Five Cents Ten Cents

I talked a little bit about how I managed to join the accounting profession even though I didn’t start out with such an intent when I was in Junior College. Sometimes when you look back at the choices you make in life, the context in which the decisions are made can be based on just one or two remarks by key people in your life.

Context of a CPA

So what does a CPA do to earn his daily bread? In general, the accounting profession allows you to move into three distinct areas: accounting, audit and tax. In reality, audit and tax are relatively narrow in focus and you can specialise in these tracks.

Audit Track

I started out in the auditing track as my first job was that of an auditor. My job responsibilities included auditing financial statements as well as the internal controls of an organisation.

In terms of actual tasks, what I did was mainly to prepare the audit plan, carry out the audit steps in verifying figures to source documents, doing counts of inventory, cash or other assets and reviewing the control procedures over financial systems covering payments, purchasing, revenue and collections, fixed assets, investments etc.

The skills I learnt over time were Excel worksheet skills, report writing, interviewing and interacting with clients, peers and supervisors.

Auditing skills are quite useful to any accountant even when they want to branch out into other tracks such as accounting and tax. This is because you tend to learn a bit about all the various financial processes and how these result in the figures you see in the balance sheet and income/expenditure or profit/loss statements.

Is it fun?

Some of you might be asking. Yeah, yeah… I read all about this in the auditing textbooks. But is it fun?

In reality, it is about understanding financial processes and checking how the transactions of the organisation and recorded accurately, completely and in a timely manner into its books, i.e. the financial system. Generally, the process is pretty dry but it’s the people that makes it fun.

Clients can get very defensive over errors or omissions you point out to them. Supervisors can be tough or relaxed. Your colleagues are the ones who make your workday. My overall assessment is that the work initially is challenging as you learn about the various financial systems. But in the end, they tend to be similar with some variation as you gain experience in doing so.

My group of close friends that I still regularly meet and whom is my support beyond family members are all ex-colleagues from my first job as an auditor. While we didn’t work in the same team, we were in some committees together and also met up socially then before we were married and have families.

Accounting Track

The accounting track is more varied as it covers many different roles the accountant can play within an organisation. You can be doing the financial reporting, i.e. manage the general ledger and quarterly or year-end financial reporting. This entails lots of coordination with the accountants in charge of payments/accounts payables, receipts/accounts receivables, fixed assets, investments, tax agent, business units etc.

You could be doing a treasury function, i.e. making sure funds are available for deployment in operations, investments, capital expenditure etc.

You could be a cost accountant. Basically this could cover number crunching how a product/service/process costs the organisation internally and help set prices or fees for inter-company or intra-company transactions.

In short, you could be doing almost anything and everything depending on what the organisation needs you to.

Tax track

I’ve not stepped into a tax role before but for larger organisations, they need people to figure out tax planning in various jurisdictions in which the organisation operates. You could also be figuring out local tax compliance requirements as part of your tax role.

Analysis and Making Sense of Numbers

The best way I can think of to describe what a CPA does is that he or she analyses figures and tries to make sense of the numbers generated by the organisation’s activities for it to make better or more timely decisions.

Hence, you must not HATE numbers if you wish to join the profession. In fact, if you want to eventually become a CEO or C-anything, you must not HATE numbers. Be neutral to them, but you need to UNDERSTAND them.

I hope this has given you a flavour of what being a CPA is all about.

Next, I’ll write about my slight detour in my journey of being a CPA.

Be well and prosper.