Dr. Raymond Leung is an associate professor with UFV’s School of Business. He has a master’s in business administration from Saint Mary’s University and a doctorate in business administration from Scotland’s Heriot-Watt University. Outside of his teaching, Leung works as an accountant and business consultant and delves into research on learning outcomes for business students and socially responsible business firms. In addition to the introductory- and intermediate-level courses he teaches, Leung has also developed a personal wealth creation course geared toward non-business students.
What first got you into accounting?
I like numbers. My friend was in university, and after year two I had to declare my major. “Hmm… I can’t speak as good as this guy — I’m not fluent in English or smart enough. I’m a dumb speaker. I cannot be a marketing major. I’m not that smart. Calculations? Maybe I can survive. So, based on the minimum standard, with survival as the motif, maybe I should do calculations.”
… Numbers are important. You cannot make it meaningful unless you quantify it. You have to quantify the subject matter. When I was a controller in a management meeting, the sales manager would say about the sales, “It was fantastic, Raymond!” “Oh, really? Was it good?” “Wonderful!” “What do you mean wonderful? How much is wonderful? Over your plan? Over the budget? More than last year in the same month? Or more than the industry average?” I like to confirm things with numbers … My training and my experience told me that numbers mean a lot.
I saw that you do research on how students learn accounting, but you also do research on words like agency theory and information asymmetry. Can you explain that kind of research as well?
In accounting, we like to solve the problem. But before you try to solve the problems, you must understand what’s the problem … I learned not to jump to conclusions too quick. Translate that to my research: agency problem, information asymmetry… They’re basic problems in accounting. Accountants know more than the owners of the business about what’s going on in the company. I make a joke to students that if you’re working at a company, if you see the controller [of a company’s finances] start to look for another job, you better follow him because he knows what’s going on ahead of you. He knows more than the owner about what’s going on in the numbers …
However, controllers might not tell the owner — they might manipulate the numbers because he’s the agent. I’m not the owner; I’m the agent for my own benefit. Therefore before I leave here, I’ll get the maximum benefits and then jump ship to another company to continue my benefits. So, they don’t have a sense of accountability. Of course they do work, technically, but the commitment is not there. Therefore that’s an agency problem. But he knows more than the owner, that’s [information asymmetry] …
Family business is both. You’re the owners and the managers. You don’t have that problem. The father is the CEO, the son is CFO [chief financial officer], and the daughter is a CMO — chief marketing officer. They’re a family. Therefore they should not have that agency problem. Because you do something against yourself, that’s stupid. But the family business has another problem because they like to conserve all the wealth for the next generation, not for outsiders.
For example, I appoint my son as the chief financial officer. Your son? He knows nothing. Well, he’s my son. So this creates a whole bunch of other problems.
It’s interesting research. In Canada it’s better because regulations are stronger, but in Asian countries it’s like an empire. The father is the chief emperor, the son is a little emperor or a little king that bullies the other senior, experienced managers.
If you had to give one piece of financial advice to students, what would it be?
Manage your money now, and plan carefully for your near future — five years later. What do you want to achieve? Put it into numbers and budget. “Oh, I need $10 grand. I need to put into savings account $100 bucks per month.” Do it. Control your expenses. It’s self-discipline. It’s self-management … Be a responsible, accountable person and carefully manage your money. Translate your dream into numbers, and control it. Two years later you change your plan? That’s okay. Change your package. Adjust a little bit, but make sure you know what’s going on.
… I tell students: no pain no gain. When I was a student for a few challenging exams for my CPA [chartered professional accountant certification] — daytime I was working, after I finished work I rushed home, ate something, and rushed to the study room in the library until 11 o’clock, came back home, took a shower, tomorrow I go work, rush home, eat something, library, and was a zombie for a few months. The only way is short-term pain for long-term gain. I understand that. If you don’t follow the advice, you have short-term gain but long-term pain … Hard work is the basic ingredient to be successful. It doesn’t guarantee you’ll succeed, but if you don’t have it you won’t succeed for sure.
I noticed you’re teaching personal wealth creation geared toward non-business students. I thought that was super interesting. Can you tell us more about what the course teaches?
It’s two things: one is my own personal finance now. Make sure you’re okay now — i.e. your expenses should be less than your income.
The North American — there’s a problem with overspending. The commercial advertising — “Buy it! You don’t need to pay now.” Of course, but you have to pay later. Be a good personal finance student now. Fix your problem. If your credit card bills pile up, you don’t pay on time, it will hurt your credit score …
The second thing is financial planning. Housing prices are crazy — [it’s] getting more and more difficult to find a good place to stay. I always remind students: try your best. Don’t pay rent for a long, long time. After 25 years you own nothing because you pay rent. Personal wealth, based on accounting equations — is assets equals liabilities plus equity. Your wealth is your equity, not your assets.
Because you may have a nice car and a big house, but you borrowed lots of money so therefore the market value of your nice car and big house minus how much you owe to the bank [is your wealth]. If by 55 years old you pay off your mortgage, your market value of your house ($1.5 million) equals zero liabilities [which] equals your wealth of $1.5 million. Your wealth is your equity. Own some stuff — for you and your future generations.
This interview has been edited for length and clarity.
Dr. Raymond Leung. January 18 2021 (Dr. Raymond Leung)
Chandy is a biology major/chemistry minor who's been a staff writer, Arts editor, and Managing Editor at The Cascade. She began writing in elementary school when she produced Tamagotchi fanfiction to show her peers at school -- she now lives in fear that this may have been her creative peak.
