April is a difficult time for professors. The cumulative impact of too many late nights hits hard. My body is tired, my mind is tired. If I were in Florida, snow birds and blue birds would be passing me by.
There are key events occurring, and you need to read really good commentary. Here is a list of the best writing I’ve come across:
“IFRS: Dead in the US?,” by Lawrence Richter Quinn from CA Magazine. An interesting read, it exposes the doubts and questions many are thinking over the impending IFRS switchover. Although I have a different take (IFRS is a done deal because the SEC is married to it), it’s nice to be aware of what others are thinking. Quinn achieves credibility upon quoting Tom Selling of The Accounting Onion.
“On IFRS, CA Magazine Publishes what JofA Won’t,” by Tom Selling of The Accounting Onion. Right now, no one in the country is writing with sounder reason or clearer thought. Although a tad less weighty than previous articles, Selling continues to shout that the IFRS Emperor has no clothes. According to Selleck, the only major parties continuing to push for standard convergence or U.S. switchover are the Big 4 leaders, their shill mouthpiece AICPA, and the SEC leadership. It is is my personsal belieff that all three groups stand to profit personally and immensely from the continued push for either convergence or switchover. Selling, though, would never indict SEC leadership.
“EU to IASB: It’s Our Way, or the Highway,” by Tom Selling of The Accounting Onion. I sent Selling a note in which I admitted lusting over his ability to write with greatness. He responded, “Knock it off.” Echoing what I’ve written about on several occasions, Selling says that the EU has realized it is most definitely not in its self-interest for the US to adopt or use the same accounting rules that it uses. Actually, he doesn’t say that. He says that the EU has realized it doesn’t want the U.S. calling the shots over at the IASB. If that occurs, then the IFRS will eventually become U.S. GAAP, and the EU should not want that. I repeat, the EU deserves its own set of accounting standards that triumph the corporate voice. The US deserves its own set of accounting standards that triumph the investor voice. Corporations want accounting standards that permit massive income smoothing. Corporations also want pushover auditors, but they already have that.
“The Iffiness of IFRS,” by J. Edward Ketz of SmartPro’s The Accounting Cycle. Along with another Selling blog post, this provides clear insight into the SEC statement of continued support for accounting standard convergence. After reading Ketz and Selling, it is obvious that the SEC has become masterful at calling a spade anything but a spade.
“What’s the Future of Audit?” by Jim Peterson of re:Balance. Jim says,
[T]he profession cannot escape the inexorable forces of evolution and change. Survival threats to the large accounting networks and their provision of assurance on the financial statements of global-scale companies are profound.
In my opinion, and I’ll be writing lots more about that opinion, the current model is broken. Investors need someone to provide a check on corporate accounting machinations and manipulations. Although the U.S. government hired audit firms to act in the public interest, the large audit firms have rejected this charge. Large audit firms not only refuse to admit they act in public interest, many huge economic incentives exist to insure that they act contrary to the public interest. And because large audit firms act contrary to the public interest with alarming frequency, they should be excused and banned from the table.
“Why a Big 4 Failure Is Imminent–and What It Will Mean,” and “What Will the Aftermath of the Next Big 4 Failure Look Like?“by Caleb Newquist of GoingConcern. With this two part article, Newquist is staking place at the table of serious accounting news reporters. If you are serious about staying current on accounting, you should be clicking on GoingConcern every day. As an accounting blogger, I consider it a very big deal to be quoted on Going Concern. Of course the fragility of the auditor function is being constantly discussed, by Peterson, McKenna, Sara McIntosh and myself. Its reporting in GoingConcern, however, gives the issue serious credibility.
“Financial Journalism and Its Discontents: Covering the Auditors’ Role in the Crisis,” by Francine McKenna at GoingConcern. Francine McKenna is an independent journalist, and in this article she writes about an issue close to her heart, the problematic coverage of accounting and auditing by the professional journalist community.
“Spread ‘Em Wide,” by Sara McIntosh at SaraMcIntosh. McIntosh (a pseudonym), a former fraud auditor and current accounting novelist, lays bare the Dodd version of financial and regulatory reform. Reading Sara is my guilty pleasure.
FEI Blog, by Edith Orenstein. As Financial Accounting Director for FEI, Orenstein does not serve the role of commentator, and she too infrequently serves as reporter ala Newquist or McKenna. What she does with amazing effectiveness, is shed a very bright spot light on the day’s most important issues. Who else reported Paul Pacter’s appointment to IASB? I found out about it at the FEI blog. That’s why she makes my list of must reads.
I’ve been busy being a professor, and regret that I haven’t been writing. I’m happy to report that my fellow boggers (and friends) have been busy with great effect.
Debit and credit – - David Albrecht