Categories
Marketing

Accounting firms are not marketing with blogs

Law firms continue to outpace accounting firms when it comes to harnessing the power of blogs to market their services to current and potential clients. A recent post by Michelle Golden asks the question “Isn’t Your Firm Blogging Yet?” and the answer apparently is no.

The post quotes this one from LexBlog founder Kevin O’Keefe, which brings to my attention that 53 of 200 AmLaw firms have a blog (or sometimes more than one). There is no comparable data for accounting firms, but Michelle maintains a pretty comprehensive list of accounting related blogs on her site, which includes my own.

(My views do not represent those of my accounting firm, but you can find my latest post on the BDO.ca home page as of this past weekend. In a sense, you can say BDO in Canada blogs.)

Seems like a good time to reprise an article I wrote about a year ago for Canadian accounting and finance industry publication The Bottom Line. It was titled
Blogs can be important marketing tools“, but I don’t think the title was insistent enough because the message hasn’t been heeded within the profession it seems.

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.

This stuff still rings true, so take mine and Michelle’s and Kevin’s advice: Get started with your blog today.

Categories
Accounting Standards

Scots tout principles in the Big Apple

The Scotsman:

The Institute of Chartered Accountants of Scotland will tell high-powered US financiers at a conference in New York that individual judgment should play a bigger role than strict adherence to a rule book.

Ah, this old classic. Once again the rules-based US system is coming under attack by external sources, this time from Scottish accountants enjoying their visit to the Statue of Liberty and Times Square with a sharp admonishment of the US accounting hegemony post Sarbanes-Oxley.

The debate over principles and rules goes to the heart of the profession as it begs questions about the type of training given and the way that accountants interpret accounts.

“We want to make accounts more accessible and we want a greater place for judgment and common sense in the way that opinion is given on the financial position of a company.”

Canadian GAAP is principles-based. International accounting standards are principles-based. US GAAP is the exception to the rule (no pun intended). Did rules prevent Enron from happening? No. Will they prevent something like it from happening again? Of course not.

Crooks are crooks regardless, and audits are not designed to detect fraud. Management fraud, like the kind at Enron, is even tougher because management can override the internal controls that are the focus of Sarbanes-Oxley!

Yes, there’s something to be said for principles. Principles allow greater judgment, which in turn allow auditors to get their way when management attempts to put an overly rosy glow on their financial reporting. If there are rules, then you can structure transactions to be just within those rules, even if the spirit of the deal is clearly out of bounds. Judgment, and principles-based accounting standards are really the only way to address this concern.

Categories
Accounting

BlackBerry maker getting the probe on options backdating

The Ontario Securities Commission has launched a probe of Research In Motion’s stock option practices. An OSC spokesperson said the review was launched in early October, which is not long after the company announced it would have to restate past financials because of its options accounting.

Another tech company is having difficulties with their options accounting. The reason is clear: the prevalence of stock options as compensation in cash-strapped startups.

RIM revealed Oct. 28 that the U.S. Securities and Exchange Commission had launched an “informal inquiry” into the way the company granted stock options. RIM did not disclose information about any similar OSC probe.

And the SEC had announced an investigation over a week earlier! Seems to me that the two major commissions in North America should have been communication between them.

This whole options backdating thing seems to me like it’s something you would intuitively know is against the rules, isn’t it?

Categories
Web

Mining Wikipedia for accounting topics

Wikipedia logoWikipedia is a good source of information about a variety of topics. I’m pleased to find that it’s generally pretty good about accounting too.

The article on the Balance Sheet contains “case studies” showing the effect of some transactions on a very basic balance sheet.

As well, I’d never seen non-current liabilities referred to as “fixed” liabilities before, although I’m familiar with “fixed assets.” Guess I’d just never considered the contra terminology!

It makes sense though, given that they result in fixed costs to the business, in general.

The article on the Income Statement shows some examples from Colgate-Palmolive and Viacom and gives instructions on calculating earnings-per-share.

Pensions have been in the news lately, with FASB announcing revised standards regarding the funded status of defined benefit plans.

Wikipedia’s pension entry provides a solid description of the two types of pensions, defined benefit and defined contribution.

I learned something new on the pension page as well:

In an unfunded defined benefit pension, no assets are set aside and the benefits are paid for by the employer or other pension sponsor as and when they are paid. Pension arrangements provided by the state in most countries in the world are unfunded, with benefits paid directly from current workers’ contributions and taxes.

It’s not surprising to find out we don’t learn how to account for these types of pensions in school. It’s basically pensions on a cash basis. Pay the cash, recognize the expense.

Poor matching of expenses to the revenue they helped generate – which is no doubt why governments are the only organizations that get to use this type!

Have you ever contributed to Wikipedia?

Categories
Accounting Standards

Pension brouhaha south of the border

FASB is coming out with some tough new standards relating to defined benefit pensions that is expected to result in significant new liabilities (or increases to existing ones) for companies that had been accounting for their pensions under the more lax requirements of the old standard.

Defined benefit pension plans are definitely the more complicated type, compared to defined contribution. I’ve only worked on one pension audit thus far, and it was – luckily for me – a defined contribution. Auditing a defined contribution plan is easier to do because future estimates aren’t necessary. Defined benefit plans require an actuary to perform the highly specialized work.

Anyway, back to the change in the standard. Under the old standard:

Employers reported an asset or liability that almost always differed from the plan’s funded status because previous accounting standards allowed employers to delay recognition of certain changes in plan assets and obligations that affected the costs of providing such benefits.

Pension accounting is one of those things you learn in a 2nd or 3rd year course at university and then pray you don’t have to see frequently in practice, unless you’re a masochist. It’s just so very complicated! I feel lucky that so far the only pension audit I’ve been on has been defined contribution.

Specifically, the new standard requires an employer to:

(a) Recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status

(b) Measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions)

(c) Recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Those changes will be reported in comprehensive income of a business entity and in changes in net assets of a not-for-profit organization.

Sounds like they’ve improved things from both the investor viewpoint as well as the employee’s. This new standard brings up the issue of comprehensive income, which is a below-the-line adjustment to net income on the income statement. I believe the Canadian standards body has guidance out relating to it but it may or may not be in effect for year ends just yet.