Archive for the ‘Accounting’ Category

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.


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.


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Professor Marsha Huber

Professor Marsha Huber

Marsha Huber, Ph.D. and CPA, is associate professor of accounting at Youngstown State University.  She is a well published accounting researcher who studies the humanity of accountants.

She is conducting the first study on the happiness levels of accountants.  She is asking for accounting professors and professionals to take a survey.  It takes 15-20 minutes to complete.  At the conclusion of the study, you can sign up to participate in her future related projects, as well as a completed report of the current project. To take the survey, click on: http://www.surveymonkey.com/s/HappyAccountant.

Marsha is a close friend.  She does it all, teaching well, researching well, and providing valuable community service.  She finds time to love and care for her family.

She describes herself on her LinkedIn profile:

I am an accounting professor and happiness researcher. I might describe myself as an educational innovator, receiving three awards in accounting education: the 2010 Bea Sanders/AICPA, the 2011 Howard Theall, and the 2012 George Krull/Grant Thornton innovation in accounting education awards. I enjoy mentoring others being selected as the 2013 KPMG Mentor of the Year. I enjoy speaking at both academic and professional conferences on the topics of resiliency, happiness, and meaning in life and at school. One of my life goals is to help all accounting professionals become happier.

Please help her out by completing this important research study.

Debit and credit – – David Albrecht

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socialcpasBarry MacQuarrie is a Boston area CPA and consultant.  In his spare time he is a social media enthusiast (aka evangelist) who as started a group called SocialCPAs. On LinkedIn, the SocialCPAs discussion group has >3,500 members.

The SocialCPAs annual Social Media Survey is in its fourth year of existence.  In the past it has revealed some very interesting characteristics of CPA likes and dislikes about professional use of social media.

The 2013 survey closes at the end of day on Friday, August 30 (tomorrow).  You should take this survey, and please ask your co-workers to take the survey.

Click here to take 2013 Social Media Survey

Debit and credit – – David Albrecht

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Candor.  No, I’m not talking about condor, a bird.  I’m talking about clear and unbiased communication.  The Merriam-Webster definition uses the words fairness and honesty.


Pic credit – Merriam-Webster

Do some corporate communications appear to contain more candor than others?  Yes, based on a proposed metric.  Does this appearance prove their candor?  Those on the outside will never know.  I’ve sometimes heard that the best corporate policy is the appearance of honesty.

Rittenhouse Rankings attempts to measure candor in corporate shareholder letters for a sample of 100 companies selected from the S&P 500.  The sample group “was selected ten years ago based on industry grouping, capitalization size and financial reputations.  Candor is quantified systematically by awarding points for informative, relevant disclosure and deducting points for jargon, confusing statements and clichés.”

Recently, the Rittenhouse Rankings 2012 Candor and Corporate Culture Survey™ was released.  In the release, it is claimed that the ten most candid companies as a group earned a greater return on a stock investment than the ten least candid companies as a group.  The difference in return appears to be large.


Pic credit – Rittenhouse Rankings

Does candor in the corporate shareholder letter prove anything about honesty in financial statements?  No, it doesn’t.  Form inferences at your own risk.  But the list of ten companies with least candor (as defined by Rittenhouse Rankings) is interesting.  You can find a list of these companies at the right IN RED.  Two or three of these companies have been mentioned in the press for alleged financial reporting difficulties.

I, of course, recommend honesty in all things.

Wouldn’t it be great if all corporate financial statements were honest and free from bias and manipulation?  What a wonderful world it would be.

Debit and credit – – David Albrecht

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aam_logo-smallAlthough I am not a member of the Association for Accounting Marketing (AAM), I am a huge fan.  I believe that a course in professional services marketing should be a requirement in every accounting student’s course of study, whether it be at the bachelor or masters level.  Although this course could include social media aspects, an emphasis on the essential concepts of promoting one’s services is essential.

I also think that all business students, including those in accounting, should take a course in social media that focuses on the professional use of social media that includes topics such as branding and networking.

Why is professional services marketing so important?  No accountant can be promoted to manager or partner without the ability to generate new business.  It’s called rainmaking.

AAM is a professional organization formed specifically to enhance the accounting marketing and practice growth profession through education, networking and thought leadership. Founded in 1989, the association has more than 800 members, comprised of marketing professionals, business developers, CPAs, consultants, service providers, educators and students.  It’s president annually is included in the Accounting Today list of Top 100 Most Influential People.

Now for the press release:


Katie Tolin

[Mount Laurel, New Jersey (July 22, 2013)] – Katie Tolin, director of practice growth at Rea & Associates, Inc. has been elected 2013-2014 president of the Association for Accounting Marketing (AAM). Her one-year term began July 1.

Other AAM officers include Kerry Sullivan-Lechner, marketing director at Anderson, ZurMuehlen & Co. P.C., president-elect; Jack Kolmansberger, chief marketing officer at Herbein & Company, Inc., vice president; Art Kuesel, founder, Kuesel Consulting, secretary; and Laura Snyder, manager at Crowe Horwath, treasurer. Erinn Keserica, regional marketing manager at Cherry Bakaert, is immediate past president.

AAM’s officers are joined by eight elected board members-at-large who include: Michael Bowlan, marketing principal, Brown, Smith Wallace, LLC; Alice Grey Harrison, marketing communications manager, Dixon Hughes Goodman LLP; Sarah Johnson, chief growth strategist and founder, Inovautus Consulting, LLC; Joe Kovacs, director of marketing, Gelman, Rosenberg & Freedman, PC; Kristen Lewis, director of marketing, EisnerAmper LLP; Sara Robertson, marketing manager, GBQ Partners LLC; Brenda Sleeper, director of business development, BizActions; and Rene Stranghoner, central region marketing leader, Grant Thornton LLP.

The AAM board of directors guides the association through programs that assist accounting marketing and practice growth professionals, including meetings, webinars, and other educational events, to generate effective responses to the unique challenges of promoting and selling professional accounting services. The association also assists members by providing networking opportunities, benchmarking research data, and delivering career development guidance.

Debit and credit – – David Albrecht

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Congress in session as it passes ‘No Forced Auditor Rotation’ act.

I just received word that the U.S. House of Representatives (Congress) has passed a bill banning mandatory auditor rotation.  Before you start to think that perhaps Congress has done something great and wonderful, a few words of wisdom should be remembered.  I’m posting some of the more accurate descriptions of Congress penned throughout the centuries:

  • Suppose you were an idiot, and suppose you were a member of Congress; but I repeat myself. –Mark Twain
  • You can lead a man to Congress, but you can’t make him think. –Milton Berle
  • We have the power to do any damn fool thing we want to do, and we seem to do it about every ten minutes.” –J. William Fulbright
  • There is no distinctly American criminal class – except Congress.
    –Mark Twain
  • Being elected to Congress is regarded as being sent on a looting raid for one’s friends. –George Will
  • There is more selfishness and less principle among members of Congress than I had any conception of, before I became President of the U.S. –James K. Polk
  • When buying and selling are controlled by legislation, the first things to be bought and sold are legislators. –P.J. O’Rourke
  • With Congress, every time they make a joke it’s a law, and every time they make a law it’s a joke. –Will Rogers
  • I don’t mind what Congress does, as long as they don’t do it in the streets and frighten the horses. –Victor Hugo
  • I have come to the conclusion that one useless man is called a disgrace, that two are called a law firm, and that three or more become a congress. –Peter Stone
  • This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer.
    –Will Rogers

My generation uses a rhetorical question whenever we spot something particularly loony, “What were you smoking?”  Well, Congress, what were you smoking when you banned auditor rotation?

Debit and credit – – David Albrecht

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