Sunday, January 24, 2010

We're Auditors, Not Bankers

Hi there. It's really been quite a while since I last posted, & I think I'd probably be doing it more often now. As most of you should already know, I've been working in the audit line for more than a year now & it's definitely amazing. In this post, I'd like to share some insights of the professional so you may widen your horizon of knowledge & widen your options for a career path.

Most of you would already know, that there are the Big 4 + 2 firms in the audit practice. They are ranked as below (you may click on the URL below the image for a link to the website).

Pricewaterhousecoopers
Ernst & Young
Deloitte
KPMG
BDO
Grant Thornton

Kindly do note, that all these firm's are international networks of practice which operate in the view of profits as separate entities in their own countries (e.g. US, UK, Malaysia).

Our work, as auditors (a.k.a. assurance providers) is with regard to the Financial Statements which comprise of the :
  1. Directors' Report
  2. Balance Sheet
  3. Income Statement
  4. Cash Flow Statement
  5. Statement of Changes in Equity
  6. Notes to the Accounts
Our role is to ensure that the Financial Statements (subject matter) are properly drawn up in accordance with the relevant reporting standards (e.g. FRS, IFRS, PERS). We have to ensure that the accounts show a true & fair view of the company. True in this context, is referring to without fraud & factual. Whereas fair refers to the unbiased condition of the subject matter. Our duty, is to actually prepare a report which is known as the Audit Report as you can see below.
An example of what we do, referring to the Balance Sheet on Cash at Bank balances. Let's say, the amount of Fixed Deposits is $160m, we shall have to confirm this amount. But how?
  • Sight and agree the amount to the bank statement
  • If figure agrees, send a bank letter to the bank
  • Receive the bank confirmation, & ensure amount is true & fair
  • Ensure proper disclosure on security placed for this amount is performed
By taking these steps, the amount is definitely true & fair and therefore shows a clear view on the company's performance. Do note though, that our work is based on materiality, a concept developed for efficiency. Our work depends on the size of the client. If the Profit before Tax figure is small, more work shall have to be done as a small Net Profit margin would mean that the shareholders would require more assurance of the figures, as a loss making company is completely different than if compared to a money making one.

Then, comes the quality control process where reviewing and leadership comes to play. Here's positioning by ranking in a firm :
  1. Managing Partner / Chairman
  2. Partner
  3. Director
  4. Principal
  5. Senior Manager
  6. Manager
  7. Assistant Manager
  8. Supervisor
  9. Senior Associate
  10. Associate
  11. Junior Associate (Assistant)
A piece of advise to all job seekers. Do not hesitate to email me if you require assistance, or are interested in joining SJ Grant Thornton. And yeah, auditors should really quit acting like bankers seriously. It's really getting on my nerves. We're not earning THAT MUCH after all.

Internal auditors are different than compared to external auditors. They work for company's with the NEDS (non-executive directors), ensuring internal controls are operating effectively. Paychecks are paid by the company itself and therefore an independence threat is apparent.
You may email me at roshann@gt.com.my .
Cheers. :)

Tuesday, November 11, 2008

Letter to You

Hola there. I finally managed to put this post up. All right, as you can see above... I'm currently employed in an audit firm, namely SJ Grant Thornton. I'm also being sponsored as an ICAEW trainee here as well. And yeah, auditing is fun. Honestly, it is. And, yeah... I have a message to all of you reading this post. Please refer below.
Dear Potential CEO,

School. A perfect place to train candidates of the most efficient employees. Then comes the million dollar question, where do these people work without employers? There is no specific subject being taught in any school around the globe on being a successful employer. Therefore, the subject that should be learned is
financial education.

Financial education is a subject where someone should learn to make things work the opposite way. Employees work for money and employers don't.
Employers make money work for them. This is a form of education which has outrageous demands which result in either an oblivious failure or a magnificent success story. Here, I shall divide the matter to four scopes: investment, understanding the market, accounting & law. To be a successful employee, one must know everything about something. Example given, a doctor who specializes in a particular area earns a considerably higher amount of money & reputation than a normal doctor. On the other hand, an employer has to know something about everything. His/her scope has to be limitless to accomplish so.

The
art of investing money is the key to making money work for you. It is like science that has formulas which you apply but not necessarily have to memorize. The crux is learning how to make formulas which particularly involves a lot of brain-storming or in a simpler term, thinking. Nevertheless, creativity is the most vital factor in investing. Take note that even in investing, there is something that works like gravity : inflation. Take precaution, think creatively and win.

Before you can actually master the art of investment, you shall have to be able to
understand the market. This is the renowned process of supply & demand. The market is like a person with feelings. It's all about emotions, which frequently doesn't comply with logic. Mastering these emotions will take thorough research & understanding. The deeper you get into these emotions, the easier it gets. Pokémon cards used to be the "in" thing during my childhood days. Almost every Tom, Dick & Harry had them. Then suddenly, everyone stops and the cards becomes very much dead. There was a tipping point. Therefore, the flow has to be followed and understood so changes can be made.

Next up,
understanding financial statements. The one & only way is through accounting. Advanced accounts has to be mastered to fully understand documents & importantly, financial statements. By using the financial statement, one will know whether the investment has potential to succeed or fail which most probably goes unnoticed by the untrained eye. Accounting plays an important role in eradicating fraud too. Anyone could lie, so you'll have to get smart & see through them. In these lies, the genuine truth is hidden.

Lastly, one should learn to
utilize the law. The law is supposedly a punishment to the rich, but in practice it really isn't. Taxes are paid by everyone. Employees work, get paid, pay their taxes then spend their money. Employers get paid, spend and pay their taxes with their leftovers by utilizing personal corporations. Almost anything can be accomplished at the tip of your fingers if you understand the law. Use it & never let it outdo you.

If all of these are learned in school, one would definitely be on the road of being a successful employer. Unfortunately, it isn't. So, it's your call. A persistent person believes in destiny, a capricious one in chance.

Happy Diwali :)

Monday, August 25, 2008

King of the Jungle

The most beautiful people we have known are those who have known defeat, known suffering, known struggle, known loss, and have found their way out of the depths. These persons have an appreciation, a sensitivity and an understanding of life that fills them with compassion, gentleness and deep loving concern. Beautiful people do not just happen. :)

The pic above is my workdesk. I'm currently employed by PPG as a purchaser. For those who didn't know, purchasers purchase on behalf of the company. In simpler terms, we do the shopping for the company's needs. It's the link between a company and it's suppliers. And the best part is, I work only from 8.00am - 4.30pm and have 3 breaks in between. ;p
Next up, tattoo; a permanent picture, design, or other marking made on the skin by pricking it and staining it with an indelible dye. It's a awesome process honestly. You get into the tattoo parlour. You either bring your own design or choose one of the thousands that have been predesigned, and he traces it using a carbon paper. Then, he rubs alcohol on your designated tattoo area and shaves it. Next, he applies a special type of glue on the area and puts the traced design on the glue, applies some pressure and voila, the design has now been transferred to you. Then, he uses an electric tattoo machine (that's what its really called ;p) to draw it. And after a few minutes which might feel like the longest and most painful ones you've ever been through, you'll have your tattoo. It hurts so bad, but feels so good. You'll definitely feel awesome.
That's Haridass' tribal one. It looks even better when you see the real thing honestly.
This is the design that was initially transfered to me.
To avoid misintrepretations of the design, it's an infuriated lion. Cut the long story short, in the heart of every brave man, sleeps a lion. Some say getting a tattoo is like a continuous ant bite. Sadly, thats a lie. It's actually a lot more agonizing than that. I gotta go "Hakuna Matata" with Timon & Pumba now. :)