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Posts Tagged ‘Bob Jensen’

Miscellany — interesting items that caught my eye during the week.


Francine McKenna is the dean of the accounting bloggers with her re: The Auditors blog.  She never disappoints.  Her comments in “More Sarbanes-Oxley Anniversary Thoughts, ” should be read.


Mark Holtzman, Accounting Department chair at Seton Hall, is an exceptional example of today’s social media enabled professor.  He has three blogs, a twitter feed and a YouTube channel.  Wow.  You don’t want to miss the essay I asked him to write, “Rise and Fall of the Gatekeepers -or- Why I Blog.”  I write more on this later.


Edith Orenstein, FEI Financial Reporting Blog, has published her thoughts following a blogging panel at the American Accounting Association Annual Meeting earlier this week.  Please read, “What Catanach, Albrecht, Holtzman and I Had to Say at AAA.”


Rick Broida at PCWorld writes, “Save a Web Page as a PDF with Just One Click.” He recommends Web2PDF. It’s handy.


Bob Jensen (retired professor from Trinity U) writes, “As the textbook purchasing season begins, I noticed that Amazon.com has free two-day shipping for college students.  I did not investigate the terms and limitations of this offer or whether it applies to used books and food items as well as new books.”  I’ll be sure to e-mail my students about this.  Why don’t you?


Some of you might like, “Top 100 Motivational Quotes of All Time!”  Any more, I need motivation to get out of bed in the morning.


Debit and credit – – David Albrecht


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Last year, the Accounting Today published its list of the Top 100 Most Influential People in [American] Accounting on September 9, 2010.  I don’t know that it ever causes a stir, but we talked about it on AECM.  AECM is the e-mail listserv for accounting professors (with a membership of 750).  We wondered why no one from the academic side of accounting made the list (or ever makes the list, for that matter).  Upon closer examination, it turned out that Frank Ross (Howard U) made the list.  Bob Jensen contacted the editor and suggested the names of 20 academics for the 2011 list.

It’s an interesting question, I think, as to who should qualify to be on the list.  The accounting industry in the U.S. is so large, certainly over 1,000,000.  There are auditors, accountants, thought leaders, professors and students who are all directly part of it.  Then there are those who are indirectly related, such as companies/investors that benefit from using accounting information, businesses that serve the accounting industry, journalists, bloggers, government regulators and even tax collectors.  And what about those Europeans who have their IFRS, FRC and the EC?  And should the person’s contribution be for only the most recent 12 months, recent years, or a lifetime of activity?  And what about fraudsters who influence the accounting industry?

For that matter, what does it mean to be to have been influenced?  I look at the list and I wonder how the honorees influenced me?  I have heard of almost none of them.  Does being influential mean having had an impact?

I’m sure the editorial staff at Accounting Today has grappled with these questions over the years, time and time again.

A short while ago, I was asked who I would say are the most influential.  Here are the people in the accounting world who have influenced me the most in the past year.

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AECM (Accounting Education Using Computers and Multimedia) is the listserv for accounting professors.  Membership fluctuates between 600-1,000.

Over the years, the e-mail discussions have been carried out between Bob Jensen, David Fordham, Paul Williams, Jagdish Gangolly, Amy Dunbar, Ed Scribner, Richard Campbell, myself and several others (my apologies for not mentioning any that want to be recognized).

How do these discussions get started?  It’s just like in any group.  Usually there’s a leader, who in this case is Bob Jensen (emeritus professor from Trinity University).  He’s always finding interesting articles out on the web (he’s a prolific surfer).  He’ll bring them to our attention, sometimes with his own comment.  Then, if the article strikes someone’s fancy, they’ll respond and pretty soon there’s a pretty good exchange going.  Discussions can get started in other ways, but not usually.

In recent years, Bob has been picking up on the commentary provided by bloggers.  Bob has passed along links to many posts written by some of the AECM members.

Bill McCarthy (Michigan State AIS guru) got the idea that a blogger panel discussion at the American Accounting Association annual meeting would be a good idea.  Five of us–Tom Selling, Ed Ketz, Francine McKenna, Joe Hoyle and myself–quickly jumped on board.  At the last minute, I’ve had to drop off due to a scheduling conflict.  It has been eating at me for weeks that I won’t be there on Wednesday, August 4, 2010 in San Francisco.

Here’s a preview of these bloggers and what they mean to AECM.

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[Ever get something wrong?  I made an error in the first version of this post (March 9, 2010).  I have fixed the error.  My apology to several fine people for implying they are accounting pornographers.  They aren’t.]

We get into some strange conversations over on AECM (Accounting Education Using Computers and Multimedia), the listserv for accounting professors.  One started out innocently enough, then took a exotic turn in the direction of wierd.

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On Developing a Worldview is proving to be a blog essay with legs.  It’s time to reveal the impetus for that piece.  In waning days of 2009, I received an e-mail:

Hello Professor Albrecht,

My name is Garrett D.; I am a recent graduate of an undergraduate accounting program currently serving in public practice as an audit associate in the Chicagoland area, and am interested in potentially pursuing a career in accounting academia. I have not applied to any programs as of yet, but am rather looking to acquire a fuller understanding of what it means to become an academic, and an accounting academic in particular. Hitherto, my exposure to this way of life has been limited to Stephen Zeff’s biography of Henry Rand Hatfield, fairly intermittent reading of the Financial Accounting Standards Research Initiative blog, and sporadic digestion of select accounting articles and monographs. Your blog has been of interest to me for a while now, and, upon reading your most recent post, “On Being a Blogging Professor,” I was struck by the emphasis you placed on developing a mature worldview as an accounting academic. Though I might be mistaken, I also recall you discussing the development of a “coherent worldview” as an accounting academic in previous posts. This “worldview development” imperative, alongside an intrinsic interest in education as a process, calling, and as a social phenomenon, is, as far as I can tell, primarily driving my interest in academia.

I am curious, if it is not too much trouble, if you will perhaps aid me in this effort to develop a coherent accounting worldview. Would you mind providing me with a recommended reading list of “accounting essentials” to add structure to my excursions within this discipline?

Thank you for your consideration.

Kind regards,
Garrett D.

Such a well-intentioned request.   I delivered On Developing a Worldview, in which the focus is on the process by which a person can acquire a worldview.  I promised a second essay in which I described the path I took in developing my own worldview.  But I didn’t promise a third essay, offering a reading list so that he could start working on his.  I never said never, I just didn’t say yes.

I delivered (and promised) only in part for two reasons.  First, I immediately saw value in a more general response for readers of The Summa.  I didn’t want to scare anyone off by being too detailed in my first essay.  Second, he was asking for something I didn’t have on hand.  So I shirked.   After I published On Developing a Worldview, Garret wrote back:

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In this essay I explain why I blog and list all the other accounting professors who blog.  There aren’t many.

I posted my first blog entry nearly four months ago, on September 3.  At long last I have joined a very popular trend, professors who blog.  Fifty posts/essays later, I’m more committed than ever.

blogkeysWhy didn’t I do it before?  Ignorance.  Until just recently, I didn’t even read blogs.  RSS feed?  Don’t even know what that is.  Just give me a journal or magazine article that I can conveniently cite when I write a journal or magazine article of my own.

I finally realized that I’ve been blogging for quite a while.  How so?  About 1,000 accounting professors belong to an e-mail list called AECM (Accounting Education using Computers and Multi-media).  I’ve been subscribed since the get-go.  The list currently generates 30-60 e-mail posts per week on a variety of topics.  Bob Jensen (emeritus of Trinity University) sends more than half. That’s OK with most of us.  He is a prolific web surfer.  He usually finds interesting articles that in some way relate to either accounting or accounting education and sends in links to them, sometimes accompanied by either his opinion on it or a series of questions designed to get us thinking.  After about 10 years of this, those who don’t like to receive so many e-mails or so many of his e-mails have left the list.

I don’t lurk.  This apparently means I don’t mind embarrassing myself if I send an e-mail to the group.  Over the past few years, whenever attending a conference I’d usually meet someone who liked reading my posts to the list.  Hmmm, I have an audience.  It’s best never to admit that to a professor.  So, I’ve slowing been increasing the rate of my submissions, and over the past year I might have sent in 200 e-mails.  That was too much for both me and the list members.  At the last conference I attended, a friend came up to me and said, “I think of you every day, when I open my e-mail program and see that you’ve filled it with so much crap.”  Although he might have been trying to be funny, I still winced.

Sending any unsolicited e-mail, let alone too much of it, is definitely not the way to keep friends and influence enemies.  So it is off to the world of blogging that I go.

Why should a professor blog?   See the next essay, Why Accounting Profs Should Blog, to find out.

Here is a listing of accounting professors that are using blogs or in some cases, have used blogs.  The ten current bloggers differ greatly from each other.  However, they all have something in common:  They have something to say that can no longer be bottled up.  I recommend that you bookmark them all.

  • The Accounting Onion (USA) – retired Thunderbird professor Tom Selling.
  • Andy’s Teaching and Learning Blog (USA) – tenured instructor and department chair at Edmonds Community College.
  • The AGA Weblog (USA)- Willamette assistant professor Kenneth Smith has written a blog since March, 2008, for the Association of Government Accountants.
  • Bob Jensen blogs (USA) – retired Trinity University professor.  Prolific contributor to AECM.  His most relevant blog is Tidbits.
  • Prem Sikka (UK)- Accounting professor at University of Essex blogs at The Guardian (London newspaper)
  • Professor Elam (USA)- University of North Texas at Dallas professor Dennis Elam blogs on every day events from the world of business, linking them to the classroom.
  • Professor Gerald Trites (CAN)- (FCA, CA*IT/CISA) is a Professor of Accounting and Information Systems at St. Francis Xavier University in Nova Scotia. He was the first Director of the Gerald Schwartz School of Business Administration and has served as Chair of the Department of Information Systems.  Maintains Canada XBRL Blog.
  • Really Engaging Accounting (USA)- Central Florida accounting professor Steve Hornik.
  • The Summa (USA)- commentary on Financial Reporting and related matters by David Albrecht.
  • Tick Marks (USA)- an Austin Peay tax accounting professor, Dan Meyer, that has blogged continuously since 2005. When blogging about accounting, his posts focus on tax (surprise, surprise, surprise) and personal finance. He also blogs about accounting students.

Here is a review by accounting students who blog

  • CPA Pledge: Accounting student Jim Chapman chronicles his experience at Central Connecticut University. Is currently centered around studying for the CPA exam.
  • NJSCPA Exam Cram Blog: Recent College of New Jersey grad Priscilla Jenkins, has blogged since July, 2007, about studying for the CPA exam. Is sponsored by New Jersey Society of CPAs.

Dormant academic blogs

Over and out – – David Albrecht

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SEC pitching GAAP in the trash

SEC pitches GAAP in the trash.

The Securities and Exchange Commission (SEC), charged with the responsibility to regulate all aspects of the American financial markets, has recently announced a tentative road map for the transition from requiring companies to prepare their financial statements under American generally accepted accounting principles (GAAP) to requiring the use of international financial reporting standards (IFRS).  Reactions range along a continuum from enthusiastic acceptance of the plan one end to the opposite end of rejection and shock over having beloved GAAP thrown in the proverbial trash can. Many have observed that the transition is like a frenzied rush.  There has been no opportunity for a consensus to develop that a move from GAAP to IFRS is the right thing to do.  The SEC simply announced its intention of making the switch.  There have been no answers provided to public questions. 

Why now?  Why so fast? Some have commented (I was one of the first) that SEC chairman Christopher Cox hopes to commit irrevocably the U.S. before President Bush leaves office and a new SEC chairman is appointed.  Recognizing the impact of partisan politics provides a reasonable rationale for the SEC push when there are no obvious economic benefits for the U.S. to make the switch.

Before getting to the meat of today’s post (reviewing important remarks by Robert E. Jensen), let me provide some background to this regulatory issue. The U.S. financial system is based on the bedrock principle that investors can make the best decisions and are best protected if all have equal access to accurate financial disclosures.  The result of applying this principle has been the creation of financial markets that are the unbridled envy of the world.  Compared to financial markets in other parts of the world (i.e., Europe), U.S. investors experience the highest rates of return and U.S. companies incur the lowest costs of raising capital.  A key reason for such success is GAAP.  The U.S.  has made and continues to make expensive investments in the creation of its GAAP.  It has evolved over time to a set of uniform rules with embedded bright lines.  Why so?  Precise rules are needed by the legal system as regulators seek to enforce corporate obedience to disclosure requirements. IFRS, created by the International Accounting Standards Board, differs from GAAP in several important regards.  First, IFRS is created to make it easier for companies to raise capital across national lines.  IFRS is not intended to assist investors in making decisions, it is intended to assist companies in raising capital.  Second, IFRS permit companies to use judgment in reporting results from operations.  Investors are not secure in knowing that all companies followed IFRS in the same manner.  Third, much less money has been invested in the creation of IFRS.  There is an adage that reminds, you get what you pay for

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Robert E. Jensen

Robert E. Jensen

Enter Robert E. Jensen, Trinity University emeritus professor and American Accounting Association 2002 Outstanding Accounting Educator.  A prolific commentator on financial reporting and its regulation, derivatives and all matters related to accounting professors, Bob has been a leading critic not only of the S.E.C.-led rush to adopt IFRS, but also of adopting IFRS in at all.  Retirement to a New Hampshire mountain does not seem to have slowed him.

Does this issue pass the smell test?

It doesn't for Robert E. Jensen.

In a landmark post to AECM (the international listserv for accounting professors) on Monday, September 14, Jensen states clearly and unequivacably, “For me the IFRS transition just does not pass the smell test.” Jensen starts his post with a poignant history of the U.S. audit industry.  He summarizes;

The poor [quality of] services of auditing firms became a focal point in the U.S. Congress when equity markets appeared of the verge of collapse due to fear and distrust of the financial reporting of corporations dependent upon equity markets for capital. The Roaring 1990s burned and crashed. In a desperation move Congress passed the Sarbanes-Oxley Act (SOX) of 2002.

SOX was a shot in the arm for the auditing industry.  SOX forced the auditing industry to upgrade services with SOX legal backing that doubled or even tripled or quadrupled fees for such services. Clients continue to grumble about the soaring costs of audits, but in my opinion SOX was a small price to pay for saving our equity capital markets.

He then introduces a new development:

In 2007 and 2008, the international auditing firms commenced to lobby intensively for worldwide adoption of the “IFRS” international accounting standards of the International Accounting Standards Board (IASB).

Jensen convincingly explains that IFRS cover the same topics as GAAP, but leave out many of the “bright line” rules.  Hence [IFRS] generated a reputation for principles-based standards instead of rules-based standards”.  He then points out:

Many of the nations, especially in Europe, that adopted IFRS do not have strong equity capital markets given their historic traditions of raising corporate capital via banks instead of individual investors buying and selling shares of common stock.  Protection of investors has not had the same priorities for these nations as it has in the U.S. where faith in equity capital market integrity is vital to our market-based capitalism.

The bottom line is that IFRS is a weaker set of equity capital market accounting standards than the present FASB standards in the United States.

To summarize.  Jensen started with a history that leads to a conclusion that the large U.S. auditing firms have a poor track record of influencing corporations in the United States to make honest financial disclosures.  This explanable in part because there was more financial reward for providing consulting services than auditing.  So auditing was deemphasized.  He then contrasts how the needs of American financial markets have led to creation of strong accounting standards.  Because European financial markets are different in many ways, Europe has accepted a weaker set of accounting rules. He then observes that the large auditing firms are strongly in favor of moving the U.S. toward weaker accounting standards and have a willing accomplice in SEC chairman Christopher Cox.

This begs the question of why the large auditing firms are lobbying so hard for IFRS standards to replace FASB standards? There are legitimate reasons given the complexity of auditing international firms having operations subject to varying domestic and international accounting standards.  And there may be less litigation risk when bright line rules are replaced by principles-based standards that give auditors and clients much more flexibility in accounting for transactions.

But for me there are also smell test concerns here.  Auditing firms love the soaring revenues from SOX, but they will love even more the soaring revenues from clients having to transition from FASB standards to IFRS international standards.  Firstly, auditing firm clients will not understand IFRS such that auditing firms will make fortunes educating and training each of their clients about IFRS.  Secondly, accounting systems, including enormous databases and software systems, will have to be overhauled.  For example, all the firms in the U.S. who use LIFO inventory valuation will have to be changed to something else since IFRS does not allow LIFO. Walla — the consulting service revenue surge becomes remindful of the Roaring 1990s.

The added auditing firm revenue from the IFRS transition may be as much or more than the added revenue from SOX.  … But to me this whole IFRS transition in the U.S. and the race to lock it in place just does not pass the smell test.

So there you have it.  The entire issue of transitioning to IFRS is about money.  Great, big, heaping, towering mountains and mountains of money. Eventually the large firms will donate a fraction of this wealth to university accounting programs, and I will be much less than thrilled. Coincidentally, Floyd Norris has blogged that the Big Four are intensely lobbying Christopher Cox to appoint a Big Four accountant to replace Charlie Niemeier on the PCAOB.  No decision has yet been made, but for some reason I’m worried about what it will be.  I leave you with an image that expresses my concern.

Over and out – – David Albrecht


Just in–Tom Selling published a post on the top 10 reasons not to adopt IFRS in the U.S.  It is well written and compelling.

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Last year, I needed to energize a class that was letting its tiredness show.  So I tried to pique everyone’s attention by saying, “Accounting can be sexy!”  Students started looking around, not quite sure what to make of me and my comment.  I said, “That’s right.  We’re going to do some sexy accounting!”  My hips started swaying as I danced to some unheard music.  That brought a bit of laughter.

What was I thinking? I had no idea if I could deliver.  So I sent an e-mail to the other accounting professors at AECM, and a couple responses theorized on the characteristics of a sexy accountant.
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