The technological and regulatory climates are changing, accountants today require an understanding of standard practices as well as new areas of knowledge.
Accounting is not a new profession. However, with continual technological advances, it’s important that today’s accountants have extensive knowledge about standard practices as well as expertise in new technologies and regulations. In this blog, I’ll go over eight important areas accountants today need to be informed about. Eager to dive in? Below are the top 8 knowledge areas every accountant needs to know in 2018.
- Fraud Risk Management
Fraud is such an important concept to grasp for accountants. That’s why fraud risk management is first on our list. Accountants need to be able to identify fraud, money laundering, and red flags as well as know how to design internal controls to prevent fraud. Some other types of fraud accountants specifically encounter are: accounts payable fraud, credit card fraud, payroll fraud, employee background investigations, inventory fraud, data breaches, and these are just a few.
- Internal Controls
Internal controls are key to companies reaching their goals and ensuring the organization can withstand growth. With internal controls, organizations can: eliminate redundancies, prevent loss, stay compliant with regulations and ensure they’re audit-ready. It’s also important that control or internal processes are in place as companies grow and their assets and processes are handled by more individuals. Some processes accountants may need to evaluate or put in place include: revenue cycle, procurement cycle, payroll cycle, financial reporting cycle, computer system controls (and cybersecurity controls), and loss prevention cycles.
- Forensic Accounting
Forensic accounting includes performing analyses, conducting investigations, testifying, depositions, discovery and more. Essentially, forensic accountants are investigating and examining fraud. Assignments could be criminal or civil, so forensic accountants work frequently with authorities from local police to federal agencies. Due to the nature of their work, it’s important that forensic accountants conduct investigations in a discreet manner and look beyond the numbers to uncover fraudulent acts.
- Conducting Investigations
Conducting investigations covers quite a lot and is just one part of investigating fraud (see item one). Some of the most common types of investigations include employee background investigations, online investigations, and investigating and detecting tax frauds. It’s important that accountants know the reasons they may need conduct these and other types of investigations. Accountants need to know ethical and legal implications of conducting investigations as well as how to plan, execute, report on their investigations and how to verify their findings.
- Cyber-fraud and Cybersecurity
When it comes to cyber-fraud and cybersecurity, there are many threats and risks accountants must be aware of. With identity theft and data breaches among the most common and important issues, there are many ways cyber-criminals try to infiltrate systems and steal information. Just a few of the most common ways include: phishing emails, denial of service (DoS), spoofing, malware, ransomware, email account compromises, and so forth. Accountants today need to know how to detect, report on and mitigate such attacks as it pertains to an organization’s security of finances and financial information. Now, with new technologies like cloud and new company policies like bring-your-own-device (BYOD), accountants need a deeper understanding of technological risks than ever before.
- Regulations and Compliance
On top of these technological risks, the information age is bringing new regulations along with it. May 2018 marked the beginning of the EU’s General Data Protection Regulation (GDPR) going into effect. This regulation gives EU data subjects more control and transparency about how companies use their data. Data subjects can be customers or employees; any EU resident your organization collects data on. Since GDPR’s inauguration, states in the United States have put their own data protection regulations in play (most recently, Arizona and California). Since personal data includes financial data, and other identifiable data, accountants need to ensure their data handling practices are compliant with the applicable regulations.
- Cryptocurrency and Taxes
As virtual currencies, like BitCoin, get more popular, it has become increasingly important for accountants to understand how governing bodies define these currencies and how to identify the tax implications of using crypto currencies. For instance, the IRS defines virtual currency as property- not currency, so a payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
- Business Ethics
An understanding of business ethics is critical for any successful accountant. Not enough people take courses or training on business ethics, which is one thing we at AccountingEd hope to help remedy. The Merriam-Webster Dictionary defines ethics as the discipline dealing with what is good and bad with moral duty and obligation; a set of moral principles; a theory or system of moral values. Ethics is also defined as the principles of conduct governing an individual or group. It is critical that anyone handling financial information or conducting investigations knows how to identify ethical issues and principles.
AccountingED is made up of a growing library of over 200 hours of NASBA registered, SelfStudy Courses, Live Webinars & Seminars, and Micro Courses that offer a broad level of industry leading accounting, fraud, and cybersecurity training. CPE topics include governmental accounting, auditing, ethics, specialized knowledge, and much more. Organizations can develop their own, secure, organization branded, white label academy complete with the organization’s look and feel. Migrate the entire AccountingED.com content library or create their own learning paths by selecting specific content from AccountingED.com and CyberTraining365.com to meet your training needs.