What Makes You Proud of Your Company?

This blog is all about energizing accounting staff by providing them with the best use of their accounting system. You will be a more productive, more effective team member if your tools save you time rather than getting in the way. But, on a deeper level, even the best tools are not enough to motivate you if you're not proud of where you work.

I am proud of the work my employer does in disaster relief both locally and globally. As an accountant, I am particularly proud that we can say:

As always with United Church emergency appeals, 100 percent of all donations received will be committed to support relief and reconstruction work for people in need. There is no administration fee deducted. This is made possible thanks to the generous ongoing support of United Church members to the church’s Mission and Service (M&S) Fund. Contributions to M&S allow the United Church to absorb the staffing and operating costs of processing donations for emergency appeals.

The situation in Haiti and other Caribbean countries is serious. Hurricanes Fay, Gustav, Hanna, and most recently Ike have left as many as one million Haitians homeless and more than 500 dead. Serious flooding was reported in many areas, and the country's agricultural capacity is again weakened.

The Accounting Department is rarely in a position to save lives, but if we can reduce the cost of administration so that more money is available to the people who can, then we have played a valuable part.

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Accounting 501: Be Nimble

The only time my father's employer changed was when his firm merged with another, whereas I have had several employers, including myself. I didn't plan it that way. In fact, I had every intention of staying with my first employer until I retired. But my generation was the one that coined the phrase negative growth, and so many things have happened in my career that I never expected:

• International accounting firms laying off staff - It was the early 80's, before all of the mergers that turned the Big 8 into the Big 4.


• Competent managers being counseled out - There was little room in the partnership, and it was either up or out.


• Prosperous companies stumbling - During the job interview process, it never occurred to me to do a credit check on my employers. In hindsight, I should have.


• Administration is an economy of scale - When two firms merge, the accounting department is one area where the new owners look for staff reductions.

As accountants, we have some advantages:

• Transferrable skills - Allowing for regional and industry differences, accounting is pretty much the same the world over, if you keep up to date on your professional development.


• Close to the truth - You know how well the business is doing. For example, when the owner of a company injected more personal funds to keep it going, I knew long before the other employees that we were in trouble.

Bottom line: be nimble. You have to be ready to change jobs at a moment's notice. Here is some of the hard won advice that I have received along the way.

1. Update your resume - At least once a year, update your resume, ensure you can contact at least three references and think about what you would like to do if your job ended suddenly. This advice came from a manager who thought he had a secure position until he was told that there was no room for him in the partnership.


2. Be business driven - If you are seen as being Administration, then you are expendable. If you are seen as being an integral part of Operations or Sales, then your position is much more secure. This advice came from a manager as our company was being reorganized from an independent unit into little more than a sales office.


3. Specialize - I had a hard time convincing a computer consulting firm that I could go back to consulting after having been a corporate Controller. The advice the partner gave me was pick an industry or a software package, but you have to specialize.


4. Constant learning - An interview question that lost me a job was, "What was your last professional development course?"


5. Do the right thing - I have been following the Livent accounting fraud case. The accusation was that the owners, "Drabinsky and Gottlieb operated a kickback scheme with two Livent vendors which siphoned approximately $7 million (Cdn) from the company for their personal benefit". The defense has been trying to prove that the fraud was perpetrated by the company's accountants without the owners' knowledge. Even though there have been no allegations that the accountants made any substantial personal gain from this fraud, clearly their lives and careers have been affected.

I wish I knew how to handle the last point. What do you do if you suspect your employer is defrauding the company? There usually isn't a smoking gun. It's usually more a case of suspicions and trying to understand people's motives. Fraud and incompetence can look very similar in the heat of battle. Of course you should get out of there fast, but the reality is that it can be extraordinarily difficult to find another position quickly. Unless you've learned to be nimble, that is.

Who Feels for the Accountant?

Yesterday marked the end of three weeks of grueling cross examination of Gordon Eckstein, the Chief Financial Officer of Livent (short for live entertainment), a company whose founders, Myron Gottlieb and Garth Drabinsky, have been accused of a massive fraud. Their defense? That it had been perpetrated without their knowledge by their accountant.

Eckstein is not innocent. He pleaded guilty to fraud a year ago and is the key witness for the prosecution against his former bosses. He has testified all along that he knew that what he was doing was wrong and made copious notes for the inevitable prosecution. He was quite aware that his bosses would turn around and blame him should the proverbial mud hit the fan. Brian Greenspan, lawyer for the defense, has dismissed Eckstein's testimony as "Nuremberg" (i.e. I was only acting under orders).

Eckstein has withstood attacks on his credibility and his character. He has been accused of being the solo mastermind of this nefarious plot. Viewed from the outside, this smokescreen by the defense is laughable:

• Gottlieb didn't know about the fraud because he tended to sleep through meetings
• Gottlieb couldn't have known about the fraud because he didn't sell any of his shares (although the way that the owners removed millions of dollars from the company has been well documented)
• Gottlieb delegated all of the financial dealings to Eckstein (but somehow got the reputation of being a financial wizard on Bay Street - the home of the Toronto Stock Exchange)

The fact is that the defense was unable to show any way that Eckstein profited personally from being the financial mastermind behind the fraud. If he was such a criminal genius, why did he not keep any of it for himself?

Three weeks of cross examination by one of Toronto's best paid lawyers is a substantial punishment all by itself. The accusations of lying and cheating by themselves are soul destroying. Yet nobody in the courtroom takes the side of a witness to the prosecution. There was nobody to object to this farce on Eckstein's behalf. It sure makes you think twice before becoming a whistle blower or agreeing to testify for the prosecution, doesn't it?

The best thing to do would have been to just walk away the second he was asked to do something he knew was wrong. No matter how high the salary, your life is worth more.