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Archive for February, 2009

Chairman Mary Schapiro
SEC
100 F Street NE
Washington DC 20549

Dear Chairman Mary Schapiro,

With this letter I indicate my support for Charles Niemeier for Chief Accountant of the Securities and Exchange Commission.

I am accounting professor and a self-described accounting theorist.  I have closely followed the Securities and Exchange Commission, the Financial Accounting Standards Board, the Public Companies Accounting Oversight Board and the International Accounting Standards Board for some time.  As a result, I became aware of the extraordinary qualifications of Mr. Niemeier.

The Chief Accountant, America’s First Accountant, establishes and maintains U.S. government policy with respect to the FASB, PCAOB and IASB.  Charles Niemeier is uniquely positioned as having prior experience with the SEC and PCAOB, and having worked with the FASB and IASB.  An appointment as Chief Accountant will serve to help him leverage all aspects of his past to move the U.S. forward in very difficult and perilous times.  There is no person today in government accounting regulation/standard setting in whom I have as much trust and respect as Charles Niemeier.  He is the person best qualified to move the U.S. forward with respect to accounting.

I believe that his primary qualification is his great mind that enables him to think in terms of a very broad world view.  His ability to discern trends and understand difficult issues, integrate them, and then correctly reason through to necessary remedies and actions is very special indeed.  In the past 15-20 years, the only other great accounting mind (outside of academia) that comes to mind is Dennis Beresford, former chair of the FASB and now accounting professor at the University of Georgia.   Niemeier’s speeches are well-researched and very insightful.  Some are required reading for my accounting majors.

Not to be overlooked is his dedication to the American investor. There is not even the hint of a suggestion that he has ever acted to advantage corporate interests over those of investors.  Moreover, he is as pro-regulation as anyone I’ve ever come across.  His September 18, 2007 speech to a NYSSCPA conference is the best defense I’ve seen about how strong regulation enhances the U.S. cost of capital advantage in world corporate markets (http://www.pcaobus.org/News_and_Events/Events/2007/Speech/09-18_Niemeier.aspx).

Another qualification he possesses is the respect and admiration of the U.S. world of accountants.  His September 10, 2008 speech to NYSSCPA  (http://www.pcaobus.org/News_and_Events/Events/2008/Speech/09-10_Niemeier.aspx) generated headlines around the world, literally.  It generated dozens of comments by conference attendees as the best defense of U.S. GAAP ever heard.  Quite honestly, it is this national respect that makes him such a serious candidate for Chief Accountant.

He has the respect and love of his staff.

It has been mentioned in the press that he is the anti-IFRS candidate for Chief Accountant.  Given his background, I think it better to say that he would work toward accounting convergence as long as the convergence did not disadvantage American investors in any way.  Some have suggested that your predecessor along with the FASB chair sold out U.S. accounting far too cheaply.  This will never happen under Charles Niemeier.  An additional factor is that many of his views are similar to yours.  For example, he favors U.S. inspection of foreign auditors that serve U.S. companies, just as you do.  I’m sure that the two of you will form a great, great team.

I’ve read every word you’ve spoken and written during the confirmation process and after.  I am becoming convinced that you will be an outstanding Chairman of the SEC.  If you are serious about making accounting the best it can possibly be in the U.S., then I’m sure you should appoint Charles Niemeier as Chief Accountant.

Sincerely,

David Albrecht, Ph.D., CPA
Associate Professor of Accounting
Bowling Green State University
http://profalbrecht.wordpress.com
albrecht@profalbrecht.com

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Four news sources are reporting that Charles Niemeier is being considered for Chief Accountant of the Securities and Exchange Commission.   This is outstanding good news!

First, what is being reported:

I am surprised, however, that CFO Magazine doesn’t have it.  In my opinion, CFO has the best reporting on current events in accounting (Accountancy Age has the best reporting in Europe).   Tim Reason (CFO editorial director) is first rate.  He has impeccable journalist credentials.  If he’s not reporting it yet, then it isn’t definite yet.  Also to weigh in is Floyd Norris, the most highly respected journalist from the New York Times.

The Chief Accountant of the SEC has a tremendous influence on accounting policy in the U.S.   In essence, the Chief Accountant is responsible for the strategic directions of all matters related to accounting and auditing.   In essence, he is the First Accountant of the United States.  He is at the center of the accounting universe.  Specifically, the Chief Accountant is responsible for:

  1. Oversight of the FASB as it develops and maintains U.S. GAAP.
  2. Oversight of the PCAOB is it regulates auditors and develops and maintains audit/auditor standards.
  3. Coordinating U.S. relations and communications with international organizations that have an impact on accounting standards and practices.

Charles Niemeier, new Chief Accountant?

Charley Niemeier was my choice for SEC chair.  President Obama gave it to Mary Schapiro, instead.   This may work out to everyone’s advantage.  A Schapiro/Niemeier team is, in my opinion, very strong. Mary Schapiro has acquitted herself very well in her public appearances immediately before and after her confirmation.   Her trying to invigorate the SEC with new blood is playing well in the press.

Niemeier’s appointment seems to be Mary Schapiro’s way of making a statement about (1) integrity, and (2) IFRS.  During her confirmation hearing testimony, she testified that she was not sold that IFRS is the way to go.  She followed this up with some written comments that were more negative towards IFRS.   Niemeier is on record as a strong critic of IFRS, at least so far as currently constituted.

If Charley Niemeier is appointed as Chief Accountant of the SEC, then it is a master stroke by Mary Schapiro.  There is no better person to head up accounting policy at this (or any) time.  Niemeier is that good! Charley Niemeier will excel as Chief Accountant because he has such a great mind, the best mind in the government field of accounting regulation.  He has a grasp of the big picture, an absolute necessity for Chief Accountant.

I will sleep much better tonight after hearing of this possibility.  If he actually receives the appointment, I will sleep much better for the next few years.

I believe this is Charley Niemeier’s best career move to create a lasting legacy in the regulatory field.  It is no secret that he has had numerous opportunities floated his way as he winds down his final days on the PCAOB.   I need to go over the SEC chair history again, but I don’t think that an accountant has ever been appointed chair of the SEC.

Mary Schapiro, I beg of you.  Please name Charles Niemeier as the Chief Accountant of the SEC.

Over and out – – David Albrecht

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Bob J. posted a list of financial terms with funny definitions over at AECM.  I did a Google search to find where they came from.  It seems as if the list has grown and evolved over time.  So, I found some additional lists, selected only the best, and added a few of my own.

Here is my version of the list.  Enjoy!

  • Standard and Poor (S&P):  Good times and bad
  • Broker:  Poorer than you were last year.
  • Broker:  What my financial planner has helped me become
  • Brokee:  Someone who buys stocks on the advice of a stock broker.
  • Stock Broker:  End of day market report
  • Bond Broker:  That guy who puts up court money to get you out of jail.
  • Buy High, Sell Low:  Market advice for the little guy
  • Value Investing:   The art of buying low and selling lower.
  • Momentum Investing:  The fine art of buying high and selling low.
  • Bull Market:  A random market movement causing investors to mistake themselves for financial geniuses.
  • Bear Market:  A 6-to-18-month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
  • Bull:  What your broker uses to explain why your mutual funds tanked during the last quarter.
  • Cash Flow:   The movement your money makes as it disappears down the toilet.
  • P/E Ratio:  The percentage of investors wetting their pants as the market keeps crashing.
  • Recession:  A mild downturn in the economy where some friends and neighbors become jobless.
  • Depression:  A mild downturn in the economy when you are jobless along with friends and neighbors.
  • 201/K:  What used to be your 401/K.
  • Poison Pill:  What investors want to take when they see their 201/K balance.
  • Discounted Stock:  A stock that is less expensive than last month and more expensive than it will be next month.
  • Financial Adviser:  Bookie.
  • Hedge Fund:  The money, jewelry, and silver coins you buried in your back yard under the hedge
  • Analyst:  Your proctologist’s trainee.
  • Pension plan:  A plan to keep you working because the market crashed.
  • Economist:  An expert who will know tomorrow why the things he predicted yesterday didn’t happen today.
  • Financial Planner  A person whose phone has been disconnected.
  • Social Security:  A federally mandated pyramid scheme.
  • 52-Week Low:  How you feel each new day when you get home.
  • TARP:  What you sleep under after you lost your job, car, and house.
  • Foreclosure:  The time that the stock market stops dropping each day.
  • CEO:  Chief embezzlement officer.
  • CFO:  Chief fraud officer.
  • EBIT:  Earnings before irregularities and tampering.
  • EBITDA:  Earnings before I tricked the dumb auditor.
  • EPS:  Eventual prison sentence.
  • FRS:  Fantasy reporting standards.
  • IRS:  I’m really sexy
  • Fair Value:  What you give up when you buy stock
  • Unfair Value:  What you receive when you sell stock.

Debit and credit – – David Albrecht

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