Mythbusters: The Accounting Edition
The Vincents HR team debunks curious notions surrounding accounting specialisations
As a university student approaching the job market, you’re expected to know which area of accounting you’d like to pursue – a decision generally based on what you’ve learned, heard, or your own personal experiences.
In our graduate recruitment process we often ask candidates for their preferred accounting service line – an admittedly tough question to answer if you haven’t worked in the industry before! Without hands-on experience, it is difficult to truly understand what’s involved in each specialisation on a day to day basis. This may mean that you, like many others, are forced to make a decision based on common “myths” or misconceptions.
So what are the realities of working in each specialisation?
What types of skills or attributes are required to succeed in these fields?
Our HR team chatted with key players in some of Vincents’ specialty business units who shared some common myths and revealed why they’re not necessarily true…
Myth: Forensic accounting is all about fraud
Reality: Whilst one area of forensic accounting does involve fraud prevention and detection, engagements are typically much broader than this. The term “forensic” refers to a dispute that lands before a court of law. You would have heard of forensic psychology, forensic police work, forensic medicine, forensic engineering etc. All of these specialties, like forensic accounting, require the presentation of expert evidence in a court of law.
Most arguments that end up in courts and tribunals are over money – what someone has lost as a result of an event (i.e. accident, natural disaster) or the actions of someone (i.e. misrepresentation, breach of contract, theft of intellectual property). Each day our staff are required to collect and analyse information, both financial and non-financial, so that the opinions we ultimately provide for these disputes in our reports are transparent, independent and based upon all known facts. Any assumptions we make must be supported by other evidence or at the very least, stand up under a good deal of scrutiny. Our primary duty is to the court or tribunal.
How to succeed in this field: It is clear then that a successful forensic accountant will need to have an excellent understanding of accounting. They will also need to have an enquiring and somewhat analytical mind that will allow proper investigation of all the facts and the organisation of them in such a way as to be able to logically and transparently form and document an opinion. This opinion must be easy to understand and hold up against a high degree of analysis.
Business Advisory (BA)
Myth: Business advisory is primarily about tax returns and bookkeeping
Reality: With digital disruption and offshoring impacting traditional compliance work, our Business Advisory (BA) unit has experienced significant change over the past 18 months to reflect this shift in accounting expectations. Whilst compliance still remains a core element of any BA role, the focus is now on strengthening the client relationship, creating efficiencies within their business and assisting them to improve their overall financial position.
From a compliance perspective, BA specialists are exposed to tax work ranging from GST advice, financial reporting and income tax returns – as well as advice on how to access exemptions or credits depending on the nature of the business. For graduates entering this specialisation, the expectation would be to develop sound tax knowledge that can then be called upon later in their careers when providing clients with business advice. Junior staff members are also provided with opportunities for client contact early in their career to further enhance these skills.
In addition to compliance work, our BA team also provides structuring, succession, business efficiency and improvement advice. With advances in real-time financial reporting available through programs like Xero, BA specialists are well placed to view real-time data and use this to plot a business’s performance through KPI’s and dashboards. These indicators are then leveraged to deliver business advice on a regular basis that moves beyond our compliance foundations and focuses on business strategies that help automate, simplify and advance systems, procedures and profits.
How to succeed in this field: Being part of an ever-evolving specialisation, BA recruits must be open to and excited about advancements and change – to be drivers of new business opportunities. For traditional accountants, sales and marketing are usually not a first love. However, for those wanting to flourish in BA, it is advantageous to develop a mindset that is constantly on the lookout for opportunities. Being able to effectively work within a team to market & sell value-add services to clients is essential, involving excellent communication skills (every task involves communicating with a client in some fashion – be it directly in a meeting, on the phone or via email). Attention to detail is essential for both the core compliance and the business improvement elements of this specialty, along with critical thinking that is “outside the box” – why are we doing things this way? Is this the best way?
Assurance & Risk Advisory (A&R)
Myth: A&R only work on financial statement audits
Reality: A&R advisory provide services across internal and external audit fields with a heavy focus on private, not for profit and government sectors. Just as tax will always remain a component of business advisory work, external audit will always remain a component of A&R advisory work – however there has been a greater shift in recent times to focus on internal audit (also known as assurance and risk) engagements.
A&R engagements see our internal auditors working within an organisation with the aim of adding value by looking at their governance, risk, systems and controls and providing recommendations to management which may create efficiencies or manage risk. In this space, the variety of work is almost endless. No two days are the same and most of our time will likely be spent onsite at clients rather than in the office. Considering that engagements are spread across a variety of clients, frequent travel across Australia is also necessary.
How to succeed in this field: Given the autonomous nature of the role and frequent interaction with clients – strong communication skills, the ability to build rapport and a willingness to travel are important factors to consider when looking at this specialisation. A successful A&R specialist should also be comfortable communicating across a variety of methods considering many team members may be based in different places.
Myth: Insolvency involves a lot of reconstruction work
Reality: Being in a position where we see financial failures, we are uniquely placed to provide advice on business performance and improvement opportunities and identify areas of concern – however unfortunately our specialists are usually approached at a point where it is too late to save the business or individual from insolvency. Therefore our main responsibility becomes helping these individuals navigate their way through financial hardship.
I&R accountants are different to the traditional tax accountant because they operate in both the legal and accountant realm. These practitioners need to understand financial statements, general accounting principles and key financial drivers but also need to have a thorough understanding of the legal frameworks of the Corporations and Bankruptcy acts. Common tasks may include reviewing financial information, performing searches into nature and operations of businesses, interviewing and holding discussion with key personnel to identify sources of information and gathering relevant documentation and reporting your findings back to key stakeholders.
How to succeed in this field: Operating in an uncertain environment, I&R specialists need to be comfortable dealing with incomplete information and data and possess strong investigation skills to put pieces of the puzzle together. Once the relevant information is acquired, strong communication skills (both written and verbal) are a must to logically piece together findings in a clear and concise manner. Given the nature of the insolvency industry, emotional resilience is also advantageous