Category Archives: Accounting & Auditing

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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

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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.