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Helping Canadian businesses beat the odds!
Hi, I’m with the Zach button from spurl and associates and what we’re talking about today is how to know if your account is a CPA. So Zach, thanks for being here today. Thank you for inviting me. Right on. So Zach, tell me about your journey here to the firm. You’ve, Edmonton CPA, you’ve been going to grant Macewan just to vote on your four year degree, one course away or soul or. Yeah, a couple of courses away from finishing off my a commerce degree and majoring in accounting and hopefully going into that CPA program as soon as I can. Right on. Right on. So you’re well on your way to becoming a, a CPA. Yeah, exactly right on. So what I want to introduce versus is uh, you know, our, our main success statistic that we bring up a lot is, you know, 50 percent of all businesses fail within five years.
Another statistic that I like to bring forward, they’ll is 82 percent of business owners with score less than 70 percent on a basic financial literacy tests. And reasonably no, this is intuit the makers of quickbooks. They actually tested business owners on very basic items, you know, what’s involved in the balance sheet, what’s an accrual, how to improve cash flow, and 82 percent of business owners got a score of 70 percent or less. Uh, so knowing if your accountant as a CPA know it’s, it’s really important to actually because you’re going to rely on that person to make business decisions. And I think that failure rate is tied to the, you know, the financial literacy and the quality of the, Edmonton CPA the advice that you’re getting. And a quote that I’d like to bring up is, you know, if you think if it’s expensive to hire a professional, wait to see how much it costs to hire an amateur.
And the guy who said that was a red adair and it’s interesting, I had to look that up because I have heard that quote a long time and I was like, well, who actually said that? Right? Uh, this guy specializes in extinguishing and capping oil wells when they’re on fire. Now, Edmonton CPA I’m sure you could probably get a regular firefighter in there. And they could, you know, capital well eventually, but, you know, think of how much oil and how much resources we literally burned up before you actually got the job done. Um, you know, the story that I get to, you know, unfortunately this isn’t an anomaly, but you know, recently we had a client who came in, uh, they had an undesignated account and they thought Cra owed them $23,000 in tax. They thought they were in line for a refund of $23,000. Now unfortunately when they got started getting notices from Cra St, we need you to pay $23,000. And their bookkeeper picked it up that it was an anomaly. The referral came in. The unfortunate story is the client actually does owe $23,000 in taxes. But he had no idea because the accountant actually made, made incorrect entries, was an undesignated accounts. Is there specific questions that you think people out there, you know, I really don’t understand. Edmonton CPA They really need to know in order to go through this process and understand a is my accountant didn’t fit, um, maintain as consultant without a professional designation start their own
Yeah. And that’s the thing that people don’t understand the law is, is they actually can, you can just literally hang out a shingle tomorrow and say I am an accountant now. You can’t call yourself a chartered accountant or a chartered professional accountant, but you can call yourself so and so you Smith and associates or, or a Johnson and company and you put up a nice fancy letterhead and you know, you build out the office and all of a sudden, Edmonton CPA you know, I have an accounting firm. And unfortunately what happens is the average person doesn’t always realize, you know, when they go into business and they walk into someone’s office is, is this person actually a, a chartered professional accountant? Edmonton CPA they just make the assumption that thing must be because there must be a rule in place one. Unfortunately, as long as you don’t call yourself a CPA or a charter professional accountant, you can start up your own accounting firm. And a lot of people get unfortunately lolled into that false sense of security that their accountant really as a CPA.
Yeah. Oh, I know personally, it’s always been a question and I know everyone that’s in school and everything is always wondering how long it does actually take to become a Edmonton CPA.
So it’s about a seven year process. Start to finish, you know, assuming you complete everything all the way through and go through as quickly as possible. So there’s really, the first component is your undergraduate degree. So you have to have a university degree. You, this is the conventional path. There is a couple other path, but either way it’s going to take you seven years, but the conventional path, you get a four year university degree and then you’re going to article, uh, at an accounting office for three years. Edmonton CPA So you’re actually going to practice in this. So it’s not just giving the university degree. There’s a four year kind of theoretical bone and three year practical component as well.
Yeah. Just with the. I’m learning everything within the article saying how does that program replicate the difficulties that, that you would experience outside after you’re seeing to get your designation?
Yeah. So, um, so it’s important to understand what’s involved in it too. So, uh, I’ll answer that first one. I’ll go into the, you know, how it replicates it. So what happens is your still doing coursework, the coursework has delivered a little bit differently. It’s not a classroom setting. So Edmonton CPA the coursework that you’re doing is, is online. So really you’re working full time at a job, you know, 40 to 50 hours a week, especially if you’re in tax time and now you’re doing a courses in addition to your regular work. Um, so which is good because you, you, you’re still getting some advanced theoretical knowledge that things that you didn’t get to university, but now you’re actually getting some practical experience in seeing that theoretical knowledge. You’ll put it into place. It’s one thing to learn about how the income tax act is written and how things are supposed to be a calculated.
You know, as you’re seeing, you know, working here, it’s a different story sometimes on how it’s applied from cra and how we actually get to that end result. So it’s one thing and the theory, but how it’s applied. So the, the articling process really it continues on that theoretical knowledge, Edmonton CPA but you’re working full time at an approved training office. And so now how that actually replicates the decision making process is really, it’s a grind that, that’s one of the main things that it replicates is it really is a grind. Um, so, you know, when you’re in school, all you really have to do is study for your tests and will most people when they’re in school, they don’t have a lot of other responsibility, but you know, like life starts to catch up with you and all of a sudden, you know, your responsibilities grow outside of work.
So the CPA program is, is pretty good on, on replicating that because now you have to be, you’re holding down this full time job and you still have to be able to perform on a testing situation on the theoretical knowledge testing situation. Um, so which is very much what it’s like in public practice. It’s not that you can get the right answer on one day on a test where you know it’s prepared to, but you have to be able to get the, you know, the right answers consistently, day after day as clients come in and you really have that time pressures of life and, and public practice weighing on. You still have the CPA program is, Edmonton CPA is pretty good at replicating that real life decision making pressure where you have to be making good decisions under time, pressure consistently day after day. The other thing that the CPA program probably does a little better than the university programs.
This is they’re very case driven. So the, even the tests that they’re asking you, they’re very much, you know, so and so has a business and they have these scenarios, you know, what’s the, the items that they should be concerned with rather in a university testing situation. Normally it’s asking you a specific question on one issue, not showing you a case and asking you to do. I said all of the issues and asked you to prioritize the issues as well too. So, uh, I think that’s where it does a good job in replicating the decision making process with all of the art claim and school and everything. Like you talked about just there. What is the password? Yeah, it, it’s, Edmonton CPA, I don’t think, uh, you know, the old ca program and the new CPA prep, I don’t think they actually care to the, that the pass rate.
I think it would be lower than everybody. Everybody expects a, you, you can get the details on the, on the exams for example, I’m on module one, module two because these guys are going through different modules over the three years and they’ll show you the passive failure rate for those. But Edmonton CPA what was really that question is how many people graduate with an accounting degree and get all the way to the end with a CPA. A, that’s a little bit difficult to trace through the stats that they actually published. Um, I would suggest that it’s lower than they like to admit. And I would suggest that it’s probably about 50 percent, you know, there’s a whole lot of really smart people who come out of university who just, you know, the, they, they fall victim to that war of attrition now instead of just doing school, they have to do, if they work full time and continue to learn and some people just don’t adjust well to the delivery method to where in university it’s very directed, you know, when you have a professor who sits up at the front of the class and it tells me what to expect and now you, you’re basically giving assignments and some resources and say figure it out and give us an answer with minimal decision making a guidance.
So, um, I, I would suggest that although it’s not, you know, on an aggregate basis published, it’s only published by model module, Edmonton CPA but in my anecdotal experience I would say it’s about 50 percent. So it’s a tough grind. On another note you also talked about, is your accountant a CPA? How would a non designated for overplay their undergraduate degree? I mean, sometimes you walk into these offices and they have a, their accounting degree, they have their Viacom on the wall and then they say, yeah, I was an accounting major at University of Alberta or, or grant Macewan and the average person sees that and they see the certificate on the wall and they think that’s a, you know, I’m all you need. But I mean, as you know, I found out and then as you’re starting to, to, to find out as you go through the actual application of those, uh, of those rules are our middle school.
It’s only the start of the preparation. Do you know, you’re really not prepared at that point to truly be in that the decision making role. Edmonton CPA, so it, it’s, I, I think they play off different, uh, you know, their Undergrad degree a lot of times as that was the finish point when really that was probably the starting point or, or, you know, maybe the halfway point at most. So I think that’s a, that’s one that people get caught up on. They see the certificate on the wall and they think it’s a CPA. There should be two certificates on the wall for their university degree and one for completion of their CPA. Yeah. With that is do you see a big difference between starting the CPA program and finishing it like instead of the knowledge base there that you mentioned earlier? Yeah. Yeah. And, and that’s one and I feel it’s a little bit, a little bit misleading and I’ve heard people recite that they’ve heard under non-designated accountants saving in the CPA program when really what they mean is they started the CPA program and, and quite honestly they flunked out and Edmonton CPA they’ll play off that experience in the CPA program as if that’s, you know, the be all end all.
But there is a huge difference between starting the CPA program and finishing them CPA program. I go back to, you know, the 50 percent completion rate. So, Edmonton CPA, do you want the person who’s advising you to be the one who flunked out? So just because you start hearing about the CPA program, the real question is, did you finish the CPA program? Are you designated? Is got to be very precise because the differences is leaps and bounds. It’s, you know, the guy who played in the nhl rather than the guy who went and saw any NHL game at point. So I think it’s different with that. How would you be able to tell if you walked into the firm, like, I know you said that the beacon is on the wall and you would look for that CPA, but what are some other quick ways to tell if your firm is CPA?
There’s some formal ways you can go through through the Institute of Chartered Professional Accountants of Alberta, but I would suggest that 99 percent of the time you can get your information you need on Google. So which one to do is you go on Google and you google the firm that you’re thinking about and what you’re looking for are a couple of really key identifiers. So Edmonton CPA first of all, does it say chartered professional accountants? Uh, in the, from name? Um, there’s a couple of other things that you want to look for that are going to denote that this person is designated. Does it say
c, p a,
or see a more. If it says professional corporation, because they’re an accountant and they have a professional corporation, in order to get that professional corporation, they had to provide proof of their professional designation. Edmonton CPA, so you’re, you’re looking for
Ba, CPA, Cga, cma.
Those are the three m. there’s another designation out there that’s called the registered public accountants. That doesn’t count. There’s a reason why when the three designations amalgamated, they didn’t let them in. It was too easy of a test. So there’s only three designations. The old designations that becomes the CPA. So you’re looking forward as the charter professional accountant. Does it state chartered accountant, does it say one of three acronyms, a or for CPA, a Edmonton CPA
Ca, cma, Cga.
Those are the four apps that you’re looking forward to say professional corporation or does it say llp? If it says llp, that will also be a designation of a, you know what it is a professional corporation that have wound up anything else, whether it says and associates or an company. That by itself is not enough. So what you want to be looking for those key words that are after it. And I would say nine times out of 10, you know, that that’s all on there. So. Okay. Is there any possibility that when you set, Edmonton CPA like googling to see where your firm is, could it be your own? Yeah, there is. There is a possibility, but it’s that one percent possibility. It’s that one out of 100. Most people do not work for seven years of the life and devote seven years of my life to become a CPA to only turn around and forget to put it on, on their website.
Accountants are kind of almost a tourist thing, bad and their marketing material sometimes. Uh, but you know, it looks like sometimes they have a website design firm, you know, the 19 eighties video game or something. But even then the guys who would get their designation generally put it on there. Um, so I would say, although it’s possible, it’s not likely. And I think clients expect the otherwise they say they think they look at this website and it’s like, oh, he must have just forgot it was like 99 times out of 100. He didn’t forget it. He, Edmonton CPA he just, he or she does not have that designation and that’s why it’s not on the website and it’s not front and center because if you really devote that time and energy your life, you’re going to put it out there. Yeah, exactly. Yeah. Another question that a bunch of clients could have and a searching around, especially on Google or something, they would look and see.
Do cpas always charged higher than a non graduate accountant? Yeah, that’s a great question. Edmonton CPA I would say for when you look at it on an hour by hour basis, I suppose cpas probably do charge more, but that being said, the fee isn’t always more. We have a um, uh, we have seen other undesignated accounts sometimes when the fall comes into us that they get what I call lost in the weeds. They didn’t truly understand what was significant and what was the less significant. So even though there may maybe billing at a lesser rate per hour, they’re taking so much more time to do things that don’t matter. Or it can be done quickly or it can be estimated reasonably or there’s other means to find out the information. So, uh, it’s not necessarily the case where just because they’re on designated, they’re cheaper, sometimes you’re actually paying more because they just don’t know how to do what they’re doing efficiently.
So they spend more time doing it. You know, I, I tell people my younger years, I want to change the transmission and the truck and I think this is a long time ago when I had a lot more time. I think it took me a month and I’m sure I could have brought that to an accountant or I could have brought that to a car mechanic and he could have done it in a day. Um, but, you know, I eventually did it took me a month. Was that a cost effective solution? No, not likely. Edmonton CPA, so yeah, I mean I think it’s sometimes that’s the case where it takes them longer because of that lack of training. And because of that lack of experience. You touched base on that lack of experience and expertise on, do you believe the accountants expertise has an effect on the amount of tax that you pay?
Um, yeah, I think it has a significant effect. Right? And when you’re looking at a theater that are, I guess the question you need to ask yourself, Zig ziglar such as, are you concerned about price or are you concerned about cost, taxes, a single biggest expense you’re ever going to have in your lifetime? Edmonton CPA as an entrepreneur there’s significant opportunities to save on that tax. So entrepreneurs really need to stop thinking about how much I pay on my counter visa and the almost aggregated with how much am I paying on my accounting fees was how much am I paying a tax. You know, if you have a bad tax plan, which is extremely common from non-designated accountants and let’s say you’re paying an extra $10,000 on tax, but you’re saving $2,000 a year in your county fees, are you really ahead? Or I have, I just actually paid $8,000 more.
So you really have to think about that. You know, on, you know, it’s likely that someone with more experience, if you’re running a business is actually going to be able to save you on taxes, especially if you’re an entrepreneur. And uh, is there, what is, what do you think is the most important when hiring an accountant, even the, even beyond the price and the tax, ultimately it’s the quality information. You have to be able to trust that quality information because as a business owner, uh, you know, investing, you know, Edmonton CPA thousands if not hundreds of thousands of dollars, if not millions of dollars on projects. Edmonton CPA, and you know, even if it’s not a lot of money that you’re investing in, lots of people are investing, sweat equity in there. You’re putting a year or two years of your life, are you making business decisions based on information that’s not reliable, you know, business, there’s no reset button. It’s not a video game. You can’t go back. So you want to have the best information on had to give yourself the best chance to succeed. Thanks very much everybody. We, uh, hope to see your comments below and look forward to addressing any, uh, any comments you have. Future, upcoming video. Thank you.