Grooming Good Accountant Qualities
Jennifer owns a bakery and has just delivered 200 croissants to a customer. If the customer promises to pay her the amount owed, say RM600, but at a later date, should she still report it as a sale in her company's accounts? Later that day, she found out that the shop beside hers has just been sold for RM2mil. Since Jennifer bought her shop lot for only RM1mil two years ago, should she report the value of this asset as RM1mil or RM2mil? The chosen figures would obviously make a huge difference in determining the overall value of her business and how much profit her bakery is making.
In very basic terms, then, the main job of an accountant is to apply established accounting rules, principles and best practices to produce the relevant sets of figures, accounts and also financial statements (ie income statement, balance sheet, etc) for businesses such as Jennifer's.
Bearing in mind the much simplified explanation above of the central role that accountants play in preparing the financial statements of companies worldwide, one can imagine the huge problems that would be created if accountants start to 'creatively' bend or break accounting rules just to make clients' businesses look healthier (ie higher profits and values of assets).
Worse still, a select few have even colluded with their clients to produce misleading financial statements or to commit outright accounting fraud such as hiding massive debts, just to make more profits. These incidences have greatly tarnished the reputation of accountants and have also led to widespread accusations that they played a major role in the 2008 global financial crisis.
Even though the Malaysian economy was not severely affected by the crisis, Malaysian accountants can take heed of the many lessons learned by their peers worldwide. While the nature of an accountant's work remains largely unchanged post-crisis, there is now greater emphasis on the ethical and integrity-related aspects of their profession. For instance, all advice given to clients should fully comply with existing accounting regulations and conventions not only in form but also in spirit.
What it takes
Qualities that good accountants usually possess include a keen eye for detail, a love of numbers, inquisitiveness and an uncanny ability to solve complex problems. These qualities are important as accountants typically have to produce complex sets of financial accounts. As many accountants typically move from one client organisation to the next, they must also be able to work independently, be highly adaptable to changing environments and able to communicate effectively. Since clients' financial statements need to be submitted to various government agencies by certain deadlines every year, they must also be highly organised and have effective time management skills.
A good accountant must also have an excellent grasp of all relevant accounting regulations as well as best practices besides being willing to go the extra mile in order to add value to a client's business. Rather than just preparing financial statements, he or she would offer advice regarding how a client's business can be improved.
This may include advice on (i) appropriate cost-cutting measures, (ii) how to put limited company resources to the best use and (iii) tax-saving measures. Put simply, good accountants proactively help businesses to either save or make more money, preferably without extra charges.
Lastly, they must demonstrate an awareness of the various ethical implications arising from their work. Indeed, ACCA − the global body for professional accountants − strives to ensure that all of its members understand what it means to act ethically in the workplace.
In order to excel as an accountant, therefore, one must develop as well as continually improve upon the many qualities and skills described above. Furthermore, one can also opt to build a career within a particular specialisation within the field of accounting − similar to how a doctor may choose to be a brain surgeon or a pediatrician.
Popular specialisations include:
Management accounting - where one analyses the financial information of companies in order to advise their managers about the financial implications of business decisions and exercising financial control. According to the Chartered Institute of Management Accountants (CIMA), management accountants have strong strategic management skills as they are closely involved in (a) formulating business strategies, (b) identifying and managing risk and (c) determining what information management needs and explaining the numbers to non-financial managers.
Forensic accounting - emphasis is placed on investigating and interpreting complex or questionable financial transactions, often in cases involving accounting fraud. This is the accountant's version of the analysis carried out by forensic experts in order to solve a crime in the popular TV series CSI. Forensic accountants are usually highly skilled in using computer applications to analyse financial evidence and are familiar with legal proceedings as they often have to testify in court as expert witnesses.