I actually enjoy doing different parts of my current work, doing cash recon and estimating depreciating expense is quite enjoyable.
Finished with my part of the work and helping senior with vouching...not so fun. My eczema fingers cracked after touching 12 months worth of sales invoices....not to mention a backache after plouging through papers for a day.
BUT, as i've promised to myself, i shall OPEN my eyes when doing the most mundane of jobs...today i learnt the true cost of a pack of a certain product, and a whole host of expense one must incur to start up a new office!
sadly i've forgotten what i've learnt in AFA on forex! Shall go revise on it this week, if not 对不起 prof. haha.
BTW....Buffett and his $200bn blunder...unheard of? Read on...
Nope, this is not about the Beyonce song, this is about a book that i recently read. It is called "The Halo Effect", click on the link for a summary of the main points. Essentially, the Halo effect is the effect that people tend to project the perception of one trait on all the other traits. For instance, if I think that a person is really really good at singing, I'll tend to rate his ability for presentation or something as unrelated as cooking, as higher than average (even if real objective performance measurement will disprove it).
I think we rely on this heuristic a little too much on daily life. have you met those parents who obviously favor one child over another? Whatever the favored child does is cute/funny/brilliant; whatever the other child does is dull/gross/stupid even if they are doing exactly the same thing...like singing in the train....hahaha...(who does that? definitely not me...)
This works in hand with Cialdini's Liking Principle to create huge biases effects on the way we view performance and allocating attributes to someone.
The following video is a summary of Cialdini's 6 points of influence.
On Incentives, Fees, Pricing, Competitive Pressure
A cost plus model is really a very weird model to pricing, yet this is used frequently in many industries. For instance, if my cost is 100 and I'd like to make a 50% markup, my selling price will be 150. Many in the professional line of business does a cost plus concept, e.g. if a lawyer bill by the hour, he is essentially saying my one hour costs X amount and you shall pay me X+y%.
However, this creates perverse incentives for people to inflate their costs. If i bill by the hour, do you think i'll resolve issues as quickly as possible or as slowly as possible?
A cost plus is also bad for the service provider for he will not be attentive to upward cost pressure and downward pricing pressure if a competitor can offer the same thing for a lesser fee. In a cost plus world, there could be a disconnect between what the buyer thinks the value is and what the seller wants to charge. In a fast growing world where there are loads unmet needs, cost-plus pricing provider may easily pass on costs to buyers.
For the accounting profession, as labor and harmonisation of accounting standards be more common, the numbers of qualified supplier of accounting related service has increased. The market demand is a slow growing one. And intensity of competition within the existing players has always been high. The means lower margins for low value added projects or engagements that the client does not value.
Possible solutions to maintain high profits include employing greater leverage (ie higher junior to senior staff mix), hiring people with lower salary and invest in them to bring them up to par to international standards, provide higher value added jobs (e.g. audit + tax computation as lower margin , process re-engineering, risk management, HR & IT solutions support as value added services).
I think it will be hilarious for any professional service firm that seeks to sell "best in class" solutions to clients to think that they can ignore the prevailing wind of market forces and not practice what it preaches.
Over the past month, managed to catch up with some old friends and I'm really impressed with their achievements. One friend chose a low paying - high job satisfaction job at ACRES, an animal welfare organisation, and another is starting a social entrepreneurship program in the Philippines. I salute their selflessness and devotion in improving the welfare of others.
Many has started work, yet i felt that there's only 2 engineer friends who are happy at what they are doing. Others enjoy the work itself, but has less than collegial colleagues. Yet others have boring unsatisfactory job but great company at work. And those who are happy at work felt a little underpaid. haha, perhaps labour market is pretty efficient. or humans just prefer to be unhappy.
David Maister changed the way I think about professionalism, the accounting profession and how a manager/employee/partner should manage oneself and others at work.
Perspective on Careers 1. The cold, hard, truth is that you’ve got to look after yourself. 2. You can’t assume that anyone is really looking out for your best interests (in spite of what they may say.) 3. There may be a human resources department in your firm, managers, coaches and a mentoring system. But don’t get fooled. Your career is up to you and you alone. 4. No one will tell you what experience you should be obtaining, let alone help you get it. 5. If you want a specific experience, ask for it. 6. Better yet, just go grab it. 7. Do not expect that you will be promoted because you deserve it - it is unlikely that anyone is really keeping track. 8. If you want to be promoted, ask to be promoted. 9. Generally, things do not come to those who do not ask for them. 10. None of this means you should be rude, disrespectful to others, or fail to be a team player. It just means don’t be naïve. 11. In spite of what they may say, it’s up to you. You’re on your own, kid. 12. Manage your own career. No one else will.
Anyone disagree that this is both the right philosophy to have and the cold, hard reality?
We always wonder which career path should we embark on. But this is an issue that confronts most people. See how Maister himself started his career as a Statistician and ended up as one of the most important consultants to professional firms. Read on.
Finally going start work in slightly more than a week's time. Will see how I score on my personal scorecard over the next few years.
BusinessWeek called Peter Druker "the man who invented management". And while reading the book 'The Drucker Lectures', I'm just amazed at the breath and depth of the various topics Drucker lectured on. From philosophy to economics to sociology, he seamlessly integrated knowledge from different fields and sought to bring about greater efficiency for managers and in some cases, tried to lay out a roadmap for others to travel on.
Druker coined the term "Knowledge Worker", and his series of lectures on knowledge is extremely relevant especially to Singapore. We have no natural resources to export, we have little low end manufacturing in Singapore, so all that we are left with is the so called knowledge-based economy. Play around on this animation and you'll see the value and productivity of different industry in Singapore.
But what is knowledge? Druker first talked about information. He said that we are in an age (1986) of people drowning in data, not information. And we will have to learn that more is less, and that data is not information. And information is something that has to be selected. "Information is something that is pertinent to the task that can be converted into knowledge. And knowledge is information in action. One has to learn this."
With this growth in information, we will have many fewer layers of management and many more specialist. He drew on the analogy of a large symphony orchestra, where the triangle player has no ambition to become a bassoonist, and none to become first violin. And looking at university size, he lamented that with the growth in student population, sooner or later there'll be need for more vice president than student. It will be interesting to review the staff to faculty to student ratio in Singapore over the last 20 years.
Drucker drew on all branches of learning that he could. He said, "Every three or four years I pick a new subject. It may be Japanese art; it may be economics. Three years of study are by no means enough to master a subject but they are enough to understand it. SO for more than 60 years I have kept studying one subject at a time. That not only has given me a substantial fund of knowledge. It has also forced me to be open to new disciplines and new approaches and new methods--for every one of the subjects I have studied makes different assumptions and employs a different methodology."
His ability to bring knowledge and wisdom down from academic stratosphere into the nuts and bolts of what should be done is astonishing. He probably lived his life to the Confucius words: 博学之，审问之，慎思之，明辨之，笃行之。
Just finished this amazing book called 13 Bankers. It discusses finance in a political setting. Essentially the struggle between pure laissez-faire economic system versus a tightly regulated banking system. It also discusses the regulation of banks from a historical perspective, and how the US achieved the lowest bank default rate post depression all the way till 1980s early.
It reminds me of my Accounting Theory course, where accounting standards setting is shown to be a political process. For instance, who gets the benefit of accounting for booking profit early say for a construction project? and can the people who benefits influence accounting standards?
Looking at Singapore's Accounting Standards Council board, it seems to me like a pretty balanced representation of different sectors in Singapore, but is everyone there as qualified as others to make accounting recommendations or does any member has great influence over others?
Also, a standard that is perhaps good for the stability of Singapore, for instance super conservative loan loss provision and prohibition of complex levered derivatives products, could mean that Singapore banks may not be able to compete effectively on an international arena. Furthermore, conservative accounting would usually lead to a lower earnings figure (relative to capital) compared to competitors, will this then lead to higher cost of capital which have a real economic impact on the competitiveness of our banks?
13 Bankers is an amazing book that strikes a balanced path in providing an end-of-book suggestion to such issues.
