Archive for November, 2010

There are three types of blogs:

  1. Commentary
  2. Lifestyle
  3. Information (or research if by academic)

The Summa is a commentary type of blog.  It all starts with an issue of interest to you and me.  I take a position, and provide reasons for it.  The end result is an argument.

Pondering the Classroom (my other blog) is a lifestyle type of blog.  I write about various things related to my life as a professor.  Every post should have a point, but generally I’m not trying to win an argument.

I don’t have an information type of blog because it takes too much time and dedication.  A great example is Paul Caron’s TaxProf blog.

Some of you might be interested in reading, “How I Became a Professor” over on Pondering the Classroom.  Some of you might not.

What led you to the field of accounting?  Because accountants can provide a valuable service to society, some call their accounting vocation a call to service.  Do you?

Debit and credit – – David Albrecht

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I have 600+ movie DVDs in my collection.  One of my favorites is the 1998 American film Godzilla.

The fictional story is simple.  Decades ago, French testing of nuclear warheads resulted in irradiated lizard eggs.  One egg hatched a mutant lizard that grows 200 times what should be its normal size.  It travels to NYC in search of the perfect habitat for laying eggs.  Much mayhem results.

Stated another way, Godzilla is an account about the impact of artificial stimulants on a lifeform.  As a result, the lifeform grows to gargantuan size and causes incalculable damage when it runs amok.  How do humans react after an encounter?  With terror.  The monster is too large and powerful.  It is impervious to human attempts at control

In the preceding image, Dr. Niko Tatopoulos is the human hero of Godzilla (1998) who comes face to face with the monster.  He realizes that he has no power to control or influence the monster’s behavior.

Survivor can only exclaim, "Gojira."

Metaphorically speaking, I wonder if the very largest international audit firms are Godzilla (or “Gojira” as the Japanese fisherman mutters), and if investors  are Tatopoulos.  At one time, audit firms existed in natural form.  They were small and plentiful.  Financial statement audits were voluntary.  Auditors had a positive public image and a reputation for honesty and integrity.  Heads of larger firms were legendary.  Then the Securities Act of 1933 and the Securities and Exchange Act of 1934 changed the environment.  Public corporations were required (by these laws) to secure audits of their financial statements.  A regulated industry of public auditors was created, receiving a government sanctioned monopoly to provide these financial statement audits.  Responding to this disruption in their natural environment, audit firms began to grow in size, becoming international in scope.  In addition, their reason for being evolved to partnering with corporate management from protecting investors.  Although an attempt was made to control them (PCAOB), the recent crisis has proven that the large firms are too powerful to control

In financial crisis after financial crisis, a cry has gone up, “Where were the auditors?” (here and here and here)  I wonder if the answer is “Godzilla,” a moster of such power that it is beyond control.

No, I’m probably off track with this musing.  Although the largest firms are TFTF (“Too few to fail” coined by Francine McKenna) according to U.S. government policy, and the firms themselves see no potential liability issues to threaten their survival, the large audit firms aren’t monsters.  After all, they protect investors and serve the public interest.  Don’t they?

Debit and credit – – David Albrecht

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Being Thankful

Many bloggers write about the things for which they are grateful.  I’ve already done so over at Pondering the Classroom’sThanksgiving at College, 2010.”

Over here at The Summa, I have a separate list of things for which to be grateful.

  • My favorite bloggers:  Francine McKenna (re: The Auditors), Jim Peterson (re:Balance), Sara McIntosh (Sara McIntosh), Caleb Newquist (Going Concern), Tom Selling (Accounting Onion), Adrienne Gonzalez (Jr. Deputy Accountant), Ed Ketz (Accounting Cycle) and Edith Orenstein (FEI Blog).  Gang, you are all my favorites, so the order is meaningless.  You each inspire me.  As a group, you have been so kind as to let me join your world.
  • Bob Jensen and AECM.  My colleagues in the world of academic accounting.  I would know nothing about accounting of any importance if it weren’t for Bob and AECM.
  • The House of Lords, and its grilling of the audit industry (aka Big 4).  It’s about time someone in government embarrassed these big firms.
  • My readers, who remain faithful despite my inability to post on a regular basis.
  • My students, who keep me connected to the good in accounting.
  • Skype, which keeps me connected to my family.

Debit and credit – – David Albrecht

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The Latest Cheating Scandal

Scandals are a financial blogger’s bread and butter.  Just ask anyone (e.g., Francine, Jim, Sara, Caleb, JDA, Sam, Tracy).  Some financial bloggers write because there are scandals, others are going to write and scandals are easy to write about.

Scandals abound in financial reporting, government regulation and auditing.  Occasionally, collegiate scandals hit the news.  If there was more money involved, collegiate scandals would be written about more often.  Last week, a doozy of a collegiate cheating scandal (University of Central Florida—UCF) hit national news.

Underlying most scandals is an act of cheating.  Depending on the rewards and risks, the cheating can be simple or sophisticated.  Regardless, cheaters normally are vilified and cheatees are sanctified.

How much cheating takes place?  There is no clear answer, as it depends on the circumstances.   At some level, cheating is universal (meaning that everyone is a cheat).  You are a cheat in at least some aspect of your life.  There is a simple test that shows 99% of you to be a cheater.

Have you willfully exceeded the legal speed limit while driving your car?

Not a fair question?  Well, yes it is.

There are two conditions that must be present for cheating to take place.  First, there must be a rule.  Second, someone must be tasked with obeying that rule.  Merriam-Webster defines cheating as, “… to violate rules dishonestly …”  (Can anyone violate a rule honestly?)  Because those charged with obeying a given rule are not in all ways congruent with those who created the rule, it is reasonable to conclude that any rule can be not complied with.

Cheating takes place in college.  Much of it revolves around tests.  Cheating on tests is rampant.  The reward is a higher test score, which could be needed to deal with peer pressure, raise the GPA for scholarship purposes, etc.  The risks are small, as most professors don’t check for cheating and cheating is difficult to detect.  As evidence, I’ll turn to my favorite source for popular culture–Youtube.

There are several videos on Youtube that can teach you how to cheat on a test.  Some are tongue in cheek, some are serious.  Two out of the many are:

Now, for the scandal at UCF.  UCF is the country’s second largest brick and mortar university.  Most courses are mass produced.  How mass produced?  The class in question has 600 students.  The professor lectures all the time, and lectures are streamed over the campus network.  The classroom for this class has a capacity of 200, but reportedly far fewer students attend.

Because of the large numbers of students, testing is severely restricted.  Because tests that include essay questions or open-ended numerical problems would take too long to grade, testing is done using multiple choice formatted questions.

At UCF, business professor Richard  Quinn uses tests that come from a publisher’s test bank.  Here’s how it works.  Usually a publisher has a data base of multiple choice questions for each chapter in a business text book.   Instructors can select certain questions, or choose to have the data base software randomly select a certain number of questions.  These are then formatted, and subsequently administered to students in a testing environment.

In the age of the Internet, it is easy to download a copy of a test bank from the Internet.  I’ve seen prices vary from free to $150.  It is common knowledge among professors that these test banks are out there and available.

At UCF,  business professor Richard Quinn stated at the start of the course that all tests would be multiple choice and that he would write all his own questions.  Subsequently, students in his course secured a digital copy of the test bank and openly shared it.  For a test in mid October, the test bank contained approximately 200 relevant questions.  Students did not know how many or which questions would appear on the test, so they studied all 200 questions.  Some scores were high, and the professor called studying from the test bank to be cheating.  Due to the large number of students involved, it made evening national news broadcasts.  The professor became an admired celebrity because of his speech to the students in which he chewed them out for cheatingl.

The following video explains some of the issues involved:

This has become a hot topic of conversation among business professors, nationwide.  It has provoked dozens of e-mails among the accounting professors at AECM.  Here’s my take.

First, the professor is acting like a jerk.  Second, the professor is largely at fault here by attempting to deceive students as to the source of his test questions.  Third, the professor shirked his professional duty by relying on a test bank he had to have known was compromised.  Quinn should have been writing his own tests because that’s what he gets paid for.  He even uses power point slides provided by the publisher.  Fourth, some 200 students acted rationally in securing a copy of the test bank to study from.  That 400 others didn’t shows the prevalence of irrationality.  If I was a student, I would have sought out a copy of the test bank and I’m honest.  Fifth, multiple choice questions from publisher test banks are notorious for being poorly written and difficult for students to understand.  This is a major reason for low test scores on multiple choice tests.  Sixth, the professor’s punitive actions against all students (cheaters and non-cheaters) provide evidence of his high level of jerkiness.  Seventh, news media professionals, as usual, didn’t adequately research the story and made material misstatements.

Predictably, the accounting professors at AECM support the professor.

I’ll have more to write on this issue.  Have fun with it in the meantime.

Debit and credit – – David Albrecht




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The AICPA 2010 Accounting Competition has reached the semi-final stage, where the public (that’s you) can vote (November 11 – November 19) on the best presentation.  Voting is a wonderful way to support students.

The advancing teams are from these schools:

  • The Citadel
  • Elms College
  • Ohio Dominican University
  • Pittsburg State University
  • University of St. FrancisSan Jose State University
  • San Jose State University
  • University of Southern Indiana
  • University of Tennessee
  • University of Texas at Dallas

To view each seven minute video presentation and vote, click here.

Congratulations to every student team that entered.  It might sound trite, but you are all winners.

Worth mentioning are two student presentations that make excellent use of the video medium.  The first is the Green Assets team from Ohio Dominican University.  The second is Eco Consulting team from the University of Texas at Dallas.

To vote, click here.

Debit and credit – – David Albrecht

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Now that Accountant’s Day is over, it’s time to report on the many ways that the world’s wild and crazy accountants celebrated the day.

I never knew there were so many different ways for accountant’s to celebrate.  Here is the Top 10 List of Things Accountants Did On Accountant’s Day, 2010.

10.   Started work three minutes late.

9.   Danced “We Are the Champions” upon uncovering boss accountant’s math mistake.

8.   Marched around drill field to debit-credit cadence.

7.   Changed batteries in calculator.

6.   Ran the tax code through shredder.

5.   Snacked on Diet Coke and Cheese Puffs.

4.   Wrote every total and subtotal in red ink.

3.   Stepped on sidewalk crack.

2.   Left office 10 minutes early.

1.  Stayed up all night counting sheep.

Debit and credit – – David Albrecht

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The 2010 Bean Counter Contest is now history.  A student at Concordia College in Moorhead, Minnesota, has been declared the winner.

The Bean Counter Contest was created to promote interest in Accountant’s Day (aka International Accounting Day), held each year on November 10.  This year, ProfAlbrecht purchased a glass jar (approximately ½ gallon)  and filled it with Brach’s jelly beans.

The guess closest to the actual count of 721 jelly beans was entered by Catherine.  Her guess of 700 jelly beans was easily the best when compared to all other entries.

This year, 74 four entries were received.  Estimates ranged from a low of 51 to a high of 1,999.  The average number of beans guessed was 461, and the median guess was 370.

The official tally is:

Catherine has won the following:

  1. bag of jelly beans
  2. bag of M&M peanuts
  3. toothbrush

Congratulations, Catherine!  I hope you had a great Accountant’s Day.

Debit and credit – – David Albrecht


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To commemorate Accountant’s Day on Wednesday, November 10, 2010, The Summa is conducting its first annual Bean Counters Contest.

If you can correctly guess the number of jelly beans in this jar (net of any allowances (the beans I eat while counting)), you will win:

  1. bag of jelly beans
  2. bag of M&M peanuts
  3. toothbrush

Entries are accepted by e-mail to albrecht@profalbrecht.com or by commenting to this blog post.  Entries must be received by 11:59 p.m. CT, November 10, 2010.  Entries must contain contestant’s name and e-mail address.  Number of expected winning entries:  one.  In case of multiple winning entries, the two entries with the earliest time stamp will be declared the winners.  The jar contains items other than jelly beans, such as Hershey’s kisses.  These are for me to eat while counting.  Your task is to count only the beans in the jar.  Limit of one entry per person.

Concordia student Josh holds onto official jar while ProfAlbrecht looks on.

Debit and credit – – David Albrecht

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I have two blogs:  The Summa and Pondering the Classroom.   I hope you read both.

The Summa, as you know, is a commentary type of blog.  Mostly the posts are editorials where I take a position on a current professional accounting or auditing issue, and argue for my position.  Although I occasionally lapse into lifestyle/humor or news, mostly I am providing commentary in which I fit a current event into my worldview.

Pondering the Classroom is what is called a lifestyle blog–about higher education.  Lifestyle posts revolve around reflection and the point I have to make.  It is not about what I ate for breakfast (blueberry waffles), nor it is about why I ate what I ate for breakfast (it was there).  No, it is about issues that come up in my classes and what I think about them.

I have written a few posts that you might find enjoyable.  Click on the links below and check them out.

As you can plainly see, there is no overlap in subject or style.  That’s why there are two different blogs.  I’m hoping you will become regular readers of both.

Debit and credit – – David Albrecht

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Recent DNA results raise doubt that Pacioli fathers accounting.

November 10 is when we celebrate Accountant’s Day.  I recently wrote,

On November 10, 1494, volume 2 of Summa de Arithmetica, Geometria, Proportioni et Proportionalita (Everything About Arithmetic, Geometry and Proportion) was published.  It is in volume 2 of the Summa that Luca Pacioli included a description of the bookkeeping/accounting system of Venice.   In honor of this contribution, Pacioli has carried for centuries the title of Father of Accounting.

Pacioli, though, never claimed to invent anything related to accounting.  In an attempt to refute paternity, Pacioli consented to a DNA test.

New Mexico State University accounting professor (and master accounting humorist) Ed Scribner writes, “Recent DNA evidence reveals that Pacioli is not actually the Father of Accounting …”

Accounting researcher Dan Stone from the University of Kentucky agrees, “Recent DNA evidence indicates that while Pacioli is not actually the Father of Accounting, he is the Father of the hoodie.”

Pacioli does not claim that, either.

I wonder.  Why would a celibate monk be considered the father of anything?

Debit and credit – – David Albrecht

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The excitement is building in my house.  Why?  Accounting Day is fast approaching.

November 10 is the day we accountants commemorate a top 25 event in the world’s history–publishing the first book on accounting.

On November 10, 1494, volume 2 of Summa de Arithmetica, Geometria, Proportioni et Proportionalita (Everything About Arithmetic, Geometry and Proportion) was published.  It is in volume 2 of the Summa that Luca Pacioli included a description of the bookkeeping/accounting system of Venice.   In honor of this contribution, Pacioli has carried for centuries the title of Father of Accounting.

This year, I’ve decided to stand on the town’s busiest street corner and hand out small bags of beans for passers-by to count.  There will be jelly beans, pinto beans, and beans that give you gas.  It doesn’t matter what the beans are, because November 10 is our day.

If you’ve never celebrated Accounting Day before, please come to my party.  There will be numbers galore.

Debit and credit – – David Albrecht

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There are only a few things that make me feel good. Topping the list is getting to count. Second on the list is being in the presence of other people who enjoy counting.

Election night, November 2, 2010, was a great night for me.  If a person wasn’t counting, they were watching counters and counts.

More so than ever, the Internet was there for me.  Several news web sites featured counting, numbers flowing everywhere.  Interactive maps mesmerized me.  Every time I moved my mouse, more numbers would pop up on the screen.

And the politicians were acting just like accountants.  How so?  Whatever the number, politicians were able to spin it their way.  Republicans feel good about the House of Representatives, where they have control after a wave of historic proportion swept away many Democrats.  Democrats can feel good because the results could have been worse.

Debit and credit – – David Albrecht

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