Category Archives: Accounting & Auditing

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Internal Audit and the Vital Connection with Cybersecurity

 

By Morgan International Staff Writers

The internal audit function provides a safety net for companies by identifying risk, and offering advice on how to manage it. With widespread and increasingly sophisticated cyber threats, the risk to business has become alarmingly high in recent years.

In fact, a 2017 government survey shows that cyber breaches or attacks affected nearly half of firms in the UK during the past year.¹ So how can an internal audit department help their company reduce exposure to cyber attacks, and deal with them effectively if they occur?

Independent cyber risk assessment

A risk assessment by the internal audit function establishes the strengths and weaknesses of any existing strategy, and helps to implement a stronger plan to deal effectively with current threats.

A completed assessment would include:

  • Potential origins of a cyber attack: for example, an organised gang of cyber criminals, a single independent hacker, business competitors, or someone working for the company
  • Reason for an attack: potentially financial, purely disruptive, reputation damage, or theft of strategic plans
  • How an attack might occur: phishing emails, stolen personal information, vulnerabilities in hardware or software programmes

Advise management on the level of risk and its management

Having assessed the measures currently in place, internal audit can advise management on their effectiveness, and suggest potential changes or updates. They will provide information on:

  • Existing and emerging cyber threats
  • Vulnerability of the business to cyber attack
  • A strategy to mitigate and manage risks in the long-term
  • Plans to deal with the crisis if an attack occurs

Once new systems are in place, or existing cybersecurity measures updated, internal audit carry out what is potentially the most important aspect of their role – testing compliance and discovering the effectiveness or otherwise of security and recovery plans.

After an attack

Internal audit should work alongside the IT department at every stage, and if the company is unfortunate enough to suffer an attack, use newly-found information to re-evaluate plans in the future.

Cybersecurity is a critical issue for every business - even the smallest enterprise is at great risk. It is crucial, therefore, that personnel understand how to prevent such an attack on a day-to-day basis. To increase your knowledge in this area and help to safeguard your company, have a look at the accredited training courses on our website.

¹https://www.gov.uk/government/news/almost-half-of-uk-firms-hit-by-cyber-breach-or-attack-in-the-past-year

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/609186/Cyber_Security_Breaches_Survey_2017_main_report_PUBLIC.pdf

http://www.accountingweb.com/aa/auditing/internal-audits-critical-role-in-cybersecurity

https://www2.deloitte.com/us/en/pages/risk/articles/cybersecurity-internal-audit-role.html

 

Accounting vs HR: the Battle for Control over Payroll

 

By Morgan International Staff Writers

In most organisations, payroll answers to the accounting function rather than Human Resources. But payroll issues are interlinked between the two departments, and a further argument could be made for sharing payroll duties and responsibilities between them.

The topic has been the subject of extensive debate, but considering the advances in technology over recent years, operating a cloud-based combined payroll, HR, and accounting system seems like a natural next step.

Accounting department vs Human Resources

What are the main arguments when deciding where payroll should be located?

  • Payroll is a business expense, so the function should report to the accounting department
  • Company personnel are its biggest asset, therefore payroll should be under the control of HR

In reality, it would serve a company well to integrate the payroll function into both departments via a cloud-based software system that provides joint access, although at first glance the contrast between HR and finance roles seems to suggest otherwise:

  • On the one hand, HR needs to ensure employee welfare and maintain good relations – a fluid task depending on the individual employee
  • On the other hand, finance must fully comply with regulations and aim for total accuracy with wages and other payments – a defined and precise remit

So what advantages might this type of cloud software offer an organisation?

Advantages of using cloud-based human capital management systems

  • Improved efficiency with access to combined information and data banks
  • Better compliance with ever-changing HR and finance legislation
  • Recruitment and pay issues viewed as a whole, rather than in isolation
  • Payroll accuracy improved, boosting staff morale and performance
  • Real-time information assists hiring and firing decisions

Potential issues of using a joint cloud-based system include data confidentiality, and reluctance between the two departments to share information about employees. Additionally, some organisations may remain reluctant to fully embrace cloud-based technology, viewing it as unorthodox, mainly due to a lack of understanding.

You can further your career in accounting, HR, and payroll by taking further professional qualifications. Have a look at our website for a wide selection of business courses that can propel you to the next stage on your career path.

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Accounting Technology Start-ups Get a Boost from AICPA and CPA.com

By Morgan International Staff Writers

The continuing development of innovative new technologies has the potential to appreciably affect the accounting profession. The use of artificial intelligence and other innovations will change the face of accounting over the next few years, which is why the AICPA (American Institute of CPAs) and its subsidiary, CPA.com, have announced their own new initiative.

Early-stage companies developing new technologies for the accounting profession are being offered an accelerator program with funding and assistance to grow.

How do accelerator programs work?

Accelerator programs provide a range of specific benefits for start-ups and young companies, in return for equity. Start-ups are generally offered mentorship, finance, and exposure to a range of potential investors - considerably speeding up the initial stage of their business journey.

The constant feedback from peers and investors helps a company to properly align itself in the market, an aspect that up to five young companies will benefit from with the AICPA program.

The AICPA/CPA.com initiative

The American Institute of CPAs and CPA.com will offer three benefits:

  • Each finalist will receive funding of up to $20,000
  • Mentoring and coaching from a panel of experts in accounting technology
  • The opportunity to present their product or service at AICPA’s ‘Engage’ Conference in 2018, with the potential to develop longer-term professional partnerships

Two key themes will be targeted:

  • Technology and financial information: including the use of artificial intelligence in accounting, routine task automation, digital ledgers, cross-industry sharing of information and blockchain data
  • Professional competency innovation: including new tools to enable/encourage collaboration between experts, mentors, and mentees; measuring professional competency; personalising the education experience using machine learning

The accelerator program will help accountancy firms to use new and emerging technologies to their own advantage, rather than fearing their effect on the profession – a crucial issue when there is literally no stopping advancement in this area.

Let us help you progress in your career with our professional certifications and qualifications.

http://www.aicpaglobal.com/accelerator.html

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Win over your clients by making them more cash

 

By Morgan International Staff Writers

Businesses view accountants in different ways. Some know a good accountant can save money, make a business more profitable, and keep vital financial control over an organisation. Even to the most financially savvy of business leaders an accountant must prove their worth and demonstrate the return on investment in their services, not open the door to their competitors.

By making your clients more cash, you can demonstrate your ROI. Business owners should be focused on bottom line profits, but a healthy cash balance shows a healthy, risk averse business and gives confidence. Free cash allows a business to keep creditors at bay, invest in inventory, recruit new employees and engage other services, like marketing, to drive profits forwards.

Cash flow and balance is one of many importance metrics which can be used to demonstrate the effective financial performance of a company, or the ROI of employing your accountancy service.

So how to make your clients more cash…firstly they need to understand why a healthy cash balance and cash flow performance is so important. Then, you need to set them on the path of levering more cash through their day to day financial operations. Educate them in how to make more, or free up, cash flow. Show them sensible ways to boost net profit margin, slow overhead growth, reduce accounts receivable and inventory days, accelerate sales growth and increase accounts payable days. You are the accountant, make sure they understand each of the methods and that whichever they try out, they understand every part of the effect on their business and the consequences. If you are networking with your local business community, in the role of advisor, you could recommend other services to help grow sales, and thus cash and profits. Maybe referring a new client or mentioning a marketing service.

When improving cash, and proving the value of your service, set month by month goals which deliver, or release funds, and manage the results. At the end of each quarter you can illustrate to your client the results, and the benefits. Making sure the spare cash is used effectively to achieve business goals.

When you have metrics available of the results, take some time to share them with your client, offsetting the costs of your work, against the results you are delivering. Though don’t just blow your own trumpet, use this kind of meeting to find out where else can be improved and what concerns your client may have. You will quickly find a client who can see the value of your service, knows you are working to achieve their business goals and you take time to hear their concerns, is a very loyal client indeed.

 

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Progression Route to CFO for Audit and Accounting Managers

 

By Morgan International Staff Writers

Having already advanced to the level of audit or accounting manager, you are probably looking towards Chief Financial Officer, or Financial Director level, as your ultimate career goal. But what individual steps will you need to take along the way?

Here we look at potential routes to the top of the auditing and accounting sector, so let us begin with auditing.

Audit manager

·         Auditing Director

  • Experience: 10 years
  • Qualifications: CPA certification; Bachelor’s degree, preferably an MBA
  • Role: Direct and supervise all audit engagements using technological and data expertise, reporting findings to corporate leadership
  • Experience: 15 years
  • Qualifications: CIA certification; Bachelor’s degree – preferably an MBA
  • Role: Ensure internal systems function as needed, and the organisation complies with external laws and regulations

·         Chief Audit/Compliance Executive

This role then leads on to Chief Financial Officer, where 15 years’ experience and an MBA or similar qualification is expected.

Accounting manager

·         Assistant Controller

  • Experience: 10 years
  • Qualifications: Bachelor’s degree
  • Role: Supervise the work of relevant departments; assist in the collection, analysis and reporting of financial data; deputise for the controller when necessary
  • Experience: 10 years
  • Qualifications: MBA/MAcc plus CPA/CMA
  • Role: Intermediary between the accounting department and corporate leaders, using advanced finance and technology knowledge
  • Experience: 10 years
  • Qualifications: Bachelor’s degree – MBA preferred
  • Role: Gather data to determine cash requirements of the business; assist the treasurer in budgeting activities; deputise for the treasurer
  • Experience: 15 years
  • Qualifications: Bachelor’s or Master’s degree; CPA or CMA recommended
  • Role: Create financial reports; supervise all accounting departments; ensure regulatory compliance; budgeting and forecasting; track financial data
  • Experience: 15 years
  • Qualifications: Bachelor’s degree, preferably an MBA
  • Role: Oversee all cash-related activities; make investments and reduce overall costs; establish financial policies and procedures

·         Accounting Director

·         Assistant Treasurer

·         Controller

·         Treasurer

Chief Financial Officer is the next step, where as we mentioned earlier, you would require 15 years’ experience and an MBA qualification.

Developing a ‘road map’ for your future career allows you to take stock and plan. Have a look through our website for a diverse range of courses and certifications to help you achieve your career goals.

 

 

 

 

 

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Why your accountancy practice should blog …

 

By Morgan International Staff Writers

Blog posts have two main areas of benefit – engaging your audience, and improving the performance of your website.

Blogging for your readers

Your website is usually the first place a customer or prospective customer, a peer, or a competitor will go to find out more about your firm. The pages of your website give the first, and often the only, impression of your services. They are a medium to convert and to inform. Web pages should be concise and deliver the message you wish to convey.

Blog posts are a way to add to your marketing messages with news, information, tips and updates. If they are effectively shared on social media or via email marketing they reach previous visitors of your website, engage your existing audience and can reach new customers who follow blog links back to your site to discover more.

Quality, informative articles, even more in-depth guides and “how to” guides, build credibility and authority in your marketplace. They are an excellent way of showcasing your expertise to potential customers and continuing to guide and engage existing customers.  Your customers need constant coaching to provide the information you need, by the deadline you need it. As they deal with their day today financial management they will have questions and need guidance. Often you will do this on a one to one basis with each client. Writing blog posts about upcoming deadlines, changes to regulations, and articles which answer and explain some of the daily financial challenges a business will face is an effective way to reach many of your clients at once. Using a blog to communicate answers to frequent questions and lead your customers is powerful way to control your client base and maintain their engagement preventing them from looking elsewhere for support. You will also free valuable time to invest when a client needs extra individual attention.

Blogging for your website

Constant new website content is critical for SEO. Search engine algorithms are constantly seeking out fresh content and ranking higher those websites where they find it. Blogs posts and informative articles are an excellent way of constantly building SEO friendly new content on your website. They provide excellent content for social media, linking back to your website and helping to build social media followers. Website linking, and social media platforms and follower growth are two more key ways to improve SEO.

Content marketing describes the strategy of utilising and broadcasting website, blog and social media content. Effective content marketing, especially in the accountancy field where competition is high but full utilisation of SEO strategy is rare can quickly set you ahead of your competition. Locally assess the content marketing of your competitors. If you can see you can quickly do more than they do through simply providing and broadcasting content, you may have found the angle you need to monopolise your marketplace.

 

 

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3 ways to make the transition from student to successful accounting career

 

By Morgan International Staff Writers

Okay, we know, there will be many more than three ways to make your career in accountancy successful. There are probably many hundreds of tips out there to read. We’ve focused on three key areas to remember when making the step from being a laid back, partying or exam cramming student, to being the next big thing at your chosen firm of accountants.

Know your stuff, and keep learning

It’s no secret, some of what you learned in your first or second year, you’ve forgotten. This happens, the important thing is to get your notes, revision and text books back out and re-learn anything you have forgotten. In practice, at work, yes there will be chances to check what your doing is correct, but don’t make a bad impression straight off by not knowing your job.

Be business ready

The progression from casual dressing, casual eating, casual living student to suited and booted business person is more tough for some than others. You had to brush up for your interview, and remember your handshakes, confident glances and concise communication. These are all important things to carry into the workplace day by day to instil confidence in your clients and your peers. Go shopping with your fellow students or new colleagues and look for their advice when choosing workwear, workwear is an investment in your career too.

Accountants are expected to be business people and advisors, as well as the stereotypical penny protecting, financial wizards of the past. Make sure you spend some time practicing your “soft” skills of style and communication. Take a basic business course, or expose yourself to some business groups in the area you will be working so you understand a little of your client’s marketplace.

Set priorities at home and at work

Chances are you are about to experience a big change in your day to day life. That could be moving location, adjusting your working hours, or simply working out how you fit work with self-care, socialising and sleep. If you are in a relationship you will need to work out how you can invest in that successfully too. It’s not only working out how to fit in being active, healthy, and social with a minimum 40 hour working week and maybe a commute too. You also need to prioritise effectively whilst you are at work. Your career will only be successful if you are good at it, so you need to be efficient, effective and achieve. By now you should know what time management methods work for you for your studies, work out how you can apply these to prioritise your workload, get it done, and impress your bosses. You are going to face peak periods of workload which require major focus, and times of high stress and pressure. You will learn to handle these but try and limit excessive socialising during these times, hangovers don’t help deadlines. Good eating, sleeping and exercise do so fit it some gym and a healthy diet while you are under pressure.

Mostly, don’t panic, as a new graduate your boss will know what to expect, so will your colleagues. Reach out if you need help or are struggling, they will appreciate honesty more than failure and understand they need to support your during you first months at work. Accountancy is a rewarding, stable and can be a very profitable career, keep committed to your goals and work hard at them and you will see the return.

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Cost Management

By Morgan International Staff Writers

Cost management involves controlling and planning a firm’s or a project’s budget. In this, you have to plan, control, manage, fund and estimate costs so the budget can be allocated appropriately. It encompasses the project’s entire life cycle, from planning it to measuring the performance of the actual costs’ performance until the project is completed.

There are four steps to cost management.

Step 1: Planning the resources

You will need to define all the resources needed to finish the project. Make use of Work Breakdown Structures (WBS) and old information to analyze what physical resources are needed. You can then figure out the associated costs when you find out the resource types and quantities.

Step 2: Cost estimating

You can use any cost estimating method to calculate the cost of carrying out the project. Estimation also depends on how much information is available. You can use parametric modeling or analogous estimating. With more information, estimations become more refined. If any uncertainties remain, they can be reduced by reserving cost. You can use contingencies and escalation.

Step 3: Cost budgeting

The budget will provide an overall outlook of the project’s total and periodic costs. Cost estimates define each activity’s cost, whereas the budget will allocate the cost according to the time period.

Step 4: Cost control

Here, you measure variances from the baseline cost and try to attain minimum costs by using corrective actions. You will have to record each change to the baseline costs. Also, you will have to continuously forecast the expected final total costs. With the availability of actual cost information, cost control centers on explaining changes in the cost baseline. To prevent cost overruns, you might need corrective action.

You can use cost control software tools for procedures of cost control, analysis, and to track and approve variations. You can augment and simplify reporting. This will make it simpler to pass information to all stakeholders.

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Why Bother Getting a CMA Certification?

By Morgan International Staff Writers

The CMA certification is given by the Institute of Management Accountants (IMA). People in the professional field of management accounting pursue this qualification.

Pursuing a CMA requires a substantial amount of time and commitment, along with significant financial burden. Fees for the CMA exam fall from $300 to $350 per part, totalling around $600 to $700. The entrance costs for the program can total $225. The good news for students and IMA members is that they get a $150 discount.

However, despite the costs, getting a Certified Management Accountant certification will lead to a wider scope of job opportunities in the market. How wide is the scope though, and why bother pursuing this certification at all?

It is globally recognised. This certification is the most widely recognised. From the US to the Middle East and China, a CMA is known throughout the globe.

You get paid more. Learning and acquiring skills definitely pay off. A CMA-certified accountant will get paid up to 1/3 more than a non- certified candidate. In the UAE, the median salary ranges from $39 thousand to $45 thousand.

CMA is a practical option. The material that CMA encompasses is relevant to daily practical work and situations.

IMA eases the load. The CMA exam process is easy and clear with few bureaucratic measures.

All in all, the requirements for clearing a CMA exam are quite extensive (you need a bachelor’s degree, you will have to clear a tough exam, then you need two years of experience in management accounting), but the payoffs make the struggles worth it.

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Why Accounting Could Be Your Business’s Biggest Need

By Morgan International Staff Writers

These can be used to compare a business’s performance with other businesses. It can also be used to analyse the efficiency of a business. This helps in making business decisions and enhancing the profitability of a business.

Accounting comes in two types:

  1. Cash Basis Method: This method is usually used in smaller businesses. It is the easier way. With each change of cash from party to party, the cash basis method records the financial transactions that occur. It maintains meticulous records of cash flows. It ensures that there is sufficient capital for operating expenses. But it does compromise on accurate records of trends in sales.
  2. Accrual accounting: This type does not consider whether or not cash is changing hands. It recognises and records transactions while they happen. It is a better choice for analysing and reviewing trends in sales, or similar financial performances. To correct this, cash flow statements are prepared.

An amalgam of financial and management accounting is used. Management is used to keep track of internal business costs, then allocating these costs to the company’s products. It can also predict future sales and create budgets. In financial accounting, financial statements are created according to the company’s financial information. They can be used by external or internal stakeholders.

The use of automated accounting systems has been on the rise. They help track financial information using several programs. Such programs produce electronic reports that can be used with a lot more ease. A business can also easily transfer the information via electronic means to interested stakeholders.

For professional services in accounting, the accounting work can be outsourced to certified public accountants (CPA) or public accounting firms. They assist businesses in producing tax returns and accounting systems. They supply audits and advise, along with corrective measures (if needed). An initial start-up should consider investing in such services to ensure the correct provision of accounting documents.