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7 Questions to Ask Before Hiring an Accountant

 

By Morgan International Staff Writers

For many small businesses, hiring an accountant can seem a bit daunting. They are often not really sure what they are looking for, and what will make an accountant a good fit for their firm. To some it may seem like all accountants and practices are the same, but this could not be further from the truth. So we are here to help you with 7 questions to ask before hiring an accountant.

 

  • How long have you been in business?

Avoid a start-up as you will benefit from an accountant who has experience of the challenges that small businesses face.

 

  • How many clients do you personally manage?

You want to make sure that the accountant will have sufficient time for your business, but equally if they have just a few clients, it may raise alarm bells about why they have been unable to attract/keep more clients.

 

  • Do you have references?

This is crucially important. You need to see references from current or very recent clients who have lots of good but honest things to say about the accountant.

 

  • What is the charging structure?

You need to be clear how fees will work. Be cautious that where there is a fixed fee, it includes all of the services you would expect to be included. You do not want to be surprised by unexpected expenses.

 

  • Will my account be managed by on person?

For consistency, it is advantageous for one person to manage the account. Of course you expect there to be cover when that person is away.

 

  • How often will I receive a P+L?

Some firms will prepare a P+L on a monthly basis which is very useful to keep a track on business profitability, particularly for small businesses.

 

  • Can you provide advice?

You will likely have plenty of questions about taxes, expenses lines, and so on. You need to feel confident that your accountant will be readily available and happy to answer those questions.

 

In summary, hiring an accountant is a big decision for businesses. Make sure you take the time to ask the questions above, and anymore you might have before you make an appointment.

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UAE Fintech Industry Surging

 

By Morgan International Staff Writers

Fintech is big news, both in the UAE, and globally. It is a fairly new financial industry using technology to improve financial activities, often through automation and making use of sophisticated tech such as artificial intelligence. The introduction of disruptive technology in the UAE and wider Middle East is likely to be advantageous for customers but will challenge the traditional banking model. The key areas where fintech has thus far been pervasive are insurance, trading, and risk management. In July 2017, The Dubai International Financial Centre’s Fintech hive selected 11 start-ups to partake in a 12 week accelerator programme which will offer them the opportunity to pitch their ideas to a number of investors in November 2017. Abu Dhabi Global Market (ADGM) announced in August 2017 that it was assessing 22 applications from fintech startups to take part in a regulatory laboratory sandbox programme. This allows successful participants to develop their ideas alongside financial services firms in a lighter touch regulatory environment.

Some of the key innovation areas utilize innovative technologies/areas such as:

  • Blockchain and cryptocurrencies such as Bitcoin
  • Smartphones and apps
  • Robo advisers and robo investors
  • Contactless cards
  • Payment solutions

 

These innovations and new industry entrants pose a significant threat to traditional banks and financial advisors, who will be forced to innovate and diversify themselves to survive. There are of course likely to be opportunities for the traditional players to team up with the innovators which will permit old business models to be updated.

 

In summary fintech allows financial services to be delivered more quickly, cheaply, and conveniently. There are still some concerns around security, but as these issues are resolved, expect to hear a lot more about innovative financial technology solutions in the months and years to come.

 

 

 

 

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VAT Implementation in Saudi Arabia

 

By Morgan International Staff Writers

Last month in Saudi Arabia, businesses were hurrying to meet the deadline to register for VAT – value added tax. Many had expected the deadline to be the end of September, so this was a surprise for many, and put added pressure on businesses to comply in time to avoid attracting financial sanctions.

 

Those affected are required to register with Saudi Arabia’s General Authority of Zakat and Tax (GAZT). The registration deadline is part of the effort by the Gulf Cooperation Council to replace oil revenue lost from barrel prices remaining low. They are attempting to address the shortfall with the imposition of an indirect tax of 5%.

 

Who is in scope for VAT? Businesses selling goods/providing services with sales in excess of 375,000 riyals which is approximately $100,000. For those with sales of less than 1 million riyals, they are permitted to delay registration until Jan 1 2019. For businesses with turnover above 187,500 riyals, but below 375,000 riyals, registration is voluntary. With respect to the kingdom’s 250 largest businesses, they were automatically registered for VAT.

 

There are of course penalties for failure to register and/or pay. Failing to:

  • Apply for registration by the deadline - 10,000 riyals.
  • Submit a tax return within the set timeframes – 25% of the tax due.
  • Pay the tax due by the deadline – 5% per month
  • Keep proper records – 50,000 riyals

 

The GAZT said in a statement that they are developing a wide range of resources to aid businesses in understanding their tax obligations. A business is of course responsible for their registration and internal processes, but reporting and payment will be done through an online GAZT portal.

This will be a step change and a challenge both financially and from a process perspective for Saudi Arabian businesses. There will be support available from the GAZT – but it will be interesting to see how effective implementation of the new indirect tax is.

For those with specific queries in relation to VAT, it would be worthwhile seeking advice from a qualified accountant.

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Seven Tips on How to Be a Great Leader in a Crisis

By Morgan International Staff Writers

Projects should run smoothly, but invariably different forces conspire to create problems and great leaders are defined by how they react to those issues and deal with the problems.

Look for early warning signs.  A crisis rarely just happens, and it is usually apparent that something is going wrong before it happens.  Learn to look for the early signs that something is starting to go wrong – such as team member reports or unexpected results – and prepare a contingency plan.

Respond with quick, effective, decisions. A crisis can be made all the worse by procrastination and poor decisions.  As a project manager, you are expected to be able to make quick decisions, based on your project knowledge, to prevent a crisis becoming disastrous.

Face reality. In a crisis, it can be easy to ignore the hard facts and look for the positives, but that can lose you valuable time.  Learn to look at a crisis for what it is – something going badly wrong - and determine how you are going to remedy it and not learn to live with it.  You can’t make realistic decisions unless you face the reality of a situation!

Manage communications effectively. Others are going to want to know about the crisis, and you need to learn how to impart that knowledge in a salient information only.  Senior managers won’t want waffle – they want to know the facts and what you are going to do about it.  In a serious crisis, you may need to respond to the media too, so be prepared for that.

Manage team ideas. In a crisis, your team are the people who will help you overcome it, but they need careful managing.  Get them together early on and work out ideas using standard tools such as brainstorming to overcome the problem.

Encourage problem solving.  As a project manager one of your main roles is to get the best out of people, and a crisis is the one place where your people have to excel. Usually, your team will look to you for direction but in this instance, you need to encourage them to find the answers within their own areas of expertise.

Be determined.  As a crisis grows, others outside the team may try to take over and pull the project from you.  In these cases, you need to stick to your principles and ensure that you have control.  If you lose governance of the team and the situation, it could turn out much worse.  Be determined and own the problem, right until its conclusion.

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Auditors focus on fraud detection

By Morgan International Writers

Whether they like it or not, auditors are increasingly being expected to focus on fraud detection. In fact it is becoming a responsibility, as in the event that there has been fraud and the auditor does not discover it, there is a significant chance that they will be sued by the company. This applies to companies both small and large. This not only applies to CPAs, but also to internal auditors and government auditors.

One of the ways in which auditors will be seeking to prevent fraud will be through risk management – that is having the appropriate controls in place over financial reporting. Furthermore, auditors are finding themselves dragged into conversations about cyber security as clearly one of the major ways fraudulent activity is carried out is via the internet and access to the corporate network. This again expands the scope of the auditor in a way that is unprecedented.

There have been advances made from a technology perspective which aid fraud detection such as artificial intelligence and machine learning. When there are large volumes of data, computers are very efficient at identifying irregularities. Furthermore they are able to ‘learn’ typical patterns of behaviour and therefore highlight any irregularities which could be fraud.

The good news is that discovery of fraud, and risk management is covered in detail within the CPA. The concept covered as explained within the 2017 course content is:

“Assessing Risks and Planning Further Procedures – Identifying and assessing risks of misstatement due to error or fraud and developing appropriate engagement procedures, including understanding and calculating materiality and considering specific engagement risks, as well as incorporating concepts such as group audits, using the work of the internal audit function and the work of specialists.”

In summary, as the occurrences of fraud not only increase in volume but also in complexity and seriousness, responsibility has fallen to auditors to identify it when it occurs and to put in place processes and procedures to prevent it from happening in the first place. This is a big responsibility, however the CPA syllabus has the requisite content to equip a new accountant with what they need to fulfil their role.

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Received Your CFA Exam Results? Failed? What Next?

By Morgan International Staff Writers

The CFA is widely considered to be Wall Street’s toughest exam. However that does not stop approximately 170,000 students worldwide turning out for it. Less than 50% pass the CFA exam, and therefore there will unfortunately be a lot of people who have not received the result they would have liked. However rather than start to doubt yourself, we are here to give you some top tips of what to do next and to pass next time around!

 

  • Pause and gain perspective

It would be very easy to fall into a depression and tell yourself you are not good enough etc. However failure is built into the system, and it is statistically likely that you will fail an exam at some stage. Many extremely good candidates will fail, but they will also get up, dust themselves off, study again, and pass the next time. So take some time to gather your thoughts and gain some perspective. It is not the end of the world and you can take it again. Of course next time you will be armed with experience of already having sat the exam before.

 

  • Evaluate

One you have taken that bit of time to get over the initial disappointment, consider and evaluate where you think you may have gone wrong. For example were you underprepared on particular topics and over prepared on others? Perhaps you did not sufficiently use the CFA curriculum books, or you did not do enough practice questions. Do the gap analysis and fix it next time.

 

  • Get back on the horse

Book in your resit. This is probably the simplest of the stages but for some the hardest as the fear of failing again can feel overwhelming. Remember you have the benefit of knowing where you went wrong last time! This in itself is invaluable.

 

  • Contact a training provider

It might be that you think you could benefit from some additional help with your exam preparation. There are a number of organisations out there such as Morgan International who have vast experience of helping students such as yourself overcome failure and pass with flying colours.

 

In Summary

Failing an exam is tough, particularly if you have done as much preparation as you feel you could have done. However you must remember that statistically you are more likely to fail than pass. This is of course not an excuse of any kind, but it should allow you to put things into perspective, fill the gaps in your knowledge, and pass a resit.

 

 

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4 Ways Tech is Transforming Accounting

By Morgan International Staff Writers

Accounting has traditionally been one of the slower professions to adopt new technologies. However a huge amount of accountancy tasks are fairly transactional and could be automated quite easily with a view to freeing professional accountants up to working on more strategic organizational activities. Here are the 4 top ways that technology is transforming accounting as we move swiftly through 2017:

 

  • Cloud Computing

Applications are made available in the cloud which means accountants can perform tasks wherever they are in the world, and wherever they are, so long as they have an internet connection. It also means that some modifications to the application can be made by the accounting team in real time, without needing to go through a change control procedure.

 

  • OCR

No more than a few years ago, OCR technology was a bit hit and miss. In an area such as accountancy, where getting just one digit wrong can cause massive problems, many businesses decided against the use of the technology. Not only has OCR now improved, but there have been big innovations in terms of creating workflows to searchable archives. This has allowed businesses to greatly streamline processes.

 

  • Mobility

Accountants are increasingly becoming dependent on their mobile devices to access data. Companies such as Xero are launching mobile apps that help accounting firms to manage their business. We are also seeing apps used as a way to aid communication and productivity between accountants and clients. It is also another way in which accountants can work on the move.

 

  • Social media

Social media is an essential and fairly inexpensive way for accounting firms to engage with their customer base. It is also an opportunity to reach and attract new clients. It is a valuable sales and marketing platform and many accounting firms are now going beyond traditional marketing to prioritize digital business development plans.

 

Summary

Technology is becoming increasingly pervasive within the accounting industry, and accounting professionals will have no choice but to keep up if they are to be successful and access the efficiencies their peers have at their disposal.
 

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