PUBLIC CARRER’S IN THE ACCOUNTING PROFESSION



COMMUNICATIONS IN THE PUBLIC ACCOUNTING FIELD

Prepared by:

Ross Larson and Kimberly Breuer

Prepared for:

Dale Sullivan, English 320

Date Submitted:

April 24, 2006

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TABLE OF CONTENTS

ABSTRACT………………………………………………………………… iii

INTRODUCTION………………………………………………………….. 1

Purpose……………………………………………………………… 1

Problem……………………………………………………………... 1

Scope………………………………………………………………... 1

Literature Review…………………………………………………… 1

METHODS…………………………………………………………………. 3

Internet Research…….…………………………………………….. 3

Personal Interview…………………………………………………. 3

Library Research…………………………………………………… 3

RESULTS AND DISCUSSION…………………………………………… 4

Introduction to Accounting ……………………………………….. 4

Communications……….………………………………………….. 4

Genres used in public accounting field……………………………. 7

Rhetorical Analysis………………………………………………... 7

Personal Interview of CPA………………………………………… 9

Professionalism in Accounting Papers…………………………….. 10

CONCLUTION……………………………………………………………. 11

REFERECNES…………………………………………………………….. 12

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ABSTRACT:

This report examines the field of public accounting and the professionalism a certified public accountant (CPA) must abide by every day. The purpose of this report is to examine the interactions a CPA has with his or her clients and the professional write-ups that are done in the public field of accounting for those clients. This report is divided up into four sections: introduction, research methods, results, and conclusions.

The introduction gives the overall intention of this report and what the reader can expect to learn from reading it. The intention of this report is to educate persons interested in entering the public accounting field and what is expected of them when they are dealing with clients and work write-ups that must be done for these clients.

Our research methods of this report included, examination of professional accounting write-ups found in the library and on the Internet, attending the Accounting Club tour of Minneapolis public accounting firms, a personal interview with CPA and NDSU accounting professor Thomas Dowdell, and research in the library.

Our research results showed how important it is to act in a professional matter when dealing with clients. Whether it is through written documents or communication over the phone, in person, or by e-mail correspondence.

In conclusion of our findings we have made a set of guidelines that any new public accountant or accounting student should follow when starting or looking for a new job in the public accounting field.

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INTRODUCTION:

PURPOSE:

This is a report of research conducted to explore communications in the public accounting field. We intend to answer the question of what communication skills are expected of accounting students when they enter into their first job as a public accountant. By answering these questions we will better understand what our career and future employer’s anticipate receiving once we graduate.

PROBLEM:

Working for a public firm CPA’s work with clients on a daily basis and must communicate effectively with these clients to get the job done properly. If a staff member has poor communication skills it reflects inadequately on the firm and will possibly cost the firm part of its clientele.

SCOPE:

This report focuses on both the written and oral communication skills in the public field. We will look at what is expected of a firm’s new hire and the effects on a public firm if a staff member has poor communication skills.

LITERATRUE REVIEW:

In the tax accounting field there are many different types of texts. My article “Intertextuality in Tax Accounting: Generic, Referential and Functional” it interprets these texts in terms of their social functions in a community. It is very hard for someone who has not had a lot of school on the different texts to try and understand what is going on. In this review I will give you descriptions and interpretations which should contribute to the better understand of how texts work in the specific discourse communities such as accounting.

Texts are a signature item of the accounting profession. To best understand one text, look at the other texts around it. In my article it says how “No text is single, as texts

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refer to one another, draw from one another, and create the purpose for one another.” In saying that they mean that where there is one text there should be more feeding of one another.

Texts are a return for the fee that the client pays- whether it is a tax return, a letter to the IRS, opinion letter, or a verbal text over the phone. In my article it states that, “As accountants repeatedly respond to recurring rhetorical situations, common discourse forms tend to recur. Each text draws on previous texts written in response to similar situations. Through such interactions of texts, genres evolve.” It talks about the thirteen different types of genres written by the big eight firms. Each genre includes a different situation which includes a different problem that the tax accountant often occurs. Together with oral genres and tax returns, these form the accountant’s different genre systems.

The most common type of genre is the unmarked quotation. Unmarked quotation meets the needs and the value of the accounting community. Most accountants use this method when the text they are quoting is to long or has too many technical words. If you are going to paraphrase the eight big firms agreed that if the client is not tax-knowledgeable then it is ok. But if the client is relying on your information then you need to put in the technical words and explain them to the client or attach supporting documents for the business.

Most members of the community share knowledge of the general tax publications; most members use a single set of genres; and all members acknowledge the authority of these tax publications. Most work done for a client is written or documented on paper, then put in a computer. Then the accountant can look back on it when doing more work for that client. Tax accountants say that the longer they are in the business, the more they realize the importance of documenting everything. That is the main way that you can communicate and look back and reference what has been done in the past.

With the study of texts it has revealed how important they are for tax accountants. The text has a genre system that enables its work. The importance of the community to better understand how things work and to look back at accountants work is very important too them.

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METHODS:

When approaching this paper we took the list from Dale Sullivan’s site of good resources to put in your paper.

INTERNET RESEARCH

We started using a search engine to find articles about the accounting field. This method turned out to be the best method for us. We are very familiar with the search engines so we used Google and Ask Jeeves. After typing in the category we got more than enough results. We found an article on the Internet, which helped us with the communication in accounting. That article gave us good tips on how to speak to board members about the financial statements. It also told us to make sure that when communicating to them, make sure everybody understands the information being communicated. We also used it to better understand the accounting field that we are pursuing. We also used it to understand the problems and the new rules and practices in our field.

PERSONAL INTERVIEW

Next, we used the personal interview to gain some knowledge from an experienced professional. We decided to interview a professor at NDSU that used to be an accountant before becoming a professor. In the interview with Dr. Thomas Dowdell he gave us some great insight on how his company communicated information with others. He also told about some personal experience in the audit field where he worked and some policies they had there. They did not use email to communicate to clients because it was not very popular back then.

LIBRARY RESEARCH

Last, we used the library to gather up information. We used the search menu on the library website to find books about accounting in the library. Locating those books was somewhat of a challenge but after finding them they became a great tool for us. The books told us more information about accounting and good ways to communicate

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accounting more efficiently.

We used different research techniques when constructing this research paper about our field. By using the Internet, which was faster we gained a lot more information as compared to the library, which was slower but still provided good books for us to look at helped and work with. We have increased our knowledge about accounting and ways to communicate the information to everybody.

RESULTS AND DISCUSSION:

INTRODUCTION TO ACCOUNTING

Accounting is defined as the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results (Merriam). When a person first starts out in the public accounting field they start as a staff accountant. By definition a staff accountant is concerned particularly with junior level accounting personnel in the first three years of employment whose duties require active involvement in the communication processes. Personnel involved in purely clerical or managerial duties are exempted from consideration (Ingram p.63). Communication skills are critical for a new staff accountant to have and these include both oral and written processes such as report writing, presentation, research, memorandums, interviews, and small group interactions. When communicating one should have good organization, grammar, syntax, and rhetoric (Ingram p.2). If a new staff member does not present theses skills their write-ups will reflect poorly on the firm and may hinder the new staff member from moving up the ladder.

COMMUNICATIONS

As stated above communication skills are critical for a new staff accountant to have and these include both oral and written processes. However, as a staff the communication form is mainly going to be written. This will vary on the size of the firm you are working for. If a new public accountant works for a big four firm their work will be almost 100% written and will have no oral communication with the clients. On the other hand if you work for a firm such as Larson Allen, a smaller public firm, you might be meeting with CFO’s of companies on a weekly basis. In most firms a public accountant will move one

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step up the ladder every busy season, which is January though April. The normal order is staff one, staff two, staff three, senior one, senior two, and then if the performance has been good enough the accountant will move up to manager. After several years as a manager with good performance and if the time is right you may be asked to become a partner in the firm. As an accountant is moving up the ladder their oral communication skills become more important to them. By the time an accountant makes partner they

almost do no accounting work at all. It has even been explained to us that a partner is pretty much a sales person.

Because communications are so important in the accounting profession one of the best things an accounting student can do is to improve their communication skills while they are still in school. On, average, schools with communication courses offer 3.5 hours credit to undergraduate students and 2.7 hours credit to graduate students (Ingram p.45). Below is a chart showing course offerings in communications skills above general education requirements.

|COURSE OFFERINGS IN COMMUNICATIONS SKILLS |

|ABOVE GENERAL EDUCATION REQUIREMENTS |

|Characteristics of courses |Undergraduate programs (n = 11) |Graduate Programs (n = 8) |

|Course are Recommended to Majors |25.2%* |12.50% |

|Courses are Required of Majors |54.10% |21.30% |

|Courses are Taught by Accounting |4.50% |5.00% |

|Faculty | | |

|Courses are Taught by Business |38.80% |16.30% |

|Faculty | | |

|Courses are Taught by Non-business |36.00% |12.50% |

|Faculty | | |

|Average Credit offered per Program |3.5 hrs. |2.7 hrs. |

|*The percentage for each item is based on the ratio of the number of programs responding positively to that item to the |

|total number of programs. |

(Ingram p.44)

When working as a CPA you will deal with the clients on the phone, by e-mail, and in person. It is important to know how to properly format an email and conduct your self on

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the phone and in person. The proper format for an email is:

Date: Month, Date, Year

To: Receiver

From: Writer

Subject Heading: Be sure to make your subject heading clear and descriptive.

Body: Keep it short and sweet and get to the point. If you don’t state the purpose in the first few sentences it will be lost to the reader. Don’t be a joker, avoid using uppers case because it implies shouting, don’t get personal, and avoid profanity and angry language. Make sure you answer all questions and don’t use abbreviations because everyone might not understand them. Lastly, scan your email for viruses. There is no quicker way to loose a client than to crash their computer system (Guerrilla).

When replying to an email, do it in a timely manner. Large companies will often take about three days to respond to e-mails. If you reply in a timely manner it will impress the client; the first response will usually get the sale. Use the reply button so that the subject line is the same as the original message. Quote the previous e-mail but make sure you reply above the quoted text from the previous e-mail. If you are angry wait to respond until you calm down. Follow all the guidelines listed above for writing emails and be professional in your writings (Guerrilla).

When communicating over the phone professionalism must be maintained. Answer the phone in a timely manner, but discontinue any previous activities before answering like chewing gum, conversations, eating, or typing. Always speak clearly and use a pleasant tone of voice. Remember that you are representing a company, so you need to make a good impression to the client. Always use the hold button when leaving the line, so the client does not hear any conversations being had nearby. Finally, if transferring your client make sure the client is aware of what is going to happen and who they will be talking to next (California State).

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When dealing with clients in person it is extremely important that you do it in a professional manner at all times. If you have a set time to meet do not be late and dress accordingly to the situation. Never use profanity or degrading language even if your client uses it. Always refer to your client by their name and shake their hand. Meet your clients in an appropriate meeting place, such as a sit down restaurant or a boardroom in

your firm. Talk about what you can offer the client, be accurate in what you are telling them, and always be polite.

GENRES USED IN PUBLIC ACCOUNTING

There are basically two sections in the public accounting field, tax and audit. Both tax and audit have genres that are used on a daily basis. When auditors preformed their audits they use work papers throughout their audit. Also some clients will have the auditors draw up their financial statements and annual report, such as balance sheet, income statement, and statement of cash flows. All the financial statements are done at the end of the client’s fiscal year, and clients usually have a CPA firm draw them up because of the inside knowing of the company. On the tax side, there are several different forms that the CPA could use on a daily basis, all depend on whether the CPA is doing taxes of a single person, family, business, or corporation. Some of the forms used are; Form 1040, 1040 EZ, Form 1040-A, 1040-V, Schedule A & B, Schedule C, Schedule C EZ, Schedule D, and Schedule D-1. A CPA must know all the inner working of these forms to get the clients the most deductions the client deserves. New staff accountants have told me that no day is the same because they work with so many different forms and are always looking for new deductions for their clients.

RHETORICAL ANALYSIS Rhetorical Analysis

We have decided to do a rhetorical analysis on Target Corporation’s annual report for 2005. This is a comprehensive financial finding for Target’s 2005 fiscal year; it includes a letter to stockholders, financial statements of the company, future plans for the company, an executive summary, and lastly a report of independent registered public accounting firm. The purpose of the annual report is to inform stockholders of the

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financial position of the company and the plans to improve the financial position in the future. This first part of the annual report is the letter to the stockholders, which we believe to be written in logos. The initial part of the letter states, “Target produced another year of outstanding results in 2005. By remaining focused on consistent execution of our strategy, we delighted our guests, enhanced our brand, and achieved record financial performance.”(TARGET p.2) It goes on to talk about how well Target did

last year, stuck to their plans, and improved the Target brand.

The other part of the annual report that is written in logos is future plans for the company. In it they talk about growth of the company, continuing to improve the brand, leadership in communities, and much more. Target states that when you shop at Target you get more for less. This is a marketing tactic that a lot of companies use and is very affective. Target maybe is using this strategy to compare them to Wal-mart. When most Target customers and shareholders think of Wal-mart they think of less for less. Pay less but get less. Target Company wrote both the logos parts themselves. I believe that the writer achieved in convincing the stockholders that their money is wisely invested and will continue to be invested well with Target Corporation.

The rest of the annual report, financial statements, executive summary, and report of independent registered public accounting firm where compiled by an accounting firm not affiliated with Target in any way. We believe these parts to be written in the form of egos. Readers of the finances need to be able to trust the numbers being presented, so they need to reflect moral character, good will, and have good sense. Being written from a third party such as an accounting firm gives it a great sense of reliability. Financial statements consist of four parts, Income statement, balance sheet, statement of cash flows, and statement of stockholders equity. All are strictly numerical statements with set formats. The numbers are key in the statements and needs to be able to be trusted by the stockholders in Target. That is why Target has the financial statement compiled by an independent registered public accounting firm. We believe all the numbers to be trustworthy and stockholder take faith in them.

The executive summary consisted of a summary of the findings and puts the findings into charts and pie graphs. It is mainly the best parts of the company, revenue growth, growth

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margins, selling and general administrative expense rates, analysis of financial contribution and many more ratios. It is very informative and is the information that stockholders are most interested in. It tells in dollars how the company is doing and what prospects the company has for the future. Can Target meet its long-term debs, buy more assets…

Finally, the report of independent registered public accounting firm is a letter for the

auditor. This letter assures the reader of the annual report that all findings are accurate and calculations were made by a reputable accounting firm. All calculations where done by the standard set by COSO criteria. This is final reassurance at the findings are correct and an impartial company from Target is telling the reader this.

PERSONAL INTERVIEW OF CPA

We sat down and did a personal interview with Dr. Thomas Dowdell, a professor at NDSU. He practiced being a certified public accountant before pursuing his doctorate. He started out as an accountant in KG, which is now KPMG in San Francisco, California. He was doing regular accounting work when they asked him if he had any interest to do any auditing work for the company. He agreed to and enjoyed the new challenge and the work that it gave him. He started teaching others how to audit. After 12 years at the company he left the firm and moved to Philadelphia. He enjoyed the employees he worked with as well as the clients he did work for.

When we asked him how to communicate with the clients on a day-to-day basis the most common way was by phone, except when you are doing an audit you are there in the business so then you get the one-on-one interaction between each other. If you have any questions or need to see more records the client is there to help you through the process.

When asked about if it looks good to take clients out to lunch and if it was more professional or laid back he answered with a laugh and said it was both. But his clients would sometimes ask if they could “just have the money instead” or if the company is paying for it or was he? They would both laugh but they knew where it was coming from.

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His lesson or advice to us was to enjoy accounting and enjoy the people you work with. Act in a professional way when talking with clients and always be confident in your work.

PROFESSIONALISM IN ACCOUNTING PAPERS

When writing papers or work papers for accounting, professionalism is a high priority for work. For your clients to understand your papers and for them to believe what you are

saying the papers need to be professional and neat. When writing your work papers make sure that the company you are writing the papers for understands what is going on or what you put in the paper.

When writing the paper it is best to use words or phrases the client you are working for can understand. Too many times accountants use words that the clients don’t understand and then they loose their interest in what they are saying.

Everybody makes a mistake and accountants are in that group also. If you make a mistake, fix the mistake as soon as possible so that you do not forget about it. When writing numbers for papers, this is no time to write like a doctor. Use clear penmanship. Just because you know what it says does not mean that your client understands what you wrote.

Most companies should have AICPA’s new code of professional conduct that should be in place in most firms. In this code of conduct it states what an accountant should and should not do. A lot of the issues have to deal with ethics. Accountants are under extreme pressure to ensure that the financial results meet expectations. Some clients of the company might want their profits to meet a certain goal or expectation. It is your job to make sure they understand the ethics and know that you will not do that for them. Communicating is the best way that both of you will understand where everybody is coming from.

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When writing work papers for companies, enjoy what you are doing! You know what you are doing and make sure that you share that knowledge to them as positively and as easily as you can. This way the client will understand you and it will greatly ensure your work in the company. (The CPA Journal)

CONCLUSION:

In conducting our research we learned just how important communication is in public accounting. Accountants must use proper formats when doing write-ups and must use good organization, grammar, and syntax. We learned that we should be working on developing good communication skill as undergraduate students. When most people think of accounting they think only of numbers, not work and client relationships. This is why we were very surprised in the amount of written communication that a new public accountant must do their first years of working at the firm. In conducting this research we leaned a vast amount about the field we choose to enter and will be better accountants for it. We leave you with some ideas to consider too sharpen up your presentation and communication skills (Alpern).

• Preparation is everything – Go though your presentation two times. You will feel more prepared the more you practice.

• Pacing – Establish a good pace though practicing and manage that time so you are not rushing and forgetting key details.

• Body Language – Take deep breaths to refrain from nerves. The audiences may not put faith in the information you’re presenting if you are noticeably nervous.

• More is always less – Do not over explain your numbers; the audience may not find it as interesting as you do.

• Speak Energetically – The more enthusiasm you put out the more attention your presentation will receive.

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REFERENCES:

1.) Alpern Rosenthan Online. How to Effectively Communicate Financial Information to Senior Executives and Board Members (2003). Referenced April 19, 2006 from: resources/publications/effectively_communicate.html

2.) Dowdell, Thomas Dr. CPA, Personal Interview April 13, 2006

3.) Ingram, Robert W. and Frazier, Charles R. Developing Communications Skills for the Accounting Profession. American Accounting Association, 1980

4.) Hopwood, Anthony. Accounting and Human Behavior. Haymarket Publishing Limited, 1974

5.) Merriam-Webster Online Dictionary. Referenced April 19, 2006 form: cgi-bin/dictionary

6.) Guerrilla Retail. How to write emails to retain customers - The Merchants Guide to Email Etiquette. Referenced April 23, 2006 form:

7.) California State University, Fullerton, Information Technology. Telephone Etiquette Guide. Referenced April 23, 2006 form:

8.) The CPA Journal. Ethics and professionalism: the CPA in industry. Referenced April 23, 2006 from:

9.) TARGET 2005 ANNUAL REPORT, Referenced on 4/26/2006, From:

10) Devitt J. Amy, Intertextuality in tax accounting generic, referential, and functional

Referenced April 29, 2006 form:

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INTERTEXTUALITY IN TAX ACCOUNTING

GENERIC, REFERENTIAL, AND FUNCTIONAL

AMY J. DEVITT

Posted on Ross Larson’s Webfolio

How to Effectively Communicate Financial Information to Senior Executives and Board Members

September 2003

Many accounting professionals are uncomfortable when confronted with the task of communicating financial information. However, as we know the business world requires an accurate and timely flow of financial information. We must effectively communicate the information if it is to have real value to our Organization. So, how do we go about this task? Education and Practice!

How you present information is definitely important, but it is only one factor in the process. Another key consideration is how much of the information is understood and received by your audience. The golden rule of effective financial communication is — "Communication only takes place if the information is received."

There are barriers that must be overcome in order for effective communication to occur. Most people are not knowledgeable about financial terms. They will either drift unfocused while the material is being presented or latch onto one particular issue instead of focusing on the big picture. Another even more serious barrier is that the vast majority do not understand finance, in general, much less the specifics of your Organization. With these challenges combined, the combination is more problematic than the parts.

The first item to address is how an Organization can educate their audience, i.e. Board of Directors and senior staff. There is broad range of tools available in educating board members and senior staff on financial matters. Many aids are available such as self-study guides, books, pamphlets and videos. The Organization can also provide a course on financial matters. These courses can be as brief or as long as the Organization would like.

Another creative and more practical way to educate is to do so while presenting the financial information, where the presenter explains the concepts and defines the jargon as it occurs throughout the presentation. For example, as you are presenting the statement of financial position, explain what the statement is, what is being presented in it, and what it means. The main advantage of this method is that it requires little additional time and is usually appreciated by the audience. This method of educating while presenting can make you extremely valuable.

The next step is honing your presentation skills. Provided below are a variety of essential techniques that will help you be a more effective presenter of financial information:

• Preparation is everything — It is impossible to over-estimate the value of sufficient preparation. A good rule of thumb is to practice the entire presentation at least two times. The more prepared you are, the more comfortable you will feel and appear to the audience. Preparation equals confidence.

• Pacing — Another reason for practicing your presentation is to establish the appropriate pacing. There is always a time limit for your presentation and it is easy to lose track of time, digress on a tangent, and find yourself rushing to finish.

• Body Language — You do not want to appear nervous because the audience may not place much faith in the information you are presenting. Remember to breathe — nothing eases tension like steady deep breaths before you begin.

• The First Minute is the Worst Minute — The number one fear people have is public speaking. The simple solution to the getting through the first minute is "to dive right in."

• More is Always Less - The best finance professionals are very proud of their grasp of the numbers and the meaning behind them. Unfortunately, this leads to a very counter productive effort — they provide too much information and lose their audience in the process. Two specific techniques to remedy this problem are to first decide what is truly important and communicate that, and second, use graphics whenever possible.

• Pick the Time to Present — The key is that the audience needs to be fresh. Avoid early morning, just after lunch and at the end of the day.

• Speak Energetically — The more energy and enthusiasm you portray, the more attention your presentation will receive. When making a presentation you must step into the role of the ringmaster and be clear and expressive.

Hopefully, if you take some of these techniques into consideration when preparing your next presentation, you will find that you will be much more comfortable and at ease. If you are more relaxed, then your audience will be more comfortable and likely to stay focused on what you are trying to communicate to them. If your audience receives more of the information, the better chance it has to consider what financial decisions need to be made.

This information was prepared by the Not-for-Profit Services Group of Alpern, Rosenthal & Company, which represents more than 140 nonprofit organizations in Western Pennsylvania.

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