Gaining Credibility

Even though credibility is established by receiving CPA/MBA certificates, performing ethically is the most valued form for accountants. An interview with Joseph Hostetler, a CPA in an upper management position at Kissimmee Utility Authority, explains the importance of ethical behavior and how a member can achieve true acquisition within the discourse once a bad reputation is established. Hostetler explains that there are many ways employees can reestablish themselves with higher credibility. If an employee wants to become closer to the discourse, he/she can obtain a CPA certificate or go back to school to get an MBA certificate. These certificates teach an accountant how to gain upper management qualities and will be respected by the members in the field. On the other hand, the credibility of these certificates is disregarded if employees display unethical behavior anytime in their career. There will always be that stain on their resume, and it is hard to recover credibility because of the importance of ethics in this field (Hostetler). An example of this within the accounting discourse would be if auditors give false reviews to investors of a company’s financial health because of personal relationships with their clients.

Not only does unethical behavior result in losing credibility within accounting, but serious repercussions will occur. An example includes the Bernie Madoff scandal in 2008 where he tricked investors out of 64.8 billion dollars through the largest Ponzi scheme ever. He was sentenced to 150 years in jail including 170 billion dollars in restitution. Even if jail time is minimal, trying to find a job after being arrested is extremely difficult. Employers look for honest employees and having a criminal record is a double negative.

 

How to Communicate

Most professions will use essay format to communicate, but accounting is the opposite. It has a simple job to present useful financial information to be used by potential investors. Making analytical conclusions of a company’s success will only hurt the members of an accounting discourse. Verbal communication in accounting is important, but numerical statistics that present relevant useful information is the best source of communication. An interview of  Ray Gonzalez, a risk consultant at Deloitte & Touche LLP, explains the type of communication needed by accountants in “The Manager's Role in Financial Reporting: A Risk Consultant's Perspective” is essential to keep clients satisfied. Gonzalez discuses that revenue recognition, timeliness, completeness, and accuracy of financial reporting are essential for communication because these reports become key measures of performance for public companies as well as private companies and partnerships (223). An example of the importance of financial statements as the source of communication is that large investors looking to invest in a company need accurate complete statistics in the correct accounting period in order to make a decision. If they see unclear or incomplete statistics that do not add up to the companies’ suggested success, then investors will turn away.

Being able to have good social skill is always a plus but in accounting its not a necessity. Learning how to use Microsoft word, excel spread sheets, power points or any other accounting software is required to communicate. When communicating statistical information, it needs to be in the simplest form it can be and must be relevant accurate information. Creativity in this field of study is not recommended and it even  might hurt you as an employee.

Staying up With Trends

If you are thinking about becoming an accountant then staying up with trends will benefit you in the long run. In this case, the trend towards Fair Value Measurement (FVM) has been a big topic of discussion through out the accounting field. FVM is a financial reporting approach in which companies are required or permitted to measure and report certain assets and liabilities at estimates of the prices they would receive. Under fair value accounting, companies report losses when the fair values of their assets decrease or liabilities increase (Ryan 11). Teresa M. Cortese-Danile, professor at St. John’s University, explains in "Ethics Is Imperative to Effective Fair Value Reporting: Weaving Ethics into Fair Value" that FVM is giving accountants incentives to act unethically and letting greed take over their judgment.   An example of unethical behavior regarding the use of FVM within the accounting discourse is how an uncommon asset, called a level 3 input, has no information on its value resulting in accountants using their own measurements. The reporting entities value the asset higher to make the company look more profitable than it actually is (Cortese-Danile 51).

FVM offers detailed procedures for implementation, but the length and complexity only creates new problems for the members of the discourse. FVM process is a two-hundred-page document solely based on processes which create complexity in a relatively simple job. Russell Madray, a CPA, explains in “The Trend toward Fair Value Accounting” that switching to FVM will raise arguments over the definition of certain assets and liabilities and will make financial statements unreliable to investors (17). An example of this within the accounting discourse would be the effect of the income statements on a company’s fixed assets like land, equipment and buildings. Accountants would have to record the assets and liabilities at the new fair value and the result of the financial statements would not resemble the company’s performance but rather the change in the value of their assets/liabilities.  This would cause false information of a company’s success in the financial reporting and could possibly hurt companies looking for investors. It will be close to impossible to implement a fair value on assets/liabilities, like fixed assets, and will lead to more aggravating arguments on how to measure a product.

By the time you earn your accounting degree, FVM might be implemented or still be in discussion. Learning more about trends will make it easier to transition into accounting by being knowledgeable of current situations. Not only does being knowledgeable about current events look good to the boss, but it gives you a chance to make an impact in the field!

 

Where does success lie?



David M. Walker

Experience in accounting is very important  to be successful, but what does it take to make you stand out from others? Donald Tidrick discusses in his interview with David M. Walker the reasons he was so liked by members of his discourse. David explained in the interview that working in the private and public sector of accounting and maintaining a nonpartisan approach gave him popularity by all factions of the discourse (Tidrick 61).  He explained he was favored by the republicans and democrats when he was appointed as the Comptroller of the United States because the Republicans wanted someone from outside of the government to transform and the Democrats wanted someone with experience in the public sector who was nonpartisan and non-ideological (Tidrick 61). Walker prioritized working in a professional manner, and any belief or value he had would not cloud his judgment. Accounting leadership positions highly favor those with the ability to work in both the public and private sectors and that show nonpartisan judgments in their work towards clients and investors. These qualities show that members of the accounting discourse are knowledgeable in their work and can be dependable in leadership positions because they understand that professionalism is the primary concern when dealing with clients. To be successful in this field, you must show professionalism which will eventually result in becoming a leader like Walker. Once Walker presented himself in a professional manner, he ensured the engine to his organization was properly running through employee satisfaction.

 

Accountants are required to point out unethical decisions, but questioning central authority concerning imperfections within the system is what leaders persist on changing. David M. Walker discusses the need for truth in “America at a Crossroads” by accusing the federal government of providing financial information that misleads investors to false statements of financial health of the United States. An example of these imperfections includes how a ten year budget projection failed to include the long-term retirement costs of the Baby Boomers (Walker 759). David Walker also points out that the common idea of military costs is the primary reason for the federal budget deficit, when in fact it only accounts for a small portion (759).

Walker’s professionalism and the way he questions the federal government is why he is favored by most accountants. His persistence to make change in the GAO and questioning greater authority resembles that he is fully proficient in the accounting discourse and is the reason he became successful. If accounting is the profession for you then you must present yourself in a professional manner. Do not let emotions get the better of you and cloud judgment. Accountants favor professionalism and its the only way to succeed. 

Acting in the Workplace

So you have landed an accounting job, so what do you do next? Membership in accounting requires being socially interactive with the work environment and obtaining a positive attitude throughout a member’s career. Lisa Van De Geyn , a CPA, discusses in “Workplace 101” that being energetic and enthusiastic about work will impress the boss and build a better relationship in the firm. She goes on to explain that new employees should stay current with literature on leadership, management styles, and dealing with personality types (29). A good start would be to reading up on the Journal of Corporate Accounting and Finance and introduce the new material to superiors with new approaches of corporate finance. This shows that you are interested in your job and could even make you stand out if your job could be at risk!

Accountants know to be independent from business investments, but they also must have the appearance of independence. Sarah Ference, CPA and risk control consulting director at CNA, explains in “Independence is in the Eye of the Beholder” that to achieve independence in appearance, a discourse member must avoid circumstances that would cause a third party with knowledge of relevant information to conclude that the integrity, objectivity, or professional skepticism of the discourse member has been compromised (1).  An example of this would be if a CPA gets too close to a client, compromising his professional duties because of their personal relationship. Employers or other employees of that discourse will see that the CPA cannot perform duties without a biased trait. Its ok to be friendly and polite but make sure all conversations are BUSINESS related!

These are only a few of the tips to act within a work place but there are many others to be discovered. Just remember to be enthusiastic, energetic, dedicated and to avoid personal attachment with clients! Follow these tips starting out and you will be promoted in no time!

 

What is Accounting in a Nutshell?

Definition
Accounting is the system of maintaining records of a company’s operations and communicating that information to decision makers.

Tools

Accounting uses financial statements, or periodic reports published by the company for the purpose of providing information to investors. The four financial statements commonly used include; Income Statement, Statement of Stockholders' Equity, Balance Sheet and Statement of Cash Flow. All of these statements build upon each other and are all required to determine the financial standing of a company.

Four main financial statements:

1.)    Income Statement

Revenues-expenses = Net income

 

2.)    Statement of Stockholder’s Equity

Net income – dividends = Stockholder equity

 

3.)    Balance Sheet

 Stockholders’ Equity + Liabilities = Assets

 

4.)    Statement  of Cash Flow

This last Financial statement takes Stockholders' Equity, Liabilities and Assets and organizes it into three categories which are Operating Activities, Investing Activities and Financing Activities. The point of this is to determine the ending amount of cash at the end of the reporting period.

Accounting Organizations

Generally Accepted Accounting Principles (GAAP) – Rules of financial accounting

Financial Accounting Standards Board (FASB) – Establishes the rules of financial accounting in the United States

International Accounting Standards Board (IASB) – Establishes the rules of accounting for all countries worldwide and is responsible for converging the accounting standards

Securities and Exchange Commission (SEC) – Requires companies that publicly trade stocks to prepare periodic financial statements for distribution to investors and creditors

Careers in Accounting

Public Accounting – Auditing, Tax Planner, or Business Consultants

Private Accounting – Financial, Managerial, Budget analyst, Internal auditors, Tax Planner, Payroll managers

Why to consider accounting?
Accounting is often considered the cornerstone of the economy because every business organization around the country will need accountants to manage financial issues. There is an anticipated 20% increase of newly hired accountants in the next decade and demand for accountants are at an all time high resulting in high starting salaries. One thing is for certain is that accountants will never be out of a job.