I left Queen's University with a Bachelors of Commerce, but somehow you have to get into a CA program, you don't get a CA coming out of University--it is not an instant certificate. It is a challenging process that you go through, which involves some of the most difficult exams; they are recognized as being most difficult of any designation in the country. Now the system is changing but for me it took me an undergraduate degree, a program in chartered accountancy and articling requirement.

The process that I went through in the CA program, was to start with a qualification exam that was very technical based, and I did that the summer after I finished university. Once you complete that exam you move on to write a uniform final examination, the UFE as it is called, which is administered nationally by the Canadian Institute of Chartered Accountants. The difference between the two exams is that the qualification exam is very technically focused. It requires you to know your technical accounting skills, and be able to apply them in audit, financial accounting and taxation. Whereas the skills that are required for the UFE are much more Universe; you are not being examined so much on your ability to apply basic technical accounting, as you are being asked to interpret situations. Much like a lot of the cases in the students exemplars. You're not being asked 'how to such and such accounting principles apply here', that is part of it, but what is more relevant is what matters to the people who the accounting principles effects. Do they want a profitable business, do they want an ethical business, how do they want things to work for them. What are their goals, what are their objectives, and that is the sort of skills that get tested on that UFE.

Now the way things are changing, in the Western part of Canada, and Alberta is effected by this directly, the program being introduced next fall called CASB or the CA School of Business. That is a program coming out of the university that students will start, I believe, in June 2001 following their last semester of University. This program will be a bit longer than what we have now, but it will afford students, the candidates in that program a greater range of opportunities, and help them develop a much broader set of skills than is traditionally instilled now, through these two exams that we have.

Articling time

Currently the articling requirement, meaning the time you have to spend in articling offices--time spent working in an approved training office, is 30 months from the day that you start work. So I started in September of 1997 and completed my articling time in May 2000.

The kind of skills, the things that you work on, the skills you build in the early stages, and as I said I started out in audit, there is a minimum number of hours of audit work that you are required to do in that 30 months of articling time. The number of hours, it is about 1250 hours. They require you to start out in Audit to build those core skills that come out of auditing. Being able to analyze, solve and interpret the information given to you to determine what makes sense. There are other requirements for tax hours, you are required to do 100 tax hours, in your time, and that forces you as well to go through that process of being exposed to tax situations and again analyzing, interpreting and solving.

Approved training office

There are a number of them; all the big five accounting firms are approved training offices in Alberta, and there are a number of smaller offices as well. The smaller practices, even some sole practitioners, or smaller offices with only two or three CAs that are approved.

What do CA's do?

I think it is a much broader career than what people imagine. There is a stigma associated with chartered accountants as being those stodgy people stuck away in a back corner in a cubicle somewhere pushing paper, running the adding machines for hours on end. That is certainly not true. I know when I started on audit, I didn't spend a whole lot of time in the office. I was going from client to client. Certainly with what we see CAs doing now, the applicability of their skills is so diverse that you see them in all facets of business, all facets of management.

The kinds of things that CAs work on; we sort of break it down into two groups:

Public Practice of CA work

I work in the public practice side right now. The public practice includes things such as work on assurance, the audits reviews, third party review, and provisions of an opinion on the financial statements of a company or a variety of other sorts of financial information. There is taxation, of course, the personal and the corporate, the tax planning. The tax planning is where there is a lot of work these days, as well as in things such as transfer pricing, which is an issue for international companies to manage their business, in line with tax within the parameters of tax legislation in order to come to the best possible situation for their firm.

We have areas like financial advisory; where I work and where we have a number of different areas that we focus on such as the bankruptcy and solvency, but also the analysis and investigation where the work varies from situation to situation, it could be support for a legal inquiry. It could be assessment of the fair market value of a company - what the company is really worth. There is a sundry list of all kinds of things that are done with natural advisory. They are also through the public practice- consulting work that we do. Our audit practice is actually called Assurance and Business Advisory Services; yes there are certain things that you learn through your experience on the audits that enable you to help companies to succeed. Certainly there is a separation, a degree of independence between, providing assurance and providing business advisory services, and that is recognized and respected. Last year I worked on outsourcing.

Out sourcing is a combination of the skills that we have as chartered accountants together with our experience in consulting with industry and being able to provide a value added service to meet that need. We have a unique set of skills we build up, and that we are able to apply. With the out sourcing, we had chartered accountants working on it, we had engineers working on it, people with experience in the oil and gas industry, people with extensive experience in technology. It is about working in tandem with other people. As a CA it is certainly not saying that you know everything by the end of the day, but that you built up a lot of skills that are transferable and that can be applied to those different situations.

Industry practice of CA work

When we look at industry which is the second side of all the work that you often find CAs doing, the kinds of things that you see there are equally vast: There are some people who are still very focused on numbers such as the people who work in investment houses. I have a friend who works with a major investment house doing analysis of business. Much like one of the cases where you look at the profitability of a movie theater running on Sundays, he would look at the profitability of a company as a whole and how they are managed in terms of investment recommendations for both private clients and public investors. You have people who will do work in corporate reporting of a company being able to manage the presentation and provision of financial information of reports such as the annual report, quarterly statements, and all those kind of things. Variable with their skill set to be able to go in to identify what needs to be done. As I said, the skills are broadly applicable, transferable, to any area. I could go on with a longer list of what we do, but what you find is that CAs are in every facet of business involving the key business decisions of many major companies. And we have very strong value added role to play there. It is exciting. It is fun work, it is enjoyable, and it is a unique challenge.

I guess the biggest message, when we talked about that, is that CAs do a lot of things, and the stuff that we work on in practice and the skills that we develop, has a very broad application. We can apply these skills in any one of a number of domains. Which makes us business leaders as well as consultants.

What were you like in high school to prepare for becoming a CA?

What I was like in high school is? I was an inquiring mind. I wanted to know how things worked, I wanted to know why things were the way they were. I had interest in terms of business, exploring what was out there and finding out just how the whole thing operated. And I am still, perhaps, in my early stages of learning about that, and I have certainly come a long way in the three years that Iıve been out here.

I think that when you talk about what kinds of kids would like accounting--what sort of skill do they need to have, I think that there has to be a genuine interest in how things work, and how to overcome challenges. There has to be a good problem solving drive. You have to want to know how things work. You have to be able to recognize what doesn't make sense, and be able to jump up and say that this doesn't make sense.

We CAs are people who are interested in helping solve problems. When I was going through school they hit us very early on with methodology using problem solving, and a common approach to applied situations. That certainly helped, that really inspired me to want to go out and solve things, and fix things, figure out how they worked, figure out how to make them better.

As regards my other academic aptitudes, I think back to the kinds of things that I did in math. I go back to my experiences at Queen Elizabeth High School in grades 10-12 and the kinds of things that I did there that started me on this path. A lot of things actually that we see in the student exemplars are all algebraic functions, and you end up getting into the quadratic functions and formula. The ability to model a situation that you have, to present it into simple variables, and to analyze it is a form of problem solving; it is certainly that which is useful - seeing how things work from a strict numbers perspective.

Sure, there is some stigma that you have to want to want to love money or have this passionate interest in making big bucks. I think it is more a case of having an interest in analyzing from a quantitative perspective a situation which you are given, combine it with the qualitative ideal, which we'll talk about in CA comments on student exemplars, and solving them from that perspective. It is seeing how the relationship between the qualitative and quantitative, which is how you get that balance between making a big buck, for example, keeping the environment safe , and having very good intention to work.

How has technology improved on the way CAs work?

See now, the accountant doesn't have an adding machine anymore; he has a laptop. There were green pens, the red pens, and the special ticks. We had to identify all those symbols, it was a very archaic set up. Somewhat mundane for those people who had to go through doing all that adding and subtracting etc.. It is much better now. The technology we have got has revolutionized the way things are done.

In our audit practice years ago, and still some firms do this, they worked off a paper file, and the paper file could be that thick and you could have any number of them for a major engagement. It is now to the point where in our firm, all of our working papers are documented on computer. We now have the technology through Lotus notes which is a group ware--software--that allows sharing of information quite readily across people, across companies, and around the world to document everything, to monitor it, and to record our progress. I have seen in the two and a half years that I was in audit, go from this laborious paper system to this revolutionized electronic format. I think that we are going to see a lot of this, and there will almost be a move to make audits almost automated. You should be able to plug in your computer and tell at the drop of a hat what's wrong, and what needs to be changed. We will see how that happens over time.

What technical accounting language could be used in the student exemplars?

The kind of language that we refer to in the context of the projects in the student exemplars, are things like revenues and costs; total costs; average costs; fixed and variable costs; unit costs, which I know is one of the sections that is in the curriculum material.

There are also such things as sum costs. If you have already paid a thousand dollars, let us say, to have a piece of machinery on your site, you have paid that, youıve already gone on site. Let us say you are trying to make a decision as to the profitability of running that machine after you have bought it. You bought it for one purpose and you are not using it for that purpose anymore. The original acquisition cost of that unit is a sum cost. It is an irrelevant cost to any future decisions you make, something that really doesn't matter in the context of decisions.

The marginal revenue you earn from another person coming in the movie theatre door is that eight dollars, that ten dollars admission fee. Your marginal cost for example, of running the pop machine is going to equal the cost of the input plus some kind of a cost for running the machine. Let us say it costs you a dime every time you pour a cup of pop. That is the marginal cost. Oftentimes, and in most cases, in fact, you will see that marginal costs change over time. The more units you produce, the cheaper it is. It is called an economy of scale. You see that in the car manufacturing plant. It costs them a lot to make one car. When they make a prototype car, like they can make designer car, that has had a lot of money put into it. It might cost $100 000 or more, simply the inputs that have gone into it. Well, when they start mass producing those things, they are enjoying that economy of scale through the spreading out of production costs. It is a lot cheaper for them.

We also have diseconomies of scale where, all of a sudden, it costs you more, it starts costing more per unit of production. When the costs per extra unit start increasing rates than which you had before, this is when you start having diseconomies of scale.

What are the different types of accountants?

There are three main accounting designations that we have in this country the chartered accountants (CAs), the certified management accountants (CMAs), and the certified general accountants (CGAs). Those are people who are actively involved in accounting. There are other designations for more specialized activities.

Chartered accountants (CAs)
Currently in this province and, to the best of my knowledge, across this country, CAs are the only individuals who are able to provide an audit opinion on a set of financial statements whereas CMAs - certified management accountants and CGA - certified general accountants are NOT. Meaning we are recognized through what we do as having expertise in providing objective, independent, third-party assessment or third-party insurance.

Certified management accountants (CMAs)
CMAs have a different course of study, than CAs or CGAs. Their main focus is more geared towards management accounting and cost accounting. I had a client, where the comptroller of the company, who had decision making with respect to the accounting decision done by a CMA. The company was a manufacturing operation so it made a lot of sense, then, to have a CMA who understood the business and understood how the costs are effective. In manufacturing, in this case, they were producing plastic components for injection molding. They produced large, vast numbers of these components for a single customer and they made money by volume. Therefore, it was incredibly important that they manage the costs within a tolerable level. If it all of a sudden started costing them ten cents per component that they produced, and theyıre only getting eight in the door, there is a problem. So they had an elaborate framework, for managing the costs, which is what one of the things that CMAs do.

Certified general accountants (CGAs)
You more typically find CGAs in the basic accounting and finance world. I don't know nearly as much about CGAs as I do CMAs and certainly CAs. There are a large number of them out there. We have some in our financial advisory practice. They work towards a set of skills that are recognized as skills in understanding, interpreting, planning, and accounting. That is far as part of their descriptions.

What is the difference between book keeping and accounting?

Often book keeping and accounting are synonymous, often it is the same thing with a different label attached to it. When you see ''accounting'' coming in on a different level, it is that decision-making sign. My mom is a bookkeeper for example; she looks after the finances for a doctor's office. Her accountant is the one who prepares the financial statements, makes some interpretations, and provides some type of recording from the information that she maintains. Even with companies, you will find the bookkeepers keep track of the accounts payable, the debts to the company, and the accounts receivable, plus the money that the company owes. They are the bookkeepers of the company whereas the accountants are the ones who interpret that information and make a decision from there. And hence a distinction, really, between more the professional career and a technical career.

 

What is the difference between accountants and economists?

The line between accountants and the economists sometimes gets blurred. From my understanding of economists, there is 2 broad groups of economists, there are people who focus on micro economics which are very individual to a company. And others who look at macro economics, where you start looking at a the big picture of the broader economy. A lot of cases that you are working with in the student exemplars are economics related, we have started talking about variable costs and immersion costs those are all economic concepts, but they have a very important role with everything we CAs do. Where do you draw the line? From my experience, I think what I see with economists, they are all very tied up in the variables and looking at the analysis strictly on a graphical basis on the up front now.

I know of economists out here who do forecasting accountancy. Cherry Coopers, for example, is one of the best economist in the country; she is well recognized for the skills that she has in forecasting and providing useful analysis. We have coming out of the CA profession what we consider a unique set of skills being able to analyze companies; being able to analyze the economies; and having that value added in from just our experience.

 

What are the common tools that accountants use to represent their data?