People want to work for organizations that care. At least that is the “known fact” that underlies a lot of thinking in corporate culture and leadership advice these days. Like a lot of “known facts” this one has a strong basis, but that doesn’t mean it isn’t misunderstood or misused by organizations in their efforts to create a positive culture. Organization show care through any number of efforts:
- Paying fair wages to a diverse employee base
- Treating their suppliers with respect
- Developing and changing products so they can be produced in a sustainable manner
- Providing a reasonable rate of return to their owners and investors
- Continuously developing their employee’s skills for an ongoing career
- Supporting the community
It’s the last point that sometimes leads to efforts that result in a culture clash. The problem starts with the assumption that for the organization to get credit for supporting the community it means money raised and volunteers provided must be in the name of the organization. This leads to money raising efforts where employees feel compelled to give, and voluntold “opportunities” where the whole group goes out on a day to support a charitable effort in the community. Organization leaders then pat themselves on the back because not only did they check the box on supporting the community, they also checked a box on a team building exercise.
The question is, how many employees are gripping behind the leaders back about “having to go work” for a charity they don’t want to support when they had important work to do for the organization itself which they will now get told is late. Maybe they would have preferred to use those eight hours by leaving a half hour early two days a week to go couch a youth sports team where one of a bunch of kids was their own. Maybe they would have preferred to give money to a different charitable organization that supports their view of how to make society better.
My point is not to do away with community outreach programs. My point is two-fold. First, make sure they are truly voluntary. As soon as people start feeling like these are voluntold “opportunities,” the impact goes from team building to culture crushing. Second, provide options for people to participate. Instead of giving money to a specific charity, have a contest or drawing where an employee gets to select this month’s or quarter’s recipient from a list of potential charities. Instead of having a team day, provide a clearing house of volunteer opportunities or participate in the President’s Volunteer Service Award program as a certifying organization, and celebrate your employees who received recognition by highlighting them to the community.
Supporting the community is a great way to show your organization cares, but be careful that you do so in a way that builds a positive corporate culture, not a negative one.
The second biggest myth about the CPA profession is that we all do taxes. As soon as someone finds out you’re a CPA, one of the first things they do is ask you a tax question. The reason I say it’s only the second biggest myth is because at least it’s true that a significant minority of our profession do tax work for a living.
The biggest myth is that being a CPA is about working with numbers. Isn’t the reason we all became CPAs is because we were good with numbers and liked math! In coming up on my 27th anniversary of getting my CPA license, and I can still honestly say the college course I use most, day in and day out, is the course I took on business and technical writing. A course which I am not ashamed to say I got a “B” in back in college. But who cares about that; I mean it wasn’t like I was going to be using it all of the time. It wasn’t actual accounting. Hah!
Ask a CPA what they do, and if they aren’t talking with clients, colleagues or others in their organizations, they are probably writing those same people responses to questions or memos to document research and decisions. The fact is that as CPAs we write a lot. Have you seen those footnotes and MD&A’s? Have you seen the support documentation for a tax position or a valuation report? That doesn’t even crack the surface when you start including all the emails, instant messages and even blogs that some of us write.
Writing is a big part of what we do, but many of us have never taken a course or even read an article on how to be a better writer. Therefore, I thought that I would share a few articles I read recently to help me become a better writer. I may not do everything these articles say, but I’m a true believer in lifelong learning, so I figure I have some time to keep improving.
Think you don’t need any help? Check out this article from our profession’s own Journal of Accountancy on English expressions that trip up writers.
Think you need to use big words to communicate with all those smart people in the world? This article on readability will make you think twice.
Want some simple steps to quickly improve you writing? Try this article with 15 easy steps to improve your writing.
Wonder what that passive voice versus active voice discussion is all about? Check out this article with tips on using active voice.
Want some proof on how to communicate better? Check out this article on science backed tips to improve your writing.
Remember, you may be the smartest CPA in the world, but if no one can understand you, that won’t matter. Words matter as much as, if not more than, the numbers.
One of the things I hear often is that Millennials (not Generation Z, which is just now entering the workforce) say they want their life and their job to make a difference in the world. While that is a great goal, I wonder, as a solid member of Generation X, if they understand what making a difference is? It seems if they aren’t solving the water crisis, stopping hunger, ending disease, or reversing climate change, that they don’t think they are making a difference. Saving the world is an unobtainable goal, and attempting to do so will either burn you out or end in depression from realizing it can’t be achieved.
One of the characters from one of my secret movie favorites – The Core – put it this way, “I’m not trying to save the whole world. That is too big, its impossible. I’m just trying to save my daughter.” Now, being Hollywood, saving his daughter meant saving the whole world, but there really is a kernel of truth in what he had to say. You don’t make the world better by changing everything all at once. You make it better, by making little changes each day; by helping one person each day.
There is another quote from another one of my favorite movies – Saving Private Ryan – that really gets at the heart of making a difference in the world. In the end, the elder Ryan asks his wife if he was a “good man.” Captain Miller told him in his dying breath to “earn this” life he and his men gave him. Ryan felt the best way to earn it was to simply be a “good man.” And, of course, his wife says he was, and the film ends with his family surrounding him.
I think one of the best things about the CPA profession is that we are surrounded by good men and women making a daily difference in the world around us. We are not all Hollywood perfect, but we all do a little bit each day to make a difference, to make things better for those that depend on us.
For those of you who made it past the title of this blog; but are wondering if it is just going to make you feel bad, let me make one thing clear from the outset. Unconscious bias does not make you a bad person; all it does is prove you are human being. The first thing we need to do is define bias. A bias is an inflexible, positive or negative, conscious or unconscious belief about a particular category of people. There are a couple of key points here. Saying that women are nurturing surely wouldn’t seem like a bad thing. Nurturing is a positive trait right? But just because your bias is something positive doesn’t mean it isn’t a bias, and it plants the seeds to being negative about someone. If you think women are nurturing and you come across a woman who doesn’t want to have kids, your bias can then become negative because you start questioning what is wrong with that woman. Is she selfish or self-centered? Her unwillingness to conform to your positive bias somehow just became negative.
The second thing we need to discuss is who pays a price for your bias. Certainly the object of your bias potentially pays a price if you won’t give them an opportunity in your organization, but the object of your bias is not the only one who pays a price. You, as the holder of your bias pay a price and your organization also pays a price. You may be unwilling to take opportunities because of your bias. You may miss the ability to find your successor that allows you to be promoted. Your organization may end up with less engaged employees and be less innovative with lower growth prospects.
The good news is that we are not sentenced to be a lifetime slave to our biases. We can do things to learn about our biases and then deal with them. Project Implicit has a series of different tests you can take to learn about your biases in many different areas. We can then take action to deal with our biases. One of the best ways is to find common ground with others. Just like dog lovers and cat lovers can find common ground as animal lovers, you can find common ground with others. Maybe it is that we are all part of the accounting profession or maybe it is that we want our firm or company to be successful. The keys to finding common ground are to do it in a cooperative, unhurried fashion. It will take personal interaction and needs to focus on shared interests, and it involves finding common goals.
I’m not saying it’s easy. This is tough work that takes time and effort, but it’s worth it. Remember having a bias does not make you a bad person, it’s what you do about it that matters.
The Public Company Accounting Oversight Board (PCAOB) has proposed changes to its auditing standards that might be overlooked because they were issued on the same day as final rules were issued related to the updated audit report. The new audit report includes discussion of Critical Audit Matters for the first time in the U.S. This is an important development, but it should not cause us to overlook the proposed rules that were issued at the same time. The new rules focus on auditing accounting estimates and using the work of specialists. Those areas are critically important. The FASB is forcing more and more fair value accounting into our financial statements and footnotes. Therefore these estimates are taking on an increasingly important role in getting the financial statements right, i.e. free from material misstatement.
The parts that CPAs in business might be interested in include rules to look at the work of an outside specialist employed by management and view any potential management bias more skeptically. This is not only going to have a significant impact on the cost of the audit, but also on the cost of the specialist the company hires to help them value assets. This is because the specialist will no longer be able to put the same reliance on management’s assertions about future cash flows from the business or assets being valued.
To sum it up, neither your auditor nor the valuation specialist you hire, will be able to trust you. That is a harsh statement, but one that is not necessarily just hyperbole. The PCAOB says the new rules are based on what they are seeing in their inspection reports. I agree the increasing reliance on valuations that require management assertions as a key input certainly gives nefarious management an increased opportunity to do bad things in the financial statements.
I’m also sure there are examples of such behavior that were not necessarily caught by auditors in the PCAOB inspection reports. We all know there are bad actors out there; otherwise we would not talk about “undue” pressure to hit earnings targets, and we wouldn’t have the litany of examples that gave us the creation of the PCAOB in the first place. The question I have is do the inspection reports distinguish between management bias from non-PAIBs and management bias from PAIBs?
PAIBs who are CPAs operate under the same code of ethics as auditors with one major exception; we don’t have to be independent of our employer. Other that that, we have the same responsibility to the public to make sure investors in public companies are protected and put ahead of our own personal interests. If these new standards are going to raise dealing with management bias to another level, don’t we as fellow CPAs deserve recognition for our commitment to mitigate bad management bias? Or should we all be treated like we are guilty until proven innocent even though we take the same oath to protect the public as out auditor colleagues?
When I was growing up, July 4th was a very special day. My family always attended our church picnic at a parishioner’s farm. BBQ chicken was supplied for all, and everyone brought sides and deserts to share. The chicken crew always got there early because you can’t cook chicken for over a hundred people in a few minutes. They would set up a special pit and slow cook the chicken over the coals for a couple of hours. It’s still the best chicken I ever ate.
While lunch was cooking, the kids and young-at-heart adults would all go play softball or volleyball in the fields. It was fun. The younger kids would be helped to make sure they got to play and learn the game. It was never about winning; I can’t remember a single score of any game in all the years, but I remember the outfield with six or seven people in it and volleyball sides so full there was no such thing as out of bounds.
After lunch we would all go back to playing while the ice cream was churned. Whenever I have homemade ice cream it still reminds me of the July 4th picnics. It was the perfect refresher after running the bases and no one left until it was served!
Once I got older and moved to business and industry, having to close the books for second quarter often meant that I couldn’t take extra time off around the fourth. However, we still managed to get to the picnic. My wife and kids and I moved an hour away and attended a different church, but we went back home to the picnic every year. It was fantastic watching my kids have the same fun I had when growing up.
July 4th should be a reminder that no matter how much we have to do, there should always be time to have some fun, create some memories and enjoy the freedom that we have. I hope you get to do that.
My children are Millennials and Generation Zers and they simply do not carry cash. OK, maybe it’s better to say they rarely carry cash. And don’t even bring up the subject of checks. At least they know what cash looks like and understand how it is used. Checks are included in the same category as records (I mean the old vinyl LPs) and Atari game systems. Quaint remembrances of the past that have no use whatsoever. They do their banking on-line, their paychecks are transferred to their bank account via ETF, they transfer money to each other through apps, and they pay for everything with plastic: either a credit card, debit card or gift card. When grandma sends them one of those quaint checks, they use an on-line app to deposit the funds; no need for an ATM, and heaven forbid having to set foot inside a bank branch. Of course the use of physical “plastic” is even becoming a last resort with more and more of those transactions occurring through a virtual card on a phone or attached to an online account.
This lack of cash and checks is providing some unique risks and opportunities to aspects of our society that are going to have to change or die. Here are a couple examples.
Houses of Worship – simply passing the basket won’t work anymore. If people don’t carry cash or write checks how will they put anything in a basket? Part of the solution is automated giving online. Members may be willing to set up recurring automated transfers, but not everyone will want to set up a recurring payment or enter a lot of information (name, address and credit card information) to make a donation. These institutions will also need a way for people to make a quick painless donation – like dropping cash in a basket. There are already ways to do that today. Set up your institution on those money transfer apps or go even further and set up a process for people to be able to donate via text if they are set up to do that.
Children – the days of giving your child a weekly cash allowance or paying cash for chores around the house are coming to an end. The question is what will take its place. Will they have bank accounts? Will they simply have money in on-line accounts like Paypal or other yet to be invented services? I don’t know where they will store their cash, but to access it they will need some type of “connected device.” Today those are cell phones, tablets and PCs; but with the technology advancements coming will they simply carry around a card that “has money on it?” I don’t know, but with Millennials starting to have kids reaching allowance age, I think there is money to be made for someone who can solve the cashless problem for allowances.
There are many more aspects that need to be thought about. Garage sales, lemonade stands and donations to the homeless are just a few. Maybe the answer is that hard currency does have a place for such transactions and Millennials will just need to adapt, but somehow I don’t see the adapting occurring on that side the ledger.
What do you think?