PwC Ireland Top 10 Email

I'm sure everyone remembers this scandal.  No matter what firm you work for or what country you are in approximately 1 month ago you would have received a reminder of your firms privacy policy, online social behaviour policies, HR policies, etc.  This was all due to PwC Ireland and the famous e-mail that went around ranking the hotness of their female colleagues.  I don't see what the big deal is though, you get underpaid, wouldn't you like the opportunity to do some modeling on the side?

See below for the image of the original e-mail that started all the fuss.

Good luck UFE Writers!

Good luck to all the UFE Writers! I notice that http://www.casb.com isn't loading, so I hope you're all getting your results. Maybe CASB should purchase more bandwidth or a better server so that these issues don't happen again. You're messing with peoples lives CASB, they're stressed out enough without your website not working.

Client Pet Peeves

1. Picking up their phone before you enter their office and pretending to make a call.

2. Answering their phone in the middle of an interview and not just saying “I’ll call you back” but getting into an issue with whoever called while you sit there awkwardly.

3. Bob telling you that he doesn’t deal with "that" Margaret does, then you talk to Margaret and she says Suzie deals with "it", then you talk to Suzie and she says Bob deals with "it".  

4. Clearly BS'ing an answer.  Ex. You “Why did sales go down?”, Client “Because of the economy”, You “Do you have any documentation to substantiate that?”, Client “No”.

5. Making comments like “oh no, the auditors, ugh not again!”.  Yes we come every year, get used to it.  FYI we’re also human beings so please treat us as such. 

Work/Life/Work Balance

Imagine you weren’t accounting (or if accounting firms truly offered work life balance).  What would you be doing right now?  Eating right, going to the gym, playing sports, spending more time with friends and family, spending more time on your hobbies (sewing, bottle cap collecting, writing for a blog).  I know you’re busy but you can do all those things now!

It’s mostly physiological, you get home, you’re tired so you sit on your fat audit butt and watch some low quality T.V.   That doesn’t have to be the case, shake up your habits and do something new.  You need to eat right, so why not meet a friend for dinner (if you can’t afford that why not have them over for dinner).  Kill many birds with one stone, go to the gym and play sports with friends.  Get some joint hobbies with some friends.  That way you’re relaxing in a more fulfilling way than watching T.V. and you’re getting some good socializing time (hopefully with some non-accountants for a change).

If you know you’re destined for industry stop making excuses such as “I’ll have a life after auditing”, embrace auditing and use your spare time (even if it’s in moderation) to its fullest now.  

P.S. For those who literally live out at their client’s auditing, I feel for you and know what it’s like.  Don’t lose hope though it hopefully is not year round, and if it helps you relax just print your accounting firms logo and put it on a dart board.

First Webisode Posted

Welcome to what will become a series of regular public accounting webisodes.

Check out the first video on YouTube at http://www.youtube.com/watch?v=tY8IPDfhJL0.

Should I stay or should I go?

The decision to accept a position outside of public practice was not an easy one. There were many conflicting ideas running through my mind as I contemplated my decision, and I believe that sharing my thought process with you may provide some valuable insight if (when for the great majority of you) you are faced with having to make this decision.

To begin, we must look at why I chose to work for a big 4 firm. After deciding complete an accounting major, the next step for me was to decide which designation I wanted. To be completely honest, after attending various presentations and talking to some of my professors, I still couldnt really understand the difference between them. A presenter did provide some insightful advice though; whichever designation you choose, you as an individual will determine where your career takes you, the designation only opens the door. Then I looked at the median salary and saw that CA's had the highest one and my decision was made. Next was the recruiting process.

Prior to this, the extent of my knowledge surrounding the accounting industry was that it involved working with numbers, and you made lots of money. At least I had one of those right! Beginning the recruiting process, I soon learned about the Big 4, and soon after that I was convinced that if I wanted to "make" it, I had to get a job with one of them. Apart from preparing the CACEE forms (applications for CA firms in Canada) the recruiting process was supprisingly laid back. Most of the interviews involved small talk with a few questions about your background. There were also many dinners and free drinks to be had, and all the employers seemed truly eager to provide you with anything you needed. After attending events with 3 of the 4, I made my decision and joined one of them, as I felt it was distinct from the other firms.

This is where the honeymoon ended. I sound found out that work life balance was more of a abstract concept than a reality. To keep things short, my time at this firm involved long nights, 8pm being commmon, and sometimes even staying past midnight. Weekends, I also discovered, were usually 1 day at best. To be fair, I only worked on weekends often after my first year, but once it began, working saturday became the norm, and sunday was spent getting ready for the week and worrying about all the work I still hadnt been able to finish. Then December came around and I found out I had passed the UFE. For the first time, I truly felt I had accomplished something I could be proud of. I say this with complete sincerity; the grueling work hours followed by even later nights completing CASB assignments was the greatest challenge I had been faced with, and I had emerged successful.

Soon after, I made the decision to leave public practice and accept a position in industry. So why did I decide to leave? Being an accountant, and knowing that you the reader, are most likely also an accountant, I have outlined my thought process below in a systematic and as unbiased way as possible, attempting to embody the principles enshrined by CAs.

Issue 1: Your salary progression will not be as quick if you go into industry

This is a common argument used by upper management to keep you in a firm. I have heard of the payscales for most firms up to manager and have now seen the payscales in my chosen industry up to manager. Private sector is higher. Now the question is will you be able to reach manager level as quickly. This is somewhat of a grey area for me.

To make manager at a big 4 usually takes about 5 years. I cannot say with complete certainty that I will achieve a manager position within this time frame, and so for the sake of argument, I will say that it will take 7 year (from the beginning of my career). Now we must consider the following facts. Going into industry, my salary increased by a significant amount. This is equivalent to knocking off 1 year from that 7 years. We are now down to 6 years. Next, I went from working on average 55 hours (recorded hours - in reality, it may have been closer to 60) per week to 37.5 hours. This is almost a 35% drop in the time I spend at work. If money is all you are concerned about, then ignore this next statement. Factoring the disparity in hours worked, on a hourly basis, my hourly wage actually doubled.

Summing up the above, you will likely reach manager more quickly in a firm. Payscales in the private sector are higher all the way up to manager, but it likely takes longer to reach manager. Hours working in industry are significantly less (unless you go into investment banking, but then your salary doubles).

Note: Going into more senior levels, I do not know the payscales; I do know that partners make a lot, and so does top management in industry. In either case, to reach these levels takes individual drive and intelligence.

Issue 2: The work atmosphere

Another argument often touted by the firms are that your work enviroment wont be as close. This is true. I cannot argue with this, and it is something that to this day I miss. Then I remember why we were so close. I lived at work. I can only liken this to surviving a near death experience with someone; you develop a close bond. Regardless, I made some great friends, and I hope to keep in touch with them for the remainder of my life.


Since leaving public practice, my family and friends outside of work were suprised to discover that I had not been abducted or killed.

Issue 3: The work

This is more of a personal consideration. It really depends what you are looking for in a job and everyone has different tastes.

The last big issue for me was that I had heard that when working in industry, you are stuck doing tasks that are repetitive and uninteresting. I actually struggled with this issue until I had the following realization. I don't like audit. I find it boring and repetitive. Sure, at first the jobs change, but eventually most statements look the same, and instead of problem solving, you are looking through the audit guidelines established by your firm to determine how you can document something for the manager to clear it. I guess this is in itself a form of problem solving...

Secondly, I personally find no personal satisfaction from doing audit work. I tried to think of why we audit. It is to provide an opinion on financial statements so that the users of said financial statements can rely on them for decision making. In principle I wholeheartedly agree with this. Without this level of trust, our financial system would collapse, no one would want to invest in others, lending would be near impossible, innovation would stifle, job markets would erode etc.

In practice, audits are exempt from having to detect fraud. This is not the purpose of an audit. Auditors are not required to look for fraud, only to consider it, be aware that it may be there, and report it if it is found. And so, this leaves the purpose of an audit to find mistakes. It does happen, but not very often. Furthermore, for larger companies, there is a good chance that you will be auditing a CA or several CAs who all have years and years of experience. In these cases, the majority of the work is for show. The company is legally required to be audited. Most of the data is automated, there are hundreds of people throughout the organization who gather this data, review, re-review it, and finally it is compiled into statments. The majority of the audit work involves partners discussing obscure interpretations of financial instrument guidelines. When you have half a dozen partners arguing for days on how to interpret a guideline the following points strike me:

- If interpretation is the issue, how can you really be certain how analysts will interpret the results.
- If this group of individuals who have spent a lifetime studying these concepts have difficulty agreeing on these interpretations, it is likely that most others will also have varying interpretations.
- Is this what I can look forward to after a lifetime of blood and sweat?

Don't get me wrong, for some, this is an incredibly satisfying and stimulating conversation topic. Not so for me. Is it for you?

In conclusion, I believe that leaving public practice was a very good decision for me, and I believe that is the key point for people to consider. Is public practice for you? If you live for work, then it might be. If you work to live, then I recommend leaving as soon as you can.

Simple Tax Tips

In future posts some of our writers will write about more complex tax tips, but here are a few simple ones to get you started. One of the important things about tax as well is that it very greatly depends on your situation and what can be good for one person might not be good for another. All tax tips are not necessarily applicable to auditors, and by no means are only applicable to auditors.

1. Maximize your RRSP and/or TFSA

Recently there have been a lot of people wondering the RRSP vs. TFSA question. I personally have developed a plan of investing in my TFSA as I think I will have comparable amount of income in my retirement as I have right now. If my salary increases significantly now I will begin to invest in my RRSP and use the tax refund to put in my TFSA. I really like the idea of having a TFSA and saving up all of my retirement funds in there and then retiring tax free. Of course I will not put this ideal over the true economic value of RRSP vs. TFSA today. If you have a lower salary now and will soon have a higher salary (eg. Currently an apprentice/student soon to be a professional), then consider saving you RRSP deductions from now and using them in the future when you will be paying more tax.

2. Claim your applicable work expenses

A lot of jobs require you to travel from your head office to remote locations, park downtown and pay for your own parking, have a home office. Consider your tax deductions for these activities. If you keep a mile log for your car you can deduct the portion of gas/insurance/maintenance that relates to the driving you did for work. For example I do around 30% of my driving for work and therefore claim that as a tax deduction. All parking for your job can also be tax deductible, so hold onto your receipts. If you require a home office for your job consider the tax deductions related to this office, they can range from consumable supplies to a portion of the expense of your home (heat/electricity/etc). The amount you can deduct is determined based on whether you are a salaried or commissioned employee. For more information see http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/hmwnr/wrk-eng.html. If you take the bus to work, or even if you have a bus pass and don’t go to work, be sure to use the federal transit pass credit.

3. Use tuition credits wisely

Do you go to school and have credits, or do you have a child who goes to school and has credits. Students get a credit in the amount of their tuition paid plus a benefit based on their full time and part time months. This is both a federal and provincial credit and the credits are calculate differently. One thing to consider is how you’re using your credit. Is the student hoarding the credits for the time period 5 years from now when they might be paying tax, or are these credits legally being passed onto a parent or grandparent in the amount of $5000 a year to be used now as a tax credit. When considering tuition credits it often makes sense to consider what’s best for the family as a whole, rather than any one individual.

4. Remember your donation tax credit and pool your credit if you have a spouse

Keep all your tax receipts from donations, they’ll add up (if you’re generous). One thing to keep in mind is that you should assign one spouse as the primary donator for the family. This is because the federal credit is 15% for the first $200 of donations and 29% for all donations above this amount. You’ll want to lump all donations to one spouses name to take advantage of the higher tax break after the $200 mark. Remember donations can be made in the current year and can be carried forward for up to 5 years.

5. Use the fitness tax credit for children

One newer credit that some people may miss is the children’s fitness amount. This credit allows a parent to claim up to $500 per child in a program of physical activity. For more information see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/365/menu-eng.html. So next time you’re complaining about how expensive hockey or soccer fees are, be sure to keep the receipts!

[Disclaimer: no tax posts constitute advice, what makes sense for one person might not make sense for another, for advice please contact a local professional accountant]

Nov. 12, 2010 News for the week

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Masked man boards Air Canada flight.

Audit Impact: Brings professional scepticism to a whole new level, maybe your client is wearing a mask!

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Stock markets rise and fall! Big increases and big decreases to end the week pretty much where it started off.

Audit Impact: Nothing, it went up, and back down, yo-yo.

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Canada enters free trade negotiations with India

Audit Impact: Watch out or those associates performing audit work for you now in India will soon take your job!

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Pyramid Scheme

Creating a pyramid scheme is very difficult.  Somehow you have to convince a group of people to support a product/service that they originally knew nothing about.  Let’s say you’re trying to sell magic pills that make you instantly lose weight.  The way to go about this is to sell the product first from the scheming company to the sales reps, and then in turn it is their responsibility to sell this product to a consumer.   In a pyramid scheme buy-in is very important.  The top of the pyramid benefits while the bottom of the pyramid is likely to have a terrible life.  An important part of a pyramid scheme as well is that the top of the pyramid does not care about the bottom of the pyramid.

How do you get to be very successful in a pyramid scheme?  You get it to seem as legitimate as possible, and have the regulators support you.  You create an exclusive accounting designation that relies on experience in your business.  You require  a certain term of service, say 30 months, before you can receive said designation.  You try to limit all possible ways to get this exclusive designation without students going through you.  It is in this way that you become the gatekeeper.  You hold all the cards.  Once you hold all the cards you can make decisions such as, the top of the pyramid benefits while the bottom of the pyramid suffers.  An example of this would be difference in compensation.  If the bottom of the pyramid earns 6% of what the top of the pyramid makes they will most likely be suffering (or living in their parents basement).  While the top can afford houses, cars, vacations, etc, the bottom is struggling to pay for rent, car payments, and vacations they took and couldn’t afford.  Combine this and any student debt they accumulated and you have a recipe for disaster.

Take Vancouver for instance where a new associate’s rent alone may eat up 46% of their income.  Maybe you have student credits so you’re not paying taxes, but if you’re paying taxes easily another 15% could be used to support the government.  What?  You work late and may need a car to get around (read the firm expects you to have a car) there goes another 15%.  You don’t like food do you?  If you do it can easily add up to another 11% just for the bare essentials.  Oh, so you’re too busy to prepare meals yourself from scratch so you go out occasionally?  Too bad that’ll cost you an additional 9%.  Need to exercise your fat audit butt, well you should, and it won’t cost you because most likely your firm has a fitness benefit.  You like watching TV, have a phone, and enjoy the use of broadband internet, well that’s nice but it’ll cost you 5%.  Well I could continue but what’s the point, we’re already over 100%, I guess that means the rest just goes on your line of credit.  Other things you may like but not be able to afford include new clothing (your employer always expects you to look your best), gifts for family and friends (because even if you don’t see them as often as you like you should still give them gifts for their birthdays and Christmas), coffee (accountants don’t drink that do they?), going to the bar/pub (to wash away your sorrows from the week), etc, etc, etc.

Note: Wikipedia defines a pyramid scheme as”a non-sustainable business model that involves promising participants payment primarily for enrolling other people into the scheme, rather than from any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud.”  The use of pyramid scheme above is purely satirical.

MPAcc vs. CASB

Note: Applicable only to Western Canada

The choice: University of Saskatchewan’s Masters of Professional Accounting Program (MPAcc) or the Chartered Accountants School of Business (CASB).

I figured I’d mention this topic due to the deadline for MPAcc being on December 15, 2010 for enrolment for a May 2012 start date. It is important to apply early if you’re even remotely interested due to the fact that you’re applying nearly 2 years in advance. For CASB students there is a lot more flexibility about when you can enrol (you can enrol at anytime in the program), and you just have to follow the module registration deadlines, but if you miss out it probably won’t be much longer before the module is offered again.

It is an important decision to make, but will probably not affect your life at all a few years down the road, so don’t worry too much about it. The reason why I don’t think it will affect your life down the road is that both paths lead you to writing the UFE and obtaining your CA. Any smart employer will see right through the MPAcc designation on your business card as a boiler plate. The only chance it could potentially help you is if you were to go for a government union job and they have to pay their professional accountants with Master’s degrees more than those with accounting designations. Additionally if you ever wanted to be involved in academic accounting the program would be beneficial to these candidates as well.

What should you consider when choosing programs? If work/school/life balance (I say balance not flexibility or work load management), is important for you than I would highly recommend the MPAcc program. When you’re working late and you’re comrades are staying up late finishing their CASB assignments you can be going to the gym, hanging out with your friends (not your work friends, they’ll be doing CASB), spending time with family, or actually getting 8 hours of sleep a night. Come summer time, you travel out to Saskatoon (which is quite nice during the summer time) and you go to school and study for close to an 8 hour day (if you’re efficient) and you can have all your evenings and weekends free (for the most part). For those who love living life, they should seriously consider the balance that the MPAcc program provides.

Do you prefer learning on your own or in a class? CASB is a distance education program that is completed under the supervision of a facilitator and has one 3-day classroom session (face-to-face) once per module. MPAcc is all classroom based, with group work, assignments, tests, and is quite similar in structure to your undergrad education.

Can you get by with no salary? One major decision factor as well could be your cash flow. Are you able to survive 4-months without pay? Is your firm going to be paying for MPAcc? It is quite a bit more expensive than CASB running $7,000 a term x 2 terms for a total of $14,000. As well as 4-months without pay, you also have 4 months without earning months towards your CA designation. Depending on your goals this could be quite important as MPAcc will set you back approximately 6.5 months as compared to CASB. Also, you work hard September through to April and just when your schedule is going to ease up and allow you to complete your learning and development activities, plan your files for the upcoming yet, etc you are out of the office. You’ll miss the lightened work weeks, golfing with the firm and client and having summer students around to carry out your wishes.

In terms of what you’ll be learning it’s probably similar, people from MPAcc pass the UFE and people from CASB pass the UFE. It is hard to compare because no one (that I know of) has taken both CASB and MPAcc, as there would be no point. Please beware of the MPAcc program claim that they have a higher pass rate, this does not mean the program is better it just means that they have more restrictive entrance criteria than CASB. MPAcc isn’t extremely difficult to get into (although it is relatively competitive), but it is certainly harder than getting into CASB which basically anyone can get in to. Allowing anyone in is a great way to make money by selling people education, even if they aren’t capable of ever passing the UFE.

So either decision is a great one, just make sure it is the right decision for you.

For further research see:

www.edwards.usask.ca/mpacc/

www.casb.com/

Lionel Hutz Said It Best...

There's the truth... and "the truth".

Those familiar with The Simpsons from the 90's will likely recognize the reference from the episode "Realty Bites", in which Marge becomes a real estate agent. It is in that very episode that I learned a valuable life lesson (who said The Simpsons is not an educational show?).

When describing houses, Marge's view of the truth is very different from Lionel Hutz's view of "the truth".

Marge: That house is awfully small.
Lionel: I would call it, cozy.

Marge: That's dilapidated.
Lionel: Rustic.

Marge: That house is on fire!
Lionel: Motivated seller!

This life lesson that I learned when I was 10 came in handy over the past few weeks. I'm sure many reading this are well aware that CA firms are in the process of herding (or recruiting, however you want to put it) a new batch of fresh grads (or soon-to-be grads) into their cult - I mean, firm. (This reminds me of the Movementarians - The Simpsons seem to make its way into my life more often than not.) It is during this very process that I feel like I've had to tell my own version of "the truth".

The Truth: I worked until midnight and worked both weekend days for 4 weeks in order to meet a deadline. I was on the verge of ramming my head on my desk, or at the very least, I was at risk of falling asleep at my desk and drooling on my keyboard at all times during the day. My family and friends also began questioning my existence.

The "Truth": There were times when I had to put in a little extra time in order to get the work done. It was, however, an amazing experience because I got to know my team very well and I got to learn more than I ever thought possible!

I had an acquaintance (who is considering entering the world of public accounting) recently ask me what my busy season hours were. I said something along the lines of: "The first two weeks on my largest job weren't that bad - we worked until 7 or 8." And based on that alone, he sounded like he had checked out of the conversation and was ready to switch majors. I hesitated telling him that it only got later and later as the weeks went on. If only he knew....

Welcome!

Welcome to what will hopefully eventually become a global public accounting blog with writers from around the world. See the above static pages to background information about the blog and reason for its creation. Official launch is November 8, 2010 so look forward to regular posts commencing then.