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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.

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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

[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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[Riverside, California]  Top Management Degrees, a website devoted to providing information about B-Schools, on November 13, 2013, released its list of “50 Most Beautiful Business Schools in the World.”

Many top universities from around the world have their B-Schools recognized.  Pretty much, it is a Who’s Who of the world’s top B-schools.

However, a newcomer in more ways than one has topped the list at #1:

Tom and Vi Zapara School of Business
La Sierra University
Riverside, California, USA

The Zapara School of Business at La Sierra University is my new school.  This school term is my first at ZSB.  I’ve seem some of the most beautiful B-school buildings from around the world.  In my opinion, though, none can compare to ZSB.

It is stunning in its beauty, both inside and out.  Once the landscaped plantings start to flourish, it will be even more attractive.  I have great affinity for the palm trees in the spacious atrium.  Classrooms are well designed and helpful to instruction. In addition, my office with it’s awesome view and faux leather couch inspires both my students and self.

The new building at the Tom & Vi Zapara School of Business at La Sierra University

The dawn of a building–Tom & Vi Zapara School of Business at La Sierra University

Sunset at the Zapara School of Business

Sunset at the Zapara School of Business

Lighting up the evening skies at the Tom & Vi Zapara School of Business

Lighting up the evening skies at the Tom & Vi Zapara School of Business

Debit & credit – - David Albrecht


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From the AICPA:

AICPA Honors Annette Nellen
with Arthur J. Dixon Memorial Award

Professor Annette Nellen, San Jose State University

Professor Annette Nellen, San Jose State University

Washington, D.C., Nov. 6, 2013 –Annette Nellen is the recipient of the 2013 Arthur J. Dixon Memorial Award, the highest honor bestowed by the accounting profession in the area of taxation.  The award, given by the Tax Division of the American Institute of CPAs (AICPA), was presented today at the AICPA’s Fall Tax Division Meeting in National Harbor, Md.

Click here to read the press release in its entirety.

Professor Annette Nellen, San Jose State University, surely deserves this honor. Her views on taxation are widely disseminated–via more than 250 articles, numerous testimonials before government panels, on multiple web sites, and her blog21st Century Taxation.

I applaud the AICPA for exercising good judgment in assigning the award to Professor Nellen.

I congratulate Professor Nellen for accomplishing so very much in her special career.

Debit and credit – - David Albrecht


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