CENTRO

ESCOLAR UNIVERSITY
MENDIOLA, MANILA

Auditing Principles
SECTION: BSA 2A

Name: BUCOT, MARIA ALIZAH L. Time: SAT 7:00am-8:00am

CASE 1 – Assurance Services

Nicolai, CPA, is engaged to provide assurance on the schedule of customer satisfaction regarding the products
of Lorelel Company for the past 24 months. Lorelel’s management has indicated that the criteria it intends to
use to evaluate customer satisfaction are combination of increase in peso sales and the customer retention rate.

Requirements:
1. Describe whether the factors to be considered by Nicolai in determining whether the criteria are
suitable.
Assurance services intend to enhance the credibility of an information regarding a certain subject
matter. It is a process of evaluating or measuring the factors affecting the subject matter or the subject
matter itself to improve the degree of confidence of the intended users other than the responsible party.
In this case, the Lorelel Company’s (responsible party) management who engaged in an assurance service
with a CPA intended to use the criteria of increase in peso sales and the customer retention rate to
evaluate customer satisfaction (subject matter) regarding their products. The company’s usage of the
increase in peso sales as their criteria basically intends to monitor if there’s a continuous customer
demand on their products over a specific period of time, which in this case, is the past 24 months or 2
years. They also used customer retention rate as their criteria by calculating data through a given set of
formula which intends to monitor whether their products or the company itself have built a good rapport
to their customers. However, the result of these two criteria may not be as effective as it seems for the
company. The factors they have considered were seemingly not enough to determine or verify the actual
result of customer satisfaction regarding their products.

These two criteria used by Lorelel’s management adheres to the relevance aspect of a suitable
criteria. It is well connected to their subject matter and it assist objectively the intended users. However,
 the criteria they intend to use are very technical based and it actually lack quality based aspect. The fact
that customer satisfaction cannot be reliably measured by numbers, their criteria may not be as accurate
as they think it could be. Depending entirely to these calculated datasets comes with possibility of
moderate to high error risks. Monitoring their increase of sales and the customer retention rate is not
be reliable if their products happen to be an essential one or basic necessities. In addition, these kind of
measurement to evaluate customer satisfaction could not surely determine if the result is in all intents
and purposes caused by the quality of their product, by their marketing strategies, or by the brand value
that their company holds. There’s a probability that the continuous increase of their sales and the high
customer retention rate are just caused by the increase of prices and the consumer mentality about the
fact that they are left with no choice since the products are part of their basic needs. With this, the
outcome are left with no significant qualified basis, hence, it is an ineffective measurement or criteria.
Monitoring the increase of peso sales and the customer retention rate could be a good consideration
when it comes to evaluating customer satisfaction if the products are not that essential or just seasonal.
Also, if the usage of this criteria happen to result into negative outcomes, it could be an effective but not
complete basis for the company to at least improve the quality of their products and the marketing
strategies that the company used to impose. The mere fact that when they used an incomplete and
unsuitable criteria, and it still resulted to negative outcomes, there must be something wrong or
improper in their controls.

Regarding the parties involved that were considered in choosing the criteria, it seemed that the
Lorelel Company was way too one-sided in gathering information about their evaluation on customer
satisfaction. They disregarded the side or the possible feedbacks of their customers, making their criteria
biased or not neutral. Also, their criteria may be very easy to calculate, to monitor, or to understand but
it lacks comprehensive information since the subject matter cannot really be based solely by number. As
I have said, it comes with a risk of committing an error.

With this, the factors they considered in determining a suitable criteria lack completeness and
transparency which may result to inconsistent interpretations.

2. If the engagement is an assertion based engagement, identify the different structures that the
engagement may take.
This kind of engagement requires the responsible party to measure or evaluate the underlying
subject matter against the criteria. The subject matter information is in the form of assertions by the
responsible party that is made available to the intended users. Example of this kind of engagement is
audit of general-purpose financial report. In this case, the subject matter is customer satisfaction
regarding the company’s products, and with that, the CPA or practitioner engaged to this will rely to the
measurement or evaluation done by the company’s management.

There are actually two examples of assertion based engagement, and it could either be and
independent audit engagement which provides a reasonable assurance that the subject matter is free
of material misstatement, and the other one is review engagement which provides a moderate level of
assurance that the information subject to review is free from material misstatement, and this is in form
of a negative assurance.

Given the said case about customer satisfaction, the practitioner could do better assurance
service through the review engagement which would enable him to review report and obtain sufficient
evidence primarily through inquiry and analytical procedures to be able to draw conclusions. Since the
subject matter requires comprehensive and quality based information, moderate level of assurance is
something that the practitioner could provide. With this, the practitioner should focus on the reliability
of the information presented to him to provide assurance that the system has been designed and
operated to produce reliable data.

If the company pursue to the criteria they chose to evaluate customer satisfaction and has come
up with a result of it, the practitioner, upon looking to it, must first review whether the criteria satisfies
the characteristics of a suitable one. If it happens to be satisfied, the practitioner may confirm the
analysis results by doing the procedures and see if it is free from material errors. But, if their criteria is
not suitable, the practitioner may inquire more about other considerations made available to him
regarding the company’s products in connection to the customer satisfaction that they aim. This could
be in form of looking into the customer feedbacks about their products, or the history of issues, reports,
complaints or misconduct, if any was made available to him, that have happened over the specific period
of time. By this, the practitioner could draw a conclusion whether something or nothing has come up to
his attention regarding the result of customer satisfaction evaluated by the company itself.

STRUCTURE FLOW: Information Reliability service

ü Is the criteria relevant to the subject matter considering the nature of the business?
 - If yes, then proceed in determining whether the criteria is suitable.
- If no, then tell the responsible party that the attestation is impossible if the criteria is not
relevant.
ü Is the criteria suitable?
- If yes, then proceed to confirmation of the analysis made by the responsible party and attest
to the results.
- If no, then the practitioner must inquire more about other considerations made available to
him. He must make sure that the evidences are sufficient, appropriate and timely.
ü With the outcomes of the review of information presented to the practitioner, and the findings
of any material information or errors, the practitioner may now attest either against or in favor
of the information presented by the responsible party. He may give recommendations about the
parameters to be considered regarding the underlying subject matter.

Statement to be presented by the practitioner if nothing has come to his attention based on the
assertions:

“In our opinion with regards to the factors and matters affecting the customer satisfaction of the
products of Lorelel Company, nothing has come to our attention that causes us to believe that the
internal control or management is not effective, in all material aspects, based on Lorelel Company’s
criteria.”

3. If the engagement is a direct reporting engagement, identify the different structures that the
engagement may take.
A direct reporting engagement requires the practitioner to directly measure or evaluate the
underlying subject matter against the criteria or he could obtain representation from the responsible
party that has performed the evaluation or measurement that is not available to the intended users.

This type of assurance engagement is primarily more reliable since the practitioner will be directly
evaluating and obtaining information about the subject matter. In this case, a quality based evaluation
must be performed by the practitioner. The criteria being not complete would surely catch the attention
of the practitioner and doubt the results about the customer satisfaction outcome. In line with this, he
must identify the lacking aspects of the criteria and perform the evaluation based on the considerations
that he added, and could still consider the criteria imposed by the responsible party.

Since the criteria used by the company was technical based and just a one way process, the
practitioner must conduct a more accurate and comprehensive assessment about the level of customer
satisfaction regarding the products of Lorelel Company. He may not just confer to the information about
increase in peso sales and customer retention rate, but also to the customer feedbacks of their products,
or the history of issues, reports, complaints or misconduct for the past 24 months. The practitioner may
personally look into it and directly ask the persons in charge to provide him the details he intend to use
for the evaluation. He should make sure that these are originally documented and timely. The
practitioner could also look into the different departments of the company, as it is more reliable if the
evidences generated internally are controlled effectively through segregation of duties. He could look
into the areas where the promotion and the production of the products take place. With that, he could
identify if the levels of customer satisfaction are caused by either the quality of the products or by the
promotion, or even both, for as long as the identified data reaches only the specific time covered by the
engagement. Finally, after synthesizing all his gathered evidence and evaluating each one of it, he would
be able to report about whether the information presented by the company regarding the customer
satisfaction are accurate and faithfully represented. And if not, he may still give recommendations
regarding implementation of sufficient and appropriate criteria.

STRUCTURE FLOW: Observation and Direct Inquiry

ü Is the criteria relevant to the subject matter considering the nature of the business?
- If yes, then proceed in determining whether the criteria is suitable.
- If no, then tell the responsible party that the attestation is impossible if the criteria is not
relevant.
ü Is the criteria suitable?
- If yes, then proceed to confirmation of the analysis made by the responsible party and attest
to the results.
- If no, then the practitioner must inquire and investigate directly about other aspects and
considerations regarding the products which affect the level of customer satisfaction. The
practitioner may look into details and make sure that every evidence acquired was originally
documented, sufficient and appropriate, and was covered by the specific period of time
agreed on the engagement.
 - With the outcomes of the review of information presented to the practitioner, the synthesis
and evaluation of all the gathered evidence, and the findings of material information or errors,
the practitioner may now directly report his findings to the intended users about the subject
matter. He may give recommendations to the responsible party about the proper parameters
to be considered regarding the underlying subject matter.

Statement to be presented by the practitioner if nothing has come to his attention during his
evaluation:

“Based on our work described in this report, as a result of our evaluation of the factors and matters
affecting the customer satisfaction regarding the products of Lorelel Company, the internal control or
management is effective, in all material aspects, based on Lorelel Company’s criteria.”


CASE 2 – Assurance VS Consulting Services

You are Isagani, CPA and auditor of Country Service Cleaning Company. The company president, Mr. Linis is
asking for consulting engagement, yet keeps mentioning the phrase “provide us with assurance…” You decided
to give Mr. Linis a rundown of the differences between assurance services and consulting services.

Requirement: Differentiate assurance services from consulting services based on the following factors:

The concept and idea of these two types of services that a CPA or an auditor offers often gets overlapped
or even misinterpreted. These are mostly differentiated according to the parties involved, to its primary
objective, and to what or where it focuses on.

1. Parties involved
When performing assurance engagements, the internal auditors independently design and
execute the work. Because assurance service engagements yield an objective examination by the
internal auditors, they receive more attention from external auditors, management, and board members
than consulting services. Consulting services include an agreement between the internal auditor and the
client as to the nature and scope of the work to be performed and are intended to directly aid managers
 in meeting their goals. Advisory services, training, or process design, which are normally relevant to
improved operational activities, are examples of work that internal auditors may perform as part of a
consulting engagement.

2. Primary purpose
Assurance engagements are services performed by a practitioner who has the primary goal of
evaluating or measuring the given information or subject matter against a specific criteria. The
practitioner would be able to draw conclusions from the outcome of the evaluation he performed
regarding the matter. The purpose of his opinions and conclusions is to enhance the credibility of the
information by the certain party he engaged with. It also serve to improve the likelihood of the
information to meet the needs of the intended users, such as the investors and regulatory bodies.

On the other hand, consulting services are part of non assurance engagements. This kind of
service has the primary goal of collaborative discussions regarding a specific problem or matter that they
both agreed upon. The practitioner aim to give solutions, advices and recommendations to his client out
of his professional skill, experiences, observation and knowledge in which he employs through the
analytical procedures and approach used in consulting services. But, these procedures employed by the
practitioner are not designed to enable him to express any assurance regarding the matter. Nonetheless,
the users of the service he rendered would surely derive a benefit from it because it has been performed
with due professional skill and care.

3. Focus
The focus of assurance engagements centers on the concept of evaluating and measuring
whether a certain information about the subject matter is based on factual evidence. And through that,
assurance services enable the practitioner to improve the quality or context of information for decision
makers like the intended users. Companies use assurance services to increase and enhance the
transparency, relevance, and value of the information they disclose to the intended users such as to the
market and to their investors.

Consulting services focus on the procedures of aiding a client on how to improve or solve a
specific matter or problem depending on the nature, approach and scope which they have both agreed
into. This type of service involves determining client objectives, fact-finding definition of problems or
opportunities, evaluation of alternatives, formulation of proposed action, and communication of results,
 implementation and follow-up. These procedures are beneficial but in no way would give absolute
assurance to the client.

Basically, assurance services function to improve the quality of information through the performance of
evaluation while consulting services function to help the management improve their ways and operations
through the employment of skills and knowledge.


CASE 3 – Types of Audit

You are Leslie, CPA and you are the Chief Financial Officer (CFO) of USB Computer Technologies, Inc., a company
that specializes in customized business software. You have been requested by the Board of Directors of the
company to attend its meeting. During the meeting, one of the directors asked you, “Why are audits of our
company performed by different auditors (internal, external, government)?” Before you could answer the
question, another director mentioned that “it would be more cost-efficient if our internal auditors performed all
the audits.”

Requirements:

1. Write down your reply to each question of the members of the Board of Directors.
Audits in a certain company are done with interrelated goals but it should be performed with
different approaches, varied procedures, and by separate individuals. Audits cannot be done by only one
person as a whole because every department or aspect in a company requires different functions, hence,
it is just proper to address those matters involved in every department through methods that are
appropriate to them considering their role in the company.
Internal auditing, also referred to as operational audit, is an appraisal activity undertaken by a
company or an organization to assure the effectiveness of internal controls, risk management, and
governance to facilitate the achievement of organizational objectives. This type of audit is very broad in
the sense that it encompasses any matters which can directly or significantly affect the attainment of
organizational goals. Internal auditors are engaged in an independent, objective assurance and
consulting activity designed to add value and improve the operations, specifically the internal controls
in a company. They are the ones in charge to work with the management to systematically review
 systems and flow of operations. On the other hand, while internal audit has a broad function, external
auditing has a primary scope that is restricted to matters that concern the financial statements as it is
also referred to as financial audit. It involves the examination of the truth and fairness of the financial
statements of an entity done by an external auditor who is independent of the organization. It is made
possible through a reporting framework such as IFRS. External auditors are the ones in charge on
inspecting their client’s accounting records and they express unbiased opinion as to whether financial
statements are presented fairly in accordance with applicable standards. What concerns them the most
are the review of financial statements of the company because it is the information that the shareholders,
whom they report to, need the most. Another type of audit that needs to be done in an organization is
like a governance audit but more on the compliance side. This type of audit functions to determine
whether an entity or an organization is following specific procedures or rules set down by some higher
authority. The higher authority in which they need to adhere has set standards in accordance to the laws
and implementing regulations universally applicable in the country. It is done by auditors independent
of that specific activity which they need to evaluate. These three types of audit may have different
functions but they actually complement each other. However, the complementary between them does
not necessarily mean that they have to be done as a whole or by one auditor only. The need for hiring
different auditors comes with significant reasons and it mostly center about conflicts especially on the
functional view. These conflicts that may arise in the workplace could actually have both good and bad
outcome. If the parties involved understand the nature of conflict, then it is possible to apply positive
energy and direct it toward problem solving and organizational improvement. But, the one man effort
for these three types of audit could also possibly result to a conflict which may be bad for the company.
Their functions may be complementary but if they happen to overlap in a dysfunctional way, it may lead
to a low chance of achieving organizational objectives or worse, bad decision making, both for the
management and for the intended users of an audit report. It may be cost-efficient to only hire one
auditor but the consequences of it might result to a high possibility of ineffective evaluation, biased
interpretations, inaccurate data, and inconsistent decisions. Henceforth, the aforementioned negative
outcomes would apparently require the organization to spend resources and money much more than
the amount that they might have spent if ever they just hired different auditors.

2. In relation to your answer in number 1, identify the issues that must be explained to the Board.
If the Board would still insist to only have one person to conduct all the audits needed in the
company, there would be inevitable issues, conflicts, and organizational problems that would certainly
arise out of it. In an organization composed of different departments, there are different head and team
leaders that are hired to direct the functions of such areas. A chairman or a CEO could not possibly handle
all of it himself because these different departments require diversified functions based on their given
roles in accordance with the organizational objectives. This concept is also applicable when it comes to
auditing. According to the imposed rules and regulations in the auditing field, different types of audit
require separate individuals to work for those different areas. And if there would only be one individual
that will perform all the audit works, then there’s a high possibility of conflict occurrences and legal
ramifications.

The idea that the Board of Directors are proposing cannot be executed in real time and scenario
since a one-man effort for all audit works is very inappropriate with regards to the established work
description that each type of audit maintains. Being independent from the company is a requirement for
an external auditor to perform his job well. It is impossible for him to maintain independence if the work
in external auditing overlaps with internal and compliance audit. Given that, the request of the Board of
Directors is somehow against the implemented rules in the auditing field.

Second issue that may arise if there is only one individual that will conduct all auditing activities
is the expedient solutions and results that he will arrive at due to time pressure and the parallel nature
of the activities. For example, the auditor who is in charge of providing solutions regarding operations
and has a time frame set for it, is also in charge of securing compliance to laws and regulations which
are also needed as soon as possible. With this, the quality of work that the auditor could do if only he
was focused on one certain work would be compromised due to the pressure of his other engagement.
If still pursued, errors or mistakes will surely occur and may also lead to bad decision making and
ineffective flow of operations. Yes, one auditor could empirically do all of it as it is practical and
convenient, but the outcome of it would not be as effective, as accurate, and as organized if different
auditors are hired to do the varied work for these different type of audits.

Another problem that might occur is conflict of interest in a sense that when people who are in
charge with equal power but in different areas and are committed to mutually exclusive goals, there
could be a clash between them when it comes to prioritizing their respective goals. And this is because
of the merging insights by different people assigned in separate areas. As a result, there could be actions
that are proper for this but are actually unethical or even illegitimate for the other. With those problems
caused by differences among areas, it is not impossible that the idea of only one individual to handle
several works will also cause problems or it could even be much more complicated than that. A one-man
 effort to do audit works at all areas may seemed to be a good collaboration among such areas but not
when these works require different approaches that might lead to opposing decisions. For example, an
internal auditor who is in charge with provisions to improve the operations especially in internal
management is also in charge with the compliance. Upon coming up with decisions for the operations,
he noticed that his proposed provisions are not in accordance with the laws or regulations set by the
higher authority. Despite the dilemma, being both an internal auditor who only wants to improve
operations, and a compliance auditor who needs to ensure obedience to rules, he just reported that the
management or the company as a whole is complying with the laws even if it is a violation. As a result,
there would be a high probability of audit deficiencies since the quality of a certain type of audit
conducted was compromised due to the demand of work in other areas. It only means that being both
the auditor of two or three different areas would certainly lead to a compromised work or would even
cause irregularities.


CASE 4 – Misconceptions about Auditing and Accounting

You are in a reunion of high school classmates. There is much food, and the drinks flow freely. Many of your
classmates joined the sciences and engineering fields; some have become doctors, others are lawyers, and still
others are entrepreneurs. You alone joined the Accountancy profession. Consider the following:

Requirements: Each situation illustrates a common misconception about accountants and auditors. Prepare
a proper reply to each classmate.

1. Gelai, a classmate since grade school (now a doctor) commented on your line of work: “I don’t know
anything about how an auditor performs his/her works. It seems that there is no scientific approach
to the audit process.” She continued, “all I know is that auditors are on the look out for fraud… other
auditors prepare income tax returns for us professionals.”

Reply:
Hi Gelai! First of all, I really do appreciate your profession as a doctor and I admire your works
because I know that it is not easy to help or cure people who are ill or diseased. But you know, scientific
approaches do not just apply to science related professions like yours. Being an accountant is more than
just numbers or money that most of you people think. Yes, CPA’s like me do look for fraud, but being an
auditor is just like a part or an aspect in the whole accountancy profession. In fact, auditing has a different
scope from other accounting field. CPA professionals can do both of it but these two line of works has a
line between them which makes them different from one another. As I have said, being an auditor is just
part of being an accountant. Hence, accountants and auditors both work with business’ financial
statements and ensure they are accurate, up-to-date, and in compliance with various regulatory
standards. But being an accountant is much broader since it requires versatility when it comes to
rendering services to clients. Accountants have the primary work of preparing financial statements,
which include the statements of financial position, comprehensive income, and cash flows. Beyond this,
there are myriad additional duties that an accountant might perform, such as bookkeeping, tracking
expenses and revenues, forecasting future profits and cash flows, and the work that you have said, which
is tax preparation. These specific works that I have mentioned are actually much more complex than you
think; it is just as intricate as your works in the medical field. Also, when doctors could have their own
clinic while still serving in a hospital, us accountants could also be a dedicated employee of a company
while simultaneously working for a third party when hired by business entities to manage their books or
prepare taxes.

When you addressed me as an auditor who only look for fraud, it is somehow an underestimation
of my work. Auditors come in behind accountants but that doesn’t mean that audit field are less
important than the other scope of accountancy profession. While most of the accountants prepare the
necessary statements for an entity, the auditors are the ones who examine these financial statements
and ensure that it represents the company’s financial position accurately. Auditors are the ones who
verify these financial statements in accordance with generally accepted accounting principles. Like
accountants, an auditor can work internally for a specific company or for a third party, such as a public
accounting firm, to audit various businesses.

Accounting and auditing draw from the same talent pool and, for the most part, require similar
skill sets. However, subtle differences exist. Accounting requires a person who is more detail-oriented
and focused. Small mistakes can cost millions, particularly for large companies dealing with massive sums
of money. As an accountant, it reflects poorly on you when an auditor comes in behind you and discovers
errors. Auditors must value attention to detail, but they also need strong investigative skills. In addition
to capturing honest mistakes, a good auditor is called upon to detect subterfuge, fraud, and intentional
 misstatements. The companies that perpetrate such chicanery are generally good at hiding it, which is
why preternatural detective skills are so valuable for an auditor.

So, see Gelai, us accountants are far from just detecting fraud and preparing income tax returns.
We are basically needed so that business entities, just like hospitals, could be secured when it comes to
dealing with finances, flow of operations, and legalities. Because no matter how effective you doctors
are, if there are irregularities in your internal management and systems, your hospital or your clinic
would not last that long in the industry.

2. Lotlot, one of your teammates in spelling competitions, is now a high school teacher. She says, “audits?
It’s not surprising that you became an accountant…auditor…whatever. With all your talent in
mathematics…”

Reply:
Lotlot, I know that I have aced all our mathematics class when we were in high school, and I even
competed and won many math competitions, but you know what? My profession is not solely based on
math, and definitely not just about numbers. The most used methods of mathematics in accounting are
actually the basic ones, which are addition, subtraction, multiplication, and division.

Yes, accountants and auditors must be good with numbers. However, this does not automatically
mean that a working knowledge of multidimensional calculus is necessary, since calculators and
spreadsheets do most of the heavy lifting where math is concerned. Professionals in both careers,
however, need to be quick and confident with quantitative analysis. Those who get confused easily when
working with numbers, and who make constant mistakes, are going to find both careers frustrating.

The accounting world has long been typecast as a haven for nerds and introverts who prefer the
company of numbers to people, but this stereotype is outdated and inaccurate. Under the broad
umbrella of accounting are many fields, such as management consulting, that require dynamic,
extroverted individuals who can establish rapport with C-suite employees and give confident
presentations to boards of directors.

Moreover, accountants and auditors often work in teams to conduct such duties as preparing
and reviewing financial statements, tallying inventory, and forecasting future sales. The overused image
 of the geeky accountant squirreled away in a corner cubicle, hiding behind a thick set of glasses and a
computer screen, is in no way accurately reflects the profession as it exists today. To be an accountant
is more than just studying formal or technical knowledge about numbers, it extensively requires a lot of
understanding especially in terms of logical matters. If accountancy is merely about numbers, then what
does being an accountant make any difference from being a math teacher or a mathematician?
Accountants may be expert in numbers, but our expertise is in no way centered in the arithmetics,
because numbers are just part of our very broad and complex scope.

So, yes Lotlot, everything in this world might have mathematics to explain it, but practically
speaking, not everything that we do in this world is just focused on mathematics. Accountancy is much
broader, more complex, and more comprehensive than that.

3. Owell is now a lawyer. He was the class salutatorian, and has a very competitive nature. He heard
Lotlot’s remarks and said, “My friend, as class valedictorian you should have joined a more useful
profession! Look at me.. I serve the public. Look at you… audits? Bah! They are NOT productive. An
audit has nothing to do with the GNP or the public interest. Rather than create value, auditors like you
simply check on what someone else has done.”

Reply:
Hi Owell, first of all, I really admire you and your chosen profession. Being a lawyer is not easy at
all. I know it requires a lot of memorization and comprehensive reasoning. But, what if I just told you
that being a lawyer is just about mere memorization? It would be offensive and undermining, right?
Being an accountant or auditor may be depicted as “checker of what someone else has done” or just
people behind big companies, but did you know that without us accountants or auditors, these
companies will surely be bewildered and disorganized.

On average, lawyers like you make more money than accountants, but this does not mean that
accountants or auditors are less productive or useless than you. Actually, both of our profession share a
lot of standards and regulations that need to adhere. We complement each other in a way that we both
seek truth and fairness in our works that are based on facts and laws established in a certain jurisdiction.

Accounting jobs are often synonymous with boredom or being unproductive. They are
comprehended as sitting at one’s desk, going through boring books of accounts and financial statements
and doing calculations. Also, an accountant is just perceived as someone who is involved in hardcore
number crunching and nothing else. Well, this was somewhat true, but a decade ago. With the advent
of technology and the way accounting jobs are perceived in the global arena today, the truth has changed.
Accounting jobs are one of the most glamorous and coveted profiles in the world of finance, and finance
is something that all sectors in society encompass.

Accounting professionals have begun to look beyond financial accounting jobs. With profiles like
management accountants gaining momentum, they are perceived as someone with a great deal of
knowledge not only in core accounting concepts but also in business decision making. As an accountant,
being involved in solving key business problems and being a growth proponent to the company would
give you a sense of responsibility and belonging. At the same time, those at the helm of the organization
see management accountants as equals, as advisories to them rather than just financial enquiry resource.
See, we are not useless, we contribute in the most productive way as well.

With automation conquering all spheres of a profession, can accounting jobs be left far behind?
Today the mundane work of accountants such as bookkeeping, receipt and voucher reviewing, scanning
invoices etc. can be done at the click of a mouse. There are software programs which take care of these
process-driven work, leaving a lot of time for accountants to focus on strategic areas of corporate finance.
These programs can be used on-demand and empower accountants to look into larger issues impacting
the organization such as capital structure, cash flows, a decision on sale or purchase of assets etc. With
the help of automation, accountants can also spend a lot of time interacting with clients and
understanding their changing needs. The notion know that us accountants would be out of demand soon
because of automation does not just really make sense. We are more than the computations that we do,
we help the organization as well as the economy through our interpersonal skills and professional
knowledge that could help our clients aside from the technicalities they need.

Today accounting is not just limited to financial, management or cost accounting jobs. You can
explore many new age roles such as Forensic accounting, Finance Controller, Project Manager, tax
advisors etc. The roles that accountants handle today is more versatile and broad. This will also give you
an opportunity to take up new challenges and showcase your finer skills. You could also occupy
leadership positions in outsourcing firms with diverse accounting verticals such as collections, Order to
Cash, Record to Report etc.

 The entrepreneurial bug has bitten most millenials today and accounting professionals are also
not left far behind. Once you have gained substantial experience in the corporate world, you can start
up a company of your own with any innovative concept. There are few successful start-ups such as tax
filing portals, crowdfunding websites, e-wallets as well as online corporate advisory services which have
been founded by accountants with rich exposure to accounting as well as an eye for opportunities. This
means that us accountants are not only confined as employees or consultants, but we could be
entrepreneurs as well which indicates that we can contribute to Gross National Product that you are
saying.

A decade ago, investment bankers or venture capitalists came to be perceived as most glamorous
roles in the world of finance. But today with changing needs, even accounting jobs are in huge demand
for global organizations. Qualifications such as CIMA, ACCA and the CPA are much sought after by many
students who wish to look beyond the usual roles offered by Chartered Accountancy. These are
qualifications which equip a student to think from a holistic perspective and make them a well-rounded
professional. This also makes the profile more challenging and aspirants find it intriguing enough to
pursue.

The financial services and banking sector is witnessing changes in the way it functions. This is
attributable not only to technology disruption but also other macro and micro factors like global
economy, adoption of international accounting standards, changes in risk and compliance guidelines as
well as other operational changes. With an industry as dynamic as this, accounting professionals are
required to be constantly on their toes and move in tandem with the evolving market. So there is a
continuous scope of learning as well as the adoption of best practices.

With all that, I can say that accounting is much more than number crunching today. It is quite a
well-established fact that accounting is the backbone of a successful business. However, the profile was
made to revolve more around mundane process-driven tasks, leading many aspirants to move away from
accounting as a profession. But now students view accounting with a fresh perspective. They are well
aware that this profile continues to be in huge demand with a new set of challenges as well as
opportunities. The perception is changing, hence aspirants need to be well equipped with the skill sets
that are demanded to make this profession a success.


Honesty Index:

30% - searched online references