Accounting Update

LONG ISLAND CHAPTER
Institute of
Management Accountants
TM
January 2006
January Meeting - Tuesday, January 10, 2006
The Milleridge Inn - Jericho, NY - NEW TIME: Cocktail Hour 6:00 PM
Accounting Update
Increased Internal Control Regulations - Sarbanes Oxley 404 and recent PCAOB guidance
Entity Level Controls and Fraud Considerations
Revenue Recognition
New Accounting Pronouncements
Special Guest Speaker:
Aharon Shamash, KPMG
Aharon Shamash is an audit manager in KPMG’s assurance practice, and is based in
Melville, Long Island. He has served companies in the consumer and industrial markets,
information, communications and entertainment (ICE) and health care lines of business.
Currently, Aharon primarily serves public clients in electronics, telecommunications, defense
and software segments. He has experience servicing some of KPMG’s prominent national
and global account clients. During 2004, Aharon participated in several year one audits of
internal control over financial reporting for SEC registrants based in Long Island.
Aharon received a Bachelor of Science degree in accounting, cum laude, from the State
University of New York at Albany School of Business. He is a member of the Golden Key
National Honor Society and the American Institute of Certified Public Accountants.
2005-2006 Dinner Meeting Schedule
February 7, 2006 - Employment & Labor Law Issues
March 21, 2006 - Capital Investment & Alternative Financing
April 18, 2006 - CFO Panel Discussion
May 9, 2006 - Financial Executive of the Year
Please Note:
The January meeting
will be held at
The Milleridge Carriage House.
This month's meeting
sponsored by:
ADP TotalSource
Page Institute of Management ACCOUNTANTS
Last Month’s Meeting
January 2006
by Bob Arnold, Jr.
Our December Meeting featured a very interesting presentation on Identity Fraud. Our speakers, Harry J. Houck, Jr. and
Vincent Vancuse, both of Citibank, shared their comprehensive expertise on the subject and provided the audience with some
very valuable information. They explained steps that can be taken by both consumers and commercial entities alike to help
reduce the risk of financial loss. They also presented some interesting accounts of various scams that they have encountered
over the years, including how the scams were detected, and how they are now defended against. Thank you gentlemen for
a very informative presentation.
Thank You To Our Sponsors
Portnoy, Messinger Pearl & Assoc., Inc. • Grassi & Co.
Jacob Ivry
Director, Nassau County
Professional Services Group
222 Old Country Road, Mineola, NY 11501
516.240.6247 • Fax: 516.240.6718 • Cell: 516.313.4528
[email protected]
www.statebankofli.com
January 2006
Institute of Management ACCOUNTANTS
Using Six Sigma to Improve the Finance Function
Six Sigma is exploding in popularity across the corporate landscape.
Motorola initiated the program in 1987, and, since then, countless
other organizations have employed it. While Six Sigma originated
within the manufacturing arena, organizations are now applying
it in functional areas such as purchasing, shipping and receiving,
sales, and administration. This methodology even holds promise for
improving the efficiency and effectiveness of the finance function.
WHAT IS SIX SIGMA?
Six Sigma relies on the voice of the customer (VOC) and objective
data, rather than anecdotal opinions, to improve existing business
processes. The primary framework used to guide Six Sigma projects
is called DMAIC (define, measure, analyze, improve, and control).
In the define stage, the project team defines the problem and clarifies
the project’s scope. In the measure stage, the team collects data to
analyze the problem and assess the process’s current or baseline
performance. In the analyze stage, the team determines the problem’s
root cause(s). In the improve stage, the team creates and implements
solutions that eliminate or minimize the root cause(s). During the
control stage, the team uses ongoing measurement and other tools
to control the process so the problem doesn’t reappear.
To carry out a Six Sigma project, a Green Belt or a more highly
trained Black Belt leads the project team. Green Belts typically have
other job duties besides their Six Sigma responsibilities while Black
Belts often don’t. A variety of organizations provide Green Belt
and Black Belt training and certification. Typical providers include
colleges and universities, such as the University of Michigan;
consulting firms, such as Rath & Strong; public corporations, such
as Motorola; and trade associations, such as the American Society
for Quality (ASQ). Because each provider has its own certification
requirements, certification isn’t licensing; rather, it’s recognition
by your peers. You can find a more complete list of training and
certification providers at www.isixsigma.com.
TIPS FOR SIX SIGMA SUCCESS
Here are some tips that can help your finance department achieve
success with a Six Sigma initiative.
Provide necessary leadership and resources. For Six Sigma to
succeed, the CEO and other senior managers must commit to
the program. They must provide the necessary resources, such
as funding, training, and time. They must also serve as change
agents, especially because resistance to change is a major Six
Sigma obstacle. To remove this obstacle, senior managers should
stir things up and create a sense of urgency. They should also get
key people to buy into the need for Six Sigma because once these
key people get on board, others follow.
Use top talent. Using top talent to head Six Sigma projects indicates
that management is committed to Six Sigma. It also ensures that
future company leaders, having developed a Six Sigma mind-set,
will continue to support the Six Sigma initiative. Incentives, such as
bonuses and promotions, should reward top talent for successfully
completing Six Sigma projects.
C&B Consulting is the benefits advisor
for the Institute of Management Accountants and
a proud sponsor of IMA - Long Island Chapter.
Call today for a free benefits consultation.
Bill Jones (516) 247-1961
www.candbconsulting.com
Page Make training ongoing. Avoid one-time-event training by
providing refresher courses for all Six Sigma participants. These
courses not only reinforce prior training but introduce new ideas
as well.
Select initial projects carefully—simple ones with high
probability of success. Start with easy, non-political, and noncontroversial projects that support the company’s strategic goals.
Successful projects build credibility and momentum and get a new
Six Sigma initiative off to a good start. Let resource availability—
including time, money, and trained personnel—dictate the number
of initial Six Sigma projects that are under way. Too many projects
can lead to mediocre results.
Design projects for short-term wins. Short-term wins provide
confirmation that efforts are paying off. Think of reaching a
milestone in a Six Sigma project, such as the end of a DMAIC
stage, as a short-term win. When you reach a milestone, give the
team a short break and recognize its members for a job well done
because these actions will energize them to move aggressively into
the next project phase.
Keep people informed. To overcome fear of change, people
must understand the reasons for change. Explain why current
Six Sigma projects are needed, and tell employees about the
project’s objectives and progress. Make special efforts to keep a
project’s process owner and other key people in the loop. If these
individuals don’t understand and support the changes, the project
will eventually fail.
Set up a website. A Six Sigma website can help project teams avoid
reinventing the wheel by providing access to a project library and
message board.
Avoid layoffs due to Six Sigma success. Six Sigma improvements
shouldn’t come at the expense of the employees who helped
achieve them. If improvements reduce the number of employees
who are needed to perform a particular task, move the unneeded
employees to other jobs within the company so layoffs are a last
resort. Employees won’t support Six Sigma if they have seen prior
projects “improve” other employees out of a job.
PROVING ITS WORTH
Six Sigma has proven its worth in manufacturing and is now
proving its worth in a wide range of service areas, including
finance. A data-intensive methodology, Six Sigma works well in
finance departments because they have large amounts of data on
hand coupled with sophisticated data-collection systems. Finance
departments also have data-oriented personnel who are good at
organizing data, crunching numbers, and using critical reasoning
to draw conclusions.
Peter C. Brewer, CPA, an associate professor, and Jan E. Eighme, an
assistant professor, both work in the Department of Accountancy at
Miami University in Oxford, Ohio. The full text of this article can be
found in the May 2005 issue of Strategic Finance.
Page Institute of Management ACCOUNTANTS
January 2006
Long Island Chapter Events
CMA Learning System Certification Course at NYIT.
CMA Part 3 begins Saturday, February 11th.
Please see brochure on our
Chapter website for more information.
Next Dinner Meeting will be February 7, 2006.
The topic for this meeting will be
"Employment & Labor Law Issues". See You Then!
Your Newsletter Editor
Your newsletter editor is always looking for information about you
and other chapter members as well as significant issues concerning
our Long Island community relative to accounting and business
matters. Please forward all personal notes for possible inclusion
in the newsletter to the editor:
Neil Seiden
Asset Enhancement Solutions, LLC
Absolute Values Funding
130 Shore Road • Port Washington, NY 11050
(516) 767-0100 • Fax (516) 767-9595
Email: [email protected]
New Members:
Send or bring a friend or business associate to an IMA meeting!
Your help is needed to keep our Chapter growing. Please submit
the name of a prospective candidate who might be interested in
IMA membership to our Director of Membership:
Patrick T. Rozmus, CPC, Senior Staffing Specialist
Lloyd Staffing
445 Broadhollow Road • Melville, NY 11747
(631) 777-7600 • Fax: (631) 777-7626
[email protected]
Visit our website at
IMA - Long Island Chapter
January 10, 2006
Accounting Update
Please pay at the door
by cash or check made payable
to IMA-LI Chapter.
Members $50
Non-Members $60
www.longisland.imanet.org