Accuracy Intelligence

June 18, 2016 // 0 Comments

We look for multiple types of intelligence in our industry accountants including but not limited to:  Accounting intelligence to properly apply accounting principles Mathematical intelligence to make calculations and effectively analyze data Systems intelligence to utilize and leverage accounting systems, Microsoft Excel and possibly utilize SQL and Microsoft Access People intelligence to communicate effectively, build relationships, and lead Special intelligence (when applicable) in areas such as (i) SEC reporting (ii) auditing, (iii) business  valuation, (vi) tax, etc. We also look for people with great attitudes, desire and motivation with strong knowledge about their company and industry The above-mentioned categories are formally taught in various mediums inside and outside organizations. However, accuracy intelligence (aka mistake avoidance intelligence) is usually not formally taught to industry accountants. Consequently, many industry accountants with sufficient accounting, [Read More]

I Want The Industry Accountants On My Team To Possess These Qualities:

January 31, 2016 // 0 Comments

Have strong GAAP knowledge and be able to apply it in various circumstances Adept at researching GAAP, using GAAP research tools, and drawing proper GAAP conclusions Strong mathematically Attain accuracy when preparing, reviewing and contributing Read and be familiar with their company’s 10-K and/or annual audited financials Understands all aspects of the monthly close calendar Understand how transactions impact each of the four financial statements (B/S, I/S, CF and ERF) Understand how information on a journal entry, reconciliation and roll-forward fit together Understand their company both operationally and economically Understand all of their areas of responsibility and have methods and intelligence to achieve excellent results Understands how a myriad of differing processes work Figure out ways that their companies can be more profitable Keep up with dynamic changes in the business (ex. if break a facility lease, know to write off the leasehold improvement) Driven to meet both [Read More]

The Spreadsheet Risk Rarerly Discussed

January 7, 2016 // 0 Comments

When spreadsheet risks are evaluated, it is usually in connection with preparing or reviewing. However, in many cases, accountants need to pluck data out of spreadsheets created by others, which carries unique risks. Listed below are 5 such risks.  Output received is flat out wrong – An example is asking HR for headcount information for a specific division and receiving it (in a spreadsheet) for the entire company. Accountants need to be on the lookout as this occasionally occurs.  A good  mitigation technique is to ask for query parameters along with the data (when applicable). Not all formulas in the spreadsheet received are populated – An example is with a derivative spreadsheet received from the treasury group. There were 2,000 derivative trades, but only 1,902 fair value calculations were populated with the remaining 98 fair value formula calculations missing. Thus, the fair value total cell was incorrect. Accountants need to review spreadsheets to ensure that formulas [Read More]

Steve Harvey’s Confusion Also Plagues Industry Accountants

December 28, 2015 // 0 Comments

The confusion experienced by Steve Harvey in announcing the wrong winner the 2015 Miss Universe contest is similar to confusion experienced by industry accountants. Mr. Harvey experienced what is referred to as “Simon Says” confusion in the “The Industry Accountant’s Intelligence Briefing.”  This confusion can occur due to (i) bad labeling, (ii) inconsistent presentation, (iii) comingling different data-types, etc. Accountants experience similar confusion in many instances including the following: The chart of accounts is not logical and sequential. For example, most revenue accounts start with “4” but contra-revenue accounts like sales discounts and sales returns are placed in the “9” series. This caused a new division controller to flash inflated revenue on each of her first four weeks on the job. Breaking the bad news to the CEO and CFO was unpleasant. The utilization of prepaid expenses such as prepaid software support is erroneously labeled as software support [Read More]

When Is It Ok To Spot Check?

December 19, 2015 // 0 Comments

When is it ok to spot check? The answer is “it depends on the situation” but in my opinion, there should be an assumption that comprehensive detail reviewing always takes precedence over spot checking barring specific unusual circumstances. The purpose of comprehensive detailed reviewing is to catch errors in the draft work-product. In many cases, spot-checking is insufficient to achieve this objective. Also, the difference between a “comprehensive review” and “spot checking” is often only 10 to 15 more minutes. That said, uncaught mistakes that survive too long can cause damage, as it can negatively impact many people, resulting in damaging the integrity of the preparer and/or reviewer. Spot checking is sometimes ok when employed as a subset of a comprehensive double-check, but risky as a stand-alone review method. Spot checking should be limited to the following: In cases where there are two reviewers, and reviewer #2 trusts both the preparer’s ability and the primary [Read More]