Posted in Academics, Accounting Ed, tagged Accounting education, Accounting Professor, Education on August 28, 2010| Leave a Comment »
I’ve created a new blog. The long title is An Accounting Professor Ponders the Classroom. Call it Accounting Professor for short. Find it here at http://accountingprofessor.wordpress.com.
Please add it to your bookmarks, and tell all your friends about it.
Debit and credit – – David Albrecht
Posted in Accounting, IFRS, Regulation, tagged Christopher Cox, FASB, Robert Herz on August 25, 2010| 3 Comments »
Robert Herz has resigned as Chair of the Financial Accounting Standards Board (FASB), effective October 1. Concurrently, the FASB is returning to seven members from the current five. The official announcement is posted here. This development is sudden and unexpected.
A process has been initiated to search for a new chair and two new board members.
Why now? Herz is under no pressure to leave, and there are several professional reasons for him to stay. It is my guess that this is motivated solely by personal concerns, possibly health related. I wish the very best for the Herz family.
What are the implications for the convergence of U.S. Generally Accepted Accounting Principles (GAAP) with International Financial Reporting Standards (IFRS)? There are three major possibilities:
What is Herz’s legacy? Herz has been a strong advocate for converting American financial reporting from the U.S. GAAP basis to the IFRS basis. An accurate generalization is that Herz has been focused on changing the accounting standards instead of improving the accounting standards already in place for American companies. The conversion process has essentially been one of compromise between existing GAAP and IFRS standards. Although the two boards pay lip service to improvement, there really hasn’t been much.
History remembers the names of those who help bring about profound change, so long as it benefits future generations. Not much chance of that here.
Robert Herz and Christopher Cox led the IFRS Railroading Express
In 2007-2008, there was considerable dissatisfaction with the way that SEC Chair Christopher Cox and Herz were pushing IFRS. Bob Jensen (emeritus accounting professor) labeled this the Cox-Herz Railroading Express.
What about the increase from five to seven board members? Earlier today on AECM, Bob Jensen wondered if the 2008 decrease in board members from seven to five was to get rid of two that might have delayed convergence. It’s clear Herz wanted only five that he could work with. However, convergence is a lot of work and two more board members might be needed now to get the work done.
Debit and credit – – David Albrecht
Posted in Humor and cartoons, Uncategorized on August 13, 2010| 1 Comment »
Thanks to Jr. Deputy Accountant for this tip.
On December 04, 2009, Fox News aired the following graphic:
pic credit: Fox News
The arithmetically inclined reader will be surprised to learn that 15% “not sure” responses are not shown.
This snafu reminds me of an humorless accounting joke. Responding to a question during a job interview about the sum of 2 + 2, the aspiring accountant replied, “Whatever you wish it to be.” Of course, a large firm auditor would have provided a similar answer, especially if it was interviewing for a multi-million dollar audit engagement.
A correct graphic for Fox New would read:
By the way, the use of “not very likely” is confusing. Although it is possible that the pollster for Fox News think “not very likely” means either “very unlikely” or simply “unlikely”, there are some that think “not very likely” means “somewhat likely”.
In conclusion, it appears that Fox News could have been done in by accountants. The arithmetic looks like the work product of an accountant, and the wording looks like the work of an IASB standard setter or a Big 4 audit opinion writer.
Debit and credit – – David Albrecht
The Summa 