I finished up my essays to get course credit for my internship yesterday! Woohoo, about 22 pages of accounting-ness. I feel bad for the professor who has to grade all of these.

I haven’t cracked a CPA book yet, but after the comments on my last blog post, I thought I would look into getting some CPA review software. I know that when I was studying for GMAT, having a good electronic simulation of a practice test really helped me prepare for the real thing.

The review software I can find is all in the range of $1,500 to $2,000 though. Becker made me a little angry because they don’t list their prices anywhere. You try to click through and they ask you for your name and billing information without showing you a price tag anywhere. I think I saw once that they are over $4,000 though, so if they won’t display it on their website, that’s the number I’m going with for comparison purposes.

So I’m still undecided on whether I need software. I might just get some 2009 books instead. Any comments?

So, as I begin preparing to take the CPA exam, I’m making an assessment of what CPA review materials I can get for free, and what I still need to get.

Lucky for me, a family friend gave me this whole box of books for free! I almost couldn’t even carry these books up to my room. I’m small, but there are still a lot of pages of study material in this box:

The dates of the books range from 2004 to 2008. I know that the CPA exam changes a little each year, but I’m guessing the majority of what’s in these books will be good study materials. Looks like I’ve got Becker, Wiley, and Gleims in my big box. Now I just need to figure out what has changed on the exam since these books were published!

I mentioned a couple of weeks ago that I picked XBRL (eXtensible Business Reporting Language) as an essay topic. In order to get course credit for my internship, I have to write a 15-page “Issues and Solutions” essay about, well, and issue I encountered during my internship, and the solution to that issue.

I have completed most of the research I need to write the essay. Essentially, I’m addressing the issue of spending time re-formatting financial data to be able to analyze it for audit tests. My solution is XBRL, but honestly, the benefits XBRL will provide go far beyond solving the issue I saw. This post is intended to be an explanation of XBRL, and also an exercise for myself to make sure I feel confident about how to define the concept.

XBRL is a tagging system, that together makes up a language. Each little piece of data that goes into a financial statement is electronically “tagged” with a label that defines what type of data it is.

Think about how tags we already use online: tags on blog posts can help you instantly pull up all of the posts that mention an issue you’re interested in. Using a common hash tag on twitter (example #sxsw) can make it easy for interested people to find all of the tweets about a certain topic.

My first reaction to what I read about XBRL was confusion about why we haven’t been using this for years. The technology involved is not exactly cutting edge, and there are so many benefits that it seems silly not to be using it.

I think that the main roadblock was getting XBRL coordinated and accepted by enough people. Of course, Twitter tags are much more useful when everyone tweeting about a particular event or topic makes an effort to use one common tag. Similarly, everyone using XBRL has to use the same tags for the same data to make full use of XBRL’s capabilities.

That’s why an XBRL taxonomy has to be developed. It is like a dictionary of tags, and defines all the tags that should be used for each particular type of data. The now-released US GAAP taxonomy has over 13,000 tags in it! What a way to demonstrate the complexity of financial statements!

So, okay, I guess there are some reasons behind why XBRL took so long to make it this far. And how far is it? Well in December, the SEC passed a ruling requiring that public companies with a market cap of $5 billion or more must file XBRL financial reports for fiscal periods ending on or after June 15, 2009. These reports will not be audited, and will be issued in additional to traditional audited financial statements. Smaller public companies will have to begin filing with XBRL in the near future too.

My main conclusion though, after all my research, is that external reporting is just a small part of what XBRL can be used for. Rather than waiting for the SEC to require the switch, companies should be jumping to use XBRL as soon as possible, so that they can begin taking advantage of the internal uses of XBRL before their competitors do. Also, when they are required to begin using it, they will have more expertise than their peers, and may even find themselves in a position to consult with other companies about how to successfully manage the process!

Credit: sxc.hu/hvaldez1

At my university, all undergraduate business majors are required to take two introductory accounting classes, one in financial accounting and one in managerial accounting. I have worked as a tutor for both of these classes for about 4 semesters now, and it is the best student job I’ve ever had.

Tutoring accounting is a great part-time job to have as a student. It is interesting to work with so many students, rewarding to help them, and pays pretty well. I mostly worked through my university’s Academic Enhancement office, which provides the services free to students, so does not pay tutors exceptionally well. However, I also tutored privately and charged about $15 an hour, which is better pay than most part-time student jobs in this area.

Just because you are a good accounting student does not mean you will be a good tutor. I was lucky to get started tutoring through my university. They provide some training, and you are seen as more legitimate to the students you tutor.

Tips for Tutoring Accounting

A lot of tutoring is really explaining the same concept several different ways. When I tutor accounting, I’ll use algebra, pictures, examples . . . basically, the professor can only explain it one way. Your job is to explain it in a different way, and chances are, one of the ways will work better.

Keep in mind, just because you hit on an explanation that works really well for your student, that doesn’t mean it’ll make sense to everyone. (Although I would still try it out, if it really helped clear up a concept for someone.)

Sometimes, you don’t even need to explain it differently than their professor did. With one of the classes I tutor, I will go over the same examples their professor already showed them in class, but since I can move slower and give them a chance to ask questions, they can then follow the problem much easier than in a lecture.

Getting Started in Tutoring Accounting

Before you start charging students for your tutoring services, try tutoring accounting for free to a friend or two, especially in their first week of financial accounting when they don’t understand what a t-account or an asset is. You may find it hard at first to explain it to them in a way they understand. Eventually, through attempting to explain it, you’ll figure out how to make it make more sense.