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Posts Tagged ‘Tom Selling’

IFRS.  IFRS.  I do not like thee, IFRS.

U.S. GAAP or IFRS?

The debate over U.S. adoption of IFRS (International Financial Reporting Standards) has died down in recent months.  This is due to three reasons, I think.  First, the FASB and the IASB have declared that further progress toward convergence is no longer possible.  The respective board members simply see the world differently and have come to different conclusions about the composition of specific accounting rules.  In other words, no compromise is possible.

Second, many (including ProfAlbrecht) believe that upon the reelection of President Obama in November, 2012, the Securities and Exchange Commission will be directed to announce the abandonment of U.S. GAAP and the adoption of IFRS.

Third, Europe and America are side-tracked by the issue of possibly mandating auditor rotation.

Tom Selling.

But that hasn’t stopped my good friend Tom Selling of the Accounting Onion from continuing the good fight. On April 2, 2012, Selling posted an insightful and well researched piece, “Ten Claims in Support of IFRS Adoption by the SEC – and Why They are False.” So impressed with this essay, I am tempted to copy it, strike out Selling’s name and replace it with mine, and submit it to two or three leading journals.

Selling is eminently qualified to write this essay.  One of the seven experts on IFRS summarized in The Summa, there is no financial accounting author more widely respected today.

You should read Selling’s masterpiece.  But if you don’t want to take the time (it a pretty long essay), here is my summarization of the major points in “Ten Claims in Support of IFRS Adoption by the SEC — and Why They are False.”

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


From Bloomberg Businessweek, “Top B-School Stories of 2011.”


Real Life Adventures, a nationally syndicated daily cartoon strip by Gary Wise and Lance Aldrich, perfectly catches the fundamental flaw of the audit model on December 8, 2011.


I like “The Promise and Perils of Academic Blogging,” a think-piece by W. Bradford Littlejohn at The Sword and the Ploughshare.


Ed Ketz and Tony Catanach share their “A Christmas List for Grumpy Old Accountants.”  I hope they get everything they ask for.


Tom Selling shares his dreams if he were the SEC’s Chief Accountant in “IFRS Convergence: Let’s Play ‘Chief Accountant for a Day’!


The Institute of Management Accountants, caretaker for the Certificate of Management Accounting, has its complaints aired about the AICPA’s plan for a competing credential in the AccountingWeb article “IMA Ready to Compete with AICPA/CIMA Management Accounting Designation.”


Debit and credit – – David Albrecht

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


Tom Selling (The Accounting Onion) writes about folk hero judge Jed Rakoff in, “Is the Judiciary about to Give the SEC a Backbone?” Some day I’m gonna be like Jed.


Jim Peterson of re:Balance talks about how a relatively small judgment could potentially lead to the demise of a Big 4 firm in, “The Big Four Accounting Firms’ Financial Tipping Point — Time for a Fresh Look.”


Francine McKenna (re:TheAuditors) discusses how Deloitte is pretty bad off, in “At Deloitte, More Pain Before Any Quality Gain.” What a mess over there.


Lisa Du of the Embargo Zone blog writes about the information sifting habits of the New York Times’ Andrew Ross Sorkin in, “Andrew Ross Sorkin Reveals What He Reads At The Gym And His Favorite Twitter Account.”

Sorkin and I are a lot alike.  He’s young, famous, rich, smart and good looking.  I’m not.


Search engines give biased results to your queries?  You betcha.  Please watch this video filmed by Mark Schaefer of {Grow}.  Helen Brown talks about Google’s filter bubbles and how to minimize the effect.

Schaefer consistently publishes must read content at {Grow}. Subscribe today.


Debit and credit — David Albrecht

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


Jonathan Weil shows why he is one of the premier journalists writing about accounting in, “Goldman Sachs Envy Gains New Meaning at Big Four.”  Weil shows several examples of the revolving door between the large accounting firms and their regulators on the PCAOB.  There are stinky conflicts of interest.


Adam Jones, accountancy correspondent for the Financial Times, writes about new KPMG International chairman Michael Andrew in “KPMG vows to remain a multi-disciplinary firm.”  In this interview, Andrew ridicules all non-Big 4 accounting firms,

He also lashed out at a Commission proposal to force the Big Four to share some audits with smaller rivals. “Can you imagine a second-tier firm auditing a global bank at a time when there is already a lack of confidence in the marketplace?”

He added: “They simply don’t have the skills or the market expertise.”

He also accused some smaller rivals of being “quite lazy” about investing in their businesses.

Mr. Andrew is a jerk.  But Steve Martin was funnier at it.

Jones has another story on the issue, “Auditing has moved into the realms of sitcom.”  It’s worth a read.


Stephanie Sammons, of Social Media Examiner, writes about, “5 Simple Steps for Improving Your LinkedIn Visibility.”  Read it.  Do it.


Tom Selling is terrific when he writes about IFRS adoption issues, as he does in, “Will the SEC Sneak IFRS in Through the Back Door?”  Selling is sounding more pessimistic about how the nefarious SEC might sneak in IFRS, despite all reason and common sense (as well as almost every accountant and investor) being against it.

I have little faith.  The commissioners of the SEC are political appointees, and Mary Schapiro has been a willing accomplice to Obama administration policy.  She has her marching orders to install IFRS, and she is loyal to the hand that feeds her.


Mark Schaefer of {Grow} has another post out on Klout, “Kould Kare Less.”

His Klout score is high, but he doesn’t care.  Mine isn’t, and I don’t care either.  Yet, many do.


Debit and credit – – David Albrecht

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Tom Selling, author of The Accounting Onion

Tom Selling, author of the The Accounting Onion, has just published a new post, “Why Do Accounting Academics Blog Less Than Other Academics?” [October 12, 2011]

There is a very select list of bloggers who I view as must reads.  Tom is on that list.  He is both an excellent writer and an insightful commentator.  He also is a retired professor.

The organizational structure of his post is very interesting.  I can’t ever recall Tom sharing details of his speaking engagements, but he does today.  He starts his post by disclosing that he will be the keynote speaker to an accounting academic conference (Northeast Section, American Accounting Association) on Friday, October 28, 2011.  He has been asked to speak on IFRS issues, a subject he has blogged on dozens of times in recent years.  He’s the only blogger who has written more frequently on the subject than I.

In other words, the organizers of an accounting academic conference have decided to give top billing to a blogger.  Yet, accounting academics shun the act of blogging for themselves?  Why is that?

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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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Hans Hoogervorst

Tom Selling’s latest on Accounting Onion is about Hans Hoogervorst, leader of the International Accounting Standards Board (the organization responsible for IFRS).  “The Hans Hoogervorst IFRS Sales Pitch Hits the Road.”  Selling’s post further cements his reputation as the premier commentator on financial reporting and accounting standard setting politics.

I do not like Hans.  Hans is a career politician.  As such, we should remember the typical politician’s propensity to be willing to say anything at any time to further his agenda.

Until just less than three years ago, he knew little more than “transparency is good,” and “global accounting standards are a must.”

Now, Hans is travelling the world, trying to get all countries to unconditionally accept IFRS.  He has made recent speeches about a United States switchover.  Hans, why not start with Europe?  Europe uses a customized version of IFRS.  The reason, of course, is that to Hans, it matters not what accounting rules are in place as long as they are branded IFRS.  During a recent speech in China, Hans admitted that he decided he wanted to chair the IASB before he became interested in accounting for accounting’s sake:  “These experiences triggered a personal interest in accounting … my desire to lead the IASB as it adapts to become the global accounting standard-setter.”

Selling says it well:

For a standards setter, Hans Hoogervorst, the new IASB chairman, doesn’t know much about accounting. By his own frank admission, he wasn’t even very interested in the subject until after the financial crisis hit in 2008, and he seems almost proud to disavow a command of the details of IFRS.

Consequently, his role on the IASB is obvious: to sell IFRS to as many countries as possible. Why anyone should expect someone with his background to do that with any sort of credibility is beyond me, but his selection seems to reflect a conscious strategy on the part of the IFRS Foundation: to promote the sizzle instead of the steak.

Recently, Hans has turned his attention to China, asking it to unconditionally adopt IFRS.  During his speech, Hans said,

[W]hile Chinese GAAP is not word-for-word IFRSs, I understand that analysis by the Chinese regulator shows that for companies with dual listings in Shanghai (using Chinese GAAP) and Hong Kong (using IFRSs) the average difference in reported profit is 0.6%. The difference in term of net assets is even as smaller as around 0.2%.

Hans, that companies can report the same results under Chinese GAAP and IFRS is not an argument for why the country should switch to IFRS (Selling agrees).  Actually, that there is little difference in reported financial results is a condemnation of both sets of accounting standards.  IFRS is notorious for allowing corporate flexibility in reporting results.  Chinese GAAP is much less exacting than IFRS.  It is entirely reasonable to expect that a company can look at financial recordings and be able to paint the sky any color it wants, either chartreuse or polka dotted.  Application of general accounting rules depends upon assumptions, and assumptions depend upon intention.  If a company wants to paint the sky a particular color, it can do so under either IFRS or Chinese GAAP.  The paintings will be similar because it is only one corporate painter.

Debit and credit – – David Albrecht

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Tom Selling of the Accounting Onion is by far the best writer today on GAAP vs. IFRS.  It isn’t easy being Tom, given that the political, regulatory and auditing establishment (political types all) have come out in favor of IFRS.  They publish so much spin (don’t touch it or smell it) about the benefits of the U.S. moving to IFRS, that it must seem like everyone in the world is for it.

But they aren’t.  All the smart guys are against it.  Isn’t that the way it so frequently works.  Smart, educated sane professionals trying to make the world a better place are pitted against powerful political parties whose only interest is what’s in it for them.  And India is backing off its commitment to IFRS after it decided it would need 65 carve-outs.

Today’s e-mail brings notification that Tom Selling has written yet another must read blog post on the issue.  He writes about the establishment spin, on one hand, and on other hand a WSJ reporter’s careful analysis of the perils of IFRS.  The blog post is titled, “ ‘Convergence Flaws'” v. Convergence Spin.”   You should just go read it.  You won’t be sorry.

Just a thought:   David Tweedie is making the rounds again hawking IFRS.  Is there anyone less believable in the accounting world today?  Other than E&Y after its Lehman Brothers audit opinion?

Another thought:  A recent survey of financial statements users reveals that 18% believe the auditor report is of no use to them at all.  I wonder what the results would have been had they asked about the value of IFRS financial statements.

Yet another thought:  Is there any more of a perfect storm than (1) corporate executives preparing financial statements (2) under IFRS and (3) receiving a clean audit opinion from a large audit firm?

Debit and credit – – David Albrecht

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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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Today I shine a bright light on some blog posts that are not only interesting, but also imaginative and compelling.   More than posts, they truly are articles in the fine tradition of business journalism.   They are examples of a powerful force in accounting news.

In a perfect world, everyone would have a focus on current events.   I recently wrote the following in “Questions From a Future Blogger” (Jan. 14, 2010).

Accounting and/or financial blogs are a big deal. As the world evolves and becomes faster paced, long-lived jobs will disappear. We accountants will adapt by piecing together a career from many project-length opportunities. I believe it will be a matter of professional life or death for accountants to get on top of evolving current events and stay there. For there to be life, we all need to make life-long learning a lifestyle …

How will we learn to think [new] ways and grow our thinking? Independent blogs commentaries like The Summa, and re: The Auditors, and TaxGirl. Blogs provide input to fuel critical thinking, seeds for creating thinking, and energy for practical thinking.

The purpose of today’s installment of The Summa is to bring a few of last week’s best and smartest to your attention.  By doing so, I hope to whet your appetite for the good stories to be written this coming week.  These are the must reads.

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I don’t know how much credibility to attach to the following reports from the UK’s GAAPweb.

The first, dated Monday, June 8, claims that sources close to EU politicians are suggesting that the EU have its own standard setting body.  The second, has a brief recap of a meeting between Tweedie and Council of the EU, in which McGreevy claims that some EU politicians question if the IASB is out of touch.

In my opinion, in these reports, reporters are just message carriers.  They reflect real political concern in Europe about the IASB.  Since I’m not over there talking with politicians myself, I can’t judge how much juice these rumors have.  There is enough smoke, however, to make me conclude that the EU dropping IFRS is a reasonable possibility.  It is way too early to tell if it is probable.

The major factor working against the IASB is its independence.  The EU wants the IASB to be independent of everyone but Europe.  The EU wants the  IASB to be subservient to Europe’s wishes. European politicians just have to be getting tired of lobbying in the financial press for certain provisions in IFRS.  It would be much easier if Europe had a standard setting body that answered directly to Charlie McGreevy, Finance Minister.  The result would be more acceptable standards and less debate in the public spotlight.

There have been other interesting things that have come out.  Tom Selling has a very interesting blog post today, in To Catch a Chief Accountant, in which he confirms my suspicion that the tide has turned against IFRS in the US.  If so, Charley Niemeier and Jack Ciesielski are more likely candidates than previously thought.  I wonder, though, if Jane Adams is still the favorite. She doesn’t have the Big-4 ties, although she does have AICPA work.  Her view on IFRS is completely unknown, as she has not spoken publicly about it.

The controversy over IFRS has both sides pushing with everything they have.  The final decision will be political.  I think it likely that the flexibility of IFRS principles/guidelines will largely be lost as a result of all the politics.  Accounting standards will inevitably become more like hard and fast rules, the result of hard fought political compromises. Both sides (national GAAP vs. IFRS) will argue for clearly defined rules, to limit gains from the other side.

Debit and crecit – – David Albrecht

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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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