Celebrating the accounting profession
Readers, with great enthusiasm and support we welcome the partnership to increase the number of qualified Bermudian accountants, a collaboration between the Chartered Professional Accountants Bermuda and the Ministry of Labour, announced by senator Arianna Hodgson and Melissa Logie, chief executive officer of CPA Bermuda, on Tuesday. This is a profession so important both personally and professionally that I can truly state that attaining an accounting designation opens the windows of the business world to a vast array of career opportunities.
So, what is an accountant and why would you want to be one?
Accountants are often humorously labelled boring, introspective, and more than a bit dull, one dimensionally focused on numbers, but readers, accounting is anything but! Numbers, money, and finance are fascinating - important to every sphere of commerce and life.
Here are some better descriptive ways to think about accountants and accounting:
• Accounting is a truly noble profession dedicated to protecting the public financial interests.
• Professionally qualified accountants and auditors are the most trusted professionals in the world of finance.
• “Managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.” – Warren Buffett
• “Never take your eyes off the cash flow because it’s the lifeblood of business.” – Richard Branson, Virgin Group
A very brief history
Wikipedia states that accounting is thousands of years old and can be traced to ancient civilizations: Mesopotamia, Iran, and early auditing systems by the Egyptians and Babylonians. By the time of Emperor Augustus, the Roman government had access to detailed financial information.
Double-entry bookkeeping was pioneered in the Jewish community of the early-medieval Middle East, then in medieval Europe. In 1494 in Italy, Luca Pacioli (the "Father of Accounting") published work on a double-entry bookkeeping system called the Summa de arithmetica, a system still used universally to this day.
By 1880 in England, accounting transitioned into an organised profession when local professional bodies merged to form the Institute of Chartered Accountants in England and Wales; 1887 in the United States, the American Association of Public Accountants (AAPA), was established.
The significance of accounting
Accurate finances are absolutely crucial to any business operations. Numbers have to be reliable, independently verifiable, and trusted by just about every single business and profession-related organisation in the world.
Investors, mortgage companies, pension managers, tax revenue agents, insurance companies, credit analysts, securities and exchange commissions, financial institutions and banks, economists, law firms, governments and related finance bureaus, for example central banks, politicians, and shareholders make financial and security decisions based on public company audited financial statements.
Accountants possess unique skills, some inherent, and many practically learnt throughout this respected career. These include: intuition, problem solving, ethical standards, fiduciary care, personal integrity, analytical observance, effective and honest communication, detail-oriented, ability to handle multiple projects, commitment, persistence, resolve and practical methodology.
Accounting has many specialty facets: financial accounting; management accounting; cost accounting; auditing; information systems, a fast-growing technology; taxation and related accounting.
And my favourite, forensic accounting – needed now more than ever. Forensic accounting involves the tracing and tracking of financial and related transactions that generally are illegal, for example, money laundering, tax evasion, fraud and manipulation of financial accounts, and criminal activities.
Accountants may be seriously tested, putting their careers and security at risk in order to protect investors. Some have been subjected to intimidation, harassment, vilification, threatened with termination, and violence just for doing their job. However, we accountants’ mission is the resolute and relentless provision of independent, verifiable financial truths, notwithstanding any impediments.
Some salacious accounting scandals detailing serious fraud that impacted markets, businesses, and individuals.
1998: Waste Management – $1.7 billion in fake earnings.
2001: Enron - accounting loopholes hid bad debt, while earnings were inflated. Shareholders lost billions.
2002: Worldcom - inflated asset values by $11 billion. The CEO served prison time, 30,000 jobs were lost while investors lost billions, too.
2002: Tyco – the executives at the top, CEO, CFO stole millions. Both served prison terms and had to repay almost $3 billion to investors.
2003: HealthSouth - inflated earnings while CEO sold $75 million in stock the day before company declared a huge loss.
2003: Freddie Mac
2008: Lehman Brothers
2008: Bernie Madoff and on and on and on!
The Madoff case made global headlines when a relentless, expert, forensic accountant, Harry Markopolos, CFA, Certified Fraud Examiner, who in 1999 when trying to replicate Madoff’s returns thought that the entire structure was fraudulent.
He notified the US Securities and Exchange Commission that year, and for several years thereafter. Madoff was finally arrested in 2008, and sentenced to 150 years in prison. Mr. Markopolos’s book, No One Would Listen: A True Financial Thriller is a fabulous read on accounting techniques, determined sleuthing and intuitive deductions, a real mystery story available on Amazon.
If you are interested in more cases, just take a virtual stroll through the United States SEC for the literally thousands of thefts, scams, steals, manipulation and malfeasance by individuals who deliberately knew – or should have known better.
Now, after reviewing these, can you imagine what chaos the financial world would be without accountants?
Accounting is a demanding profession, but the rewards are great and many.
The biggest plus – an accountant can always get a job. No business can operate successfully without one!
Readers, I speak from many years of experience.
Bermuda needs accounting professionals. Per capita, we probably have the most demand than any other country today.
Dear readers, if any of you that are interested, I challenge you to seriously consider joining this profession today, to work in the world of truth and respect in action.
You will not regret it.
Congratulations, too, again, to all Bermuda accountants who have earned the CPA designation!
Accountants: Unexpected Heroes of the World, https://tinyurl.com/ybzf4n67
US News: Best Jobs, Accountants, https://money.usnews.com/careers/best-jobs/accountant
Corporate Finance Institute, https://corporatefinanceinstitute.com/resources/knowledge/other/top-accounting-scandals/
Bermuda’s Auditor General, the independent monitor of the public purse. Heather Jacobs Matthews CA, CFE, became Bermuda’s first female Auditor General: “An excellent choice for the lonely job of Auditor-General”, https://tinyurl.com/yanvvtk4
• Martha Harris Myron, CPA JSM, a native Bermudian, is the author of The Bermuda Islander Financial Planning Primers https://www.royalgazette.com/bermuda-islander/, consultant to the Olderhood Group Bermuda, and financial columnist to The Royal Gazette, Bermuda. All Proceeds from these articles are donated to the Salvation Army, Bermuda. Contact: email@example.com