Category Archives: Accounting & Auditing

Blog Category

The-crucial-role-of-a-CMA-within-organization-02

Why Organizations Need CMAs

 

By Rebecca Langdon

We all know that the days of organizations surviving based on tactical decision making is over. Strategic decision making must be core within an organization if it is to prosper in today’s tumultuous and rapidly changing environment. The days of keeping some functions in the rhetorical basement are over. Teams such as marketing, accounting, HR, and operations, are now seen as having essential seats at the table when an organisation is strategizing. I believe that management accountants, particularly CMAs, are being seen increasingly as a key contributor to strategic decisions.

Why?

  1. The numbers don’t lie

I say this with some jest, as of course there are instances where numbers can be misleading. However the feasibility of all strategies is dependent on the cost model, i.e. what is it going to cost to implement, and what will the return be in the short, medium, and long term. A management accountant has the requisite skills to profile the costs associated with a strategy.

  1. Performance management

A key part of the CMA syllabus is performance management. This covers performance evaluation, variance analysis, and use of key performance indicators and balanced scorecards. CMA’s are trained to produce budgets and then measure deviations from those budgets. To ensure monetary control of strategies, budgeting and forecasting is of fundamental importance.

  1. Decision making

Another element of the CMA syllabus is decision analysis. This teaches the budding accountants to use financial data to perform analysis for the decision making process. This includes a number of tools and techniques which all contribute to strategic decisions, such as cost volume profit analysis, marginal analysis, make vs buy decisions, and pricing methodologies.

  1. Financing decisions

Many new strategies will require financing. This may be from internal funds, or perhaps a new funding round, or maybe a bank loan. There will be a piece of analysis that needs to be undertaken to ascertain which type of finance best suits the particular strategy. CMAs are trained to undertake this analysis, underpinned by the key concept of risk and return. They also have an operational understanding of short and long term financial management, in addition of the pros and cons of major financial instruments.

Summary

Above are just 4 of the reasons why qualified Management Accountants are so fundamental to the strategic decision making process within an organisation. There are of course many more. It is positive to see that there has been a seismic shift in the last decade in terms of how accountants are viewed and if you are interested in undertaking the CMA qualification, have a read through our website.

Internal-Audit-02

Internal Audit: More Important Than Ever

 

By Morgan International Staff Writers

Now is a great time to be an internal auditor, and predictions are that the importance to business of this role is set to increase: salaries are on the rise, and internal auditors with certain specializations are increasingly sought after.

So what’s making this role so in demand? Internal audit has always been a vital function to business, helping to add value through its systematic approach to improving the areas of risk management, control and governance. But in recent years certain global events have given internal audit even greater importance. First there was the financial crisis, which sent shockwaves across the world and saw many businesses with long-established, solid reputations collapse overnight. Later, economies become mired in recession, a period that also saw a number of high profile fraud cases come to light: awareness of fraud risk to businesses became heightened and internal audit was under pressure to minimize this risk through strict controls. Throughout this volatile economic period, tighter regulatory frameworks were brought in with a view to setting businesses on a path with greater oversight and control – once again internal audit was in the hot seat to ensure businesses complied with new rules.

In short, the role of an internal auditor is evolving. And this need to manage risk better is making internal auditors (IAs) more strategic. Twenty-eight percent of executives in a Forbes Insights/EY study from earlier this year said that IAs currently play a strategic role, but more than half said that within the next two years they expect the role of “strategic advisor” to become the IAs’ primary mandate. Experts also predict that by the end of this decade the profession will have evolved further toward an increasing focus on risk management, governance, and technology issues. In the same Forbes Insights/Ey study, three of the top five emerging risks cited by executives related to IT. All this seems to fit with the results of a 2012 survey conducted by the Institute of Internal Auditors, that declared internal auditors specializing in information technology, fraud, and forensics to be particularly in demand.

With so much pressure to perform, businesses naturally look to internal auditors with the Certified Internal Auditor (CIA) designation as a reflection of competence in the principles and practices of internal auditing. Sponsored by the Institute of Internal Auditors (IIA), the CIA serves as the only internationally accepted designation for internal auditors worldwide. According to the IIA, the CIA is enduring because it requires candidates to master the ability to identify risks, examine alternative remedies, and prescribe the best initiatives to control these risks. In the words of John J. Fernandes, CIA, Executive Vice President and Chief Operating Officer of The Institute of Internal Auditors: “CIAs master auditing standards and practices as well as management principles and controls, information technology, and emerging strategies to improve business and government.”

Do you want to get certified? Find out about Morgan's CIA Exam Preparation here.

 

I-passed-the-CPA-exam-02

Gain and Maintain the CPA Credential

 

By Rebecca Langdon

There is global demand for candidates with the CPA qualification, and perhaps you are reading this because you have decided you want to become a qualified Accountant. The eligibility requirements to undertake the CPA exams differ between US states and territories; therefore the best thing to do is take our quick and easy eligibility questionnaire.

Once you are ready to start studying for your exam, you can contact Morgan who will be pleased to use their extensive experience to increase your chances of passing first time.

Once you have passed the exam you will want to earn your CPA accreditation, and to do that there are specific work experience requirements that also vary by state. For more information, click here. Once you have successfully achieved your accreditation there will be state specific requirements to maintain the accreditation. Again you should research the exact requirement, but it will involve gaining a certain number of CPE credits.

The good news is that whilst some of the eligibility and maintenance requirements may seem a little confusing at first, Morgan is on hand to help you every step of the way. We also offer Morgan alumni who have passed their exams the opportunity to access Morgan Connect free of charge. Morgan Connect is a cutting edge online platform which provides a way for globally reputed employers to find qualified employees (such as yourself). For more information, please don’t hesitate to get in contact with us.

13-Things-Auditor-Will-Need-For-An-Initial-Audit-02

10 Things an Auditor Will Need for an Initial Audit

 

By Aimee Mhaolcraoibhe

If your business is going into an audit it is important to have as much information to hand as possible. Of the necessities any auditor will expect to review during the course of the audit are:

  1. General ledger.
  2. This may seem obvious but it is exactly where the auditor starts to determine what all they will need to review.
  3. Trial Balance.
  4. The trial balance can be presented in Excel or represented through the accounting program, such as QuickBooks.
  5. Hard copies of all loans, contracts or leases that show company debt and outgoings.
  6. If there are any loans outstanding, full copies of the statements of each loan will be required.
  7. A schedule of depreciation for all assets.
  8. A copy of every employment contract, merger agreements and articles of incorporation.
  9. A copy of all bank statements with a list of all bank accounts and signatories.
  10. The name of the business solicitor and their contact details.
  11. If there has been any stock issued by the company a register of all the stock trades and ownership of current stock will also be required.

Basically speaking, if you are hit with an audit you must be prepared to show written proof of all incoming and outgoing for the business on an up to date term as well as physical proof to back up the ledger that you have provided which was created between your bookkeeper and your accountant.

Having contact details on hand for any person that may be necessary in the audit including the accountant, bookkeeper, owner and manager would be a good way to ensure that the auditor is able to intake all that they need to in one meeting. The last thing you want is a repeated visit!

This article has only given the high level details of each of item, and for more information you might consider undertaking a professional qualification such as the CIA program.

The-crucial-role-of-a-CMA-within-organization-02

Why organizations need CMAs

 

By Rebecca Langdon

We all know that the days of organizations surviving based on tactical decision-making is over. Strategic decision making must be core within an organization if it is to prosper in today’s tumultuous and rapidly changing environment. The days of keeping some functions in the rhetorical basement are over. Teams such as marketing, accounting, HR, and operations, are now seen as having essential seats at the table when an organisation is strategizing. I believe that management accountants, particularly CMAs, are being seen increasingly as a key contributor to strategic decisions.

Why?

  1. The numbers don’t lie

I say this with some jest, as of course there are instances where numbers can be misleading. However the feasibility of all strategies is dependent on the cost model, i.e. what is it going to cost to implement, and what will the return be in the short, medium, and long term. A management accountant has the requisite skills to profile the costs associated with a strategy.

  1. Performance management

A key part of the CMA syllabus is performance management. This covers performance evaluation, variance analysis, and use of key performance indicators and balanced scorecards. CMA’s are trained to produce budgets and then measure deviations from those budgets. To ensure monetary control of strategies, budgeting and forecasting is of fundamental importance.

  1. Decision making

Another element of the CMA syllabus is decision analysis. This teaches the budding accountants to use financial data to perform analysis for the decision making process. This includes a number of tools and techniques which all contribute to strategic decisions, such as cost volume profit analysis, marginal analysis, make vs buy decisions, and pricing methodologies.

  1. Financing decisions

Many new strategies will require financing. This may be from internal funds, or perhaps a new funding round, or maybe a bank loan. There will be a piece of analysis that needs to be undertaken to ascertain which type of finance best suits the particular strategy. CMAs are trained to undertake this analysis, underpinned by the key concept of risk and return. They also have an operational understanding of short and long term financial management, in addition of the pros and cons of major financial instruments.

Summary

Above are just 4 of the reasons why CMA qualified professionals are so fundamental to the strategic decision making process within an organisation. There are of course many more. It is positive to see that there has been a seismic shift in the last decade in terms of how accountants are viewed and if you are interested in undertaking the CMA qualification, have a read through the content here.

CPA or CMA

CPA vs. CMA: Which One’s For You?

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 14 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 2014 pass rates for CPA ranged from 46.35% for AUD up to 55.46% 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 21% for Part 1 and 37% for Part 2 in 2014. That compares with a respective pass rate of 35% and 49% 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. A newly qualified finance accountant in the UAE can expect a basic salary of around US$5,000 per month, according to Morgan McKinley.

Following two comprehensive surveys in 2010 and 2012 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 77% since 2010. The median annual basic salary came in at US$21,250 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$57,500, while in Egypt the average salary was US$6,610. Putting geography aside, perhaps the most eye-catching piece of information is that CMAs earn 50% 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 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.

Still not sure which one's for you? Schedule your free one-on-one consultation session to find out!

What-every-accountant-should-know-about-fraud-02

9 Steps to Detect Fraud Like a Pro

 

By Aimee Mhaolcraoibhe

If you are the accountant of a business it is your responsibility to be able to identify a fraudulent transaction if it occurs. There are many types of factors that an accountant would look for to determine if there has been fraud in the business. Namely the accountant will look for:

Unusual transactions

Any business will develop a routine over time which will be borne out in the bookkeeping; when a change happens to the natural flow of the accounts it is something that should be reviewed to determine the reason for it.

Employees acting unusually

If an employee has acted in a fraudulent manner towards the company their stability usually goes out the window – too many holiday days and sick days or leaving early when the accountant is in are all signs that something could be wrong.

Refunds that happen more than once to the same people

If there are names that continually show up as having gained a refund from the business that could imply that fraud is taking place.

Unbalanced general ledgers

Everything should add up within a general ledger and when it does not it can mean that fraud has taken place.

Too many purchases

If the amount that a business is paying to any supplier is unduly large in relation to past experience, they could be trying to funnel money to use to convert funds or pay off a purchasing agent.

Ghost employees

If there is a name of someone on the payroll whom the accountant has never seen and cannot trace, this can be an instance of fraud.

Paying bills twice

Duplicate payments can be a way of hiding a different financial transaction.

Shortage in inventory

If there is less inventory in stock, then what shows as existing in the books it could be that the inventory was fraudulently sold.

Write offs

Writing off a receivable can be an indication of something fraudulent as well.

This is not a complete list but it shows the types of factors that make an accountant become aware that fraud has taken place. Through ongoing monitoring, it becomes obvious when something unusual occurs and at those times consideration of fraud is always a factor.

For those of you who may be interested in a formal qualification, we would welcome you to take a look at the various accounting and finance certification we offer.

References

Cooking the Books: What Every Accountant Should Know About Fraud, http://www.acfe.com/products.aspx?id=2590

CMA

Gain and maintain the CMA Credential

By Rebecca Langdon

You have decided you want a career in management accounting, and perhaps you have already decided upon the CMA program. You may have even completed one or more of the prerequisites to pass the program and gain the accreditation. As a quick reminder, these are the prerequisites:

  • Maintain membership in IMA.
  • Entrance into the CMA program.
  • Hold a bachelor’s degree from an accredited college/university or a related professional certification.
  • Two continuous years of professional experience in management accounting or financial management.
  • Complete and pass Parts 1 and 2 of the CMA exam.
  • Abide by The IMA’s Statement of Ethical Professional Practice.

Assuming you already have a degree, the main effort required will be to pass your exams and also ensure you have two continuous years of experience. Once you are fully qualified, to maintain the accreditation you will need to:

  • Maintain your membership
  • Continue to abide by The IMA’s Statement of Ethical Professional Practice
  • Undertake 30 hours (including two in ethics training) of CPE credits annually

Perhaps you already have a job you are happy in, or you are seeking your first Accounting role, or maybe you are looking to move to a new organisation. At Morgan International we are first and foremost a training institute and we offer candidates the opportunity to undertake the CMA program. However, we also proudly offer Morgan Connect which is an excellent online platform which brings together qualified candidates with potential employers. It is free of charge for Morgan alumni who have passed their exams, and it can be used to search for new roles and interact with a wealth of globally reputed employers.

Top-10-reasons-to-sit-for-the-CPA-exam-before-April-2017-02

Top 7 Reasons to Sit for the CPA exam before April 2017

 

By Rebecca Langdon

As you may or may not know, the format of the CPA exam is going to change from April 2017. There are a number of reasons why it would be beneficial to sit before the format changes. These are the top 6 reasons:

  • The new exam is expected to be harder

 

The current exam tests two core skill sets; knowledge and understanding, and application. However the new format will test four core skill sets; remembering and understanding, application, analysis, and evaluation. The additional testing of analysis and evaluation will increase the difficulty of the exam as these are considered to be higher cognitive skills.

  • Task-based simulations are increasing

 

The AICPA will increase task-based simulations from 40% to 50% on the FAR, AUD and REG exams. They will introduce task-based simulations to the BEC exam.

  • Multiple choice questions will decrease

 

The number of multiple choice questions will reduce to make way for task-based simulations which encourage critical thinking.

  • You will have to wait longer for your results

 

The AICPA has indicated a 10 week delay after the initial testing window when the new exam is released. This means you will have a gruelling wait to know if you have passed or now.

  • The testing time will increase from 14 to 16 hours

 

This is to make way for the reduction in multiple choice questions, and the increase in simulations.

  • The exam will be more expensive

 

As the testing time is increasing, the exams will be more expensive.

  • Get your career started!

 

The sooner you pass the CPA, the sooner you can receive your accreditation and kick start your career.

Plan to Pass before April 2017

You may be reading this and have passed none of the exams yet, or perhaps you are part way through. The good news is that if you are ready to sit your exams and want to finish before the new exam format is introduced, it is entirely possible. As an example you could sit the exams as follows:

  • First section: beginning of September
  • Second section: end of October
  • Third section: beginning of November
  • Fourth section: end of January

This timetable provides a break in December, but also leaves some time in case of any retakes. This timetable may seem compact, but it is entirely possible, particularly with the support of Morgan. We offer a range of study options and can help you to fast track your learning with the aim of passing all of your exams before the format changes.

The-power-of-the-CMA-02

What Are Your Job Options as a CMA?

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.

  1. 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.

  1. 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.

  1. 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.

  1. Business strategist

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

  1. 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.

  1. 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, please take a look at our website where you will find lots of useful information.