Archive for May, 2011

Today, May 30, 2011, is Memorial Day in the USA.  It is different, to say the least.  Originally dedicated to fallen soldiers of the USA Civil War, it now marks the start of the summer vacations.

Immediately after the end of the Civil War, there were many local ceremonies honoring slain soldiers.  A fraternal organization for surviving soldiers of the Union Army designated May 30, 1868, for placing flowers (decorating) on the graves of Union and Confederate soldiers buried in Arlington National Cemetery.  Decoration Day was born.  Eventually the day was broadened to honor the fallen of all the armed services.

In 1915, Moina Michael wrote:

and started selling red poppies to raise money for impoverished veterans.

In 1971, the U.S. Congress changed the date of Memorial Day to the last Monday in May, coupling the day to a weekend.  That changed everything.  No longer a day only for remembering fallen soldiers, it is now a weekend signalling the start of summer and the many days of play sure to follow.  Memorial Day has been secularized.  I wish Congress would decouple Memorial Day from weekends, and restore Decoration Day to May 30.

Today, I ask my American readers to spend some time in remembrance of those who have fallen in military service to the country, and to reflect on the significance of their sacrifice.

Debit and credit – – David Albrecht





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Three topics are hitting the accounting news sites.  I’m just passing along announcements.


Work Plan for the Consideration of IncorporatingInternational Financial Reporting Standards into the Financial Reporting System for U.S. Issuers:  Exploring a Possible Method of Incorporation

A Securities and Exchange Commission Staff Paper

May 26, 2011

I will be commenting on this next week.  In the meantime, read the FEIblog summary here.


The FASB and IASB have been working on leases.  The accounting for leases has been a problem area for many, many, many years.  I’ve not commented on it yet.  With the current proposal, neither corporations (and their paid auditors) nor investors are happy with the proposed rule.  The latest change is a prime example of why the IASB will not produce US-useful accounting numbers.

Edith Orenstein at the FEI Blog has a good write-up on the latest, “Preparers Concerned About Change In Direction In FASB, IASB Leasing Proposal.”

# Shareholders to Become SEC Reporting Registrant

Jim Hamilton’s World of Securities Regulation, one of my most trusted and useful news sources, has a new piece out, “House Legislation Would Raise 500-Shareholder Threshold for Reporting Against Backdrop of SEC Review of the Trigger.”  I’ve been wanting to write on this issue for some time.  The Jim Hamilton Blog reports that new legislation has been proposed, increasing the number of shareholders required for enhanced disclosures from 500 to 2,000 shareholders of record.  This will be useful to many large companies, such as Facebook, to ignore the light of the public eye.  This proposed legislation is corporation friendly and investor unfriendly.

Debit and credit – – David Albrecht

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Accosting the Golden Spire, by D. Larry Crumbley

About a week ago or so, I received a package from Larry Crumbley containing one of his educational novels, Accosting the Golden Spire.  Last night I read it.  It was a fun read.

D. Larry Crumbley, CPA, Cr.FA, CFFA, FCPA, is the KPMG Endowed Professor at Louisiana State University.  A tax professor, he has been a prolific author.  He has written 55 books in whole or in part, including 13 educational novels.  He is the author (or co-author) of over 100 journal articles.  Honestly, it would take me a half dozen lifetimes to accomplish all that he has in one.

Larry is passionate about writing.  He is also very good.  Strike that, he is excellent, at least in his fiction works.

Why does he write educational novels? From a newspaper article reprinted on the LSU web site:

Crumbley said he writes novels about forensic accounting because people tend to learn better about a subject when it unfolds in the form of a story. “Hopefully, I’ve made forensic accountants popular, because the main characters in my novels are forensic accountants,” he said.

From the New York Times (April 17, 2011), Crumbley is quoted as saying,

All my novels have massive plots and I kill a lot of people.  If I teach a tax [or accounting] principle and it involves someone getting shot, people will remember that.

Larry has written 13 novels.  His first three (including Accosting the Golden Spire) were published in 1988, the most recent (Trap Doors and Trojan Horses) was published last year.  They include:

  • Dangerous Hoops: A Forensic Marketing Action Adventure
  • Big R: A Forensic Accounting Action Adventure
  • Trap Doors and Trojan Horses
  • Deadly Art Puzzle: Accounting for Murder
  • Simon the Incredible.
  • The Bottom Line is Betrayal
  • Costly Reflections in a Midas Mirror.
  • Accosting the Golden Spire
  • The Ultimate Rip-off: A Taxing Tale
  • Computer Encryptions in Whispering Caves
  • Chemistry in Whispering Caves
  • Nonprofit Sleuths: Follow the Money
  • Burmese Caper

Accosting the Golden Spire is not a great work of fiction.  It is, however, great entertainment.  There is a difference.  I only read great works when I am forced to, such as when they have been assigned for a literature class.  I read entertaining novels because I want to for the fun and enjoyment.  As I say, Accosting the Golden Spire is great entertainment.

It is also educational.  Crumbley’s formula seems to contain three ingredients:  (1) a story about taxes, fraud or auditing, (2) including several details about the tax, fraud or accounting issue, and (3) abruptly inserting a paragraph about some accounting issue that is unrelated to the storyline.  I can see how students would like the first two ingredients.  Ingredient 3, however, is annoying.

Can a student learn about accounting by reading one of Crumbley’s novels?  Yes, especially if it is about a fraud auditing issue. Will all students learn by reading a Crumbley novel?  I’m not so sure.  However, I think that most students will learn as much, if not more, from a Crubley novel than from a textbook.  More importantly, I think the lessons will be retained for a much longer period of time than from traditional instruction.

I like Accosting the Golden Spire, and think it can be used in an auditing or forensic accounting class.  If you are looking for something to freshen up your classes, then have them read this book and then evaluate what the investigator did correctly, and incorrectly.

Why do I like the novel?  It is entertaining, and as satisfying as many Hollywood movies.  This is not a dull, dry, boring  book.  The novel starts off which a character sketch of one of the bad guys (there are others).  This one kills a little dog (for peeing on his front door), in a a fit of temper hurls a brick through a restaurant’s front window because management wouldn’t seat him on a busy night, frames a professor for plagiarizing, and kills another professor.

It deals with a fraud investigation.  Of course, there’s the original fraud.  Then there’s the framing of the fraud investigator, the framing of the fraud originator (by another bad guy), and how the fraud investigator figures it all out.  And, it is competently written.  The plot has twists and turns, most of which I was unable to see coming.

I had enough enjoyment that I ordered his latest novel, Trap Doors and Trojan Horses.  I expect it to be entertaining, and I’m curious to see how his writing style evolved from 1988 to 2009.  As an indication of my sincerity, here’s the receipt from my order:

Debit and credit – – David Albrecht

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Rose Orlik of Accountancy Age

A new story at Accountancy Age by Rose Orlik, “EU green paper calls for softer stance on audit,” reports that a more balanced approach is being considered for auditors and the audit opinion.  If this change sticks, then world-wide audit firms will rejoice.

Orlik writes, “An EU green paper on audit is currently being prepared, the investigation being headed by European Commissioner for Internal Market and Services Michel Barnier, considered by some to be radically pro-competition …”  A green paper is a proposed government policy, in this case something that would be passed by the EU parliament and subsequently in force for companies participating in European capital markets.

Orlik also reports, “Syed Kammal MEP, Conservative shadow lead member in the legal affairs committee, said the revised paper supports ‘flexibility’ and is less drastic than initial proposals that called for mandatory rotation every eight years.”  The changes result from intense lobbying by opponents to the status quo in audit. This opposition, obviously, is mostly from large audit firms and the companies they audit.

With billions of dollars of resources available in large audit firms to fight reform, it is difficult to imagine that any changes will ever be made to the audit model or to the audit function.

Debit and credit – – David Albrecht

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I can speak with unquestionable authority on this issue.  Professors hate grading and assigning grades.  After 32 years in the college classroom, I have to admit that students have been accepting of the grades I’ve assigned.  However, every once in a while some student will come a-complaining.

All professors & instructors can relate to the video, “I Am Worried About My Grade.”  Give a student a lower grade than what the student wants, and you risk having the student march into your office demanding a better grade.  Oh, sometimes it is couched in terms of a request, but the tone of request reveals it is a demand.

I’ve taught at public universities and private colleges, and it seems to me that demanding students are worse at private colleges.  And yes, I’ve even heard, “It’s your fault I received this bad grade.”

I found this video on YouTube.  I did not create it.  It does seem to strike a cord, though.

Debit and credit – –  David Albrecht

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Michelle Golden

Michelle Golden is one of Accounting Today‘s 100 most influential in the American world of accounting.  Focusing on professional service firms (such as CPAs and attorneys), she long has been an expert consultant on marketing.  Early on she saw the value of social media as a tool for professionals to reach new clients and to strengthen relationships with existing clients.  Her book, Social Media Strategies for Professionals and Their Firms: The Guide to Establishing Credibility and Accelerating Relationships, is unusually good.  I own two copies, one for the office, and one for home (I regularly carry one of them with me).

The Maryland Association of CPAs (MACPA), more than any other statae CPA society, has long promoted social media usage by CPAs.

MACPA's use of social media

MACPA members and employees are encouraged to explore all forms of social media and find the one(s) that best fit their needs. Doing so expands our ability to learn and share our own knowledge with others.

Led by Tom Hood and Bill Sheridan, it has an impressive presence on the web 2.0.  A page devoted to its resources is here.  Coincidentally, MACPA was the first society to establish a presence on Second Life.  Long-time readers of The Summa might remember Profalbrecht’s participation in “If I Were an Auditor,” a musical valentine sponsored by MACPA and released in Second Life.

I believe that all CPA firms and accounting professors should seriously consider joining the social media bandwagon, or expanding efforts if already there.  The Internet is omnipresent in the fabric of American life.  Social media simply means interactive Internet.  For CPAs, it means reaching out to current and potential clients where they are, opening up additional channels of communication.  For professors, it means pushing academe away from its array of 19th century practices and into the 21st century.

Recently, Bill Sheridan interviewed Michelle Golden, and on Friday uploaded the video to YouTube.  I’m embedding a link to it for several reasons.  First, it’s about social media use by CPAs.  Second, Michelle Golden should do more of these things.  Well spoken and attractive, she could develop an Internet following that would translate into increased attendance at her speaking engagements.  Third, MACPA could perform a substantial service to the industry by creating a series of these vodcast interviews with the industry’s leading experts.  I would watch them all.

Here’s the interview.  Please watch it.

Debit and credit – – David Albrecht

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Daniel L. Goelzer

Daniel L. Goelzer has been a member of the Public Company Accounting Oversight Board (PCAOB) since its inception in 2002.  His term is expiring in October, 2011, and the SEC is initiating a process that will eventually result in his replacement.

In a letter sent to key regulators and other officials, SEC Chairman Mary Schapiro said:

According to the [Sarbanes-Oxley Act of 2002], two members of the Board must be or have been a CPA.  One of the members that the Commission recently appointed is a CPA.  The term of the other CPA member expires in October, 2011 …

The Act requires that the Board members be “appointed from among prominent individuals of integrity and reputation who have a demonstrated commitment to the interests of investors and the public, and an understanding of the responsibilities for and nature of the financial disclosures required of issuers under the securities laws and the obligations of accountants with respect to the preparation and issuance of audit reports with respect to such disclosures.”

In addition to the requirements of the Act, we consider other desirable experience and related criteria of candidates, including experience that demonstrates a strong understanding of the role of auditors in the Commission’s financial reporting and disclosure system, the ability to be a fair regulator from the viewpoint of all participants in the financial markets, a demonstrated record of independence and the ability to make unpopular decisions when necessary, and the ability and willingness to serve the full term to which appointed.

Names and qualifications should be submitted for consideration by June 17 via email to: Board-recommendations@sec.gov or via mail to: U.S. Securities and Exchange Commission, Office of the Chief Accountant, 100 F Street, NE, Washington, DC 20549, Attn: PCAOB Suggestions.

The official announcement is posted here.  The SEC’s procedures for PCAOB member or chair selection is posted here.

Debit and credit – – David Albrecht

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