Congratulations from my Member of Parliament

Peggy Nash congrats CA 2006When you pass the UFE, your partners, managers and co-workers line up to congratulate you on your success. In my case, fellow bloggers joined in the chorus. On top of all this, your Member of Parliament sends you a certificate like the one pictured here.

It’s nice to keep getting things that can be framed, if I ever get around to doing so. I also got to thinking, if I’d known this was going to be one of my rewards for passing, I would’ve moved to York Centre, where former Montreal Canadiens great Ken Dryden is the MP!

Exxon Mobil’s profits and taxes: both records

Exxon Mobil announced recently the highest annual profits by a US corporation in history. Reaction was predictable – the US Congress was littered with outraged politicians calling for a windfall profits tax. But that would be wrong, and the Tax Foundation can explain why much better than I:

While they were recording record profits last year, they were also writing checks to Uncle Sam to the tune of $100.7 billion — two and a half times what they made in net profit. In fact, previous Tax Foundation research found that from 1977 to 2004, federal and state governments extracted $397 billion by taxing the profits of the largest oil companies and an additional $1.1 trillion in taxes at the pump. In today’s dollars, that’s $2.2 trillion.

This is followed by a nice segue into one of my favourite topics – hammering home the point that corporations don’t pay taxes.

Economists across the ideological spectrum agree that individuals bear the burden of business taxes. As stakeholders, we all pay in one of three ways: The first to pay are the employees of oil companies here in the U.S. — people who would make lower wages or perhaps even lose their jobs. Next would be the millions of Americans who have investments in the oil industry — people who would earn lower returns on those investments. And finally, the principal group to pay would be American gasoline customers — the millions of people who would pay more at the pump.

The main reason why the company can boast such a huge net income is simply because it’s so large in general. Formed when Exxon and Mobil merged in 1999, the company is the largest in the world by market value and revenue. It’s (obviously) the largest of the six “supermajor” oil companies. Income as a percentage of revenue is a reasonable 10.5%.

Canadian audit overseer reports problems and solutions

The Canadian audit oversight body, the Canadian Public Accountability Board, announced Friday that last year they deregistered a small firm in Vancouver (which has since gone out of business) and prevented three other small firms from accepting new client due to deficiencies in their audits discovered upon inspection.

My initial thought was, these small firms have public company clients? The CPAB is charged with overseeing only firms that audit public companies, therefore I guess they must. Good on them. Generally public companies choose auditors with more expertise on board that a partner or two and a handful of staff. This is because of their often complex accounting needs and the greater security that comes with a firm that can take on higher liability.

CPAB said yesterday it reviewed 121 audits performed by Canada’s six largest accounting firms last year, and found five cases where the work was so deficient that the companies involved had to correct or restate their reported financial results.

Another nine of the files “had serious deficiencies” in the work done, but did not require restatements. In each case, the audit firm was required to do more work on the file or improve its documentation.

Overall the oversight board believes documentation is the biggest area of improvement for audit firms. We just don’t document our thought processes in enough detail to satisfy them, in particular when we consult internally on complicated matters or judgment calls. I know my firm has recently rolled out what they’re calling the new “documentation standards”, which address this concerns.

I’d like to have a file that I worked on examined by the CPAB just to see whether my work is up to snuff. Something tells me it’ll happen sooner or later!

TransitCamp set to improve the TTC

A group of Toronto bloggers are getting together this weekend for the TTC TransitCamp to brainstorm ways to improve the TTC’s absolutely horrid website.

When I first heard about it a few days ago, my first impulse was to try to get involved. Then I realized, there are probably many more Torontonians with much more to contribute than one who drives every day to random parts of the GTA.

Some got together on January 21 to plan the event, and the group can be seen in this Flickr set. The event has even been dugg! The buzz is building and I can’t wait to hear about the great ideas that are sure to result from this innovative “unconference.”

Blogs can be important marketing tools

Originally published in The Bottom Line February 2007 print edition only.

Blogs are all about having more personal and meaningful conversations with an audience about a topic. When you’re an accountant or accounting firm, blogs are a way to reach people interested in your expertise, whether they’re fellow accountants interested in discussing the profession or potential clients looking for an accountant with an aptitude for technology and an ability to stay on top of the trends.

Why should an accountant blog?

If you’ve got something to say about accounting or, even better, a specific area of competency within the industry, having a blog will help establish your name online, and in a profession such as public accounting, getting your own name out there is important for your career. “Personal PR” should involve offline networking as well as an online component. Blogging will allow you to meet like-minded accountants from around the world and gain useful contacts.

You have to enjoy writing to be able to blog productively and to come up with enough interesting topics every week – regular updates are critical to growing blog readership. Once a week seems to be the accepted minimum frequency, but there are some prolific bloggers making several posts per day.

Blogging can be part personal release, part professional development. Blogging is a creative outlet, where you can explore new ideas and argue constructively with other bloggers about the industry. Blogging will also allow you to differentiate yourself from the pack, since it is still a relatively new medium and certainly has not been embraced yet by the accounting mainstream. Current CFOs don’t read blogs much (yet), but future CFOs do.

Blogging about accounting will allow you to keep up on the hot topics in the industry in a more meaningful way. In 2006, options backdating in the US and income trusts in Canada have been on the front burners of accountant blogs. Being able to weigh in on those topics with some credibility allows a blogger to have a level of influence that otherwise would go untapped.

As a Canadian, an accountant blogger can make Canada’s voice heard on an international scale. This will become even more important as we move to international accounting standards. Educating others about the situation in Canada with income trusts could help other countries better deal with the problems flow-through entities can present.

Why should an accounting firm have a blog?

It’s a bit different if you’re blogging about your firm. In this case, you’re selling something a little more blatantly than if you’re blogging independently.

It is a good idea for all accounting firms to embrace blogs as a way of keeping in contact with clients and providing relevant accounting and tax news and firm information. You can also communicate with clients more frequently by blogging every other day on a new topic of interest, and speak to them on a more personal level compared to more traditional forms of communication like periodic informational leaflets.

Firms can focus their blogs on different topics, for example, a corporate tax blog, a personal finance blog, and an audit and assurance blog. Breaking up the audience into segments like this will increase the overall exposure of the firm in search results.

Search engines, and especially Google, have caught on to the blog phenomenon and will now crawl frequently updated blogs at least daily, which will have a dramatic impact on your firm showing up in search results when a potential client searches for a topic you’ve blogged about. Imagine a potential client searching for information about the changes to dividend tax, and finding a recent blog post that highlights your firm’s expertise on the subject.

Blogs can even be used purely internally to share news within the firm and encourage dialogue about firm policies. Engaging accountants in your firm in dialogue at all levels will help your firm retain the top talent, as it will encourage them to take a more active role in the firm at earlier stages of their development.

How should an accountant blog?

Take advantage of the nature of the medium to have a more personal conversation with your readers. Engage them in the discussion and encourage community. A blog really isn’t a blog without the ability of readers to post comments, and blogs that do not allow comments are isolated from the blogosphere, which is critical to building traffic and a reputation.

Most important is to let your personality shine through in your writing, because accountants already have a reputation for being about as interesting as a block of cheese. Be a real person, and speak from the heart. Have opinions, and explore them. Although you are selling yourself and your ideas, being a phony will never work since the next blog is just a mouse click away.

Resist the temptation to slap some ads on your blog. You won’t make anything from them until you’ve built a solid readership, and building that readership will be harder if you’ve got ads framing your writing. A professional, hosted blog can cost as little as $15/month, and you should consider it an investment in your career or firm.

That being said, you can easily start blogging right away and it will cost you nothing at all except your time using any one of a variety of free blog hosting services, such as Google’s Blogger (www.blogger.com). It will allow you to get your feet wet and experience what blogging is all about on a trial basis.

Blogs are not a fad, they are here to stay and will grow and evolve as the tools become more sophisticated. An accountant or accounting firm has a lot – of potential clients and contacts – to lose by ignoring the phenomenon. So take advantage of this new method of communication to build your network of clients and contacts!