Technical expertise – just how important is it?

A while ago I met with the CFO of a $150m+ agribusiness and asked him the question …

How important is technical expertise in an accountant?

It’s extremely important.  What you’re paying for is their level of expertise and so they need to be able to give you that right level of expertise for that particular assignment that you’re engaging them in.  It’s the crux of it all.  They need to have the right skill sets to be suited to the particular work assignment at hand.  You don’t want a generalist normally; you want someone who can come in, do the specific assignment that you want them to do, deliver it in the most efficient, effective manner, and then be out again, because that is what you are paying for.

Do clients expect a certain level of expertise and skill when they engage a Big Four accounting firm?

Absolutely, yes.  With one of the larger firms, you do go in with an automatic assumption that they’re very well prepared.  That’s always been my experience.  I’ve never had any difficulties with that.  The issue more is in the level of staffing that they put on a particular engagement, and whether you get the junior who you end up training on the job, or whether you get someone who’s actually pitched at the right level that you need.  If you get the junior you find that they’re having to rework things as they go back to the partner and change things. So often with a larger firm it’s not the quality at the partner level, it’s the quality of the staff that are put onto the assignment and whether their skillset and experience is at the right level.

Enough said.

See you next time,

James E.

Technical expertise – how important?

Recently I met with the CFO of a $200m + agribusiness and asked him the question …

How important is technical expertise in an accountant?

It’s extremely important.  What you’re paying for is their level of expertise and so they need to be able to give you that right level of expertise for that particular assignment that you’re engaging them in.  It’s the crux of it all.  They need to have the right skill sets to be suited to the particular work assignment at hand.  You don’t want a generalist normally; you want someone who can come in, do the specific assignment that you want them to do, deliver it in the most efficient, effective manner, and then be out again, because that is what you are paying for.

Do clients expect a certain level of expertise and skill when they engage a Big Four accounting firm?

Absolutely, yes.  With one of the larger firms, you do go in with an automatic assumption that they’re very well prepared.  That’s always been my experience.  I’ve never had any difficulties with that.  The issue more is in the level of staffing that they put on a particular engagement, and whether you get the junior who you end up training on the job, or whether you get someone who’s actually pitched at the right level that you need.  If you get the junior you find that they’re having to rework things as they go back to the partner and change things. So often with a larger firm it’s not the quality at the partner level, it’s the quality of the staff that are put onto the assignment and whether their skillset and experience is at the right level.

Enough said.

See you next time,

James E.

You don’t know what you’re doing until you’re 31!

A couple of years ago I read a book by Malcolm Gladwell (pictured & the famous author of The Tipping Point & Blink!) titled Outliers.

The book is unusual, thought provoking and definitely worth reading.

One of the themes the book examines that struck me the most, was what Gladwell calls the 10,000 hour rule.
Rather than reinvent the wheel here is an excellent summary I found on the web.

The idea that excellence at performing a complex task requires a critical minimum level of practice surfaces again and again in studies of expertise. In fact, researchers have settled on what they believe is the magic number for true expertise: ten thousand hours.

Even Mozart, the greatest musical prodigy of all time, couldn’t hit his stride until he had his ten thousand hours in. Practice isn’t the thing that you do once you’re good. It’s the thing you do that makes you good.

The other interesting thing about those ten thousand hours, of course, is that ten thousand is an enormous amount of time. It’s all but impossible to reach that number all by yourself by the time you’re a young adult. You have to have parents who encourage, guide and support you. You can’t be poor, because if you have to hold down a part-time job on the side to help make ends meet, there won’t be time left in the day to practice enough. In fact, most people can reach that number only if they get into some kind of special program, or if they get some kind of extraordinary opportunity that gives them a chance to put in those hours.

Is the ten-thousand-hour rule a general rule of success? If we scratch below the surface of every great achiever, do we always find the equivalent of the Michigan Computer Center or the hockey all-star team – some sort of special opportunity for success?

Let’s see the idea with two examples: the Beatles, one of the most famous rock band ever and Bill Gates, one of the world’s richest men. What truly distinguish their histories are not their extraordinary opportunities. The Beatles, for the most random of reasons, got invited to go to Hamburg. Without Hamburg, the Beatles might well have taken a different path. “I was very lucky,” Bill Gates said at the beginning of an interview. That doesn’t mean he isn’t brilliant or an extraordinary entrepreneur. It just means that he understands what incredible good fortune it was to be at Lakeside in 1968.

These outliers were the beneficiaries of some kind of unusual opportunity. Lucky breaks don’t seem like the exception with software billionaires, rock bands and star athletes. They seem to be like the rule. http://www.bizsum.com/2page/b_Outliers.php

So there you have it. Assuming you’re working at something around 20 hours a week for 10 years (which is roughly 10,000 hours) you will more than likely be an “expert”.  So for the professional accountant, lawyer or adviser you really don’t know what you’re doing until your early 30’s.

Controversial or what?! 🙂

See you next post (I hope)

James E

Are technical skills important?

Paul Cramsie, Associate Director (Finance) @ Ward Civil Engineering has a pragmatic response to the question, How important is technical expertise in an accountant?

The short answer is ‘it depends.’  My first instinct is to say it’s the absolute, number one priority.  However, it depends on the type of service being required from the external firm. At Ward the external work we farm out is a rough 50/50 split between audit and “consulting” work.

For example, if I wanted an audit to be performed by an external firm then I would expect a certain level of competence. By and large an audit is a brief, a set of processes, interactions between the audit team and the business and the deliverable of an audit report. With respect to auditors everywhere, a statutory audit is not rocket science so long as the methodology & process is followed.

On the other hand, when it comes to the consulting work, I want the external accountant to tell us things that we don’t know how to do.  In the case of the non-audit work, going to external people for advice, the technical aspect is everything.  That’s what I’m paying for. I want to have complete confidence that that answer that I’m getting is correct.

A lot of accountants I know place way too much emphasis on their technical abilities. Most of the time well developed & honed technical skills are the way to go, however, as you’ll see in future posts, this is not always the case!

Bye for now,

James E