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accountantdaySmallOn November 10, 1494, Luca Pacioli published the first book about accounting.  To honor this great event, we celebrate November 10 as Accountant’s Day.

Over the years, I’ve celebrated Accountant’s Day in many ways.  One year I took juggling lessons.  Then I experimented on a great recipe to cook the books.  Another year I passed out pencil erasers on a busy street corner.  I almost always count jelly beans.

Gourmet jelly beansAnd so I attempted this year.  I woke up at midnight to be the first in Southern California to count the beans.  However, I lost the count when I couldn’t move my lips and chew at the same time.  In other words, I ate a package of Trader Joe’s Gourmet Jelly Beans without counting them.  Do you think I’ll go to hell?

This year, I’ve been working on a top ten list of things to think about today.

10.    Counting is mandatory, a-counting is not.

9.    Your wife doesn’t depreciate you any more.

8.    The tax loophole named after you pays royalties.

7.    The dry cleaner won’t charge for removing today’s coffee stains.

6.    Would the course of history have been different if debits were on the right?

5.    Everyone complains you are accrual.

4.    You are certified but not crazy.

3.    You are a debit to your profession.

2.    How to Frame a Figg (on Netflix) is your favorite movie.

1.    Today only, no spouse can contradict an auditor’s opinion.

Debit and credit – – David Albrecht


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Got Your Back

working_togetherI am teaching this term a masters level course term on professional skills.  You know, personal skills for business people.

We’ve covered professional branding, networking, professional use of social media and now team building.

The book we’re studying now is Who’s Got Your Back, by Keith Ferrazzi.  We previously studied his book, Never Eat Alone.

Prior to actually reading the book, I had one thought only in mind about having someone’s back.  It is about someone who is willing to go to war with you.   It is someone who will defend you in your absence.  It is someone who will defend against behind your back challenges when your focus is forward.  My feeling of the word is captured by the following screen shots from Mr. and Mrs. Smith, starring Angelina Jolie and Brad Pitt.

mr_mrs_smith_going_to_war

Fortunately for my students, I am not a warrior facing battle in class.  Along the way, I’ve picked up on a different aspect of business relationships.  That is, business is best conducted between people who know, like and trust each other.  The students in my classes are part of my team.  When we come to class, we are working together to accomplish the learning task of the day.

And this is Ferrazzi’s thesis in Who’s Got Your Back.  Business is most successfully conducted by close and effective teams who build deep, trusting relationships with business connections.

handsI’m a typical accountant in many ways.  I prefer numbers over people.  If a subject doesn’t contain numbers (such as psychology or sociology), I deride it as touchy and feely.  Never-the-less, Ferrazzi makes relationships sound appealing.  If only I know how to make a relationship work.

Does this book hold anything for accountants?  I think so. Accountants get a bad rap for their lack of people skills.  Based on my personal experience with thousands of accountants, this reputation is well deserved.

Just imagine what accountants could do for society if we were liked and trusted.  It would be a new and wonderful world.

Ferrazi’s Who’s Got Your Back has three themes.

The first theme is the necessary mind sets that must be present to help develop a sense of intimacy with another person.  They are (1) generosity, (2) vulnerability, (3) candor and (4) accountability.

The second theme is focused on “building your dream team.”  A rugged individualist is limited to what he or she can personally accomplish.  A business person who is part of team can leverage everyone’s individual efforts.

The third theme is the life time commitment it takes to doing things the people way.

I like Who’s Got Your Back, and recommend you pick it up for a thoughtful weekend read.

Debit and credit – – David Albrecht


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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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