar career in accountancy.

Explore our ACCA packages.

 

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The Rise of the CPA: Three Letters That Signal You Are in Demand

 

By Morgan International Staff Writers

If there is one function of a business that has grown significantly in importance in recent years, it is that of finance. The backdrop to this is a combination of factors from a number of monetary scandals that have rocked established organizations around the world, to the tsunami-like global financial crisis itself, to the more recent sobering economic climate and subsequent ushering in of belt-tightening measures.

One thing is for sure: never has it felt like so much scrutiny or pressure has been placed on businesses to make sure their financial houses are in order. And so who do companies rely on in times such as these? The answer can be summed up in three letters: CPA.

Put simply, certified public accountants, or CPAs for short, are now seen more than ever as the bedrock of any organization’s ability to survive. Demand is so great for their skills that in some countries there are even CPA shortages, leading to a boost in salaries for those already in the privileged position of being in the field.

It isn’t just the financial climate, though, that is driving this demand for CPAs. The uncertainty of the times in which we live (with recent years having seen the Middle East going through unprecedented levels of unexpected events and change) creates a climate in which businesses have to plan better and reduce risk for their survival. At the same time markets are increasingly competitive, as globalization opens up new opportunities and challenges, and as the digital landscape reshapes consumer dynamics.  Take all this into consideration and it’s no surprise that certified professional accountants are sought after for their knowledge that can create a competitive advantage to business. And just as the business landscape is increasing in complexity, so is the diversity of opportunities and salary ranges for CPAs.

So what is it that makes a CPA such a valuable commodity in the talent pool? The reasons are simple: even without today’s business or economic backdrop, having CPA certification is seen as a plus for a career in accountancy: it is a benchmark that indicates high standards of professionalism, of quantitative skills, and of adherence to ethical standards, thus increasing a professional’s leverage in the job market. It also brings with it the prospect of increased salary, generally entailing at least a premium of five percent over accountants’ salaries without the CPA. But beyond all of this, the plus of having CPA certification is also seen as a way to open doors to multiple career opportunities; it is a stepping stone to wherever your dreams might take you – from private sector business to multinational corporations, government agencies and non-profit organizations, your skills as a CPA will always be in demand. From accountancy to tax, risk management to investment consulting, and all the way up the corporate ladder to the boardroom via the role of chief financial officer (increasingly seen as the key driving force in any business), there is a diverse range of careers within a CPA’s grasp.

It’s clear that if there used to be any thoughts of a CPA merely representing a step up from an accountant, this is no longer the case. Today’s CPAs are called on to play increasingly important roles in a company’s future. No longer are they simply accounting for what has happened; they are also relied on for valuable insight into how to manage and plan for what lies ahead. In short, today CPAs have a vital role to play in the success of any organization and that makes them in demand more than ever before

 

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The FP&A Program Will Boost Your Chances in a Competitive Field

 

By Morgan International Staff Writers

Not only is Financial Planning & Analysis (FP&A) one of the most highly sought after positions in a company, it’s also, according to executives, one of the hardest to fill. But certification is one way that job hopefuls can give themselves a solid step up in the right direction.

Why look to FP&A

Since the financial crisis, businesses have been placing more emphasis on the analysis of financial data and forward planning – this is where FP&A comes in. And the need for FP&A professionals continues to rise as economic uncertainties make no signs of disappearing.

The role itself involves liaising with upper management to deliver analysis that will drive future organizational strategy. It’s not just about crunching numbers, it’s about sharing insight and guiding decisions, therefore it makes sense that businesses look to hire only the most highly qualified individuals to perform this role.

Who fits the FP&A profile

This is a career best suited to people with a financial or analysis background but also who possess excellent analysis and communication skills. It could be a chief accountant looking to make their next big move in the corporate world, or an analyst seeking to build their executive career. Likewise financial managers, controllers, cost management accountants, strategy & development managers are all well suited to follow the FP&A Program to add a highly regarded credential to their existing skills.

Why take the program?

At its heart the FP&A Program offered by Morgan International acts as a validation of your understanding of the complex processes, tools and uniform standards of practice used around the globe. Once you have the FP&A credential you will possess a unique professional designation that differentiates yourself from non FP&A holders – a key distinguishing factor in what can be a tightly fought battle for the highly prized FP&A position. One of the plusses of taking the program is that candidates can enroll and begin taking the exams before the Education and Experience Requirements have been fully satisfied – noting that the credential will only be awarded after the requirements have been met.

What does it involve?

Morgan International’s FP&A Program offers a range of facilities to make your studying process user-friendly and targeted toward success, such as the Online Learning Center that gives you accessibility via your laptop or mobile. Through the Resource Center students have direct contact with an FP&A expert, and can interact via email for individual follow-up on course questions and content. SmartStudy Tools have been designed to increase your studying success by giving you the tools to create a custom study plan based on your initial assessment scores and experience. Tests, which range from quick quizzes to post-test assessments, interactive case studies, and individual and group reports are all designed to give you optimal preparation for the exam, backed up by a host of other facilities that include downloadable flashcards, helpful links, and a comprehensive reference glossary.

Looking to the future

Those that do well in the role of FP&A Controller can go on to progress to FP&A Director and Finance Director, meaning that this can be your passport to an executive-level career. But obtaining the FP&A certification is definitely the first step in ensuring you stand out in a very enviable crowd.

To enquire about the FP&A program or register, contact your local Morgan representative today.

 

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How to Pass the 2017 CPA Exam

By Rebecca Langdon

There are a number of reasons to try and sit the CPA exams prior to the format change in April 2017. However, if for whatever reason that is not possible for you, there is nothing to be concerned about, as Morgan is here to ensure you are prepared to pass the new format.

Why is the format changing?

The simplest way to devise how to pass your exams first time is to understand why the AICPA are making the changes. They want to ensure that the exam is relevant to the accountancy profession and after a practice analysis undertaken in 2014 they concluded:

 “Overall, the research demonstrated that the profession supports the initiative to make meaningful changes to the exam, to operationalize the testing of higher order skills and to align more closely with the types of tasks regularly performed by newly licensed CPAs.”

In essence they felt that the current exam is too focussed on testing the ability to memorize and apply, and is not sufficiently focussed on testing higher order skills such as analysis and evaluation.

Tips to pass the new format

  • Use an experienced training company

Experienced training companies such as Morgan will be closely aligned to the changes to the new format and will be amending all training materials to the highest standard to maximise your chances of passing your exams first time.

  • Don’t panic

Remember that the other candidates taking the exam in the new format are in the same position as you are.

  • Practice task based simulation questions

Within the training materials there will be practice questions. Make sure you undertake those examples and review the sample answer in detail.

  • Refocus from purely memorizing to applying high order skills

It will of course still be important to remember content, but you should keep in mind that you need to be able to apply, analyse, and evaluation using the knowledge you have. This should not be dissimilar from what was expected of you if you have undertaken a Bachelor’s degree.

In summary

The format of the exam may seem daunting but if enrolling at Morgan International means you will be offered the guidance and support you need to enter the exams confidently.