Jan 18

Forensic Accountant: Reliability & admissibility as Expert Witness

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Forensic Accounting

Forensic accounting is a rapidly growing area of accounting concerned with the detection and prevention of financial fraud and white-collar criminal activities. George A. Manning in his book “Financial Investigation and Forensic Accounting” defines Forensic Accounting as the science of gathering and presenting financial information in a form that will be accepted by a court of jurisprudence against perpetrators of economic crimes. The integration of accounting, auditing, and investigative skills yields the specialty known as Forensic Accounting which focuses very closely on detecting or preventing accounting fraud. “Forensic”, according to the Webster’s Dictionary means, “Belonging to, used in or suitable to courts of judicature or to public discussion and debate.” The word accounting is defined as “a system of recording and summarizing business and financial transactions and analyzing, verifying, and recording the results.” The term ‘forensic accounting’ refers to financial fraud investigation which includes the analysis of accounting records to prove or disprove financial fraud and serving as an expert witness in Court to prove or disprove the same. Thus, basically, the forensic accounting is the use of accounting for legal purposes.

The History of Forensic Accounting

The forensic accounting can be traced back as far as 1817 to Meyer v. Sefton, a Canadian case that allowed an ‘expert witness’ to testify in court. The term ‘forensic accounting’ was first published in an article in 1946 “Forensic Accounting- Its Place in Today’s Economy” authored by Maurice E. Peloubet, a partner in Price Waterhouse. He stated that, “during the war both the public and industrial accountant have been and now engaged in the practice of forensic accounting”. Many scholars have traced the roots of investigative accounting to his work. Interest in forensic accounting spread through the United States and England early in the twentieth century. One of the first institutions to use the services of such investigative accountants was the IRS. The story of Al Capone the famous mobster being caught on a tax evasion scheme is well-known. The FBI decided to use forensic accountants and employed nearly 500 such agents during World War II. As a profession, forensic accounting continued to grow during the latter half of the century, as GAAP and tax laws became widespread and mandatory.

The need for Forensic Accounting

Forensic Accounting is a fast emerging field in the “World of Accounting”. Although it has been around for a long time, it has become increasingly popular and much relevant today in view of global financial crisis due to the downfall of the Lehman Brothers and its ripples felt across the globe. Thus, a new avatar of Accountant has emerged known as Forensic Accountant. Although Investigative Accounting has been around for years, it has only recently begun to transform into a new branch of accounting, hence Forensic Accounting. Forensic accountants unlike traditional accountants, look beyond the numbers, put their nose and eye deep into the financial books, records and data to uncover fraud, hidden assets, siphoned funds and the like. The word forensic is defined as the application of scientific knowledge to legal problems and legal proceedings. The word accounting is defined as “a system of recording and summarizing business and financial transactions and analyzing, verifying, and recording the results.” By combining these two definitions it can be concluded that forensic accounting utilizes his regular accounting principles & practices in legal situations. Forensic Accounting is like the bridge which connects accounting system to legal system. Thus, we can say that the forensic accounting is an accounting that is used in a court of law. One of the most notable legal situations in the recent past would be the Enron scandals; where large numbers of American forensic accountants were employed. The wave of financial crisis primarily caused by corporate malfeasance and fraudulent financial activities eroded public trust and investor confidence in financial reports and audit services and need was felt to look beyond the conventional accounting function which only fulfilled the compliance requirements i.e. company’s books of accounts are kept in accordance with rules & regulations. In view of the increasing number of financial frauds committed by conspiracy with complex accounting records manipulation, it was felt that a new tribe of Accountant is needed to detect the financial fraud in companies with his accounting, auditing, and investigative skills and also assist in legal matters. This area of accounting came to be known as ‘forensic accounting’. There is a global awareness to fight the cases of financial frauds. Though many strategies have been formulated and many actions have been taking to fight against it, the problem still persists. One of the major hindrances in fighting financial crime cases is lack of quality forensic analysis of the financial statements and records due to lack of forensic accounting professionals. This author who had been an investigating officer during his tenure with Delhi Police in number of major cases of financial crimes have faced this dearth of quality forensic accounting experts who could have come handy in timely & accurate investigation of the intricate financial crimes and unearth the complex modus operandi adopted by the fraudsters who are themselves in some cases highly qualified financial professionals. The reason why there has been rampant increase in white collar financial crimes because they think that they can get away with it with impunity and the greatest deterrent to thwart the criminal act is law enforcement. However, the conviction rate in the financial fraud cases was very low due to weak law enforcement which is attributable to weak litigation support in prosecution process. Without full support of accounting expert, prosecutors often fail to prove and provide strong evidence to put fraudsters behind bar. Here, the Forensic accounting can play an important role here by providing accounting or financial information or other evidentiary inputs for legal purposes. To achieve the aim, forensic accountant besides having financial accounting expertise, should also have proven skill in law, scientific investigative technique, interpersonal and communication skills etc.

Growth of Forensic Accounting

The Western Countries are utilizing the forensic accounting expertise to address the financial fraud cases. United States and Canada are pioneers in development & implementation of Forensic Accounting. The Canadian Institute of Chartered Accountant recently recognized Investigative and Forensic Accounting as an accounting specialty. The CICA has started granting its members to use the designation initials CAIFA who complete three years post qualification experience as a CA with Diploma in Investigative and Forensic Accounting (DIFA) from the University of Toronto. The CA-designated specialist in investigative and forensic accounting (CAIFA) combines the well-recognized and respected attributes of the CA – in particular integrity, understanding of business, and financial acumen – with an in-depth knowledge and experience in investigative and forensic accounting. The CA-designated specialist in investigative and forensic accounting (CAIFA) combines the well-recognized and respected attributes of the CA – in particular integrity, understanding of business, and financial acumen – with an in-depth knowledge and experience in investigative and forensic accounting. This is accomplished through a profession-endorsed certification process that has ongoing experience and education requirements. The CAIFA tells litigation lawyers, law enforcement professionals, the courts and other legal forums that the designated holder is well positioned to practise in areas such as fraud and economic loss quantification, including:

· investigating and analyzing financial evidence;

· testifying as an expert witness ;

· becoming involved in criminal investigations and uncovering financial evidence in employee or insurance fraud cases;

· Investigating in the rapidly evolving area of computer and Internet fraud.

Forensic Accounting implementation in India

However in India, this branch of accounting has not got its due recognition even after alarming increase in the complex financial crimes and lack of adequately trained professionals to investigate and report on the complex financial crimes. The task of Forensic Accountants is handled by Chartered Accountants who apart from handling traditional practice of auditing as required under the Companies Act, 1956 or Income Tax Act are called upon by the law enforcement agencies or the companies or private individuals to assist in investigating the financial crime or scam. The CA or CWAs in India are best suited for this profession due to their financial acumen acquired during their rigorous training which can be further honed by introducing post qualification degree or diploma in Investigating and Forensic Accounting similar to one introduced by CICA. The CA or CWA who acquire post qualification in Investigative & Forensic Accounting can use the designation CA-IFA or CWA-IFA and be legally recognized as the Forensic Accounting Experts to handle the investigation of financial crimes and give expert testimony in the Court of Law. However, no efforts has so far been made by the ICAI and ICWAI, the two leading statutory accounting professional bodies to move in this direction and set up a institute which can offer the post qualification diploma in Investigative and Forensic Accounting to its members.

However, growing financial fraud cases, recent stock marker scams, failure of non financial banking companies, phenomena of vanishing companies and plantation companies and failure of the regulatory mechanism to curb it has forced the Government of India to form Serious Fraud Investigation Office (SFIO) under Ministry of Corporate Affairs which can be regarded the first step of Government of India to recognize the importance and advance the profession of forensic accountants. The SFIO is a multidisciplinary organization having experts from financial sector, capital market, accountancy, forensic audit, taxation, law, information technology, company law, customs and investigation. These experts have been taken from various organizations like banks, Securities & Exchange Board of India, Comptroller and Auditor General and concerned organizations and departments of the Government. However, the main important law enforcement agency involved directly in combating white-collar crimes is the Police, CBI, DRI etc. There is a total lack on the part of these law enforcement agencies to train their investigators in this specialized part of investigating white-collar crimes involving forensic accounting. The investigation of the major financial crimes is handled by ordinary investigating officers who after spending some time in investigation of conventional crimes are shunted to the economic offence wing and they are expected to handle the financial crime cases involving complex & intricate financial records which is required to be analyzed to unearth crime or unique MO adopted by the white collar criminal. The result is obvious, the case dies its natural death and the criminals roam free as the IO given his lack of specialized knowledge & qualification fails to properly investigate the financial crime to its logical conclusion. On the other hand if we look at the western countries particularly USA, the law enforcement agencies of which like DEA, FBI, CIA has well marshaled its pool of special agents having forensic accounting backgrounds that are the backbone of the bureau’s financial crimes and terrorism financing units and investigate with professional acumen, the complex financial crime like money laundering, internet crimes, financial institution fraud and other economic crimes. Today, there are more than 600 FBI agents with accounting backgrounds. Thus, it is highly imperative on the part of law enforcement agencies in India that they follow the suit and engage specialist forensic accountant on its roll whose engagements relating to criminal matters typically arise in the aftermath of financial fraud.

The Indian Law which refers to Forensic Accounting:

1) The Companies Act, 1956:

a) Section 235 and 237: There are provisions in Companies Act (Section 235 and 237) which empowers the Central Government to inspect the books of accounts of a company, to direct special audit, to order investigation into the affairs of a company and to launch prosecution for violation of the Companies Act, 1956. Books of accounts and other documents of the companies are inspected by the officers of the Directorate of Inspection and Investigation and the Registrars of Companies. These inspections are designed to find out whether the companies conduct their affairs in accordance with the provisions of the Companies Act, 1956 to see whether any unfair practices prejudicial to the public interest are being resorted to by any company or a group of companies and to examine whether there is any mismanagement which may adversely affect any interest of the shareholders, creditors, employees and others. Wherever inspection reports disclose any information that may be of interest to other Departments or agencies like the Ministry of Commerce and Industry, Central Board of Direct Taxes, Enforcement Directorate, State Government or Provident Fund Authorities, such information is passed on to them. If an inspection discloses a prima facie case of fraud or cheating, action is initiated under provisions of the Companies Act, 1956 or the same is referred to the Central Bureau of Investigation.

b) Provisions of Sick Industrial Companies Act incorporated into the Companies Act, 1956: The Section 424A(5) of the Companies Act, 1956 empowers National Company Law Tribunal (NCLT) to examine as preliminary issue whether the company is a sick industrial company u\s 2(46AA). Thus even before examining the viability of the scheme of revival proposed by the company, NCLT can check the genuineness of the reference made to it. Thus, inquiry by operating agency will only be to enable NCLT to decide the viability of the scheme and to assess whether the company has the ability to revive on its own. Further, Section 424B of the Companies Act, 1956 empowers the tribunal to make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial company. Further, the Tribunal may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry, require by order any operating agency to enquire into the scheme for revival and make a report with respect to such matter as may be specified in the order. Operating agency is group of experts consisting of persons having special knowledge in banking & industry in which sick industrial company is engaged and includes public financial institution, State level institution, scheduled bank or any other any other person as may be specified by general or special order as its agency by the Board. Thus, Forensic Accountant can be part of operating agency and investigate whether the reference made by the company is genuine or the accounts are manipulated or fabricated to suit the scheme of reference made to NCLT to declare it as sick company and thereby siphon public funds.

2) SEBI Act, 1992:

The share market is highly volatile and the brokers indulge into various unfair and fraudulent trade practices like synchronized share trading, manipulate and fabricate the books of accounts and cheat the gullible investors. Regulation 11 C of the SEBI Act, 1992 empowers the SEBI to direct any person to investigate the affairs of intermediaries or brokers associated with the securities market whose transactions in securities are being dealt with in a manner detrimental to the investors or the securities market. Thus fraudulent and unfair trade practices of the brokers or market intermediaries are investigated by the investigator appointed by SEBI which require the broker or market intermediary to furnish information, books of accounts, registers, documents or records etc. which is analyzed by the investigator to find out any manipulation, fraudulent practice or otherwise of the broker. Thus, Forensic Accountant can play a lead role in assisting the SEBI to unearth the complex share related frauds perpetrated by the brokers.

3) The Insurance Act, 1938:

Section 33 of the said Act empowers the IRDA to direct any person (“Investigating Authority”) to investigate the affairs of any insurer. The investigating authority may seek assistance of the auditor (or actuary or both) who shall be the Chartered Accountant within the meaning of Chartered Accountant Act, 1949 for the purpose of assisting him in any investigation. The books of account, registers and other documents are taken by the investigating authority in its custody to analyze it to find out the manipulations or fabrication in the books of accounts. Thus, Chartered Accountants plays a front role as an Forensic Accountant and aid in the investigation conducted into the affairs of the insurer as per the provisions of Insurance Act, 1938.

4)  The Prevention of Money-Laundering Act, 2002:

Section 3 of the Prevention of Money Laundering Act, 2002 defines the offence of money laundering as involvement of a person in any process or activity connected with the proceeds of crime and projecting it as untainted property. The three important stages in the money laundering process are:

· Placement: Physical disposal of cash acquired from illegal sources by depositing the cash in domestic banks or other kinds of financial institutions.

· Layering: Working through complex layers of financial transactions to distance the illicit proceeds from their source and disguise the audit trail.

· Integration: Making the wealth derived from crime appears legitimate.

Forensic Accountant can often be involved in the following antimony laundering activities:

· Investigating and analyzing financial evidence to establish a suspicious transaction;

· Developing computerized applications to assist in the analysis and presentation of financial evidence;

· Communicating their findings in the form of reports, exhibits and collections of documents that assist the banks in submission of the suspicious transaction reports to the regulator; and

· Assisting in legal proceedings, including testifying in court as an expert witness and preparing visual aids to support trial evidence.

5)  The Companies (Auditor’s Report) Order, 2003:

CARO, 2003 requires the auditor to report to the effect that if a substantial part of fixed assets have been disposed off during the year, whether it has affected the going concern status. In order to carry out the duties, the auditor has to draw a corollary and reference to the section 293 Companies Act, 1956, AS 24 (‘Discontinuing Operations’) and to AAS 16 (Going Concern) and thereafter make his observations on this matter. It also requires the auditor to report on Frauds i.e.; if any fraud on or by the company has been noticed or reported during the year.

Expert forensic accounting evidence

Who is an expert witness?

An expert witness is a witness, who by virtue of education, training, skill, or experience, is believed to have knowledge in a particular subject beyond that of the average person, sufficient that others may officially (and legally) rely upon the witness’s specialized (scientific, technical or other) opinion about an evidence or fact issue within the scope of their expertise, referred to as the expert opinion, as an assistance to the fact-finder. Expert evidence is evidence given to a court or tribunal by a person, skilled and experienced in some professional or technical sphere, of the conclusions he has reached on the basis of his knowledge, from facts reported to him or discovered by him by tests, measurements or similar means. It is commonly given by, for example, doctors, chemists, surveyors, architects, accountants and the like. In a Scottish case, Davie v Edinburgh Magistrates (1953) , it was said that the function of an expert witness “…is to furnish the judge with the necessary scientific criteria for testing the accuracy of his conclusions, so as to enable the judge to form his own independent judgment by the application of those criteria to the facts proved in evidence” .

An expert witness is different from ordinary witness

Expert witnesses have a different status from ordinary witnesses when giving evidence at a Court or other judicial or quasi-judicial tribunals. The evidence of the “expert” differs from that of the ordinary witness who testifies as to facts observed, in that the expert is permitted to express his/her opinion on a matter that has occurred in the past, or may occur in the future which have not been actually observed by the expert, who is providing evidence. The relevance and weight which the Court or tribunal will attribute to such an opinion within the total evidence which is adduced is a matter for the Court or tribunal.

An expert, unlike other witnesses, is allowed, because of his special qualifications and/or experience, to give opinion evidence. It is for his opinion evidence that he is called, not for his view of the facts or circumstances of the dispute, although his interpretation of the facts is often necessary in order to explain and/or justify his conclusions.

Forensic Accountant as an Expert Witness:

The tradition and law relating to the status of the experts as witnesses dates back to English Courts around 1550. However, the first recorded use of an accountant as an expert witness was in Meyer V. Sefton, 2 Stark. 274 (1817). The use of Forensic Accountant testifying as an expert witness in the Court of law is becoming increasingly prevalent today in view of the rapid increase in the financial fraud cases. In court cases where the knowledge of an expert can help to better explain the facts in issue or relevant facts, an “expert witness” may be called upon to give expert testimony.

Section 45 of the Evidence Act which makes opinion of experts admissible, lays down that when the Court has to form an opinion upon a point of foreign law, or of science, or art, or as to identity of handwriting or finger impressions, the opinions upon that point of persons specially skilled in such foreign law, science or art, or in questions as to identity of handwriting, or finger impressions are relevant facts. However, neither the Indian Evidence Act nor there is any seminal judicial pronouncements which clarifies as to when, how and under what circumstances, the testimony of Forensic Accounting Expert would be admissible or inadmissible.

In order, to bring the evidence of a witness as that of an expert it has to be shown that he has made a special study of the subject or acquired a special experience therein or in other words that he is skilled and has adequate knowledge of the subject. The Cost Accountant or Chartered Accountant can be considered as an expert to give testimony within the meaning of Section 45 of the Evidence Act. Moreover, the draft of “The Companies Bill, 2008″ includes the definition u/s 2 (1) (zn) which interalia includes Cost Accountant and Chartered Accountant in the definition of “Expert” which can be also considered/extended for relying upon their testimony in the Criminal/civil cases by the court.

In USA, however, the admissibility of the Forensic Accounting Expert testimony is supported by the Judicial Pronouncements and Federal Rule of Evidence. Over the years, the US Supreme Court has delivered several decisions clarifying its standards for the admission of expert testimony:

In Frye v. U.S., the Court stated that expert testimony will be admitted if based on a methodology “generally accepted” by the scientific community.

In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) the Court concluded that the trial judge must act as a gatekeeper for expert testimony, considering several nonexclusive factors applicable

to the testimony’s reliability and relevance, including:

· Whether the theory or technique has been or can be tested,

· Whether the theory or technique has been subjected to peer review or publication,

· The known or potential rate of error, and

· Whether the theory or technique is generally accepted in the relevant scientific community.

Although Daubert focused on the admissibility of scientific expert testimony, its progeny have had a great impact on Financial Expert testimony. In Kumho Tire Co. V. Carmichael, 526 U.S. 137 (1999), the Court made clear that the gatekeeper function applies to all expert testimony, not just scientifically-based testimony.

Rule 702 of the Federal Rules of Evidence effectively codifies the Supreme Court’s decisions in “Daubert” and “Kumho”. Rule 702 provides that if the Court finds that scientific, technical or other specialized knowledge “will assist the trier of fact to understand the evidence or to determine a fact in issue,” and if the Court finds that the witness is qualified as an expert “by knowledge, skill, experience, training, or education,” then the Court may permit the witness to testify — so long as the witness’ testimony is based on “sufficient facts or data,” the testimony “is the product of reliable principles and methods,” and the witness has “applied the principles and methodology reliably to the facts of the case.

Further, concerning determinations of nonscientific expert testimony reliability, financial expert testimony (which includes Forensic Accountant Testimony) in particular, the Advisory Committee on the Federal Rules of Evidence and the Standing Committee on Rules of Practice and Procedure (“Committee”) which proposed amendments to the texts of Rules 701, 702, and 703, specifically observed:

“Some types of expert testimony will not rely on anything like a scientific method, and so will have to be evaluated by reference to other standard principles attendant to the particular area of expertise. . . . The expert’s testimony must be grounded in an accepted body of learning or experience in the expert’s field, and the expert must explain how the conclusion is so grounded. “Whether the testimony concerns economic principles, accounting standards, property valuation or other non-scientific subjects, it should be evaluated by reference to the ‘knowledge and experience’ of that particular field.”

Therefore, under the Federal Rules of Evidence, a judge will permit an accountant to testify as an expert witness only if the judge decides that:

The accountant’s testimony will help the jurors or judge understand the evidence or determine a fact in issue.

The accountant is qualified as an expert by knowledge, skill, experience, training, or education.

The accountant can show that his or her testimony (a) will be based on sufficient facts or data and (b) will be the product of reliable principles and methods that have been applied reliably to the facts of the case. (These requirements are often referred to in shorthand as “qualification, reliability, and fit.”)

Thus, under the rule announced in Daubert v. Merrill-Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and expanded in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), the courts must ensure that experts-scientific and otherwise-will offer testimony that is methodologically sound and relevant to the facts of the case before admitting their expert testimony.

Qualifying as an Expert Witness

Challenges to financial expert testimony have skyrocketed in recent years. Since Daubert v. Merrell Dow Pharmaceuticals, Inc. (1993), an increasing number of testifying experts have been subjected to challenges by opposing counsel in an attempt to prevent the experts from testifying (Journal of Forensic Accounting: 1524-5586/Vol.IV(2003), Page-113). Figlewicz and Sprohge in their article, “The CPA’s Expert Witness Role in Litigation Services: A Maze of Legal and Accounting Standards,” offer ten guidelines to help avoid legal challenges:

1. Know the relevant professional standards.

2. Apply the relevant professional standards.

3. Know the relevant professional literature.

4. Know the relevant professional organizations.

5. Use generally accepted analytical methods.

6. Use multiple analytical methods.

7. Synthesize the conclusions of the multiple analytical methods.

8. Disclose all significant analytical assumptions and variables.

9. Subject the analysis to peer review.

10. Test the analysis-and the conclusions-for reasonableness.

Now the various investigation agencies such as Police, CBI etc. are taking the help of CA/CWA as a Forensic Accountant and using their report as evidence in the cases of criminal/civil nature. Whether the aforesaid principles/guidelines laid down by the two US Supreme Court Judgments incorporated into Federal Rules of Evidence would be followed by Indian Courts or not will become clear in the due course of time.

However, the fact is that though till today there is general acceptance of admissibility of scientific evidence and expert’s opinion in Indian Courts, there is no special law with respect to this which lays down criteria, principles or guidelines in clear terms with regard to when the expert opinion would be admissible and when it will not as is the case under the US federal law. Section 45 of the Indian Evidence Act is insufficient in this regard. However, in case of doubt, the principles laid down by US Supreme Court can be adhered to. In conclusion, one should understand that it is ultimately for the Court Of Law to decide as to who is qualified as an expert by knowledge, skill, experience, training or education, who may testify thereto in the form of an opinion or otherwise if:

1. The testimony is based upon sufficient facts or data,

2. The test is the product of reliable principles and methods, and

3. The witness has applied the principles and methods reliably to the facts of the case

However, no doubt, with the rapid increase in the cases involving misappropriation of funds, manipulation of books of accounts, banking fraud cases, Securities scams etc. involving complex financial transactions, the Forensic Accountants and admissibility of their testimony needs to be elucidated and these would be determining factors for deciding the fate of these cases. The involvement of Forensic Accountant in financial fraud cases and his testimony will not only take these cases to logical conclusion but also will go a long way ahead to put a curb on these menace of white collar offences.

Neeraj Aarora

(Advocate)

Neeraj Aarora


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Jan 06

Impact of Enterprise Resource Planning (ERP) on Roles of Management Accountant in Organizations

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1. Introduction

Enterprise Resource Planning is the latest high end solution, information technology has lent to business application. These days we are living in a globalized world, where competition is not absent. This is why it is essential for managers of the enterprise to develop different strategies to satisfy client needs, many of which have become hard to see. They are trying to anticipate what clients will want or need, and in that way they work to offer customized products. Companies are looking for software that can be capable of administrating every aspect of their business integrally. Many of them have been seeking new technological tools that can optimize their internal procedures and make them more efficient.The ERP solutions seek to streamline and integrate operation processes and information flows in the company to synergise the resources of an organization namely men, material, money and machine through information. The emergence of ERP systems offer businesses a set of integrated application modules which span most business functions (Scapens and Jazayeri, 2003).  Today many companies in India have gone in for implementation of ERP and it is expected in the near future that 60% of the companies will be implementing one or the other ERP packages since this will become a must for gaining competitive advantage. The aim of this paper is to demonstrate the impact of ERP implementation as a new system on management accounting practices. The management accounting and ERP system will be introduced and clarify how are they working together. This paper will view a definition of an ERP system implementation, defining the management accounting, the dimensions of management accounting such as the roles and attributes of management accounting, finally implications of impact ERP implementation on management accounting.

2. ERP system implementation

ERP (enterprise resource planning) is an industry term for the broad set of activities supported by multi-module application software that help a manufactures  or other business manage the important parts of its business, including  product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders [  Olson 2004].

Implementing an ERP package has to be done on a phased manner. Step by step method of implementing will yield a better result than big-bang introduction.The normal steps involved in implementation of an ERP are as below:

Project Planning, Business & Operational analysis including Gap analysis, Business Process Reengineering, Installation and configuration, Project team training, Post implementation.

The above steps are grouped and sub-divided into four major phases namely 1) detailed discussions, 2) Design & Customization, 3) Implementation and 4) Production. The phases of implementation vis-à-vis their tasks and respective deliverables are as below:

Detailed Discussion Phase: Task: – Project initialization, Evaluation of current processes, business practices, Set-up project organization 
Deliverables:- Accepted norms and Conditions, Project Organization chart, Identity work teams.

Design and customization Phase: Task :- Map organization, Map business process, Define functions and processes, ERP software configuration and Build ERP system modifications. 
Deliverables :- Organization structure, Design specification, Process Flow Diagrams, Function Model, Configuration recording and system modification.

Implementation Phase: Task :- Create go-live plan and documentation, Integrate applications, Test the ERP customization, Train users 
Deliverables :- Testing environment report, Customization Test Report and Implementation report

Production Phase: Task:- Run Trial Production, Maintain Systems 
Deliverables:- Reconciliation reports, Conversion Plan Execution

3. The main role for management accounting in the organization

“Management accounting is a system of  measuring and providing operational and financial information that guides managerial action, motivates behaviors, and supports  and creates the cultural values necessary to achieve  an organization’s strategic objectives”[ Jan, Shahid, Homas and Arol 1999].

Management accounting is often defined as a system that provides useful information for managers in terms of decision making, planning, control and performance evaluation (Drury, 2004, p. 20). A definition by Atkinson et al.1 (2001) describes management accounting as:

“A value adding continuous improvement process of planning,  designing, measuring and operating a nonfinancial and financial information system that guides management action, motivates behavior, and supports and creates the cultural values necessary to achieve an organization’s strategic, tactical and operating objectives”. Management accounting measures and reports financial and non-financial information that helps managers make decisions to fulfill the goals of an organization.Managers use management accounting information to choose, communicate and implement strategy, coordinate product design, production and marketing decisions, Management accounting focuses on internal reporting, and Management accounting is future oriented.

4. Attributes of a good management-accounting system

The management accounting can be success if contains some attributes which enhance its process such as the following attributes: [Jan, Shahid, Homas and Arol 1999].

The management accounting can be success if contains some attributes which enhance its process such as the following attributes: [Jan, Shahid, Homas and Arol 1999].

Good management accounting information has three attributes:

■Technical—it enhances the understanding of the phenomena measured and provides relevant    information for strategic decisions.

■Behavioral—it encourages actions that are consistent with an organization’s strategic objectives.

■Cultural—it supports and/or creates a set of shared cultural values, beliefs, and mindsets in an organization and society.

5. The impact of ERP implantation on management accounting system

The involvement of management accountants is seen as another important success factor for ERP implementations. Management accountants play a critical role in providing data and information to manage the business, their participation is critical to ensure that the needed data are available and so that the management accountants will know how the data are obtained and reported. Literature review has shown that involvement of the management accountants results in better outcomes in the ERP implementation. – In a number of organizations, the management accountants played a critical role in the implementation and success of the ERP system.  The more active the role played by the management accountants, the higher the level of perceived success for the ERP implementation.  This was consistent across all organizations visited.  If the management accountants were actively involved in the ERP implementation from the beginning, and acted as a change agent, the system was a success.

6. The impact of ERP systems on the role of management accountants

ERP is a broad term for any software application that integrates all business processes and data into a single system (Waxer, 2006). ERP facilitates company-wide Integrated Information System covering all functional areas.ERP provides for complete integration of Systems not only across the departments in a company but also across the companies under the same management. ERP not only addresses the current requirements of the company but also provides the opportunity of continually improving and refining business processes.

ERP provides business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for enabling people to make better decisions and thus improve their business processes. As these ERP systems are integrated, all data are available to all personnel throughout the organization at any time (Aidan O’ Mahony, John Doran 2008)These software packages can be customized to cater for the specific needs of an organization (Esteves and Pastor, 2001; Granlund and Malmi, 2002). ERP systems have become the system of choice for the majority of companies. These systems have changed the way accounting information is processed, evaluated and reported throughout the business. ERP systems are comprehensive systems as they operate throughout the entire company maintaining large amounts of data. They are also modular systems which are based on a client/server technology. Data are stored in a single database, whicheliminates the need to update data in several different subsystems (Davenport, 1998; Rosemann, 1999). By providing universal, real-time access to operating and financial data, the systems allow companies to streamline their management structures, creating flatter, more flexible, and more democratic organizations (Davenport, 1998; Ross, 2000; Jackling and Spraakman, 2006).

The Institute of Certified Management Accountants (ICMA, Australia) describes the management accountant as someone who applies his or her professional knowledge and skill in the preparation and presentation of financial and other decision oriented information in such a way as to assist management in the formulation of policies and in the planning and control of the operation.  The changes which are affecting the core role of the management accountant are in large part due to the popularity of ERP systems such as SAP and Baan, particularly in large companies (Foote, 2006; Jackling and Spraakman, 2006; Bae et al. 2004; Booth et al.  2000; Burns et al., 1999; Davenport 1998).

In this new environment the management accountant must acquire a broad knowledge of the business, and add value to the organization by bringing financial expertise to the management process and participating as team players. The management accountant must now move into the spotlight and become an integral part of the management team by using a broader range of skills, utilizing both financial and non-financial indicators; taking decision-making roles in cross functional teams; and integrating operational and strategic control. The management accountant must broaden the nature of their role and become a strategic manager (Collins, 2000; Murphy, 2004; Parker, 2002; Pierce, 2001).

 

7. Benefits of ERP

The main benefits of using ERP systems identified could be summarized as follows

The benefits accruing to any business enterprise on account of implementing are unlimited. According to the companies like NIKE, DHL, Tektronix, Fujitsu, Millipore, Sun Microsystems, following are some of the benefits they achieved by implementing ERP packages:

Gives Accounts Payable personnel increased control of invoicing and payment processing and thereby boosting their productivity and eliminating their reliance on computer personnel for these operations. Reduce paper documents by providing on-line formats for quickly entering and retrieving information. Improves timeliness of information by permitting, posting daily instead of monthly. Greater accuracy of information with detailed content, better presentation, fully satisfactory for the Auditors. Improved Cost Control. Faster response and follow up on customers. More efficient cash collection, say, material reduction in delay in payments by customers. Better monitoring and quicker resolution of queries. Enables quick response to change in business operations and market conditions. Helps to achieve competitive advantage by improving its business process. Improves supply-demand linkage with remote locations and branches in different countries.

Provides a unified customer database usable by all applications. Improves International operations by supporting a variety of tax structures, invoicing schemes, multiple currencies, multiple period accounting and languages. Improves information access and management throughout the enterprise.

Provides solution for problems like Y2K and Single Monitory Unit (SMU) or Euro Currency.

 

8. Change in the Role of the Management Accountant

The suggestions in the literature that the role of the management accountant has changed and that one of the main reasons is the implementation of ERP systems is supported by the interviewees (Aidan O’ Mahony, John Doran 2008). This is in line with similar literature where research shows that ERP systems have only a limited impact on management accounting practices (Fahy and Lynch, 1999; Granlund and Malmi, 2002; Scapens and Jazayeri, 2003). However there are conflicting views as some literature state that the adoption of an ERP system can bring around a redefinition in the tasks and responsibilities of the management accountant (Brazil and Li, 2005; Carruth, 2004;

Gabriels, 2002). It is clear that ERP is influencing the management accountant and is a valuable tool which assists the management accountant in fulfilling their core activities. However the core responsibilities remain and there is still a high priority to provide the financials on a monthly basis. The extent to which the new system has had an impact on the role of management accountants was assessed by several.

Changes in time spent on data collection – All firms agreed that the management accountants spent

significantly less time on data collection following the implementation of the ERP system irrespective of whether the implementation was a success or not. There was also an indication that the type of data collected had changed.  For example, company E indicated that the manual accruals had decreased considerably since implementation of the ERP system.

Changes in time spent on data analysis – Most companies agreed that management accountants are spending a lot more time on data analysis. This was particularly the case for the more successful implementations. Management accountants: a profession dramatically changed by ERP systems.

Changes in involvement in business decision-making – All companies agreed that management accountants were more involved in business decision-making following the implementation of the ERP system. This also varied with the relative success of the ERP implementation, with the changed involvement in business decision-making being scored highly for the most successful implementations. Case studies in literature review showed that the extent to which the new system has had an impact on the role of management accountants was assessed by several criteria:

Changes in focus on internal reporting – The focus of the management accountants on internal reporting (for example performance measures and control issues) increased most companies.

Changes in focus on external environment – The focus of the management accountants on the external environment (for example benchmarking) had increased where it was applicable to the company. This change in focus was not related to the success or otherwise of the ERP system implementation.

Changes in focus from historic to forward looking analysis – In all the organizations that had a successful implementation, the management accountants are involved in significantly more forward looking analyses.  This is most likely a result of the capability of the ERP systems to generate virtually any desired historical-based report. As such, there is limited need for the management accountants to perform this type of task. The management accountants are spending much more time and effort on business planning.

Changes in focus from domain specific to cross-functional analysis – The implementation of ERP systems is viewed as a prerequisite for cross- functional analysis for most of these organizations.  In virtually every instance, prior to the implementation of the ERP system, the data wasn’t available to undertake cross-functional analysis.  Now that the data is available, the management accountants are able to be involved in cross-functional analysis.

Changes in use of time resulting from elimination of routine report generation – Since routine report generation was previously the responsibility of the management accountants, they now have more time available to complete other tasks.  In most organizations, this time has resulted in a change in how the management accountants approach their job, and in how the management accountants are perceived by others in the organization.  In some settings, the management accountant is becoming more of a business partner to senior management.

Changes required in the management accountant’s communication skills – Management accountants need to be technically competent, and must be able to communicate those technicalities.  While communication was always important, the study found that the need for improved communication skills has expanded because of the way management accountants are now involved in discussions with the business management team.  In order to be business partners, management accountants must provide insight and present the information at the time that the manager needs that information.   Changes in the formal and informal communication structure resulting from the ERP system – No link was found between the implementation of the ERP system and the changes in the formal and informal communication structure.  The ERP system, by its very nature, results in significant centralization of data.  This is often associated with a more formal communication structure.  The existing organizational structure and culture seems to have a greater impact on the communication structure than does the ERP system.

Changes in the management accountant’s satisfaction resulting from the ERP system – The ERP systems implementation generally resulted in increased job satisfaction for the management accountants.  Job satisfaction needs to be examined over a period of time, rather than at a specific point in time.  If asked immediately after the ERP system was implemented, most management accountants would be very frustrated with the software, the hours, the task, and many other aspects.

The management accountants’ contribution to the ERP system success – In a number of organizations, the management accountants played a critical role in the implementation and success of the ERP system.  The more active the role played by the management accountants, the higher the level of perceived success for the ERP implementation.  This was consistent across all organizations visited.  If the management accountants were actively involved in the ERP implementation from the beginning, and acted as a change agent, the system was a success.

 

3. Recommendations for management accountants in an ERP environment

The participants in this research were very consistent with their perception of the skills needed by management accountants in ERP environments.  All of the interviewees started from the perspective that the management accountant has both appropriate and adequate accounting training.  Some believed that a formal accounting qualification was very desirable as a way to signal that a management accountant possesses the requisite skills.  Almost every participant identified the need for good communication and interpersonal skills.  Analytical skills and the ability to focus on objectives and prioritise work (work management) were also deemed important.

The increased importance in understanding the business was also emphasized, as was the need to have ‘entrepreneurial salesman skills.’  That is, the management accountants need to be able to communicate with the management team and synthesize and explain the results (the impact of the financial data) in a way that can be easily understood.  Management accountants need to take on a partnership role with the managers.  This will sometimes result in the management accountants supporting major decisions by influencing managers onto the right area through a thoughtful and reasoned explanation of what the information means.  Along with these skills, other non-traditional skills were identified.  These included being an educator as the management accountants must be able to explain how the numbers were obtained and what they mean, and they might also be asked to explain how the system generates those numbers.  Patience was also identified as needed since the ERP packages are very difficult to use when they are first implemented.

 

10. Findings

. The findings of this study indicate that when management accountants are involved in the implementation of an ERP system there is an increased likelihood of success. The task is not easy and there was much frustration in the implementation process. However, in the successful implementations, data quality increases, there is more timely access to information, and decision-making is improved. Furthermore, a successful ERP implementation results in significant changes in the tasks of the management accountants. The management accountants become more closely involved in business decision-making and perform other value adding tasks rather than the mundane reporting tasks that are now performed automatically using the ERP.

 

11. Conclusion

In conclusion the findings suggest that the ERP system has had a positive effect on the role of the management accountant, however the rise of these ERP systems has not changed the ultimate responsibility of accountants which is the end of month figures. The ERP integrates operation processes and information flows in the company to synergize the resources of an organization namely men, material, money and machine through information.  ERP effortlessly communicates information across various departments and improves efficiency, performance and productivity levels.

12. Limitations

There were also a number of limitations of the ERP systems currently used. These include not getting the full capability of the ERP system and the manipulation of information that is needed to generate a final set of accounts. One of the most interesting findings highlighted in the study relates to the problems that can arise where an ERP system becomes too customized towards a company’s needs. This is partly due to the fact that an ERP vendor may not support an over-customized system. It is well documented that there has been a shift in the role of the management accountant. ERP is one of the major contributors to the change in the role of the management accountant. Accounting personnel feel that ERP allows them to expand their roles and instead of producing figures allows time for further analysis and value adding activities in areas such as cost control. An interesting finding in this study is in relation to the idea of non-management accountants becoming accountants. Prior to the introduction of ERP systems accounting was exclusively completed by personnel in the finance area. The introduction of ERP systems has allowed tasks such as reporting and journal bookings to be completed by non management accountants. But despite this, core accounting activities related to finalizing accountants are still completed by the finance personnel. From these findings the authors would argue that ERP is having a positive effect on management accountants. Although there are negatives the overall view is that the positives of ERP far outweigh the negatives.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

A. A. Atkinson, R. D. Banker, R. S. Kaplan and S. M. Young (2001): Management

Accounting, 3rd edition, Prentice- Hall Inc, Upper Saddle River, New Jersey 07458

 

A. Caglio (2003): Enterprise Resource Planning systems and accountants: towards

hybridization? European Accounting Review, Vol. 12, Issue 1, pp. 123–153.

 

 

A. A. Atkinson, R. Balakrishnan, P. Booth, J. M. Cote, T. Groot, T. Malmi, H. Roberts,

E. Uliana and A. Wu (1997): New Directions in Management Accounting Research,

Journal of Management Accounting Research, Vol.  9, pp. 79-108.

 

Abdinnour-Helm, S., Lengnick-Hall, M.L., and Lengnick-Hall, C.A., “Pre-implementation attitudes and organizational readiness for implementing an Enterprise Resource Planning system”, European Journal of Operational Research, Vol 146 (2), 2003, 258-273.

 

B. Light, C. P. Holland, K. Wills (2001): ERP and best of breed: a comparative analysis,

Business Process Management Journal, Vol. 7, No. 3, pp. 216-224.

 

B. Pierce and T. O’Dea (2003): Management accounting information and the needs of

managers Perceptions of managers and accountants compared, The British Accounting

Review, Vol. 35, pp. 257-290.

 

Booth, P., Matolcsy, Z., and. Wieder, B. (2000). Integrated Information Systems  (ERP-systems) and Accounting Practise – the Australian Experience.   Paper presented at the Third European Conference on Accounting Information Systems, Munich, Germany, pp. 27-28.

 

Brazel, J. F. and Dang, Li (2005). The Effect of ERP System Implementations on the Usefulness of Accounting Information.  Managerial Auditing Journal, Vol. 20, No. 6. pp. 619 – 631.

 

Burns , J., Ezzamel M. and Scapens R. (1999). Management Accounting Change in the UK.   Management Accounting, London, Vol.77 No.3, pp. 28-30.

 

 

Carruth, B. (2004). Management Accounting-What’s new?’ Chartered Accountants Journal. Sept. 2004 pp. 29-30.

 

 

C. Ma, D. C. Chou and D. C. Yen (2000): Data warehousing, technology assessment and management, Industrial Management and Data Systems, Vol. 100, Issue 3, pp. 125-

135.

 

G. K. H. Li and E. Jordan (1999): The Information Systems (IS) Role of Accountants: A

Case Study of an On-line Analytical Processing (OLAP) Implementation, paper presented at American Conference on Information Systems (AMCIS 1999), 13-15

August, Milwaukee, Wisconsin, the United States.

 

G. K. H. Li and E. Jordan (1999): The Information Systems (IS) Role of Accountants: A

Case Study of an On-line Analytical Processing (OLAP) Implementation, paper presented at American Conference on Information Systems (AMCIS 1999), 13-15

August, Milwaukee, Wisconsin, the United States.

 

Jacobs, F.R. and Whybark, D.C., Why ERP ? A primer on SAP implementation Irwin McGraw Hill, 2001.

 

 

J. Burns and G. Baldvinsdottir (2005): An Institutional Perspective of Accountants’

New Roles – The Interplay of Contradictions and Praxis, European Accounting Review,

Vol. 14, Issue 4, pp. 725-757.

 

K. Lukka and M. Granlund (1996): Cost accounting in Finland: current practice and rends of development, European Accounting Review, Vol. 5, Issue 1, pp. 1-28.

 

M. Newman, C. Smart and I. Vertinsky (1989): Occupational role dimensions: the

profession of management accounting, The British Accounting Review, Vol. 21, Issue 2,

pp. 127-140

 

P. Booth, Z. Matolcsy and B. Wieder (2000): Integrated Information Systems (ERPSystems) and Accounting Practice – The Australian Experience, paper presented at the third European Conference on Accounting Information Systems (ECAIS’2000), March 27-28, 2000, Munich, Germany

 

R.R.K. Sharma “ERP implementation and its effect on a few variables of organization structure and manager’s job“. Journal of the Academy of Business and Economics. FindArticles.com. 12 Dec, 2010.

 

 

S. Brignall and J. Ballantine (2004): Strategic Enterprise Management Systems: new

directions for research, Management Accounting Research, Vol. 15, Issue 2, pp. 225-

240.

 

S. C. Lodh and M. J. R Gaffikin (2003): Implementation of an integrated accounting and cost management system using the SAP system: a field study, European Accounting

Review, Vol. 12, Issue 1, pp. 85–121.

 

U. J. Gelinas Jr., S. G. Sutton and J. E. Hunton (2005): Accounting Information

Systems, 6thedition, Thomson/South-Western

 

 

 

Zainab Mehmood , Aakifa Nudrat

Department of Commerce,

MSc Accounting & Finance,

Islamia University Bahawalpur, Pakistan.


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Dec 03

Get an accountant and a bookkeeper for one competitive price-

About Financial No Comments »

Accountancy Champs, the Chartered Certified Accountant UK, provides Accountancy, Bookkeeping, Tax and Payroll services at competitive prices to entrepreneurially-led owner managed businesses that are small, medium and large businesses based local, national and international.

It offer a wide range of services for e.g. limited company formation, company secretarial services, tax consultancy, Bookkeeping, Business start-up packages, Inhouse Accounts Department, Accounting Software, Annual Accounts, Personal Tax, VAT Reclaim, Cash Flow, Credit control, Consultancy, Payroll, Company Formation, Training, Contractor Solutions, Self Assessment, Tax and CIS Rebate, Assist with HMRC Investigation, Budgets, Audits, Access to Business Finance, Business plans, Finance Director/Manager on Demand, General Business Advice, VAT, Corporation Tax, NI Rebate, Management Accounts, Forecast and HR services.

With over 15 years extensive commercial experience, working for businesses like yours, you get real advantage over other firms of accountants, many of whom have only ever been accountants and never been in the same as the small business man.

Accountancy Champs helps entrepreneurs create, protect and enhance personal wealth, and also give directors and shareholders the assurance they need to manage their organisation effectively and the proactive support they demand to help them stay ahead of competition.

Accountancy Champs work with clients who have a desire to grow their business save tax, reduce tax bill, improve cash flow and improve their profit margin.

Accountancy Champs team comprise of 2 Partners.
Accountancy Champs founding partners are FTSE 100 trained ACCA qualified accountants with over 15 years experience working for household names in the CITY OF LONDON.

Partners’ skills and experience are broad and varied in bookkeeping, VAT, corporation tax, annual accounts preparation, payroll, management accounts, budgets, forecast, tax saving initiatives, improving cash flow, profit margins, Self assessment, Consultancy, IT audits, Risk and assurance, Personal tax, Corporation tax and training having worked from entry level accountants to senior management positions managing teams of accountants at various levels and reporting to Board of Directors. Household names fall within the following industries and are not an exhaustive list:

Asset management
Corporate finance organization
Investment banking
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Top 3 Accountancy Firm
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Various other service industries

Accountancy Champs’ current team comprise of a strong team of bookkeepers, accountants and payroll staff at various stages of their professional accountancy studies. The team member includes the members of the Institute of Bookkeepers, Institute of Payroll, CIMA and ACCA.

The team has broad skills and very good industry knowledge as a result of working for a range of industries.

Accountancy Champs are specialist for the following business categories Business Start up, Sole Trader, Limited companies, Limited Liability Partnerships, Partnerships, PLC, Charity and not for profit organizations.  Clients include those in Manufacturing, Retail, Building and Construction, Transport, Property, Financial Services, IT and e-commerce, Marketing, Recruitment, Hospitality, Catering and Tourism, Medical and Healthcare, Food, Professional practices, Rural and Estates, Social Housing, Education, Entertainment(Media and Sport), International clients, Entrepreneurial and OMB, Consultancy, Aim Listed, Mid Corporate, Services industries, Garages/Automotives.

At Accountancy Champs, our accountancy teams are friendlily, approachable and our doors are always open.

http://www.accountancychamps.co.uk/

 

Chartered Certified Accountant & Business Advisers


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Nov 03

Accountant Salary and Information

Accounting No Comments »

Job Description

An accountant provide information about financial records. This involve them in financial reporting, taxation, auditing, forensic accounting, corporate finance and so on.

They have a strategic role in companies as they provide professional and trustworthly advice. They goals is to maximise profitability on behalf of the client or the company the accountant is working for. They work in many different sectors including public firms, industry and commmerce.

Typical work activities include many different aspects of finance work… They provide financial audvice, they manage financial audits and keep a track on financial systems and budgets…

Most accountants have a specialty. There are four main kinds of accountants.

Public accountants work for public accounting companies. They do accounting, auditing, tax, and consulting work. Some have their own businesses. They do many different kinds of accounting for people outside the company.

Management accountants keep track of the money spent and made by the companies for which they work.

Internal auditors make sure that a company’s accounting records are right. They check the records to see that no one in the company is stealing. They also check to see that no one in the company is wasting the company’s money.

Government accountants and auditors make sure that government accounting records are right. They also check the records of people doing business with the government.

Accountants and auditors work in offices. They generally work a standard 40-hour week, but some work 50 hours a week or more. Tax accountants often work long hours during the tax season, from January to April. Accountants working for the government and public companies travel to audit other companies or branches of their own company.

Career Path for this Jobs

How do you get ready?

Most accountants have a college degree in accounting. Public accountants have to take a special test as well, resulting in a certification. Public accountants also must have a special license from the State in which they live. Most employers want accountants who know quite a bit about computers. Previous experience in a summer or part-time internship is also a plus.

People who want to be accountants should be good at math, and have good analytical skills. They also should be able to write well, so that they can tell others about their findings.

There is a lot of different paths people can take to become an accountant. Most of the people start as an Customer Service Representative, Junior Accountant, or Assistant Accountant.

After a couple of years, an Accountant could be promoted as Staff Accountant, Senior Accountant, Senior Staff Accountant…

Accountant Salary

How much does this job pay?

Accountant Salary: $41,000 (average salary)

20,000 Salaries

Staff Accountant Salary: $41,000 (average salary)

4,000 Salaries registered anonymously for this job

Senior Accountant Salary: $58,000 (average salary)

1,500 Salaries registered anonymously for this job

Job Offers

How many jobs are there?

There were 1.5 million accountants and auditors in 2010.

Most of them worked in cities, because that is where the large companies tend to be.

Similar Jobs

Are there other jobs like this?

Auditor: 1,200 Salaries registered anonymously for this job.

Senior Auditor: 800 Salaries

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Corporate Auditor: 200 Salaries added anonymously for this job.

Budget Analyst: 1,500 Salaries added anonymously for this job.

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Loan Officer: 500 Salaries for this job.

Financial Analyst: 15,000 Salaries for this job.

Check WhatSalary.com for more details

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Career Adviser

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Oct 18

How to choose a Miami Accountant – Why Miami Accounting firms can save you money

Accounting No Comments »

There are a number of individuals and businesses who use the services of an accountant year round. There are other individuals who only hire an accountant to help get all of their finances in order before their tax returns are due.  View any directory of accountants in any major metropolitan area and you will find hundreds, if not thousands, of accountants listed.

Surprisingly, most business owners and individuals don’t carefully consider matching their needs to an accountant’s qualifications when making a selection. That’s because many of us who don’t have a strong accounting background view all accountants as being equal.

But the reality is that all accountants are not created equal….and the same goes for Miami Accountants as well.

An accountant, technically speaking, is a professional who takes care of the accounting needs of an individual or a business, including bookkeeping, tax preparation, financial advice, and more. Choosing an accountant is a highly individual process, as everyone has different needs.

This article explains how miami accountanting firms can help you conquer business finances and provide useful questions you should use to choose an accountant that best matches your needs and can help you prosper — and not somebody who just crunches the numbers.

What do accountants do anyway?  How can an accountant help me?

Skilled accountants are highly trained and specialized to recognize data interrelationships and identify trends, amounts, and other relationships that just “look” incorrect.  This analysis also includes the clear absence of missing information and the ability to recognize cost or tax savings measures that may have been otherwise overlooked or misinterpreted.

Experienced accountants have also been trained to methodically choose and apply selective analysis to financial data with an acute attention to detail.

Some small businesses make due with a bookkeeper – someone to perform the tedious task of recording financial information and cranking that data into the necessary formats, like P&L statements and tax forms. But a good small business accountant does much more than just record transactions and passively generate documents – they actively analyze, interpret and convert that data into actionable business intelligence.

How do I choose an accountant that best matches your needs?

Perhaps the most fundamental consideration in choosing an accountant, or accounting firm, is to choose one that best suits the needs of the individual business.

When hiring an accountant, you’re choosing an individual or group that provides you with the requisite expertise that you do not hold.  Therefore, your accountant should be adequately experienced and educated in the areas that are most applicable to your needs.

It’s not so uncommon that some people who offer “accounting services” are unqualified.  They are unlikely to carry any liability insurance, nor is there any supervisory body you can complain to if things go wrong. The apparent savings in fees, if any, could prove costly.

Accountants who are certified are subject to wide variety of knowledge, experience and ethics requirements, unparalleled by most any other regulated industry.  Certified accountants are required to have attended and successfully completed rigorous, higher-level education and/or experience requirements in addition to passing an examination indicating the same. Certified accountants are required to complete certain continuing professional education requirements on an ongoing basis.  The purpose of this standard is to help ensure the accountant remains knowledgeable with changing laws, regulations, interpretations and technological advancements.

Experience considerations are of the utmost importance.  Accountants practicing “public” accounting have the largest breadth of exposure to various industries, businesses, and persons with unique needs.  Public accountants are acutely trained to be able to gather, sort and interpret large volumes of information in very short time periods.  Choosing an accountant with prior industry or project experience, can help you save time, money or even the avoidance of costly mistakes.  Choose an accountant that has demonstrated an advanced knowledge of specific areas that may be applicable to you.

Step by Step Questions When Choosing an Accountant

Determine what your specific needs are. Do you need an accountant for your business or for your personal finances?  Do you need to create a budget, need help with financial planning, need financial records kept, or do you just want someone who will prepare your taxes? Accountants and accounting firms often have specialties, and they all have their own strengths, so make sure you know what you are looking for.

Get personal recommendations. If you have a friend or a relative who loves her accountant, ask her about it! It is best to find someone who is in a position similar to yours (who is happy with her accountant).

Speak personally with the accountants. After you have recommendations, speak with the accountant or accountants that interest you. Explain what you are looking for and ask any questions that you might have. Watch and listen for clear, direct answers and make sure you feel comfortable with the accountant. Feel free to ask about credentials and experience – most accountants will be happy to provide that information.

Determine how much it will cost. As with many professional services, cheapest is not necessarily best when it comes to accountants! On the other hand, you don’t want to be overcharged. Do a little comparative shopping to make sure that the fees seem to be within an acceptable range.

Consider your feelings. It may sound silly to involve feelings in a business or financial decision, but if you are working with someone, especially someone who will be working with your money, you want to feel secure and comfortable. If you are uncomfortable with the accountant for any reason, choose a different one. Get a timeline. Make sure you talk to the prospective accountant about when you need things done. If you are on a tight deadline for tax season, make sure that he or she can meet that deadline. You need to make sure that the accountant you choose can give you the time that you need!

Does Your Accountants Proximity to Your Business Really Matter?  Why Choose a Miami Accountant?

As the accountants’ relationship with clients often requires a continuous, ongoing exchange, it is important to choose an accountant that is easily accessible.  However, due to recent technological advancements of communications, desktop sharing and remote access, accountants can more easily exchange information that previously required a physical presence that is no longer applicable.

Miami is a city that provides a wide variety of interests and cultural backgrounds.  The majority of its residents are fluent in more than one language.  It is probably the best known gateway in the United States to Latin America and South American businesses, European nationals and foreign investors doing business in the United States.

Accordingly, the business acumen of Miami accountants is to generally hold a higher level of knowledge and experience with respect to foreign businesses wanting to have a U.S. presence, foreign real estate and business investors.

Applicable knowledge and skills of Miami accountants will often include more complex taxation reporting requirements, currency translation, business capitalization techniques, choosing entity structures most beneficial to foreign owners, and more complex tax reporting as it relates to foreign investors and owners.

Given the current and ever changing state of technological advancements, ability to communicate fluently in foreign languages, improved knowledge and expertise of accountants of tax matters as it relates to foreign ownership, the demand for certified accountants in cities such as Miami is on the rise.

Mitch Helfer is an experienced miami accountant with the skills necessary to get your company on track financially. Learn more about one of the top miami accounting firms by visiting cpamiami.com.

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Oct 02

How to Choose the Right Bookkeeper and or An Accountant that is suitable for you and your business!

Accounting No Comments »

Ok so you’re either thinking about starting your own business or have already got it up and running and have managed for a while to get by managing your own books by yourself and are now finding all too much to keep on top of the paperwork.

It is an all too familiar position; most people have found that they keep telling themselves that they do it tomorrow or later or at the end of the week, and before you know it your deadline is upon you and your all stressed out to get it in on time, It’s time to get help!

Affordable professional help

Being a small and/or at home business owner are you tired of the lack of affordable professional help available?  So you need to find professional help whom are able to offer such things such as:

· Free and up to date accounting advice

· Realistic solutions to card payments and cash flow issues,

· A good supply of Bookkeeping/Accounting forms for the small business readily available

· Advice with managing online card merchant accounts.

· What sort of Accounting software is suitable to your type of business

· Tools & Resources helpful to your Business, those that are current and up to date, to know today, what others will find out tomorrow.

· Where you can access free spreadsheet bookkeeping templates

· Who run forums where Like Minded people, like you, can discuss online business issues that are not just financial issues?

· That have links to other useful sites

· Where you can also advertise your own business.

· The ability to Use the latest of modern technology to effectively manage your accounts from the other side of the country without massive Technical costs to your or themselves.

Certified And Accredited

Bookkeepers:

It is important that you find a bookkeeper that is certified and accredited Accounting technicians. There are many governing bodies but the two most, well known governing bodies are:

1. The AAT (association of accounting Technicians)

o The Association of Accounting Technicians, or AAT, is an accountancy organization with over 108,000 members worldwide. The AAT is a technician level qualification which entitles those who have completed the exams and obtained relevant supervised work experience to call themselves associate accounting technicians. The AAT is based in London but there are branches all over the UK and the rest of the world.

Professional recognition

The body is sponsored by four of the UK chartered accountancy bodies. These are:

· The Chartered Institute of Management Accountants (CIMA);

· The Institute of Chartered Accountants in England and Wales (ICAEW);

· The Institute of Chartered Accountants of Scotland (ICAS); and

· The Chartered Institute of Public Finance and Accountancy (CIPFA).

AAT versus CAT (Certified Accounting Technician)

· The one UK chartered accountancy body which does not sponsor the AAT is the Association of Chartered Certified Accountants (ACCA). This organization used to be a sponsor of the AAT but broke away in order to form a rival body which offers the Certified Accounting Technician (CAT) qualification. The ACCA implemented this policy as it wanted a technician level qualification which followed the same business model which it did, ie. one with a global presence.

· Whilst the AAT is recognized as a professional qualification by the Department of Trade and Industry in the UK, the accountancy professions there, the USA and existing and former British Commonwealth countries, CAT is not. CAT is a professional academic qualification within the ACCA examination structure. AAT is both a recognised academic and vocational qualification in its own right.

2. The ICB (Institute of Certified bookkeepers)

The Institute of Certified Bookkeepers (“ICB”) is a not for profit organisation that promotes and maintains the standards of bookkeeping as a profession, through the establishment of a series of relevant qualifications and the award of grades of membership that recognise academic attainment, working experience and competence.

Started in the United Kingdom in 1996 the ICB has grown rapidly and now has a world wide presence in over 50 countries.

The Institute’s objectives

· to promote bookkeeping as a profession

· to enable bookkeeping to gain recognition as an integral part of the financial profession

· to promote training in the principles of bookkeeping

· to develop personal study skills and improve confidence of those persons who undertake a course in bookkeeping

· to enable the achievement of a qualification, which may be used to enhance prospects for progression into higher levels of study

· to improve the career prospects of its members

The ICB is the largest bookkeeping body in the world, with over 150,000 members and students. By offering career advice and support to bookkeepers the ICB has helped many throughout the world set up a successful practice.

You cannot buy your way into any of these associations, like most trade governing bodies, but have to take stringent examinations and also to keep memberships you must also keep up your CPD (Continual Professional Development), and also have current professional and Indemnity Insurances.

A professional Bookkeeper should be able to answer most of your day to day financial questions, before you need to start thinking about a Chartered Accountant, which is when the price will jump up dramatically. They should be able to process personal tax returns and give you basic help with corporation tax calculations.

In most cases a Bookkeeper should, if unable to answer your questions, then know exactly where to find the answer or to put you in touch with the right person.

Accountants:

Now be careful here as there are many people out there that can call themselves an accountant, but what you are really looking for is a chartered accountant. There is often some misconception as to the type of accountant needed, or indeed that there are more than one type and below are just two of the main types of Chartered accountants there are:

1. The Association of Chartered Certified Accountants (ACCA) is a British chartered accountancy body with a global presence that offers the Chartered Certified Accountant (Designatory letters ACCA or FCCA) qualification worldwide. Since Chartered Certified Accountant is a legally protected term, individuals who describe themselves as Chartered Certified Accountants must be members of ACCA and, if they carry out public practice engagements, must comply with additional regulations such as holding a practicing certificate, being insured against any possible liability claims and submitting to inspections.

Continual Professional Development – Before 2005, Continual Professional Development (CPD) was mandatory only for holders of practising certificates and insolvency licences. From 2005, ACCA is extending mandatory CPD to all members on a phased basis:

2. The Chartered Institute of Management Accountants (CIMA) is a UK based professional body offering training and qualification in management accountancy and related subjects, focused on accounting for business; together with ongoing support for members. CIMA has two grades of full membership:

o Associate – designated by the letters ACMA

o Fellow – designated by the letters FCMA

To be admitted as an associate a candidate must have:

o completed a period of qualifying practice of at least three years, documented and signed by appropriate witnesses

o passed the institute’s 15 qualifying examinations

o Been proposed and seconded for membership by two individuals who have direct experience of the candidate’s work experience but who do not need to be members of CIMA or even accountants.

To become a Fellow a candidate ACMA must, in addition, have appropriate experience at a senior level.

Summary

It is very important when you look at any of these professionals to view their portfolio and testimonials to see what experience they have in what industries. For example a bookkeeper or an Accountant may have worked primarily for manufacturing companies and yours is an online business. Although they will understand the principles, it will take them a lot longer to understand your business and also may not have the contacts and resources easily available to hand that is relevant to your business.

So before you go head long into picking that all important Professional help, take the time to interview & research them just like you would with an employee or a supplier and ask for some testimonials from their current customers that are of a similar industry to yourself. Try to get it right 1st time. But don’t worry if you don’t, because you can always change!

Author: Monique Davis MICB CB Cert. MAAT & CIMA Student

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Sep 25

Chartered Accountant Services, Chartered Accountants India

Accounting No Comments »

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They offer guidance and give valuable suggestions to businesses; like how they should deal and take advantage of the changing and existing business environment. These firms help businesses in dealing with magnanimous burden of legal complexities that companies come across on day to basis. The Government, also realizes the importance and expertise of these firms, therefore has set up statuary institutions to churn out qualified chartered accountants, cost and work accountants, company secretaries and has made it mandatory for companies of certain categories to get there financial reports audited by them.

The idea for creating Chartered-accountants.in portal arose from the fact, that today service providers’ expertise varies in all kind of legal, investment and management knowledge. Therefore, Chartered-accountants.in is an initiative to bring together these service providers who have expertise in their respective domains. This portal will make it easier for businesses to find the service providers with expertise in domains they are interested in. The portal gives excellent platform to businesses to search and contact service providers across the regions. Our portal has taken all due care to properly categorize these service providers. The categories that we have carefully selected for businesses to choose from are:

Chartered Accountants And Consultants

Patent and Trade Markers

Investment Consulting

Market Research Consultants and Agencies

Management Consulting

Insurance

Tax Planners, Practitioners and Consultants

Lawyers, Advocates and Other Legal Services

Consultants and Negotiators

Company Registration

Consultants ISO 9000 14000 Tqm

Import Export License

These Categories depict rich diversity in type of service providers existing in the market at the moment. The trend of diversification is expected to continue in future and we will continue to research and add appropriate categories/service providers for the convenience of your businesses.

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Aug 21

Choosing a Business Accountant With Your Goals in Mind

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One thing most business owners don’t enjoy is keeping up with the accounts. And that’s why it can often be easier and quicker to hire the services of an accountant. However, for most, it isn’t as straight-forward as that. You have to consider what tasks you will continue to do on your own, and the results you expect your accountant to deliver.

Doing Your Own Accounts

If you intend to go it alone with your accounting, it is worthwhile knowing that you will likely require the services of an accountant at one point in the future. For example, some limited companies are required to have their accounts audited. Although you may think that you will spend more money through using the services of an accountant, you may find that you end up spending more on tax; getting less attractive financing options; and that you sacrifice time on filling in returns that should be spent growing your business.

Sector Experience

It’s great to work with an accounting firm that has experience with clients in your sector. The firm will then not only be able to take care of your paperwork but also give you advice on the future direction of your business. Ask your potential accountant for examples of clients similar to you that they’ve worked with. If they can’t, then ask them why they think they’re right for the job.

An Accounting Firm or an Accountant?

If you work with a larger accounting firm then it is likely that you will have access to experience in more areas. Larger firms have experience in dealing with business consultancy, taxation, mergers & acquisitions, auditing and other complimentary services. However, their prices will definitely be higher. They have more expenses and, as a services firm, they don’t get much economies of scale.

An individual accountant, on the other hand, will form a closer bond with you and your business. They might not have direct access to all of the experience on hand, but you are more likely to be able to get their services for a cheaper price. An individual accountant might not be able to perform certain legal requirements for your business. It is best to ask them about this, and how they get around it, before using their services. For many small business owners, though, this will not be a problem.

Recommendation

It’s always best to get references from other business owners before choosing an accounting company or accountant. Find out about the experiences other have had, whether they completed work on time, whether they offered tips for their business, and whether they found their service to be satisfactory.

Prices

Agree prices before you have any work carried out. Some accountants charge a fixed annual fee whilst others charge per hours worked. Evaluate your business and work out which is the most cost effective route for you.

Relationship

If your business grows as expected, chances are that you will be spending a lot of time with your accountant. Make sure that you find one that you trust and can get on with as a person. The right accountant can not only help you with your books but also act as a friend and advisor through good and bad times.

Naz Daud – CityLocal Internet Business & Franchise Internet Business Directory Internet Business Opportunities

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Aug 15

Financial Accountant Job Career Profile

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The financial accountant work is critical to making a business work, including the purchase and sales ledger, balance sheets, reconciliations, cash flow, credit control, and stautory reporting. In larger companies there would be a separate financial accountant and a separate management accountant. The management accountant looks at profit and loss, monthly accounts and analyse these to advise the board or owner of the business in make key business decisions.

A Group Financial Accountant would be responsible for the financial accounting in a group of companies, share reporting obligations,consolidating the financial accounts, plus also doing the European or International  statutory reporting, for example US Gaap reporting in a US owned company.

A Financial Accountant can also be responsible for the control of the financial management of a business as well as advising and being involved in the strategic direction and administration of that business. Accountants extract and interpret information from the financial records for a wide range of interested parties throughout that organisation – shareholders, potential investors, bankers, employees, trade creditors and government departments.

A financial Accountant could therefore be ACCA, ACA or CIMA qualified, quite often a typical first time move for someone first time move out of practice, would be for someone who is ACA or ACCA qualified with a hogh level of statutory accounting or reporting knowledge.
 
The Work
The Financial Accountant is responsible for controlling the working capital of a business, ensuring debtors, creditors and stocks are maintained at an acceptable level, taking day to day decisions, giving advice to the Board of Directors (very often the Financial Accountant is a Director of the company) and advising on capital investment.

The Financial Accountant may also responsible for the preparation of:

- Regular management accounts (where there is no management accountant)

- Budgets (where there is no management accountant)

- Reports on variance between actual performance and budget performance. The Financial Accountant has to recommend any remedial action.

- Interpretation of Financial Information – advising on trends.

-For Group roles the provision of group financial reporting, group consolidation, reconciliations, statutory accounts. Provision of monthly financial accounts with commentary and analysis and assist with the year end audit.

The Work Environment
Financial Accountants tend to be employed in companies more than £10 million turnover, with a european or international marketplace. They may also work in a smaller company where they will be involved in all aspects of business management, where they may be called a Finance Manager or bookkeeper, if the Financial Controller is doing the management accounts.

Personal Characteristics
Accountants must enjoy working in a numerate environment and have a good working knowledge of accounting information. They should have an inquiring, analytical mind and be able to work logically, consistently and accurately even when under pressure. They need to be self-motivated individuals with the ability to manage their time efficiently. Accountants need management skills as well as knowledge of the general economic environment in which they operate. They need to keep themselves up-to-date with the regular changes in financial rules and regulations and have the ability to quickly recognise the implications of such changes on their employers’ or clients’ affairs.

Accountants work with people from all walks of life and therefore effective interpersonal skills are essential. They should be confident individuals with the ability to put people at their ease and inspire confidence. They should have excellent written and spoken communication skills and be able to discuss and explain financial issues with both fellow professionals and those with little or no financial background. There are recruitment agencies who specialise in Accountancy opportunities.


Pay and Conditions
Salaries for Financial Accountants vary greatly. The size of a company and its location affect salaries at all levels. Part-qualified ACCA, ACA or CIMA accountants’ salaries range from £15,000 to £30, 000, Once qualified they can earn £34,000 to £65,000, as a Group Financial Accountant.

Other benefits may include: 4 weeks Annual holiday  Company car, Pension scheme, Private medical care scheme

Search here for all UK Financial Accountant Jobs

Sacha Deakin is the Accounts Director at www.JustAccountancyJobs.com with over severn yeras exposure to the UK recruitment marketplace.

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Aug 13

Things to Think About Before Hiring an Accountant

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Locating a good honest accountant is not as simple as you would think. The majority of us looks in a local directory and chooses the first one who answers the phone. You should never employ anyone so easily; you might end up spending years with the same accountant so choosing one that suits you is crucial.

Many accountants are not only there to help with your tax returns. A resourceful and professional accountant can also be relied upon for advice on personal issues and other business linked matters. If you have a business you will need them to be skillful in tax laws, but along with that they should also have a great deal of knowledge on other related subjects too.

If you are searching for an accountant to help set up a small business, below are some to locate a professional accountant to help in your business, here are some guidelines as to what qualities to look for.

An accountant should be well-informed in all areas of business finance, not only those related with tax. In particular look for one who is well informed and has experience within the industry you are working. For example, if your company sells motor vehicles, then the accountant should have some previous experience with this type of business and understand the regulations and laws that can affect your business.

Once you find an accountant you feel you can rely on, use them. They can help you out with your personal matters and should be able to point out suitable investments for you, including long-term investments and retirement plans.

An accountant should never take a back seat when it comes to your business decisions, practical and positive feedback should be the least they input. There are many levels within your life and business they can be of help, such as cutting back on expenses, suitable software for your bookkeeping, tax free savings and paying salaries. You should not have to tell a good accountant what tasks need to be done and when, they should be aware of their duties and schedule their own timetable.

Your accountant isn’t necessarily going to be full time, however they should be easily reached if you need them and generally be there as a financial and business consultant.

Contact the accountant you are hoping to employ and then arrange a meeting with them to see how they interact with you. Many people these days turn to their accountants for all kinds of advice, hopefully, this will be a lasting relationship and there has to be some kind of connection between you, your accountant needs to be approachable and have a personality.

Let them know your business ideas and plans and see if they have any ready input and advice regarding them. As you discuss your financial plan, a knowledgeable accountant will be interested and automatically hand out advice or inform you of other ways that would work to your advantage. A qualified accountant should have a lot of feedback regarding your ideas or questions. If you get the feeling that they are not particularly interested, look around for another.

Building up a firm relationship with your accountant can benefit your business. There are many other levels they can aid you with thus saving you time and energy by not having to spend time looking around for other professionals. Forming a good relationship with your accountant will turn them into trusted advisers in all financial and legal sectors.

Some people will only make appointment with their accountant once a year when it is time to complete tax returns. The best accountants, however, will find the time to contact you at regular intervals to see if there are any issues or changes they need to be aware of and make sure all paperwork is correct and up to date.

Large firms can have too many clients and you may feel they tend to forget about you until tax returns are due. Small companies can sometimes be too busy and not have enough time to give you information and advice when you need it. Carry out some thorough research before making a final decision on an accountant; they should be able to answer to your needs and requirements and have time for your inquiries

Search the internet for experienced accountants who have experience in your area and are proactive and motivated.

Michiel Van Kets provides article services for Carl Benson, who writes articles for http://www.accountantsrus.com.au/. The company is an accounting firm, offering chartered accountants or business tax accountants anywhere in Australia. For advice and information on accounting firms and accountants.

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