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Archive for July, 2012

One of the courses I teach is Cost Accounting.  As some of you remember, it is a course for undergraduate accounting majors and is taken during the junior or senior year.  Although some schools teach it in a two course sequence (as does Bowling Green State University where I was once an associate professor), at many schools it is a stand alone course.

At my new school (University of South Carolina Upstate), Cost Accounting is taken by both accounting and general business majors.  As a result, the course is a mix of (1) costing for the accounting students, and (2) showing how to use accounting information for making decisions by the nonaccounting students.

You might be interested in reading my syllabus.  You’ll see what a collegiate syllabus has evolved into.

In days past, a syllabus included the professor’s name and phone number, a grading scale (for three tests and attendance/homework), and a schedule for the semester with homework assignments.  Such a syllabus could be printed on one page (or two pages at most).

My syllabus is substantially different.  I spend several pages trying to motivate students as to why they should (1) take the course, and (2) care enough about it to become involved as an active learner.  For accounting students, getting buy-in is essential to earning their commitment to work hard on a daily basis.  Nonaccounting students, on the other hand, would rather do almost anything else than take this course.  Preferable alternatives include a root canal, hard labor, being bossed around by parents.  If they are not adequately motivated, they probably won’t learn anything at all.

You’ll also notice the detailed learning outcomes.  Accreditation bodies are pressuring universities (and therefore the professors) to be able to prove that students are learning what they should be in their courses.  It is not enough to prove it by saying that certain grades were earned.

Also, you will notice a number of course policies.  The 21st century is a full-disclosure era.  Students must be made aware of how the course is to be managed.

I require students to write papers and work on realistic projects.  I also write my own homework problems.

To check out my syllabus, click on the following image.

Click on image to read ProfAlbrecht’s Cost Accounting syllabus.

Debit and credit –  – David Albrecht


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Hot, hot, hot.  In most of the USA, above average temperatures and below average rain have parched both the ground and the spirits of good citizens.  This is especially true for me.

Look at this, then tell me what you think.

For the past few weeks I’ve felt hot and tired.  My never ending condition of exhaustion comes from the fast pace of teaching summer classes at the U, and not yet being acclimated to the heat of South Carolina.  To compound matters, my old laptop died.  To my dismay, I discovered that my backups got messed up.  Consequently, I’m lost my archived e-mail from before June.

Look for a flood of blog posts in the near future.  I’ll clear out a backlog of partially written posts I’ve worked on during the past three weeks.  Then, I’ll turn to the Annual Meeting of the American Accounting Association to be held in Washington DC, starting this coming weekend.  I expect I’ll have quite a bit to say about IFRS adoption, government regulation of financial reporting, and the fatally flawed audit model used in North America and Europe.  Then, I’ll be turning to social media usage.  Just for kicks, I’ll write a bit about some developments in higher education.

I’m glad to be back.

Debit and credit – – David Albrecht


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Dr. Thomas G. Calderon is Professor of Accounting & Chair of theGeorge W. Daverio School of Accountancy at the The University of Akron.  We have been friends since I met him in the doctoral program at Virginia Tech.  He was two years ahead of me.

Thomas is a very active researcher and prolific writer.  I respect and admire him.  He writes me of a very interesting panel discussion upcoming at the Annual Meeting of the American Accounting Association (of accounting professors) upcoming in Washington, D.C.

I think this panel discussion will be excellent, and I plan on attending and reporting on it.  If you are in the area, I recommend that you attend.

Title: Hot, Vital and Unresolved: Views From Practice Leaders of Issues that the Academy Should Research

Time: 4:00 – 5:30 p.m., Monday, August 6, 2012

Location: AAA National Meeting, Washington DC

Moderator: Thomas Calderon, Professor & Chair, George W. Daverio School of Accountancy, The University of Akron

Panelists:

  • Darrel Schubert, Partner, Professional Practice Audit and Assurance Services; Leader, Development of E&Y audit methodology and policies, Ernst & Young; Chairman, Auditing Standards Board, AICPA
  • Trent Gazzaway, National Managing Partner of Audit Services, Grant Thornton
  • William F. Ezzell, National Managing Partner, Regulatory & Public Policy Group, Deloitte
  • Frank Steininger, Assurance Partner, PricewaterhouseCoopers

About the session:

Accounting faculty across the globe are interested in learning about the challenges faced by professionals in the field. Faculty are also eager to learn how they might contribute to addressing those issues through their research. In this session, leading professionals from public accounting firms will share their views on what is “hot, vital and in need of research by academics.” This is an important panel that could potentially help in setting the academic research agenda in auditing for many years.

Debit and credit – – David Albrecht


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Accounting professor Sue Ravenscroft (Iowa State) is chair of the Public Interest Section of the American Accounting Association (of accounting professors).  She sent out this announcement yesterday.

Have you been following the news about the Libor rate manipulation scandal? The one that recently led to the pressured resignation of the CEO of Barclay’s Bank?

Providence College Professor Mike Kraten began investigating allegations of Libor rate manipulation four years ago with colleagues from NYU, Moody’s, and UConn, and has continued his forensic research work since then.

He discussed his work at the 2010 Midyear Meeting of the Public Interest Section, and published his study in the Journal of Banking and Finance early this year. After his work was cited on the floor of the British House of Commons during a floor debate on global banking regulations, the British press (and its American counterparts) recognized Mike and his co-authors’ study as a major influence on current efforts to investigate the causes of the scandal and to reform the system.

Click Here to read a recent editorial by City AM, a news publication that covers London’s financial district.

Click Here to read an article that initially appeared in the Financial Times of London and that now appears on the CNBC web site under a content sharing arrangement.

And Click Here to read an article that initially appeared in the Economist and now appears on the CFO Magazine web site under a content sharing arrangement.

Congratulations to Mike and his colleagues.

Debit and credit – – David Albrecht


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Gwen Jorgensen, an accountant on leave from Ernst & Young, is a member of the USA Triathlon team that will compete in the London Olympics.  In past blog posts, I’ve featured videos on her training for the swim and bike portions of the triathlon.  In this blog post, I feature a video on her training for the run portion of the event.

Gwen Jorgensen was a Big Ten champion in the 3,000m and 5,000m events, and was an All American in track.  I used to run.  So, I can appreciate her ability to run a series of 5:00 minute miles, say in a 5k or 10k race.  On my best days, I could only do 6:00 miles. At 5:00 miles, she is flying along.

In every triathlon event for which I’ve seen detailed results, Jorgensen has had the fastest time in the run portion of the race. Wow!

Good luck Gwen.

Other videos on her training are:

Debit and credit – – David Albrecht


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Social Media usage has taken over the web, which is not a new revelation.  Businesses in general use social media mostly for marketing purposes.  The use of social media within organizations lags far behind.  However, there is a great difference in social media usage, male versus female.

In this new infographic by Digital Flash and posted at Mashable, women are said to use Facebook, Twitter and Zynga in greater numbers than men.  Men, use LinkedIin, Google+ and Reddit in far greater numbers than do women.

Click on image to view larger graphic image.

I’m not aware of any similar study that contrasts financial professionals against those who use their financial services.

Debit and credit – – David Albrecht


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Mark Twain opined, “Politicians and diapers must be changed often, and for the same reason.”  I’m guessing that Rihanna wishes he had advised her that accountants also must be changed frequently.  PCAOB please take note.

Rihanna is a popular singer whose recordings and tours have produced millions in revenues.  According to her lawsuit against Berdon, LLP and accountants Michael Mitnick and Peter Gounis.  She hired the firm in 2005 when she was young (16), famous, and newly arrived in the USA.  No kid aged 16 truly understands finances, budgeting and accounting.  I might add that few college kids taking accounting courses understand those, either.

Now facing an IRS audit and the prospect of paying back taxes and fines (I wonder if jail is in the picture), she is suing the accounting firm and the two accountants for mismanaging her finances. Note, she fired the accounting firm in 2010.

Who, on the outside, knows who is at fault here–Rihanna or her accountants?  I certainly don’t.

Rihanna, I’m sorry much of your fortune has dissipated.  In the future, I advise you to change accountants fairly frequently, and then hire someone (such as a forensic accountant) to check up on the accountant.

For more on this, please read:

Debit and credit – – David Albrecht


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Gwen Jorgensen of E&Y is the Olympic Accountant.  On Saturday, August 4, she will be competing in the women’s triathlon at the London Olympic games.  She is a contender for a medal.

The Olympic triathlon combines a 1,500 m swim, 43 k bike race, and 10k run.  For elite women, it takes about two hours to complete.

Gwen Jorgensen was a collegiate athlete at the University of Wisconsin, competing in swimming, track and cross country.  She was All-American in track distance events.

This video features Gwen talking about the swimming portion of the race.

Debit and credit – – David Albrecht


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Sarah N. Lynch is a young business reporter for Reuters.  She has previously published such good work that I’ve started looking for her by-line.  Her story on Friday, June 29, 2012 alerts us to an important auditing issue.

Lynch’s story is “SEC official backs shareholders on auditor independence.”  In this story, she reports on a speech by SEC Commissioner Louis A Aguilar (Democrat) to the NAPPA 2012 Legal Education Conference in Philadelphia, PA, on June 27, 2012.

Aguilar’s speech is noteworthy for two reasons.  First, it was one of two speeches last week by SEC Commissioners in which it was emphasized that audit quality is deteriorating and investor confidence in securities markets is waning.  Second, Commissioner Aguilar disagrees with SEC staffers who have blocked shareholder proposals to rotate auditors at their company or to promote other forms of improving auditor quality.

Really?  Companies have received at least two dozen shareholder proposals to vote on auditor rotation and increased auditor disclosure, and the SEC’s Division of Corporation Finance let companies block them from shareholder vote?  Aguilar’s comments on this are highlighted below.

It is apparent that pressure is being directed at the PCAOB from the lofty heights of the Commissioners of the SEC.

Aguilar’s speech is important.  To promote your reading of relevant portions, I’m publishing them in this blog post.

(more…)

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Jonathan Russell, city diary editor for London’s Telegraph Group, has an interesting story on today’s Telegraph website. It is titled, “Ernst & Young ‘Covered Up Judge Bribe Case.’

My write-up is based on Russell’s story, and his story is supposedly based on court documents.  I have no personal knowledge of anything other than Russell’s story.  I am not alleging anything, only summarizing what has been reported.

Russell writes,

Mr [Cathal] Lyons was a partner with E&Y’s Russian practice when the alleged wrongdoing came to light. It was originally investigated by James Mandel, E&Y’s general counsel in Moscow. In a witness statement supplied in support of Mr Lyons’s case, Mr Mandel said he suspected the payment may have been corrupt and wrote a report to that effect.

“I had the suspicion that this payment was not a proper payment for legal fees, but was an illegal payment possibly made to facilitate a positive outcome of a tax case,” he claimed in his witness statement.

He suspected that the €120,000 payment via a Russian law firm was made to influence a 390m rouble (£8.4m) court case brought by Russian tax authorities investigating a tax avoidance scheme E&Y was using to pay its Russian partners. E&Y was later cleared of liability in the case.

Russell continues,

Mr Lyons claims that after he reported his concerns about the case to E&Y’s global head office, his medical insurance was withdrawn and he was dismissed.

In his writ he says the dismissal flowed from “personal animosity against him rising from a discussion in late 2010 between the claimant and Maz Krupski [E&Y’s director of global tax and statutory] regarding alleged corruption by the practice.”

Mr. Lyons is suing for 20 years continuance of medical support, stemming from serious injuries sustained in a 2005 automobile accident.  The medical support payments are valued at $6,000,000.

I will make an effort to retrieve relevant British court documents.

In an interesting coincidence, Jonathan Middup, partner at Ernst & Young (UK) Fraud Investigation & Dispute Services, has a piece in Friday’s growthbusiness.co.uk titled, “The UK Bribery Act One Year On.”  In this article, Middup “… looks back on the first year of the UK Bribery Act to see if the British perception of corrupt practice has changed.”

Debit and credit – – David Albrecht


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Gwen Jorgensen is the Olympic Accountant.  A tax specialist at Ernst & Young, Milwaukee, she will represent the USA in Women’s Triathlon at the 2012 Olympics.

I’m embedding two new videos that reveal more about Gwen.

The first video, “On Triathlon Sportsmanship,” features Gwen talking about the community of triathletes.  She mentions the support that each competitor has for the others.  [After playing the video no YouTube, use your browser's back button to return to The Summa.]

The second video, “Born to Ride,” shows Gwen talking about training for the biking aspect of the triathlon. She also talks about moving to Minneapolis.

Debit and credit – – David Albrecht


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