The Student CPA » Financial Accounting

Study Habits for the Average Accounting Student

Narcisse Dansou — Thu, 22 Apr 2010 04:50:06 +0000

Succeeding in any field of study requires the use of a solid strategy and accounting is no exception. As an undergraduate student in accounting, I many times had classmates in my accounting courses that would complain about their inability to consistently achieve above average exam grades. In response, I would ask them to outline their strategy for tackling accounting courses. In 9 out 10 cases, they had no clearly defined strategy and that’s exactly what I call a recipe for failure. Successful studies in the field of accounting require a structured approach. While I never did exceptionally well in college, I was however able to do better than average in all my accounting classes because I developed and adopted effective learning habits very early on. Before going any further, I would like to mention that the accounting study tips I am about to share with the whole world are

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US GAAP to IFRS Migration: Reframing the Debate

Narcisse Dansou — Tue, 13 Apr 2010 04:38:53 +0000

For a decade or so, there has been quite a lot of talk in the US about a possible transition from U.S. Generally Accepted Accounting Principles (GAAP) to International Reporting Standards (IFRS) with regard to U.S. publicly traded companies. Up to this point, most of the discussions on the subject have been about assessing the merits of such a change. As usual, some people are for it while others aren’t. Because I am still in the process of gathering the facts on the possible ramifications of the adoption or non-adoption of IFRS by the U.S. Securities and Exchange Commission (SEC), I find myself incapable of formulating an opinion on this issue. There is however plenty of literature about the subject available online therefore I urge you to conduct your own investigation. From the little I have learned so far, it is no longer a matter of if but when

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Earnings Management: The Dark Side of Financial Reporting

Narcisse Dansou — Sun, 04 Apr 2010 23:21:22 +0000

As I explained in my previous post, accrual accounting is not an exact science. Indeed, a variety of assumptions and accounting estimates is used in arriving at the final earnings figures. In assessing the health of a company, lenders and investors alike almost always look at the quality of its earnings first. However, it is nearly impossible for a company to consistently report stellar periodical earnings over a long period of time. This is because a company’s business activities can be affected by changes in economic cycles, seasonal changes, new legislation, and other extraordinary events. In order to “normalize” the continuous succession of ebbs and flows in financial results characteristic of any typical business, company managers, more often than not, resort to a practice known as earnings management. According to Healy and Wahlen (A review of the earnings management literature and its implications for standard setting’, Accounting Horizons, December

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The Statement of Cash Flows Does Not Lie

Narcisse Dansou — Mon, 22 Mar 2010 01:42:41 +0000

From the date I graduated from college in May 2009 until a few weeks ago, I did not have a single opportunity to accomplish any reading as it pertains to academic related accounting materials. I was indeed very tied up with completing the different components of the graduate school application process. Researching Master of Accounting programs, intensively preparing for the GMAT, and meeting the application requirements of four different programs took up all my spare time from June 2009 through February 2010. Waiting to receive admissions decisions on my graduate school applications, I recently started laying the groundwork for my preparation for the CPA exam. I intend to complete all four sections of the CPA exam in year 2011. Before dashing to buy any CPA review materials, I thought it would be wise to brush up on the topics that I didn’t fully grasp while I was completing my

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A Two Headed Monster Named Intermediate Accounting

Narcisse Dansou — Mon, 06 Jul 2009 02:20:40 +0000

So you cleared Principles of Accounting and you are now ready to take on the double headed monster known as Intermediate Accounting. Intermediate Accounting is the only two-semester course sequence that you have to go through in order to obtain your bachelor of science in accounting. Because of the depth and breadth of the topics covered in a typical Intermediate Accounting course, I gave it a nick name: The Two Headed Monster. I also came up with a nick name for Auditing but it will be revealed when I write a post on the auditing course. For now, just do yourself a favor by accepting de facto that intermediate accounting is going to test your resolve. Going through the two semester course sequence is often a very labor intensive process. You will need to devote 10 to 15 hours a week digesting what you will be taught in the

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Principles of Accounting or The Alphabet of Accounting

Narcisse Dansou — Sat, 20 Jun 2009 14:59:30 +0000

Principles of Accounting ( referred as “P. Acct” from here then on) is the introductory accounting course at the undergraduate level in most US colleges and universities. Most students who have taken this course would agree that its difficulty level is about average. In fact, getting a B in “P. Acct” doesn’t require much effort at all. This is because “P. Acct” related exams only test general accounting lingo along with some customary journal entries here and there. Consequently, a good memorization of key concepts and a few hours of homework every week are all you will need to get a B or sometimes a A if the professor is nice enough to curve the grades. Unfortunately, having good grades in “P. Acct” is a poor predictor of how well one will perform in upper level accounting courses. That’s why a majority of those “P. Acct” overachievers are stunned

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