p01_OBC_CoverSummer09.indd 2 PM 40065475 Certifi ed Management Accountants • British Columbia •British Accountants Management ed Summer 2009 7/16/09 2:11:26 PM p02-03_Contents_Summer09.indd 2 7/16/09 2:15:02 PM in this issue 6 4 | Letter from the Editor 5 | Message from your President & Chair CMA Spotlight

How do you use social media? 6 | Sharing best practices

News and Notes

Digital dashboard | Gadgets and 12 8 | widgets | Inquisitive study

Accounting Scope

Excel conditional formatting 9 | Highlighting subtotals for easy reading 17 18 10 | What qualifi es as CPLD? The cash fl ow statement Strategy Report 12 | An entrepreneurial perspective Web 2.0 Accounts payable automation 22 | An introduction to social media 14 | The next evolution in accounting The sociable enterprise 24 | Why you need an integrated social media Management View marketing strategy today

Method for your message 17 | Communication is key for accountants and CMA News non-accountants alike The CMA Strategic Leadership You only crash once 27 | Program: an overview 18 | A practical approach to IT disaster recovery 29 | Diary of a CMA in training 20 Fraud prevention 101 | How to keep your organization from getting taken 30 | Members on the move 2009 CMA British Columbia 32 | Members Conference 34 | CMA sponsorships and events 35 | Chapter profi le: Victoria 32 34 COVER PHOTO: SHUTTERSTOCK

in this CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia issue | 3

p02-03_Contents_Summer09.indd 3 7/16/09 2:15:04 PM Certified Management Accountants • British Columbia Letter from the Editor SUMMER 2009 Editorial and Business Offi ce Suite 1055 Two Bentall Centre, 555 Burrard St., Box 269, Vancouver, BC, V7X 1M8 • Phone: 604-687-5891 Toll-free: 1-800-663-9646 • Fax: 604-687-6688 Email: [email protected] • Website: www.cmabc.com We welcome your feedback. his year the Society issued three surveys to our Copyright CMA British Columbia 2009. Publications Mail Agreement No: 40065475. members on society direction and member Please return undeliverable copies to address above. engagement, continuing education and salary. executive board Th ese surveys provided us with a varied view of CHAIR Mia Maki, cma, fcma Tour members’ needs, but the results primarily showed a desire PAST CHAIR Mehb Jessa, cma, fcma for the following: FIRST VICE CHAIR Donalda MacDonald, cma, fcma SECOND VICE CHAIR Kelvin Stretch, cma, fcma 1. Increased awareness of the designation TREASURER Stephen Lee, cma 2. Increased continuing education opportunities, especially SECRETARY Colin Bennett, cma, fcma outside the Lower Mainland directors at large 3. Knowledge of the current CMA pathways and what they Michael Brown, cma, Jeff Champion, cma, Graham Fane, cma, fcma, Clay Harmon, cma, entail Mark Kennedy, cma, Patricia Kennedy, cma, fcma, 4. Increased communication Ron Matthews, cma, Jim Olsen, cma, Cecil Stoochnoff , cma, Laura Hartley, cma - yukon Two vehicles the Society will use to improve the content of our communication are lay representatives CMA E-News and Update magazine. Both will be revamped and redesigned this fall to Doug Alley, bcom, Anders I. Ourom, llb, include more content on our programs, profi le CMAs within this province, share best Cathy Whitehead McIntyre, ba, mba practices, provide continuing education articles, communicate information on seminars executive staff and keep our members apprised of Society activities and news. You will also see new social PRESIDENT AND CEO Colin Bennett, cma, fcma marketing tools such as blogs and podcasts appearing in our communications as we focus VICE PRESIDENT, OPERATIONS Rick Lightheart, cma, fcma VICE PRESIDENT, PROGRAMS & MARKETING on engaging our membership at all levels of their careers and industries. We hope these Vinetta Peek, cma (hon.) will provide you with new ways to network with fellow CMAs and share best practices. update staff Th is fall we will also be launching our continuing education program and website, which EDITOR – VICE PRESIDENT, PROGRAMS & MARKETING is currently in a beta form for testing. Th is site will include news articles, and continuing Vinetta Peek, cma (hon.) education seminars and webinars, which will continue to be built in the upcoming year to ASSOCIATE EDITOR – COMMUNICATIONS SPECIALIST Tiana Mah UPDATE EDITORIAL TASK FORCE: David Andru, cma, focus on the CMA core competency model and the needs of our members. Don Nilson, cma, fcma, Geoff Bryant, cma candidate, In the January survey to our members regarding continuing education, 84.4 per cent Jeff rey Sparling, cma, Roy Quinones, cma said they felt CPLD activities are valuable for keeping current in their career, and 78.3 per cent agreed CPLD reporting should be a requirement of sustaining their CMA designa- tion. Th e overall consensus was that they supported continuing education as a means of growing their business and careers. We welcome your feedback on this program at each stage of its growth. Canada Wide Media, 4th Floor, 4180 Lougheed Highway, Burnaby, B.C. V5C 6A7 | Phone: 604-299-7311 Also, I would like to thank all of the members who attended our sold-out 2009 CMA Fax: 604-299-9188

Members Conference in Burnaby this May. Th e post-event survey gave the conference EDITORIAL COORDINATOR Kirsten Rodenhizer a 98.9 per cent satisfaction rate, with 80 per cent of those members stating they would ART DIRECTOR Edwin Pabellon be registering for next year’s conference, which will be even larger, with more options ADVERTISING SALES Karen Rice PRODUCTION MANAGER Suzy Williamson for speakers and activities. So mark it in your calendars – May 18 and 19 at the Hilton STUDIO MANAGER Kristina Borys Metrotown. Registration will open later this year and will be announced in Update and PRODUCTION COORDINATOR Julie Reynolds CMA E-News. PRODUCTION SYSTEMS MANAGER Kim McLane ADVERTISING PRODUCTION Allison Griffi oen, Miki May, I hope everyone is having a great summer as we all start preparing for the 2010 Chris Sherwood Olympics this winter and for being showcased on the world stage. SENIOR IMAGING TECHNICIAN Debbie Lynn Craig ELECTRONIC IMAGING Bernhard Holzmann, Laura Michaels ELECTRONIC PRODUCTION Ina Bowerbank Vinetta Peek, CMA (Hon.) Vice President, Programs and Marketing CHAIRMAN & CEO Peter Legge, o.b.c., lld (hon.) [email protected] PRESIDENT Karen Foss EXECUTIVE VICE PRESIDENT Heather Parker, cga SENIOR VICE PRESIDENT Millie Warren, cga SENIOR VICE PRESIDENT SALES Bruce Wiesner VICE PRESIDENT PRODUCTION Corinne Smith VICE PRESIDENT MARKETING AND DIGITAL MEDIA Have an article, editorial suggestion or feedback you’d like to share with Samantha Legge, mba Update? Contact Tiana Mah, Communications Specialist at [email protected]. VICE PRESIDENT EDITORIAL Kathleen Freimond VICE PRESIDENT FINANCE Farnaz Riahi, ca

A Note to Readers Want to advertise in the next issue of Update? Contact Karen Rice at Update is published four times a year by the Certifi ed 604-205-1711 or [email protected]. Management Accountants Society of British Columbia and is mailed to 4,000 CMAs, 1,000 CMA students and industry partners throughout the province. Opinions expressed are not necessarily endorsed by CMA British Columbia.

editor’s 4 | note CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p04-05_LetterMessageSummer09.indd 4 7/16/09 2:15:50 PM Message from your President & Chair

s we write this, it has been a very busy time promote CMA members to the media and to our of late and we have many exciting things to membership based on the value they are adding to look forward to in the coming months. We their profession and community. have just wrapped up a very successful and • In May we launched our new members CPLD plan, Asold-out third annual CMA British Columbia Members which includes webinars and seminars to be held Conference, which had a strong focus on continuous in major centres around B.C. in the upcoming year professional learning and development (CPLD) for those (registrations online). attending. We are already planning our fourth conference, • We are setting up a chapters blog to enhance to be held May 18-19, 2010. On May 25 our B.C. Board of communications and share best practices among Directors approved the 2009-2010 Business Plan, and on our B.C. chapters. May 29 we participated in the CMA Canada Council of • We are beginning to videotape speakers and presenters Chairs/CEO’s meeting, as well as a strategic discussion that at our conferences and seminars and post them on included the CMA Canada Board of Directors. Eff ective YouTube and the new CPLD site. June 2, 2009, Joy Th omas took over as President and Chief • We will be expanding our successful “Four Courses” Executive Offi cer of CMA Canada, having successfully led dinner recruiting events to more locations around the CMA Alberta society for the past few years. the province. We have also had some changes here at the B.C. Society. • We will continue to build on our annual Executive Irwin DeVries, Vice President, Accreditation Programs Tours to all regions, providing Society updates and has announced his resignation. As a result, eff ective June recognizing members with CMA service awards. 22, 2009, Vinetta Peek, CMA (Hon.) will be overseeing a • We are enhancing our CMA volunteer program to combined Programs and Marketing Department as Vice provide more incentives to members to get involved President, Programs and Marketing. Vinetta has been Vice with their Society and their designation. President, Marketing and Communications for the last fi ve This is just a sampling of the events, activities and and a half years at the Society. Bob Gautama, CMA has also member services planned for the next fi scal year. We hope been promoted to the new position of Director, Programs. it gives you some sense of our direction and how we are Bob was previously Manager, Market Development. Shannon continuing to forge ahead in a positive and progressive Th ompson, Manager, Recruitment has been promoted to manner for the benefi t of our members and the long-term Senior Manager, Marketing. Congratulations to Vinetta, Bob sustainability of the Society. and Shannon on their new roles and responsibilities. We’d also like to wish Irwin all the best with his PhD studies. Best regards, In B.C. we continue to focus on mobilizing signifi cant time and resources towards continued improvement of the CMA profi le and awareness in all markets, ongoing net growth in our designated membership and increased and improved professional development off erings, opportuni- ties and other services for our members. As usual we have many continuing and planned new activities and initiatives in next year’s approved business plan. A few examples: • Update magazine: yes, this is the 10th issue, and we plan to continue improving it by taking into account comments received from you, our members. For example, we will be incorporating more information on what the Society is doing to build member pride, increase awareness of the CMA designation and provide more CPLD off erings. We’ll also be including news and information on our members’ activities in each region of the province. Colin Bennett, CMA, FCMA Mia Maki, CMA, FCMA • We will launch a new and improved version of President and CEO, Chair, CMA British Columbia CMA BC E-News this fall. CMA British Columbia Board of Directors • We will be launching a public relations campaign to [email protected] [email protected]

message from your CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia president & chair | 5

p04-05_LetterMessageSummer09.indd 5 7/16/09 2:15:50 PM How do you use social media? Sharing best practices

pdate recently caught up with Juanita Lohmeyer, Candidate in the CMA Program, as well as Stewart Marshall, ACMA, CMA and Richard Wong, CMA Uto fi nd out why they’re online and how they use the web’s newest phenomenon – social media.

Update: The use of social media tools like wikis, RSS feeds and social networking sites like LinkedIn, Facebook and Twitter seems to be commonplace. Can you tell me why you’re online?

Lohmeyer: I use these tools primarily to stay connected with others and access relevant informa- tion quickly. As I’m fi nishing up my MBA and CMA and transitioning my career, I’ve been able to use my LinkedIn account to keep track of and manage my contacts, as well as update key individuals on my progress. Facebook has helped me stay connected with fellow classmates.

Marshall: Th ese days I don’t subscribe to cable or Juanita Lohmeyer, Candidate in the CMA Program – own a TV, so I use the Internet for the majority of Program Director my world news. However, that’s the passive side of things – blogs We believe using social media can enhance our and tools like Twitter are a form of company branding and profi le, and most importantly, personal and business expression. I help clients engage better with their customers. My use these interactive tools as a way colleagues and I have acquired new contacts from to fi nd communities I can be a part using social media personally and professionally. We of and participate in. have found it very useful, as it gives both parties some insight and background information before meeting Wong: I’m online and utilizing in person. It defi nitely allows for easier conversations social media tools to increase my and quickly established relationships. fi rm’s brand presence. I fi nd it’s a great medium to communicate with Update: Richard makes a good point about how others, engage them and hopefully the Internet is a great tool for connecting with add value with the advice we give. people and conducting background research. My firm [First Choice Capital Other than company websites or blogs, many Advisors] uses social media as people are turning to wikis for information. Do both an internal and external any of you have experience with this tool? communication tool. Currently we are writing and contributing Lohmeyer: A wiki is often used to create collaborative online content in order for people websites and power community websites. I managed to understand some of the value we a team that developed, promoted and established my Stewart Marshall, ACMA, CMA – Financial provide to our clients in our advisor company’s internal wiki, or knowledge base. Th is was

Storyteller relationships. done in order to address the imminent retirement MARSHALL PHOTO) COURTESY KRIS KRUG (STEWART

CMA 6 | spotlight CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p06-07_SpotlightSummer09.indd 6 7/16/09 2:16:56 PM eligibility of a large proportion of the workforce. Th e events and opportunities for members to network and tacit knowledge these team members possessed share best practices. needed to be documented so that future generations could benefi t from it, and so that the business could Wong: I’d like to see the Society use social media continue to run smoothly. to upgrade our communication and branding with Normally people don’t enjoy documentation. Th ey the public. often fi nd it an unnecessary evil and leave it as the last thing to be completed, which often results in it not Marshall: Short answer – however they want to! For being done. With a wiki, however, the documentation the Vancouver chapter I chair, we’ve recently started is quick, collaborative and constantly evolving. People a blog at www.cmavancouver.com and a LinkedIn actually enjoy participating. Really! group, as well as a fan page on Facebook. I also know Th rough a process of education and continuous of a number of CMAs who are on Twitter. enhancement, over 2,000 team members have I encourage all members who are already using contributed to the knowledge base, with over 85,000 these tools to share what they have learned and reach edits and over 1,000,000 page views. It became an out to members who may not be online. Th ere are easy integral collaboration platform for the exchange of ways to get involved: start a discussion on LinkedIn, day-to-day business knowledge. have a Twitter conversation or comment on a blog post. My hope is that if we all contribute, we can start Update: We’ve heard a lot about LinkedIn and the process of building a truly how it’s the networking site for professionals. valuable CMA community, both Stewart, you have a large network on LinkedIn – on and offl ine. can you share your experiences with this site? Update: Any fi nal words of Marshall: When I decided to move to Vancouver I advice for CMAs on using searched on LinkedIn for 10 people I thought would social media? be great to connect with, either based on the number of their connections or the industry they were in. I Lohmeyer: I have four pieces of then contacted them through the site and started to advice for fellow members: one, build an email relationship. present a consistent image or I was polite and succinct in my fi rst communica- message; two, make it authentic; tions, and I received a number of good responses. three, always speak in your own Some of these introduced me to others in the city. voice; and four, be selective. Not When I visited Vancouver on vacation I made a point all of the tools out there are right of trying to meet as many of these people as possible, for everyone. if only for 15 minutes to buy them a coff ee. I continued to use LinkedIn remotely for new connections until Wong: Th ink of social media as I finally landed as a permanent resident. Then I another way of branding your continued to build relationships in person. Some of company online, connecting those fi rst contacts are now good friends, and some you with employees, customers, led to paid work. prospects and other stakeholders by communicating items of Richard Wong, CMA – Partner, First Choice Update: The Internet and social media are value to your audience. Don’t Capital Advisors constantly evolving. Where do you see the future try to use it solely as a sales of social media heading? tool – this will be recognized and you won’t be getting the benefi ts of social media. Th ink of it as Wong: As the younger generation becomes part another networking method and you’ll be just fi ne. of management I can see social media becoming a normal part of communications for everyone inside Marshall: Try it out. Have no expectations and simply and outside the organization. History has shown let it develop. By all means be cautious, but don’t let people eventually warm up to new ways of communi- that prevent you from engaging in something you can cation; for example, faxes, computers, email and make work for you. ■ Instant Messenger. Connect with Stewart Marshall at www.fi nancialsto- Update: How would you like to see the Society ryteller.com, on LinkedIn at www.linkedin.com/in/ and members use social media? stewartmarshall or on Twitter @fi nstoryteller. Richard Wong: www.linkedin.com/in/richardwongcfo; Twitter Lohmeyer: To stay connected in our fast-paced and @wongrichard. Juanita Lohmeyer: www.linkedin. exciting world – especially for announcements about com/pub/dir/juanita/lohmeyer.

CMA CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia spotlight | 7

p06-07_SpotlightSummer09.indd 7 7/16/09 2:16:58 PM Gadgets and widgets News Digital dashboard & Notes Microsoft Excel Management keyboard shortcuts Minute podcasts Looking for management tips to help you Try out the following time-saving shortcuts the next through these tough times? Robert Half time you’re using Excel: International has launched a new podcast series, The Management Minute. These Keystroke Function monthly podcasts feature management and career advice for mid- to senior-level accounting [Alt] [Enter] Insert a new line within a cell and fi nance professionals. Topics include supervising teams in a tough economy, going [F2] Enable editing within a cell global with your accounting and fi nance career and developing soft skills, among others. Visit: [Ctrl] K Insert a hyperlink rhi.com/podcast.

[Ctrl] ; (semicolon) Insert the current date

Inquisitive study What are you good at?

By Seth Godin

s you consider marketing yourself for your next gig, be sure you understand the diff erence between process and content. Content is domain knowledge; people you know or skills you’ve developed. Playing the piano or writing copy about furniture sales. A Rolodex of movers in Aa given industry, or your ability to compute stress ratios in your head. Domain knowledge is important, but it’s (often) easily learnable. Process, on the other hand, refers to emotional intelligence skills you have for managing projects, visualizing success, persuading other people of your point of view, dealing with multiple priorities, etc. Th is stuff is highly valuable and hard to learn. Unfortunately, it’s usually overlooked by headhunters and HR folks, partly because it’s hard to accredit or check off in a database. Venture capitalists like hiring second- or third-time entrepreneurs for their understanding of process, not their ability to do a spreadsheet. One of the reasons super-talented people become entrepreneurs is they can put their process expertise to work in a world that often undervalues it. As the world changes ever more quickly, as industries shrink and others grow, process ability is priceless. Figure out which sort of process you’re world-class at and get even better at it. Th en learn the domain – that’s what the Internet is for. ■

Seth Godin is the bestselling author of more than seven books. He writes about marketing, the spread of ideas and managing customers and employees with respect. Visit sethgodin.typepad.com/seths_blog.

news & 8 | notes CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p08-09_News&Notes_Summer09.indd 8 7/16/09 2:20:19 PM Excel conditional formatting Highlighting subtotals for easy reading

By Ken Puls, CMA

ne of the things that always struck me as odd about the subtotals feature in Excel is that the developers only made the words in the subtotals bold, and not the subtotals Othemselves. In a long list of data this can make it hard to see which numbers are the subtotals. Fortunately this is very easy to fi x using conditional formatting. Assume you have a list of data with date, vendor and amount columns. After going to Data→ Subtotals and selecting Sum the Amount for every change in Figure 2: Subtotalled list with bolded amounts. date, you’d end up with a subtotalled list like the image shown in Figure 1. 1) When constructing formulas the references are always based on the active cell. In the case of our example, we selected column C, which meant the active cell became C1. Th is is why we looked at $A1 to see if it contained “Total.” In cells B2 and C2 we’d be looking at $A2, and so on down the list. Th e active cell is usually the fi rst cell in your selection, and it can be easily identifi ed, as its background is always clear compared to the other cells in the selection, which have shaded backgrounds. 2) All formulas are evaluated to see if they are true Figure 1: Subtotalled list without bolding. or false. So in our example, we checked to see if Let’s assume you’d like to see the subtotals in the the right fi ve characters equalled “Total.” If so, the amount column displayed in bold with a line on the conditional format is applied, and if not, it isn’t. top and bottom. As you can see from Figure 2, this test would have returned false on A8, but true on A9. Start by highlighting column C. Conditional formatting is an incredibly useful tool that is not restricted to working with subtotals and can Excel 2003: Go to Format→ Conditional be applied to anything that lives within the spreadsheet Formatting and change the drop-down to grid, including pivot tables. A few examples of where read “Formula Is.” I use conditional formats are: highlighting the largest or smallest numbers in a list, highlighting invalid data Excel 2007: Go to Home→ Conditional that has been entered into a worksheet, colour-banding Formatting→ New Rule→ Use a formula to alternate rows to make large spreadsheets easier to determine which cells to format. read and highlighting rows in large data sets. Th is tool has existed in Excel for many versions, Enter this formula: =Right($A1,5)= “Total.” but went through a major upgrade in 2007. Until then you were limited to using only three conditional Click Format. formats in any cell, but with the release of Excel 2007 this limitation was removed. You can now use as many At this point you’ll see the familiar “Format Cells” formats as you wish, the only limit being the memory dialog box, where you can choose what properties in your computer. Other additions to Excel 2007’s you’d like used to display the data in your cells. On the conditional formatting toolset include data bars, icon Ken Puls, CMA is Font tab select Bold and on the Borders tab click the sets, heat maps, overlapping formats and the ability Controller and Director top and bottom border of the cell. Once done, click to stop any further formats from being applied once of IT at Fairwinds Community and Resort OK until you are back at the spreadsheet. Notice your one is triggered. in Nanaimo. He is also a data list is now much more readable! (See Figure 2.) Used properly, conditional formats are a truly Microsoft MVP for Th ere are two things you need to understand to powerful feature in Excel, and well worth exploring Excel and principal of construct eff ective conditional formats: if you haven’t done so already. ■ www.excelguru.ca.

accounting CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia scope | 9

p08-09_News&Notes_Summer09.indd 9 7/16/09 2:20:20 PM What qualifi es as CPLD?

By Jeffrey Sparling, CMA

ollowing are the qualifying professional development activities as posted on the CMA BC website under “I am a CMA” in the professional development section. Next issue Fwe’ll present a framework and options for developing and pursuing a professional development program that encompasses the CMA Competency Map. Th e activities listed below are only part of the equation. Knowing what your professional strengths and weaknesses are, and what will be required of you professionally in the future, is essential to formulating the development program to best satisfy your future growth and competency.

Qualifying professional development activities All continuous professional learning and develop- ment (CPLD) activities must serve to increase professional competency in the broad area defi ned as CMA territory. CMA British Columbia encourages its Examples: Certain continuing education courses, members to undertake a broad range of CPLD activi- non-credit courses, training courses off ered at work, ties to enhance their cross-functional skills. online training, conferences, seminars. CPLD activities are broken down into six catego- Measure: One (1) hour = one (1) learning credit. ries for the purposes of tracking and reporting. Th ese Yearly maximum: 80 credits. activities are tracked on an input basis. Th is means each CPLD activity will have a unit of measure 3. Reading or research related to professional (learning credits) associated with it. In most cases, a competency learning credit is equivalent to one hour, except where Th is category involves business reading and research indicated below. conducted at work and at home. Examples: Reading business journals and books, 1. Formal learning and development activities non-credit courses, web-based reading and research. Th e CPLD requirement for this category is satisfi ed Measure: One (1) hour = one (1) learning credit. through formal course study leading to a new degree, Yearly maximum: 30 learning credits (eff ective for diploma or recognized professional designation, or CPLD undertaken from July 1, 2009 onward). coursework resulting in a fi nal grade. Examples: Courses related to professional activi- 4. Volunteer and community leadership contrib- ties with structured evaluations, such as university uting to professional competency Jeffrey Sparling, CMA is the Manager of the courses or programs, MBA degrees and distance or Th is category requires active involvement in the Offi ce of Strategic and part-time university credit courses. In the case of business and volunteer community in roles that Performance Manage- distance education courses, the equivalent hours that highlight, enhance or maintain a member’s professional ment with Bouchard would be required for the course if it were taught in and business competency. and Company, Chartered the classroom are used. Examples: Mentoring activities, serving on volunteer Accountants. He is a Measure: One (1) hour of classroom time = one (1) boards or committees. member of the Update Editorial Task Force learning credit. Measure: One (1) hour = 1.5 learning credits. and serves on the CMA Yearly maximum: 80 credits. Yearly maximum: 25 credits. Continuous Profes- sional Learning and 2. Informal learning and development activities 5. Formal teaching and/or writing contributing to Development Commit- related to professional competency professional competency tee and CMA Public Th e CPLD requirement for this category is achieved Th is involves teaching in a formal academic environ- Licensing Committee. He is also a moderator through a self-directed program of informal studies ment or in a defi ned teaching role within business for the CMA Strategic that serve to maintain and/or enhance the member’s and/or writing for publications (including approved Leadership Program. business and professional competencies. web-based publications).

accounting 10 | scope CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p10-11_AccntScopeCPLD_Summer09.indd 10 7/16/09 2:20:55 PM Upcoming CPLD opportunities

Examples: Moderating or teaching CMA Canada- CMA Executive Development Series (fall 2009) Victoria – Sept. 16, Oct. 14, Nov. 4, Dec. 2 related courses, moderating or teaching other Vancouver – Sept. 17, Oct. 15, Nov. 5, Dec. 3 programs of an equivalent level of professionalism, The CMA Executive Development Series is a four-part series facilitated by writing articles or books of a professional nature, author and professional speaker Shane Gibson, focusing on key trends and delivering presentations. challenges business leaders face today. Measure: Part 1: Implementing Social Media Into Your Business Strategy • One (1) hour moderating/teaching time = two Part 2: Executive Presentation Skills Part 3: Partnering and Stakeholder Engagement Strategies (2) learning credits Part 4: Leadership 2.0 • One (1) published article = 15 learning credits • One (1) extensive paper = 20 learning credits Free Microsoft Dynamics eLearning courses • One (1) published book = 80 learning credits CMA Canada has teamed up with Microsoft and Qixas Academy, a leading (exempt from maximum credit restriction) provider of Microsoft Dynamics education, to offer all CMAs and CMA candidates free Microsoft Dynamics eLearning courses. Visit CMA MemberPerks at • One (1) hour of presentation time = two (2) cma-canada.venngo.com for a list of available courses. learning credits Yearly maximum: 20 credits, except as otherwise stated. Fourth annual CMA British Columbia Members Conference May 18-19, 2010 – Hilton Metrotown Hotel, Burnaby, B.C. This two-day confer- 6. Other professional learning and development ence qualifi es for 15 CPLD credits. activities as may be deemed appropriate by CMA IFRS seminars (dates and locations vary) British Columbia for developing and maintaining CMA British Columbia members qualify for a 10 per cent discount on IFRS member competency. seminars booked through www.iaseminars.com/en/cmabc.html.

Next issue we’ll discuss a framework and options for ECornell – leadership and business management members designing a professional development program CMA Canada members can now earn certifi cates from Cornell University that encompasses the CMA Competency Map. To learn in the fi elds of leadership and business management. For more details visit www.cma-canada.org and click the professional development link. more about upcoming CPLD opportunities, refer to the CMA members receive a 36 per cent discount on eCornell’s courses and latest issue of CMA E-News, or visit the new CMA BC business certifi cates. CPLD website: www.cmabc-pd.com. ■

accounting CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia scope | 11

p10-11_AccntScopeCPLD_Summer09.indd 11 7/16/09 2:20:56 PM The cash fl ow statement An entrepreneurial perspective

By Don Nilson, CMA, FCMA

n the winter 2009 issue, we took a new look at the But, more importantly, we adjust the operating and traditional accounts receivable aging schedule. shareholder sections by adding back owner compen- In this issue, we look at a new approach to the sation. Th us, the operating earnings are “pre-owner cash fl ow statement, particularly geared to remuneration,” and the shareholder section eff ectively Ientrepreneurial business. includes all funds withdrawn, not just those off the For us “old-timers,” the cash fl ow statement has had balance sheet. We also present this information on a fairly active history in the handbook. Over the years a rolling fi ve-year comparative, add up the fi ve-year it has been known euphemistically as the “Where totals and express all of this in percentage as well as Got Where Gone,” and properly as the Statement dollar terms. Each client’s historical information is of Sources and Uses, the Statement of Sources and kept in an Excel data fi le, and this is pasted annually Applications, the Statement of Changes in Financial to a template fi le in Excel. Position and, lately, the Statement of Cash Flows. Previously it focused on net working capital, but it has Here’s how it looks: evolved to instead focus on cash or cash equivalents. Working down the categories in order, we can make Th e categorical concept of operating, investing and several observations and inferences. (See the table on fi nancing subheadings was introduced in 1987. the opposite page.) First, we look at the dollar levels: While we produce handbook-style cash flow • Working capital (essentially the interplay of statements in the offi cial fi nancial statement package, receivables, inventory and trade payables) has we produce a modifi ed version for separate reporting required significant funding year after year, to our entrepreneurial clients. Th is includes a fourth totalling approximately $1 million over five subcategory, which we call “shareholder activities.” years, or $200,000 per year on average. At fi rst, this merely shuffl es the reporting of dividend • Cash infl ow from operations hit an all-time high payments and shareholder loan activity from other in 2009, and the company is averaging almost

places on the statement to the shareholder section. $600,000 per annum. iSTOCK

accounting 12 | scope CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p12-13_CashFlow_Summer09.indd 12 7/16/09 2:22:25 PM • Owner salaries, dividends and shareholder loans equipment. Th e historical perspective of both these have withdrawn $1.6 million over the fi ve years Excel sheets provides some context for making strategic (approximately $300,000 per year), and 2009 decisions about how much can be withdrawn without was the highest. impairing the business. We can also add context to that • Th e investment section shows the company has decision by drawing on the experience we have gained invested in plant and equipment to the tune of going through these Excel sheets with hundreds of approximately $600,000 over the fi ve years. other entrepreneur clients over the years. Th is particular business is a wholesaler that carries Second, we can look at the fi ve-year total percentage $1 million each in inventory and receivables, as well relationships between the various line items, expressed as a signifi cant investment in capital equipment. As a as a percentage of annual cash infl ow: result, the operating activities require fi nancing, and • Over the fi ve years, operating activities have lenders are loath to carry the full weight, so some provided almost all of the cash infl ow (94 per retained capital is required from the owners. Th us, we cent), except for a bit of incoming fi nancing for see the shareholders have only been able to withdraw plant and equipment (mostly in 2008). approximately half of the operating cash fl ow over • Of that cash infl ow, one-third has been required the fi ve years. Th e rest has been needed to sustain to fi nance working capital, 53 per cent has been a growing, capital-intensive business. (On the other withdrawn by owners and 19 per cent has been hand, a service business will have less capital need, invested in plant and equipment. and thus we see the owners can withdraw 80-100 per cent of the annual operating cash infl ow.) For our Each year’s percentages can be studied on their own wholesaler, we also keep an eye on the sales growth as well. Th e last line at the bottom – Percentage of statistics and on the ratio of working capital to sales. Operations Cash Flow – refl ects owner withdrawals Th is business has been growing at close to 20 per cent purely as a percentage of operating cash infl ow, not per annum for the last fi ve years, and the working- total cash infl ow, which can be skewed in years where capital-to-sales ratio has ranged from 17-21 per cent. there has been signifi cant incoming fi nancing for Going forward, this helps us estimate how much plant and equipment (e.g. 2008 – 35 per cent versus capital will be needed next year if sales grow again 52 per cent). by 20 per cent; for example, another $1 million in We use this report live, along with a traditional sales will require new financing of approximately financial ratios worksheet, when we are reviewing $200,000. Where is it going to come from? Banks? year-end results with our clients. It’s always nice to see Trade creditors? Retained earnings? Don Nilson, CMA, FCMA a business do well; however, most clients would rather Th ese analyses and insights help entrepreneurs is the Principal at Nilson see more of that success go into their own pockets – manage proactively, rather than making a panic call & Company. He is also allowing them to pursue life and happiness – than have to their banker when bills are due and the credit line a member of the Update it stay in the business to fi nance working capital and has hit its max. ■ Editorial Task Force.

SOURCES AND (USES) OF CASH 2005 2006 2007 2008 2009 Five-Year Total LESS (MORE) WORKING CAPITAL (182,984) (109,930) (308,866) (271,883) (157,623) (1,031,286) % of total cash infl ow -41.4% -21.7% -49.7% -30.7% -21.2% -33.7% FROM OPERATIONS (*) 432,255 486,806 620,963 602,101 743,802 2,885,927 97.8% 96.0% 100.0% 68.0% 100.0% 94.3% BORROWING (REPAYMENT) 9,692 6,241 (92,769) 282,787 (33,010) 172,941 2.2% 1.2% -14.9% 32.0% -4.4% 5.7% TO SHAREHOLDERS (*) (270,623) (311,655) (269,520) (311,197) (451,680) (1,614,675) -61.2% -61.4% -43.4% -35.2% -60.7% -52.8% FROM (TO) INVESTMENTS (48,776) 14,190 (78,510) (373,210) (97,719) (584,025) -11.0% 2.8% -12.6% -42.2% -13.1% -19.1% INCREASE (DECREASE) IN CASH (60,436) 85,652 (128,702) (71,402) 3,770 (171,118) 13.7% -16.9% 20.7% 8.1% -0.5% 5.6% % OF OPERATIONS CASH FLOW -63% -64% -43% -52% -61% -56% *PRE-OWNER REMUNERATION

accounting CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia scope | 13

p12-13_CashFlow_Summer09.indd 13 7/16/09 2:22:29 PM Accounts payable automation The next evolution in accounting

By Catherine Dahl, CMA

n your organization, has a vendor invoice ever sat Although this technological process has been under the paper pile on someone’s desk? Have you available for some time to Fortune 500 companies, ever paid a bill twice because a duplicate invoice in recent years it has become available to small slipped through? Do you store your historical and mid-size companies in simple and affordable Iaccounts payable fi les in boxes off -site or in some faraway platforms. Thanks to the Internet and web-based room, resulting in a groan when a request for those outsourcing, any company can take advantage of documents comes through? Does your company make workfl ow process automation. copies of invoices and send them to multiple locations for approvals at various levels of management? What is accounts payable automation? If you answered yes to one or more of these questions, Accounts payable automation (APA) is the fi nal your organization suff ers from “accounts payable pains.” frontier in process automation. Most companies still code, approve and fi le their vendor invoices by hand. COMPANY ABC PER MONTH ($) ANNUAL ($) APA changes the manual workfl ow into a paperless, digital process. Labour costs 3,000 36,000 In other words, invoices are centrally scanned Missed discounts 250 2,997 into a digital format via optical character recogni- tion (OCR) software, and routed for coding and Reduced duplicates 375 4,500 approval via the Internet and email. This process Document storage costs 250 3,000 uses a web-based software application, “SaaS,” as well as an off-site, secure document archival TOTAL estimated savings 4,750 56,997 system. The OCR component eliminates the need for manual data entry, since digitally read, coded and approved invoices are then imported into the Sample costs of Bean Services’ APA offering accounting system. User fees 300 3,600 Measurable benefi ts of automation Capture fees 1000/inv/mth 1,000 12,000 • Labour cost-savings – OCR capture and integra- TOTAL 1,300 15,600 tion into enterprise resource planning (ERP) systems such as SAP or accounting software, Net savings 3,450 41,397 such as QuickBooks, can signifi cantly reduce the Table 1: Savings with an APA system. number of full-time equivalent (FTE) accounts payable clerks needed. Th e alternative is to increase Not to worry, there is a solution. Automating your payables volume without adding more staff . accounts payable process and workfl ow can eliminate • Increased utilization of cash discounts – most these pains and save your organization signifi cant manual processes are too slow to maximize resources at the same time. these opportunities. Analyzing the cost and effi ciency of the payable • Improved payment accuracy – APA completely process rarely gets the attention it deserves in small to eliminates duplicate vendor payments. mid-size organizations. And rarely is there something • Improved document retrieval and storage – truly evolutionary in the field of accounting that the best APA systems are database archival actually leads to measurable savings, is easy to do systems. Finding documents is as easy as and relates to accounts payable. But the automation opening a web page and searching – extremely of accounts payable is precisely that: new, effi cient, fast and simple. capable of saving signifi cant resources – fi nancial and • Reduced operating costs – APA can result in non-fi nancial – and, as an added bonus, green. the elimination of physical paper storage, as

accounting 14 | scope CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p14-17_APAutomation_Summer09.indd 14 7/16/09 2:23:23 PM APA FEATURES BEANBILLS TIMBERSCAN BASWARE CUSTOM-DEVELOPED

Low upfront risk, High cost High upfront High cost multiple options, including serious Cost risk, high IT staff including hosted – low IT staff time & requirements time & effort staff requirements effort; high-risk

Diffi cult to use; diffi cult training Easy to use; easy Easy to use; May vary based Usability – Timberline training easy training on development entrenched usability

Web-Based Yes No Yes Possibly Accessibility

Yes, None, would None, would need Yes, optional additional need to purchase Data Capture to purchase and service software and implement implement OCR cost OCR

Easy through Very limited, application also limited Customizable Unknown Yes programming by Timberline interface functions

Purchase Orders Yes No Yes Yes

Purchase Order Yes No Yes Potentially Matching Workfl ow

Integration Yes Only Timberline Yes Yes

Table 2: APA providers. Canada Revenue Agency currently accepts • No installation or maintenance of hardware or PDF copies for tax purposes. APA also reduces software. invoice routing (i.e. mail and courier) costs and • Enhanced data security – most SaaS vendors have the time staff spend making multiple copies of 24-7 physically secured and electronically secure vendor invoices. data storage at a level most small to mid-size companies would fi nd cost prohibitive. Additional intangible benefi ts of APA • Aff ordable bandwidth. • Faster invoice dispute resolution. • Disaster recovery/business continuity, as data is • Easier rerouting or repackaging of accounts hosted and backed up off -site. payable backup documents to customers. • Ease of upgrades, as this rests with the APA • Reduced business disruption after a disaster, as vendor. documents are off -site. • Continual access to new program features. • Easier audits. • Reliable service levels – SaaS providers typically • Better regulatory compliance, as delivering vendor monitor their systems 24-7 to proactively invoices to electronic repositories guarantees identify and fi x potential problems. important data is recorded, properly validated and easily accessible to the audit process. How quickly it adds up: a case study Let’s assume ABC Company has $1,500,000 in annual Catherine Dahl, CMA Benefi ts of using SaaS applications vendor payments, and two accounts payable clerks is a Client Development over proprietary software who process 1,000 invoices a month. Th e average Manager with Bean Why use a web-based option (SaaS) over purchasing or clerk can usually process as many as 600 to 900 Services Inc. (www. designing an in-house software system? Generally, cost invoices per month with a manual data entry system beanservices.com) – an award-winning developer is the reason, but there are many other ways SaaS makes (source: By the Numbers: Accounting, OSBC, 2005). of web-based invoice the APA process accessible to smaller companies. Th e all-in salary of one FTE is $36,000 annually, or software and a leading • Lower cost of ownership – this cost is borne by $3,000 a month. ABC Company has access to vendor APA SaaS provider the outsourcing company. discounts of one per cent to two per cent on about based in Vancouver, B.C.

accounting CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia scope | 15

p14-17_APAutomation_Summer09.indd 15 7/16/09 2:23:23 PM Although this technological process When considering this type of automation, has been available for some time to a detailed analysis is recommended and can be Fortune 500 companies, in recent furnished by your APA provider. In addition to easily measured savings, a company should consider the soft years it has become available to small costs saved by a reduction in frustration and “pains” and mid-size companies in simple and that exist outside the accounts payable department. affordable platforms. Thanks to the Internet and web-based outsourcing, Who is the leader? Th ere are several APA options out there today to any company can take advantage of choose from. Table 2 on page 15 assesses some of the workfl ow process automation. more popular choices.

54 per cent of those invoices, but only captures 63 Three keys to successful adoption of APA per cent of those available, a typical situation (source: When considering automating the payables process, IOMA’s benchmarking study, 2005), which adds up to there are three critical keys to success: $299,700 in total vendor payments that are available for missed early payment discounts. 1. Plan ahead – analyze your process, cost out ABC Company is typical in that it loses 0.03 per the ineffi ciency of your current system, make an cent of total payables through unrecovered duplicate implementation plan and know your workfl ow. payments (source: IOMA’s benchmarking study, 2. Assess your organization’s ability to adapt 2005); also in that the company pays $250 per month to change. Going paperless is not as simple as for long-term off -site storage. it seems, as we are so used to paper. Table 1 on page 14 outlines how much an APA 3. Have a centralized routing system for all system could save ABC Company. As illustrated by vendor invoices. To gain the effi ciencies of an this example, a good APA system will pay for itself APA system, paper has to be discarded after many times over. Keep in mind each company has its it is scanned – or, mandate electronic vendor own unique set of processes and problems. invoices. ■

p14-17_APAutomation_Summer09.indd 16 7/16/09 2:23:28 PM Method for your message Management View Communication is key for accountants and non-accountants alike

By Roy Quinones, CMA

o my peers, accounting is a foreign language understood only by those who speak it. Yet we can’t understate its importance in the overall business framework. So how do Twe communicate accounting and accounting-related information to non-accountants? The first step is improving our overall skill in communication. Looking back to my university studies, my business communications course stands out and continues to be one of my better references. While communication is still a work in progress, I try to adhere to these guidelines:

Purpose Make sure it’s clearly defi ned, otherwise the message you’re trying to convey may be passed off as unimportant, or be missed altogether. For example, I once received an email with no message, only the subject “As Requested.” Th e attached Excel fi le had a graph, but no other information. In the end, I contacted the sender to clarify what the data was.

How a message is conveyed is just as important as the message itself. interpret or use it diff erently. Try to understand the When attempting to be persuasive perspective of your audience. Ask yourself, “Why do or turning down a suggestion, try to they need this information?” or “How can I make be polite and positive. Avoid using them understand where I’m coming from?” Keeping sarcasm or negative words such as those questions in mind can help make your message clearer. I previously served as an intermediary between “not,” “unable” and “wrong.” fi nance and operations. Transmitting information both ways gave me a better sense of what both groups Tone wanted – their inquiries became easier to address as I How a message is conveyed is just as important as started to understand what each party wanted. the message itself. When attempting to be persuasive or turning down a suggestion, try to be polite and Environmental factors positive. Avoid using sarcasm or negative words such Sometimes intangibles can aff ect the clarity of your as “not,” “unable” and “wrong.” Instead of saying, “Th is message. For example, sending a message about a doesn’t work because…,” try saying, “I understand vacation request to your manager during year-end what you want to accomplish, but this is what we are processes will most likely be received unfavourably. A allowed to do…” – it might work better than a message better approach would be to determine the best time that sounds like a blunt “no.” to relay a message or request. For example, co-workers ALSO, AVOID USING CAPITAL LETTERS, may be less receptive to information requests at AS THE READER MIGHT FEEL LIKE YOU’RE the end of the work day, while others may be more Roy Quinones, CMA is a SHOUTING. accepting. Personally, I prefer receiving information Credit Risk Analyst with requests at the beginning of the day, as I like to use the Powerex and a member Frame of reference end of the day to review work and have quiet time to of the Update Editorial

iStock Two people can look at the same information and complete my tasks. ■ Task Force.

management CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia view | 17

p14-17_APAutomation_Summer09.indd 17 7/16/09 2:23:30 PM You only crash once A practical approach to IT disaster recovery

By Arian Soheili, CMA

hat you are about to read is, unfortu- So let’s understand what is gone. All of the company’s nately, a true story. data, including accounting, HR, sales, marketing, It’s 7 a.m., and the CFO of a administration and intellectual property. In other $15-million electronics distributor words, everything our client needs to stay in business. Wis frantically calling my home phone. “Our business Our only hope lies in reading those three tapes. We was broken into, and the server containing all of our dig through storage looking for the original vendor data and applications was stolen. Can you help us?” invoices to fi nd out what was originally installed on My stomach lurches. I’m almost afraid to ask, “Do the server. By 1 p.m. the next day, we have enough you have backups?” information to create a plan. We’ll try to fi nd a new Th ere’s a long silence. “Maybe.” server with a matching tape on the off chance we can Of companies experiencing a major loss of restore the tapes. computer records, 43 per cent never recover enough Our client is amazingly lucky. We fi nd a compat- to reopen their doors. Another 51 per cent close down ible used tape drive, persuade the backup software within two years of the loss. A mere six per cent survive manufacturer to let us download a long-obsolete over the long term (see Management Information edition, obtain an old version of Novell for the newly Systems for the Information Age by Stephen Haag, provisioned server and piece together the information Maeve Cummings and Donald J. McCubbrey). So the on the tapes, parts of which have been corrupted. prospects for our client are grim. After an entire week of working around the clock, we Nevertheless, we dash to the client’s site, and recover over 95 per cent of the data. discover only three backup tapes. Th e old server was But the cost is high – $30,000 in consulting fees, taken along with the previous night’s tape, and no and a week of lost sales and productivity. Too bad they one knows what backup software was used. In fact, didn’t have a business continuity plan. the original installation media for all the software was either taken at the time of the break-in or has been Business continuity planning

lost over the years. A business continuity plan is a blueprint for the way iSTOCK

management 18 | view CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p18-19_ManViewCrash_Summer09.indd 18 7/16/09 2:24:19 PM a business plans to respond to and survive everything remote off -site storage location. Th ey’re also faster, from a local equipment failure to a global disaster. As off ering near real-time backups. Moreover, since most Management business professionals, we understand the necessity NAS devices are servers in their own right, they can View of such a plan. However, very few of us have one in be used to virtualize a backup copy of the server image place – primarily because the topic is overwhelming – impossible with tape. In short, this technology for those traditionally tasked with creating them; permits a restored copy of your entire server to run namely accountants. in a virtual environment on the backup device. More So how do we prevent a disastrous data loss? We information on virtualization can be found in the could focus on a data-oriented business continuity winter 2008 issue of Update magazine in the article plan, an indispensable component of business planning Th e Sun Sets on Server Sprawl. regardless of your organization’s size. However, small to mid-size businesses generally lack the in-house BASIC TAPE NAS WITH OFF-SITE IT resources to achieve the demanding planning, BACKUP STORAGE technical and process requirements. As a result, many Reliability Lower Higher either neglect to implement a data-oriented business continuity plan, or else they approach data backup Maintenance cost Higher Lower and recovery in a sporadic, rudimentary fashion. Cost of ownership Higher Lower Traditionally, the only solution for the small to Overall risk Higher Lower mid-size business has been a tape backup. A tape No Yes solution is costly to acquire and manage and requires Near real-time backups constant monitoring, servicing and testing to achieve Automated daily off-site No Yes acceptable reliability. Also, tape is highly sensitive to Virtual server appliance No Yes environmental factors such as heat, humidity and magnetic interference, leading to high failure rates. Analysts estimate that anywhere from 42 to 71 per cent Tips for implementing NAS of tape restores fail (see the article Recovery Will Since NAS technology is relatively new, your consul- Move to Disk-Based, Manager of Managers Approach tant may not be familiar with its intricacies. When by 2011 by Dave Russell of Gartner Group at evaluating solutions, look for a NAS device that: www.gartner.com). Moreover, tape cartridges must be • Allows for near real-time backups, performing replaced every six to 12 months, a costly and cumber- them as frequently as every 15 minutes. some process. • Maintains incremental images for years. • Backs up everything, including the operating Advances in network system, applications and all data. attached storage (NAS) • Offers automated daily off-site storage at an As technology has progressed, and data volumes aff ordable cost. have expanded from megabytes to terabytes, tape • Can be monitored remotely and managed by technology has lost ground to new technologies such a specialist, eliminating the cost and time of as network attached storage (NAS) and remote storage on-site management. facilities. Both are based on hard-disk technology that • Eliminates server downtime for repair or has become very inexpensive in the past few years. replacement by using virtual server applications A NAS device is a self-contained computer connected to activate a temporary backup image. to a local area network (LAN). In general, NAS devices • Encrypts access to both the NAS and the remote supply fi le-based data storage services to other devices, storage facility with an ultra-secure password. such as desktops and servers, on a network. Th ey are • Bundles the costs of frequent on-site backups, proving to be more reliable, cost-eff ective and easier to an on-site virtual server, remote storage, disaster manage and maintain than tape solutions. Th e trend is recovery and 24-7 management. toward using NAS devices with remote storage capacity Back to our client with the stolen server. Yes, the story for additional security. had a relatively happy ending, with near-total data recovery and a hefty consulting fee for my fi rm. But Better than tape this isn’t how good consultants want to make a living. Tape-based backups are still an alternative that should We would much rather come in before a disaster be considered. However, the NAS device is making strikes and develop a workable business continuity tape a less competitive solution. Th is is because NAS plan to protect our clients. Ideally, that would include Arian Soheili, CMA device backups with off -site daily storage are more the latest disaster-recovery technology, like NAS and is Managing Director of Cantatus Systems reliable. Th ey have lower maintenance and total remote storage – much more eff ective than legacy Group, Inc., an integrated ownership costs. By eliminating physical tape, they tape systems at an equivalent price, and so reliable enterprise solution lower the risk and cost of human intervention in the I won’t need to fear my phone ringing at the crack provider in Surrey, B.C. process of moving the backup tape to and from a of dawn. ■ (www.cantatus.com).

management CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia view | 19

p18-19_ManViewCrash_Summer09.indd 19 7/16/09 2:24:21 PM iSTOCK

Fraud prevention 101 How to keep your organization from getting taken

By Patricia McDowell, CMA

s your most trusted employee robbing you blind? organizations that have grown to a point where the Th e Association of Certifi ed Fraud Examiners’ owner/manager no longer does all of the accounting. 2008 Report to the Nation (www.acfe.com/ Usually the person who commits fraud is the one resources/publications.asp?copy=rttn) estimates person everyone relies on, who takes on the lion’s share Iyou lost at least seven per cent of your total revenue of the work – your most trusted employee! to fraud, assuming your business has good, working Occupational fraud research has shown white- internal controls – and potentially much more if collar criminals need to be able to justify their crimes it doesn’t. in their own minds, so part of the prevention involves Every year thousands of companies go out of removing potential justifi cations. You can do this business or file for bankruptcy protection. It’s with fair pay, good working conditions and reason- impossible to know how many of these failures were able benefi ts. In addition, research shows that while the result of losses sustained from theft or corruption roughly 20 per cent of people are completely honest, of employees, management, contractors or suppliers. 60 per cent can be tempted, and the remaining 20 per While the fraud losses sustained by businesses are not cent are utterly dishonest and will steal regardless of often in the news, those sustained by not-for-profi ts what you do. Hopefully you have managed to avoid often are. Recently in the Lower Mainland, volunteers hiring the criminal 20 per cent, so you need to ensure working for organizations like junior soccer leagues and you are not tempting your employees to steal. In my the Canadian Legion stole hundreds of thousands of experience, many fraudsters get their start by making dollars and left their organizations virtually penniless. a “mistake” that isn’t caught. What is going on? Are these simply aberrations or is there a pattern? Top 10 things you can do to Most of the fraud that takes place in small businesses prevent fraud in your business and not-for-profi ts has its roots in a lack of internal or not-for-profi t: controls, with one or more trusted employees or volunteers having too much responsibility without Protect your assets by segregating work,

adequate oversight. Often these are medium-size 10 if possible. One person should not control iStock

management 20 | view CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p20_21_Fraud_Summer09.indd 20 7/16/09 2:24:46 PM an entire process or asset. If possible, separate: bank credit cards has had employee fraud as a direct result, deposits from bank reconciliations and general ledger often with signifi cant losses. I once heard from a Management updates; purchasing from accounting and receiving; sales director that a certain company had to provide View authority to set up new vendors from handling of corporate credit cards because several of its best signed cheques. If this is not possible due to the size salespeople couldn’t qualify for their own cards. I of your organization, you need to pay particular was investigating a signifi cant fraud committed by attention to the next suggestion. one of those individuals at the time. Needless to say, you don’t want people who can’t manage their own Do every thing you can to make your employees fi nances to have direct access to your money through 9 believe you are checking their work. To a credit card account. protect your bank accounts, have bank statements sent to you directly, at home if necessary. Open If you have an external auditor, you need to them and give them a quick review before you pass 3 ensure they have unrestricted access to all them to the person responsible for reconciliations. accounting personnel, documents and records. Ideally, you should always ask your reconciler a In one of my cases, the external auditor (one of the few questions about the contents to indicate you Big Four) was only allowed to talk to the accounting are checking. manager, not any of the supervisors or staff , and could only use information she provided (in some Never hire anyone without checking all of cases specially prepared by her) for the audit. 8 his or her educational and prior employment Th e auditor missed years of fraud indicators (the claims. You would be surprised by how many so-called red fl ags) that cost the company millions employees who commit fraud started by inventing of dollars. or infl ating their qualifi cations. When speaking to references, especially prior employers, make sure Perform a risk review to identif y your company’s you ask for candid feedback. Ask whether, given the 2 exposure to fraud, and design cost-effective opportunity, they would rehire that person. A yes or controls to either eliminate or mitigate the risks. a no is suffi cient for your purposes; you don’t need a Review periodically to ensure the controls are: a) lot of details. still working and b) still eff ective. In addition, look closely at the people, usually senior employees or Ensure all payments made to employees for managers, who are able to circumvent or ignore 7 business expenses are properly supported internal controls. and approved. Who authorizes the manager’s expenses? You may want to consider setting some Arrange for surprise internal audits at least fi rm guidelines for business travel and entertain- 1 once per year. Companies without internal ment expenses. audit departments are much more vulnerable, but can mitigate this risk by hiring an outside specialist Make sure you are paying competitive wages to perform annual audits. Just knowing someone 6 and benefi ts to avoid giving your employees could appear at any time to review the operation is a motive to “supplement” their salaries without a huge deterrent to employees who might otherwise your knowledge. Have open discussions with staff if be tempted. you are unable to give pay raises on schedule, so they don’t feel personally aggrieved. One thing I haven’t mentioned, but highly recommend, is the establishment of an anonymous whistle-blowing Patricia (Pat) McDowell, Set an ethical tone at the top. Make sure hotline operated by a third party. CMA is an independent 5 your employees do not see you taking ethical Occupational fraud is a complicated subject forensic auditor and shortcuts. Your employees need to feel you are with nearly as many variations as there are people accountant working in committed to ethical dealings with staff, clients who steal. It’s also very diffi cult for organizations to association with the and suppliers. Some companies send form letters deal with. For instance, when a bank is held up and Lions Gate Investigations on an annual basis to all suppliers to tell them staff the robber gets away with $100,000, management Group, which specializes in identifying, investi- are not allowed to accept gifts of any kind. Give immediately knows the extent of the loss. When gating and quantifying suppliers your contact number to call if they have a cashier embezzles $100,000 from cash deposits losses due to occupa- any concerns. over months, management may not know there were tional fraud. She is also a losses until much later, if at all, and depending on the Certifi ed Internal Auditor If possible, do not provide corporate credit circumstances, they may never know exactly how (CIA) and a Certifi ed Fraud Examiner (CFE), and is cards to your staff. Ideally, have employees use much was stolen. Th e fact that the person stealing 4 currently Vice President their personal credit cards and ensure reimburse- is often your most trusted employee also gives the of the Vancouver chapter ments are made promptly. Without exception, every whole situation an emotional overlay that can be very of the Association of Cer- company I have dealt with that has used corporate complex and diffi cult to face. ■ tifi ed Fraud Examiners.

management CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia view | 21

p20_21_Fraud_Summer09.indd 21 7/16/09 2:24:48 PM Web 2.0 An introduction to social media By Dave Macdonald, CMA

ver the past several years the Internet has evolved from a network with very few contributors – libraries, academic institutions and a few businesses – to an Oenvironment where anyone can contribute. Th is is the layperson’s defi nition of “Web 2.0” – a term that often pops up without any indication of what it means. Web 2.0 gradually came to be called “social media,” with the creative “SocMed” abbreviation appearing with increasing frequency. Social media is about sharing ideas and gleaning information from sources of one’s own choosing. Social media is lightning-quick, and through sites such as Twitter, Google Reader, Facebook, LinkedIn and dozens of others, there is an A LinkedIn event listing for the recent CMA BC Members immense amount of information at your fi ngertips. Conference shared presenter bios and other information.

Social media basics Google Reader uses the same principle, and Facebook Th e value proposition for avid Internet users is the is very similar. With Google Reader, you can follow dynamism of social media. For example, on Twitter, you news sites, blogs and other regularly updated sites and sign on to “follow” those you fi nd interesting. Should be notifi ed when they are updated. On Facebook, you people fi nd the information you share interesting, you receive information from your list of friends. can be followed in the same fashion, provided your security settings are not set to private. Th ere is no rule of Instantaneous information reciprocity, and everyone’s list of “tweeters” – the people one Th e main principle of social media is that user-generated

follows or those following another person – is unique. content is made available to other users. But what can Shutterstock

strategy 22 | report CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p22-23_Web20_Summer09.indd 22 7/16/09 2:25:13 PM Self-promotion, that is, building your While there is no limit on the self-promotion brand through social media, is an art that can occur through social media, it’s just like any other platform: if people get tired of a spokesperson, a – and no one really knows its limits. message or a brand, they “stop watching that channel.” With over six million people on Twitter Th e content needs to be fresh, and people need to be and nearly 200 million on Facebook, authentic. Th ere is actually little value for “grazers” there is a serious case for using social because the real value is in discourse and engagement. It’s participative learning. media to build a brand. Words of caution – security these tools and media provide to those who don’t, or and profi le management have yet to, spend much time online? As with any personal information, balancing authen- As mentioned above, the first benefit is rapid ticity with security and pragmatism is of utmost sharing of information. In mid-January when U.S. importance. Th e bottom line is, only share information Airways fl ight 1549 plunged into the Hudson River, you don’t mind the world seeing. Th ere have been few Internet users were able to follow the news live via signifi cant breaches of social media sites, but to deny Twitter from people in the area who were on boats any risk would be rash. rescuing survivors, and on the plane itself. Those seeing the story unfold on the news were sometimes Taking social media offl ine hours behind. The method of following this story We are fortunate in British Columbia to have a rich was simple – a search for “Flight 1549” on Twitter online culture. Th ere are multiple opportunities to returned dozens of accounts. What was drama in meet the people we engage with online. Twitter and January is now part of regular discussion – a search Facebook users can organize events or “meetups” (or for “Flight 1549” fi ve months later results in news “tweetups”), while sites such as meetup.com focus about luggage being returned to passengers. exclusively on events and matching people with events A second product of social media is the formation they are interested in. With any social media site there of active networks that typically focus on achieving are opportunities to form groups, join groups and meet some relatively short-term objective (shorter-term people of specifi c interests. goals often require less formal organization and rely Why do this? Engaging offl ine is as important as on the momentum of core proponents). Social media the online component. Behind every Twitter feed or creates the right environment for these groups to blog there is a person whose ideas and contributions move forward. likely aren’t being fully capitalized on by their Internet In his 2008 book, Here Comes Everybody, Clay contributions alone. Engaging people online off ers an Shirky describes this phenomenon as “collaborative opportunity to take networking to extents we often production.” For certain exercises, social media tools don’t experience through traditional means. For remove barriers and give people a collaborative space example, if through a Twitter conversation you fi nd in which to make things happen. Shirky opens his book out a CEO you’ve been planning to meet in person to with a prime example involving a stolen cell phone. pitch your services to is an avid cyclist, just as you are, Th e police dubbed the owner’s phone “missing,” so her there is a connection that could pay off immensely. brother created a website outlining the details of the theft. A proactive audience formed around the site, The CMA BC Vancouver chapter exchanging messages and clues until the identity of With this in mind, the Vancouver CMA BC chapter the thief was established. Within six weeks there was has recently developed an online presence – a blog an arrest and the phone was recovered. Th is chapter is at www.cmavancouver.com and a Twitter page at currently available for free at books.google.com. www.twitter.com/cmavancouver, as well as profi les on Th e anecdote borrowed from Shirky is certainly a LinkedIn and Facebook. Any CMA in B.C. can join niche example, but “niche” is a word that aptly describes the LinkedIn group, and everyone is welcome and social media. With these tools we are able to engage in our encouraged to do so. Th e goal is to engage members own niche activities, alongside experts and novices alike. in discourse, exchange information and provide Th e fl ow of information facilitates quick learning, rapid opportunities to connect both online and off . Dave Macdonald, CMA network growth and opportunities to self-promote. With a basic understanding of social media, it’s is a Special Projects very easy to participate – whether you’re just curious Administrator at WPCG, Brand-building or are looking to promote your brand or company and the Online Self-promotion, that is, building your brand through online. Social media has people talking, and no one Communities Director for the CMA BC Vancouver social media, is an art – and no one really knows its knows where it’s heading, but this is a time when the chapter. Connect with limits. With over six million people on Twitter and general public can be very close to the cutting edge him on LinkedIn, Twitter nearly 200 million on Facebook, there is a serious case of Internet technology – and we hope CMAs will be (@davemacdonald) or his for using social media to build a brand. able to fi nd their way around. ■ blog at davemacdonald.ca.

strategy CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia report | 23

p22-23_Web20_Summer09.indd 23 7/16/09 2:25:15 PM The sociable enterprise Why you need an integrated social media marketing strategy today

By Shane Gibson

“Social media is making past management approaches obsolete. The new strategies must recognize that the new backbones of infl uence are now networks of ordinary people.” –Peter Aceto, CEO, ING Direct, itbusiness.ca, May 12, 2009

oday a front-desk secretary who operates Social media tools and networks are a signifi cant your customer service account on Twitter force that is growing – one you can’t aff ord to avoid. can have a more positive impact on your Th e truth is in the numbers: brand than the transit ads you run, or the • Facebook: 190 million users Tdirect-mail campaigns you execute. A junior executive • LinkedIn: 35 million professional users who posts the wrong comments on a competitor’s blog representing every company on the Fortune 500 can also undo your positive branding and marketing • Twitter: 6.5 million users; 1.3 billion messages eff orts in one click. per year and growing • YouTube: 1 billion views per day (the second- biggest search engine behind Google) Th e consumer is already talking about your brand online, and if you’re not online listening and engaging, you’ve lost control of your brand. Th e great news is, by getting proactive you can begin to positively direct and amplify these online conversations.

Your social media strategy – things to consider Before using social media we need to understand some core principles:

Social media messaging is not produced solely by a marketing team. Zappos, a billion-dollar online shoe company, makes it mandatory for all staff to use Twitter. Expand marketing roles to everyone, taking the number of marketing messages and multiplying them signifi cantly online.

Provide social media training to all staff . More important than training on the tools is training on The case for social media the principles of using the tools. Th ere is a specifi c Many senior executives are opting not to make use of etiquette to engaging people in each of the major social media, a highly eff ective but also hard-to-control networks. marketing tool. Some will claim there are no case studies measuring the eff ect of social media marketing, but this Have a social media policy and process that is far from the truth. Th ere are numerous documented outlines how to engage customers online. Th is social media success stories, from companies such as should include guidance on how to deal with Comcast and Ford to individual entrepreneurs such as negativity, social events and clients. One important Gary Vaynerchuk of winelibrary.com, who went from note: if your guidelines are too stringent and you take $4 million to over $40 million in sales using video- the fun out of Twitter or blogging, don’t be surprised

blogging, Twitter and other social media platforms. if your eff orts fall fl at. iSTOCK

strategy 24 | report CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p24-26_SociableEnt_Summer09.indd 24 7/16/09 2:25:59 PM In the spirit of transparency, many organizations, 2. Identify your target audience. Having a message such as Intel, post their social media guidelines on their that rises above all the noise online is critical. Achieve websites (www.intel.com/sites/sitewide/en_US/social- this through targeted “nano-casts,” as Jay Levinson, media.htm) for all of their stakeholders to see. author of Guerrilla Marketing, calls them. Traditional media is about broadcasting; social media is two-way Listen and engage. Social media is about listening, nano-casting. You will have to drill down and defi ne community, adding value and entertaining people. several niche target groups. It’s about dialogue. It’s a multilateral communication medium. “Talking at” people or “blasting” updates is not 3. Pick the right platforms. Twelve months ago true engagement, and it isn’t good for your brand either. Twitter wasn’t a great place to engage a CEO or connect with elected offi cials. Today it’s the perfect Don’t outsource your personal brand. Everyone tool for that. Be careful in looking at historical data needs to operate his or her own Twitter account, even and at what’s happening right now when choosing your the CEO. Th is transparency and direct communica- platforms. Invest in existing networks and platforms, tion enhances your brand. Sending your secretary to a but also look at which ones have the biggest opportu- cocktail party on your behalf isn’t nearly as eff ective as nity for growth. Invest in building your network before going yourself – people want to meet the personality the masses rush in. of the brand. Th e same goes for online networking. 4. Map out social etiquette. Each platform Implementing a social media strategy (Facebook, LinkedIn, Twitter, etc.) has its own social In order to profi t long-term from social media, you rules and norms. If you’re not sure what they are, need a well-thought-out plan. Here are six steps to connect with or follow someone who is established implementing a social media marketing strategy: and observe his or her habits and conversations, and the types of content they post over time. 1. Identify your goal. Getting on Facebook because Shane Gibson is a some marketing guru said you should is a bad idea. 5. Implement a listening strategy. Social media professional speaker, Blogging just because your competitors are is equally monitoring, social searches and reading other people’s author and marketing bad in its strategic signifi cance. Here are good blogs should all be part of your listening strategy. In strategist. Connect with Gibson on Twitter examples of annual goals: order to be eff ective at infl uencing people, we must (@shanegibson) or on • To increase staff recruitment by fi ve per cent have a high level of empathy and understanding. his blog at closingbig- this year by engaging 18-to-23-year-old men If we listen intently enough, our market will ger.net. This article is and women in B.C. through interactive blogs, expose the missing solutions and “pains” that need based on excerpts from community-driven video content and Twitter. fulfi llment. Listening tools include such sites as Gibson and Stephen Jagger’s new book • To reduce marketing costs 90 per cent by search.twitter.com and www.google.com/alerts. Sociable! which will ceasing all print advertising and using blogging, be available at YouTube, Facebook and Twitter to market 6. Know core pains and communicate your sociablebook.com later real estate developments. solution. Hopefully by listening and directly engaging this year.

Key Tips for Employers

Want to know how many people viewed the rates. cmabcjobs.com boasts roughly 35,000 job that you posted in the past day, week banner ad impressions per month. Contact or month? [email protected] for more details. As an employer you can use the Reports feature to see job views or employer description views Want to send a response to everyone who on an hourly basis to a monthly basis. This is applies letting them know about next steps? just one of the many reporting functions of Use the Auto-Response function in the Employer cmabcjobs.com. Centre to create a customized message that will automatically send a reply email to anyone Want to advertise your company to CMAs who applies for your posted job through and CMA students? cmabcjobs.com. An example would be,”Thank Banner advertising is available on a monthly you to everyone who submitted an application or yearly basis on both the employer and the with [Your Company]. We will contact all jobseeker areas of the website at very competitive applicants within two weeks.”

strategy CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia report | 25 CMABCJobs-Ad.indd 1 4/30/09 1:34:51 PM

p24-26_SociableEnt_Summer09.indd 25 7/16/09 2:26:00 PM • Eight steps to delivering a winning presentation CMA Executive Development Series • Strategies for presenting to different personality styles Victoria – Sept. 16, Oct. 14, Nov. 4, Dec. 2 Vancouver – Sept. 17, Oct. 15, Nov. 5, Dec. 3 Part 3: Partnering and Stakeholder Engagement Strategies The CMA Executive Development Series is a four-part • The stages of relationship and partnership series facilitated by author and professional speaker development Shane Gibson, focusing on key trends and challenges • Key steps in systemizing your relationship and business leaders face today. stakeholder development planning • Tips on handling and avoiding roadblocks Part 1: Implementing Social Media Into Your Business Strategy Part 4: Leadership 2.0 • The role of social media in marketing strategy • New rules for engagement in a digitally transparent era • Core social media marketing success principles • Web 2.0 collaboration and learning tools • How to develop and execute a social media • Creating an environment that is productive and marketing plan that works engaging for the millennial generation/generation Y.

Part 2: Executive Presentation Skills To learn more about the CMA Executive • This program has tools: how to prepare for a Development Series, visit the new CMA British major presentation or pitch Columbia CPLD website: www.cmabc-pd.com.

your target markets you will develop a grounded and 2009, Twitter’s user base grew 1,382 per cent and complete view of what ails them or their businesses. Facebook grew 228 per cent, the 35-49 demographic Th e next step is to communicate why your solution is being the largest group contributing to this growth. unique and valuable through an engaging, contribu- With a strong strategy and understanding of the tion-focused social media campaign. core principles of being “sociable,” your company In summary, consumers and companies are and community can benefi t from this open adopting social media at a breakneck pace. According and transparent method of marketing through to Neilson Netratings from February 2008 to February engagement. ■

Canada Wide Media Limited is very proud to be working on Update magazine on behalf of the Certifi ed Management Accountants of British Columbia.

Introducing your new Advertising Account Manager Karen Rice

Please contact me with any ideas, questions and feedback regarding advertising in Update. I look forward to working with you! 604-205-1711 [email protected]

strategy 26 | report CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p24-26_SociableEnt_Summer09.indd 26 7/16/09 2:26:01 PM The CMA Strategic Leadership Program: an overview

he CMA Strategic Leadership Program (SLP) is the most critical step in shaping Required coursework for the the professional identify of a CMA. It’s what CMA National Entrance Exam distinguishes the CMA designation from Tthe other accounting designations in Canada and forms the basis for CMAs’ diff erentiating competencies. Th e SLP was introduced to the CMA designation in 1995 as the “Professional Program” and underwent the change to the current name in 2000. Th e program has had a number of changes in the past few years, and CMA National Entrance Exam many CMAs who went through the SLP in its early years may not recognize the current version.

Program description Th e SLP is a two-year part-time program undertaken after the CMA National Entrance Exam. It is the fi nal stage of the pathway to the CMA designation CMA Strategic and includes the CMA Board Report. Th ere are two intakes for the SLP every year – in September and Leadership Program (SLP) January. In order to allow all students to complete the SLP concurrently and graduate together, the January intake runs on a more compressed schedule than the September intake.

Program structure CMA Each year of the SLP consists of three Saturday- Sunday interactive sessions, for a combined total of six sessions. During each session the candidates meet in Th e fi nal stage of the SLP is the CMA Board Report. a classroom setting, with two moderators facilitating The board report is a large-scale, comprehensive each group. Th e moderators are highly experienced business case that integrates management, strategy CMAs with teaching experience, since fellow members and accounting, and demonstrates candidates’ ability best understand the competencies of a CMA and the to utilize all of the CMA competencies. Th is case requirements of CMAs in industry and the business study, typically completed in teams of four, consists community. Between each of the interactive sessions of a written submission and a presentation to a panel there are a number of written assignments, reports of CMAs, and is the fi nal evaluation component for and online activities. Th ese components, along with the CMA designation. concurrent work experience, constitute the learning elements of both years of the SLP. SLP entrance requirements Th e interactive sessions consist of large-group To enter the program, candidates must have a uni- and small-group discussions, activities and presenta- versity degree or an equivalent in relevant work tions, all designed to integrate knowledge, skills and experience and education (degree waiver). Th ey behaviours. Some of the written assignments are must also have acquired a knowledge base, typically graded by a pool of national markers, while other by taking 16 or more related courses at a college elements, such as demonstrations of teamwork, com- or university, or through the CMA Accelerated munication and professionalism, are evaluated by the Program. Th ese courses cover such areas as mana- interactive session moderators. Th e combination of gerial and fi nancial accounting, fi nance, tax and written and interactive assessments provides both auditing, which are part of the typical accounting evaluation and feedback to candidates. Th is feedback, stream. Th e requirements also include a variety along with regular assessment of the candidates’ work of non-accounting and fi nance business courses experience, is part of their ongoing professional and designed to broaden students’ knowledge base. Th is personal development in the program. breadth of knowledge forms a foundation for the SLP

CMA CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia news | 27

p27-29_SLPDiary_Summer09.indd 27 7/16/09 2:27:05 PM and allows students to apply strategic management To enter the program, candidates skills to all areas of their workplace, rather than just must have a university degree or in the accounting offi ce. To enter the SLP, students must also pass a national an equivalent in relevant work entrance exam, which tests their knowledge of the experience and education (degree material in the CMA syllabus. Candidates at certain waiver). They must also have post-secondary institutions accredited by CMA acquired a knowledge base, typically Canada may be exempted from the national entrance exam if they meet the minimum grade/course require- by taking 16 or more related courses ments during their undergraduate degree. at a college or university, or through the CMA Accelerated Program. SLP changes Th e SLP has undergone several recent changes to its program structure and curriculum, including: learned – i.e. as educational elements. Th e compe- • Increased focus on individual knowledge and tency map reframed them as a set of skills and skills, especially in the fi rst year. behaviours a CMA can bring to the workplace and • Increased technical content (functional skills) contribute to the success of any organization. built into the program. The competencies include both functional and • Elimination of day two of the entrance exam – enabling areas. Functional competencies include this was replaced with a case exam taken after strategic management, risk management and gov- the fi rst year of the SLP. ernance, performance management, performance • Change in grading of the board report from a measurement, fi nancial resource management and blended mark to a must-pass fi nal evaluation. fi nancial reporting. Four enabling competencies were identified: problem-solving and decision-making; Also, the names Development Phase and Application leadership and group dynamics; professionalism and Phase have been applied to the fi rst and second ethical behaviour; and communication. years of the SLP, respectively. Th e concept behind Th e new SLP program, while bearing many simi- the name changes is that “Development Phase” more larities to the previous version, was designed to accurately describes the stage where candidates incorporate and blend these 10 areas of competence. build the skills in integrating technical and analytical Th e goal was to incorporate the technical components components that are tested in the case exam, while (functional competencies) more intensively into the “Application Phase” describes applying these skills program, particularly in the fi rst year, with increas- in team settings more practically to the workplace. ing focus on strategy, teamwork, professionalism and Th e Application Phase skills are then tested in the communication in the second year. Th e case exam and board report. board report changes were intended to increase the overall rigour of the program. Reasons for changes to the SLP All of the functional and enabling areas are developed, Th e introduction of the new national CMA compe- demonstrated and evaluated in the SLP and are core to tency map in 2006 was the main reason for the the CMA professional identity and skill set. While the changes to the SLP. Th is map provided a more struc- SLP will continue to evolve based on employer and tured approach to the knowledge and skill profi le of candidate feedback, as well as analysis of current results, the graduating CMA candidate. Prior to 2006 the it will remain the essential process in the formation of competencies were defi ned mainly as topics to be the CMA – today and in the future. ■

p27-29_SLPDiary_Summer09.indd 28 7/16/09 2:27:05 PM Diary of a CMA in training The journey continues: module two and beyond

By Geoff Bryant, Candidate in the CMA Program

he transition from module one to module One exercise I found particularly helpful was two of the CMA Strategic Leadership working through the practice case exam as a group. Program (SLP) had us analyzing strategic My group split into two smaller groups, wrote out our and operational issues at an increased level case fi ndings and then exchanged answers. One lesson ofT depth. Assignments are increasingly complex and I learn at every SLP class is that each class member has test our critical-thinking skills, as multiple decisions diff erent ideas that add value to the overall analysis need to be made during analysis. Module two also from beginning to end. Th e diff erent perspectives and introduces candidates to real-life problem-solving approaches to problem-solving are a key take-away scenarios that focus on the functional competencies for me, especially as everyone in the SLP program is of the SLP program. at diff erent career stages and has diff erent skill sets. By working as a team, those who struggled in certain areas Module two assignments benefi t from the knowledge and experience of others. Module two began with an assignment involving capital Case study analysis, at the level expected in the investment decision-making and how it can aff ect SLP program, does not come overnight. Each module, compensation plans and performance-measurement and the corresponding assignments, allows us to build systems. We had the opportunity to apply capital upon existing and newly acquired skills as we apply budgeting (investment appraisal) methods such as the structured case approach to business cases and net present value, internal control analysis, fi nancial prepare for the case exam. reporting classifi cation and presentation, as well as other concepts related to the CMA competency map. Application of SLP concepts Another module two assignment was an online Year one of the SLP program doesn’t focus on one group discussion on approaching and implementing particular skill or emphasize one particular concept. strategy, during which everyone had the opportunity Th e assignments are designed to cover a broad scope to challenge the viewpoints of two renowned authors of accounting, management, strategy and other business on strategy, C.K. Prahalad and Michael E. Porter. issues, requiring candidates to think beyond the facts of During module two we also had our fi rst practice case a case – a problem I had in module one. Th is new way exam, which gave us an idea of what to expect this of thinking transfers easily to the workplace, as it entails August when we write the case exam. looking beyond the initial impact of a decision. I have begun to reassess my work assignments and have found Geoff Bryant is a Junior Interactive session that considering all the short- and long-term eff ects of a Accountant with Océ Th e interactive sessions aff ect candidates in diff erent decision can sometimes change my approach to tasks. Display Graphics Inc., ways. With each assignment comes a higher expecta- As we enter module three, I’ll be focusing on the and is currently a student in the CMA tion and required level of critical thinking about the case analysis areas I need to improve on. I left the Strategic Leadership issues presented. Th e interactive session allows us to interactive session for module two knowing where my Program. He is also a exchange ideas about assignments as we continue to attention should be focused so that I am successful in member of the Update assess where improvements are needed. the case exam this August. ■ Editorial Task Force.

CMA CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia news | 29

p27-29_SLPDiary_Summer09.indd 29 7/16/09 2:27:06 PM Members on the move

ongratulations to these CMA British Columbia members Mehmud Karmali, CMA assumed a who have been promoted or accepted a new career new role earlier this year as a Director C opportunity: of Health Systems Planning for Cardiac Sciences with Fraser Health, allowing him After 38 years as principal of J.R. Berkson to focus on the development of cardiac & Associates, Inc., Jerry Berkson, CMA, care across a large region encompassing FCMA recently merged his practice 12 hospitals. Mehmud previously spent with Entrust LLP, Chartered Accountants almost four years working as a Director (www.entrustcas.com), a mid-size public of Acute Programs at Royal Columbian practice serving Metro Vancouver and Fort Hospital. St. John. Jerry specializes in accounting, auditing, assurance, income tax compli- Serguei Kotlikov, CMA recently joined HSBC Bank Canada as ance, partnerships, estates, trusts and corporate restructuring. Assistant Vice President, Tax. Prior to joining HSBC, Serguei was a Senior Tax Manager with the Vancouver offi ce of Ernst & Karilyn Bolton, CMA has joined the City of Quesnel as Director Young LLP. of Finance. Prior to taking this position, Karilyn was a corporate accountant with West Fraser Mills Ltd. Ron Matthews, CMA recently joined Avantage Partners as a consultant. Gerald Chang, candidate in the CMA Avantage assists its clients in achieving a Executive Program, recently joined “connected business” by bringing together ImmunoPrecise Antibodies Ltd. as Chief the right technology and management Financial Offi cer. ImmunoPrecise, a practices to streamline their operations. Victoria-based company that has grown Prior to joining Avantage, Ron was signifi cantly in the past fi ve years, designs Director, Business Solutions at Visiphor Corporation. and develops antibodies for some of the world’s most renowned universities, Gregory Nesbitt, CMA recently joined the research facilities and pharmaceutical companies. Gerald will Treasury Board of Canada Secretariat as a be part of the executive team overseeing growth and expansion Senior Analyst. Prior to joining the Treasury strategies for ImmunoPrecise. Previously, Gerald was Manager of Board, Gregory was an Internal Auditor Corporate Development for one of B.C.’s largest privately owned with the Interior Health Authority. corporations. Lisa Lak, CMA is now Financial Controller Rachel Cuthbert, CMA has taken on a new role as Business at PPC Worldwide Canada EAP Services Intelligence Analyst at Aritzia, following a recent successful Ltd. Before moving to PPC Worldwide, Lisa was a Senior Project SAP implementation. As part of the business intelligence team Business Analyst with Fluor Canada Ltd. for internal reporting, Rachel will maintain a close relationship with business operations to ensure informational requirements Connie Lee, CMA has moved back to are clearly understood and delivered. Most recently Rachel was a B.C. from the U.S. Connie is now an product planner at Aritzia. Assistant Vice President for HSBC Bank Canada, heading up planning and analysis. Daisy-Lee Fitzgerald, CMA has moved from Port Metro Vancouver Previously, Connie was on a four-year to the Chief Financial Offi cer Branch of Human Resources and Skills international assignment with HSBC Bank Development Canada. She is now Head of Accounting Operations USA, where she implemented information at the Vancouver offi ce. delivery for a global fi nancial platform.

Doris Good, CMA has taken on a new Stuart Mah, CMA recently joined the role with the provincial government University of British Columbia in the and is now Training Coordinator for Enrollment Services/Student Develop- the Consumer Taxation Audit Branch ment & Student Services department. of the Ministry of Finance. Previously Doris was an auditor with the Consumer Donna Porter, CMA has taken on the role Taxation Audit Branch of the Ministry of Director, Accountability and Reporting of Finance. with the Ministry of Advanced Education

CMA 30 | news CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p30-31_MembersMove_Summer09.indd 30 7/23/09 12:16:13 PM and Labour Market Development. Previously, she was a Manager Lynn Wise, CMA has taken on a new role in the Customer Service and Information Branch of the Ministry at Ritchie Bros. Auctioneers as Director, of Finance. Operational Accounting. Lynn previously held the positions of Senior Manager, Patrick Seeley, CMA joined the B.C. Liquor Distribution Branch as Operational Accounting and Controller, Director, Internal Audit. Previously Patrick was working as an indepen- Canadian Operations with Ritchie Bros., dent consultant providing risk management advisory services. the world’s largest auction company for industrial assets. ■ David Splett, CMA has relocated to Lima, Peru and is now Vice President, Finance and Administration with Compania Minera Have you recently moved to a new company, or would you like to Antamina SA. Before moving to Peru, David was Director, Investor welcome a new CMA to your company? Submissions to Members on Relations with Teck in Vancouver. the Move can be emailed to Tiana Mah at [email protected]. New and returning members Member in memoriam We wish to extend our sympathies to family of CMA British Columbia and friends of the following member who recently passed away: Welcome to these new members of CMA British Columbia: William (Bill) Frederick MacDonald, CMA Harvey Watson Walker, CMA has retired to Qualicum Beach, B.C. Previously Harvey was with the Government of Alberta Department of Energy for 26 years in a Bill started his fi nancial career in 1962 as variety of fi nancial and audit roles. His most recent position was Executive Director Controller/Manager of Materials for Dahmer Steel in Kitchener, Ontario, and received of Finance. his RIA designation one year later. In 1976 he moved to Lear Siegler Industries, where Grace Li, CMA is a Financial Analyst with Star Group Limited in Hunghom, Hong he took on the role of Assistant Controller. Kong. Grace was formerly a Financial Analyst with Petro-Canada in Ontario. In 1982 he joined Apex Metals Limited as Controller/Vice-President, where he remained Prior to moving to Victoria, B.C., Leo Gauthier, CMA was Regional Manager, Financial until retirement in 1989. A supporter of Management with Public Works and Government Services Canada in Edmonton, CMA BC, Bill was a chapter director, and Alberta. Leo is now Senior Financial Analyst, Engineering Assets with Public Works chapter chairman for the Grand River chapter in Victoria. in Kitchener from 1962 to 1968. It is with sadness we report that Bill passed away on April 29, 2009. If you would like to Beverly Engele, CMA is now enjoying retirement in Surrey, B.C. Previously send a note of condolence to Bill’s family and Beverly was Vice President, Finance and Operations with the Lung Association of friends, contact Rick Lightheart, CMA, FCMA Saskatchewan, where she worked for 20 years. at 604-484-7004; 1-800-663-9646, ext. 7004; or [email protected].

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Leading the way! Jerome Berkson, CMA, FCMA Entrust is pleased to announce Jerome Berkson has joined our team as Senior Principal.

Contact Jerome for our professional value added solutions to meet your organization’s accounting, tax and auditing needs.

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CMA CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia news | 31

p30-31_MembersMove_Summer09.indd 31 7/23/09 12:16:17 PM 2009 CMA British Columbia Members Conference

his year’s sold-out third annual Members Conference (May 26-27) brought over 350 members, CMA students and candidates and business professionals together for two days of networking and sharing best Tpractices on how to manage in today’s challenging economy. Th irteen diff erent professional development workshops were available, with topics ranging from change management and leadership to IFRS, risk management and governance, Excel, systems implementation, carbon reporting and crafting strategy. Keynote speakers included Mia Maki, CMA, FCMA, chair of the CMA British Columbia Board of Directors; Michael Campbell, business analyst, author and host of Money Talks; Andrea Southcott, President of TBWA Vancouver; and Michael Kerr, “workplace energizer.” Mark your calendars today for next year’s conference May 18-19, 2010 at the Hilton Metrotown in Burnaby, B.C. Further details will be available later this year on 1 cmabc.com and in Update magazine.

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1. Ken Puls, CMA leading the Excel: Spreadsheets That Last workshop. 2-3. Conference attendees engaging in group discussions at the leadership wake-up call and IFRS workshops. 4. Networking at the wine-tasting reception May 26. 5. A display promoting conference sponsor Thompson Rivers University. 6. Keynote speaker Michael Campbell. 7. Conference sponsor Robert Half International’s booth at the conference. 7

CMA 32 | news CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p32-33_CMANews_Summer09.indd 32 7/23/09 12:17:16 PM 8. Crafting Strategy in Uncertain Times presenters Katie Wyka and David Gibbons. 9. “Workplace energizer” Michael Kerr, May 27 luncheon keynote speaker. 10. Practising a happy dance with 8 Michael Kerr.

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11. Ron Matthews, CMA presenting the workshop Change Management in the 21st Century. 12. Social media expert Shane Gibson leading the 360 Degrees of ROI workshop. 13. Meryle Corbett, CMA, FCMA moderating a panel on systems implementation: Survivor Strategies for Small Businesses During Diffi cult Economic Times.

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CMA CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia news | 33

p32-33_CMANews_Summer09.indd 33 7/23/09 12:17:24 PM CMA sponsorships and events

Junior Achievement of B.C. CMA British Columbia sponsors a number of events that support the business community and the development of future business leaders. Most recently the Society was a supporting sponsor of Junior Achievement of B.C.’s student awards. Junior Achievement is a not-for-profi t organization dedicated to educating young people about business. Junior Achievement delivers a number of business education programs to youth in elementary, middle and high school. Members interested in volunteering can fi nd out more at www.jabc.org. Wendy Ming, recipient of the 2009 Junior Achievement Award for Excellence and Leadership (left) with Shannon Thompson, Senior Manager, Marketing. BIV Colour Series Business in Vancouver Newsgroup’s Colour Series brings together business leaders focused on profi t- ability, sustainability, investment and philanthropy. CMA British Columbia is a sponsor of this year’s series and recently attended the Green event (June 11), which focused on sustainability. Don’t miss the remaining two events, which feature keynote speakers Discussing and listening to Leadership 2.0, a presentation by professional on business investment (September 24, 2009) and speaker, author and marketing strategist Shane Gibson June 18. philanthropy (December 2009). For more information on the Colour Series visit: www.biv.com. CMA Executive Tour Keynote speakers Shane Gibson Th is spring and summer CMA British Columbia (left; Leadership 2.0) and Saul Klein (right; Globalization in hosted events around the province. Together with Turbulent Times). local chapter executive boards the Society organizes an annual Executive Tour, which recognizes members who have held their CMA designation for 25, 30, 35, 40, 45, 50 and 55 years. A list of all members recognized at this year’s events will be published in the fall 2009 issue of Update. Afternoon with a CMA In June an Afternoon with a CMA event took place at the Royal Canadian Mounted Police (RCMP) headquar- ters in Vancouver. CMA British Columbia would like to thank Max Xiao, CMA of the RCMP for helping to organize the afternoon. Th ese events allow students Networking at the May 5 CMA Executive Learning Series event. interested in the CMA designation to meet with CMAs at their workplaces, network and ask questions about CMA Executive Learning Series careers in accounting, fi nance and management. Th e Executive Learning Series hosted by the CMA Executive Program features guest speakers from the business and academic communities. Th is past spring two learning series events were held. In May Saul Klein, Lansdowne Professor of International Business at the New Elite Employers University of Victoria, spoke on globalization in turbulent times, and how CMA British Columbia would business leaders need to re-examine emerging markets. In June, Shane Gibson, like to welcome Imperial President (North America) of Knowledge Brokers International, presented Parking Corporation (Impark) Leadership 2.0, focusing on leading and collaborating with stakeholders and to the CMA Elite Employer employees in a digitally connected marketplace. Program.

CMA 34 | news CMA UPDATE | SUMMER 2009 | Certified Management Accountants | British Columbia

p34_-35Events_ChptrProf_Summer09.indd 34 7/16/09 2:34:04 PM Chapter profi le Victoria Chapter

Holly Lodto, CMA, Victoria Chapter Chair Manager of General Ledger and Reporting, Vancouver Island Health Authority

MA British Columbia chapters What are some of the upcoming development venues has been the major are an essential link in the chapter initiatives you have focus of the chapter. Society’s relationship with planned for 2009? I would like to see the chapter become its members and the local A survey conducted at the holiday social more involved in promoting volunteer Ccommunity. For each chapter, an executive showed members wanted more venues for opportunities. A positive contribution committee of CMAs is responsible networking, more professional development from CMAs to their local communities for organizing and promoting activi- opportunities and improved communica- is one of the best advertisements for the ties to encourage member involvement, tions. As a result we have now instituted designation. networking and professional development after-work mingles in addition to our I would also like to see our chapter throughout the year. popular networking breakfasts. We are develop a “bank” of local CMAs who enjoy To recognize the eff orts of these commit- also organizing an advanced Excel course, a public speaking and who would be willing tees and learn about their upcoming initiatives, networking skills workshop and a confl ict- to speak at other organizations’ events. Update spoke with Holly Lodto, CMA – resolution workshop for members. chair of the Victoria Chapter. Why did you decide to become a CMA? Can you give us a brief I happened to meet a very description of your role knowledgeable and professional as a chapter chair? individual who introduced me to As the Victoria Chapter has 17 the CMA designation (thank you hard-working and dedicated Betty Weber, CMA). Th e CMA directors on its board, my main Accelerated Program and SLP role is to organize meetings, were also the most direct and prepare agendas and coordinate cost-effi cient route towards an chapter initiatives. accounting designation. It also allowed me to do the accounting What are some of the work I enjoyed rather than article challenges you face in for an accounting fi rm. Nicole Beach, CMA, Jarra Ford, CMA and Debbie Kulesh, CMA – all of the Victoria Chapter? the Victoria chapter – at a joint FMI-CGA-CMA professional develop- One of our biggest sources of ment event with keynote speaker Bernie Magnan, CMA, FCMA. Why did you choose to get funding is the proceeds of an involved with the Society annual three-day joint FMI-CGA-CMA Lastly, the board has also started posting at a chapter level? professional development event. With the meeting minutes to the CMA BC website Th e people are the most rewarding part of current economic challenges, we anticipate to further improve communications among being active with the chapter. I fi nd the depth reduced professional development funding members. and breadth of knowledge, and experience, from employers and are actively seeking of our members fascinating and inspiring. sponsors to help defray costs. Th is event is What are you doing in your Not surprisingly, this is the reason an ideal opportunity for sponsors to reach market to support growth and I became involved. I knew the greatest out to over 100 professional accountants brand awareness? strength of the designation lay within per day. We are also always on the lookout Not enough. Because CMAs are primarily CMAs themselves. I was interested in for speakers. owners, employees or consultants to fi nding ways to help CMAs connect with Finding meeting space and organizing various organizations (rather than in public one another. ■ the growing numbers of networking events practice), networking with other CMAs is the chapter hosts have produced their own key to developing personal career goals If you’re interested in getting involved with challenges, but these fl ow out of our success and building new business relationships. the Victoria Chapter, please email Holly in creating an active chapter. Creating networking and professional Lodto at [email protected].

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