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Pic credit - CUNY Baruch

Pic credit – CUNY Baruch

Legendary accounting professor Abe Briloff has passed away.  In my time in the profession, Abe is in a small group of two accountants whom I admire and respect the most.

For more on this, please read this CUNY-Baruch obituary.  No other news items are yet available.

I’ll write more later.

David Albrecht

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[From somewhere near an Amazon distribution center]  Jeff Bezos was interviewed last night (December 2, 2013) on legendary 60 Minutes at CBS by Charlie Rose.  I didn’t view it then as I don’t watch television (way too busy).  But someone sent me the link.  Gotta love social media and other digital era technologies.

I am a fan of Amazon, and have ordered hundreds of books over the past 10-12 years.  I have an Amazon branded bank card, the use of which which earns me an allowance for free books and other merchandise.  One of my next purchases is Amazon Prime.

Two weeks ago I searched for books using the term, “people skills.”  I didn’t see anything that appeared sufficiently relevant to tickle my fancy.  A week later I received an e-mail with eight suggestions.  I will order six of these books.

Amazon does a lot of thing very well.  Being a modern, cutting-edge, innovative 21st century company heads the list.

Amazon has 225 million customers.  One of its goals is to sell everything to everybody.  It puts the customer first, so far as I can see.

I’m presenting two clips today.  Each one is mandatory viewing for students of business.  In the first, Bezos provides a glimpse of behind the scenes operations.  The key to Amazon success is being able to deliver products quickly to customers.  Pay $89 per year for Amazon Prime, and get anything in stock delivered the next day. There are 90 distribution centers located in or close to the country’s major urban areas.  State of the art warehousing and packaging enables orders to be almost immediately out the door.

During the 60 Minutes feature, Bezos discussed same day delivery for grocery items in Seattle and Los Angeles.  In addition, Bezos’s company is experimenting with shipment by aerial drones!

In the second clip, Bezos reveals the capital raising process back in 1995.

Debit and credit – - David Albrecht


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Pic credit - Huffington Post

Pic credit – Huffington Post

[Black Friday]  Black Friday–so named due to crowded stores, crowded roadways and bad shopping behavior–is today in the United States.  It gets bad out there, as described in this Huffington post article, “9 Reasons To Stay Home On Black Friday (And Forget The Damn HDTV).”

Why do so many shoppers love Black Friday?  They think they are being served by stores offering unbelievable deals, incredulous sales and stocked shelves.

But are they being served? Stores have an inclination to raise prices because of increased quantity demanded (remember your lessons from Econ 101?).  They offer an occasional bargain against as stark environment.  Shoppers rush in to fight against each other to grab an over-hyped bargain.  There is no excuse for bad shopping behavior, but in truth the retail industry promotes it.

A popular shopping day for many decades, the Christmas shopping period now has expanded over to Black Friday eve, Black Friday week, pre-Black Friday week, and even Black November.

The shopping day was originally named Black Friday by Philadelphia police in the 1960s because it was such a horrible time of year to be serving the public. But the retail industry doesn’t care, it really is there to serve itself.  It’s all about money.  And money always brings out the black in business.

There are many parallels between Black Friday and Black Accounting.

Auditing firms arose in the United States in the early 1900s. The country was expanding and so was business.  Against the context of unregulated financial markets, audit firms sold their services–an independent opinion –as value added.  The investing public trusted these opinions and directed their capital to companies offering assurance about the reliability of the corporate financial statements.

The name of the game was independence, and audit firms were mostly independent.

But conditions changed when the federal government mandated that publicly traded companies had to purchase an audit opinion for their financial statements.  The government did this in an attempt to serve the public as a means to trust financial statements. In reality, if honest audit opinions were for sale then shopping investors would rush to the stores to purchase them.

How did the large audit firms respond?  Not by serving the investing public.  Big audit was there to promote sky high prices, reduced costs (difficulty in suing audit firms for negligence), and barriers to entry (state licensure).  And of course, audit firms always promote their services as independent when they are anything but independent.

This year, large audit firms are so completely in control of their line of business that they have defeated regulatory efforts to instill a minimum degree of independence.  What are these efforts?  Forced auditor rotation and a prohibition against consulting services.  In reality, there can be no auditor independence when the audit firm is a business partner of the audited company.  That is why this season we are afflicted with Black Accounting.

Against this bleak reality, I continue to hope for a White Christmas.  I want to bury the blackness.  As an investor, I hunger for honest financial statements, or at least financial statements with an honest audit opinion.

Dare I check my hung stocking on Christmas Eve?

Debit and credit – - David Albrecht


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Thanksgiving Day

thanksgiving_feastToday is Thanksgiving Day in the United States.  The traditional celebration is for family and friends to gather to share a feast of terrific food.

As I reflect on the past year, there have been many blessings to be grateful for.

For all of us who prefer numbers (sometimes instead of people), there seem to be jobs aplenty. Many of my students have used their accounting skills to enter the world of business.  Many are still in accounting, but some have moved on to other aspects of business.  I thankful that accounting has worked so well for so many of us.

On a personal level, I am grateful for new employment at the La Sierra University Zapara School of Business.  I appreciate the students and my colleagues out here, as well as the beautiful new building in which to work.  And I love my family and hope their celebrations in Ohio and Arizona are joyous and comfortable.

Debit and credit – - David Albrecht


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An Accounting Song

An Accounting Song

[Christmas Season]  I’ve been listening to Christmas music for a few days, but haven’t heard this one.  You know the tune.  Check back every so often for a new stanza.

On the twelth day of Christmas my true love gave to me,

Twelve happy accountants,
Eleven audit errors,
Ten digit keypads,
Nine green eye shades,
Eight accounting standards,
Seven tacky tick marks,
Six degrees / convergence,
Five pencil stubs,
Four accounting giants,
Three cups of coffee,
Two much expense,
And a debit where a credit ought to be.

(more…)

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Professor Marsha Huber

Professor Marsha Huber

Marsha Huber, Ph.D. and CPA, is associate professor of accounting at Youngstown State University.  She is a well published accounting researcher who studies the humanity of accountants.

She is conducting the first study on the happiness levels of accountants.  She is asking for accounting professors and professionals to take a survey.  It takes 15-20 minutes to complete.  At the conclusion of the study, you can sign up to participate in her future related projects, as well as a completed report of the current project. To take the survey, click on: http://www.surveymonkey.com/s/HappyAccountant.

Marsha is a close friend.  She does it all, teaching well, researching well, and providing valuable community service.  She finds time to love and care for her family.

She describes herself on her LinkedIn profile:

I am an accounting professor and happiness researcher. I might describe myself as an educational innovator, receiving three awards in accounting education: the 2010 Bea Sanders/AICPA, the 2011 Howard Theall, and the 2012 George Krull/Grant Thornton innovation in accounting education awards. I enjoy mentoring others being selected as the 2013 KPMG Mentor of the Year. I enjoy speaking at both academic and professional conferences on the topics of resiliency, happiness, and meaning in life and at school. One of my life goals is to help all accounting professionals become happier.

Please help her out by completing this important research study.

Debit and credit – - David Albrecht


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socialcpasBarry MacQuarrie is a Boston area CPA and consultant.  In his spare time he is a social media enthusiast (aka evangelist) who as started a group called SocialCPAs. On LinkedIn, the SocialCPAs discussion group has >3,500 members.

The SocialCPAs annual Social Media Survey is in its fourth year of existence.  In the past it has revealed some very interesting characteristics of CPA likes and dislikes about professional use of social media.

The 2013 survey closes at the end of day on Friday, August 30 (tomorrow).  You should take this survey, and please ask your co-workers to take the survey.

Click here to take 2013 Social Media Survey

Debit and credit – - David Albrecht


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Candor.  No, I’m not talking about condor, a bird.  I’m talking about clear and unbiased communication.  The Merriam-Webster definition uses the words fairness and honesty.

candor_definition_a_final

Pic credit – Merriam-Webster

Do some corporate communications appear to contain more candor than others?  Yes, based on a proposed metric.  Does this appearance prove their candor?  Those on the outside will never know.  I’ve sometimes heard that the best corporate policy is the appearance of honesty.

Rittenhouse Rankings attempts to measure candor in corporate shareholder letters for a sample of 100 companies selected from the S&P 500.  The sample group “was selected ten years ago based on industry grouping, capitalization size and financial reputations.  Candor is quantified systematically by awarding points for informative, relevant disclosure and deducting points for jargon, confusing statements and clichés.”

Recently, the Rittenhouse Rankings 2012 Candor and Corporate Culture Survey™ was released.  In the release, it is claimed that the ten most candid companies as a group earned a greater return on a stock investment than the ten least candid companies as a group.  The difference in return appears to be large.

Screen-Shot-2013-07-23-at-10.55.34-PM

Pic credit – Rittenhouse Rankings

Does candor in the corporate shareholder letter prove anything about honesty in financial statements?  No, it doesn’t.  Form inferences at your own risk.  But the list of ten companies with least candor (as defined by Rittenhouse Rankings) is interesting.  You can find a list of these companies at the right IN RED.  Two or three of these companies have been mentioned in the press for alleged financial reporting difficulties.

I, of course, recommend honesty in all things.

Wouldn’t it be great if all corporate financial statements were honest and free from bias and manipulation?  What a wonderful world it would be.

Debit and credit – - David Albrecht


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aam_logo-smallAlthough I am not a member of the Association for Accounting Marketing (AAM), I am a huge fan.  I believe that a course in professional services marketing should be a requirement in every accounting student’s course of study, whether it be at the bachelor or masters level.  Although this course could include social media aspects, an emphasis on the essential concepts of promoting one’s services is essential.

I also think that all business students, including those in accounting, should take a course in social media that focuses on the professional use of social media that includes topics such as branding and networking.

Why is professional services marketing so important?  No accountant can be promoted to manager or partner without the ability to generate new business.  It’s called rainmaking.

AAM is a professional organization formed specifically to enhance the accounting marketing and practice growth profession through education, networking and thought leadership. Founded in 1989, the association has more than 800 members, comprised of marketing professionals, business developers, CPAs, consultants, service providers, educators and students.  It’s president annually is included in the Accounting Today list of Top 100 Most Influential People.

Now for the press release:

katie_tolin

Katie Tolin

[Mount Laurel, New Jersey (July 22, 2013)] – Katie Tolin, director of practice growth at Rea & Associates, Inc. has been elected 2013-2014 president of the Association for Accounting Marketing (AAM). Her one-year term began July 1.

Other AAM officers include Kerry Sullivan-Lechner, marketing director at Anderson, ZurMuehlen & Co. P.C., president-elect; Jack Kolmansberger, chief marketing officer at Herbein & Company, Inc., vice president; Art Kuesel, founder, Kuesel Consulting, secretary; and Laura Snyder, manager at Crowe Horwath, treasurer. Erinn Keserica, regional marketing manager at Cherry Bakaert, is immediate past president.

AAM’s officers are joined by eight elected board members-at-large who include: Michael Bowlan, marketing principal, Brown, Smith Wallace, LLC; Alice Grey Harrison, marketing communications manager, Dixon Hughes Goodman LLP; Sarah Johnson, chief growth strategist and founder, Inovautus Consulting, LLC; Joe Kovacs, director of marketing, Gelman, Rosenberg & Freedman, PC; Kristen Lewis, director of marketing, EisnerAmper LLP; Sara Robertson, marketing manager, GBQ Partners LLC; Brenda Sleeper, director of business development, BizActions; and Rene Stranghoner, central region marketing leader, Grant Thornton LLP.

The AAM board of directors guides the association through programs that assist accounting marketing and practice growth professionals, including meetings, webinars, and other educational events, to generate effective responses to the unique challenges of promoting and selling professional accounting services. The association also assists members by providing networking opportunities, benchmarking research data, and delivering career development guidance.

Debit and credit – - David Albrecht


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empty_congress_2013_6_7

Congress in session as it passes ‘No Forced Auditor Rotation’ act.

I just received word that the U.S. House of Representatives (Congress) has passed a bill banning mandatory auditor rotation.  Before you start to think that perhaps Congress has done something great and wonderful, a few words of wisdom should be remembered.  I’m posting some of the more accurate descriptions of Congress penned throughout the centuries:

  • Suppose you were an idiot, and suppose you were a member of Congress; but I repeat myself. –Mark Twain
  • You can lead a man to Congress, but you can’t make him think. –Milton Berle
  • We have the power to do any damn fool thing we want to do, and we seem to do it about every ten minutes.” –J. William Fulbright
  • There is no distinctly American criminal class – except Congress.
    –Mark Twain
  • Being elected to Congress is regarded as being sent on a looting raid for one’s friends. –George Will
  • There is more selfishness and less principle among members of Congress than I had any conception of, before I became President of the U.S. –James K. Polk
  • When buying and selling are controlled by legislation, the first things to be bought and sold are legislators. –P.J. O’Rourke
  • With Congress, every time they make a joke it’s a law, and every time they make a law it’s a joke. –Will Rogers
  • I don’t mind what Congress does, as long as they don’t do it in the streets and frighten the horses. –Victor Hugo
  • I have come to the conclusion that one useless man is called a disgrace, that two are called a law firm, and that three or more become a congress. –Peter Stone
  • This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer.
    –Will Rogers

My generation uses a rhetorical question whenever we spot something particularly loony, “What were you smoking?”  Well, Congress, what were you smoking when you banned auditor rotation?

Debit and credit – - David Albrecht


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no-fireworks-3[July 4, Bowling Green, OH] The July 4th holiday used to be known as Independence Day. Ever since I became an accountant, on this day I’ve been celebrating the notion of auditor independence from the corporations for which they are hired to provide an opinion on the financial statements.  Every time a rocket would explode into a flash of color, I’d say, “Hooray for auditor independence!” (OK, I’m a bit weird.) But no more.

This Independence Day, I’m reflecting on the lack of independence between large CPA firms and the corporations that employ them.  And I’m mourning.

More than ever, CPA firms view themselves as a company’s partner.  All of the largest firms are creating huge consulting arms that are to provide billable services to their audit clients.  But problems with audits and opinions have led to world-wide calls for increased regulation of the largest firms.  I guess investors and auditors don’t see it the same way.

This July 4 there is no independence for CPAs.

The auditing profession sees this as a good thing.  I don’t.

Debit and credit – - David Albrecht


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leading-the-wayMost of us know LinkedIn, the most popular and best social media platform for accountants.  Yet, not very many accountants, accounting professors, accounting students and accounting aficionados use it well.

Would it help to know that the most influential people in accounting (according to Accounting Today) use LinkedIn and are heavy users?  If they have invested serious amounts of time in it, then perhaps so should you.

I use LinkedIn heavily.  Over the past year, I pretty much have shifted my social media efforts from blogging on The Summa to interacting with accounting types through LinkedIn.  So much so, I might be called Mr. LinkedIn amongst accounting professors.  Oh, I think that blogging is still my raison d’être.  But LinkedIn is le futur. [Perhaps I can be called Professor Social Media}

You remember the Accounting Today list of the Top 100 Most Influential People in accounting? Published in September of each year, it is Accounting Today’s attempt to capture what’s happening in the industry.  Look carefully, and you’ll notice that those savvy in digital era and social technologies get the AT nod as to who should be influential.

80 of the T100 Most Influential People use LinkedIn. 53 use it heavily with 500+ connections.  The other 27 have small networks. That’s the scale in online social networks.  Large networks are >2,500. Medium sized network have at least 500 contacts.

I categorize the Top 100 Most influential people into those who made the list primarily for (1) blogging/media, (2) audit firm leadership, (3) consultants and vendors, (4) regulators, (5) association leadership, and (6) lobbyists.

Here is my tally of the T100 Most Influential People who use LinkedIn.  I provide links to the profiles for the heavy users.  You must be signed into LinkedIn to fully see the profiles.

Bloggers. All four who make the T100 list for blogging are on LinkedIn.  Heavy users are Dave Albrecht (The Summa), Paul Caron (Tax Prof Blog) and Rick Telberg (CPA Trendlines).  Caleb Newquist (Going Concern) also uses LI.

Accounting Firm Leadership.  10/14 who make the T100 list due to their accounting firm leadership are on LinkedIn.  Heavy users are Jason Blumer (Blumer & Associates), Jim Bourke (WithumSmith+Brown) , Stephen Chipman (Grant Thornton) and Jody Padar (New Vision CPA Group).  Small LI network users who make the T100 list are Rick Anderson (Moss Adams), Ken Baggett (Cohn Reznick), Joe Echevaria (Deloitte), Tom Marino (CohnReznick), Kris McMasters (CliftonLarsonAllen) and Robert Moritz (PWC).  Echevaria is barely on LI, with a short profile and a network of zero.  What’s the point?

Consultants & Vendors.  40/41 who make the T100 list because of their service to accounting firms/professionals are on LinkedIn.  Heavy users are August Aquila (Aquila Global Advisor), Ron Baker (VeraSage Institute), Gary Boomer (Boomer Consulting), Jim Boomer (Boomer Consulting), David Cieslak (Arxis Technology), Gale Crosley (Crosley+Co.), Chris Frederiksen (The 2020 Group), Michelle Golden (Golden Practices), Jeff Gramlich (CCH Small Firm Services), Angie Grissom (The Rainmaker Consulting Group), Pascal Houillon (Sage North America), Randy Johnston (K2 Enterprises), Rita Keller (Keller Advisors), Allan Koltin (Koltin Consulting Group), Taylor Macdonald (Intacct), Jeff Pawlow (The Growth Partnership), Kevin Robert (Wolters Kluwer Tax & Accounting), Marc Rosenberg (The Rosenberg Associates), Bonnie Buol Ruszczyk (BBR Marketing), Rebecca Ryan (Next Generation Consulting), Joel Sinkin (Transition Advisors), Doug  Sleeter (The Sleeter Group), Brad Smith (Intuit), Jennifer Warawa (Sage North America), Troy Waugh (The Rainmaker Companies), Geni Whitehouse (Even a Nerd Can Be Heard), Sandra Wiley (Boomer Consulting), Jennifer Wilson (ConvergenceCoaching), Joe Woodard (Scaling New Heights) and Diane Yetter (Yetter Tax Consulting).  Other LI users are Erik Asgeirsson (CPA2BIZ), Jon Baron (Thomson Reuters Tax and Acct), Chandra Bhansali (AccountantsWorld), Jim Buttonow (New River Innovation), George Farrah (Bloomberg BNA), Zach Nelson (Netsuite), Jay Nisberg (Jay Nisberg and Associates), Brian Peccarelli (Thomson Reuters Tax and Acct), Terry Putney (Transition Advisors), Jill Ward (Intuit).

Regulators.  Only 5/18 who make the T100 list because of their service as regulators of accounting are on LinkedIn.  Heavy users are Orrin Hatch (U.S. Senate) and Mitt Romney (presidential candidate). Other LI users are Karen Hawkins (IRS), Terri Polley (FAF) and Leslie Seidman (FASB).

Professional Associations.  19/20 who make the T100 list because of their leadership in professional associations are on LinkedIn.  Heavy users are Richard Caturano (AICPA), Richard Chambers (IIA), Calvin Harris (NABA), Marie Hollein (FEI), Tom Hood (MACPA), Erinn Keserica (AAM), Mark Koziel (AICPA), Lana Kupferschmid (NCCPAP), Barry Melancon (AICPA), James Metzler (AICPA), Clarke Price (OSCPA), James Ratley (ACFE), Ralph Thomas (NJSCPA) and Jeffrey Thomson (IMA).  Other LI users are JoAnne Barry (NYSSCPA), Parnell Black (NACVA), Loretta Doon (California Society of CPAs), Edward Karl (AICPA) and John Sharbaugh (Texas Society of CPAs).

Lobbyists.  Two of the three who make the T100 list because of their leadership of important lobbying organizations are on LinkedIn.  Neither Ken Bishop (NASBA) or Cindy Fornelli (Center for Audit Quality) are heavy users.

In the world of accounting, influential leader and LinkedIn go hand in hand.

Debit and credit – - David Albrecht


Want more of The Summa? Sign up to receive email notification of posts. And please follow me on Twitter (@profalbrecht). Connect to me on LinkedIn.

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