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Year 2002 Quarter 1: January 1-March 31 Additions to Bob
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Bob Jensen at Trinity
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Bob
Jensen's New Bookmarks on March 31, 2002
Bob
Jensen at Trinity
University
Quotes of the Week
Had the
computer come first—and paper second—no one would raise an eyebrow at the
flight strips cluttering our air-traffic-control centers.
by Malcolm Gladwell in the March 25, 2002 edition of The New Yorker --- http://www.newyorker.com/printable/?critics/020325crbo_books
They put their
pants on the same way we do. They just pull them up two feet higher.
Rich Glas, North Dakota basketball coach just prior to his team's 91-61 loss to
Kansas.
If our food,
drinks and service aren't up to your standards, please lower your standards.
Red Dog Saloon, Juneau, Alaska
Auditing firms and their self-regulating processes seem to have adopted a
similar slogan (see below)
Nobody stands
taller than those willing to stand corrected.
William Safire
We know
accurately only when we know little; with knowledge, doubt increases.
Johann
Wolfgang von Goethe
If you hate a
person, you hate something in him that is a part of yourself.
Hermann Hesse
You're not
going forth. You're going to take that damn hat off, and you're going to
get a job.
Bill Cosby, in a commencement address at Southern Methodist University
Life is a
game. Money is how we keep score.
Ted Turner (as quoted in a recent message from Andrew Priest)
When the Time
Waner write down was reported on a local radio station, it was observed that it
was bigger than our the New Zealand GDP! Surely this should be a lesson to
those who want to carry goodwill in any capacity (e.g. as brands). The numbers
are without meaning.
Robert B Walker [walkerrb@ACTRIX.CO.NZ]
But open
archiving means you don't have to go to the journal and we believe it could very
rapidly undermine the journals without putting anything in their place.
The problem is that things happen in the loop and somebody has to pay for them.
Sally Morris, Association of Learned and Professional Society Publishers, in a
March 25 BBC News interview --- http://news.bbc.co.uk/hi/english/sci/tech/newsid_1885000/1885931.stm
In the final
analysis, there is a real learning curve involved in maximizing both the
instructional and business models for this type of program. Still, it is clear
that corporate education is heading in a new direction. Companies like Intel are
looking to this new corporate education model to provide higher quality
assurances and overall increased value. By combining a traditional graduate
degree curriculum with content tailored to the needs of a company, customized
degree programs offer unprecedented benefits to both the employee and employer
and stand to ultimately redefine the relationship between academia and the
"real world."
Tom Moore (See Babson College's experiments with "Tailor-Made
Degrees" below.)
Self Regulation Really Works in New
York --- It Kept a Few NY Drunks From Performing Bad Audits
Out of roughly 50,000 accountants licensed in New York, only 16 were disciplined
by the state last year-most of them for drunk driving. In fact, only one was
reprimanded on professional grounds.
NEW YORK, March 18, 2002 (Crain's New York Business) — http://www.smartpros.com/x33351.xml
They were an
admixture of old-fashioned and uncouth, a duo almost as unlikely as Neil Simon's
odd couple. The seventy-year-old had been married to the same woman for
forty years, in the same job for more than twenty, and in the same place--Orange
County, California--forever. The fifty-four-year-old had recently divorced
and remarried, switched jobs often and moved even more frequently, most recently
to a million-dollar home in swanky Moraga, east of Oakland, California.
Despite their obvious differences, they spoke on the phone virtually every day
for many years. They first met in 1975 and had traded billions of dollars
of securities with each other. The elder of the pair was the Orange County
treasurer, Robert Citron; the younger was a Merrill Lynch bond salesman, Mike
Stamenson. Together they created what many officials described as the
biggest financial fiasco in the United States: Orange County's $1.7 billion loss
on derivative
Frank Partnoy, Page 157 of Chapter 8 entitled "The Odd Couple"
F.I.A.S.C.O. : The Inside Story of a Wall Street Trader
by Frank Partnoy
- 283 pages (February 1999) Penguin USA (Paper); ISBN: 0140278796
A longer passage from Chapter 8 appears at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
A second passage beginning on Page 166 reads as follows:
Also on December 5, Orange County filed the largest municipal bankruptcy petition in history. Orange County's funds covered nearly two hundred schools, cities, and special districts. The losses amounted to almost $1,000 for every man, woman, and child in the county. The county's investments, including structured notes, had dropped 27 percent in value, and the county said it no longer could meet its obligations.
The bankruptcy filing made the ratings agencies look like fools. Just a few months before, in August 1994, Moody's Investors Service had given Orange County's debt a rating of Aa1, the highest rating of any California county. A cover memo to the rating letter stated, "Well done, Orange County." Now, on December 7, an embarrassed Moody's declared Orange County's bonds to be "junk"--and Moody's was regarded as the most sophisticated ratings agency. The other major agencies, including S&P, also had failed to anticipate the bankruptcy. Soon these agencies would face lawsuits related to their practice of rating derivatives.
On Tuesday, January 17, 1995, Robert Citron and Michael Stamenson delivered prepared statements in an all-day hearing before the California Senate Special Committee on Local Government Investments, which had subpoenaed them to testify. It was a pitiful display. Citron left his wild clothes at home, testifying in a dull gray suit and bifocals. He apologized and pleaded ignorance. He said, "In retrospect, I wish I had more education and training in complex government securities." Stuttering and subdued, appearing to be the victim, Citron tried to excuse his whole life: He didn't serve in the military because he had asthma; he didn't graduate from USC because of financial troubles; he was an inexperienced investor who had never even owned a share of stock. It was pathetic.
Stamenson also said he was sorry and cited the enormous personal pain the calamity had produced. He pretended naivete. He said Citron was a highly sophisticated investor and that he had "learned a lot" from him. Stamenson's story was as absurd as Citron's was sad. When Stamenson asserted that he had not acted as a financial adviser to the county, one Orange County Republican, Senator William A. Craven, couldn't take it anymore and called him a liar. Stamenson finally admitted that he had spoken to Citron often--Citron had claimed every day--but he refused to concede that he had been an adviser. At this point Craven exploded again, asking, "Well, what the hell were you talking about to this man every day? The weather?" Citron's lawyer, David W. Wiechert, was just as angry. He said, "For Merrill Lynch to distance themselves from this crisis would be akin to Exxon distancing themselves from the Valdez."
For updates on derivative financial instruments frauds, go to http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
Nice going
Lehman: To
Hell With the Widows and Orphans
Richard Gross, an analyst at Lehman Bros.,
maintains a "strong buy" rating on Enron as the stock declines from
$81 to $0.75. A Lehman spokesperson helpfully explains to the New York Times
that the firm was advising Dynegy on its purchase of Enron's pipeline, and it is
Lehman's policy not to change the firm's rating on any company involved in a
deal in which Lehman is an adviser.
Number 55 among the 101 Dumbest Moments in Business reads as follows
at http://www.business2.com/dumbest/
Nice Going
Paine Webber: To Hell With the Widows and Orphans
Accounting Has Big Problems, But It is Not as Rotten to the Core as
the Professions of Financial Analysis and Investment Banking --- http://www.trinity.edu/rjensen/fraud.htm#Cleland
"The Man Who Paid the Price for Sizing Up Enron," by Richard A. Oppel, Jr., The New York Times, March 27, 2002, Page C1 --- http://www.nytimes.com/2002/03/27/business/27ENRO.html
Enron (news/quote) executives pressed UBS PaineWebber to take action against a broker who advised some Enron employees to sell their shares in August and was fired by the brokerage firm within hours of the complaint, according to e-mail messages released today by Congressional investigators.
The broker, Chung Wu, of PaineWebber's Houston office, sent a message to clients early on Aug. 21 warning that Enron's "financial situation is deteriorating" and that they should "take some money off the table."
. . .
The episode illustrates just how easily Enron appears to have thrown its weight around at a Wall Street firm, which may have satisfied a big corporate customer at the expense of some retail customers. PaineWebber managed Enron's stock option program for employees and handled brokerage accounts for many company executives. It also did substantial investment banking work for Enron, which generated fees for the firm. PaineWebber said that Mr. Wu was fired because he had violated policies by sending unauthorized e-mail messages to more than 10 clients and by failing to disclose that PaineWebber's research analyst had rated Enron a "strong buy."
But the day that Mr. Wu was fired was the day that Enron's chairman, Kenneth L. Lay, was both shedding some of his own shares and talking up the stock. On Aug. 21, Mr. Lay sold $4 million of stock to the company. He also sent an e-mail message to employees saying that one of his highest priorities was to restore investor confidence, adding that that "should result in a significantly higher stock price."
The message complaining to PaineWebber about Mr. Wu was sent by Aaron Brown, an Enron official who PaineWebber said helped oversee the stock option program. Mr. Brown could not be reached for comment. A switchboard operator at Enron said today that Mr. Brown no longer worked at the company, and a spokesman did not respond to questions.
Mr. Wu, who declined to comment through his lawyer today, previously asserted that Enron was behind his dismissal, but today's disclosure was the first to show pressure was applied by Enron officials. Mr. Wu now works for A. G. Edwards.
A PaineWebber spokesman declined to elaborate on the matter involving Mr. Wu but pointed to a letter sent to Congress last week.
Continued at http://www.nytimes.com/2002/03/27/business/27ENRO.html
Bob Jensen's threads on how the professions of investment banking and security analysis are rotten to the core can be found at http://www.trinity.edu/rjensen/fraud.htm#Cleland
This week's, March 31, updates on the Enron scandal and accounting fraud are in a separate document at http://www.trinity.edu/rjensen/fraud033102.htm
Do you think that, in retrospect, the
following initiative would have deterred the Lay, Skilling, Fastow executives at
Enron or David Duncan at Andersen? I contend that they will still do it
because they can still get away with it, and even if they get caught stealing
millions of dollars, the payoff vastly exceeds the punishment.
Read the following March 21, 2002 Message from Phil Livingston, CEO of Financial
Executives International (FEI)
Read an HTML version of this message, plus our archive of past issues, at http://www.fei.org/newsletters/feixp/
SEC CHAIRMAN PITT OUTLINES CURRENT SEC INITIATIVES IN SENATE TESTIMONY Chairman Pitt emphasized that the Commission and Congress must act together towards reform, with the Congress only stepping in with legislation, which "would have the benefit of extending the reach of the available SEC authority where necessary".
Chairman Pitt's recommendations focused on the following three areas for reform: · Corporate governance and disclosure, including MD&A requirements for critical accounting policies, SPEs and related party transactions and trend information, and guidelines toward more timely disclosure · Accounting reform, including the public accountability board (PAB), and auditor independence requirements · Accounting standard setting to improve the FASB process by broadening FASB funding sources, advocating principles-based standards and providing more SEC input to the FASB agenda
He stressed the need to increase the "CEO's individual accountability for his or her company's disclosure" via certification to shareholders of significant information. With regard to the PAB, he emphasized "private sector" regulation with SEC oversight, comprised "predominantly of independent public members, unaffiliated with the accounting profession". Membership in the PAB would be a "prerequisite to an auditor's ability to supply audit opinions on which a registrant may rely". The SEC does not advocate a ban on "the receipt of non-audit services from their auditors and believes the SEC framework, adopted in late 2000, will over time, serve investors better." The Commission is also against the mandatory rotation of auditors and cautions on creating a "cooling off" period for which auditors cannot go to work for their clients.
Chairman Pitt also referenced, and included as an appendix to his testimony, FEI's recently released Reform Recommendations. Here's the Chairman's complete testimony, and it includes much more detail and opinion than I could provide here: http://www.sec.gov/news/testimony/032102tshlp.htm
Speaking as the final witness before the Senate Banking Committee, Harvey L. Pitt, chairman of the Securities and Exchange Commission, argued against proposed legislation that would introduce radical reforms for accounting firms, but supported reforms of companies, credit agencies, and accounting standard-setters. http://www.accountingweb.com/item/75865
The Securities and Exchange Commission has filed suit against the founder and five other former top officers of Waste Management Inc. for massive fraud. The complaint charges the defendants with inflating profits to meet earnings targets. http://www.accountingweb.com/item/76329
Note that Waste Management just announced that it was changing auditors. The auditor up to now was (guess?) Arthur Andersen.
Bob Jensen's threads on this and other frauds can be found at http://www.trinity.edu/rjensen/fraud.htm
Hi Patricia,
You raise deep questions, and I am afraid that today I only have time to give you off-the-wall answers that hardly do justice to your questions.
Firstly, I might point out that Trinity University accounting courses are very traditional in a five-year program leading to an MS in Accounting. Being a very small university with only five accounting faculty, we often teach course modules rather than entire courses in some specialties like not-for-profit accounting. Our strength lies in student quality due, in large measure, to the huge Trinity University endowment that provides financial aid to the best and brightest prospects and/or provides small classes and great learning opportunities outside the classroom. Virtually all incoming first-year students have never considered majoring in accounting. A few see the light along the way, and we graduate about twenty students per year in our MS in Accounting Program. Our students all intern in their senior year, and nearly all have their jobs in hand before even starting their fifth year program. The program is a success for our students, so we have not tinkered with radical innovations that might upset the success of the students and the program. I think we are probably quite like most accounting education programs in that regard.
If you want to listen to an influential professor who takes a quite opposite viewpoint, you should listen to the August 2001 remarks of Professor Joel Demski when he became this year's President of the American Accounting Association. In an August 15, 2001 controversial address to the American Accounting Association, current AAA President Joel Demski lamented the fall of accounting education (I think he meant business education in general) from scholarship, joy, and an academic curriculum. In particular, he blasted the current textbooks and publishers, public accounting firms, accounting educators, administrators, and the tendency for scholarship and curricula to become niched into specialty topics with failing cross-communications between those specialties such as tax accounting, capital markets studies, NFP accounting, managerial accounting, AIS, etc. In particular he laments the way accounting curricula have evolved to meet the career interests of public accounting firm employers and the virtual failing of the five-year, 150-credit, requirements to sit for the CPA examination. At the end of his address to the membership, Joel announced a curriculum-design competition. Winners will be announced in August 2002 at the annual meetings in San Antonio.
You can both read and listen to Joel Demski's August 15 address to the AAA membership at http://www.cs.trinity.edu/~rjensen/001aaa/atlanta01.htm
My own feelings about accounting education cannot be divorced from my feelings about higher education. I think that the traditional undergraduate and graduate "diplomas" should be replaced by a succession of life-long "certifications" that begin with required liberal exposure to a large variety of disciplines that reduces over time to increasingly narrower focus upon disciplines and technical details. After say, ten years, the certifications should become quite narrow and quite technical. What we have now is an undergraduate diploma that pretends to "certify" such graduates as "artists," "managers," "accountants," "psychologists," "engineers," etc. when these graduates have only superficial backgrounds and skills in their chosen fields. They become more specialized in graduate education programs, but then the formal education process ends. On-the-job learning, of course, continues, but is a haphazard and serendipitous life-long progression that needs to be improved upon in virtually all academic disciplines. In some professions there are certification examinations, but these typically do not progress down to increasingly technical successions of certification accomplishments over the life of a specialist. The certification process is also too focused upon examinations rather than mentoring and rigorous education/training courses. I am not just talking about professions like accounting, engineering, law, and medicine. I am also talking about art, art history, history, literature, etc.
I have become a very vocal advocate of distance education. My main reason is that I think that distance education using emerging technologies offers mentoring and lifelong learning opportunities that were not feasible until very recently. And these technologies are improving at breakneck speed. See http://www.trinity.edu/rjensen/000aaa/0000start.htm
I am not optimistic about rapid change in this regard. The so-called corporate universities offer more hype than hope. Traditional universities such as the University of Wisconsin offer hundreds or thousands of online courses and are making enormous strides in educational experiments. But these programs are trapped in our existing culture, traditional economy, and traditional employment practices. Change must be monumental in the economy, business tradition, profession tradition, and culture. Such change may be very disruptive and must evolve slowly rather than with a big bang. Bit by bit the world will make progress as the world becomes more global due to modern education technologies.
Rather than isolate the poor and ignorant people who suffer and make war, we need to use our new education technologies to offer them affordable opportunities and share our knowledge and to make creative contributions to our knowledge bases. We then need to offer them career tracks and lifelong opportunities to better themselves and their products and services.
In terms of accounting education and professional opportunity, I am very worried about the impact of the Enron/Andersen scandal. Some of the serious proposals such as the dropping of most consultancy services will be disastrous overreactions. But this is leading me astray, and I am running out of time today. So I will close here.
Best of luck in your endeavor to both same and improve accountancy and the education of its faithful servants.
Bob Jensen.
-----Original Message-----
From: Willipat@aol.com [mailto:Willipat@aol.com]
ent: Tuesday, March 26, 2002 1:36 PM
To: rjensen@trinity.edu
Subject: accounting educationDear Professor Jensen:
It was a pleasure to meet you at the University of Denver's panel "Accounting in Turmoil: Picking Up the Pieces." As I told you, I write CPE for CPA's and am currently writing a chapter for CPE Direct (the subscription program from the AICPA in connection with the Journal of Accountancy) on the changes needed in accounting education. The article from the JofA that is part of this chapter is entitled "The Crisis in Accounting Education" and points out the decrease in the number of accounting students, their qualifications, and the need for changes in accounting education.
When I spoke to you at DU you indicated that you prefer to answer questions by email.
One of the questions that you answered at DU had to do with how you would change accounting education. Would you be willing to elaborate on what you think needs to be done in order to improve accounting education overall? How would you go about recruiting the most qualified students to the accounting profession? What has Trinity University done in this area? I will, of course, quote you, and include any information about you, Trinity's accounting program, and the university as a whole, that you would like included. I would like permission to include your web site in the chapter. You have such a wealth of information on your site. I wish I had known about it much sooner!
Thank you so much for taking time to consider answering these questions. If you would prefer, I would be happy to call you for an interview by phone. However, I know that with your schedule, email is probably more convenient for you.
Patricia Lane Williams
303-367-4496 Willipat@aol.com
Two Letters to Senator Schumer
On March 25, 2002, Walter P. Schuetze, former Chief Accountant of the Securities and Exchange Commission, wrote Senator Schumer a letter that leaves no doubt that he opposes booking of employee stock options when they vest. That letter is now on the Web at http://www.trinity.edu/rjensen/theory/sfas123/schuetze01.htm
I wrote a draft reply in order to point out some opposing arguments. My reply is on the Web at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm
Mr. Schuetze is a friend, and my arguments in the above letter are academic. Nothing personal in any way is intended.
Educators and students may also be interested in the short case that I wrote in the Appendix to my letter.
Actually, I have not yet mailed my letter to Senator Schumer and would appreciate replies with helpful suggestions and corrections.
For added background reading, I have added some other papers/lectures by Walter Schuetze as follows:
Once again, my reply reply is on the Web at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm
Thanks,
Bob (Robert E.) Jensen
Jesse H. Jones Distinguished Professor of Business
Trinity University, San Antonio, TX 78212
Voice: (210) 999-7347 Fax: (210) 999-8134
Email: rjensen@trinity.edu
http://www.trinity.edu/rjensen
March 31, 2002 reply from Robert B Walker [walkerrb@ACTRIX.CO.NZ]
I have briefly scanned the two letters. I would say at the outset that I, too, have a strong instinct for realisable value as the benchmark for assessing financial position - at least I do until I deal with the public sector where the notion breaks down.
My first thought is that Mr Schuetze asks himself the wrong question. He asks is there an asset which is depleted? He should ask: is there an obligation with a financial value? If the answer is yes, then he has a credit and a resultant debit to deal with. Then he can consider whether the debit has any value or not. If no then it is a debit to equity (net assets) in some way.
In his first scenario, where the senators manage their Club, there is no obligation. No further issues arise.
In his second scenario, there is an obligation. It has a financial value. In the event of booking the credit, does the debit have any 'future economic' (cash?) benefit. The answer is no because it has had value in the past not the future. Then:
Dr Expense Cr Liability.
The liability will be discharged by a transfer of shares to the owner of the right. This is the same as giving the person some money and having them buy shares (doctine of substance over form or representational faithfulness applies). The problem is this. There is no outflow of economic benefits (money), except in substance (the problem with that doctrine is anything can mean everything), because:
Dr Liability Cr Equity (paid up capital)
We are left then with doing one of two things:
First, redefine Liability to be Equity - Type 2 compared to Equity - Type 1, being that held by the original shareholders. You then have, essentially, a shuffle around inside equity. You do, however, achieve the main objective. You inform the original shareholders that they have had value transferred from themselves to another, for which they received a service. This is necessary because otherwise how will they know?
Another way to see the problem is to conceive of it as having two separate reporting entities. RE1 is the merged interest of the original stockholders. RE2 is the interest of the newcomer. The first accounting then makes a sort of sense. The two reporting entities are then combined without carrying out eliminations.
Remember I can only argue the second of these because of our (NZ) definition of the reporting entity which states:
'A reporting entity exists where it is reasonable to expect users dependent on general purpose financial reports for information which will be useful to them in terms of the objectives [of general purpose financial reporting.' (para 2.1 Statement of Concepts for General Purpose Financial Reporting)
March 31, 2002 reply from nodoushan@mail.hartford.edu
Dear Robert:
The other issue that I believe is behind the effort not to book or value stock options is the tax treatment. I'm a tax accountant so this is my take.
Currently, there is no taxable income upon the receipt of a nonstatutory option that does not have a readily ascertainable fair market value, even if the FMV of the option is ascertainable before it is exercised or disposed of. The rules are under Internal Revenue Code §83 which does define "readily ascertainable" but the definition requires that four conditions exist: 1) option is freely transferable by the recipient; 2) option is immediately exercisable in full by the recipient; 3)option is not subject to any condition or resitrction that has a significant effect upon its FMV; and 4)FMV of option is readily ascertainable.
Obviously, companies write the options so that these conditions are not met because there is a time restriction and the options usually are not transferable. However, if FASB/SEC/Congress changes financial accounting rules and requires stock options to be valued and booked when issued, you will probably see the Treasury/IRS/Congress move to have the income taxed immediately. There would be a major commotion against this as it violates the "wherewithal to pay" concept, but this concept is violated frequently in the IRC. Then, you have the problem of what happens if the value later declines? Do you allow the employee a loss deduction equal to previously taxed income, and what if the tax rates have changed? Congress can deal with this but it adds complications.
I believe that changes to financial accounting for stock options will change the tax treatment. If the company reports the options as compensation expense does it go in the employees W-2? There is too much potential income out there to ignore if these options will have a "readily ascertainable value." We all know that they do have a value to both the company and the employee; the tax question has always been what's the value prior to exercise and when should the value be taxed?
More issues to consider and to complicate things. Just thought I'd add my two cents. If you're writing to Congressmen about something that could increase taxes they don't always act in the best interest of accounting theory.
Patricia Nodoushani, Ph.D., CPA
Dept. of Accounting & Taxation
University of Hartford
WHITE-COLLAR
CRIMINALS Enough Is Enough They lie they cheat they steal and they've been
getting away with it for too long.
by Clifton Leaf, Fortune magazine, March 18, 2002, pp. 60-78
--- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206659&_DARGS=%2Fhtml%2Fmag_archive%2Fmag_archive_index.html.6_A&_DAV=Home
What
Really Happens (From Fortune, March 18, 2002, p. 72)
In the ten-year period from 1992 to 2001, SEC officials felt that 609 of its civil cases were egregious enough to merit criminal charges. These were referred to U.S. Attorneys. Of the initial 609 referrals, U.S. Attorneys have disposed of 525 Defendants prosecuted 187 Found guilty 142 Went to jail 87 |
609 525 187 142 87 |
And how many attorneys are in this office to fight the nation's book cookers, insider traders, and other Wall Street thieves? Twenty-five--including three on loan from the SEC. The unit has a fraction of the paralegal and administrative help of even a small private law firm. Assistant U.S. Attorneys do their own copying, and in one recent sting it was Sandy--one of the unit's two secretaries--who did the records analysis that broke the case wide open. (Page 72)
----------------------------
Nevertheless, the last commission chairman, Arthur Levitt, did manage to shake the ground with the power he had. For the 1997-2000 period, for instance, attorneys at the agency's enforcement division brought civil actions against 2,989 respondents. That figure includes 487 individual cases of alleged insider trading, 365 for stock manipulation, 343 for violations of laws and rules related to financial disclosure, 196 for contempt of the regulatory agency, and another 94 for fraud against customers. In other words, enough bad stuff to go around. What would make them civil crimes, vs. actual handcuff-and-fingerprint ones? Evidence, says one SEC regional director. "In a civil case you need only a preponderance of evidence that there was an intent to defraud," she says. "In a criminal case you have to prove that intent beyond a reasonable doubt." (pp. 70-71)
----------------------------
The auditor in that case, you'll recall, was Arthur Andersen, which paid $110 million to settle a civil action. According to an SEC release in May, an Andersen partner authorized unqualified audit opinions even though "he was aware of many of the company's accounting improprieties and disclosure failures." The opinions were false and misleading. But nobody is going to jail.
At Waste Management, yet another Andersen client, income reported over six years was overstated by $1.4 billion. Andersen coughed up $220 million to shareholders to wipe its hands clean. The auditor, agreeing to the SEC's first antifraud injunction against a major firm in more than 20 years, also paid a $7 million fine to close the complaint. Three partners were assessed fines, ranging from $30,000 to $50,000, as well. (You guessed it. Not even home detention.) Concedes one former regulator familiar with the case: "Senior people at Andersen got off when we felt we had the goods." Andersen did not respond to a request for comment. (Page 63)
Waste
Management Defects: There Appears to Be No Honor Among Thieves
Big Five firm Andersen is facing almost daily defections of major clients as
publicly held companies jump ship in search of another auditor. Waste
Management, Occidental Petroleum and Dynegy have announced they have
switched to other Big 5 firms. http://www.accountingweb.com/item/74745
"WHITE-COLLAR CRIMINALS Schemers
and Scams: A Brief History of Bad Business It takes some pretty spectacular
behavior to get busted in this country for a white-collar crime. But the
business world has had a lot of overachievers willing to give it a shot."
by Ellen Florian, Fortune magazine, March 18, 2002, pp. 62-68 --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206661
1920: The Ponzi Scheme
Charles Ponzi planned to arbitrage postal coupons--buying them from Spain and selling them to the U.S. Postal Service at a profit. To raise capital, he outlandishly promised investors a 50% return in 90 days. They naturally swarmed in, and he paid the first with cash collected from those coming later. He was imprisoned for defrauding 40,000 people of $15 million.1929: Albert Wiggin
In the summer of 1929, Wiggin, head of Chase National Bank, cashed in by shorting 42,000 shares of his company's stock. His trades, though legal, were counter to the interests of his shareholders and led to passage of a law prohibiting executives from shorting their own stock.1930: Ivar Krueger, the Match King
Heading companies that made two-thirds of the world's matches, Krueger ruled--until the Depression. To keep going, he employed 400 off-the-books vehicles that only he understood, scammed his bankers, and forged signatures. His empire collapsed when he had a stroke.1938: Richard Whitney
Ex-NYSE president Whitney propped up his liquor business by tapping a fund for widows and orphans of which he was trustee and stealing from the New York Yacht Club and a relative's estate. He did three years' time.1961: The Electrical Cartel
Executives of GE, Westinghouse, and other big-name companies conspired to serially win bids on federal projects. Seven served time--among the first imprisonments in the 70-year history of the Sherman Antitrust Act.1962: Billie Sol Estes
A wheeler-dealer out to corner the West Texas fertilizer market, Estes built up capital by mortgaging nonexistent farm gear. Jailed in 1965 and paroled in 1971, he did the mortgage bit again, this time with nonexistent oil equipment. He was re-jailed in 1979 for tax evasion and did five years.1970: Cornfeld and Vesco Bernie
Cornfeld's Investors Overseas Service, a fund-of-funds outfit, tanked in 1970, and Cornfeld was jailed in Switzerland. Robert Vesco "rescued" IOS with $5 million and then absconded with an estimated $250 million, fleeing the U.S. He's said to be in Cuba serving time for unrelated crimes.1983: Marc Rich
Fraudulent oil trades in 1980-81 netted Rich and his partner, Pincus Green, $105 million, which they moved to offshore subsidiaries. Expecting to be indicted by U.S. Attorney Rudy Giuliani for evading taxes, they fled to Switzerland, where tax evasion is not an extraditable crime. Clinton pardoned Rich in 2001 (and he and Hillary received over $7,000 in furniture from the wife of Marc Rich to furnish the Clinton's new home in New York.)1986: Boesky and Milken and Drexel Burnham Lambert
The Feds got Wall Streeter Ivan Boesky for insider trading, and then Boesky's testimony helped them convict Drexel's Michael Milken for market manipulation. Milken did two years in prison, Boesky 22 months. Drexel died.1989: Charles Keating and the collapse of Lincoln S&L
Keating was convicted of fraudulently marketing junk bonds and making sham deals to manufacture profits. Sentenced to 12 1/2 years, he served less than five. Cost to taxpayers: $3.4 billion, a sum making this the most expensive S&L failure.1991: BCCI
The Bank of Credit & Commerce International got tagged the "Bank for Crooks & Criminals International" after it came crashing down in a money-laundering scandal that disgraced, among others, Clark Clifford, advisor to four Presidents.1991: Salomon Brothers
Trader Paul Mozer violated rules barring one firm from bidding for more than 35% of the securities offered at a Treasury auction. He did four months' time. Salomon came close to bankruptcy. Chairman John Gutfreund resigned.1995: Nick Leeson and Barings Bank
A 28-year-old derivatives trader based in Singapore, Leeson brought down 233-year-old Barings by betting Japanese stocks would rise. He hid his losses--$1.4 billion--for a while but eventually served more than three years in jail.1995: Bankers Trust
Derivatives traders misled clients Gibson Greetings and Procter & Gamble about the risks of exotic contracts they entered into. P&G sustained about $200 million in losses but got most of it back from BT. The Federal Reserve sanctioned the bank.1997: Walter Forbes
Only months after Cendant was formed by the merger of CUC and HFS, cooked books that created more than $500 million in phony profits showed up at CUC. Walter Forbes, head of CUC, has been indicted on fraud charges and faces trial this year.1997: Columbia/HCA
This Nashville company became the target of the largest-ever federal investigation into health-care scams and agreed in 2000 to an $840 million Medicare-fraud settlement. Included was a criminal fine--rare in corporate America--of $95 million.1998: Waste Management
Fighting to keep its reputation as a fast grower, the company engaged in aggressive accounting for years and then tried straight-out books cooking. In 1998 it took a massive charge, restating years of earnings.1998: Al Dunlap
He became famous as "Chainsaw Al" by firing people. But he was then axed at Sunbeam for illicitly manufacturing earnings. He loved overstating revenues--booking sales, for example, on grills neither paid for nor shipped.1999: Martin Frankel
A financier who siphoned off at least $200 million from a series of insurance companies he controlled, Frankel was arrested in Germany four months after going on the lam. Now jailed in Rhode Island--no bail for this guy--he awaits trial on charges of fraud and conspiracy.2000: Sotheby's and Al Taubman
The world's elite were ripped off by years of price-fixing on the part of those supposed bitter competitors, auction houses Sotheby's and Christie's. Sotheby's chairman, Taubman, was found guilty of conspiracy last year. He is yet to be sentenced.
Bob Jensen's threads on fraud, including derivative financial instruments fraud, are at http://www.trinity.edu/rjensen/fraud.htm
"Hard Time? Hardly In 1999 we
wrote about some accounting bad guys who seemed to have airtight cases against
them. Guess how many went to jail?"
by Carol J. Loomis, Fortune magazine, March 18, 2002, Page 78 --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206662
Raise your hand if you think one or more Enron executives should go to jail. The yes votes on that one would surely put President Bush's approval rating to shame. We might even get past 99.99% affirmative, with only the Lay, Skilling, and Fastow families voting no.
But the fact is that putting bigtime executives in jail for perpetrating accounting frauds has proved very hard to do. Some 2 1/2 years ago (Aug. 2, 1999) FORTUNE ran an article, Lies, Damned Lies, and Managed Earnings, that spotlighted the accounting scandals of the time. Of the big ones then generating tales of absolutely egregious behavior, none has produced jail sentences.
Indeed, only one produced a sentence of any kind: Bruce J. Kingdon, who had run a division of Bankers Trust that did securities processing, pleaded guilty in September 2000 to conspiracy and falsifying bank records, and was ordered to perform 450 hours of community service, see a therapist once a week for three years, and pay fines of $180,500. (Bankers Trust itself had earlier paid a $63 million fine.) Kingdon's lawyer says his client's community service consisted of work for a medical cause--"cerebral palsy or muscular dystrophy or something like that."
Jail sentences could yet come out of several other cases, including two that have actually produced indictments. The zinger is likely to be the case against two prominent CUC International executives, CEO Walter Forbes and President Kirk Shelton, who in 1997 merged their company with HFS Inc. to form Cendant. A scant four months later CUC's accounting was exposed as rotten, and Cendant's market value dropped $14 billion in one day.
In time the U.S. Attorney for New Jersey, working with the SEC, wrung cooperating plea agreements from three former CUC financial executives, who are expected to testify against Forbes and Shelton. The two men are charged with three types of fraud--securities, mail, and wire--and with conspiracy to lie to the SEC. In their trial, scheduled to start in Newark in September, they will face a morally outraged team of prosecutors, one of whom says, "This is war." Forbes and Shelton cannot have been helped by the furor over Enron.
The second batch of indictments emerged from another merger-related mess, arising from McKesson's acquisition of software supplier HBO & Co. in January 1999. Again, within months rot was exposed, this time in HBO's accounting. (Say, whatever happened to the due diligence that supposedly precedes mergers?) After a criminal investigation headed by San Francisco Assistant U.S. Attorney Leslie Caldwell, the two co-presidents of HBO, Albert Bergonzi and Jay Gilbertson, were charged with the fraud battery--securities, mail, and wire--and with conspiracy. No date has been set for their trial, and Caldwell won't, in any case, be apt to take part in it. She's now heading the Department of Justice task force that's investigating Enron.
"Massive financial fraud" is what the SEC says occurred at both McKesson and Cendant. But that is also how it described the goings-on a few years ago at Sunbeam and Waste Management, and those cases have brought no criminal indictments. That means the executive everyone loves to hate, deposed Sunbeam CEO Al Dunlap, has escaped charges, and so has Waste Management's former CEO, Dean Buntrock. Other escapees: partners of Arthur Andersen & Co., which was the outside auditor at both Sunbeam and Waste Management (and, as all the world knows, at Enron).
The weirdest accounting case around is one in which indictments have existed for years, but nothing has made it to court. Here, in early 1999, the U.S. Attorney for the Southern District of New York, Mary Jo White, charged Garth Drabinsky and Myron Gottlieb of theatrical producer Livent with 15 counts of fraud and one of conspiracy. But Drabinsky and Gottlieb had already fled to Canada, Drabinsky's homeland--and there they remain today. No wonder, since the U.S. Attorney's office has never moved to extradite them, even though it vowed from the start to do so.
Continued at http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206662
Nice Going Paine Webber: Screw the Widows and Orphans
Accounting Has Big Problems, But It is Not as Rotten to the Core as the Professions of Financial Analysis and Investment Banking --- http://www.trinity.edu/rjensen/fraud.htm#Cleland
"The Man Who Paid the Price for Sizing Up Enron," by Richard A. Oppel, Jr., The New York Times, March 27, 2002, Page C1 --- http://www.nytimes.com/2002/03/27/business/27ENRO.html
Enron (news/quote) executives pressed UBS PaineWebber to take action against a broker who advised some Enron employees to sell their shares in August and was fired by the brokerage firm within hours of the complaint, according to e-mail messages released today by Congressional investigators.
The broker, Chung Wu, of PaineWebber's Houston office, sent a message to clients early on Aug. 21 warning that Enron's "financial situation is deteriorating" and that they should "take some money off the table."
. . .
The episode illustrates just how easily Enron appears to have thrown its weight around at a Wall Street firm, which may have satisfied a big corporate customer at the expense of some retail customers. PaineWebber managed Enron's stock option program for employees and handled brokerage accounts for many company executives. It also did substantial investment banking work for Enron, which generated fees for the firm. PaineWebber said that Mr. Wu was fired because he had violated policies by sending unauthorized e-mail messages to more than 10 clients and by failing to disclose that PaineWebber's research analyst had rated Enron a "strong buy."
But the day that Mr. Wu was fired was the day that Enron's chairman, Kenneth L. Lay, was both shedding some of his own shares and talking up the stock. On Aug. 21, Mr. Lay sold $4 million of stock to the company. He also sent an e-mail message to employees saying that one of his highest priorities was to restore investor confidence, adding that that "should result in a significantly higher stock price."
The message complaining to PaineWebber about Mr. Wu was sent by Aaron Brown, an Enron official who PaineWebber said helped oversee the stock option program. Mr. Brown could not be reached for comment. A switchboard operator at Enron said today that Mr. Brown no longer worked at the company, and a spokesman did not respond to questions.
Mr. Wu, who declined to comment through his lawyer today, previously asserted that Enron was behind his dismissal, but today's disclosure was the first to show pressure was applied by Enron officials. Mr. Wu now works for A. G. Edwards.
A PaineWebber spokesman declined to elaborate on the matter involving Mr. Wu but pointed to a letter sent to Congress last week.
Continued at http://www.nytimes.com/2002/03/27/business/27ENRO.html
Bob Jensen's threads on frauds have been updated at http://www.trinity.edu/rjensen/fraud.htm
Oxford University Press has launched what may be the world's largest reference collection on the Internet -- with a hefty fee to view it.
"Oxford Online: Will People Pay?" by Kendra Mayfield, Wired News, March 28, 2002 --- http://www.wired.com/news/business/0,1367,51300,00.html
Now, this centuries-old collection of illustrious reference works will be available to anyone with an Internet connection -- if they can afford the annual subscription fees.
"It will offer a new global standard for reference across the Internet, and in the process make accessible Oxford's massive reference assets," said Rob Scriven, managing editor of Oxford Dictionaries.
The Core Collection, the first database to be available as part of Oxford Reference Online, integrates over 100 dictionaries and reference titles across an array of subjects -- from astronomy to zoology -- into a single cross-searchable resource.
OUP decided to take its extensive collection online because "the technology is there to put books online, the content is there and the interest is large," said Rebecca Seger, sales and marketing director for OUP USA scholarly and professional reference group.
All that information comes at a price, however. Annual subscription fees will cost approximately $250 a year for schools and anywhere from $395 to just under $3,000 for multiple-user accounts such as libraries.
Institutions and organizations can also sign up for a free 30-day trial. More than 3,000 institutions around the world have signed up so far.
But will users pay for content when many general reference materials on the Web remain free?
Oxford University Press publishers think so.
Continued at http://www.wired.com/news/business/0,1367,51300,00.html
Babson College's experiments with "Tailor-Made Degrees"
"Tailor-Made Degrees: Customized Corporate Education," by Tom Moore, Syllabus, March 2002, pp. 30-33 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=6135
The popular notion of a new graduate entering "the real world" points to the fact that we commonly view academia and the corporate environment as two disparate, almost polarized communities. The perception may be that universities focus on theory while businesses concentrate on practice. And to combine the two—to influence academic curriculum on behalf of corporate needs—has traditionally been frowned upon as a corruption of pure academic purpose.
This is not to say that higher education has ignored the corporate community. Colleges and universities have long offered corporate training programs and customized courses. However, corporate offerings and traditional degree programs have fallen into two distinct categories, usually considered to be very separate: the graduate degree program, typically thought of as the more rigorous education experience designed exclusively by academics, and the executive education program, a shorter-term, not-for-credit alternative intended to serve the corporation’s needs.
Now, due in large part to the maturing nature and growing acceptance of distance learning, the wall that once stood between business and academia is beginning to crumble. Over the past few years, we’ve begun to see a blending of executive education and graduate degree programs. The result is a new model for professional education: the corporate-customized graduate degree program.
The Babson College Experience
In 2000, Babson College opened the doors of Babson Interactive, a school dedicated to applying e-learning to innovative management education programs. The goal was to create an e-learning/faceto- face hybrid that is both responsive to the needs of businesses and culminates in a degree from an established brick-andmortar university.
When I was first hired by Babson College, I held the titles of dean of the Babson School of Executive Education and dean of its Graduate School of Business. My responsibilities included overseeing Babson’s MBA programs and executive education courses at the same time. As I stepped into the position of CEO of Babson Interactive, I relinquished my role as dean of the Graduate School but retained my title and responsibilities as dean of Executive Education. It was clear from the start that e-learning offered high potential for an entirely new type of executive education, and that Babson Interactive was the place where we would explore the possibilities.
Babson had been watching the development of e-learning from the sidelines for quite some time before opening Babson Interactive. At first we were, frankly, not very interested. For the most part, the technologies appeared underdeveloped and unproven. We had great concern that the initial technology was not robust enough to provide the kind of insight and judgment building that we felt a good graduate program should offer.
In the past few years, however, we’ve seen the technology improve and have observed other institutions implement very successful e-learning programs. I now believe that a blended degree program—one that incorporates both elearning and face-to-face instruction— offers an education experience that can, in fact, be superior to the traditional classroom experience. The key is in the proper balancing of these two learning modes.
A number of corporations have come to Babson Interactive. In one example, Babson, along with Cenquest, an e-learning company with expertise in creating online courses, developed a oneof- a-kind company-customized MBA degree program for Intel Corp. By combining the foundational and theoretical knowledge included in a Babson graduate degree with the strategic intent of the company, the program provided Intel with a completely new employee education option.
The customization of the curriculum took several forms. The Intel team offered input into the class electives. They also provided real work projects to be used as examples and incorporated into the coursework. Through e-learning technology, Intel executives, partners, and even customers could be included as guest lecturers.
ROI and Student Benefits
Corporations have long viewed companyreimbursed education as a standard employee benefit alongside health care and bonus programs. U.S. businesses spend $58 billion annually on employee education. And in a market where there is always fierce competition for top employees, offering quality education programs is seen as essential to hiring and retaining the best and brightest.
Unfortunately, the return-on-investment for company-reimbursed degree programs has been less than easy to quantify. Corporations have had little influence over the schools being attended, much less the programs being offered and the curriculum being taught. Aside from reimbursement contingencies based on keeping a certain grade point average, businesses have had limited input into the nature of their employee’s for-credit education experience. The programs are typically funded more upon faith and hope then on real data showing that employees will learn skills that will increase their overall value to the company.
Perhaps a larger irony to these programs is that while they are seen as a necessary tool for hiring and retaining employees, they often have an opposite effect. It is not unusual for a company to pay for an employee’s graduate education only to have that employee leave once the degree is obtained. In such cases, the reimbursement program often becomes a company-sponsored training ground for its competition.
Since the programs at Babson Interactive are designed to increase an employee’s value to the company, chances are far better that graduates will continue their careers at the company once their degree is completed. And since employees work and study with other employees from various corporate locations, managers see the learning experience as providing a rare opportunity to build valuable employee relationships across company campuses.
Lessons Learned
In the final analysis, there is a real learning curve involved in maximizing both the instructional and business models for this type of program. Still, it is clear that corporate education is heading in a new direction. Companies like Intel are looking to this new corporate education model to provide higher quality assurances and overall increased value. By combining a traditional graduate degree curriculum with content tailored to the needs of a company, customized degree programs offer unprecedented benefits to both the employee and employer and stand to ultimately redefine the relationship between academia and the "real world."
Janet Fulk of our Annenburg School for Communication has been happy using the Internet 2 infrastructure for high quality video conferencing. It has enabled her to conduct a joint doctoral seminar with two other distant US-based schools. With Internet 2, there are no charges for the bandwidth connecting the schools. Market prices for such bandwidth would be in the tens of thousands of dollars, effectively precluding the seminar.
Kevin Kobelsky PhD CA·CISA
Assistant Professor Leventhal School of Accounting,
Marshall School of Business
University of Southern California Accounting Building 125
Los Angeles, CA 90089-0441
Voice: (213) 740-0657 Fax: (213) 747-2815
Information Week had an interesting article that says that teens are developing bad "work" habits that may cause them problems at work--e.g., plagiarism.
http://www.informationweek.com/story/IWK20020307S0005
Glen L. Gray, PhD, CPA
Department of Accounting and Information Systems
California State University, Northridge 18111 Nordhoff Street
Northridge, CA 91330-8372 818.677.3948
glen.gray@csun.edu
http://www.csun.edu/~vcact00f
Bob Jensen's threads on cheating and plagiarism are at http://www.trinity.edu/rjensen/plagiarism.htm
"Online Education Must Capitalize on Students' Unique Approaches to Learning, Scholar Says" by Michael Arnone THE CHRONICLE OF HIGHER EDUCATION, March 4, 2002 http://chronicle.com/free/2002/03/2002030401u.htm
In a recent interview, Nishikant Sonwalkar, principal educational architect at the Education Media Creation Center at the Massachusetts Institute of Technology, says "online learning provides tremendous opportunity for providing pedagogical choices to learners that cannot be provided by a single professor or teacher in a classroom situation. Online education provides a unique opportunity to use multiple representations of knowledge in terms of media. At the same time, it also provides opportunity to sequence this knowledge in a way so that it makes more pedagogical sense, by providing different learning strategies."
"High-tech teaching could be 'suicidal,' scholar says" by John Sanford STANFORD REPORT, February 11, 2002 http://www.stanford.edu/dept/news/report/news/february13/gumbrecht-213.html
Speaking at the Stanford University Center for Teaching and Learning's "Award-Winning Teachers on Teaching" series, Hans Ulrich Gumbrecht, Albert Guerard Professor of Literature, said, "I think this enthusiastic and sometimes naive and sometimes blind pushing toward the more technology the better, the more websites the better teacher and so forth, is very dangerous -- [that it] is, indeed, suicidal."
Stanford Report is published daily by the Stanford University News Service, 425 Santa Teresa Street, Stanford, CA 94305-2245 USA; tel: 650-723-2558; email: stanford.report@forsythe.stanford.edu ; Web: http://www.stanford.edu/dept/news/report/
"Philosopher's Critique of Online Learning Cites Existentialists (Mostly Dead)" by Michael Arnone THE CHRONICLE OF HIGHER EDUCATION, March 15, 2002 http://chronicle.com/free/2002/03/2002031501u.htm
Hubert L. Dreyfus, a professor of philosophy at the University of California at Berkeley, "argues that the Internet's promise of extending and improving human interaction through the digital medium isn't everything it's cracked up to be. . . . To prove his point, Mr. Dreyfus calls on existentialist philosophers from the 19th and 20th centuries, most of whom never saw a computer or heard of the Internet."
"Oversold and Underused: Why Faculty Don't Use Computers in the Classroom" by Larry Cuban AFT ON CAMPUS, March 2002 http://www.aft.org/publications/on_campus/march02/technology.html
While affirming that most academics make great use of computer technology in their writing, research, and communication, Cuban argues that "University promoters of computers for instruction need to downsize their expectations for deep changes in pedagogy or seriously examine other factors that influence how professors teach." He believes that "[t]raditional forms of teaching seem to have been relatively untouched by the enormous investment in technologies that universities have made in recent decades."
AFT On Campus is published eight times a year by the American Federation of Teachers, 555 New Jersey Avenue NW, Washington, DC 20001 USA; tel: 202-879-4400; email: online@aft.org; Web: http://www.aft.org/ Current and back issues are available at no cost at http://www.aft.org/publications/on_campus/index.html
Tom Moore, dean of Babson College's School of Executive Education, writes: "The popular notion of a new graduate entering 'the real world' points to the fact that we commonly view academia and the corporate environment as two disparate, almost polarized communities. The perception may be that universities focus on theory while businesses concentrate on practice. And to combine the two--to influence academic curriculum on behalf of corporate needs--has traditionally been frowned upon as a corruption of pure academic purpose." In "Tailor-Made Degrees: Customized Corporate Education" (SYLLABUS, vol. 15, no. 8, March 2002, pp. 30-1, 33), Moore describes how Babson created a school that can be customized to meet individual corporation's needs while students benefit from both e-learning and face-to-face instruction experiences. The article is available online at http://www.syllabus.com/syllabusmagazine/article.asp?id=6135
In his book, HIGHER ED, INC: THE RISE OF THE FOR-PROFIT UNIVERSITY (Baltimore: Johns Hopkins University Press, 2001), Richard S. Ruch writes, "I must confess that until a few years ago I thought that all proprietary institutions were the scum of the academic earth. I could not see how the profit motive could properly coexist with an educational mission. While I did not know exactly why I believed this, I was certain in my conviction that non-profit status was noble, just as the profession of education is noble, and that to be for-profit meant to be in it for the money, which was corrupting and ignoble." Based on his subsequent experiences with for-profit colleges and universities, Ruch re-examines these assumptions.
The first chapter of the book is available online at http://www.press.jhu.edu/press/books/titles/s01/s01ruhi.htm
Philosophy - Why We Should
Explore Web sites that will help you develop a strategy for online learning from developing a philosophy to determining scenarios for application. In other words, find out why we should to how we can.
Distance Learning...What is it?
This site presents an interesting critique of the nature of e-learning and how it can or cannot fit into existing philosophies of education. Differentiates the different kinds of courses using online structure.Learning To Learn: Using research to define effective distance education.
The author presents a paper of the ideas of notable writers on the subject of the philosophy of distance education.alt.education.distance FAQ [part 1 of 4]
This four-part website answers frequently asked questions about distance and online learning.Philosophy and Purposes of Distance Education
This lengthy paper describes the philosophy and purposes of distance education including credit and non-credit courses, relationship of on-campus and off campus learning, and different models of distance learning.Constructivist Theory Unites Distance Learning and Teacher Education
They said it couldn't be done, but here is an article that combines constructivist theory with both distance learning and teacher education. The authors use interviews with teachers whose teaching methods have changed after combining constructivist theory in building online courses.Application -- How We Can
GOALS: Global Online Adventure Learning Site
This is a terrific site for teachers interested in taking their students on virtual journeys. Each location allows students to view graphics and read about the area. They can then email the explorers with comments and questions. The Classroom Expedition page provides lesson plans and activities.EdWeb: Exploring Technology and School Reform
"An intelligent, detailed, informed and practical guide, both to education related issues concerning the Internet, and to educational resources on the World Wide Web." (quoted from the Harvard Educational Review)Online Learning - an Overview
Excellent site on the pitfalls and successes of online learning for university students. Interactive pages provide wealth of information for prospective students of e-learning.Planning and Designing Educational Facilities Online
This is an online course from the University of California Riverside for all school board members, administrators, district planners, etc., who are involved in the planning, designing, and executing the advancement of e-learning.The Web of Asynchronous Learning Networks
Visit this resource website, which is for anyone interested in asynchronous online delivery systems.
Bob Jensen's threads are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
Hardware
Printers
Kyocera Mita America has introduced the FS-1010 black-and-white laser printer, designed for individual users and small workgroups and featuring 600 x 600 dpi resolution, 15-page-per-minute printing speed, and support for parallel, USB, and Card Flash interfaces. The FS-1010 comes with a one-year parts and labor warranty. $429.
Kyocera Mita America, 225 Sand Rd., P.O. Box 40008, Fairfield, NJ 07004; (800) 222-6482
Oki Data's OKI C7000 Series printers can print at 12 pages per minute in full color and 20 pages per minute in black and white. Additional features include 600 x 1200 dpi resolution, the ability to print on various types of card stock, and an output of 10,000 pages before the toner needs to be changed. Rebates are available for schools that trade in old ink-jet or laser printers. $3,499.
Oki Data, 2000 Bishops Gate Blvd., Mount Laurel, NJ 08054; (856) 235-2600
Projection Devices
BOXLIGHT has unveiled the SP-9t LCD projector that comes with 1000 ANSI lumens, 800 x 600 SVGA resolution (compressed 1280 x 1024 SXGA), built-in component video input, digital keystone adjustment, and manual zoom and focus. The unit is backed by a two-year parts and labor warranty and a 120-day lamp guarantee. $1,999.
BOXLIGHT, 19332 Powder Hill Pl., Poulsbo, WA 98370; (800) 844-6464
Software
4MATION LiveText is a Web-based professional development system. Using their own lesson models or one of five built-in templates, teachers can create and update lessons from any Internet-enabled computer. Tutorials are designed to provide strategies for sparking student motivation, mastery of facts, and other instructional techniques. Lessons are then stored on LiveText's server, where teachers can search for additional lessons from other participating teachers. State standards are available for quick reference, as are collaboration tools such as forums, chat groups, and lesson reviews provided by other teachers.
About Learning, Inc., 1251 N. Old Rand Rd., Wauconda, IL 60084; (800) 822-4628
Gemteq Software, Inc., just released Version 2.0 of its eGems Collector Pro software. New features of this research tool are designed to improve speed by capturing Web pages, pictures, and hyperlinks simultaneously. New editing capabilities offer options to update collected gems or create and format original content with text, images, and links. Bibliography formats now include APA, MLA, and Chicago style. Workgroups are also available for users on shared networks. Upgrade for $29.95 at the site or purchase a CD for $79.95.
Gemteq Software, Inc., 936 7th St., Ste. R, Novato, CA 94945; (415) 899-8100
Newton's Quest for grades 4, 5, and 6, from Knowledge Adventure, focus on cross-curricular skill-building exercises. Designed to reinforce problem-solving strategies and test performance, these programs cover a full year of the math and language arts curriculum, and each title includes over 4,000 questions. Content is also correlated to state standards, as well as to the Stanford Achievement Test and the Iowa Test of Basic Skills. Teacher editions start at $59.95.
Knowledge Adventure, 101 Castleton St., P.O. Box 100, Pleasantville, NY 10570; (800) 321-7511
Macromedia's new Accessibility and E-Learning Solutions Kit provides tools and resources for Web developers who want to make content on their site accessible to people with disabilities and who are interested in building online courses. Media templates, tutorials, and accessibility resources help develop and retrofit Web sites, making them available to all users. New e-learning features include product extensions and tutorials on moving content to the Web. Both are free with purchase or upgrade to Flash 5, Dreamweaver 4, or eLearning Studio.
Macromedia, 600 Townsend St., San Francisco, CA 94103; (415) 252-2000
TB Labs has released RoadLingua, a dictionary database that fits in a handheld computer's optional memory card (MMC/SD/CF or MemoryStick). The database allows users to choose from several multilingual and specialty dictionaries for devices running Palm OS 2.0 and above or Windows CE 3.0 and above. $14.95. A free trial version can be downloaded at the Web site.
TB Labs, 30-1-66, Anokhina ul., Moscow, Russia 117602; (661) 760-8820
Books
Geared toward administrators and instructors, The Design and Management of Effective Distance Learning Programs examines challenges and solutions related to distance education. Examined issues include costs incurred for remote equipment, loss of traditional evaluation methods, potential losses of academic integrity, and more. $74.95.
Idea Group, Inc., 1331 E. Chocolate Ave., Hershey, PA 17033-1117; (800) 345-4332
The Web Design CD Bookshelf offers unabridged versions of the six most popular O'Reilly Web-building titles. Topics include HTML, ActionScript, information architecture, and more. The collection can be viewed through any Web browser; references and tutorials are fully searchable, cross-referenced, and indexed. $79.95. Also from O'Reilly, Building Wireless Community Networks provides a blueprint for a wireless LAN based on 802.11b standards. Also included are sample configuration files, network layout diagrams, and topographical maps. $24.95.
O'Reilly, 1005 Gravenstein Hwy. N, Sebastopol, CA 95472; (800) 998-9938
Zuleyma Tang-Martinez apparently sides with David Noble
"Higher Education and the Corporate Paradigm: the Students are the Losers," by Zuleyma Tang-Martinez --- http://www.louisville.edu/journal/workplace/tang-martinez.html
0.1. As institutions of higher education throughout the US and abroad have adopted the corporate model, "efficiency" and profit have been emphasized, while students have been redefined as "customers", "consumers," and "clients." In reality, what we are currently witnessing, as the result of this corporate paradigm, is the destruction of American higher education. University presidents and administrators take on the roles of Chief Executive Officers, and business managers have not supported greater diversity or inclusiveness in academia, whether in terms of faculty or students. The bottom line has become making money rather than educating students or fostering an environment conducive to free intellectual inquiry and development.
0.2. Although faculty often object to the corporate paradigm, because of what it does to our profession and to us as individuals, it is important to keep in mind that ultimately it is the students and their education who suffer the most and have the most to lose. There are three trends, dictated by the corporate approach, that profoundly affect the quality of the education our students receive.
For more on the negative side, go to http://www.trinity.edu/rjensen/000aaa/theworry.htm
For the positive side, go to http://www.trinity.edu/rjensen/000aaa/updateee.htm
For a summary of assessment issues, go to http://www.trinity.edu/rjensen/assess.htm
Cross Archive Search Engines discussed by Peter Cuber, "Noesis: Is it a library with built-in searching or a search engine with a built-in library?" Syllabus, March 2002, pp. 18-22 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=6133
Every discipline has a rapidly growing body of literature on the Web. Many hard-working volunteers in every field have built Web directories of this literature. Some have even built discipline-specific search engines. As the scholarly content on the Web grows, life gets more and more difficult for these directory and search engine editors. Think about the problems they face. They must try to cover the field, or their own topic within the field, comprehensively. They must distinguish worthy literature from unworthy. They must discover new sites within a reasonable time and add them if they are worthy. They must fix or delete dead links. The directory editors must organize their contents to help users navigate. If they can, they should offer searching, not only of the links and their annotations, but of the full-text files to which they point. Finally, they must use methods that scale up as the relevant body of literature continues to grow. Methods that worked five years ago when the Web was small no longer work today.
Noesis (noesis.evansville.edu) is an online library and search engine for the field of philosophy that solves these problems. Moreover, the software enabling it to solve them is transferable to any other discipline.
I’m one of the two co-editors of Noesis. My partner, Tony Beavers, deserves the credit for envisioning and implementing the features of this powerful software. In what follows, I can make immodest claims for Noesis because I’m praising Tony.
Noesis Today
Noesis has a board of topic editors, each with a different specialization within the field. The topic editors are responsible for monitoring their corners of the field for old, new, and worthy content. The Noesis software gives them a Web form for adding sites, which is much easier than writing HTML code or sending e-mail to another human editor who then writes HTML code. (Noesis also gathers new content by inviting user submissions, which are evaluated by the editors.) Topic editors may organize their topic area according to the sub-topics of their choice. Users can browse or search the entire Noesis collection or any sub-collection produced by an individual editor. By dividing the labor among the editors, an entire discipline can be covered comprehensively and kept up-to-date. If one editor has too large a topic to cover adequately, then we only have to divide the topic and add another editor.
Gateway Selection Filters
Noesis uses several kinds of peer review to identify and recommend worthy sites. The first is at the gateway, when editors use their professional judgment to decide what deserves to be included. In addition to the criteria invoked in the gateway decisions, Noesis currently requires (with a few exceptions) that the texts be written by Ph.D.s. As we’ll soon see, Noesis supports other, higher kinds of quality control that sort out the better from the worse among the texts that make it into the collection.
Adjustable-Scope Searching
Searching is the glory of Noesis. Because Noesis stores all its texts in a database, it can index them for searching much more quickly than a traditional search engine can crawl a series of Web sites. For the same reason, it can fine-tune the construction of the index. Traditional searchable collections only support all-or-nothing searching: if a file contains the search string, then a link to the file appears on the hit list, and otherwise not.
But Noesis is an adjustable-scope search engine. Users can search the whole collection, any sub-collection created by a topic editor, the collection of works by a given author, the collection of works from a given journal or set of journals, or the custom collection created by the user. Noesis also classifies its texts by genre (essays, reviews, course syllabi, and so on) and lets users filter any search by genre. Finally, editors only need to collect links to desirable texts; Noesis will automatically provide fulltext searching of those texts.
Adjustable-scope searching allows users to add another layer of peer review to their research. If you trust the peer review judgments made by the editors of journals A, B, and C, then you can set the scope of Noesis to search just those journals.
When updating its search index,Noesis automatically purges dead links. The next version of the software will put dead links in a special offline graveyard for post-mortem analysis. Most of the time, dead links mean that content has been moved, not deleted. With a little effort, the new location can be found and the link revived.
Noesis Tomorrow
The version of Noesis now online is 2.0. Noesis 3.0 will have two key features that we’ve already proved to work, so it’s not premature to sketch here how they could enhance research.
I said that in 2.0, users could create a custom collection to help organize and search a subset of the master collection. A custom collection could contain texts relevant to a course, a dissertation, or an essay.
In Noesis 3.0, user control over custom collections is set free to flourish. The first key feature in 3.0 is that users can create as many custom collections as they want. That might mean one for each course, each essay, each research interest. By default, all Noesis collections are public, so the collections you make for your courses can be used by your students. Each collection has a unique URL, making it easy to tell your students where to look.
At first only Noesis-approved editors will have the authority to add new items to the master collection—i.e., to make the gateway decisions about relevance and worth. Other Noesis users will only be able to make custom collections from the items in the master collection.
But eventually all users will be able to make Noesis collections from any content anywhere on the Web.We can give up the gateway control because Noesis will contain other, more effective forms of peer review and quality control.
Continued at http://www.syllabus.com/syllabusmagazine/article.asp?id=6133
Cross-Archive Search Engines
ARC --- http://citeseer.nj.nec.com/liu01arc.html
CiteBase --- http://www.eprints.org/
Torii --- http://torii.sissa.it/html/torii_service_provider.html
Free Online Scholarship
A guide to the terminology, acronyms, initiatives, standards, technologies, and players in the free online scholarship (FOS) movement —the movement to publish scholarly literature on the internet and make it available to readers free of charge --- http://www.earlham.edu/~peters/fos/guide.htm
As I mentioned in the March 25 edition of New Bookmarks, my wife and I really enjoyed the day we spent in Denver's Tattered Cover Bookstore.
"To Bookseller, Officers' Try at a
Search Warrants a Fight A Denver drug probe clashes with aims to keep the
public's reading choices private." by Joyce Meskis, Los Angeles Times,
March 27, 2002 --- http://www.latimes.com/features/lifestyle/la-000021929mar27.story
I quote the concluding paragraphs below:
Bevis, meanwhile, wondered how many other bookstores had been approached whose owners didn't have the will or the money to fight the government. "God only knows how often it's happened," he said. "And the stores that roll over, you'll never know about."
In Denver, the criminal investigation that started the Tattered Cover's ordeal has taken a back seat to the 1st Amendment case. Only one charge was ever filed in the meth lab bust, and that was later dropped. Authorities don't know where the four people who were under investigation now are.
March 28 message from Dawn Davidson
Hello Bob
This article was in yesterday's LA Times. Isn't this your favorite bookstore in Denver?
http://www.latimes.com/features/lifestyle/la-000021929mar27.story
dee davidson
Accounting Systems Specialist
Marshall School of Business Leventhal School of Accounting
University of Southern California 213.740.5018
dgd@marshall.usc.edu
I attended a workshop called "Information Fluency: Beyond the Basics" conducted by Michael Kaminski from the Trinity University Library. Based upon his informative presentation plus some of my own searches, I added the following to my Search Helpers at http://www.trinity.edu/rjensen/searchh.htm
Search for Library and Reference Databases
Evaluation of Information Sources --- http://www.vuw.ac.nz/~agsmith/evaln/evaln.htm
American Library Association (ALA) --- http://www.ala.org/
Information Literacy Competency Standards for Higher Education --- http://www.ala.org/acrl/ilcomstan.html
Association of College and Research Libraries --- http://www.ala.org/acrl/
Government
Library of Congress Online Catalog --- http://catalog.loc.gov
FedWorld --- http://www.fedworld.gov/
FirstGov (over 30 million government Web pages) --- http://www.fedworld.gov/firstgov.html
U.S. Government Information --- http://www2.lib.udel.edu/subj/godc/database/govdb.htm
Government Documents --- http://lib.trinity.edu/servcols/govdocs/
Government Information and Maps --- http://www.lib.ucdavis.edu/govdoc/
U.S. Federal Government Gray Literature --- http://www.osti.gov/graylit/
Public Records and by State --- http://www.pac-info.com/
Politics and Government --- http://www.access.gpo.gov/su_docs/multidb.html
Also see Yahoo at http://dir.yahoo.com/Government/
Census Information --- http://www.peoplefind.com/frames/freeresources/govdataindex.htm
Also see http://www.trinity.edu/mkearl/
Trinity University Library --- http://lib.trinity.edu/
Quest --- New Databases --- http://www.trinity.edu/mkaminsk/new_databases.htm
Databases for Trinity Students, Faculty, and Staff --- http://lib.trinity.edu/dbs/dbs.asp
eJournals, Electronic Journals --- http://www3.tdnet.com/trinity/
Also see http://sharewareconnection.com/play/402000index.htmlUlrich's Periodicals Directory --- http://lib.trinity.edu/dbs//dbs.asp#U
Michael Kaminski --- http://www.trinity.edu/mkaminsk/
Research Tips --- http://www.trinity.edu/mkaminsk/research_tips.htm
New Databases --- http://www.trinity.edu/mkaminsk/new_databases.htm
Information Databases
Free Database Links --- http://www.docx.com/freedb.htm
Multiple International and Historical Databases (including Encyclopedias and Photographs) --- http://www.slco.lib.ut.us/databases.htm
Global (Music, Literature, etc.)--- http://www.isop.ucla.edu/lac/bibliography-databases.htm
Academic Gateway --- http://datalib.ed.ac.uk/sources.html
University of Wisconsin Core Databases and Journals --- http://www.library.wisc.edu/guides/coreguide/corelist.htm
Also see http://www.library.wisc.edu/libraries/Instruction/jaid.htmBaker Library (Harvard Business School) Electronic Resources --- http://www.library.hbs.edu/abouta.htm
Business Information Databases --- http://www.ficci.com/ficci/Databases/databases.html
Biographical Databases --- http://www2.lib.udel.edu/subj/biography/
Biomedical --- http://www.nlm.nih.gov/databases/databases.html
Drug Information --- http://matweb.hcuge.ch/Medical_search/Drugs_pharmacology_pharmacy.html
Drug Information --- http://www.coreynahman.com/medicalinfodatabases.html
Drug Information --- http://library.pbac.edu/drug_information_databases.htm
UNC Health Sciences --- http://www.hsl.unc.edu/lm/degrant/introduction.htm
Health --- http://chid.nih.gov/
Dorland Healthcare Information --- http://www.healthcare-info.com/database.htm
Pesticides --- http://ace.orst.edu/info/npic/tech.htmBusiness Databases --- http://dir.yahoo.com/Business_and_Economy/Business_to_Business/Information/Databases/
Internet and Information Systems --- http://idrinfo.idrc.ca/
Public Records and by State --- http://www.pac-info.com/
Government Information and Maps --- http://www.lib.ucdavis.edu/govdoc/
Legal Information Databases --- http://www.wlu.ca/~wwwlib/subject/legal/databases.html
Politics and Government --- http://www.access.gpo.gov/su_docs/multidb.html
Restaurants and Diets --- http://businesstravel.about.com/cs/restaurants/
Country of Origin and Legal Information --- http://www.unhcr.ch/research/rsd.htm
Internet Public Library (from the University of Michigan) --- http://www.ipl.org/
20,000 electronic texts, and an annotated guide to web sitesBob Jensen's Guide to Economic Statistics --- http://www.trinity.edu/rjensen/bookbob1.htm#EconStatistics
Economic and Demographic Statistics --- http://www.pac-info.com/
From New Zealand (Statistical Information Databases) --- http://www2.auckland.ac.nz/lbr/stats/webpages/statsdb.htm
Baker Library (Harvard Business School) Electronic Resources --- http://www.library.hbs.edu/abouta.htmSociology Databases and Other Great Links --- http://www.trinity.edu/mkearl/
Bob Jensen's Bookmarks --- http://www.trinity.edu/rjensen/bookbob.htm
Primary Sources
Enter "Primary Sources" into Exact Phrase at http://www.google.com/advanced_search
Gray Literature (hard to find documents)
Enter "Gray Literature" into Exact Phrase at http://www.google.com/advanced_search
U.S. Federal Government Gray Literature --- http://www.osti.gov/graylit/
Shareware and eBooks --- http://sharewareconnection.com/play/402000index.html
Some Other Free Sites Noted at http://www.techlearning.com/db_area/archives/TL/2002/03/inservice.html
Encyclopedia.com --- http://www.encyclopedia.com
contains more than 50,000 articles. In addition, it links to Electric Library, mentioned above.Internet Public Library --- http://www.ipl.org
or IPL, was one of the first public libraries "of and for the Internet community." Some available collections are general reference, associations, literary criticism, newspapers, youth, and teens.Library of Congress Online Catalog --- http://catalog.loc.gov
records represent the holdings of the library, including books, computer files, manuscripts, cartographic materials, music, sound recordings, and visual materials; it also includes searching aids for users.
Yahoo --- http://www.yahoo.com/
Bob Jensen's search helpers are at at http://www.trinity.edu/rjensen/searchh.htm
Bob Jensen's bookmarks are at http://www.trinity.edu/rjensen/bookbob.htm
Electronic Database and Information System Glossary --- http://databases.about.com/library/glossary/bldef-information.htm
Bob Jensen's Technology Glossary and Links --- http://www.trinity.edu/rjensen/245gloss.htm
Bob Jensen's Other Glossary Links (including accounting, business, and finance) --- http://www.trinity.edu/rjensen/bookbus.htm
Individuals and nonprofits can no longer purchase personal computers in Cuba, according to a government decree. Dissidents claim it's another example of the restriction of information flow --- http://www.wired.com/news/politics/0,1283,51270,00.html
Disaster of the Week: Hollings' Hell
The proposed copy-protection bill from Senator Fritz Hollings would demand restrictive technology on practically all new devices. Here's a rundown on what the law would do if passed --- http://www.wired.com/news/politics/0,1283,51275,00.html
A bill introduced by Senate Commerce Chairman Fritz Hollings would prohibit the sale or distribution of nearly any technology -- unless it features copy-protection standards to be set by the federal government.
Creating:
Anyone selling -- or creating and distributing -- "digital media devices" may not do so unless they include government-approved security standards. Digital media devices are defined as any hardware or software that can reproduce or display copyrighted works. [Section 5(a)(1)]Importing:
It would be unlawful to import software or hardware without government-approved security standards. It's not clear whether this section bans an individual downloading a copy of a program from a non-U.S. website. [Section 5(a)(1)]Protecting:
Network-connected computer systems may not delete markers indicating a file is copy-protected. Such systems must preserve the markers intact. This section applies to peer-to-peer networks, FTP sites, websites, routers, Internet providers, library terminals and more. [Section 4]Removing:
Knowingly removing copy-protection markers from digital content is prohibited. [Section 6(a)(1)]Sending: I
t would be unlawful to knowingly distribute or send someone any digital content that has been purged of its this-is-copy-protected marker. [Section 6(a)(2)]Violations of any of those four sections will be punished by civil penalties ranging from $200 to $25,000 per violation, and, in some cases, federal felony charges.
Fair use:
Another section says that if anyone wants to use the copy-protection standard, to be drafted by the Federal Communications Commission, they have to use the whole thing. That's designed to preserve at least minimal "fair use" rights. [Section 6(b)]But it's a section with blunt teeth. Nearly all the other parts of the bill promise criminal penalties: This merely promises civil damages of between $200 and $2,500.
MP3 players:
One part of the bill overrides a landmark lawsuit that said the Rio MP3 player did not violate copyright law.In 1999, a federal appeals court ruled that Diamond Multimedia Systems could sell the Rio -- a decision that ushered in the MP3 craze. This bill rewrites current copyright law to require copy-protection in any device that "retrieves or accesses copyrighted works in digital form."
"By including that, they want to get around the Rio court case," says Ethan Ackerman, a senior research fellow at the University of Washington School of Law. "This is statutorily overruling that court case. This way they can sue the player manufacturers."
Also see "Howling Mad Over
Hollings' Bill," by Brad King --- http://www.wired.com/news/mp3/0,1285,51337,00.html
The two concluding paragraphs read as follows:
Along with upsetting the 2 million people who have already purchased digital television sets, the bill also wipes away many of the legal uses people have become accustomed to, Petricone said. The CEA is also averse to adding taxes onto the cost of new devices that could be used to pay entertainment companies, something the Audio Home Recording Act forced on portable MP3 makers.
"Consumers have the right to do things to make recordings of broadcast shows," said Petricone. "If you charge them extra, then it's not a right. If we're put in a position that we have to sell devices that don't allow people to do what they've always done, then nobody is going to buy any new devices."
"The Oscars get Napsterised," The Economist, May 22, 2002 --- http://www.economist.com/agenda/displayStory.cfm?Story_ID=1049624
Hollywood feels threatened as more people use Internet file-sharing services to obtain free copies of movies. But just as the music business has found in its efforts to fight the mass copying of songs through services such as Napster, the film studios will not be able to rely on technology alone to protect their copyrights
Oh Oh!
The IRS has compiled statistics indicating that Federal employees owe more than $2.5 billion in back taxes. Of the 8.7 million federal workers and retirees, 381,500 were behind on their taxes, or 2.8% of the total. Find out how this compares with a national average of the American workforce and which branches of the government are the worst offenders. http://www.accountingweb.com/item/76127
One of the wonderful adventures of my life was a sabbatical in New Zealand.
Many locals may not have known the Dictionary of New Zealand Biography ever existed, but now that it's online, librarians hope Kiwis will get to know more about their homeland. Kim Griggs reports from Wellington, New Zealand --- http://www.wired.com/news/culture/0,1284,51132,00.html
March 27 message from Fathom
Fathom's spring break offer is ending this week, but you still have time to take advantage of your special 25% discount. Just enter the coupon code SPRNG at checkout for any Fathom enrollment through March 31. Hundreds of new courses are open for enrollment, including:
ARTS & HUMANITIES
Tiananmen June 1989: The Roots of Crisis http://www.fathom.com/course/51704700/esp1
Digital Video: An Introduction with Michael Rubin http://www.fathom.com/course/4701042/esp1
HISTORY & GLOBAL AFFAIRS
Covering Terrorism: The Media and 9/11 http://www.fathom.com/course/71705500/esp1
Israeli and Palestinian Nationalism: Debates over Partition http://www.fathom.com/course/68705501/esp1
PROFESSIONAL DEVELOPMENT
Organizational Behavior: Communication and Conflict Resolution http://www.fathom.com/course/42704460/esp1
Disaster-Proof Your Finances http://www.fathom.com/course/40704013/esp1
Search for more courses: http://www.fathom.com/link.jhtml?cid=esp1&page=home
Partly driven by marketing, partly by genuine customer needs, integrated analytics will soon be the yardstick by which enterprise app business value is measured. By Sharon Ward http://www.dsi-enews.net/e-bin/enews.asp?id=8949006
Big Blue Bully?
A recent lawsuit filed by Compuware against IBM certifies that intellectual
property protection needs to be a part of business strategy. http://www.dsi-enews.net/e-bin/enews.asp?id=8949010
How to Value Interest Rate Swaps
Hi John,
Basics are explained in the early part of "Summary of Derivative Types." It can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
I would download http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
Then I would examine the attached solutions file for Example 5 in Appendix B, particularly Columns N-W in the "Effective" spreadsheet of that Excel workbook. The 133ex05a.xls file is also available online at http://www.cs.trinity.edu/~rjensen/
In practice, firms then to use the Bloomberg terminal to derive swap (yield) curves from forward rates.
Hope this helps.
Bob Jensen
-----Original Message-----
From: Walters, John [mailto:John.Walters@bdk.com]
Sent: Wednesday, March 27, 2002 7:55 AM
To: 'rjensen@trinity.edu' Subject: Yield Curve DerivationsMr. Jensen, I am trying to model a zero coupon yield curve in excel for the purpose of valuing our swap portfolio. As I'm fairly new to the Treasury area I am interested in the tutorials mentioned on your web site. Are these still available? Thanks for your assistance.
Regards, John Walters
Treasury Manager
Black & Decker Corporation
Messages from Business Week magazine on March 26, 2002
So you've decided to get a Master's of Business Administration--the coveted degree that often serves as an entr?e into the upper echelons of management. You've figured it's worth the $150,000 or more investment--in tuition, expenses, and two years of lost pay. And you've spent late nights boning up for the Graduate Management Admission Test, earning a score that should put you in the running for a spot on the "admitted" list at a highly rated school.
Now what? Before you slog through those lengthy applications, take a step back. You need to consider more than just a brand name when it comes to choosing the right program. Every applicant has different needs and goals, and not every school will meet them.
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/magazine/content/02_12/b3775113.htm?c=bwmbamar27&n=link1&t=email
Saul Keeton -- Jones School, Rice University | Class of 2002 -- There was time during my last full-time job when it was fashionable to be "comfortable with ambiguity." I was working for Andersen Consulting, and the Internet was sizzling. High-flying, cash-burning startups were spending wildly on consulting services to rush their products to market in hopes of gobbling up chunks of market share ahead of their competitors. This new operating environment required a paradigm shift for us, the consultants. We were accustomed to working to the n-th degree of detail and to perfecting our work products prior to going live. But e-commerce changed everything.
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/bschools/mbajournal/index.htm?c=bwmbamar27&n=link3&t=email
Cell-phone manufacturers are cranking out new products at an astonishing rate, even though the market is flat. They sound confident, but the analysts are worried --- http://www.wired.com/news/wireless/0,1382,51152,00.html
Where technology really helps
"Of Diesel and Dial-Up: The IT Traveler," by Paul Heltzel, Technology Review, March 22, 2002 --- http://www.techreview.com/articles/wo_heltzel032202.asp
It makes sense that truckers are the most well-connected travelers on the road. They need to stay in touch with the trucking company and with family. Also, they increasingly use Web-based services that help them find loads to drive home and avoid deadheading, or driving an empty trailer—every trucker's worst nightmare since those miles produce no revenue. In an attempt to remedy this situation, companies such as The Internet Truckstop, Insight Technology and On Time Media have set up Web-based load matching services. A trucker can log on to these sites, enter the city where he will be dropping off a load and the city to which he needs to return. The system will then tell him of any loads that need to be hauled between those cities. It gets sophisticated. For example, if a load is being dropped in Orlando and the trucker needs to go to New York, the system may find an Orlando-Memphis load, followed by a Memphis-Cleveland load and then a Cleveland-New York load.
Some IT investors follow the online movements of truckers closely because they are not traditionally thought of as early adopters of technology. Like travelers who pull over to eat where the truckers do, investors feel a sense of comfort once a technology becomes viable at truck stops. According to Jack Vonder Heide, president of Oakbrook Terrace, IL-based Technology Briefing Centers, 18-wheeler operators have led the way in road testing technologies that have filtered down to consumers. He notes a laundry list of technologies used today, including cell phones, ruggedized notebooks, touch screens, discount long-distance services, self-serve gas pumps, "and, lest we forget the past, CB radios."
"We find truckers to be very reliable predictors of an emerging technology's likelihood of success," says Vonder Heide. "Truckers don't have large amounts of expendable income. They're not conspicuous consumers. So when we see truckers adopt a technology, that gives us a higher level of comfort that we can recommend that technology to our clients as an investment."
So what's down the road, so to speak, after dial-up access in roadside restaurants? In the next 12 to 18 months, expect to see wireless public Internet access points begin to pop up at truck stops around the country. Using the same technology found in wireless home and office networks, 802.11b LANs provide Internet access within 200 to 300 feet of the truck stop. Providers are test marketing wireless access plans priced around 15 cents a minute (or $7 a day), as well as nationwide service plans for frequent travelers willing to subscribe for a monthly fee.
"I think wireless service will be widespread in our industry," says Bill Bartkus, vice president of IT at TravelCenters of America. "Wireless networks put Internet access at every seat, not just the ones with a phone jack. We'll add wireless access points to the exterior of the buildings, so drivers won't have to go inside. People who want to sit in the lot in their car or RV won't have to lug a laptop into the building."
FREE
eBook Samplers from Barnes & Noble ---
http://ebooks.barnesandnoble.com/bn_digital/free_samplers.asp?sourceid=00394094055875196094&bfdate=03-22-2002+13:04:58
Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm
National Academy Press: Scientific Inquiry in Education http://www.nap.edu/books/0309082919/html/
i-xiii
Executive Summary
1-6
1 Introduction
7-18
2 Accumulation of Scientific Knowledge
19-34
3 Guiding Principles for Scientific Inquiry
35-56
4 Features of Education and Education Research
57-68
5 Designs for the Conduct of Scientific Research in Education
69-90
6 Design Principles for Fostering Science in a Federal Education Research Agency
91-112
References
113-138
Appendix: Biographical Sketches, Committee Members and Staff
Bob Jensen's bookmarks on education are at http://www.trinity.edu/rjensen/bookbob2.htm
Learning Differences and Disabilities
From PBS: Misunderstood Minds http://www.pbs.org/wgbh/misunderstoodminds/
The Misunderstood Minds project consists of three elements: The PBS documentary, first airing March 27, 2002; the companion Web site on PBS Online, www.pbs.org/misunderstoodminds ; and the Developing Minds Multimedia Library.
Misunderstood Minds: the documentary
For one in five students, learning is an exhausting and frustrating struggle. Often mistakenly called "lazy" or "stupid" by their teachers, classmates, and even their families, these children may be suffering from debilitating learning problems. If not addressed, the problems can have a devastating impact on the students' self-esteem and future academic and social success.
The PBS documentary, Misunderstood Minds shines a spotlight on this painful subject, following the stories of five families as, together with experts, they try to solve the mysteries of their children's learning difficulties. Produced and directed by renowned Frontline filmmaker Michael Kirk, this 90-minute special shows the children's problems in a new light, and serves as a platform to open a nationwide dialogue on how best to manage young, vulnerable, and misunderstood minds.
Misunderstood Minds is a co-production of the Kirk Documentary Group, Ltd. and WGBH Boston. Executive producers are Michele Korf and Brigid Sullivan. The producer and director is Michael Kirk. Misunderstood Minds is closed captioned for deaf and hard-of-hearing viewers by The Caption Center at WGBH Boston. Narrated descriptions are provided by Descriptive Video Service® (DVS®), a national service of WGBH Boston that makes television, cable, and home video programming accessible to people who are blind or visually impaired.
Information on ordering a copy of Misunderstood Minds is available on the order videos section of this site, or by calling 1-800-949-8670.
Misunderstood Minds: the Web site
www.pbs.org/misunderstoodminds
Parents, teachers, and students looking for explanations of the science behind learning difference and strategies to aid success in school, can find both on the companion Web site for Misunderstood Minds. The site includes profiles of the students in the documentary, as well as sections on Attention, Reading, Writing, and Mathematics. Interactive activities, called Firsthands, are designed to give site visitors a sense of what it may be like for a student struggling with a basic skill.
The Web site is a production of WGBH Interactive and Educational Programming and Outreach. Executive producers are Ted Sicker, Michele Korf, and Brigid Sullivan. The producer is Arthur R. Smith.
The Web site is accessible, designed for use with screen reader devices that render text into speech for blind and low-vision Web users. To learn more about providing access to Web content for users with disabilities, please visit the CPB/WGBH National Center for Accessible Media on the Web at www.ncam.wgbh.org .
Funding for the Misunderstood Minds PBS documentary and Web site is provided by Schwab Learning, a service of the Charles and Helen Schwab Foundation; Exxon Mobil Foundation; Spencer T. and Ann W. Olin Foundation; Emily Hall Tremaine Foundation; The Roberts Foundation; Geraldine R. Dodge Foundation, and public television viewers. Thank you.
Developing Minds Multimedia Library
This multimedia library of videos and print guides is designed to help parents and teachers of elementary and middle-school children explore differences in learning through the approach and conceptual framework of developmental-behavioral pediatrician, author, and professor Dr. Mel Levine.
The 22-video library explores the relationship between learning and key brain functions, and features practical, easy-to-use strategies to help students become more successful learners. The 18 accompanying print guides reinforce the concepts and strategies presented in the videos.
The Developing Minds Multimedia Library can be ordered in its entirety. As well, multi-video sets have been arranged around particular learning difficulties and problem clusters, with many combinations to choose from. Individual videos and accompanying guides are also available.
Detailed item descriptions and full ordering information (phone, fax, or mail orders) may be obtained by downloading the brochures on the order videos page of this site. You may also call 1-800-949-8670 to request more information or to order.
About WGBH
WGBH Boston is America's preeminent public broadcasting producer. More than one-third of PBS's prime-time lineup and companion Web content is produced by WGBH, and the Boston station is the source of many public radio favorites. WGBH also is a pioneer in educational multimedia and in access technologies for people with disabilities. For more information visit www.wgbh.org.
About All Kinds of Minds
All Kinds of Minds helps families and teachers understand why a student is struggling in school and provides an action plan to help each child become a more successful learner.
Founded in 1995, All Kinds of Minds is a private, non-profit Institute, affiliated with the University of North Carolina at Chapel Hill that offers a powerful system of programs for helping kids succeed. The Institute's primary goal is to educate teachers, parents, educational specialists, psychologists, doctors, and children about differences in learning, so that students who are struggling in school because of the way their brains are "wired" are no longer misunderstood. Its programs have been developed by Dr. Mel Levine and colleagues based on scientific research and over twenty-five years of clinical experience. The programs provide a comprehensive framework for understanding how all kids learn.
All Kinds of Minds enables a student (K-12), his parents, and his teachers to understand why he is having difficulty in school and provides the language and tools for parents, educators, and clinicians to develop a concrete, practical action plan to help him succeed. For more information about All Kinds of Minds, visit www.allkindsofminds.org.
March 28 message from Vasant Raval [vraval@bluejay.creighton.edu]
Fourth Annual Meeting of AIS Educator Association is scheduled for June 28 through July 2 in the beautiful Copper Mountain Resort in Colorado, about 80 miles West of Denver. Details are posted on the Association's website, www.ais-educ.com .
You are welcome to participate in training, or conference, or both. A total of 19 training sessions, 3 keynotes, and up to 57 conference paper presentations are planned. Besides training proposals and research paper presentations, we need help in other roles, such as paper discussants, session chairs, and panel organizers. Also, please encourage your graduate students to attend as well. The deadline for proposals is extended to April 15.
The annual meeting offers a unique opportunity in accounting information systems and related areas, both in terms of learning hands-on, and by sharing with others relevant technology and tools, curriculum innovations, and research. The meeting offers a very friendly, informal environment for networking and sharing ideas and resources.
We hope to see you in Copper this summer.
Best Wishes.
Sincerely,
Vasant Raval,
Conference Chair AIS Educator Association (vraval@creighton.edu)
Message regarding the forthcoming
European Conference on Accounting Information Systems
From Andrew Lymer [A.LYMER@bham.ac.uk]
Whilst particularly for those of you who are attending ECAIS 2002 in April in Copenhagen, others may be interested in the materials which have been posted up to our website today for one of our workshops - on Researching ERP systems, to be given by Ben Wier (with assistance from Niels Dechow). The website pages can be access at http://accountingeducation.com/ecais - see Keynote and Worskshops link.
Ben and Niels have offered up four papers to be examined prior to attending this workshop to illustrate different approaches to researching this topic area as used by them, and other researchers, in the recent past.
Two of these papers are working papers (please respect this status and ask permission of the respective authors if you wish to use them subsequently) and two are papers awaiting publication where copyright should also be respected, and correct citation made where appropriate.
Further information on other other two workshops (on Case based reasoning research and ECommerce research) and keynote speech will be added to the website in the near future.
We look forward to welcoming as many of you as can attend to the conference.
Regards
Andy Lymer University of Birmingham,
UK on behalf of the ECAIS 2002 Chairs and organisers.
March 28 message from Graziella Michelante [michelante@eiasm.be]
With this message, I would like to remind you the following events :
Workshop on Accounting and Economics V
When : June 20-21, 2002
Where : Madrid, Spain
Submission deadline : March 31, 2002 !!
Web site : http://www.eiasm.be/events/WsAccountingEconomics.htmlInternational Conference on Accounting, Auditing & Management in Public Sector Reforms
When : September 5-7, 2002
Where : Dublin, Ireland
Web site : http://www.eiasm.be/events/WsDublin.htmlWorkshop on Accounting in Historical Perspective
When : December 5-6, 2002
Where : Lisbon, Portugal
Web site : http://www.eiasm.be/events/2002.12.5-6.html3rd Conference on New Directions in Management Accounting : Innovations in Practice and Research
When : December 12-14, 2002
Where : Brussels, Belgium
Web site : http://www.eiasm.be/events/3rd_Conference_ON_New_Directions.htmlInternational Workshop on Management and Anthropology
When : September 12-14, 2002
Where : Venice, Italy
Web site : http://www.eiasm.be/events/WsManagement&Anthropology.htmlSincerely,
Graziella Michelante_______________________________
Graziella Michelante
EIASM Conference Manager
Rue d'Egmont 13 - 1000 Brussels - Belgium
Tel.: 32 2 5119116 - Fax : 32 2 5121929
March 30 message from Ho S. M., Simon (ACY) [simon@baf.msmail.cuhk.edu.hk]
Dear Bob,
As you may know, I am chairing the Organizing Committee of the above Congress. I hope you have planned to attend this truly international event.
. . .
For more information of the Congress, please browse www.cuhk.edu.hk/acy/hkaaa/iaaer.html I look forward to hearing from you soon.
Sincerely,
Simon S.M. Ho
Chairman, Organizing Committee of the 9th WCAE
A new breed of customer service agents will be so attentive to your needs that you’ll never guess you’re talking to software.
"Are You Being Served?" by Joe Nickell, MIT's Technology Review, March 15, 2002 --- http://www.techreview.com/articles/nickell031502.asp
Somehow it seems the more businesses cater to customers through the use of new technologies, the harder it is to get good service. It's hard to find a company of any size today that answers its phone or e-mail without first sending customers through a maze of touch-tone menus or voice prompts—"voice hell" always a 1-800 number away. Then there are online customer support centers: soulless lists of frequently asked questions, hyperlinked conceptual puzzles and unintuitive search engines that never quite answer the question at hand. "What customers very often end up wanting is an F-U button," jokes Dr. Rosalind Picard, an associate professor at MIT whose research examines the role of emotions in human-computer interactions.
Undaunted, technology providers and their corporate clients are pushing toward a future in which an increasing percentage of customer inquiries can be handled automatically and, hopefully, with better results. They aim to build so-called "service bots"—software-hardware hybrid systems that understand spoken or written English (or any other dialect or language preferred by the customer), interpret vague or broad queries, possess a thorough understanding of both the company's products and the customer's past interactions, and speak or write answers in an intelligible, context- and emotion-sensitive fashion. The necessary skill set for the perfect service bot demands several interdependent layers of technology: voice recognition modules, natural language understanding engines, artificial intelligence for data extraction and text-to-speech synthesizers.
Customers should like these new bots because they would be faster, more accurate and more consistent than live service agents, providing personalized interactions managed across any medium, available any time of the day. Companies will line up for the new technology in order to fend off ever-rising customer service costs and catastrophic call-center employee turn-over rates.
That's the premise, anyway. It may all sound pie-in-the-sky, but numerous technology companies, as well as research centers at leading academic institutions, are hammering away at the challenges of building a better service bot. The first generation is already here. Ford Motor Company employs a chatty online bot named Ernie, built by San Francisco-based NativeMinds, who helps technicians at its network of dealerships diagnose car problems and order parts. IBM's Lotus software division employs a service bot from Support.com that can examine a user's software, diagnose problems and fix them by uploading patches to the user's computer—without any necessary intervention by human tech support personnel.
And in an odd twist, Electronic Arts has built an entire game, called Majestic, around service bot technology built by San Francisco-based developer eGain. Majestic carries players through a complex, multi-media episodic mystery. Players receive clues and information via pager, fax, e-mail, Web sites and even telephone calls. eGain's service bot keeps track of player information such as what clues they've collected and how they have reacted. The software can handle 100,000 simultaneous player interactions.
But given the lousy track record of automated customer service so far, consumers have reason to be skeptical of this new generation of talking machines. Confusing or insufficient menu choices, lack of personalization, outdated or insufficient responses and failure to carry over punched-in account information to conversations with live reps rank at the top of consumer complaints about automated customer service systems today. Almost 40 percent of Americans press zero whenever they encounter an automated answering system, rather than waiting to hear the menu options, according to a study conducted in 1998 by the Center for Client Retention.
So will service bots truly give us better service, or will they simply allow companies to reinforce the walls between themselves and customers? Can we really hope for a better-than-human service bot? And, is it realistic to expect companies to deploy tomorrow's automated systems any better than they deploy today's?
"I don't think it's possible to even imagine a generic customer service [bot] that can handle any kind of question in any industry," says Joe Bigus, leader of the Agent Building and Learning Environment (ABLE) project at IBM Research. Bigus' research group has recently produced a toolkit that allows developers to build small software agents—programs that gather information and perform duties automatically—in Java. The toolkit consists of software code that provides baked-in machine learning capabilities and a set of instructions for customizing the software agents with specific domain knowledge. This allows developers to design any number of discreet agents that possess specialized knowledge and problem-solving capabilities; the agents can even interact with one another when faced with a complex problem.
By facilitating the deployment of a number of small, specialized software agents—rather than one massively complex agent—this approach mimicks the way human resources are managed: customer service agents at Sony aren't all trained to understand every product from audio cassettes to digital video cameras. Instead, small groups of service agents are given specific products to understand thoroughly.
Continued at http://www.techreview.com/articles/nickell031502.asp
Bob Jensen's threads on speech recognition and text reading are at http://www.trinity.edu/~rjensen/245glosf.htm#Speech1
From FEI Express on March 21, 2002
IBM included "A Road Map" in their 2001 Glossy Annual Report, a two-page narrative with helpful hints to walk you through their 51 pages of MD&A and provide some perspective before reading their financials. This is a great step towards making financial statements more understandable to the average reader and not so overwhelming. Take a look for yourself on their website at http://www.ibm.com/annualreport/2001/financial_reports/fr_index.html
Caterpillar, on the other hand, took a different approach to their 2001 Glossy Annual Report. They opted for a glossy summary annual report that included consolidated financial statements, with detailed disclosures instead included as an appendix to their Proxy. You can view an electronic version of this report at http://www.caterpillar.com/about_cat/investor_information/pdf/YECX0014.pdf. I've noticed that several companies this year have opted for a glossy Summary Report, with varying levels of detail in what's provided in that summary.
TenLinks.com: Ultimate Directories for Technology Professionals http://www.tenlinks.com/
communities, events, jobs, products and companies, reference, reviews, services and consultants, translation
FEA, CFD, products and companies, resources, reviews, services and consultants
TopTen Civil Engineering Sites, bridges, codes, dams, environment, geotechnical, hydrology, indoor/outdoor, IT in construction, organizations, portals, reference, services, software, tall buildings, transportation
communities, consultants, data, education, events, jobs, products & companies, reference
communities, products and companies, reference, services and consultants, CAM, rapid prototyping, quality
Architecture
TopTen sites, builders' sites, built environment, home improvement, magazines, portals, sustainable architectureComputers
computing for the disabled, hardware, hardware reviews, magazines, softwareElectronic Design (EDA)
TopTen EDA, products and companiesEngineering
civil, design, chemical, electrical, mechanical, collaboration, humor, jobs, magazines, referencesFree Stuff
CAD, GIS, FEA, Internet access, general stuffMathematics
online solvers, math software, unitsTech Jobs
CAD, engineering, general, GIS/Mapping, qualityTechnology
computers, free tech stuff, Internet, newsletters and digestsGeneral Interest and Diversions
cycling, employment, folk medicine, reference, salary calculators, satellite images, science, software, webcams
Bob Jensen's technology bookmarks are at http://www.trinity.edu/rjensen/bookbob4.htm
Tate Online: Turner Collection -- http://www.tate.org.uk/collections/collection_search_simple.jsp?group=turner
In 1856, nearly five years after Turner's death, his estate was settled by a decree in which the works found in his studio that were considered to be by his own hand were accepted by the nation as the 'Turner Bequest'. This comprises nearly 300 oil paintings and around 30,000 sketches and watercolours (including 300 sketchbooks). A group of nine paintings from the Bequest is retained at the National Gallery. View the Turner collection highlights View the Turner sketchbooks
While the great majority of the works by Turner in the Tate are from the Turner Bequest there are also a small number of oils, watercolours and prints which have been acquired independently.
Updates on FAS 133 Derivatives Accounting
March 22, 2002 Message from Risk Waters Group [RiskWaters@lb.bcentral.com]
The Financial Accounting Standards Board (FASB) has ruled that undrawn loan commitments will not be subject to derivatives accounting rules, and do not have to be marked to market - a victory for commercial lenders. But, there may be a larger problem on the horizon for banks opposed to fair-value loan accounting. FASB, the US accounting standards-setter, also said it would add loans to its ongoing fair-value accounting project, through which it is devising mark-to-market accounting rules for all financial instruments.
The International Monetary Fund became the latest critic of credit derivatives. It believes the lack of financial disclosure and transparency in the credit derivatives market has the potential to increase market risk, as participants find it more difficult to gauge the depth of credit deterioration caused by credit events.
Turnover in equity index contracts at Asian exchanges, meanwhile, rose by 40% in the fourth quarter of last year, according to the latest quarterly report from the Bank for International Settlements (BIS). The Switzerland-based banking body pointed to the rapid development of options trading in Korea as leading the charge.
In a blow to new market development, Italy's IntesaBCI shelved its plans to trade weather derivatives this year.
Christopher Jeffery Editor,
RiskNews
http://www.risknews.net
mailto:cjeffery@riskwaters.com
Interesting Business History in the Context of the Enron Scandal
A very interesting story, much more so than 'The Untouchables'...
The key accountant if there was one, was actually one of his lawyers, Edward O'Hare, who advised Capone on business ventures. 'Fast Eddie' O'Hare became a prominent lawyer and was involved in many businesses with Capone. During Capone's imprisonment for the Valentine's Day massacre in 1929, the laws had been changed to enable taxation of illegally earned profits. Capone and his associates, including Eddie, became a focus of IRS operations in 1930.
Fast Eddie decided to turn on Capone to settle up with the IRS. This was a breakthrough for the IRS. In addition, a set of accounts seized years earlier was properly analyzed provided further evidence of Capone's illegal earnings.
A very interesting wrinkle was that Eddie planned ahead for his son Butch. Terms of the deal with the Feds included acceptance of Butch at Annapolis. Eddie cooperated, and Capone was convicted.
In November, 1939, Eddie was executed by mob associates for cheating another boss, Frank Nitti, on a deal, and perhaps as (somewhat overdue) payback for Capone. According to http://www.alleged-mafia-site.com/tuohy/ohare.html several months later, Nitti married Eddie's fiance (Eddie had divorced Butch's mother much earlier).
In the meantime, Butch graduated from Annapolis, and in 1942 became a war hero, the first US Navy Ace, by single-handedly downing 5 Japanese bombers and buying time that saved the carrier USS Lexington from destruction. According to http://www.alleged-mafia-site.com/tuohy/ohare.html President Roosevelt called his outstanding performance, "One of the most daring, if not the most daring, single action in the history of combat aviation." He was subsequently shot down at night in Nov, 1943 and lost at sea.
In 1949, Col. Robert H. McCormick, publisher of the Chicago Tribune, led the charge to rename the Chicago-area airport (formerly named Orchard Field) to O'Hare's International Airport. And so it is named today.
I wonder if anyone from Enron is making similar deals...
Other links:
http://www.alleged-mafia-site.com/tuohy/ohare.html
http://wy.essortment.com/alcaponegangst_rwdl.htm
http://www.ohare.com/ohare/about/about_butch.shtm
Kevin Kobelsky PhD CA*CISA
Assistant Professor Leventhal School of Accounting,
Marshall School of Business
University of Southern California Accounting Building
125 Los Angeles, CA 90089-0441 Voice: (213) 740-0657 Fax: (213) 747-2815
March 24 message from Emanuel Schwarz
In case you are interested in this new developed Managerial Cost accounting, will you please open my website: www.InternalAccounting.com or just click here: IAE Home Page
You will see a totally new concept of Internal Accounting. We have now separated the External-Financial Accounting from the Internal one. A very important step ahead.
Please, let me hear from you with all your observations and comments.
God bless you there.
Sincerely yours,
Emanuel Schwarz Professor Emeritus, Ph.D.
From The Wall Street Journal Accounting Educators' Review on March 21, 2001
TITLE: Berkshire Hathaway Changes
Accounting of Its Berkadia Stake
REPORTER: Reuters DATE: Mar 18, 2002
PAGE: A6
LINK: Print Only (Not online)
TOPICS: Accounting Changes and Error Corrections, Accounting For Investments,
Consolidation, Equity, Financial Accounting, Accounting, Financial Analysis,
Financial Statement Analysis, Investments
SUMMARY: An accounting change will increase assets and liabilities of Berkshire Hathaway by $5.5 billion. The change is related to investments in Berkadia.
QUESTIONS:
1.) Describe Berkshire Hathaway's investment in Berkadia. Prior to the accounting change, how did Berkshire Hathaway account for the investment? How is Berkshire Hathaway currently accounting for the investment? Why are assets and liabilities higher under the new accounting method? Why are there no changes to net income or equity under the new accounting method?
2.) What are the differences between the cost method and the equity method of accounting for investments? What factor(s) determine the appropriate method? When should investments be accounted for by consolidation of financial statements?
3.) What happened to Berkshire Hathaway's share price? What was the percentage change? Why do you think the price changed? Could the change in accounting treatment have affected share price? Support your answer.
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
From The Wall Street Journal Accounting Educators' Review on March 21, 2001
TITLE: Audit Cleanup: New Oversight
Is Proposed by Blue-Chip Firms
REPORTER: Cassell Bryan-Low and Michael Schroeder
DATE: Mar 20, 2002
PAGE: C1
LINK: http://online.wsj.com/article/0,,SB10165764708550520.djm,00.html
TOPICS: Auditing
SUMMARY: The FEI has proposed changes in regulation over the auditing profession to include a new oversight body staffed with finance and accounting professionals knowledgeable about, but independent from, the industry. As well, the group proposes a minimum two-year delay before auditors who are leaving the profession may begin working for their audit clients. They also support streamlining the Financial Accounting Standards Board's operations.
QUESTIONS:
1.) Describe the changes proposed by the FEI that are highlighted in the
article. As described in the article, how do these proposed changes differ
from some other proposals currently being discussed?
2.) What is the "outgoing Public Oversight Board"? Two members of that Board, Charles Bowsher and Aulana Peters, testified before Congress this week. With whose proposed reforms do those two individuals express concern? Comment on what you think they are concerned about and why.
3.) Who pays for oversight of the accounting and auditing profession? How does the FEI propose that the new regulation efforts be funded? Why do you think they make this proposal?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Congratulations to Baruch Lev from NYU --- http://www.stern.nyu.edu/~blev/main.html
Baruch's picture adorns the cover of Financial Executive, March/April 2002 --- http://www.fei.org/magazine/marapr-2002.cfm
The cover story entitled
"Rethinking Accounting: Intangibles at a Crossroads: What
Next?" on pp. 34-39 --- http://www.fei.org/magazine/articles/3-4-2002_CoverStory.cfm
The concluding passage is quoted below:
The Inertness and Commoditization of Intangibles
Intangibles are inert - by themselves, they neither create value nor generate growth. In fact, without efficient support and enhancement systems, the value of intangibles dissipates much quicker than that of physical assets. Some examples of inertness: uHighly qualified scientists at Merck, Pfizer, or Ely Lilly (human capital intangibles) are unlikely to generate consistently winning products without innovative processes for drug research, such as the "scientific method," based on the biochemical roots of the target diseases, according to Rebecca Henderson, a specialist on scientific drug research, in Industrial and Corporate Change. Even exceptional scientists using the traditional "random search" methods for drug development will hit on winners only randomly, writes Henderson.
uA large patent portfolio at DuPont or Dow Chemical (intellectual property) is by itself of little value without a comprehensive decision support system that periodically inventories all patents, slates them by intended use (internal or collaborative development, licensing out or abandonment) and systematically searches and analyzes the patent universe to determine whether the company's technology is state-of-the-art and competitive.
uA rich customer database (customer intangibles) at Amazon.com or Circuit City will not generate value without efficient, user-friendly distribution channels and highly trained and motivated sales forces.
Worse than just inert, intangibles are very susceptible to value dissipation (quick amortization) - much more so than other assets. Patents that are not constantly defended against infringement will quickly lose value due to "invention around" them. Highly trained employees will defect to competitors without adequate compensation systems and attractive workplace conditions. Valuable brands may quickly deteriorate to mere "names" when the firm - such as a Xerox, Yahoo! or Polaroid - loses its competitive advantage. The absence of active markets for most intangibles (with certain patents and trademark exceptions) strips them of value on a stand-alone basis.
Witness the billions of dollars of intangibles (R&D, customer capital, trained employees) lost at all the defunct dot-coms, or at Enron, or at AOL Time Warner Co., which in January 2002 announced a whopping write-off of $40-60 billion - mostly from intangibles.
Intangibles are not only inert, they are also, by and large, commodities in the current economy, meaning that most business enterprises have equal access to them. Baxter and Johnson & Johnson, along with the major biotech companies, have similar access to the best and brightest of pharmaceutical researchers (human capital); every retailer can acquire the state-of-the-art supply chains and distribution channel technologies capable of creating supplier and customer-related intangibles (such as mining customer information); most companies can license-in patents or acquire R&D capabilities via corporate acquisitions; and brands are frequently traded. The sad reality about commodities is that they fail to create considerable value. Since competitors have equal access to such assets, at best, they return the cost of capital (zero value added).
The inertness and commoditization of most intangibles have important implications for the intangibles movement. They imply that corporate value creation depends critically on the organizational infrastructure of the enterprise - on the business processes and systems that transform "lifeless things," tangible and intangible, to bundles of assets generating cash flows and conferring competitive positions. Such organizational infrastructure, when operating effectively, is the major intangible of the firm. It is, by definition, noncommoditized, since it has to fit the specific mission, culture, and environment of the enterprise. Thus, by its idiosyncratic nature, organizational infrastructure is the major intangible of the enterprise.
Focusing the Intangibles Efforts
Following Phase I of the intangibles work, which was primarily directed at documentation and awareness-creation, it's now time to focus on organizational infrastructure, the intangible that counts most and about which we know least. It's the engine for creating value from other assets. Like breaking the genetic code, an understanding of the "enterprise code" - the organizational blueprints, processes and recipes - will enable us to address fundamental questions of concern to managers and investors, such as those raised above in relation to H-P/Compaq and Enron.
Organizational Infrastructure By Example: A company's organizational infrastructure is an amalgam of systems, processes and business practices (its operating procedures, recipes) aimed at streamlining operations toward achieving the company's objectives. Following is a concrete example of a business process, part of the organizational infrastructure, which was substantially modified and thereby created considerable value. This was adopted from "Turnaround," Business 2.0, January 2002.
Nissan Motor Co. Ltd., Japan's third-largest automaker and a perennial loser and debt-ridden producer of lackluster cars, received in March 1999 a new major shareholder, Renault, and a new CEO, Carlos Ghosn, both imported from France. Ghosn moved quickly to transform Nissan into a viable competitor, and indeed, in the fiscal year ending March 2001, the company reported a profit of $2.7 billion, the largest in its 68-year history.
How was this miracle performed? Primarily by cost-cutting, achieved by a drastic change in the procurement process. Here briefly, is the old process: Nissan's buyers were locked into ordering from keiretsu partners, suppliers in which Nissan owned stock. The guaranteed stream of Nissan orders insulated those suppliers from competition. Suppliers can't specialize and can't sell excess capacity elsewhere. Each supplier was assigned a shukotan, Nissan-speak for a relationship manager. It was the shukotan who would negotiate price discounts - but favors got in the way.
Here, in brief, is the new procurement process, as drastically changed by Ghosn: Ghosn gave Itaru Koeda, the purchasing chief, authority to place orders without regard to keiretsu relationships - and, more important, insisted that he use it. Then, a Renault executive and Koeda dumped the shukotan system, instead assigning buyers responsibility by model and part. They formed a sourcing committee to review vendor price quotes on a global basis. "This is the best change in our process," Koeda says. "Suppliers are specializing in what they do best, making them more efficient."
The results? An 18 percent drop in purchasing costs, which was the major contributor to Nissan's transformation from a loss to a profit. Ghosn's next major set of tasks: To change the car design process in order to enhance the top line, sales; to rid Nissan of the myriad design committees and hierarchies that stifle and slow innovation; and to institute an efficient, effective innovative process.
Baruch's cover story is accompanied by "Fixing Financial Reporting: Financial Statement Overhaul," by Robert A Howell, pp. 40-42 --- http://www.fei.org/magazine/articles/3-4-2002_Howell_CoverStory.cfm
Financial reporting is broken and has to be fixed - and fast! If it isn't, we will continue to see more cases such as Xerox, Lucent, Cisco Systems, Yahoo! and Enron. Xerox's market value is down 90 percent, or $40 billion, in the past two years. In the same period other market losses include; Lucent, down more than $200 billion; Cisco Systems, off more than $400 billion; Yahoo!, more than $100 billion; and Enron, down more than $60 billion in the largest bankruptcy of all time.
Some argue that these are extreme examples of "irrational exubuerance." Some in the accounting profession say that such cases represent a small percentage of the aggregate number of statements audited - some 15,000 public company registrants. Perhaps. But a financial reporting framework that permits these companies to suggest that they are doing well, and, by implication, to justify market valuations which, subsequently, cost investors trillions in the aggregate, is unconscionable.
Financial reporting, especially in the U. S., with its very public capital markets, has reached the point where "accrual-based" earnings are almost meaningless. Reported earnings are driven as much by "earnings expectations" as they are by real business performance. Balance sheets fail to reflect the major drivers of future value creation - the research and product, process and software development that fuel high technology companies, and the brand value of leading consumer product companies. And, cash flow statements are such a hodge-podge of operating, investing and financing activities that they obfuscate, rather than illuminate, business cash flow performance.
The FASB, in its Concept No. 1, states, "financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit and similar decisions." This is simply not so.
The primary financial statements - income statement, balance sheet and cash flow statement - which derive their foundation from an industrial age model, need major redesign if they are to serve as the starting point for meaningful financial analysis, interpretation and decision-making in today's knowledge-based and value-driven economy. Without significant redesign, ad hoc definitions such as pro forma earnings, returns and cash flows will continue to proliferate. So will significant reporting "surprises!"
Starting Point: Market Value Creation
The objective of a business is to increase real shareholder value - what Warren E. Buffett would call the "intrinsic value" of the firm. It's a very basic idea: Investors get "returns" from dividends and realized market appreciation. Both investments and returns are measured in cash terms, so individuals and investors invest cash in securities with the objective of realizing returns that meet or exceed their criteria. If their judgments are too high, and that later becomes clear, the market value of the firm will drop. If judgments are too low and cash flows turn out to be stronger, market values increase.From a managerial viewpoint, the objective of increasing shareholder (market) value really means increasing the net present value (NPV) of the future stream of cash flows. Note, "cash flows," not "profits." Cash is real; profits are anything, within reason, that management wants them to be. If revenues are recognized early - or overstated - and expenses are deferred or, in some cases, accelerated to "clear the decks" for future periods, resulting earnings may show a nice trend, but do not really reflect economic performance.
There are only three ways management may increase the real market, or "intrinsic," value of a firm. First, increase the amount of cash flows expected at any point in time. Second, accelerate cash flows; given the time value of money, cash received earlier has a higher present value. Third, if a firm is able to lower the discount rate that it applies to its cash flows - which it frequently can - it can raise its NPV.
Given that cash flows drive market value, financial statements should put much more emphasis on cash flows. The statement of cash flows now prescribed by the accounting community and presented by management is not easily related to value creation. Derived from the income statement and balance sheet, it's effectively a reconciliation statement for the change in the balance of the cash account. A major overhaul of the cash flow statement would directly relate to market valuations.
Cash Earnings and Free Cash Flows
Managers and investors should focus on "cash earnings" and the reinvestments that are made into the business in the form of "working capital" and "fixed and other (including intangible) investments." The net amount of these cash flows represent the business's "free cash flows."With negative cash flows - frequently the case for young startups and high-growth companies - a business must raise more capital in the form of debt or equity. The sooner it gets its free cash flows positive, the sooner it'll begin to create value for shareholders. Positive free cash flows provide resources to pay interest and pay down debt, to return cash to shareholders (through stock repurchases or dividends) or to invest in new business areas.
The traditional cash flow statement purportedly distinguishes between operating, investing and financing cash flows, and has as its "bottom line" the change in cash and cash equivalents. In fact, the operating cash flows include the results of selling activities, investing in working capital and interest expense, a financing activity. Investing cash flows include capital expenditures, acquisitions, disposals of assets and the purchase and sale of financial assets. Financing cash flows consist of what's left over.
Indeed, the bottom-line change in cash is not a useful number, other than to demonstrate that it may be reconciled with the change in the cash account. If one wants a positive change in cash, simply borrow more. These free cash flows ultimately drive market value, and should be the focus of managers and investors alike.
Replacing Income With Cash Earnings
The traditional "profit and loss," or "income," statement needs modification in three ways, two of which are touched on above, along with a name-change, to "Operating Statement." That would suggest a representation of the business' current operations, without the emphasis on accrual-based profits.Interest expense (income) should be eliminated from the statement, as it represents a financing cost rather than an operating cost. A number of companies do this internally to determine "net operating profit after taxes" (NOPAT). Also, NOPAT needs to be adjusted for the various non-cash items, such as depreciation, amortization, gains and losses on the sale of assets, tax-timing differences and restructuring charges - which affect income but not cash flows. The resultant "cash earnings" better represents the current economic performance of a business than accrual income and, very importantly, is much less susceptible to manipulation.
A third adjustment is the order in which the classes of expenses are displayed. Traditional income statements report cost of goods sold or product costs first, frequently focus on product gross margins, and then deduct, as a group, other expenses such as technical, selling and administrative expenses. This order made sense in the industrial age when product costs dominated. It does not for many of today's high-tech or consumer product companies. It would be more useful for companies to report expenses in an order that reflects the flow of the business activities. One logical order that builds on the concept of a business' value chain, is to categorize costs into development costs, product (service) conversion costs, sales and customer support costs and administrative costs.
Reinvesting in the Business
For most companies - especially those with significant investments that are being depreciated or amortized - cash earnings will be significantly higher than NOPAT. Unfortunately, cash earnings are not free cash flows because most businesses have to reinvest in working capital, property, plant and equipment and intangible assets, just to sustain - let alone increase - their productive capabilities.As a business grows in sales volume, assuming that it offers credit to its customers who pay with the same frequency, accounts receivable will increase proportionately. As sales volumes increase, so, too, will product costs, inventories and accounts payable balances. Working capital - principally receivables, inventories, and payables - will tend to increase proportionately with sales growth, and will require cash to finance it. The degree to which it grows is a function of receivables terms and collection practices, inventory management and payables practices.
Companies such as Dell Computer Corp. collect payments up front, turn inventories in a few days and pay their vendors when due. The net effect is that as Dell grows it actually throws off cash, rather than requiring it to support increases in working capital. Most companies are not as efficient; the amount of cash needed to support increases in working capital can be as much as 20-25 percent of any sales increase. The degree to which working capital increases as sales increase is an important performance metric. Lower is better, which absolutely flies in the face of such traditional measures of liquidity as "working capital" and "quick" ratios, for which higher has been considered better.
Balance sheets ought to reflect investments that represent future value. What drives value for many businesses in today's knowledge-based economy - pharmaceuticals, high technology, software and brand-driven consumer product companies - is the investments in R&D, product, process and software development, brand equity and the continued training and development of the work force. Yet, based on generally accepted accounting principles (GAAP) accounting, these "investments" in the future are not reflected on balance sheets, but, rather, expensed in the period in which they are incurred.
A frequent argument for "expensing" is the unclear nature of the investments' future value. Apparently, investors believe otherwise, evidenced by the ratio of market values to book values having exploded in the past 25 years. In 1978, the average book-to-market ratio was around 80 percent; today it is around 25 percent. In the early 1970s, when accounting policies were established for R&D, product lines were narrower and life cycles longer, resulting in R&D being a much less significant element of cost. Expensing was less relevant. Now, with intangible assets having become so central and significant, expensing - rather than capitalizing and amortizing them over time - results in an absolute breakdown of the principle of "matching," which is at the heart of accrual accounting. The world of business has changed; accounting practices must also change.
Financial Statement Overhaul
Financial statements need marked overhaul to be useful for analysis and decision-making in today's knowledge-driven and shareholder value-creation environment. The proposed changes fall into three categories:First - Move to a much more explicit shareholder (market) value creation and cash orientation, and away from accrual accounting profits and return on investment calculations predicated on today's accounting policies. Start with a shareholder perspective for cash flows, then reconstruct the statement of cash flows to clearly provide the free cash flows that the business' operations are generating. Cash earnings and reinvestments in the business comprise free cash flows.
Second - Expand the definition of investments to include intangibles, which should be capitalized as assets and amortized according to some thoughtful rules. This will better reflect investments that have potential future value.
Third - Change the title to "operating statement" and other "housekeeping" of financial statements, to include categorizing costs in a more logical "value chain" sequence and aggregating all financial transactions, such as interest and the purchase and sale of securities, as financing activities.
Value creation is ultimately measured in the marketplace, so it stands to reason that if a firm's market value increases consistently, over time, and can be supported by improvements in its cash generation performance, real value is being created. For this to happen, the place to start is by fixing the financial statements.
Bob Jensen's threads on accounting theory are at http://www.trinity.edu/rjensen/theory.htm
March 24 message from Andrew Lymer [A.LYMER@bham.ac.uk]
ECAIS 2002
Copenhagen Business School, Copenhagen
23-24th April, 2002
The conference programme for the forthcoming European Conference on Accounting Information Systems has been added to the Conference series website at http://accountingeducation.com/ecais .
This includes:
- the Conference Schedule (draft) - copies of the invited papers - copies of the other accepted papers for presentation
We invite you to access our website and examine these materials.
Further details of our three workshops and our keynote speaker will be added in the near future.
As organisers of this year's conference we believe this event will be of great interest to anyone associated with accounting or information systems. We encourage you to consider attending the event if you have not already booked. Full booking details are also available on the above website. The event this year only costs 50 Euro due to the very generous sponsorship we have received in support of this conference.
This event immediately precedes the European Accounting Association Annual Congress - held at the same venue 25-27th April. See their website for further details of this event - http://www.eaa-online.org
We hope to see as many of you as can make it to Copenhagen at the end of April.
Regards
Andy Lymer
Eddy Vaassen
im Hunton
Joint Chairs - ECAIS 2002.
Dictators of the World: Past
and Present, Best to Worst (History, Government)
The Dictatorship.com --- http://www.thedictatorship.com/
A Web Training Course From the U.K.
Becoming WebWise http://www.bbc.co.uk/webwise/learn/index.shtml
Welcome to BBC Becoming WebWise!
This new online course is the easy way to get to grips with the Internet. It lets you learn at your own pace and can lead to a nationally recognised qualification. Enrol at your local college for one of the accredited qualifications.
- The eight key sections, or trips, will take you through the Internet basics in a simple and easy to follow format. Remember, you can return to any of the sections as often as you like. It will probably take you about ten hours to complete the course.
- Becoming WebWise will help you find out about getting connected, e-mailing, searching, bookmarking, making your own address book and the very basics of building your own web page. You will also learn about technological developments like Digital TV and WAP phones, your legal rights online, the history of the net, and the other ways in which you might get online.
- As you progress through the course, you will be able to see your scores by visiting your scorecard. This will tell you which trip and landmarks you have visited and also your scores in our tasks and quizzes. It is important to log out at the end of your visit so that your scores and progress will be saved.
- Remember: in order to obtain the accredited qualification you must enrol at a local college. Use our national coursefinder section to find one.
- Use the Register or Log In link to get a scorecard. If you would like to enter Becoming WebWise without registering or logging in then use this link: Enter Becoming WebWise
University of Texas at San Antonio (UTSA) Workshop Schedule
Below is a link to the web page which contains the revised schedule for our colloquia as well as copies of the papers to be presented. Again, I would like to invite your faculty to attend any workshops that are of interest to them. Please share this schedule with interested faculty. Thank you,
Rick Hatfield
African History and
Geography (Photographs)
American Museum of Natural History Congo Expedition --- http://diglib1.amnh.org/
March 25, 2002 message from Richard Newmark [richard.newmark@phduh.com]
Bob,
I thought you might be interested in this.
Rick
-------------------------
Richard Newmark
Assistant Professor of Accounting
University of Northern Colorado
Kenneth W. Monfort College of Business
Campus Box 128
Greeley, CO 80639
(970) 351-1213 Office
(801) 858-9335 Fax (free e-mail fax at efax.com)
richard.newmark@PhDuh.com
http://PhDuh.com
IRS finalizes hedging regs with liberalizations
TD 8985; Reg. § 1.1221-2, Reg. § 1.1256(e)-1
IRS has issued final regs for determining the character of gain or loss from hedging transactions.
Background. As a result of a '99 law change, capital assets don't include any hedging transaction clearly identified as such before the close of the day on which it was acquired, originated, or entered into. (Code Sec. 1221(a)(7)) Before the change, IRS had issued final regs in '94 providing ordinary character treatment for most business hedges. Last year, IRS issued proposed changes to the hedging regs to reflect the '99 statutory change (see Weekly Alert ¶ 6 2/1/2001). IRS has now finalized the regs with various changes, many of which are pro-taxpayer. The regs apply to transactions entered into after Mar 19, 2002. However, the Preamble states that IRS won't challenge any transaction entered into after Dec. 16, '99, and before Mar. 20, 2002, that satisfies the provisions of either the proposed or final regs.Hedging transactions. A hedging transaction is a transaction entered into by the taxpayer in the normal course of business primarily to manage risk of interest rate, price changes, or currency fluctuations with respect to ordinary property, ordinary obligations, or borrowings of the taxpayer. (Code Sec. 1221(b)(2)(A)(i); Code Sec. 1221(b)(2)(A)(ii)) A hedging transaction also includes a transaction to manage such other risks as IRS may prescribe in regs. (Code Sec. 1221(b)(2)(A)(iii)) IRS has the authority to provide regs to address nonidentified or improperly identified hedging transactions (Code Sec. 1221(b)(2)(B)), and hedging transactions involving related parties. (Code Sec. 1221(b)(3))
Key changes in final regs. The final regs include the following changes from the proposed regs.
... Both the final and the proposed regs provide that they do not apply to determine the character of gain or loss realized on a section 988 transaction as defined in Code Sec. 988(c)(1) or realized with respect to any qualified fund as defined in section Code Sec. 988(c)(1)(E)(iii). The proposed regs also provided that their definition of a hedging transaction would apply for purposes of certain other international provisions of the Code only to the extent provided in regs issued under those provisions. This is eliminated in the final regs because the other references were to proposed regs and to Code sections for which the relevant regs have not been issued in final form. The Preamble states that later regs will specify the extent to which the Reg. § 1.1221-2 hedging transaction rules will apply for purposes of those other regs and related Code sections.
... Several commentators noted that the proposed regs used risk reduction as the operating standard to implement the risk management definition of hedging. They found that risk reduction is too narrow a standard to encompass the intent of Congress, which defined hedges to include transactions that manage risk of interest rate, price changes or currency fluctuations. In response, IRS has restructured the final regs to implement the risk management standard. No definition of risk management is provided, but instead, the rules characterize a variety of classes of transactions as hedging transactions because they manage risk. (Reg. § 1.1221-2(c)(4); Reg. § 1.1221-2(d))
... The proposed regs provided that a taxpayer has risk of a particular type only if it is at risk when all of its operations are considered. Commentators pointed out that businesses often conduct risk management on a business unit by business unit basis. In response, the final regs permit the determination of whether a transaction manages risk to be made on a business-unit basis provided that the business unit is within a single entity or consolidated return group that adopts the single-entity approach. (Reg. § 1.1221-2(d)(1))
RIA observation: As a result of the two foregoing changes made by the final regs, more transactions will qualify as hedging transactions. This is good for taxpayers because any losses from the additional transactions qualifying as hedges will be accorded ordinary treatment.
... In response to comments, the final regs have been restructured to separately address interest rate hedges and price hedges. (Reg. § 1.1221-2(d)(1)(iv); Reg. § 1.1221-2(d)(2))
... In response to comments, the final regs provide that a transaction that converts an interest rate from a fixed rate to a floating rate or from a floating rate to a fixed rate manages risk. (Reg. § 1.1221-2(d)(2))
... The final regs provide that IRS may identify by future published guidance specified transactions that are determined not to be entered into primarily to manage risk. (Reg. § 1.1221-2(d)(5))
... The proposed regs sought comments on expanding the definition of hedging transactions to include transactions that manage risks other than interest rate or price changes, or currency fluctuations with respect to ordinary property, ordinary obligations or borrowings of the taxpayer. While comments were received, the final regs did not make any changes in this area. However, IRS continues to invite comments on the types of risks that should be covered, including specific examples of derivative transactions that may be incorporated into future guidance, as well as the appropriate timing of inclusion of gains and losses with respect to such transactions.
... With respect to the identification requirement, a rule has been added specifying additional information that must be provided for a transaction that counteracts a hedging transaction. (Reg. § 1.1221-2(f)(3)(v))
RIA Research References: For hedging transactions, see FTC 2d/FIN ¶ I-6218.01 ; United States Tax Reporter ¶ 12,214.80
Bob Jensen's threads on hedging are at http://www.trinity.edu/rjensen/caseans/000index.htm
Forwarded by Scott Bonacker, CPA [scottbonacker@MOCCPA.COM]
LOWELL, Mass.--(BUSINESS WIRE)--Jan. 30, 2002--With the March 15 IRS deadline for business tax filings approaching, accountants and business owners can access a free search tool at www.bizownerHQ.com to help determine the right IRS activity code for a business. A business tax return cannot be filed without an IRS business activity code. The IRS switched to a new industry classification system for these codes in 1998. Subsequently, many accountants complain they are often uncertain of which code to assign. bizownerHQ has frequently found activity code errors in reviewing tax returns for valuations
March 20, 2002
Aimster suits on hold after bankruptcy filing --- http://www.latimes.com/technology/la-000020204mar20.story?coll=la%2Dheadlines%2Dtechnology
A federal judge in Chicago called a temporary halt to the music and movie industries' legal assault on Madster, the online file-swapping service formerly known as Aimster. The move came shortly after two of the targets of the industries' copyright-infringement lawsuit--BuddyUSA Inc. and AbovePeer Inc., which operate Madster--filed for bankruptcy protection.
Bob Jensen's P2P threads are at http://www.trinity.edu/rjensen/napster.htm
The Efficient Auditor Newsletter is the most unique publication in the world of auditing. First, it's loaded with practical tips and ideas to improve your engagements. In addition, you'll find yourself smiling and even laughing as you read each issue. That's right-The Efficient Auditor is an auditing publication that you'll truly enjoy reading! http://www.accountingweb.com/members/auditwatch/resources.html
Bob Jensen's practice tips are at http://www.trinity.edu/rjensen/fees.htm
A free service called "FreeAnswers" can assist you in getting answers to many software packages' "help functions", such as Quicken, Excel, Pagemaker and more. http://www.accountingweb.com/item/75438
Council on Foreign Relations http://www.cfr.org/index_public.html
Businesses Won't Rush to Install XP Look for consumers to gobble up Windows XP as Microsoft's latest OS makes its debut, but businesses won't be so quick to jump on board, according to research by Gartner's Dataquest. http://www.newmedia.com/default.asp?articleID=3447
An original Macintosh computer is now considered worthless. But the box it came in? It goes for hundreds of dollars on eBay --- http://www.wired.com/news/mac/0,2125,51208,00.html
Five Quick MS Word Tips to Save You
Time
Here are some helpful tips to help you save time and money during your
day-to-day activities. http://www.accountingweb.com/item/75441
March 22, 2002 message from Eckman, Mark S, CFCTR [meckman@att.com]
Probably my last contribution while at AT&T. Mark S. Eckman, CPA Box 1923 340 Mt. Kemble Avenue Room N270-E130 Morristown NJ 07962-1923 Phone 973.326.3011 FAX 973.326.2699
Privacy Bird software is offered free from AT&T Labs. Individuals can set up their privacy guidelines, and then the Privacy Bird will tweet and change colors from green to yellow to red to inform users whether a Web site they are visiting complies with their privacy preferences. The free software is available at http://privacybird.com .
BUSINESS Email Deployment Systems: A Step-By-Step Buyer's Guide Shopping for a system or provider that can handle your email, lists, data, and reporting? Here's how to define your needs and find the right match. http://www.newmedia.com/default.asp?articleID=3461
Next Up for Financial Services: Wireless With wireless devices such as mobile phones approaching critical mass, GartnerG2 expects U.S. consumers to begin adopting such devices for wireless financial services. http://www.newmedia.com/default.asp?articleID=3455
Those awful leisure suits and other
items that were popular in the 1970s
JCPenney Catalog Fall/Winter 1980 --- http://www.excitementmachine.org/jc/
American Folklore (including hoaxes and tall tales) --- http://www.americanfolklore.net/
Welcome to American Folklore. This folklore site contains retellings of American folktales, Native American myths and legends, Tall Tales, weather folklore and ghost stories from each of the 50 states. Read about famous characters such as Paul Bunyan, Pecos Bill, Jesse James, Davy Crockett, Daniel Boone and many more. Choose a folktale from the list below, or browse one of our six categories.
Famous Characters State Folktales Historical Folklore Regional Folktales Tall
TalesEthnic Folklore
My wife
makes me eat so much roughage that I started passing wicker furniture.
Tim Conway at a performance at Trinity University on March 23.
Giving
viagra to a person my age is like putting a new flag pole on a condemned
building.
Harvey Korman at a performance at Trinity University on March 23.
But the "Pen on Viagra is
Mighter" will slip through the smut filter!
A witness in the case to overturn library filters says that among the blocked
pages was "The Pen Is Mightier" because the software read
"penis." --- http://www.wired.com/news/politics/0,1283,51339,00.html
Blasts of gamma rays targeted at
flatulence-causing foodstuffs can eliminate the age-old problem of
nose-scrunching noxious methane fumes, scientists from India say --- http://www.wired.com/news/medtech/0,1286,51354,00.html
It is the title of the article that tries to be funny: "Zap Those
Buttock Burps Away"
A study showing that female squirrels are more likely to aid a family member with a familiar smell could go a long way toward proving that the "armpit effect" has merit --- http://www.wired.com/news/culture/0,1284,51330,00.html
Forwarded by Todd Boyle [tboyle@ROSEHILL.NET]
There are two new models of shredders featured in the Enron Mall in Business 2.0 this month http://www.business2.com/images/mag/enronmall.pdf
The Shredmaster XT is a 250 HP motor that annihilates up to 1000 pages per second (the photo seems to resemble a municipal tree shredder trailer) But I can't understand how the shredmaster Ultra works.
Can somebody provide CPE Courses on these emerging issues?
On an airplane, I overheard a stewardess talking to an elderly couple in front of me. Learning that it was the couple's 50th wedding anniversary, the flight attendant congratulated them and asked how they had done it.
"It all felt like five minutes . . ." the gentleman said slowly.
The stewardess had just begun to remark on what a sweet statement tat was when he finished his sentence with a word that eanred him a sharp smack on the head:
" . . . underwater."
Forwarded by Dick Haar
From The Original Hollywood Squares TV Show. These are from the days when game show responses were spontaneous and not scripted like they are now.
Q. Imagine you are a child in your
mothers womb, can you detect light?
A. Paul Lynde: Only during ballet practice.
Q: If you're going to make a
parachute jump, you should be at least how high?
A: Charley Weaver: Three days of steady drinking should do it.
Q: True or false...a pea can last as
long as 5,000 years.
A: George Gobel: Boy it sure seems that way sometimes...
Q: You've been having trouble going
to sleep. Are you probably a man or a woman?
A: Don Knotts: That's what's been keeping me awake.
Q: According to Cosmo, if you meet a
stranger at a party and you think he's really attractive, is it okay to come
out directly and ask him if he's married?
A: Rose Marie: No, wait until morning.
Q: What are "Do It",
"I Can Help" and "Can't Get Enough"?
A: George Gobel: I don't know but it's coming from the next apartment.
Q: As you grow older, do you tend to
gesture more or less with your hands while you are talking?
A: Rose Marie: You ask me one more growing older question, Peter...and I'll
give you a gesture you'll never forget!
Q: Paul, why do Hell's Angels wear
leather?
A: Paul Lynde: Because chiffon wrinkles too easily.
Q: Charley, you've just decided to
grow strawberries. Are you going to get any during your first year?
A: Charley Weaver: Of course not, Peter. I'm too busy growing strawberries!
Q: In bowling, what's a perfect
score?
A: Rose Marie: Ralph, the pin boy.
Q: During a tornado, are you safer in
the bedroom or in the closet?
A: Rose Marie: Unfortunately, Peter, I'm always safe in the bedroom.
Q: When you pat a dog on its head he
will usually wag his tail. What will a goose do?
A: Paul Lynde: Make him bark.
Q: If you were pregnant for two
years, what would you give birth to?
A: Paul Lynde: Whatever it is, it would never be afraid of the dark.
Q: Is it possible for the puppies in
a litter to have more than one daddy?
A: Paul Lynde: Why, that bitch!
Q: While visiting China, your tour
guide starts shouting "Poo! Poo! Poo!" What does that mean?
A: George Goebel: Cattle crossing.
Q: Back in the old days, when Great
Grandpa put horseradish on his head, what was he trying to do?
A: George Gobel: Get it in his mouth.
Q: Who stays pregnant for a longer
period of time, your wife or your elephant?
A: Paul Lynde: Who told you about my elephant?
Q: When a couple have a baby, who is
responsible for it's sex?
A: Charley Weaver: I'll lend him the car. The rest is up to him.
Q: Jackie Gleason recently revealed
that he firmly believes in them and has actually seen them on at least two
occasions. What are they?
A: Charley Weaver: His feet.
Q: Do female frogs croak?
A: Paul Lynde: If you hold their little heads under water long enough.
Forwarded by Dr. Bernards
Next time you are washing your hands and complain because the water temperature isn't just how you like it, think about how things used to be. Here are some facts about how it was in the 1500s:
Most people got married in June because they took their yearly bath in May and still smelled pretty good by June. However, they were starting to smell, so brides carried a bouquet of flowers to hide the body odor.
Baths consisted of a big tub filled with hot water. The man of the house had the privilege of the nice clean water, then all the other sons and men, then the women and finally the children. Last of all the babies were bathed. By then the water was so dirty you could actually lose someone in it. Hence the saying, "Don't throw the baby out with the bath water."
Houses had thatched roofs - thick straw, piled high, with little or no wood underneath. It was the only place for animals to get warm, so all the dogs, cats and other small animals (mice rats, and bugs)lived in the roof.
When it rained it became slippery, and sometimes the animals would slip and fall off the roof. Hence the saying, "It's raining cats and dogs."
There was nothing to stop things from falling into the house. This posed a real problem in the bedroom where bugs and other droppings could really mess up your nice clean bed. Hence, a bed with big posts and a sheet hung over the top afforded some protection. That's how canopy beds came into existence.
The floors were usually dirt. Only the wealthy had something other than dirt. Hence the saying "dirt poor." The wealthy had slate floors that would get slippery in the winter when wet, so they spread thresh on the floor to help keep their footing. As the winter wore on, they kept adding more, thresh until when they opened the door it would all start slipping outside. A piece of wood was placed in the entranceway. Hence, a "thresh hold."
Folks cooked in the kitchen with a big kettle that always hung over the fire. Every day they lit the fire and added things to the pot. They ate mostly vegetables and did not get much meat. They would eat the stew for dinner, leaving leftovers in the pot to get cold overnight and then start over the next day. Sometimes the stew had food in it that had been there for quite a while. Hence the rhyme, "Peas porridge hot. Peas porridge cold. Peas porridge in the pot nine days old."
Sometimes they could obtain pork, which made them feel quite special. When visitors came over, they would hang up their bacon to show off. It was a sign of wealth that a man "could bring home the bacon." They would cut off a
>little to share with guests and would all sit around and "chew the fat."
Those with money had plates made of pewter. Food with a high acid content caused some of the lead to leak onto the food, causing lead poisoning and death. This happened most often with tomatoes, so for the next 400 years or so, tomatoes were considered poisonous.
Most people did not have pewter plates, but had "trenchers." A trencher was a piece of wood with the middle scooped out like a bowl. Often trenchers were also made from stale pays and bread which was so old and hard that they could use them for quite some time. Trenchers were never washed and a lot of times worms and mold got into the wood and old bread. Often, after eating off wormy, moldy trenchers, one would get "trench mouth."
Bread was divided according to status. Hired workers got the burnt bottom of the loaf, the family got the middle, and special guests got the top, or "the upper crust."
Lead cups were used to drink ale or whiskey. The combination would sometimes knock a hefty drinker out for a couple of days. Someone walking along the road would find these folks passed-out and take them for dead. They would then be prepared for burial. A part of this preparation was that they would be "laid out" on the kitchen table for a couple of days and the family would gather around and eat and drink and wait and see if they would "wake up." Hence, the custom of holding a "wake."
England is old and small and they started out running out of places to bury people. So they would dig up coffins and would take the bones to a "bone-house" and reuse the grave. When reopening these coffins, one out of twenty-five coffins were found to have scratch marks on the inside and they realized that in spite of holding their "wakes" they still had been burying some people alive. So they began to tie a string on the wrist of the corpse, lead it through the coffin and up through the ground. Above ground the string was tied to a bell. Someone would have to sit out in the graveyard all night to listen for the bell. Hence, the beginning of the term, "graveyard shift." If the bell rang, that person was, "saved by the bell!" If, after a week passed and the bell did not ring, the person was considered a "dead ringer."
Whoever said that "History" is boring.
And that's the way it was on March 31, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on
the Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at
http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
Bob
Jensen's New Bookmarks on March 25, 2002
Bob
Jensen at Trinity
University
Quotes of the Week
The only time
my education was interrupted was when I was in school.
George
Bernard Shaw
The important
thing is not to have a lot of ideas, but to live one of them.
Ugo Bernasconi
Beware of
defining as intelligent only those who share your opinions .
Ugo Ojetti
Numbers 24, 55, and 98 among the 101 Dumbest Moments in Business reads as follows at http://www.business2.com/dumbest/
24. By faking the transactions that should have offset the risk in his portfolio, a trader named John Rusnak, working for a Baltimore subsidiary of Allied Irish Banks, loses $691.2 million before the bank discovers his misdeeds. After the bank and the federal government launch investigations, Rusnak is fired, denying him the chance to unseat Barings PLC's Nicholas Leeson -- who lost $1.4 billion and destroyed a 232-year-old company -- as the most inept rogue trader ever.
Nice going Lehman
55. Houston, We Have a Problem, Part 7: Richard Gross, an analyst at Lehman Bros., maintains a "strong buy" rating on Enron as the stock declines from $81 to $0.75. A Lehman spokesperson helpfully explains to the New York Times that the firm was advising Dynegy on its purchase of Enron's pipeline, and it is Lehman's policy not to change the firm's rating on any company involved in a deal in which Lehman is an adviser.98. "Do you judge Ted Williams on one bad year?" -- Morgan Stanley analyst Mary Meeker, to Fortune magazine, explaining why it's unfair to criticize the fact that stocks on which she has maintained "outperform" ratings have lost more than 90 percent of their value. (For the record, Ted Williams's worst year was 1959. He played the season with a neck injury and still finished the year hitting a respectable .254.)
The notion
that the goal of the professional accountant is public or social service is
nonsense. His function is to provide the best possible possible service to his
specific clients, the people who pay for his efforts. And in doing this his
attitude is not one of independence or aloofness; instead he should be
endeavouring to become as fully acquainted as practicable with each client's
affairs and problems and be prepared to give constructive advice on his internal
accounting methods, and all phases of financial measurement, review and
planning. Fortunately, in actual practice, most accountants follow this path
rather than accepting the posture of working in the interest of that elusive
entity, the public or society at large. If I were a business owner or executive
I certainly wouldn't engage an aloof accountant, bent on promoting the general
welfare with me footing the bill. Of course, this doesn't imply that the
accountant should condone or participate in any kind of crooked or destructive
conduct. This point would be taken care of by emphasizing competence and
integrity as qualifications rather than independence and public service.
William A. Paton stated in "Earmarks of a Profession- And the APB," Journal
of Accountancy, January 1971)
(This quotation was forwarded by George Lan from the University of Windsor.
An ISOS
consists of a thin layer of software (an ISOS agent) that runs on each
"host" computer and a central coordinating system that runs on one or
more ISOS server complexes. This veneer of software would provide only the core
functions of allocating and scheduling resources for each task, handling
communication among host computers and determining the reimbursement required
for each machine. This type of operating system, called a microkernel, relegates
higher-level functions to programs that make use of the operating system but are
not a part of it. For instance, Mary would not use the ISOS directly to save her
files as pieces distributed across the Internet. She might run a backup
application that used ISOS functions to do that for her. The ISOS would use
principles borrowed from economics to apportion computing resources to different
users efficiently and fairly and to compensate the owners of the resources.
David P. Anderson and John Kubiatowicz, Scientific American --- http://www.sciam.com/2002/0302issue/0302anderson.html
The following was forwarded last week by my wife's sister, Frannie, who lost her beautiful and talented fifteen year old daughter in a tragic traffic icy-road accident in Dousman, Wisconsin several years ago. I am including it in New Bookmarks for one of my graduate students, Desiree Pratt, who lost her best friend in an auto accident in Houston on March 17 and Mary Jane, our office secretary whose mother is near death at this time. I am also including it in New Bookmarks for Auntie Bev who writes: "I am going through a very bad time in my life . . . as I am going to Pa. Friday morning and will be gone at least two weeks. My sister was diagnosed with: metastasized cancer with effect to the cerebral hemisphere (brain). This has come as a great shock to all of us, especially since my sister has not been sick."
If I Knew
It Would Be The Last Time
by Laura HortonIf I knew it would be the last time
That I'd see you fall asleep,
I would tuck you in more tightly
and pray the Lord, your soul to keep.If I knew it would be the last time
that I see you walk out the door,
I would give you a hug and kiss
and call you back for one more.If I knew it would be the last time
I'd hear your voice lifted up in praise,
I would video tape each action and word,
so I could play them back day after day.If I knew it would be the last time,
I could spare an extra minute
to stop and say "I love you,"
instead of assuming you would KNOW I do.If I knew it would be the last time
I would be there to share your day,
Well I'm sure you'll have so many more,
so I can let just this one slip away.For surely there's always tomorrow
to make up for an oversight,
and we always get a second chance
to make everything just right.There will always be another day
to say "I love you,"
And certainly there's another chance
to say our "Anything I can do?"But just in case I might be wrong,
and today is all I get,
I'd like to say how much I love you
and I hope we never forget.Tomorrow is not promised to anyone,
young or old alike,
And today may be the last chance
you get to hold your loved one tight.So if you're waiting for tomorrow,
why not do it today?
For if tomorrow never comes,
you'll surely regret the day,That you didn't take that extra time
for a smile, a hug, or a kiss
and you were too busy to grant someone,
what turned out to be their one last wish.So hold your loved ones close today,
and whisper in their ear,
Tell them how much you love them
and that you'll always hold them dearTake time to say "I'm sorry,"
"Please forgive me," "Thank you," or "It's okay."
And if tomorrow never comes,
you'll have no regrets about today.
This week's, March 25, updates on the Enron scandal and accounting fraud are in a separate document at http://www.trinity.edu/rjensen/fraud032502.htm
Great Site of
the Week (John Dallair led me to this site) --- http://www.exploratorium.edu/
Exploratorium, The Museum of Science, Art, and Human Perception
Housed within the walls of San Francisco's Palace of Fine Arts, the Exploratorium is a collage of over 650 science, art, and human perception exhibits. The Exploratorium is a leader in the movement to promote the museum as an educational center.
This unique museum was founded in 1969 by noted physicist and educator Dr. Frank Oppenheimer, who was director until his death in 1985.
Innovation of the Week: Slide Rather Than Click!
IBM Glass Engine (Music) --- http://www.philipglass.com/glassengine/
The IBM glass engine enables deep navigation of the music of Philip Glass. Personal interests, associations, and impulses guide the listener through an expanding selection of over sixty Glass works.
The engine is currently compatible with MS Internet Explorer (4.5+) running on Windows 98, ME, 2000, or Apple OS 9, OS X platforms. Medium to high-bandwidth Internet access is highly recommended, but not absolutely required. Problems? See Frequently Asked Questions.
Forwarded by Cindy Happy
Ok, fellow "happy people". You need to take this test. Hope you are not color blind. HP: #1
http://www.colorgenics.com/
Tax Time 2002 http://lii.org/taxes
The following resources include Web sites related to income tax preparation, taxation, sales tax, tax-related finance sites, the IRS and state taxation agencies, tax forms and publications, and finally (how we need it during tax season) a bit of humor.
Bob Jensen's tax threads are at http://www.trinity.edu/rjensen/bookbob1.htm#010304Taxation
Reply from Scott Bonacker, CPA [scottbonacker@moccpa.com]
Thanks for the tax links.
This isn't specifically about you, but I came across http://www.mihov.com/eng/lc.html while researching a network problem we are having, and I thought of how hard it is to maintain valid links on an extensive website like you have.
If this is wanted and useful, then I am happy to have helped.
Scott
The University
of Michigan's Open Archives Initiative
OAlster --- http://oaister.umdl.umich.edu/
OAIster is a Mellon-funded project of the University of Michigan Digital Library Production Services. Our goal is to create a wide-ranging collection of free, useful, previously difficult-to-access digital resources (what are digital resources?) that are easily searchable by anyone.
The novelty of this service is multi-fold:
Our service will reveal digital resources previously "hidden" from users behind web scripts (how are they hidden?). The OAI harvesting protocol we're using makes this possible.
There won't be any dead ends. Users will not be retrieving merely information (metadata) about resources -- they will have access to the real things. For instance, instead of just the catalog records of a slide collection of Van Gogh's works, users will be able to view images of the actual works.
The service will provide one-stop "shopping" for users interested in useful digital resources.
Digital resources will be easily findable and viewable through our service. The middleware we use to index these resources makes this possible.
If you're interested in making your collection available for harvesting, please contact Kat Hagedorn.
If you're interested in easier access to digital resources, please check back for results on our survey about use of online resources. Further testing is in progress for the initial release of the service.
Message sent to Stanford, Yale, and Oxford alumni:
Renew your academic passion! This spring, Stanford, Yale and the University of Oxford are offering online courses to alumni and friends through the Alliance for Lifelong Learning, a joint venture among the three institutions – http://www.allLearn.org/stanford.
Courses cover a range of contemporary subjects and are produced by distinguished faculty members of the three partner universities. Designed for your busy schedule, you can participate at times that are convenient for you. Spring 2002 offerings include:
Islam and the West World War II The Stock Market Emotional Intelligence Shakespeare The American Civil War Roman History
Click here to examine the complete online course catalog and register for classes: http://www.allLearn.org/stanford .
Spring courses start on April 15. Enrollments are limited and will be filled on a first-come, first-served basis, so please act now.
All Stanford alumni, family and friends are welcome to enroll. Please feel free to share this e-mail with others you know who may be interested in taking online courses offered by the Alliance.
Sincerely yours,
Howard Wolf President,
Stanford Alumni Association
THANK YOU DU! --- http://www.dcb.du.edu/officeofdean/pressreleases/pressreleasedescription.asp?PressReleaseID=10
I want to thank Peter Firmin and the faculty of accountancy at the University of Denver, the home of my MBA degree, for being such wonderful hosts during my visit last week. In a March 15 panel, we solved all the problems, at least in theory, regarding the future of the accountancy profession. Peter is the former Dean of the colleges of business at both Tulane University and the University of Denver. He resurfaced out of retirement as a fund raiser (Director of Development) for the University of Denver's School of Accountancy. He and other top university administrators have done a fantastic job pulling DU out of its nearly-bankrupt state in the early 1980s. DU is now ranked among the top 100 universities in the U.S.
With DU's various new buildings, including the fantastic new $25 million Daniels College of Business, its amazing growth in endowment, and the economic outlook for Denver and Colorado, I predict a dynamic and highly successful future for DU. The Daniels College of Business has a very innovative, albeit expensive, team-teaching curriculum with an excellent faculty and outstanding students. See http://www.dcb.du.edu/accountancy/
I also wish Peter and his wife, Jean, well on their forthcoming canoe adventure to four jungle camps in Peru and a planned trek into the wilds of Africa. Erika and I are younger and less adventuresome. Our idea of roughing it is being forced on occasion to downgrade to a four-star hotel.
On Saturday, Erika and I spent a delightful day in one store in Denver. It is called the Tattered Cover Bookstore and is located across from the Cherry Creek Shopping Mall. It is more like a public library with comfortable furniture and quiet nooks to browse. There is also a wonderful restaurant called the Fourth Story Restaurant and Bar in the bookstore. I "read" (snore?) much better after a couple of cubalibras and a lobster lasagna lunch. The Tattered Cover website is at http://www.tatteredcover.com/
Reply from Peter Firmin
My goodness, Bob
What a nice thing for you to do. Jean and I are finalizing our Zambia trip this afternoon and will be putting a deposit down on it. Even though it's a year-and-a-half away, the camps we plan to go to hold only 6 people - so we need to act now to save our spaces. The two-day canoe trips down the river require that we do the rowing. So I'm hoping that it is row, rest, look, take pictures, row, rest, rest, rest, etc. But just in case, I'm starting now to get in shape. We also have five days of walking safaris to look forward to.
Nice seeing you again. I'll just plan to take you up on your kind invitation to visit in San Antonio.
Peter
Reply from Kevin
O'Brien [kobrien@du.edu]
Kevin made an excellent presentation on CPA
whistle blowing obligations.
Bob, thanks for the feedback; I have had several CPAs come up and tell me your presentation was very thought provoking!
My Powerpoint related to the presentation is on my website at the following URL: http://www.du.edu/~kobrien/whistleblowing.ppt
You can also access it at www.du.edu/~kobrien and follow the link to "CPA Ethics".
March 18 reply from George Lan [glan@UWINDSOR.CA]
Bob Jensen wrote:
. In a > March 15 panel, we solved all the problems, at least in theory, regarding > the future of the accountancy profession.
Hi Bob,
Any earth-shattering solutions to the future of the accountancy profession? P.S. What is a cubalibra anyway? Some drink from Cuba? And did you find out by any chance what was the first degree of the taxi driver?
George Lan
In answer to George, I might note the following:
- My earth-shattering accounting solutions are the arbitration and whistle blowing recommendations at http://www.trinity.edu/rjensen/FraudConclusion.htm#MyAnswer
- A Cubalibra is simply rum and coke with a squeezed slice of lime (the lime is vital to the flavor). Apparently it was a favorite drink of Hemingway --- http://www.vertebrate.co.uk/overground/og7/cubalibra.html
There is also a song entitled La Cubalibra
- I did not find out any details about the taxi driver's first degree. I don't think it was an online degree.
Distance Education Success: A Sample of One Taxi Driver
On March 17, 2002 while returning home from the San Antonio Airport, I learned that our taxi driver was currently taking two distance education computer engineering courses via the Internet from SMU. He said he really enjoyed this online education opportunity that was helping him walk in his father's footsteps (his father is a computer engineer). SMU's Master of Science distance education program in engineering and computer science is at http://www.seas.smu.edu/disted/
Bob Jensen's threads on distance education programs are at http://www.trinity.edu/rjensen/crossborder.htm
EDUCAUSE Review, Volume 37,
Number 2
The Table of Contents below gives you a peek at the articles in this
issue. The full issue is online at http://www.educause.edu/pub/er/erm02/erm022w.asp
.
FEATURES
Leading the IT Team: The Ultimate Oxymoron or the Ultimate Challenge? by J. GARY AUGUSTSON Changes driven by advancements in the information technology industry will define the ultimate challenge for future IT leaders as well as for senior managers of higher education institutions. http://www.educause.edu/ir/library/pdf/erm0220.pdf
WINWINI and the Next Killer App: An Interview with Carl F. Berger by CAROLE A. BARONE "WINWINI will be most important in this killer app.... We need a killer app that operates and gets What I Need When I Need It." http://www.educause.edu/ir/library/pdf/erm0221.pdf
Commonsense Ideas from an Online Survivor by HERMAN D. LUJAN By first exploring the myths that surround technology and its role in teaching and learning, higher education institutions can use commonsense ideas to survive in the online environment. http://www.educause.edu/ir/library/pdf/erm0222.pdf
Bits and Atoms: An Interview with Neil Gershenfeld by RICHARD N. KATZ "Ordinary people can learn to do exceptional things if the educational attention moves from the content of a formal curriculum to the tools that can help people find their own solutions to problems that they care about." http://www.educause.edu/ir/library/pdf/erm0223.pdf
EXCERPT
The Organizational Challenge: IT and Revolution in Higher Education by JOHN R. CURRY From Richard N. Katz and Associates, Web Portals and Higher Education: Technologies to Make IT Personal http://www.educause.edu/ir/library/pdf/erm0224.pdf
DEPARTMENTS
techwatch Information Technology in the News http://www.educause.edu/ir/library/pdf/erm02211.pdf
Leadership Commerce, Language, and Culture under One Roof by WILLIAM H. CROUCH JR. http://www.educause.edu/ir/library/pdf/erm02210.pdf
E-Content Technology's Payload by DEANNA B. MARCUM http://www.educause.edu/ir/library/pdf/erm0229.pdf
New Horizons Web Services: Stitching Together the Institutional Fabric by CARL JACOBSON http://www.educause.edu/ir/library/pdf/erm0228.pdf
policy@edu What's Policy Got to Do with IT? by RODNEY J. PETERSEN http://www.educause.edu/ir/library/pdf/erm0227.pdf
Viewpoints Vive la Difference? by GREGORY A. JACKSON http://www.educause.edu/ir/library/pdf/erm0226.pdf
Homepage The Wise and Trusted Counselor by CYNTHIA GOLDEN http://www.educause.edu/ir/library/pdf/erm0225.pdf
Increasingly popular among the PC-literate crowd, Internet-based training is helping hundreds, if not thousands, of accountants to balance their work schedules and their personal lives. http://www.accountingweb.com/item/74824
Bob Jensen's threads on online training are at http://www.trinity.edu/rjensen/crossborder.htm
Email
Forwarding
SwitchEmail: Free Email Forwarding http://www.switchemail.com/pages/index.asp
Email-To-FAX
Service
OURFAX: Free World Wide Email to Fax Service http://www.ourfax.com/
Telephone
Voice to Email Service
Copytalk is a glorified dictation service. From any phone, you dial
Copytalk's toll-free number. At the tone, you dictate, for example, an e-mail
message. Between 3 and 20 minutes later, the message you dictated is sent on its
merry way across the Internet (with or without your review, at your option),
looking exactly as if it came from your desktop PC ---
http://www.nytimes.com/2002/01/24/technology/circuits/24STAT.html
Convert Print
to Spoken Words
From Syllabus News on September 11, 2001
The recently released Scan and Read family of software scans any printed material and converts it to spoken words, delivered in a variety of voices through the computer's speaker. The software also displays the text on the screen and highlights each word as it's read, a helpful feature for readers of all ages, those with learning disabilities, and non-English speakers looking for a way to increase their vocabularies. The more advanced members of the software family include word processing capability; the ability to access Microsoft Word files and convert them to spoken words; automatic image rotation, which allows software to convert text regardless of how it's positioned on the scanner bed; and the ability to create MP3 files, which can then be downloaded to other devices.
For more information, visit http://www.premier-programming.com
Access Your PC
from Anywhere - Free Download
GoToMyPC --- https://www.gotomypc.com/
FAQs --- https://www.gotomypc.com/help.tmpl?SessionInfo=9197287/5C369812E7DB446/null
ZDnet gives it a rating of 9 out of 10 --- http://www.cnet.com/software/0-3227892-1204-8480755.html
PC World Review --- http://www.pcworld.com/downloads/file_description/0,fid,8177,00.asp
March 16 message from Richard Campbell [campbell@RIO.EDU]
I thought some might want to see the new version of Flash in action. This puzzle is one of the sample files provided by Macromedia.
http://www.virtualpublishing.net/vp_puzzle/vp_puzzle.html
Richard J. Campbell
March 16 message from Bob Blystone
I got up earlier that Bob Jensen so you get this email from me instead of the other Bob.
The Web site below is very interesting on several levels.
The site allows one to see a photo album of 800 college campuses.
From time to time I have the opportunity of going to a campus that I have not visited before. This web site allows the chance to "see" the campus before going.
It also shows what some schools are doing to "show off" their institution.
The campus tours site also lists those schools that have web cams, campus maps, videos, and VR tours. Trinity was one of the first to have a VR tour.
Give it a quick look if you like to see what the other guys are doing and look like.
Bob Blystone
Robert V. Blystone, Ph.D.
Professor of Biology
Trinity University San Antonio, Texas 78212
rblyston@trinity.edu 210-999-7243 FAX 210-999-7229
From Syllabus News on March 12, 2002
UC Davis Prof Launches Sustainable Business Web Site
A University of California at Davis professor launched a web site dedicated to "sustainable business," the idea that businesses make the social and environmental impact of their work a top priority. The Sustainable World site grew out an MBA course on responsible business and technology taught by Richard Dorf of the Graduate School of Mangement at U.C. Davis. Dorf sees the site as a way to bring together graduate students from several disciplines, including agriculture and engineering, and weave sustainable business thinking into engineering and business curricula.
For more information, visit: http://www.sustainablebiztech.org
Online University Stocks Slip From All-Time Highs
Stocks of online universities fell last week on concerns that their earnings did not justify recent surges in share prices to all-time highs. Apollo Group, which administers educational programs for working adults, closed down 4.26 percent from an all-time high of $52 posted last Tuesday. Apollo subsidiary University of Phoenix Online, which offers degrees via the Internet, was down 6 percent, at $36.17, from an all- time high posted Tuesday. And ITT Educational Services, a provider of technical education, was down 2.49 percent, at $43.78. It has gained more than 26 percent since mid-January. "The entire post-secondary education group has been on a tear" over the past several weeks, said Greg Cappelli, senior research analyst at Credit Suisse First Boston. "It gets to a certain point and valuation becomes a concern."
From Syllabus News on March 19, 2002
William & Mary, AMS, Combine on Management Series
William & Mary College last week announced a partnership with American Management Systems Inc. to start a course in human capital management. The program, to focus on how organizational factors influence business success, will be funded by a $120,000 gift from AMS. A key part of the deal will be a seminar series in human capital management for business school faculty and AMS personnel. John Boschen, associate dean at the School of Business, said, "interactive relationships between business and schools of business are the wave of the future ... we gain support for further development of the management faculty and AMS can call on our depth of talent as consultants when projects require."
For more information, visit: http://www.business.wm.edu
St. Edward's University to Enhance Online Offerings
Austin, Texas-based St. Edward's University said it would use web-based collaboration software to deliver MBA courses online and to expand its online undergraduate curriculum. The school will use software tools from Centra Inc. to deliver selected MBA programs completely online and improve the quality of online courses delivered through its New College undergraduate program for working adults. Centra applications, including interactive Web meetings, virtual classrooms, and large- scale conferences, are based on CentraOne, a thin-client Web platform that includes content creation tools and delivery systems that can either be installed on-site or accessed through its secure ASP.
For more information, visit: http://www.stedwards.edu
Partnership to Globalize Blackboard 5 System
Blackboard Inc. last week announced a partnership to allow educational institutions abroad to tailor the Blackboard e-Learning platform to their local pedagogical approaches. The company said it would work with Welocalize Inc., a Frederick, Md., firm specializing in globalization services for the e- Learning industry, to help clients extend their e- Learning software and offerings across international borders. Georg J. Anker, a professor at the University of Innsbruck, said the international version of Blackboard "will surely further the systems acceptance on our own campus as well as throughout the German market. More importantly, it will enable us to establish the e-Campus in the region outside the traditional university and to offer one platform for a number of other learning institutions."
For more information, visit: http://www.blackboard.com
U. Wisconsin's dot.edu Org Takes Sun Micro Award
Sun Microsystems, Inc. last week said it chose the University of Wisconsin's dot.edu department, at the Milwaukee campus, as a Sun Center of Excellence in e- learning. dot.edu -- Digital Online Technology.Educational Design Utility -- is an e- learning infrastructure provider for educational institutions inside and outside Wisconsin. As a Sun Center of Excellence in e-learning, dot.edu provides instructional design, software training, hosting services, and a 24x7 helpdesk for online course development. It has placed more than 10,000 courses online since the being founded in 1999. To date, there are two Sun Centers of Excellence in e-learning globally: dot.edu at the University of Wisconsin System and the University of Alberta, Canada.
For more information, visit: http://www.sun.com/edu
Wow Site of
the Week
University of Wisconsin's dot.edu: 10,000 courses online since the being
founded in 1999
http://www.uwm.edu/Dept/dotedu/
dot.edu provides hosting services for online course development using an array of courseware products including, but not limited to, Prometheus and Blackboard. Services can be selected and uniquely organized to meet the needs of each associated institution. The Utility Model is structured as a three-stage implementation plan that transfers responsibility for course development and instruction from dot.edu to the associates. The program design and timeline are also determined by the needs of each institution. A written plan, with the flexibility necessary to meet changing needs, will be designed jointly by dot.edu and the respective institution.
Services we provide include:
- Hosting
- Course Management Systems
- Instructional Design Consultation
- Software Training
- The Solution Center - 7x24 Support
- ...and more! Click here to learn about them
dot.edu provides a robust, up-to-date e-learning system infrastructure including technology, training, support, and instructional design services to effectively apply these resources to enhance education. dot.edu works with all University of Wisconsin System higher education institutions, public and private higher education institutions, and public and private schools, school districts, and educational agencies in Wisconsin and beyond.
Reply from Damian Gadal [DGADAL@CI.SANTA-BARBARA.CA.US]
This site isn't too bad either:
http://online.sbcc.net/
March 19 message from Fathom
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See more courses: http://www.fathom.com/link.jhtml?cid=esp0&page=edu
THINKING IS ENCOURAGED @ FATHOM.COM (TM) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
* Offer expires March 31, 2002, and cannot be combined with any other offer. The 25% coupon may be used only once and will apply to the entire amount in your cart before checkout. This coupon is an exclusive offer from Fathom and is not valid on the websites of Fathom's individual course providers or any other website.
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Free Assessment Summary Tool for Teachers --- http://www.getfast.ca/
Traditionally, teaching assessments are conducted at the end of a course - a practice precluding students from offering constructive feedback while they are still in the course. However, conducting instructor-designed and administered web-based course assessments opens a proactive dialogue with students about teaching, the course, and the entire learning process.The FAST project is committed to providing users with a simple online tool for assessing their students' impressions of their courses and their teaching. Using the software does not cost anything so if this is your first visit, become a user and see if FAST would be useful for you and your students. Also, you may want to read the FAQ's and the User Tips to provide you with an overview of the functionality of the software.
If you have any questions or comments about FAST, please enter them in the discussion board or send either of us a note - Bruce Ravelli, lead researcher and/or Zvjezdan Patz, lead programmer.
Whose Rules?
Young people have grown up with computers, the Internet, and instant
communication, yet are governed by the laws and values of a society still
adjusting to such technological developments. (Not surprisingly, teens don't
think adults have a clue.) InformationWeek examines the ethical issues being
raised by, and about, your soon-to-be co-workers. http://update.informationweek.com/cgi-bin4/flo?y=eGNk0BcUEY04e0BZkg0AA
FINANCE Investment Banking's Big Chill
in Europe The Continent's investment bankers had a horrible year in 2001. This
year could be worse
http://europe.businessweek.com/magazine/content/02_12/b3775150.htm?c=bweuropemar19&n=link1&t=email
Message received on March 20 from ProfNet [profnet@newprofnet.com]
ProfNet - New Question
New question for Robert Eugene Jensen:
History of company declines
" Hi, I'm a reporter at the San Jose Mercury News, the main paper in Silicon Valley, and I'm researching historic parallels to the decline in the tech sector since 2000. In other words, what other industries have seen such a sharp reversal of fortune as the hi-tech industries have had during the tech bubble and bust? And what do these historic parallels show about what will happen next? One example is the bursting of the energy and oil service stocks after 1980.
I'm also looking for examples of companies that had very large write-offs of intangibles and impaired goodwill for expensive mergers in the past and what happened to them. If JDS Uniphase had the biggest write-off in U.S. Corporate history, what were the previous biggest write-offs... and what happened to these companies?
I can be reached at dsylvester@sjmercury.com or 408 920 5019... and I'm working on this this week but as soon as possible would help. Tnx David Sylvester Financial writer San Jose Mercury News
--Contact Details-- Organization: San Jose Mercury News Email: dsylvester@sjmercury.com Phone: 408-920-5019 "
from:
Temporary Access - Wed Mar 20 18:42:24 EST 2002
Access My ProfNet now --- http://www3.profnet.com/organik/orbital/login/login.jsp?bypassSessionCheck=true
The 101 Dumbest Moments in Business --- http://www.business2.com/dumbest/
In a perfect world, a list like this
would not exist. In a perfect world, businesses would be run with the utmost
integrity and competence. But ours is, alas, an imperfect world, and if we must
live in one where Enron, Geraldo Rivera, and Cottonelle Fresh Rollwipes exist,
the least we can do is catalog the absurdities.
By Tim Carvell, Adam Horowitz, Thomas Mucha, April 2002 Issue
1. Houston, We Have a Problem, Part 1: Enron states billions of dollars in extra revenue through aggressive accounting and complicated off-the-books partnerships managed by its own executives, all the while ignoring warnings from its employees and enriching its top executives at the expense of its investors and workforce. And it assumes none of this will ever come to light.
2. A dozen Burger King marketing execs suffer first- and second-degree burns while walking over hot coals as part of a team-building retreat in October. One of the injured, a VP for product marketing aptly named Dana Frydman, tries to put a positive spin on having her feet flame-broiled like so much ground chuck. "It made you feel a sense of empowerment and that you can accomplish anything," she tells the Miami Herald.
3. Republic co-founders Mel and Patricia Ziegler start ZoZa, an "athletic formalwear" retailer, in late 2000. Mel says he expects sales to reach $1 billion within seven years. Gary Rieschel of Softbank Venture Capital invests $16.5 million, telling BusinessWeek, "If you have guts and you have capital, how can you not be optimistic about the consumer market?" Here's how: ZoZa's designers revamp its spring 2001 line, intentionally making their dresses two sizes smaller than labeled. Even the svelte are outraged, and ZoZa's merchandise return rate soars to 80 percent. The company shuts down in May 2001, proving that, if the dress doesn't fit, you must, uh, quit.
4. Sept. 11 Inc., Rampant Greed Division: Gas stations nationwide exploit post-Sept. 11 fears of a fuel shortage by charging customers $4 and $5 per gallon. Among the worst offenders: a station in Jackson, Mich., that, according to Newsweek, hikes its price to $6.75 per gallon.
5. Proving the old business-school saw that "any idiot can sell a dollar for 80 cents," online-currency company Flooz.com in July launches a special offer whereby American Express platinum cardholders can buy $1,000 of Flooz currency for just $800.
6. A month later, Flooz.com ceases processing transactions. It declares bankruptcy in November, leaving those who bought Flooz currency stuck with worthless e-dollars.
7. Last May, Citizens Against Government Waste, a group that received funding from Microsoft (MSFT), is caught simulating a "grassroots" campaign to get state attorneys general to drop their antitrust suit against the software giant. One detail that gives the scheme away: Some of the letters supporting Microsoft are from people who have long since died.
8. After issuing his landmark antitrust decision against Microsoft, Judge Thomas Penfield Jackson lets reporters print comments from previously confidential interviews, in which he compares Bill Gates to Napoleon and Microsoft executives to gangland killers. In June an appeals court overturns Jackson's decision to break up the company, citing his remarks as evidence of his "rampant disregard for the judiciary's ethical obligations."
9. At a Microsoft employee event last summer, CEO Steve Ballmer apparently suffers a grand mal seizure. Or attempts to dance. One or the other. It's hard to tell. In any case, a video clip of his calisthenics starts making the rounds of the Internet.
10. With the slogan "Sometimes wetter is better," Kimberly-Clark (KMB) introduces Cottonelle Fresh Rollwipes premoistened toilet paper -- or, to put it another way, baby wipes for adults.
24. By faking the transactions that should have offset the risk in his portfolio, a trader named John Rusnak, working for a Baltimore subsidiary of Allied Irish Banks, loses $691.2 million before the bank discovers his misdeeds. After the bank and the federal government launch investigations, Rusnak is fired, denying him the chance to unseat Barings PLC's Nicholas Leeson -- who lost $1.4 billion and destroyed a 232-year-old company -- as the most inept rogue trader ever.
Bob Jensen's threads on derivative financial instruments frauds are at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
Nice going Lehman
55. Houston, We Have a Problem, Part 7: Richard Gross, an analyst at Lehman Bros., maintains a "strong buy" rating on Enron as the stock declines from $81 to $0.75. A Lehman spokesperson helpfully explains to the New York Times that the firm was advising Dynegy on its purchase of Enron's pipeline, and it is Lehman's policy not to change the firm's rating on any company involved in a deal in which Lehman is an adviser.100. Houston, We Have a Problem, Part 14: In February 2002, as it struggles to emerge from bankruptcy, Enron pays more than $200,000 to retain its box seats and luxury suite at Enron Field. The company argues that it is making the payment solely to fulfill its contractual obligation -- although, coincidentally, it had earlier failed to fulfill a $200,000-a-year commitment to fund a local Boys and Girls Club.
63. Bottling the Stench of Death and Calling It Perfume: Philip Morris also attempts to counter antismoking measures in the Czech Republic by commissioning an economic analysis of the "indirect positive effects" of early deaths -- savings on health care, pensions, welfare, and housing for the elderly. The company later apologizes.
75. Unilever subsidiary Lipton approves an ad in which a man standing in line for communion holds a bowl of onion dip, presumably to improve the taste of the body of Christ. Under protest, Lipton withdraws the ad.
98. "Do you judge Ted Williams on one bad year?" -- Morgan Stanley analyst Mary Meeker, to Fortune magazine, explaining why it's unfair to criticize the fact that stocks on which she has maintained "outperform" ratings have lost more than 90 percent of their value. (For the record, Ted Williams's worst year was 1959. He played the season with a neck injury and still finished the year hitting a respectable .254.)
Continued at http://www.business2.com/articles/mag/0,1640,38604,00.html
In a reply message, David Albrecht noted that Number 40 is really funny.
40. The Newspaper Association of America names Kmart its "Retailer of the Year" on Jan. 21, 2002, one day before the company files for bankruptcy protection under Chapter 11.
Reply from Leo Gallant [lgallant@STFX.CA]
This could become a whole new language of laughter for accountants.
47 Ha Ha
83 Ha Ha
and so on
Reply from NANCY BAGRANOFF [BAGRANNA@MUOHIO.EDU]
I'd just like to chime in to say that Business 2.0 is one of the greatest resources for all kinds of stories. The dumbest moment story is second only to the business guru trading cards in the October 2001 issue. I subscribe to the paper journal but most everything is at the web site - www.business20.com .
Nancy A. Bagranoff
Professor of Accountancy
RT Farmer School of Business Admin.
Miami University Oxford, Ohio 45056
March 14, 2002 message from Dennis Beresford [dberesfo@terry.uga.edu]
Bob,
The Financial Accounting Foundation proposed today to reduce the size of the FASB from 7 to 5 members in order to speed up the process. The press release describing this is on the Board's web site - www.fasb.org .
Denny
The news release is at http://www.fasb.org/news/nr031402.html
After a review of recent events, the Trustees determined that there is a need for the FASB to be more flexible in responding to change and to increase the efficiency of its standard-setting process. By doing so, financial reporting standards would be enhanced.
The Trustees considered the need for accelerating the standard-setting process by improving the FASB’s efficiency without compromising the quality of its open due process. To meet that objective, the Trustees approved a proposal for public comment that includes the following:
- Reduction in the size of the FASB from seven to five members.
- A simple majority-voting requirement of 3-2 for the five-member board. The current board has a 5-2 supermajority requirement.
- A recommendation to the FASB that it expose proposed standards for shorter comment periods.
The Trustees will carefully consider responses to the proposal before deciding on a course of action. If approved, the proposed reduction in the size of the FASB would transition over time and be achieved through attrition. Comments also will be sought on the composition of a five-member board. The current board is composed of three members from public accounting, two from industry or the preparer community, another from the investor or user community and one from the academic community.
In reflecting on the action under consideration by the FAF to enhance the FASB’s process, Mr. Johnson remarked, "We have a responsibility to investors and we take it very seriously. The Trustees are committed to preserving the independence of private-sector standard setting and will continue to consider improvements to the process in as timely a manner as possible."
Independence
At its March 4 meeting, the Trustees also reviewed the importance of having an independent accounting standard setter. Much of that review centered on a position paper entitled "The FASB’s Role in Serving the Public, A Response to the Enron Collapse" that was prepared by FASB Chairman Edmund L. Jenkins. The paper, covering a broad range of issues, emphasizes the necessity of having an independent, private-sector accounting standard setter in maintaining efficient capital markets and is available on the FASB’s website at www.fasb.org .
Despite significant resistance from some of those affected, the FASB has made substantial improvements to financial reporting that have resulted in greater transparency of financial information. The following are a few examples drawn from the Jenkins paper:
Requiring that reporting entities recognize liabilities for retirement benefits when those entities promise them to employees rather than when they later pay them.
- Requiring significant disclosures about the separate operating segments of an entity’s business so that investors can evaluate the differing risks in the diverse operations.
- Requiring that derivative instruments and hedging transactions be reflected in financial statements which, previously, were not reflected.
- Requiring that the acquisition of one company by another be accounted for in the same way for all entities and that the total amount paid for the acquisition be reflected in the financial statements. In the past, that was not often the case.
In commenting on current auditor reform proposals, Mr. Johnson stated, "While the Trustees are interested, concerned and highly supportive of efforts to improve the independence and effectiveness of the auditing system, the FASB has no authority or responsibility for auditing matters. And as part of the broader financial reporting system, we believe it is critical that the FASB remain an independent, private-sector organization—free from political pressure. Independence is critical to developing credible and transparent information for investors and is essential to the vibrancy of the U.S. capital markets."
Vital to the independence of a private-sector standard setter is broad-based funding support from constituents in order to avoid undue influence from any single source. In commenting on this issue, Mr. Johnson said, "Now more than ever, all of our constituents—and especially the investor community—should view this as an important opportunity to support high-quality financial reporting standards, and we strongly encourage broad participation in the contribution process." Approximately two-thirds of the FASB’s funding comes from the sale of publications and licensing agreements. The remaining one-third is from a broad base of contributors, including the public accounting profession, and the corporate, investor and academic communities.
Comment Period
A document seeking public comments on the proposed changes will be issued on or about March 18, 2002, and will also be available on the FASB’s website at www.fasb.org . The comment period will be 30 days and all responses received in that time frame will be considered by the Trustees at their next regular meeting scheduled for April 23, 2002.
This is an age-old question of the accounting world, and there are no easy answers. In simpler times, the fear of being publicly humiliated by losing your CPA license and having to sit for the 3-day exam again was enough to keep most CPAs clean. http://www.accountingweb.com/item/74689
No longer the impossible dream, international accounting standards just took another step closer to gaining widespread acceptance. On March 12 the European Parliament voted in favor of plans to require IAS for listed companies in the European Union, starting in the year 2005. http://www.accountingweb.com/item/74948
Diversity Poll Identifies Top-Ranked
Accounting Firms
A survey by The Black Collegian magazine of more than 2,300 African, Asian,
Hispanic, and Native American undergraduate and MBA students found that
corporate diversity is a critical factor for minority students in deciding upon
employers, and several major accounting firms are among the companies that excel
in this area. http://www.accountingweb.com/item/73983
UK's Sunday Times Chronicle of
the Future (including prediction of a new set of Ten Commandments in 2042)
http://www.chronicle-future.co.uk/
From Phil Livingston, CEO of the Financial Executives International on March 20, 2002
FEI Publishes Reform Recommendations Last week the FEI Executive Committee approved a set of recommendations for consideration by Congress, the regulators and all corporate executives. The proposals cover a broad area and are intended to strengthen our financial reporting and governance systems. The 12 recommendations were developed by a member task force, and the task force also had significant input from FEI’s Committee on Corporate Reporting.
We offer recommendations in four areas: · Strengthening financial management and commitment to ethical conduct · Rebuilding confidence in financial reporting, the accounting industry and the effectiveness of the audit process · Modernizing financial reporting, and reforming the accounting standards-setting process · Improving corporate governance and the effectiveness of audit committees
Download a copy of the recommendations at: http://www.fei.org/download/taskforce.pdf (This file is in Adobe Acrobat format. To download the free Adobe Acrobat reader, click here: http://www.adobe.com/products/acrobat/readstep2.html )
FEI Publishes Revised Code of Ethics After receiving more than 200 comments from members, FEI is republishing its Code of Ethics. Thanks to the great work by the Ethics & Eligibility Committee, chaired by Rich Schrader, CFO of Parsons Brinckerhoff. The revised code now calls for all financial executives to acknowledge their affirmative duty to proactively promote ethical conduct in their organizations. View the revised code at: http://www.fei.org/info/code.cfm
March 20 Message from Ira Kawaller
Hi Bob,I just posted a recently published article on how to satisfy the FAS 133 disclosure requirements for interest rate hedges. Although it was originally published by Bank Asset/Liablility Management (March 2000), the content is applicable to all firms with interest rate exposures -- not just banks.If you are interested, it is available at http://www.kawaller.com/pdf/BALMHedges.pdfYou can also find additional information about derivatives, risk management, and FAS 133 in the various articles posted on the Kawaller & Company website: http://www.kawaller.comPlease feel free to contact me with any questions, comments, or suggestions.Ira Kawaller Kawaller & Company, LLC kawaller@kawaller.com (718) 694-6270
Bob Jensen's documents and threads on FAS 133 are linked at http://www.trinity.edu/rjensen/caseans/000index.htm
The Excel workbook solutions to examples and cases are on a different server at http://www.cs.trinity.edu/~rjensen/
News of the Week
XBRL
Statements Make Their Internet Debut
Microsoft Corporation has announced that it is the first technology company to
publish its financial statements on the Internet using Extensible Business
Reporting Language (XBRL). http://www.accountingweb.com/item/74412
Bob Jensen's XBRL threads are at http://www.trinity.edu/rjensen/xmlrdf.htm
The shortage of experienced personnel in the accounting profession has become critical. According to most estimates, this will not change in the near future. Every firm is looking for a magical way to keep staff happy, motivated and out of the job market. http://www.accountingweb.com/item/74223
The Case for Halting the Auditors'
Revolving Door
Law-makers and businesses are taking steps to halt the "revolving
door" between auditors and their clients. A majority, 58%, favor imposing a
two- to five-year waiting period during which auditors may not accept senior
positions with audit clients. http://www.accountingweb.com/item/73865
Differences of opinion between House Democrats and Republicans have resulted in the introduction of a second bill in the House Financial Services Committee. Known as the Comprehensive Investor Protection Act, this new proposal is the toughest accounting reform bill yet. It was the result of close coordination with the Securities and Exchange Commission, and it is supported by the AFL-CIO, consumer groups, and former SEC Chief Accountant Lynn Turner. http://www.accountingweb.com/item/73861
Differences of opinion between House Democrats and Republicans have resulted in the introduction of a second bill in the House Financial Services Committee. Known as the Comprehensive Investor Protection Act (CIPA), this new proposal is the toughest accounting reform bill yet. It was the result of close coordination with the Securities and Exchange Commission (SEC), and it is supported by the AFL-CIO, consumer groups, and former SEC Chief Accountant Lynn Turner.
Among other things, CIPA would:
- Create a Public Accountability Board with a 7-member majority selected from the public and the remaining 6 members drawn from groups representing institutional investors and pension funds.
- Empower the Board to conduct reviews of audits and audit firms, institute disciplinary actions and set standards for quality control of audits, auditor independence, and ethics.
- Impose tougher legal penalties on auditors by restoring joint and several liability in certain circumstances and restoring the aiding and abetting liability for accountants and outside professionals.
- Require the SEC to review more filings more systematically based on a risk-rating system that uses analytics (such as price-earnings ratios) to determine the frequency of reviews.
- Restrict auditors from providing a list of specified nonaudit services and require audit committee approval of any nonaudit services not listed in the bill, such as tax services.
- Require a 4-year rotation of auditors, with the possibility of one 4-year extension, if approved by the Public Accounting Regulatory Board.
- Require audit committees to meet quarterly with auditors and have an opportunity to do so outside the presence of management.
- Require a 2-year cooling off period for certain former auditor employees before they could work for an audit client.
- Prohibit directors from providing consulting services to the companies on whose boards they sit.
- Double the resources for SEC’s Division of Enforcement, Corporation Finance, and Office of the Chief Accountant.
- Set restrictions on security analysts to prevent conflicts of interest.
In introducing the bill, Representative John LaFalce said, the reforms are not "cosmetic" and do not "paper over the problem." Georgetown University law professor Donald Langevoort told Reuters, "If it were just the little guy who got trounced [by the Enron collapse], we would simply get cosmetic changes. But this has hurt more than the little guy."
Read the news release. Read the summary of the bill. View a side-by-side comparison with the bill introduced by the House Financial Services Committee Republicans.
The American Institute of CPAs is building a lobbying campaign against Enron-related reform proposals being discussed in Washington and demanded by the private sector. According to an AICPA spokesman, an e-mail was distributed to 3,000 federal key people - AICPA members who have contact and/or access to lawmakers - urging their assistance in convincing lawmakers to temper the response to requests for reforms. http://www.accountingweb.com/item/74169
Also see http://www.house.gov/banking_democrats/pr_020228.htm
Bob Jensen's threads on fraud are at http://www.trinity.edu/rjensen/fraud.htm
A message from Barry Rice
Today's issue of The Baltimore Sun has an article which tries to put a positive spin on being an accountant. I'm not sure they succeed! It's at http://www.sunspot.net/features/lifestyle/bal-to.accountant06mar06.story?coll=bal%2Dartslife%2Dtoday . The title is "The numbers game -There's no accounting for taste as changing times and high-profile scandals turn bean counters from no-accounts to celebrities". I find it interesting that in the paper edition, the article appears in the Today section rather than the Business section. That is the section with the TV listings, movie reviews, the comics and Ann Landers and Liz Smith's columns.
Please note that after two weeks, The Sun archives articles and after that they are only available for a fee.
Barry Rice
www.barryrice.com
www.AccountingIsCool.com
LEARNING TO PUT ETHICS LAST
During their spell in B-school, MBA students become more focused on company profitability and less on things like customer service
Does an MBA degree change a person's attitudes and values? According to a new study, the answer is yes -- and perhaps not for the better. "Where Will they Lead?: MBA Student Attitudes About Business & Society," published by the nonprofit Aspen Institute's Initiative for Social Innovation through Business (ISIB), finds that MBA students enter B-school with relatively idealistic ambitions, such as to create quality products and be of service to consumers. By the time they graduate, though, these goals have taken a back seat to such priorities as boosting their company's share price.
It might appear a benign transformation were it not for the specter of Enron, where MBAs Jeffrey Skilling (Harvard 1979) and Andrew Fastow (Northwestern 1987) apparently pursued such a strategy to the hilt, with disastrous results.
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/bschools/content/mar2002/bs2002038_0311.htm?c=bwmbamar13&n=link1&t=email
Ten Ways to Reduce Chargebacks and Fraud Merchants' concern about online credit card fraud and chargebacks is rising at a significant rate. According to the 2001 Online Fraud Report conducted by Mindwave Research, 41 percent of merchants say the issue of online credit card fraud is "very serious" to their business. http://www.newmedia.com/default.asp?articleID=3443
Bob Jensen's threads on fraud are at http://www.trinity.edu/rjensen/fraud.htm
Bob Jensen's e-Commerce threads are at http://www.trinity.edu/rjensen/ecommerce.htm
GMAT PREP Looking to improve your score? To help you prepare as thoroughly as possible, BusinessWeek Online has developed an area that focuses on the ins and outs of the exam. You'll find expert advice, sample questions, and more http://www.businessweek.com/bschools/gmat/?c=bwmbamar13&n=link6&t=email
Hi Dave,
Her name is Amy Dunbar at the University of Connecticut.
I think all educators should read at least the first 15 pages of "Genesis of an Online Course," by Amy Dunbar at www.sba.uconn.edu/users/adunbar/genesis_of_an_online_course.pdf
She was the Wow Professor of the Week at http://www.trinity.edu/rjensen/book01q3.htm#Dunbar
Her husband also teaches tax online, although he also has some onsite courses at the University of Connecticut.
Hopefully, Amy will be presenting a workshop on August 13 in San Antonio. Watch for a future announcement under CPE at http://accounting.rutgers.edu/raw/aaa/2002annual/meetinginfo.htm
Bob Jensen
-----Original Message-----
From: University of St Thomas [mailto:djohn@USWEST.NET]
Sent: Thursday, March 07, 2002 12:32 PM To: AECM@LISTSERV.LOYOLA.EDU
Subject: Secrets of online teaching successI'm looking for a link from Bob Jensen's site and can't find it. It linked to an online tax accounting course that was exemplary. I recall that it was taught by a woman (and husband team?) and that she routinely received the highest marks from her course evaluations, even from students who received poor grades. Does anybody remember this link? I want to discover the secrets to her success delivering an online course.
Dave Johnson
Reply from Barb Edwards [bjedwards@SHAW.CA]
I think all educators should read at least the first 15 pages of "Genesis of an Online Course," by Amy Dunbar at www.sba.uconn.edu/users/adunbar/genesis_of_an_online_course.pdf
I found this interesting to read. First I noted that teams were used and that the students' responses were very positive. (Exhibit III, page 19) I use teams in my online accounting course and I now have a case that deals with team building to prepare the graduate students for team work. I am interested in comments from others about using teams in online courses and the need for team building. My teams complete weekly case summaries and once a term a major presentation of one case.
The other point that was interesting is that students generally did not use the "flashier" tools - flash files, sound files (Exhibit II, page 17). I was considering adding audio but now I wonder if it is worth the work. Maybe the straight content is more important than flash. Opinions?
The last point that I still struggle with is having students accept that graduate courses are different from undergrad. Just like Dunbar's course, my course is the first graduate course. How do you really prepare them for the graduate level of work? Thanks
Barb Edwards
Senior Lecturer,
Accounting Graduate Diploma in Business Administration
Simon Fraser University,
Burnaby BC Canada Email: bjedwards@sfu.ca
From Syllabus News on March 5, 2002
Distance Learning Lobby Praises Internet Bill
A distance learning lobbying group said it supported the House's passage of H.R. 1542, the Internet Freedom and Deployment Act. U.S. Distance Learning Association executive director John Flores said passage of the bill is "good news for the nation's distance learning industry whose future prosperity depends on universal access to broadband technology in our nation's homes, schools, universities and workplaces." The bill, sponsored by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mi.), requires Bell companies' central offices to have high speed data capabilities within five years.
For more information, visit: http://www.usdla.org
George Washington U. Launches Consulting Group
George Washington University launched a consulting group to provide learning strategies for business and government clients. GWSolutions will "pinpoint key challenges and craft individualized and customized learning strategies" for its customers. Solutions will range from top-to-bottom learning programs in multimedia formats, to trends analysis, strategic consulting, research, and the development of joint ventures. In launching the venture, the school said its first "Solution Center," would focus on problems related to security, including crisis, emergency and risk management; privacy, information security, and transportation safety.
For more information, visit: http://www.gwu.edu
Scottish School Offers Advanced Degree in Games Tech
The University of Abertay Dundee is offering what it claims is the world's first postgraduate degree in computer games technology. It will recruit its first group of students via the British Council's Online Learning Zone (OLZ) in New Dehli. The school expects about 20 young Indian computer scientists will subscribe and participate in the course via the WebCT online learning platform. The OLZ in Delhi is a mini-campus, equipped with library and hi-tech computers. Indian students taking the Abertay course will have the same quality learning experience as students in Dundee, with the only difference being that the lecturer is on the screen instead of the podium.
For more information, visit: http://www.abertay.ac.uk
AICPA Issues Proposed Standard On Fraud
Detection
On February 28, 2002, the American Institute of CPAs (AICPA) released a draft of
a revised audit standard on Consideration of Fraud in a Financial Statement
Audit. If adopted, this updated standard will replace the current standard with
the same name, (Statement on Auditing Standards No. 82). http://www.accountingweb.com/item/73718
From The Wall Street Journal Accounting Educators' Review on March 7, 2002
TITLE:
Auditing Standard for Detecting Fraud Is Posed
REPORTER: Dow Jones Newswires
DATE: Mar 01, 200
PAGE: A4
LINK: http://online.wsj.com/article/0,,BT_CO_20020228_009080.djm,00.html
TOPICS: Auditing
SUMMARY: The article implies that a new auditing standard on fraud actually has been issued, but the actual document issued was an exposure draft of a proposed standard.
QUESTIONS:
1.) Access the AICPA web site to read the actual document issued by the Auditing Standards Board at http://www.aicpa.org/members/div/auditstd/consideration_of_fraud.htm
The article begins with the statement that "the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants issued expanded fraud guidance for U.S. auditors..." Is this statement correct?
2.) In the second paragraph of the article, the author states, "The guidance comes at a time when questionable accounting practices have surfaced in the wake of bankruptcy-law filings by...Enron Corp. and Global Crossing Ltd." Were these recent scandals the reason behind the new auditing standard proposal? If not, what were the ASB's reasons for proposing the new standard? (Hint: again see the actual document at the AICPA's web site.)
3.) The proposed new standard would mandate specific requirements to search for fictitious entries and perform other tests to search for fraud under certain circumstances. Compare and contrast this proposal to current auditing requirements to search for fraud.
SMALL GROUP ASSIGNMENT: The proposed auditing standard requests feedback from respondents to assess each of the major areas of the new standard (e.g., classification of risk factors for fraud, identification of revenue recognition as the major area for risk of fraud, consideration of the risk of management override of fraud, inquiry of audit committees about fraud, and the attitude of professional skepticism). Divide the class into small groups and assign one section to each group to draft a response to the questions posed in the exposure draft.
Reviewed
By: Judy Beckman, University of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Bob Jensen's threads on fraud are at http://www.trinity.edu/rjensen/fraud.htm
THE E-MAIL MONSTER This indispensable tool for business has a huge dark side that can bring mail servers -- and workers' productivity -- to a halt --- http://www.businessweek.com/technology/tc_special/email.htm?c=bwtechmar08&n=link8&t=email
Museum of Hoaxes (repeated from earlier editions of New Bookmarks) --- http://www.museumofhoaxes.com
March 8, 2002 message from Craig Polhemus [craig@aaahq.org]
FEI BUSINESS COMBINATIONS VIDEO PROGRAM http://www.fei.org/confsem/bizcombo2k2/agenda.cfm
American Accounting Association (AAA) members may view a replay of a day-long webcast on accounting for business combinations and intangible valuations (SFAS 141 and 142) at half the price that will be charged to other non-FEI members ($149 versus $299). The FEI hopes to use funds generated from AAA members to help the FEI assume sponsorship of a Corporate Accounting Policy Seminar.
The webcast encompassed five presentations by experts with question-and-answer periods: (1) Overview of SFAS 141/142, by G. Michael Crooch, FASB Board Member; (2) Recognition and Measurement of Intangibles, by Tony Aarron of E&Y Valuation Services and Steve Gerard of Standard and Poors's, (3) Impact on Doing Deals: Structure, Pricing and Process, by Raymond Beier of PWC and Elmer Huh, Morgan Stanley Dean Witter, (4) Testing for Goodwill Impairment, by Mitch Danaher of GE, and (5) Transition Issues and Financial Statement Disclosures, by Julie A. Erhardt of Arthur Andersen's Professional Standards Group.
As an example (Digital Island Inc.) of the impact of FAS 142 on impairment testing for goodwill, please print the following document: http://www.edgar-online.com/brand/businessweek/glimpse/glimpse.pl?symbol=ISLD
Amortization of intangible assets. Amortization expense increased to $153.7 million for the nine months ended June 30, 2001 from $106.4 million for the nine months ended June 30, 2000. This increase was primarily due to a full period of amortization of the goodwill and intangibles related to the acquisitions of Sandpiper, Live On Line and SoftAware, which were completed in December 1999, January 2000 and September 2000, respectively. This increase was offset by a decrease in the current quarter's amortization as a direct result of a $1.0 billion impairment charge on goodwill and intangible assets in the quarter ended March 31, 2001. Amortization of intangible assets is expected to decrease in future periods due to this impairment charge.
Impairment of Goodwill and Intangible Assets. Impairment of goodwill and intangible assets was recorded in the amount of $1,039.2 million. The impairment charge was based on management performing an impairment assessment of the goodwill and identifiable intangible assets recorded upon the acquisitions of Sandpiper, Live On Line and SoftAware, which were completed during the year ended September 30, 2000. The assessment was performed primarily due to the significant decline in stock price since the date the shares issued in each acquisition were valued. As a result of this review, management recorded the impairment charge to reduce goodwill and acquisition-related intangible assets. The charge was determined as the excess of the carrying value of the assets over the related estimated discounted cash flows.
March 8, 2002 Message from the Risk Waters Group [RiskWaters@lb.bcentral.com]
ONLINE TRADING TRAINING NOW AVAILABLE (Investments, Finance, Derivatives) …
‘Introduction to Trading Room Technology’ from Waters Training. A low-cost, Web-based training solution for financial professionals. Go at your own pace, travel nowhere, and learn about the core trading processes and key technology issues from your own desktop. For more information, go to http://www.waters-training.com to find out more. Lastly, if you have any colleagues, training managers or business associates who would be interested in this new product, please forward them this message.
Thank you.
GIS and Historical Maps from the David Rumsey Collection (Geography, History, Travel) http://www.davidrumsey.com/
Terrorism: Questions & Answers --- http://www.terrorismanswers.com/
An e-publisher selling versions of several significant books survives a day in court against Random House --- http://www.wired.com/news/politics/0,1283,51022,00.html
Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm
From InformationWeek Daily on March 4, 2002
Adobe's All Aboard Web Services
Web, print, and video publishing vendor Adobe Systems Inc. is getting into the Web services game with an update to its AlterCast imaging server software.
AlterCast automatically creates multiple versions of an image based on one original version, so they can be easily modified to use across Web sites in various formats (in different sizes, colors, and so on). The new version will further simplify the process by letting AlterCast communicate with content-management systems and application servers via the Simple Object Access Protocol Web-service standard. "One of the key advantages of Web servers is being able to create Soap packets on any system that can talk to AlterCast servers, whether the server runs on Solaris or Windows," says Gregg Brown, group product manager for Adobe AlterCast servers. Customers who previously had to buy multiple versions of AlterCast, depending on the import and export formats they needed to support, now only have to buy one copy of the software.
E-business integrator Burntsand Inc. uses AlterCast to help its clients access advertising images, and channel director Christian Pease is looking forward to the upgrade. "With Web services, we can take ad content that we've already created and make it available to a broader set of players in a supply chain or business-to-business environment, without having to do extra coding," he says.
The AlterCast Web-services upgrade will be available free to existing users Monday on Adobe's Web site http://update.informationweek.com/cgi-bin4/flo?y=eGHt0BcUEY0V20BXKx0Ad . The product is priced at $7,500 per CPU for new users.
Business-Intelligence Progress In Jeopardy
E-business technologies, CRM applications, supply-chain management systems, and other enterprise applications can provide competitive advantages or bring companies closer to customers and suppliers. But many companies are having difficulty organizing the data and disseminating it to decision makers. Can business- intelligence tools really help? According to a Datamonitor report, business-intelligence tools will help many businesses, but others will find serious barriers. http://update.informationweek.com/cgi-bin4/flo?y=eGHs0BcUEY04e0BXLB0A1
A Statement of Responsibilities for AAA Members? Register Your Views
The American Accounting Association Council is considering the adoption of a Statement of Responsibilities (SOR) as guidance for Association members. The AAA Professionalism and Ethics Committee wrote a proposed Statement of Responsibilities after many years of input from AAA members. Previous versions have been exposed at both regional and national AAA meetings.
The current version of the proposed SOR, a set of Frequently Asked Questions, and two questions are online at http://www.aaahq.org/surveys/sor.cfm so that you may register your views and provide confidential feedback by March 31. The Professionalism and Ethics Committee will present the results of this member feedback to the Council at its meeting in Sarasota, Florida, on April 6. Please participate and express your views.
AAA Professionalism and Ethics Committee
Medicine and Madison Avenue (Marketing
and Advertising History)
http://scriptorium.lib.duke.edu/mma/
Bob Jensen's marketing helpers are at http://www.trinity.edu/rjensen/bookbob1.htm#022119Advertising%20and%20Marketing
Harry Benson: 50 Years in Pictures (History, Photography) --- http://digitaljournalist.org/issue0112/hb_intro.htm
The Wright Brothers in Photographs (Aviation, History) http://www.libraries.wright.edu/special/wright_brothers/dmc.html
The Whitney Museum of Art: 2002 Biennial Exhibition http://www.whitney.org/2002biennial/
In an ambitious project, the Library of Congress is digitizing its perfect rendition of the Gutenberg Bible. These high-resolution images could reveal more about Gutenberg's invention of moveable type --- http://www.wired.com/news/culture/0,1284,50589,00.html
"Handhelds of Tomorrow," Technology Review, April 2002 --- http://www.techreview.com/articles/tristram0402.asp
Encouraged by such statistics, some companies are offering next-generation devices that give consumers either new ways to do old things or new functions we didn’t know we needed. At last November’s Comdex, the world’s biggest trade show for consumer electronics, Bill Gates spent much of his keynote speech predicting the coming popularity of tablet-style wireless computers, which will supposedly replace today’s keyboards with pen-based computing. National Semiconductor was pushing for its all-in-one Geode Origami Mobile Communicator, a prototype that folds up into different shapes depending on its use, transforming itself into a digital camera, a digital video recorder, a videoconferencing terminal, an Internet access device, an Internet picture frame, an MP3 player and a few other things to boot. A company called Senseboard Technologies showed off its virtual keyboard, which lets you type in the air by measuring the movements of your fingers and converting them to readable e-mail messages. Then there was the Chat Pen from Ericsson, which records your handwriting on digital paper, transmits this digitized scrawl to your cell phone, and sends it along to any e-mail address. There are countless others, in prototype and production.
Most of these concepts, of course, will tank. Not because they don’t offer enough processing power or storage capacity. Not because they don’t offer compatibility with the latest wireless protocol. Not because they don’t do what they’re supposed to do, although that can be an issue. Unh-uh. The ultimate success or failure of any given gizmo will depend on a million or so people picking it up and deciding whether it feels good or not.
“Most good products are designed around the person, not the technology,” says Donald A. Norman, principal at Fremont, CA-based Nielsen Norman Group and author of The Invisible Computer, a manifesto for replacing “technology-centered” products with “human-centered” ones. “It’s not a case of people saying, ‘Gee, look at this neat technology.’ It’s a case of people saying, ‘Gee, look at what this thing can do for me.’”
A message from David Fordham on March 7, 2002
We have had superb results using The Accounting Library, by Excelco. It is easy to learn, astoundingly comprehensive, intuitive, and very complete in its line-up of accounting packages.
We give the students a case study (in most semesters, a contrived and well-developed hypothetical company replete with all sorts of "easter-eggs" in the internal-control area, -- but occasionally a real live consulting engagement). The students then use The Accounting Library to select a fitting package, and justify why they select their package over the others compared by TAL.
The CEO of Excelco is a close friend of Ralph Benke, one of our emeritii faculty, and they keep us updated with the latest edition. I don't know if they have an educational version or not, but it is certainly worth checking out. Their product is one of the most comprehensive that I've run across, at least for small to medium-large companies. They won't handle a Boeing or General Motors, but would easily handle a Weyerhauser or Starbucks or Starlight Plastics, all the way down to a one-chair barbershop.
David Fordham
James Madison UniversityFrom:
Jeff Romine
To: AECM@LISTSERV.LOYOLA.EDU
Sent: Thursday, March 07, 2002 5:58 PM
Subject: Re: questionCan someone provide the name of the software package that allows students to input the answers to questions about a company and then will select several accounting packages for consideration? I would also appreciate hearing if anyone has good or bad experiences to share. - Jeff Romine
Fraud Continues to Haunt Online Retail Online fraud losses for 2001 were 19 times as high, dollar for dollar, as fraud losses resulting from offline sales, GartnerG2 found. http://www.newmedia.com/default.asp?articleID=3427
March 11, 2002 message from Jagdish Gangolly
Ron,
I have been using PGP (Pretty Good Privacy) to illustrate most concepts in the area (Encryption/Decryption, Digital signatures, Digital certificates, Public Key Infrastructure, certificate authorities,key ring, ...).
It is freely available for download for MS-Windoze. Most unix installations will probably have it installed.
It is also very easy to use. Even some students in my class who have very little background are able to use it in a matter of days.
Hope this helps.
Regards,
Jagdish
Bob Jensen's network security threads are at http://www.trinity.edu/rjensen/ecommerce/assurance.htm
From The Wall Street Journal Accounting Educators' Review on March 7, 2002
TITLE:
Vivendi Posts Big Loss for 2001 After Write-Down of Goodwill
REPORTER: John Carreyrou
DATE: Mar 06, 2002
PAGE: B2
LINK: http://online.wsj.com/article/0,,SB1015349100950078120.djm,00.html
TOPICS: Accounting, Goodwill, Accounting Theory, International Accounting,
Valuations
SUMMARY: Vivendi Universal SA reported the biggest loss in French corporate history due to a 15.7-billion-euro write-down of goodwill. Additional write-downs of assets and increases in reported debt will occur when Vivendi begins reporting under U.S. GAAP. Questions focus on accounting for goodwill and differences between U.S. GAAP and French GAAP.
QUESTIONS:
1.) Describe accounting for goodwill under current U.S. GAAP. Describe what the article refers to as "old U.S. rules." Compare and contrast accounting for impaired goodwill under current U.S. GAAP and old U.S. GAAP.
2.) The article states that "[u]nder the old U.S. rules, companies could write down goodwill gradually, over many years. But, under the new rules, the goodwill has to be written down entirely as soon as it is deemed overvalued." Do you think that this statement fairly reflects the old and new rules for accounting for goodwill? Support your answer.
3.) What differences between French GAAP and U.S. GAAP are mentioned in the article? Compare and contrast French GAAP and U.S. GAAP on these issues.
4.) Why would a French corporation prepare financial statements under U.S. GAAP? Is Vivendi any less profitable when financial statements are prepared in accordance with U.S. GAAP? Support your answer.
Reviewed
By: Judy Beckman, University of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Renaissance Secrets (including how
women worked within societal and cultural constraints)
http://www.open2.net/renaissance2/doing/doing.html
New from JASC Software
After Shot picks up where your digital camera leaves off so you can complete all your photo tasks quickly and easily. Designed to work the way you do, After Shot is filled with amazing, easy-to-use tools that are literally just a click or two away. After Shot makes your digital photography experience what it should be – fun, fast, and simple! --- http://deals.jasc.com/promos/ashot/EAFSFS.asp
Patrick Charles forwarded the link http://www.icaew.co.uk/index.cfm?AUB=TB2I_30478&CFID=1346135&CFTOKEN=3
Seven of Europe’s leading accountancy Institutes* have announced a joint project to explore how to bring their professional qualifications closer together within, approximately, five years.
The Institutes hope that the project will result in the greater part of the content of the curricula for their qualifications being common to all the Institutes. The Institutes will also explore the potential for common learning materials, education, examination and other forms of assessment for the proposed common content.
Michael Groom, President of the Institute of Chartered Accountants in England and Wales, commented:
"Our members operate in a global business environment and the common content project would enhance the portability of their qualification. The Institutes involved in the project believe that there is significant and growing demand for the highest quality global accountancy qualifications. We are working together because we can see real benefits from the project to the wider business community as well as for our members, their firms and their employers."
The Institutes envisage that a prospective member would be able to satisfy the assessment criteria for the common content in any of the participating countries. A prospective member would satisfy the national content in the country in which he or she wants Institute membership or the right to practise.
Each Institute will consult the appropriate supervisory, regulatory and examination bodies about this project as well as its members, their firms and other employers of members. The participating Institutes also intend to advise other major Institutes, the International Federation of Accountants (IFAC) and the Federation of European Accountants (FEE) about the nature of the project and seek their involvement at the appropriate time.
*The seven Institutes participating in the project are:
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Ordre des Experts-Comptables (OEC) (France)
- Institut der Wirtschaftsprüfer (IDW) (Germany)
- Institute of Chartered Accountants in Ireland (ICAI)
- Consiglio Nazionale de Dottori Commercialisti (CNDC) (Italy)
- Koninklijk Nederlands Instituut van Registeraccountants (NIVRA) (The Netherlands)
- Institute of Chartered Accountants of Scotland (ICAS)
Background:
Under the common content project, the Institutes would retain their respective national professional qualifications but the greater part of the curricula for those national qualifications would become common to all the Institutes. In order to implement the project, therefore, the Institutes need to:
agree a common content for the curricula of all their qualifications; and identify a national content for the curriculum of each individual qualification. A prospective member of an Institute would become qualified by satisfying the assessment criteria for the common content in any participating country and for the national content in the particular country or countries in which he or she wants Institute membership or the right to practise. Satisfying the criteria for the national content with ICAEW, ICAS or ICAI would, as now, enable members to practise throughout the United Kingdom and Ireland.
The common content will be developed on the assumption that each Institute’s qualification is a business and finance qualification.
The common content will be designed to:
be attractive to top quality graduates and other potential entrants to the profession; be relevant to accounting firms and other businesses who train, employ or use the services of holders of the qualifications; facilitate the use of global education and training; and meet the increased competition from other qualifications and career paths (with or without qualifications).
SPECIAL REPORT: THE TECH REBOUND Tech's
Best Hope: Pockets of Prosperity Within the industry, some sectors will outrun
others. And within sectors, only some companies will benefit. But 2002 sure will
beat 2001
http://www.businessweek.com/technology/content/mar2002/tc20020315_8603.htm?c=bwtechmar19&n=link3&t=email
Mark Twain: A Film Directed by Ken Burns (Literature, History) --- http://www.pbs.org/marktwain/
Early Modern Women Resources http://35a-505.umd.edu/emw/early_modern.php3
Most K-12 textbooks are inspired more by political correctness than facts. John Hubisz is a leading scientist attempting to force publishers to get the facts right.
March 5 Message from John L. Hubisz [hubisz@mindspring.com]
The website is finally up and running. The site address is http://www.science-house.org/middleschool/ and can be accessed now.
This note is being sent to those folks, who over the past year expressed an interest in Middle School physical science. Most were following up a reference to a report on a review of several middle school physical science books mentioned in a newspaper article, a newsmagazine, a newsletter, on a radio talk show, in a TV interview, or by word of mouth. I want to be able to provide valuable assistance to anyone and everyone interested in seeing to it that the Middle School student's experience in physical science is a positive one and one that encourages further interest in the study of science.
Feel free to make suggestions and contributions to improve the site's content.
My aim is to keep the tone positive. When errors are cited, there will be suggestions for improvement. I will try to influence states and school districts to see that for the most part their methods of choosing textbooks is seriously flawed and needs to be changed.
Best wishes,
John L. Hubisz
Hubisz@unity.ncsu.eduJohn L. Hubisz, Physics Department, Box 8202, North Carolina State University, Raleigh NC 27695-8202; hubisz@unity.ncsu.edu, (919)515-2515, (919)515-7331 FAX
Reply from Jane Jackson
Colleagues:
Below are excerpts from an important new book that reviews HIGH QUALITY middle school science programs. It's a result of research by the Education Development Center, Inc., in Boston.You can easily download the several pdf documents that constitute the book (256 pages) at http://www.middleweb.com/EDC/EDCscience.html
See also http://www.middleweb.com/EDC/EDCmain.html for a new book that reviews high quality middle school MATH programs.
Cheers, Jane Jackson,
Dept. of Physics, Arizona State University
Invasion of the "Porn Nappers" Beware: Smut-site owners are waiting to grab your URL if you allow your registration for it to lapse --- http://www.businessweek.com/bwdaily/dnflash/mar2002/nf2002037_2837.htm?c=bwtechmar08&n=link3&t=email
From The AccountingWeb on March 4, 2002
Book Recommendation: Excel 2000 Answers, By Gail Perry, CPA
A whole book of Excel 2000 Answers for less than the price of one support call! Why pay $50, $100, $150, or even more for one phone call to tech support when you can have the answers you need at your fingertips for under $25? Get this valuable, reader-friendly book and you'll get hundreds of answers to all of your basic to advanced Excel 2000 questions, straight from the databases of Stream International--the world's largest third-party tech support organization. http://www.amazon.com/exec/obidos/ASIN/0072118830/accountingweb
Hi George,
I am back for a day and hundreds of email messages in a queue. But your message below caught my eye.
Utility functions are never identical between people. What is ideal for one is sub-optimal for another, and Arrow's Impossibility Theorem tells us that it is impossible to optimize everybody's utility at the same time (maybe in heaven?)
Utility functions are temporal. When I was a newly minted graduate, the ideal job, I thought, would was awaiting me Colorado where I planed to hold class 12 hours per week for a full salary while skiing and chasing women the rest of the week. Professor Herb Miller, who was a visiting professor at Stanford at the time, took me under his wing and convinced me that I would be miserable if I did not choose a research university where I could teach six hours a week and do research for 70 hours a week. Turned out he was correct. (Among other things, I'd be dead given my hot dog style of skiing.)
Some faculty love face-to-face interactions with students all day long (Alice Nichols at FSU comes to mind during the four years that I was chair of FSU's accounting department). Most research professors would run and hide if students wanted to interrupt them all day long. Some professors will give all the time in the world to graduate students but prefer to brush away the undergraduates (or vice versa).
When I was a newly minted assistant professor at Michigan State, one of my colleagues taught the first economics course to over 1,000 students every semester (some live and some on piped TV into dormitory classrooms where TAs took role and answered questions). Al M. asserted that the best job in the university was to teach over 1,000 students each term. Then you never had to see a student, read a paper, or grade a test (computers graded all tests). It was like being the preacher whose only duty was to give one sermon a week.
The answer pure and simple is that colleges are big institutions where faculty and students have different utilities and needs. I am really bothered by the publish or perish mentality that shuts down the really great face-to-face teachers outside the classroom unless they were mistakenly (in the eyes of some colleagues) given tenure with little or no research on their record. At the same time, I am bothered by research professors who collect a paycheck but can never be found on campus.
My advice is to march to your own drummer, but only after you have tenure. Hopefully, however, someone is tending to the flock on campus.
Bob Jensen
-----Original Message-----
From: glan@UWINDSOR.CA [mailto:glan@UWINDSOR.CA]
Sent: Monday, March 11, 2002 9:20 AM
To: AECM@LISTSERV.LOYOLA.EDU Subject:
Re: Acctg. Prof. - "My Dream Campus Interview"Is there a "dream" teaching job? Aside from pecuniary incentives and recognizing the diversity of situations and preferences, is there an "ideal" teaching load, research atmosphere and level of interaction with faculty and students?
Should the regular course load in the business school be three and three i.e. a total of six courses per year or a different number? Class size will also be a factor- should there be class limit to say third and fourth year classes in accounting ? Is it preferable to teach three sections of the same course in a semester (one prep) or to have two or three preps ? Do you find a large amount of difference in the number of hours you spend preparing for some accounting courses as opposed to other accounting courses? ( A senior accounting faculty, who has retired a while ago, once told me that accounting is like throwing jello on the wall -- it does not stick; hence a lot of preparation is required.) Do availability of T.As and G.As make a big difference, especially re marking of assignments? Do you mark all your midterms and final exams or do you make use of T.As and G.As to mark some exams?
Should there be a course or two off for those actively doing research ?Is it the dean's job to ensure that the faculty have the data bases (such as CRSP tapes and COMPUSTAT)or is it the responsibility of the faculty member to do whatever it takes to have access to the data? (e.g. obtaining permission and commuting to another university that have these data). Is having the time to do research the most important factor?
Do you have students waiting in line outside your office to see you during your office hours? I am amazed by my neighbour- there is always one or two students in his office during his office hours and usually I have to navigate through a throng of students waiting in the hallway to see him to get to my office. ( I only have a few students occasionally coming to see me!). Should faculty members, especially the new ones, spend more time in the office?
In the final analysis, what would you consider to be the significant rewards of a "dream" teaching job? The flexibility of the working hours, the opportunities to travel to exotic places for conferences, the success of former students, self-actualization...
George Lan
University of WindsorOn 10 Mar 2002, at 17:17, Barry Rice wrote:
From: The Chronicle of Higher Education, Wednesday, March 6, 2002. http://chronicle.com/jobs/2002/03/2002030601c.htm
"Driving home from my last campus interview, I felt like Sarah Hughes making a perfect landing on her Olympic gold figure-skating routine. As a tenured associate professor of accounting and business at a small > private college in the Midwest, I had ventured out on the job market for the first time in 18 years..."
Book Recommendation: Practice What You
Preach, By David Maister
Maister, a professional service consultant, surveyed 6,500 employees at 50
worldwide companies to evaluate the relationship between company financial
performance and employee satisfaction and loyalty. Here, he offers detailed
commentary from CEOs, managers and staffers, and analysis of the survey results.
http://www.amazon.com/exec/obidos/ASIN/0743211871/accountingweb
From Cindy
This is an interesting site that might be helpful in understanding why this war is taking so long.
http://wire.ap.org/APpackages/caves_flash/index.html
Paul Adams works up a lather over the Simple Object Access Protocol, a fast, easy, XML-based way for Web aps to talk to each other --- http://hotwired.lycos.com/webmonkey/02/08/index0a.html
Bob Jensen's XML threads are at http://www.trinity.edu/rjensen/xmlrdf.htm
The AccountingWeb's Book Recommendation: Strategic Management of Professional Service Firms, by Bente R. Lowendahl
Professional service firms play an increasingly important role in the value creation of today's business as well as public sector organizations. This book describes in detail the driving forces behind the challenges involved in management of a professional service firm. Based on in-depth studies of firms in multiple industries, the book presents a number of examples as well as a framework for the development of firm strategies. http://www.amazon.com/exec/obidos/ASIN/8716135083/accountingweb
Forwarded on March 5, 2002 by Desiree Pratt
Here's
a look at who's likely to 'fess up as the new, more virtuous era of
bookkeeping begins. Expect earnings to take a hit. By Michael Brush Even if there are no more disasters like Enron lurking out there, one thing’s for sure: We’re moving into an era of stricter accounting standards that will clip the earnings outlook -- and stock prices -- for lots of companies. CAs
an investor, you need to get familiar with the most common accounting
ploys – like the ones outlined below -- so you can steer clear of
companies abusing them. Pressure from Congress and regulators is likely
to make executives get religion on accounting and back away from
aggressive practices over the next few quarters. |
The World's Flags Given Letter Grades (some reviews are really funny) --- http://138.251.140.21/~josh/flags/intro.html
Forwarded by Dick Haar
A Flag As A Tax Symbol? A visitor from Holland was chatting with his American friend and was jokingly explaining about the red, white and blue in the Netherlands flag. "Our flag symbolizes our taxes," he said. "We get red when we talk about them, white when we get our tax bill, and blue after we pay them." "Oh, that's the same with us," nodded the American, "Only we see stars, too!"
The owner of a small deli was being questioned by an IRS agent about his tax return. He had reported a net profit of $80,000 for the year. "Why don't you people leave me alone?" the deli owner said. " I work like a dog, everyone in my family helps out, the place is only closed three days a year, and you want to know how I made $80,000?" "It's not your income that bothers us" the agent said. "It's these deductions. You listed six trips to Bermuda for you and your wife." "Oh, that," the owner said smiling. "I forgot to tell you -- we also deliver."
A new arrival, about to enter the hospital saw two white-coated doctors searching through the flower beds. "Excuse me," he said, "have you lost something?" "No" replied one of the doctors. "We're doing a heart transplant for an IRS Agent and want to find a suitable rock."
Q: Are birth control pills deductible? A: Only if they don't work.
There is only one thing worse than the flu season -- the tax season. You can recover from the flu.
Internal Revenue Service Theme Song
Tax his cow, tax his goat,
tax his pants, tax his coat.Tax his crop, tax his work,
tax his ties, tax his shirt.Tax his chew, tax his smoke,
teach him taxing is no joke.Tax his tractor, tax his mule,
tell him taxing is the rule.Tax his oil, tax his gas,
tax his notes, tax his cash.Tax him good and let him know
that after taxes he has no dough.If he hollers, tax him more;
tax him till he's good and sore.Tax his coffin, tax his grave,
tax his sod in which he's laid.Put these words upon his tomb,
"Taxes drove him to his doom."After he's gone, we won't relax.
We'll still collect inheritance tax.
And last but not least - Death &
Taxes
A businessman on his deathbed called his friend and said "I want you to
promise me that when I die you will have my remains cremated." "And
what do you want me to do with your ashes?" the friend asked. The
businessman said, "Just put them in an envelope and mail them to the
Internal Revenue Service and write on the envelope 'Now you have
everything'."
HAPPY TAX SEASON
Forwarded by Don Ramsey
Susie Jones goes to the cemetery to visit her husband's grave, but she can't remember the exact location of the plot. The office tells her they have no plot under the name Herman Jones, but they do have one for Susie Jones. "That's him!" she says. "He put everything in my name."
Forwarded by George Lan
Some differences between an accountant and a financial analyst.
You have probably heard the joke about accountants giving you the numbers that you want. Here is a common one about financial analysts.
A potential investor came to seek investment advice from a financial analyst (F.A.). The F.A. told the investor, " I have the experience, you have the money."
Several weeks later, after the investor has lost all the money from following the advice of the F.A., the investor came to see the F.A. and the F.A. said to the investor:
"You have the experience, I have the money!"
Bob Jensen's Enron humor is at http://www.trinity.edu/rjensen/fraud.htm#Humor
Forwarded by Dick Haar
A man left from work one Friday afternoon. But instead of going home, he stayed out the entire weekend hunting with the boys & spending his entire paycheck. When he finally appeared at home, Sunday night, he was confronted by his very angry wife and was barraged for nearly 2 hours with a tirade of yelling about his actions...
Finally his wife stopped the nagging and simply said to him "How would you like it if you didn't see me for 2 or 3 days?"
To which he replied, "That would be fine with me."
Monday went by & he didn't see his wife. Tuesday & Wednesday came & went with the same results. On Thursday, the swelling went down just enough where he could see her a little out of the corner of his left eye.
Dear Grandson:
I have become a little older since I saw you last, and a few changes have come into my life since then. Frankly, I have become a frivolous old gal. I am seeing five gentlemen everyday.
As soon as I wake up, Will Power helps me get out of bed. Then I go to see John. Then Charlie Horse comes along, and when he is here he takes a lot of my time and attention.
When he leaves, Arthur Ritis shows up and stays the rest of the day. He doesn't like to stay in one place very long, so he takes me from joint to joint.
After such a busy day, I'm really tired and glad to go to bed with Ben Gay. What a life. Oh yes, I'm also flirting with Al Zymer.
Love,
Grandma
P.S. The preacher came to call the other day. He said at my age I should be thinking of the hereafter. I told him, "Oh I do it all the time. No matter where I am, in the parlor, upstairs, in the kitchen, or down in the basement, I ask myself ... "Now, what am I here after?"
A blonde was bragging about her
knowledge of state capitals. She proudly says, "Go ahead, ask me, I know
all of them." A friend says, "OK, what's the capital of
Wisconsin?"
The blonde replies, "Oh, that's easy: W."
What did the blonde ask her doctor when
he told her she was pregnant?
"Can you run a DNA test to see if it's mine?"
Forwarded by Auntie Bev
Puns:
My wife really likes to make pottery, but to me it's just kiln time.
Dijon vu - the same mustard as before.
Practice safe eating - always use condiments.
I fired my masseuse today. She just rubbed me the wrong way.
A Freudian slip is when you say one thing but mean your mother.
Shotgun wedding A case of wife or death.
I used to work in a blanket factory, but it folded.
I used to be a lumberjack, but I just couldn't hack it, so they gave me the axe.
A man needs a mistress just to break the monogamy.
Marriage is the mourning after the knot before.
A hangover is the wrath of grapes.
Corduroy pillows are making headlines.
Is a book on voyeurism a peeping tome?
Dancing cheek-to-cheek is really a form of floor play.
Banning the bra was a big flop.
Sea captains don't like crew cuts.
Does the name Pavlov ring a bell?
A successful diet is the triumph of mind over platter.
Time flies like an arrow. Fruit flies like a banana.
A gossip is someone with a great sense of rumor.
Without geometry, life is pointless.
When you dream in color, it's a pigment of your imagination.
Condoms should be used on every conceivable occasion.
Reading whilst sunbathing makes you well-red.
When two egotists meet, it's an I for an I.
If electricity comes from electrons... does that mean that
Morality comes from morons?
Forwarded by Debbie Bowling
Garbage Lawyer Department
If you damage your car by hitting a wild animal (such as a deer), you can now
sue the wildlife agency in the state where the accident happened. See http://www.washtimes.com/sports/20020310-39328075.htm
Forwarded by Bob Overn
A programmer is someone who solves a problem you didn't know you had in a way you don't understand.
An auditor is someone who arrives after the battle and bayonets then counts all the wounded.
A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain. (Mark Twain)
An economist is an expert who will know tomorrow why the things he predicted yesterday did not happen today.
A statistician is someone who is good with numbers but lacks the personality to be an accountant.
A mathematician is a blind man in a dark room looking for a black cat that is not there.
A topologist is a man who does not know the difference between a coffee cup and a doughnut.
A lawyer is a person who writes a 10,000-word document and calls it a "brief."
A psychologist is a man who watches everyone else when a beautiful girl enters the room.
A professor is one who talks in someone else's sleep.
A consultant is someone who takes the watch off your wrist and tells you the time.
A diplomat is someone who can tell you to go to Antarctica in such a way that you will look forward to the trip.
Forwarded by Dick Haar
Secrets if a Successful Marriage
1. Two times a week, we go to a
nice restaurant, have a little wine, some good food and companionship.
She goes Tuesday's, I go Friday's.
2. We also sleep in separate beds. Hers is in San Francisco and mine is in Denver.
3. I take my wife everywhere, but she keeps finding her way back.
4. I asked my wife where she wanted to go for our anniversary. "Somewhere I haven't been in a long time!" she said. So I suggested the kitchen.
5. We always hold hands. If I let go, she shops.
6. She has an electric blender, electric toaster, and electric bread maker. Then she said, "There are too many gadgets, and no place to sit down!" So I bought her an electric chair.
7. My wife told me the car wasn't running well because there was water in the carburetor. I asked where the car was. She told me, "In the lake."
8. She got a mudpack and looked great
for two days.
Then the mud fell off.
9. She ran after the garbage truck, yelling, "Am I too late for the garbage?" The driver said, "No, jump in!"
10. Remember....Marriage is the number one cause of divorce.
11. Statistically, 100% of all divorces start with marriage.
12. I married Miss Right. I just didn't know her first name was Always.
13. I haven't spoken to my wife for 18 months. I don't like to interrupt her.
14. The last fight was my fault. My wife asked, "What's on the TV?"...I said, 'Dust!"
15. In the beginning, God created earth
and rested.
Then God created man and rested. Then God created
woman............
Since then, neither God nor man has rested.
Forwarded by Dick Haar
1. If you're too open minded, your brains will fall out.
2. Age is a very high price to pay for maturity.
3. Going to church doesn't make you a Christian any more than going to a garage makes you a mechanic.
4. Artificial intelligence is no match for natural stupidity.
5. If you must choose between two evils, pick the one you've never tried before.
6. My idea of housework is to sweep the room with a glance.
7. Not one shred of evidence supports the notion that life is serious.
8. It is easier to get forgiveness than permission.
9. For every action, there is an equal and opposite government program.
10. If you look like your passport picture, you probably need the trip.
11. Bills travel through the mail at twice the speed of checks.
12. A conscience is what hurts when all your other parts feel so good.
13. Eat well, stay fit, die anyway.
14. Men are from earth. Women are from earth. Deal with it.
15. No husband has ever been shot while doing the dishes.
16. A balanced diet is a cookie in each hand.
17. Middle age is when broadness of the mind and narrowness of the waist change places.
18. Opportunities always look bigger going than coming.
19. Junk is something you've kept for years and throw away three weeks before you need it.
20. There is always one more imbecile than you counted on.
21. Experience is a wonderful thing. It enables you to recognize a mistake when you make it again.
22. By the time you can make ends meet, they move the ends.
23. Thou shall not weigh more than thy refrigerator.
24. Someone who thinks logically provides a nice contrast to the real world.
25. Blessed are they who can laugh at themselves for they shall never cease to be amused.
Also forwarded by Dick Haar
The elder priest speaking to the younger priest said, "I know you were reaching out to the young people when you had bucket seats put in to replace the first four pews. It worked. We got the front of the church filled first."
The young priest nodded and the old one continued, "And, you told me a little more beat to the music would bring young people back to church, so I supported you when you brought in that rock'n roll gospel choir that packed us to the balcony."
"So," asked the young priest, "What's the problem?"
"Well," said the elder priest, "I'm afraid you've gone too far with the drive-thru confessional."
"But Father," protested the young priest, "My confessions have nearly doubled since I began to do that!"
"I know, I know, my son, but that flashing neon sign "Toot 'n Tell or Go to Hell" really has to go."
And that's the way it was on March 25, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
Bob
Jensen's New Bookmarks on March 4, 2002
Bob
Jensen at Trinity
University
Quotes of the Week
Quotations on the Topic of Investment Banking, Structured Financing, and Derivatives
JP Morgan – whose lawyers must be working overtime
– is refuting any wrongdoing over credit default swaps it sold on Argentine
sovereign debt to three hedge funds. But the bank failed to win immediate
payment of $965 million from the 11 insurers it is suing for outstanding surety
bonds.
Christopher Jeffery Editor, March 2, 2002, RiskNews http://www.risknews.net
Note from Bob Jensen:
The above quotation seems to be Year 2002 Déjà Vu in terms of all
the bad ways investment bankers cheated investors in the 1980s and 1990s.
Read passage from Partnoy's book quoted at http://www.trinity.edu/rjensen/book02q1.htm#022502
Enron was its own investment bank on many deals, especially in credit derivatives. You can read the following at http://www.trinity.edu/rjensen/fraud.htm
Selected quotations from "Why Enron Went Bust: Start with arrogance. Add greed, deceit, and financial chicanery. What do you get? A company that wasn't what it was cracked up to be." by Benthany McLean, Fortune Magazine, December 24, 2001, pp. 58-68.
Why Enron Went Bust: Start with arrogance. Add greed, deceit, and financial chicanery. What do you get? A company that wasn't what it was cracked up to be."
In fact, it's next to impossible to find someone outside Enron who agrees with Fasto's contention (that Enron was an energy provider rather than an energy trading company). "They were not an energy company that used trading as part of their strategy, but a company that traded for trading's sake," says Austin Ramzy, research director of Principal Capital Income Investors. "Enron is dominated by pure trading," says one competitor. Indeed, Enron had a reputation for taking more risk than other companies, especially in longer-term contracts, in which there is far less liquidity. "Enron swung for the fences," says another trader. And it's not secret that among non-investment banks, Enron was an active and extremely aggressive player in complex financial instruments such as credit derivatives. Because Enron didn't have as strong a balance sheet as the investment banks that dominate that world, it had to offer better prices to get business. "Funky" is a word that is used to describe its trades.
I was particularly impressed, as were all people who phoned in, by the testimony of Scott Cleland (see Tuesday, January 15) and then click on the following link to read his opening remarks to a Senate Committee on December 18. If you think the public accounting profession has an "independence problem," that problem is miniscule relative to an enormous independence problem among financial analysts and investment bankers --- two professions that are literally rotten to the core. Go to http://www.c-span.org/enron/scomm_1218.asp#open
A portion of Mr. Cleland's testimony is quoted below:
Four, it's common for analysts to have a financial stake in the companies they're covering. That's just like, essentially, allowing athletes to bet on the outcome of the game that they're playing in.
Five, most payments for investment research is routinely commingled in the process with more profitable investment banking and proprietary trading. The problem with this is it effectively means that most research analysts work for the companies and don't work for investors.
Six, credit agencies may have conflicts of interest.
Seven, analysts seeking investment banking tend to be more tolerant of pro-forma accounting and the conflict there is, essentially, the system is allowing companies to tell -- you know, to make up their own accounting. To describe their own financial performance, that no one then can compare objectively with other companies.
Eight, surprise, surprise, companies routinely beat the expectations of a consensus of research analysts that are seeking their investment banking business.
You can read about traunches and other misuses of derivatives by investment bankers in structured financings at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#CreditDerivatives
Other Quotations
Just another
day on the river
Forwarded by Phil Cooley http://koti.mbnet.fi/~soldier/towboat.htm (Try
it for the amazing photographs!)
Pupils eat
that which the teachers have digested
Karl
Krauss
The journalist
is stimulated by a deadline. He writes worse if he has time
Karl
Krauss
Suppose you were an idiot . . . and suppose you were
a member of Congress . . . But I repeat myself.
Mark Twain
Expansion
means complexity and complexity decay.
Cyril
Parkinson
However, over
the last decade, railroads have been engaged in their own version of an
information revolution. The combination of computers and wireless systems gives
railroads greater customer service capacity and better dispatching and cost
controls—as well as dispensing with armies of clerks. Charles Dettmann,
executive vice president for operations, research and technology at the
Washington, DC-based Association of American Railroads, argues that railroads’
competitiveness—perhaps even their existence—depends on their use of
information technologies.
Don Philips, Technology Review (from MIT), March 2002 --- http://www.techreview.com/articles/philips0302.asp
"Historically,
companies have been forced to evaluate ethics programs on the basis of outputs,
such as training sessions and hotline calls, rather than real outcomes,"
said the head of Andersen's ethics group, Dr. Barbara Ley Toffler. "The
result has been misdirected investment and concern among senior executives about
the real value of these programs."
"Andersen Introduces Yardstick for Employee Ethics Programs," The
Electronic Accountant, June 15, 1999 --- http://www.electronicaccountant.com/news/1999/061599_4.htm
In particular,
it has raised awareness of “hollow swaps”, where two telecoms companies
exchange identical amounts of network capacity, then book the purchase cost as
capital expense and the sale as revenue. Although C&W says it does not use
hollow swaps, it has recently admitted to using another controversial accounting
method to book the sale of “indefeasible right of use” (IRU) contracts.
C&W booked the contracts, which give access to its telecoms network, as
upfront revenue even though they were spread over periods of up to 15 years.
Such deals — which were outlawed in 1999 by regulators in America — boosted
C&W’s revenues by £373 million in 2001.
Chris Ayres and Clive Mathieson, London Times Online, March 1, 2002 --- http://www.thetimes.co.uk/article/0,,5-222235,00.html
Bob Jensen's threads on financial derivatives instruments frauds are at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
US GAAP is
under attack on the world stage, and the case for acceptance of international
accounting standards is gaining momentum. Will the U.S. lose its authority over
how foreign firms file financial statements for the U.S. market? What's
happening and why?
http://www.accountingweb.com/item/73130
Porn websites
are making millions. Now mainstream dot.coms are asking them for advice.
Sara Gaines in The Guardian, February 25, 2002 --- http://www.guardian.co.uk/online/story/0,3605,659159,00.html
The Online
Computer Library Centre's annual review found 74,000 adult websites last year,
accounting for 2% of sites on the net, and together they bring in profits of
more than $1billon. Though many are small scale, with half making $20,000 a
year, even that figure is the envy of many mainstream brands.
Ibid
When Ashe is
not posing naked on her site, Danni's
Hard Drive, she has a growing list of business engagements. Last year these
included speeches at the Streaming Media Asia seminar in Hong Kong and the
Internet World Conference in Sydney, and Ashe has twice testified before US
congressional committees on child protection and internet-related issues.
Ibid
(Her site does not seem to offer any child protection.)
The Catholic
church gives its blessings to the Internet, saying it's a "marvelous
technological tool." But it also says that the "ideology of radical
libertarianism is both mistaken and harmful."
Farhad Manjoo, "What Would Jesus Surf?, Wired News --- http://www.wired.com/news/culture/0,1284,50757,00.html
Enron: Updates
on March 4, 2002 ---
http://www.trinity.edu/rjensen/fraud030402.htm
My answer proposed at http://www.trinity.edu/rjensen/fraudConclusion.htm#MyAnswer
My answer, albeit naive, is that auditing firms must
begin to "warrant" or "insure" their services much like
insurance companies insure against liability with limits as to what they will
pay such as limits to liability in automobile accidents. Clients should
decide how much auditing liability insurance they are willing to purchase as a
component of the total audit fee. The insured liability limit should
be publicized on Page 1 of a corporate annual report and in stock price listings
in newspapers and on the Internet. Accordingly, the amount of insured
audit liability would then become an important input into investor and creditor
decisions. Firms paying for lower audit liability would then pay the price
by having a higher cost of capital. This does not mean that all
audits should not be held accountable to identical high auditing standards or
that audit insurance claims can be filed for stock price declines. Claims
should only be filed when there is evidence of audit negligence and/or fraud.
This is not a proposal that I have worked out in any kind of detail. Two components that I would like to include are as follows:
Also see http://www.trinity.edu/rjensen/damages.htm
Dan Whatley set out to expose what he saw as Enron-style corporate malfeasance on an Internet message board. Now he has a judgment against him for $450,000. His story is not uncommon --- http://www.wired.com/news/business/0,1367,50548,00.html
Bad Flashing versus Good Flashing (Webpage Design, Authoring) --- http://www.flash99good.com/
Bob Jensen's threads on authoring are at http://www.trinity.edu/rjensen/000aaa/thetools.htm
Innovation of the
Week: Augmented Reality
Believe it or not, this may be the prototype for the killer app in portable
computing. It's called augmented reality and it alters how we see the world. But
there's still a little work to be done.
"Augmented Reality," by Steve Ditlea, Popular Science --- http://www.popsci.com/popsci/computers/article/0,12543,190327,00.html
Walk down the street, look at the world. This is reality. Now repeat, but wearing an odd-looking, bulky pair of glasses that place into your line of vision selective, relevant bits of data about the world; the data hovers in sight like virtual Post-it Notes, annotating your view. This is augmented reality. Glasses on, you glance to the right, at a vaguely familiar restaurant, and click a small button in your hand. Up pops text reminding you that Tom's Restaurant was the model for the diner on "Seinfeld"; not only that, but -- according to the glasses, at least -- the Morningside salad is worth ordering.
When the technology for augmented reality (AR) is fully developed, the gear won't amount to much more than glasses and some sort of small unit like a PDA. Right now, though, it consists of about 26 pounds of equipment that gets strapped to the back and to the head, along with a shoulder-perching flying saucer-shaped antenna. The Mobile Augmented Reality System (MARS), developed at Columbia University (not far from Tom's Restaurant), has been assembled from off-the-shelf technology, including a 1GHz Dell laptop with a graphics accelerator chip and soap-bar-sized batteries to power the display glasses and the critical positioning and orientation technologies. Strap on this rig and you look like a robothief on the lam from CompUSA.
But if you do strap on this rig, as I have, you begin to understand the profound possibilities of an AR system, which can superimpose computer-generated text, graphics, 3-D animation, sound, or any other digitized data on the real world. Think of what digital detail can accomplish when it pops up at your beck and call, to identify faces, or buildings, or the parts of an engine being repaired, or the flight number of a plane in the air, or the schedule of a train in a station.
Already, AR is providing real-time battlefield data for soldiers and giving physicians the equivalent of X-ray vision during delicate operations. Data is power, and AR promises to be a powerful way to insert data into the seen world.
Much of this will have to wait until later in this decade: The MARS system I wore, the first to take AR outdoors, cannot be comfortably used for much more than a few minutes at a time, even if you don't mind the gawking of passersby. And the coordination between the wearer and the data-display system needs to be better synchronized. But the principles of AR are well demonstrated, and better-working technology is on the way.
Continued at http://www.popsci.com/popsci/computers/article/0,12543,190327,00.html
I don't think they realize the magnitude of the service if Bob Jensen registers at MyBookmarks --- http://www.mybookmarks.com/
MyBookmarks is a free Internet service that allows you to keep your browser bookmarks and favorites online so you can access them from anywhere.
Your Internet Explorer favorites, Netscape bookmarks, and AOL favorite places can be imported to MyBookmarks to get started quickly. Our full-featured editor makes it easy to organize and search your online bookmarks. You can even export your online bookmarks back to your browser. Add instant content to your homepage by optionally making your online bookmarks public.
A demo is provided.
Email-To-FAX Service
OURFAX: Free World Wide Email to Fax Service http://www.ourfax.com/
Telephone Voice to Email Service
Copytalk is a glorified dictation
service. From any phone, you dial Copytalk's toll-free number. At the tone, you
dictate, for example, an e-mail message. Between 3 and 20 minutes later, the
message you dictated is sent on its merry way across the Internet (with or
without your review, at your option), looking exactly as if it came from your
desktop PC ---
http://www.nytimes.com/2002/01/24/technology/circuits/24STAT.html
Distinguished Lecturer of the Week
"OF HERETICS AND INTERLOPERS: IN
SEARCH OF COMMUNITY,"
A Keynote address delivered by
Arturo Madrid Murchison Distinguished Professor of the Humanities at Trinity
University http://www.trinity.edu/rjensen/arturo.htm
Hi Roger,
What is ironic is that the largest CPA firms argued civil damages to be awarded on a pro-rata basis (instead of being the deep pockets in a lawsuit where the primary defendant is bankrupt) was due to "cookie-cutter" lawsuits in which identically worded lawsuits were being filed for multiple firms whose prices had severely declined. (In some cases, the letters even had the names of the defendants wrong).
I guess we have cookie cutters on both sides.
Thanks,
Bob Jensen
Original Message-----
From: Roger Collins [mailto:rcollins@cariboo.bc.ca]
Sent: Friday, March 01, 2002 12:14 AM
To: Jensen, Robert Subject: Politics and standard settingBob, regardless of the merits of the argument, I quite like this quote from the article.. The responses show evidence of a co-ordinated US campaign against the IASB proposals, which have been criticised by Senator Michael Oxley, the chairman of the US House of Representatives' committee on financial services.
The letters include 116 from the US business community that are identical in content and even contain the same typographical error. http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT31GJ4Q4YC&live=true&tagid=FTDCZE6JFEC&subheading=accountancy
Roger
Roger Collins Associate Professor UCC School of Business
Oh Oh!
Goof of the Week
Apple's iPod can be used to copy software from display computers at stores like
CompUSA. Will it herald a new era of virtual shoplifting? --- http://www.wired.com/news/mac/0,2125,50688,00.html
When Apple introduced the iPod, the company was aware that people might use it to rip off music from the Net or friends' machines. Each new iPod, in fact, is emblazoned with a sticker that warns, "Don't Steal Music."
But it is unlikely that Apple imagined people would walk into computer stores, plug their iPod into display computers and use it to copy software off the hard drives.
Continued at - http://www.wired.com/news/mac/0,2125,50688,00.html
Here's a potential reason to stay on the job rather than retire to the golf course.
Not only can adults generate new brain cells, new research proves that these new neurons can forge new connections and fire like the older ones. In mice, anyway --- http://www.wired.com/news/business/0,1367,50724,00.html
From InformationWeek Daily of March 1, 2002
Microsoft Targets Next Generation With .Net Academic
Microsoft on Thursday released a specially priced academic version of its Visual Studio .Net software, adding extra tools for computer science students in a bid to produce a new batch of .Net-friendly programmers.
"We are very interested in getting the next generation of developers to come out of academia to understand .Net," says Michael Bronsdon, lead product manager for Microsoft's academic developer marketing. "This shows how big our investment in .Net technologies is and that we're committed to academia to ensure that there will be technologists to build for them."
Visual Studio .Net Academic contains the same set of software tools available in the professional version of Visual Studio .Net, a development suite for writing applications to run over the Internet, which was released in mid-February. The academic version adds wizards, templates, and documentation for students as well as an assignment publishing toolset, grade manager, and code-extraction tool for creating interactive software-coding tests. The package will be sold to students for $99, and universities can obtain a $799 departmentwide yearly subscription.
"It's an interesting move, but not all that surprising as Microsoft has watched with alarm as Java has become the de facto programming [platform] at universities," Summit Strategies analyst Dwight Davis says. The education market has become a "significant battleground" for the company, which hopes to prop up support for .Net by winning over converts before they reach the professional world, he says. "Microsoft can't afford to ignore that future crop of programmers." - David M. Ewalt
More on .Net Microsoft Launches Visual Studio.Net http://update.informationweek.com/cgi-bin4/flo?y=eGDa0BcUEY0V20BW7V0AL
Gates: .Net Is 'Architecture For This Decade' http://update.informationweek.com/cgi-bin4/flo?y=eGDa0BcUEY0V20BWuy0Aw
Why You Might Want A Water-Cooled Notebook
Hitachi Ltd. has developed a notebook computer with a water- based radiator system, which could become the first of its kind used in mass-produced portable computers.
Water-based solutions have long been used to cool processors in more complex devices such as supercomputers, which must be carefully maintained by users who refill the liquid if it evaporates or degrades. But by refining the quality of the solution, Hitachi has made it essentially maintenance-free and practical for use in cooling notebooks. The company says the innovation eliminates the need for fans, making the machine quieter and more durable, without raising costs or reducing power. The notebook works by pumping the solution past the hot processor through a stainless steel tube, absorbing the heat. That hot water is then pumped behind the notebook screen, where the heat radiates out into the surrounding air.
The system exists only as a prototype, but Hitachi plans to release a commercial version in Japan in the third quarter of this year, a spokesman says. While there are no formal plans beyond that, he says, the notebooks will show up in the United States eventually, and the system could be used in other components, such as servers and plasma display panels.
Brian Eisenbrandt, owner of BE Cooling in Stevensville, Mich., sells water-cooling kits for desktop machines to hobbyists over the Internet, but he's never seen the system used in a notebook. "I'm curious to see how they get it so small," he says. But if it works, he believes water-cooling is the way to go. "It's quieter, it allows you to run cooler and to use higher clock speeds." - David M. Ewalt
Read on IBM To Debut Adaptable PC Core http://update.informationweek.com/cgi-bin4/flo?y=eGDa0BcUEY0V20BXFe0Aq
When I was at the GSB, competition was cutthroat. While this may not have been healthy, I found it to be extremely motivational and became a better student because of the competition.
I really question the quality of learning if students get bombarded with solutions every time the going gets tough. I cannot say that I am proud of the following policy at my alma mater. I wonder if this means that a graduate can never disclose his or her grades. The following is only a small excerpt from Suharita Mulpuru's MBA Journal:
**************************************
SUPPORTIVE.
One of the biggest drivers of the culture at the GSB is the policy of non-grade disclosure to anyone outside the school, namely recruiters. It's so strict that any potential employer that recruits on campus and so much as asks about grades is politely requested not to return. What this policy does is that it infuses a spirit of cooperation and camaraderie amongst classmates that is unparalleled. Where competition and a cutthroat culture may be common in other places, it is not unlikely for students to share answers to homework assignments or to e-mail around exam aids that they procured from second-years. I learned this early on when I sent out a desperate plea for help on a homework assignment and was bombarded with an inbox full of solutions, many from people I'd never met.Of course, there is the flip side to non-grade disclosure. There's been vehement seesawing back and forth as professors feel students have insufficient incentive to work hard, especially during the second year. However, that is always countered by the students' argument that Stanford's culture is unique and one of the most special elements of the school.
For all their griping that students should work harder, professors at business school are nonetheless the most involved and accessible teachers I've had. My most vivid personal example involves a professor who I e-mailed in the middle of the night regarding a class question. I received a very polite, very helpful response within minutes. Many professors run their own review sections, a task many undergraduate lecturers would leave to teaching assistants. This, of course, is all the more impressive as these professors, like any others, still face the perennial pressures to publish papers and attend to research.
Professors make themselves available in many other ways, too. Nearly all are more than willing to partake in the school's Take a Professor to Lunch program, where any student is free to invite any professor to a lunch (reimbursable up to $7.50). Then there is the recently incorporated Books on Break program, where a faculty member leads a discussion of a recently published book (fiction or non-fiction) that students decide to read over the winter break. And at Student Faculty suppers, students host dinner parties for a dozen students and a faculty guest. Mine was a delightful Thai dinner whipped up by a group of second-years in the company of none other than our venerable head, Dean Joss himself. The level of accessibility among senior administration, in this case the dean of the GSB, who graciously came to a student's house for dinner, I found most impressive.
To further encourage communication among students and faculty, there are weekly WIM group sessions in which small groups of female classmates gather for a couple of hours to air concerns, complaints, commiserations and anything else to create support structures and female companionship. There are also extensive student body committees that help shape everything from the social life and academics to the information technology and sports programs. Additionally, there are monthly lunches with the deans, and quarterly surveys to gauge students satisfaction.
Stanford is also very supportive of career decisions that are 'out of the box.' There is funding available for students who opt to take low or non-paying summer internships in the public sector, as well as programs to assign students to work with alumni living abroad. There is also an Alumni Mentor Program that matches local alums with a variety of professional backgrounds with students who share their interests. The university also supports and partially subsidizes Study Trips, two week immersion experiences where students go in groups to foreign countries (the most recent ones went to Brazil, Australia, India, Russia, and Mexico) to meet with businesses to whet their appetites for international business and potentially poise them for a career abroad.
And finally, probably one of the most indispensable and camaraderie-building parts of the business school is, oddly enough, the computer lab. Open 24 hours, 7 days a week, it is a gathering point and central learning place - the venue where countless group projects come together. It ends up being a particularly social place before any big assignment is due, as numerous students congregate to one of the many workstations to finish their papers.
I'm finding that business school is good in many ways that undergrad wasn't. While there is some rigid structure that I didn't have even in college-assigned classes, mandatory attendance, class participation, name tags - it is met with a student body that is actively involved in just about every aspect of the GSB and a sense of camaraderie that breeds a wonderful and non-competitive culture.
Suharita Mulpuru --- http://www.businessweek.com/bschools/content/mbajournal/01mulpuru/5.htm*************************************
For the opinions of other MBA students at other universities, go to B Schools MBA Journals from Business Week Magazine at http://www.businessweek.com/bschools/mbajournal/index.htm?c=bwmbafeb27&n=link3&t=email
FULL-TIME MBA PROFILES
From Business Week
In 2001, W expanded our coverage of full-time MBA programs by reviewing more schools and packing profiles with extra data. Scan these 250 profiles to determine which MBA programs fit your needs and lifestyle.
http://www.businessweek.com/bschools/01/full_time_rank.htm?c=bwmbafeb27&n=link7&t=email
****************
B-SCHOOL FORUMS
Visit BW Online's interactive forums [ http://forums.businessweek.com/bw-bschools/start?c=bwmbafeb27&n=link8&t=email ] for wide-ranging discussions about management education. Search through OVER 342,000 POSTS for topics that interest you. Join in today! Here are a few samples of recent messages:
From the University of Michigan
Women Who Ruled: Queens, Goddesses, Amazons 1500-1650 http://www.umich.edu/~umma/women/
Center for Women and Information Technology http://www.umbc.edu/cwit/
From PublicationsShare.com --- http://publicationshare.com/
Free Downloadable Reports from CourseShare:
- CourseShare.com researchers have collected online survey data from both college faculty and corporate trainers regarding their online learning needs and supports. Both surveys were co-sponsored by JonesKnowledge.com and CourseShare.com and are available below:
Bonk, C. J. (2002). Online Training in an Online World. Bloomington, IN: CourseShare.com
(Note: Distribution or Reproduction of more than 50 copies of this report require permission from CourseShare.com or JonesKnowledge.com)Online Training in an Online World (Adobe PDF format :: 649 KB)
Executive Summary Only (Adobe PDF format :: 284 KB)Bonk, C. J. (2001). Online Teaching in an Online World. Bloomington, IN: CourseShare.com
(Note: Distribution or Reproduction of more than 50 copies of this report require permission from CourseShare.com or JonesKnowledge.com)
Online Teaching in an Online World (Adobe PDF format :: 308 KB)
Executive Summary Only (Adobe PDF format :: 68 KB)- As a Senior Consortium Research Fellow with the U.S. Army Research Institute (ARI), Dr. Curt Bonk of CourseShare.com has written the following major report with Dr. Robert Wisher from ARI that is now available online as well as in a hardcopy format:
Bonk, C. J., & Wisher, R. A. (2000). Applying collaborative and e-learning tools to military distance learning: A research framework. (Technical Report #1107). Alexandria, VA: U.S. Army Research Institute for the Behavioral and Social Sciences. (Note: this report has unlimited distribution.)
Click to Download PDF of this file.- Bonk, C. J., & Cunningham, D. J. (1998). Chapter 2: Searching for learner-centered, constructivist, and sociocultural components of collaborative educational learning tools. In C. J. Bonk, & K. S. King (Eds.), Electronic collaborators: Learner-centered technologies for literacy, apprenticeship, and discourse (pp. 25-50). Mahwah, NJ: Erlbaum.
Click to Download PDF of this file.
(Note: Permission to download from this site was granted by the publisher Lawrence Erlbaum Associates; call LEA at 1-800-9books9 to order the book)- Introduction section to (including a list of contributors) Bonk, C. J., & King, K. S. (Eds.). (1998). Electronic collaborators: Learner-centered technologies for literacy, apprenticeship, and discourse. Mahwah, NJ: Erlbaum. ISBN: 0-8058-2796-X (cloth); 0-8058-2797-8 (paper).
Click to Download PDF of this file.
For more on the Electronic Collaborator's Book, see: http://php.indiana.edu/~cjbonk/book.html
Table of contents:http://php.indiana.edu/~cjbonk/nbook.html#table
Book Contributors:http://php.indiana.edu/~cjbonk/nbook.html#contributor
(Note: Permission to download from this site was granted by the publisher Lawrence Erlbaum Associates; call LEA at 1-800-9books9 to order the book)
Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm
Bob Jensen's threads on education technologies are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
CPA firms are attempting to expand their assurance services in a number of areas, most notable of which is SysTrust --- http://www.trinity.edu/rjensen/ecommerce/assurance.htm#SpecialSection
However, new competition is arising in the SysTrust market. The following appears in the February 26, 2002 issue of Syllabus News:
U. Illinois, Security Firm, Start Info Assurance Center
The University of Illinois at Urbana-Champaign and Argus Systems Group, Inc., a company specializing in security technologies, jointly launched the Center for Advanced Research in Information Security. The Center will be located in the school's computer science department, which was designated as a Center of Academic Excellence in Information Assurance by the National Security Agency. The center will focus its research on next generation infrastructure security technologies, and aims to influence public policy in the area of information assurance.
For more information, visit: http://www.engr.uiuc.edu
Hi Jim,
Alternative electronic classroom systems are summarized at http://www.ala.org/acrl/is/projects/control.html
At Trinity University, we are very happy with the Insight system, although this is not the cheapest of alternatives by any means. The Insight system allows us to project any computer in a classroom on the screen. It also allows for designation of groupings of computers for team work.
The Insight system allows for the projection of the instructor's screen on every classroom computer. This makes it easier to read fine print. More importantly, students cannot be doing email, play games, or view any other software while the instructor is teaching from his or her own machine at the front of the classroom. At any point, however, the instructor can give control back to students, who will then return to whatever they were viewing before the instructor took contol of their monitors.
Hope this helps.
Bob Jensen
-----Original Message-----
From: Jim McKinney [mailto:jim@MCKINNEYCPA.COM]
Sent: Monday, March 04, 2002 6:40 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Electronic Classroom Management SoftwareDo members of the list have suggestions regarding software solutions to the following issues regarding electronic classrooms: 1) Software that allows the instructor to broadcast his/her screen to classroom computers or to receive the image from their computers.
2) Limiting the applications the students have access to on a temporary basis. For example: I am teaching a segment on Access, I don't want the students using their e-mail. After the class is over I want to enable them to use their software again. For a test on the computer I do not want the students to access most software. 3) Limiting the sites a student may go to on a temporary basis. I give exams in the classroom using a database driven web page. I would like to prevent students during the exam from accessing other web sites or instant messaging. After the exam I would like to enable full Internet access.
Does anyone have suggestions or solutions to any of these issues?
Jim McKinney
Howard University
Bob Jensen's threads on classrooms and electronic classrooms are at http://www.trinity.edu/rjensen/bookbob2.htm#Classrooms
Free TECHKNOWLOGIA Educational Technology Readings for the Week
From Infobits on March 1, 2002
ARTICLES ON TECHNOLOGIES FOR EDUCATION AND LEARNING
The theme for the January-March 2002 issue of TECHKNOWLOGIA is "Technologies for Education and Learning." Articles include:
"Solving the Connectivity Problem," by Heather E. Hudson, Professor and Director, Telecommunications Management and Policy Program, University of San Francisco Article describes different connectivity options: terrestrial wireless, satellite technologies, wireline technologies, and other technologies.
"Getting a School On-line in a Developing Country: Common Mistakes, Technology Options and Costs," by Mike Trucano and Robert Hawkins, World Links Article provides a blueprint for school officials and planners to determine the connectivity options and costs associated with getting (and keeping) schools connected.
"ThinkCycle at MIT: Sharing Distributed Design Knowledge for Open Collaborative Design," by Nitin Sawhney, Saul Griffith, Yael Maguire, and Timothy Prestero, MIT ThinkCycle is a student-led initiative at Massachusetts Institute of Technology (MIT) that seeks to develop design pedagogy and collaborative tools to address critical design challenges by working closely with universities and organizations worldwide.
"ICTs in African Schools: A Multi-Media Approach for Enhancing Learning & Teaching," by Shafika Issacs, SchoolNet Africa SchoolNet Africa is a network of organizations that promote education through the use of ICTs (information and communication technologies) in African countries, in partnership with a range of global, regional and local organizations.
"Designed for the Dumpster, Outdated Computers Bring Hope and Progress to Disadvantaged Communities," by John Thomas, Executive Director, The CURE Network, Inc. Article explains how to start a computer recycling program.
The entire issue is available on the Web at http://www.techknowlogia.org/
TechKnowLogia is published bimonthly by Knowledge Enterprise, Inc., 9926 Courthouse Woods Court, Vienna, VA 22181-6019 USA; fax: 703-242-2279; email: techknowlogia@knowledgeenterprise.org ; Web: http://www.techknowlogia.org/ Publication is in collaboration with the United Nations Educational, Scientific and Cultural Organization (UNESCO) and the Organization for Economic Co-operation and Development (OECD).
Subscriptions are free, but readers must first register to gain access to articles. Readers will then be notified by email when new issues are published.
From Infobits on March 1, 2002
RECOMMENDED READING
"Recommended Reading" lists items that have been recommended to me or that Infobits readers have found particularly interesting and/or useful, including books, articles, and websites published by Infobits subscribers. Send your recommendations to carolyn_kotlas@unc.edu for possible inclusion in this column.
A new book, published by EDUCAUSE and NACUBO, addresses technology issues related to portals and their implications for the culture, business, organization, and policies of the institution. WEB PORTALS & HIGHER EDUCATION: TECHNOLOGY TO MAKE IT PERSONAL is written by Richard N. Katz and a group of top leaders in higher education. To learn more about this publication or to order it online, visit http://www.educause.edu/pub/pubs.html
The NACUBO homepage is at http://www.nacubo.com/
Message from James L. Morrison Editor-in-Chief The Technology Source http://ts.mivu.org Phone/Fax: 919.493.1834 Home Page: http://horizon.unc.edu
Hi Bob
Below is a brief description of the articles published in the March/April 2002 issue of The Technology Source, a free, refereed, e-journal at http://ts.mivu.org
IN THIS ISSUE:
Information Technology and the Future of Education: An Interview with Diana Oblinger, by James Morrison and Diana Oblinger
Oblinger assesses the integration of information technology in higher education: its driving forces, its specific applications, its future development trends, and its current challenges. See http://ts.mivu.org/default.asp?show=article&id=983 ----
Computerizing College Composition, by Joel Foreman
Foreman describes how to use customized software for guiding student revision; manage the flow of incoming assignments, peer review, and instructor feedback; and an archive that instructors can consult to measure student proficiency. See http://ts.mivu.org/default.asp?show=article&id=967 ----
ABCs of the Virtual High School, by Kathy Winograd
Winograd interviews virtual high school leaders on the needs their schools serve, the innovations they provide to teaching/learning models, and the future paths that virtual education at the K-12 level will take. See http://ts.mivu.org/default.asp?show=article&id=988 ----
Using a Web-Based Course Management Tool to Support Face-to-Face Instruction, by Nada Dabbagh
Dabbage addresses the challenges and opportunities involved with integrating face-to-face and Web-based instructional formats. See http://ts.mivu.org/default.asp?show=article&id=938 ----
Open Knowledge and Open Source Initiatives: An Interview with MIT's Phil Long, by Steve Gilbert and Phil Long
Gilbert and Long discuss two recent initiatives at MIT, the Open Knowledge Initiative (OKI) and the OpenCourseWare Initiative (OCW), that illustrate how open source policies can support effective online course design. See http://ts.mivu.org/default.asp?show=article&id=979 ----
Drafting a Faculty Copyright Ownership Policy, by Laura Gasaway
Gasaway discusses the crucial distinctions between faculty and institutional ownership and their role in determining copyright policy. See http://ts.mivu.org/default.asp?show=article&id=982 ----
Using a Course Management System for Large Classes: Support, Infrastructure, and Policy Issues, by Doug Johnson
Johnson evaluates the implementation of a course management system in large undergraduate courses and offers solutions to problems that may arise. See http://ts.mivu.org/default.asp?show=article&id=945 ----
Training Professional Workforce Educators Online, by Sharon Pitt, Edmund Vitale, Jr., and Diane Foucar-Szocki
Pitt, Vitale, and Foucar-Szocki describe the Workforce Development Campus and offer a valuable glimpse into the future of online professional development programs. See http://ts.mivu.org/default.asp?show=article&id=947 ----
Delivering Web-Based Multimedia Using CD/Web Hybrids, by David Diaz
Diaz argues that CD/Web hybrids represent a powerful solution to numerous problems, including bandwidth limitations, overloaded servers, and slow modem speeds. See http://ts.mivu.org/default.asp?show=article&id=963 ----
Spotlight Site: The George Lucas Educational Foundation, by Stephen Downes
Downes describes this site as representing force of advocacy and public service, offering a vision for the future of education that brings us closer to realizing its potential. See http://ts.mivu.org/default.asp?show=article&id=999 ----
Letter to the Editor: Announcing Teacher Focus, an Online Community of Educators, by Lucy Vaysman
Vaysman describes a Web site designed to foster a virtual community for teachers around the globe in which they can share experiences, concerns, and practical solutions to the challenges of teaching. See http://ts.mivu.org/default.asp?show=article&id=993 ----
The Technology Source is published by the Michigan Virtual University as a service to the educational community. Please forward this announcement to colleagues who are interested in using information technology tools more effectively in their work.
As always, we seek illuminating articles that will assist educators as they face the challenge of using information technology tools in teaching and in managing educational organizations. Please review our call for manuscripts at http://ts.mivu.org/default.asp?show=call and send me a note if you would like to contribute such an article.
Many thanks.
Jim
From Infobits on March 1, 2002
FREE ONLINE ASSESSMENT TOOL
Bruce Ravelli, an instructor of sociology at Mount Royal College, Calgary, Canada, has developed a student assessment tool known as the Free Assessment Summary Tool, or FAST. FAST "allows students to anonymously submit feedback about their course and/or instructor. The data goes directly and only to individual teachers. It allows instructors to open an active, ongoing dialogue with their students about the course, content, instruction and the learning process." Rather than relegating evaluations to the end of the semester, instructors can use the tool to get and apply student feedback throughout the course term. The tool lets instructors build their surveys on the Web; results are returned in Excel format for ease of data manipulation and tabulation. For more information about FAST and to use the tool, see http://www.getfast.ca/
Passage from http://www.getfast.ca/
Traditionally, teaching assessments are conducted at the end of a course - a practice precluding students from offering constructive feedback while they are still in the course. However, conducting instructor-designed and administered web-based course assessments opens a proactive dialogue with students about teaching, the course, and the entire learning process. Seeing Student Assessment in a Brand New Light
The FAST project is committed to providing users with a simple online tool for assessing their students' impressions of their courses and their teaching. Using the software does not cost anything so if this is your first visit, become a user and see if FAST would be useful for you and your students. Also, you may want to read the FAQ's and the User Tips to provide you with an overview of the functionality of the software.
If you have any questions or comments about FAST, please enter them in the discussion board or send either of us a note - Bruce Ravelli, lead researcher and/or Zvjezdan Patz, lead programmer.
EDUCAUSE Quarterly
Volume 25, Number 1 http://www.educause.edu/pub/eq/eqm02/eqm021w.html
Viewpoints
Feature Articles
EDUCAUSE Review
January/February 2002 --- http://www.educause.edu/pub/er/erm02/erm021w.asp
Table of Contents
Features
Departments
Distance Education: The Great Debate
From Infobits on March 1, 2002
EVALUATION STRATEGIES FOR DISTANCE EDUCATION
"The many factors involved in the success of distance offerings makes the creation of a comprehensive evaluation plan a complex and daunting task. Unfortunately, what may seem the most logical approach to determining effectiveness is often theoretically unsound. For example, comparing student achievement between distance and face-to-face courses may seem a simple solution, yet the design is flawed for a number of reasons. However, theoretically sound approaches do exist for determining the effectiveness of learning systems, along with many different methods for obtaining answers to the relevant questions." In "Measuring Success: Evaluation Strategies for Distance Education" (EDUCAUSE QUARTERLY, vol. 25, no. 1, 2002, pp. 20-26), Virginia Tech faculty Barbara Lockee, Mike Moore, and John Burton explain the factors to consider when evaluating distance education (DE) programs. Sharing the experience gained from DE evaluations at Virginia Tech, they provide guidance to readers who want to set up evaluation plans at their institutions. The article is available online (in PDF format) at http://www.educause.edu/ir/library/pdf/eqm0213.pdf
The link to the Lockee et al. paper is at http://www.educause.edu/ir/library/pdf/eqm0213.pdf
Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm
From EDUCAUSE at http://www.educause.edu/
ACE-EDUCAUSE distance learning monograph published
The American Council on Education (ACE) and EDUCAUSE have just published the second monograph in a series on distributed education. Maintaining the Delicate Balance: Distance Learning, Higher Education Accreditation, and the Politics of Self-Regulation, by Judith S. Eaton, President of the Commission for Higher Education Accreditation, can be accessed in PDF format or purchased from ACE. http://www.educause.edu/asp/doclib/abstract.asp?ID=EAF1002
Abstract
Maintaining the Delicate Balance: Distance Learning, Higher Education Accreditation, and the Politics of Self-Regulation is the second monograph in a series of papers on distributed education commissioned by the American Council on Education (ACE) and EDUCAUSE. It describes the impact of distance learning on the balance among accreditation (to assure quality in higher education), institutional self-regulation, and the availability of federal money to colleges and universities. The paper confronts the challenges of protecting students and the public from poor-quality higher education, and attending to quality in an increasingly internationalized higher education marketplace.View HEBCA proof-of-concept video
Visit the EDUCAUSE Information Resources Library to view the video that was shown at a recent demonstration of the Higher Education Bridge Certification Authority (HEBCA), the Federal Bridge, and the Public Key Interoperability project. Read the press release describing the proof-of-concept event.NSF releases latest HPNC announcement
In a recently released High Performance Network Connections for Science and Engineering Research (HPNC) announcement, the NSF encourages U.S. institutions of higher education and institutions with significant research and education missions to establish high-performance (at or above 45 megabits per second) Internet connections where necessary to facilitate cutting edge science and engineering research. View the announcement and instructions for proposal submission.
Hi Kevin,
Thank you for the message below. My concern with John Sanford's report is that critics of distance education often have never tried it. Or even if they have tried it, they have never tried it with the instant message intensity of an Amy Dunbar --- http://www.trinity.edu/rjensen/book01q3.htm#Dunbar
I just do not think the armchair critics really appreciate how the Dunbar-type instant messaging pedagogy can get inside the heads of students online.
But I think it is safe to day that the Sanford-type critics will never have the motivation and enthusiasm to carry off the Dunbar-type instant messaging pedagogy. For them and many of us (actually I'm almost certain that I could not pull off what Dr. Dunbar accomplishes), it is perhaps more "suicidal" for students.
I also think that success of distance education depends heavily upon subject matter as well as instructor enthusiasm. But I think there is only a small subset of courses that cannot be carried off well online by a professor as motivated as Dr. Dunbar.
I am truly grateful that I was able to
persuade Professor Dunbar and distance education expert from Duke
University to present an all-day workshop in the Marriott Rivercenter Hotel on
August 13, 2002. If our workshop proposal is accepted by the AAA, this is
an open invitation to attend. Details will soon be available under "CPE"
at http://accounting.rutgers.edu/raw/aaa/2002annual/meetinginfo.htm
I wish John Sanford would be there to watch the show.
Thanks for helping me stay informed! Other views on the dark side are summarized at http://www.trinity.edu/rjensen/000aaa/theworry.htm
Bob Jensen
Bob,
Since I know you track information technology WRT education, I thought you might be interested in this. The original source is the "Stanford Report" cited below: TP is a listserv that redistributed it.
KevinFolks:
The article below presents an interesting take on the limitations of technology, teaching, and learning. It is from the Stanford Report, February 11, 2002 http://www.stanford.edu/dept/news/report/ . Reprinted with permission.
Regards,
Rick Reis reis@stanford.edu UP NEXT: Book Proposal Guidelines
HIGH-TECH TEACHING COULD BE "SUICIDAL"
BY JOHN SANFORD
University educators largely extol the wonders of teaching through technology. But skeptics question whether something is lost when professors and lecturers rely too heavily on electronic media, or when interaction with students takes place remotely -- in cyberspace rather than the real space of the classroom.
Hans Ulrich Gumbrecht, the Albert Guerard Professor of Literature, is one such skeptic. "I think this enthusiastic and sometimes naïve and sometimes blind pushing toward the more technology the better, the more websites the better teacher and so forth, is very dangerous -- [that it] is, indeed, suicidal," Gumbrecht said, speaking at the Jan. 31 installment of the Center for Teaching and Learning's "Award-WinningTeachers on Teaching" series.
But Gumbrecht cautioned that there are few, if any, studies either supporting or rejecting the hypothesis that traditional pedagogy is superior to teaching via the Internet or with a host of high-tech classroom aids. "If [such studies] exist, I think we need more of them," he said.
He added that he could point only to his "intuition that real classroom presence should be maintained and is very, very important," and emphasized the need for educators to critically examine where technology serves a useful pedagogical function and where it doesn't.
However, Gumbrecht allowed that, for courses in which knowledge transmission is the sole purpose, electronic media probably can do the job well enough. Indeed, given the 20th century's knowledge explosion and the increasing costs of higher education, using technology as opposed to real-life teachers for the transmission of information is probably inevitable, he said.
In any case, knowledge transmission should not be the core function of the university, he added, noting that the Prussian statesman and university founder Wilhelm von Humboldt, sociologist Max Weber and Cardinal John Henry Newman all held that universities should be places where people confront "open questions."
"Humboldt even goes so far to say -- and I full-heartedly agree with him -- they should ideally be questions without a possible answer," Gumbrecht said. He asserted the university should be a place for "intellectual complexification" and "riskful thinking."
"We are not about finding or transmitting solutions; we are not about recipes; we are not about making intellectual life easy," he continued. "Confrontation with complexity is what expands your mind. It is something like intellectual gymnastics. And this is what makes you a viable member of the society."
Paradoxically, "virtual" teacher-student interaction that draws out this kind of thinking probably would be much costlier for the university than real-time, in-class teaching, Gumbrecht said. The reason for this, he suggested, is that responding to e-mail from students and monitoring their discussion online would require more time -- time for which the university would have to pay the teacher -- than simply meeting with the students as a group once or twice a week.
In addition, Gumbrecht asserted that discussions in the physical presence of others can lead to intellectual innovation. He recalled a Heidegger conference he attended at Stanford about a year ago, where he said he participated in some of the best academic discussions of his career. Heidegger himself "tries to de-emphasize thinking as something we, as subjects, perform," Gumbrecht said. "He says thinking is having the composure of letting thought fall into place." Gumbrecht suggested something similar happens during live, in-person discussions.
"There's a qualitative change, and you don't quite know how it happens," he said. "Discussions in the physical presence have the capacity of being the catalyst for such intellectual breakthroughs. The possibility of in-classroom teaching -- of letting something happen which cannot happen if you teach by the transmission of information -- is a strength."
Gumbrecht argued that the way in which students react to the physical presence of one another in the classroom, as well as to the physical presence of their professor, can invigorate in-class discussions. "I know this is problematic territory, but I think both the positive and negative feelings can set free additional energy," he said. "I'm not saying the physical presence makes you intellectually better, but it produces certain energy which is good for intellectual production."
Asked to comment on some of the ideas Gumbrecht discussed in his lecture, Decker Walker, a professor of education who studies technology in teaching and learning, agreed that pedagogy via electronic media may work best in cases where information transmission is the goal -- for example, in a calculus course. In areas such as the humanities and arts, it may be a less valuable tool, he said.
In any case, the physical presence of teachers can serve to motivate students, Walker said. "I think young people are inspired more often by seeing other people who are older -- or even the same age -- who do remarkable things," he said. "It would be hard to replace this with a computer."
On the other hand, Walker maintained that computer technology can be a useful educational aid. One such benefit is access to scholars who are far away. "Technology can enable a conversation, albeit an attenuated online one, with distant experts who bring unique educational benefits, such as an expert on current research on a fast-moving scientific topic," Walker said. "This may greatly enrich a live class discussion with a local professor."
Walker maintained that the university environment is not in danger of being supplanted by technology. On the contrary, he noted, large businesses have adopted aspects of the university environment for their employees' professional education. For example, General Motors started GM University, whose main campus is at the company's new global headquarters in Detroit's Renaissance Center.
Museums also function in some ways like universities, he noted. For example, the Smithsonian Institution has numerous research, museum and zoo education departments
And for all the emphasis high-tech companies put on developing devices and software for remote communication, many have had large campuses constructed where workers are centralized -- a nod, perhaps, to the importance of person-to-person interaction.
Rick Reis, executive director of Stanford's Alliance for Innovative Manufacturing and associate director of the Learning Lab's Global Learning Partnerships, noted that the subject of technology in education covers a lot of territory. Few people, for example, are likely to argue that making students trudge over to the library's reserve desk to get a piece of reading material for a course, or making hundreds of hard copies, is preferable to posting it on the web, Reis said. But he added that whether the kind of teaching generally reserved for a seminar could be as effective online is an open question.
Reply from Amy Dunbar [ADunbar@SBA.UCONN.EDU]
George,
you wondered about the following Sanford statement:
>"paradoxically "virtual" teacher-student interaction that
> draws out this kind of thinking probably would be much costlier for the
> university than > real-time, in class-teaching...responding to e-mail
>from students and monitoring their discussion online would require more
> time--time for which the university would have to pay the teacher--- than simply
> meeting with the students as a group once or twice a week."Although I probably do spend more time "teaching" now that I am online (I teach two graduate accounting courses: advanced tax topics and tax research), I think the more important issue for me is "when," not "how much." My students work full time. They are available at night and on weekends, and they prefer to do coursework on weekends. Thus, I spend a lot of time at home in front of my computer with my instant messenger program open. If a student wants to talk, I'm available during pre-determined times. For a compressed six-week summer session with two classes and around 60 students, I live online at night and on weekends. With a regular semester online class, I base my online hours on a class survey of preferences. Last fall I was online from 7 to 9 or 10 at least two nights a week, Saturday afternoons, Sunday mornings for the early birds (an hour or two), and then Sunday evenings from 6 to 10. Sunday evenings were my busiest times. On the other scheduled days, I generally could do other easily interruptible tasks while I was online. Frequently a group of students would call me into a chat room, either on AIM or WebCT. I think that my online presence takes the place of "the physical presence of teachers [which] can serve to motivate students." Students log on to AIM, and they see me online. For my part, I love logging on and seeing my students online. They are just a click away.
Most of my online students think the burden of learning has been shifted to them, and I'm just a "guide on the side." And they are right. Online learning is not for everyone, but as Patricia Doherty noted, live classroom instruction isn't an option for all students, particularly students who travel in connection with their work. And just as not all live classroom instruction encompasses the dynamic interchanges described by Sanford, not all online courses will either, but I have certainly been an observer and a participant in spirited exchanges among students.
As for the comment that the university would have to pay the teacher for additional time, I'm not sure such time is quantifiable because I do other things when I am online but no one is "talking" to me. As a tenure track prof, I'm not sure how that comment would apply in my case in any event. Perhaps where the extra cost arises is in the area of class size. Handling more than 30 students in an online class is difficult. Thus, schools may have to offer more sections of online courses. __________________________________
GO HUSKIES!!! (BEWARE OF THE DOG)
Amy Dunbar ( mailto:adunbar@sba.uconn.edu 860/486-5138 http://www.sba.uconn.edu/users/ADunbar/TAXHOME.htm
Fax 860-486-4838
University of Connecticut School of Business, Accounting Department
2100 Hillside Road, Unit 1041A Storrs, CT 06269-2041
Reply from Dan Gode, Stern School of Business [dgode@STERN.NYU.EDU]
David Noble has been one of the foremost critics of distance learning for the last four years. He is widely quoted. I too have found his articles (at http://communication.ucsd.edu/dl/ ) interesting. While discussing them with my colleague today, I could not avoid noticing the irony that he himself is one of the biggest beneficiaries of the internet and distance learning.
Many of us would not have "learned" about his views without the web. He has been able to "teach" his ideas in the distance learning mode almost free only because of the web. In fact, most of the critics of distance learning have achieved their fame precisely because of the knowledge dissemination enabled by the web.
I agree that adoption of distance learning will be much slower than the expectation of many distance learning companies and universities but it will be foolhardy to ignore the gradual technological innovation in education.
A select few in New York can afford the live entertainment of Broadway, most others are grateful for the distance entertainment that is available cheaply to them. Distance learning may not replace classroom learning, but it will surely provide much needed low cost education to many.
Dan Gode
Stern School of Business
New York UniversityNote from Bob Jensen: You can read more about David Noble at http://www.trinity.edu/rjensen/000aaa/theworry.htm
Reply from Bob Jensen
Hi Jagdish,
I agree with you to a point. However, I am always suspicious of academics who see only the negative side of a controversial issue. I'm sorry, but I find David Noble to be more of a faculty trade union spokesperson than an academic. Much of his work reads like AAUP diatribe.
Those of you who want to read some of his stuff can to to in my summary of the dark side of distance education at http://www.trinity.edu/rjensen/000aaa/theworry.htm
I would have much more respect for David Noble if he tried to achieve a little more balance in his writings.
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: J. S. Gangolly [mailto:gangolly@CSC.ALBANY.EDU]
Sent: Thursday, February 28, 2002 9:37 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: The Irony of David Noble and other critics of distance learningDan,
Let me play the devil's advocate once again; this time I do so with a bit of conviction.
Noble's tirade has been against the commoditisation of instruction and the usurping of what are traditionally regarded as academic faculty prerogatives by the administrators in their quest for revenues (or cutting costs). These are real issues, and a knee-jerk reaction does no one service.
Noble's arguments are based on the actual experiences at UCLA and York. I suppose if he were to rewrite his pieces today, the list would be much longer.
Noble's reservations are also based on the distinct possibility of higher education turning into diploma mills (Reid's observation: "no classrooms," "faculties are often untrained or nonexistent," and "the officers are unethical self-seekers whose qualifications are no better than their offerings.")
I am a great enthusiast for distance learning, but I think the debate Noble is fostering is a very legitimate one. It will at least sensitize us all to the perils of enronisation of higher education. Do we need the cohorts of the likes of Lay and Skilling running the show? What guarantee do we have that once it is commoditised, a non-academic (with or without qualifications and appreciation for higher education) will "manage" it?
I do very strongly feel that distance education has a bright future, but the Noble-like debates will strengthen it in the long run. There is a need for the development of alternative pedagogies, etc.
Back in the late 60s, I was working in a paper mill in the middle of nowhere in India, and I started taking a course in electrical engineering in the distance mode (we used to call it correspondence courses). Unfortunately, those days there was no near universal eccess to computers, and it was not easy. However, it put the burden oif learning on me much more so than in my usual higher education even at decent schools (including one of the IIMs). Unfortunately, I had to discontinue it because of pressure of work.
I look at most existing distance learning today as the model T of education. We need to figure out how we can improve on it, not take it as a matter of faith.
Jagdish
Reply from Paul Williams [williamsp@COMFS1.COM.NCSU.EDU]
Jagdish point is well spoken; the issue is the commodification of higher education (and everything else for that matter). "Efficiency" is not the only value humans cherish. There is an interesting article in the last Harper's by Nick Bromell, a professor of English at UMass Amherst, titled Summa Cum Avaritia. Higher education produces substantial revenues and a good deal of the discussion about distance education is really about coopting those revenues (privatizing education for profit).
Reply from George Lan [glan@UWINDSOR.CA]
Hi Amy,
Thanks for sharing your on-line experience with us. It shows what flexible learning could achieve. However, those who think that teaching on-line or a dist. ed course is a walk in the park and that on-line courses are cash cows will probably think twice. Administrators should ensure that the classes are not too big so that teh on-line instructor can elicit the kind of interaction and learning that you mention.
The "psychiatrist", "nurse" or sometimes the "gladiator" in me prefers personal contact courses but I do recognize the value of on-line and distance education courses, especially for those to whom live classroom is not an option, as Pat and you have mentioned.
You make a critical point when you mention that "most of my online students think that the burden of learning has been shifted to them, and I'm just a "guide on the side." " Having taught some distance education courses in the past, I've noticed that the drop-out rate seems to be higher in my dist. ed courses (I agree that I have not used the power of technology and the computer to the fullest before) but could some of the students find the burden of learning on their own unbearable? In Canada, the Certified General Accountants have a high quality on-line delivery of courses for those wishing to pursue the accounting designation. In the big city centres, the students also have the choice of attending lectures-- they pay some extra fee (however, all assignments are submitted on-line, usually on a weekly basis and they are graded and returned to the student within 7 days- there is an efficient system of markers and tutors for each course). The onus to learn is on the student and several of them have to repeat the same course several times (which probably is not dependent on whether they choose to attend lectures or not). Financially and time-wise, it can be very costly to the students. But then, as stated by the economist Spence, education is a signal.
George Lan
Reply from Ross Stevenson [ross.stevenson@AUT.AC.NZ]
Hi (from the South Pacific) aecmers
I have written heaps of computer based (first year accounting) stuff that students can:
1 Use at their own pace in a teaching computer lab (my classroom) and/or 2 Use on their home computer
When writing the stuff I had 'distance learning' in mind. However, I and most of my students, enjoy the flexible computer lab approach during which they can 1 Listen to me (all stuff projected on large wall screen) or 2 Work at their pace from their monitor
In my mind, there is no doubt that a majority of (first year) students prefer the classroom (dare I say 'non-distance learning') IT approach. Some of my colleagues teach the same course with no more technology than overhead projectors
I am planning some research along the following lines
At beginning of semester, each student completes: 1 An objective profile of themselves (age, gender, English as their first language? etc.)
2 A subjective profile of themselves as to what they perceive are their preferred learning environments (IT based ? classroom? home? etc.)
At end of semester 1 more student feed back as to how they rated my classroom -IT delivery.
PURPOSE OF RESEARCH
To see if we can survey students at *beginning* of semester and advise them as to which class (lecturer & delivery style) would probably suit themI would appreciate any references to any research similar to above you are aware of.
Regards
Ross Stevenson
Auckland Uni of Technology NZ
Reply from arul.kandasamy@indosuez.co.uk
George,
you asked: could some of the students find the >burden of learning on their own unbearable?IMO, online learning isn't for everyone. I suggest a switch to the University of Hartford's live grad program when students are dissatisfied with online learning. (UConn's MSA program is an online program.) I have noticed that if students hang in, however, their attitude frequently changes. By the time my students take me for my second online class, most respond to my survey question re: online vs live preference by choosing online. I thank Bob Jensen for his kind words in yesterday's posting, but let there be no doubt that I have students who do not like online learning. For example, one student in my first online class said, "This experience was very new to me and I learned a lot, but my expectations were different b/c I didn't know this was going to be an on-line class. I don't think I could have gotten through this class without the help and support of you and my group members. Above I checked that I would prefer a live classroom setting. Tax can be confusing and I think I would understand the material better if you were telling it to me rather than me reading it on the computer. I learn better by hearing things than by reading them. Even though this class did not completely support my style of learning, I still think it is one of the best classes I have taken, mostly because of the way it is structured - group work. (And also because it has a great teacher.)" (You didn't think I would pick a comment that didn't say something positive about me, did you? ;-)) And "I just think that as much as we interacted with you Dunbar, it's just that much harder because in the end, all of your hard work making the content modules, etc. has to be self-taught on a level that I don't think any of us are accustomed to (or fully capable of yet)."
I am very interested in learning more about Canada's experience with the Certified General Accountants online courses. I didn't realize that live classes were an option. Has anyone compared outcome results for live/online vs strictly online students?
Dunbar
Reply from Thomas C. Omer (E-mail) [tcomer@UIC.EDU]
While I haven't paid much attention to David Noble I have paid attention to administrators whose incentives rest on balancing the budget rather than thinking about the educational issues that result from developing or offering online courses. It is critical that faculty who are interested in being involved with distance learning must show some solidarity in rejecting offers of distance learning based on cost measures alone. We are in the business of education, after all, not budget balancing. The extent to which administrations take advantage of faculty members exploring new ways to educate will only reduce our educational institutions to paper mills, a problem some might suggest is already occurring in many settings. Think for a moment about whether the grade you assign to a student is really within your authority, at my home institution and here at UIUC it is not, I also do not have the ability to drop or add students to a class. While this sounds like I am whining (I probably am), it also suggests that my control of the factors affecting the educational experience and outcomes is slowly degrading and adopting distance learning without explicit contracts as to what I am allowed to do and what the administration cannot do sets the stage for making distance learning a nightmare for me and potentially an educational farce for students.
I think Amy's experience has been very positive and I certainly agree that distance learning is not for every student. Unfortunately, my first experience with developing a curriculum based on Distance learning started with a discussion of the cost effectiveness of the approach not the educational issues.
I now step off the soap box,
Congratulations Amy!!!
Thomas C. Omer
Associate Professor (Visiting) Department of Accountancy
University of Illinois at Urbana-Champaign
Article of the
Week on Ubiquitous Computing
Persuasive, Pervasive Computing Project Oxygen's New Wind Remembering
Technology's Humanist Virtual Farm Aid Step Into Your New Browser Work the
Problem, People Internet2: The Once and Future Net Writable Web The Cricket
Indoor Location System MIT A.I. Lab
"Persuasive, Pervasive Computing, by Eric Brown, Technology Review, February 25, 2002 --- http://www.techreview.com/articles/brown022502.asp
In 2000, the Massachusetts Institute of Technology launched an ambitious project to transform the way the world uses computers. The old model: a box, a monitor and keyboard. The new: computers as pervasive and invisible as the air we breathe. They called it Project Oxygen.For an overview of the Project's goals, and a Q&A with its founders, see "Project Oxygen's New Wind".
Now, nearly two years out, the first technologies are rolling out of the labs. Project leaders—Laboratory for Computer Science chief Victor Zue, associate director Anant Agarwal and Artificial Intelligence Laboratory director Rodney Brooks—insist that Project Oxygen is about an idea, not products. But corporate sponsors—among them Hewlett Packard, Nokia and Philips—eagerly await their results. Technology Review went into the labs to get a sneak peak at three facets of Oxygen that show particular promise: Cricket, a location-aware computing system; the Intelligent Room, an high-tech office that doubles as a vision-interface research lab; and the Raw microprocessor, a low-power, ultra-programmable chip designed to power the handheld devices of the 21st century. Together these technologies, their creators say, will put computers everywhere—and nowhere.
A Raw Deal
Handheld computers have come a long way since Apple unveiled its Newton in 1993. Once little more than a glorified Rolodex, handhelds today rival the performance and range of applications of desktop PCs. But higher speeds and multiple, specialized processors have made them power-hungry, and battery life continues to be a limiting factor. To address the power problem, Oxygen researchers, led by Agarwal, are building a more flexible, less power-intensive chip they call the Raw Architecture Workstation, or Raw. "Today, people build custom [chips] for video, graphics, networking and so on," says Agarwal. "We have a single processor that can do all these things."
Not only does this optimize performance—especially for tasks like video processing, which bog down in memory—but it saves power, an essential feature for any small, battery-powered device. And the programmability extends not only to integrating discrete functions. It could open up exciting breakthroughs in areas such as software radios, which can easily switch between multiple cellular protocols.
By making the data paths highly programmable, Raw avoids centralized memory and register systems. "In a typical processor you may have to bounce a piece of data around. But with Raw, it goes straight to where I want it to go," says Agarwal.
The Raw architecture resembles a network of tiles, each containing features for instruction, switch instruction, data memory, logic units, registers and a programmable switch. "We pay a lot of attention to the interconnect, to the wires," says Agarwal. "If you expose the interconnect to the software you can customize how data flows through the chip. You can orchestrate the flow of data. Now my software can match up the hardware with the application."
The first device the chip will power will be Oxygen's model handheld, what they call the Handy 21. Prototype Handys integrate voice recognition, wireless communications and video—power-hungry applications that would benefit from Raw's all-in-one design. A prototype of the Raw processor, being developed with IBM Microelectronics, is expected to arrive sometime this year.
Cricket Chirps Up
At Project Oxygen, researchers believe a mobile computer can be more helpful if it knows where it is, and what's around it. Enter the Cricket Indoor Location System, a network of wireless transmitters that provides mobile devices such as Handy 21s with information about their physical location, which they can use to find static devices such as printers or exits as well as other people.
Location-tracking is a hot topic now in light of the Federal Communications Commission's "Enhanced 911" requirements that call for 95 percent of all cell phones to include automatic location identification technology such as the Global Positioning System by the end of 2005.
The goal, says LCS associate professor Hari Balakrishnan, is to develop an indoor alternative to satellite-based GPS tracking, which rarely works inside buildings and often fails outside near tall buildings.
Inside buildings, multipath and magnetic interference disrupt traditional locational devices. "Getting something to work indoors is particularly challenging," says Balakrishnan. "The goal for us is to get linear distances of within a few centimeters so you can tell where you are within a foot or so."
Cricket's trick is to have each beacon continually transmit two signals: one radio and one ultrasound signals. Because radio zips along at the speed of light and ultrasound pulses travel at the speed of sound, the Cricket software that governs the listening device built into a piece of hardware can calculate the timing difference between the two to determine location. "So if there's a gap of ten milliseconds…then you're about ten feet away," says Balakrishnan.
The low-cost, battery-powered Cricket beacons can be "slapped" on ceilings quickly without calibration, thus making for easy scalability. They're placed so any listening device can receive signals from three or four devices at once to further localize position. Cricket beacons can also send other information beyond location coordinates, for example, transmitting the identity of key resources in its purview.
The Oxygen team is also working on a "Cricket Compass" prototype that can determine which direction the listening device is facing. By equipping each listening device with several ultrasound receivers placed very closely together, they can compare the minute differences between the reception times, thus determining orientation. This capability could help direct a computer to send information to the nearest facing display, or it could enhance informational and point-of-sale applications. For example, shoppers could point their handheld toward a store display to find out about nearby sales, or museum visitors could download information on a nearby exhibit. Cricket is not wed to a particular radio frequency, and Balakrishnan says they may switch to Bluetooth if the technology takes off. Sensitive to Cricket's big-brother undertones, researchers are also designing intricate protections for user privacy.
Cricket's greatest impact may come in embedded systems that track not people in an office, but parts through a warehouse. In fact, Balakrishnan's group is experimenting with a wired library, in which every book features a radio tag tracked by a Cricket-like system. Better tracking of goods throughout their manufacture and delivery could save billions in theft, loss and inefficiency, while avoiding the privacy worries attendant to the tracking of people.
The Intelligent Room
If, as LCS director Victor Zue suggests, Project Oxygen is a "big playground," then the Intelligent Room is the cool new jungle gym in the middle. The room hosts a variety of projects exploring new collaborative tools and audio/visual interfaces. For Oxygen, the Artificial Intelligence Laboratory is focusing on voice and vision recognition technologies that will help to shape Oxygen's Enviro 21, a room-controlling device that lets users interact naturally with the computer.
At first glance, the Intelligent Room looks like a typical meeting room, albeit with a surfeit of computer projected "live board" displays on the wall. You interact with the displays via voice, light pen, gesture, or, if all else fails, a touch panel. The ceiling is studded with an array of 32 microphones, two standard video cameras and two stereoscopic video cameras.
A basic goal is to improve communications between microphones and cameras so that the computer can determine who to pay attention to. The task of identifying speakers is important both for controlling videoconferences and for letting the computer respond to user commands without getting confused. Eventually, such communications, which are orchestrated via Oxygen's innovative networking software, Metaglue, will also help the computer customize responses for each individual.
"In traditional vision systems you have mono cameras trying to detect objects by extracting the prerecorded background, but changing the lighting fools the camera," says Krzysztof Gajos, an A.I. Lab research scientist and technical director of the Intelligent Room. "With the stereo cameras, we can not only record the background image, but the background shape. It's much more robust."
Oxygen is also interested in what people are looking at, for example to help the computer decide which displays to use for optimal viewing. Software tracks the way a user is looking by combining face-recognition software with the 3D information provided by a stereo camera. To identify orientation, the head-post algorithm keys in on how facial features change during movement. Among other applications, the researchers hope to mount the tracking system on robots to improve navigation.
Researcher Harold Fox demonstrated SAM, an animated computer display that shows different emotions to reveal its state. Instead of prefacing commands by saying "computer," which can be confusing in meetings, the user just looks at the graphic, and Fox's prototype knows to listen up. When the user looks away, SAM disengages.
Whether SAM or Cricket or Raw ever find their way into the conference rooms, hallways and handhelds in everyday business is a question that will not be answered for years. But one thing is for certain: the concepts they inspire undoubtedly will.
Bob Jensen's threads on ubiquitous computing are at http://www.trinity.edu/rjensen/ubiquit.htm
Faculty Pay and Benefits Database from the Chronicle of Higher Education (Salaries) --- http://chronicle.com/stats/990/2001/
Student Project Films free from Florida
State University
FSU Films http://www.fsufilms.com/index.cfm
If you are interested in email messages regarding financial risk news, you may be interested in contacting:
Christopher Jeffery mailto:cjeffery@riskwaters.com
Editor, RiskNews
http://www.risknews.net
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Congress Online: Assessing and Improving Capitol Hill Web sites http://www.congressonlineproject.org/webstudy2002.html
From the American Accounting Association's Accounting Education News, Winter 2002, Page 1 --- http://aaahq.org/ic/browse.htm
This is the Curriculum Challenge put forth by the current AAA President, Joel Demski. I think that Joel has a longer-term goal of providing guidance for both curriculum change and research focus in accountancy academe.
The Curriculum Challenge was designed to invite and promote some "out of the box" thinking about our approaches to academic training in accounting. What follows is one idea, with ties to the curriculum structure at the University of Florida. It is aimed at our "3/2" Program in which the 150-hour requirement is satisfied, and the successful student exits with a Bachelor and Master’s degree. So the proposal does not stray from the usual building blocks of formal courses, standard graduation requirements, etc. I should also mention two of my colleagues, Karl Hackenbrack and Hadley Schaefer, have played a major role in putting this idea together.
The centerpiece of the proposal is an explicit focus on information, on what we know about information, and on what we know about accounting as a specialized information service. The basics are developed in a sequence of four courses:
(1) Measure Theory, where we cover such things as what does it mean to measure something, what scaling alternatives are available, and so on. Examples are ordinal measurement and additive, conjoint measurement. (Parenthetically, I often associate this material with an undergraduate course in mathematical psychology.)
(2) Risk Measurement, where we continue the measurement theme and cover the basics of risk, partial measures thereof, and the fact that no general measure of riskiness exists. This is also where we encounter risk assessments, hedging effectiveness, and, of course, choice under uncertainty.
(3) Economics of Organizations, where we study economic forces that influence the design and operation of organizations, be they decentralized organizations, alliances, or market arrangements. This course provides a focus on the role of institutional arrangements in efficiently delivering some good or service.
(4) Information Services, where we continue the organization theme, but now focus on the production and delivery of information services, drawing upon institutional arrangements in, say, journalism, federal data sources, and consulting. This is where we deal with institutional details that ensure "reliability" of some information service, as well as the fact there are many such services.
(These first four courses also illustrate the potential for gains to trade. I envision the first two and fourth being offered and taught by the accounting group and the third offered and taught by the economics group. And I see all four appealing to students well beyond those majoring in accounting.)
From here, the design focuses explicitly on accounting, with the following additional courses: information service, complete with the infrastructure (e.g., the FASB, IASB, and SEC) that holds it all together.
(5) Assurance Services, where we focus on assurance and the industry structure that supports the efficient delivery of this important service.
(6) Financial Measurement, where the topics of firm-wide economic stocks and flows are entertained, but from the perspective of an explicit information service complete with the infrastructure (e.g., the FASB, IASB, and SEC) that holds it all together.
(7) Financial Measurement, where the topic of intra-organization measurement is examined, again from the perspective of an explicit information service, complete with its own infrastructure.
(8) Economy-wide Measurement, where the topics of national income measurement, productivity, etc., are studied, once again from the perspective of an explicit information service, complete with its own infrastructure. The financial, organizational, and economy-wide courses all make reference to respective infrastructures, e.g., mandated disclosures and regulatory agencies, external and internal audit functions, and so on. Here I also envision careful and thorough exploration of the commonalities and complementarities in the respective infrastructures. Finally, the development is rounded out with a capstone course.
(9) Capstone, where we take a specific firm in a specific industry and document its information practices, with special attention to its accounting choices and management of those choices. Where we go from here to fill in the remaining, and more familiar, details depends on degrees of freedom in the
TITLE: Oligopolies Are on the Rise As
the Urge to Merge Grows
REPORTER: Yochi J. Dreazen, Greg Ip and Nicholas Kulish
DATE: Feb 25, 2002 PAGE: A1,10
LINK: http://online.wsj.com/article_print/0,4287,SB1014589181477203560,00.html
TOPICS: Antitrust, Managerial Accounting, Mergers and Acquisitions
SUMMARY: Dreazen, Ip and Kulish report on the recent spate of mergers in specific industries resulting in apparent oligopolies. The article explains why firms seek these arrangements, how the firms benefit, how consumers benefit, and also what the risks are for the consumers. They relate the tales of some of the more prominent mergers of the recent past as well as those from the beginning of the last century. How they are similar, and different. Finally, they explain the role of government in the matter.
QUESTIONS:
1.) Define the term oligopoly. How does it differ from a monopoly? How can an
oligopoly have a similar impact that a monopoly might? Can you name a well-known
oligopoly that tries to function like a monopoly? How are the oligopolies
different today from those of a century ago?
2.) What motivates firms to merge with their competitors? Is it simply a matter of growth or are there tangible benefits from these unions? Can consumers benefit from such arrangements? Can they also suffer?
3.) What can happen to competition in this environment? How can two executive administrations view these mergers in such a different light? Have the laws themselves changed in the last few years? What recent economic development has fueled these mergers?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
From The Scout Report on February 22, 2002
Business 2.0 Web Guide http://www.business2.com/webguide/
According to one of its own brochures, "Business 2.0 is the essential tool for navigating today's relentlessly changing marketplace, particularly as it's driven by the Internet and other technologies." In both print and electronic versions, Business 2.0 does cover an incredible amount of ground, including day-to-day and month-to-month information and offering extensive subject lists of its material, broken down by general subjects -- from management and marketing to Enron and the Internet. Not only clearly in touch with today's business world, Business 2.0 promises to put its readers in touch with it through company links, as well as through straightforward contact lists. While Business 2.0 is open for anyone's consultation, registered readers are granted greater access privileges to archived and premium content.
Columbia Newsblaster http://www.cs.columbia.edu/nlp/newsblaster/
With a team of researchers headed by Prof. Kathy McKeown, Columbia Newsblaster is an online project at Columbia University's Department of Computer Science in the School of Engineering and Applied Science. Newsblaster currently looks at news reports from thirteen sources, including Yahoo, ABCNews, CNN, Reuters, Los Angeles Times, CBS News, Canadian Broadcasting Corporation, Virtual New York, Washington Post, Wired, and USA Today. The product uses artificial intelligence techniques to cull through news reports published online and then sorts and summarizes these reports in five different news categories -- US, world, finance, entertainment, and sports. These summaries are based on reflecting factors, such as where a fact is mentioned in the published reports and how often it is repeated across reports dealing with the same event or subject. They are also based on the news value of individual facts, such as how many were killed or injured, or how much damage to property occurred. On the whole, in an age of information overload, this newly developed tool may provide assistance to journalists, executives, and average news consumers.
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
Quality Counts 2002: Building Blocks for Success (prior to K-12 years) http://www.edweek.org/sreports/qc02/
From Syllabus News on February 26, 2002
Online Masters Degree in Health Law Enters Second Year
Nova Southeastern University said a second class of students had begun its online master's degree program in health law. The graduate program is designed to educate non-lawyer health care professionals about health- related legal issues. The masters is a two-year program taught almost entirely over the Internet. Short residential sessions each year supplement the program, which is designed for working professionals, full-time practitioners, administrators, military personnel, nurses, and leaders in the health care industry.
For more information, visit: http://www.mhl.nsulaw.nova.edu .
Women, Enterprise & Society: A Guide to Resources in the Business Manuscripts Collection at Baker Library http://www.library.hbs.edu/hc/wes/
Northern Lights (Photography) --- http://www.northern-lights.no/
PhotoGraphic Libraries: Education Resource (History, Photography, Art) http://www.photographiclibraries.com/
U.S. Steel Gary Works Photograph Collection (American History, Photography) http://www.dlib.indiana.edu/collections/steel/
Life.com: (Photographs on the Cover of Life Magazine, Photography, History) --- http://www.lifemag.com/Life/search/covers
Graphic Design from the 1920s and 1930s in Travel Ephemera (Art History, Graphics, Travel) --- http://www.travelbrochuregraphics.com/
This is a virtual online gallery I've created to display and share the best items in my collection of 1920s and 1930s travel-related ephemera. Many friends and fellow collectors have asked to see the items in my collection so I figured, why not, I'll build a website to display the best ones. Nothing on this website is for sale, it is purely an online gallery.
My basic passion is paper items such as travel brochures, airline time-tables, ocean liner time-tables, auto road maps, luggage labels, advertising, and graphic design publications from the the 1920s and 1930s, primarily in Europe but also Asia and, to a small degree, the U.S.A.
I am still collecting and still building this website and it will continue to grow. Right now there are over 950 individual images on the website. I still have much work to do and will post additions on the "What's New" page so keep checking back!
Why Is This Happening?
I "fell down the rabbit hole," or rather, I started collecting travel ephemera in 1992 while I was on my way to Prague, Czech Republic, where I lived from 1992 to 1994. We had stopped in London on our way to Prague and one day in London we visited the famous British Museum. Afterwards, we wandered down Museum Street, just south of the museum, and I stumbled on an Antiquarian book store. In this store I notice a small brochure, which I would later learn were called "ephemera."
Later, in Prague, I was walking through the streets of Prague's Old Town and I passed an Antiquarian Book Store. I went inside and there were bins of old paper items. There were travel brochures and ocean liner time-tables and luggage labels. That was it - I was hooked.
Most of the items are from Europe, which is my main area of interest, with a concentration on Germany and Italy and Central Europe. These countries had by far the best graphic design in the period influenced, no doubt, by the Bauhaus and Italian Futurism.
Surgeon General Reports on the Web (Medicine) http://www.nlm.nih.gov/news/surgeonreports.html
American Dietetic Association http://www.eatright.org/adainfo.html
Message from Bill Ayers at BillA@flosim.com
I noticed that you have links on your excellent site
http://www.trinity.edu/rjensen/bookbob3.htm
to various external calculator-related resources.
I'd really appreciate it if you would consider linking to our site at
Calculator.org has a number of calculator related resources, including an online scientific calculator, units conversion and constants database, and other information.
Visitors can also download Calc98, a free scientific, engineering, statistical and financial calculator for Windows and PocketPC. Calc98 includes a vast range of units conversions, fundamental constants and physical property data, and other features including arbitrary base numbers, Roman numerals and a stopwatch feature and built-in Periodic Table of the Elements.
Our site has won many awards, including a StudyWeb Academic Excellence Award, and the software was a winner in the 1998 Shareware Industry Awards. I am sure our site would be of interest to your visitors.
Many thanks in advance for considering linking to us.
Regards,
Bill Ayers Flow Simulation Ltd.
APPLE'S FUTURE
Steve Jobs certainly has the needed pieces. The key question: Will its hot
products and a major retail effort boost market share?
http://www.businessweek.com/technology/tc_special/apple.htm?c=bwtechmar01&n=link8&t=email
I thank Roger Collins for this link.
"Enron: how the press
failed," by Richard Lambert, London Times Online, http://www.thetimes.co.uk/article/0,,7-221632,00.html
Enron's debacle was also a failure of journalism. As business grows more
powerful we need better reporting to hold it to account
The signs were there for anyone who cared to look. The fact that Enron executives had for some time been selling their shares for all they were worth was public information. So were the company’s links with the obscure off-balance- sheet partnerships that were to trigger its downfall. The annual report for the year 2000 should have raised all kinds of questions: about the group’s cashflow, which was a lot less impressive than you might have expected; about conflicts of interests involving an unnamed senior executive who was also working for the off-balance-sheet partnerships; about the length and complexity of the footnotes to the accounts — often a warning that things are not quite what they appear.
Above all, no one for years had come up with a satisfactory answer to the question: how did Enron make its money? Even the company seemed vague about the answer to this one. According to its website: “It’s difficult to define Enron in a sentence, but the closest we come is this: we make commodity markets so that we can deliver physical commodities to our customers at a predictable price.”
You can understand why Wall Street missed, or ignored, all these signals. Enron was a cash machine, spinning out enormous investment banking fees by way of its many transactions. It set itself ambitious growth targets and always met them. No one had an incentive to ask awkward questions so long as this process continued. But why wasn’t the press on to the case sooner? After all, it is now clear that the company had encouraged a culture of rule-breaking, or worse, for years. Enron was arrogant — it described itself as the world’s leading company. It was opaque — even its supporters acknowledged difficulties in making the numbers add up. And it made no secret of its political connections in its home state of Texas, in Washington, and in the world at large.
Why didn’t someone kick the tyres? More generally, why is the media less successful in spotting trouble to come in big corporations than it is, for example, in governments? The first serious questions about Enron that I can find were raised by Fortune magazine in a perceptive article published last March. Until that point, Fortune had been one of the company’s cheerleaders. Enron was featured in a gushing article a few months earlier on the world’s most admired businesses, and in the summer of 2000 its shares were tipped by the magazine as one of the world’s outstanding investments for the next ten years. The headline was rather unfortunate: “Ten Stocks to last the Decade.”
Most publications started to take Enron’s problems seriously only in the final few months of last year, when the game was already up.
Part of the explanation for this indifference lies in the mood of the times. Enron rose to its position as one of the world’s biggest companies during a period that ranks among the greatest financial bubbles in business history — a time when the willing suspension of disbelief seemed the best route to prosperity. In the South Sea Bubble itself, nearly 300 years earlier, one ambitious promoter launched “a company for carrying on an undertaking of great advantage, but nobody to know what it is”. That slogan might have served as Enron’s mission statement.
But there is more to the story than the bubble mentality. The Enron affair reveals something about the culture of business journalism. As Editor of the Financial Times over the period, I was part of this culture. Business reporting is unlike other forms of journalism in some important respects. As Russ Lewis, the chief executive of The New York Times, wrote in January in The Washington Post, it is far easier to investigate governments than businesses:
“The press is aided by laws that provide reporters with access to government meetings and documents. But much of what happens in corporations goes on behind closed doors.”
Political reporting deals in opinions, which often turn out to be adversarial hot air, as much as it does in hard information. If you call a politician a villain in your columns, as like as not you can expect a lunch invitation. Business reporting has a harder edge: a lot of it is about facts, which are either right or wrong. Call a business leader a villain and you are more likely to receive a writ — at least if you work in Britain. If you work for a fragile publication, there is also the worry about what the cost might be in terms of cancelled advertising.
So it takes courage and conviction to say that the emperor has no clothes. This was doubly so in Enron’s case. First, the company’s management was brutal in its response to questioning. People who didn’t buy the story were told in public that they simply didn’t get it: they were beneath contempt.
Secondly, Enron had a fervent fan club among the big financial institutions. They were, of course, profiting from its excesses. But if as an inexperienced reporter you see a company being championed by a Citigroup or a JP Morgan Chase, you think twice about saying that it is built on sand.
Financial journalists in general have come to rely too heavily on the guidance of investment analysts. Analysts have done the homework and have fat research reports full of numbers to demonstrate it. But, as Enron shows, they have every incentive not to make trouble. Many of them were rating its shares a “buy” almost up to the end.
Another trend that allowed the company to avoid bad headlines for so long has been a shift towards soft, personality-based journalism in the business pages. You don’t read about Microsoft so much as about Bill Gates. Ken Lay, the Enron chairman, made a great cover story for many admiring magazines.
Fortune magazine is a good example of this development. It used to be full of worthy pieces about the long-term strategy of Caterpillar Tractor. Over recent years it has shifted towards personality stories, and prospered mightily as a result.
All of this matters because business matters even more than it used to and has a bigger political influence. The Enron story did not just have an impact on its employees, creditors, customers and shareholders. It also reached into Government in the US and, more tangentially, in Britain.
In Washington, the company lobbied successfully for legislation two years ago that exempted much of its trading activity from regulatory oversight, and spread its funds around politicians of every stripe. On a much smaller scale, Enron shows that soft money is playing an increasing part in funding British politics also. The Tory peer, Lord Wakeham, sat on Enron’s board and the company made small donations to both Labour and the Conservatives.
In a recent pamphlet for the think-tank Demos, a diplomat, Robert Cooper, argued that in years to come the corporate sector could be better placed than national governments to set international standards. “Transnational corporations may even work out international procedures for arbitration themselves,” he wrote.
And according to Russ Lewis: “If the creators of the US Constitution had foreseen this development, they would have recognised the necessity for the press also to serve as a check against the excesses of big business.”
One of the main tasks of the media is to hold power to account. With no serious alternative to free-market capitalism, governments are increasingly obliged to enter into relationships with corporations. An intelligent examination of business starts to become a crucial component of democratic choice.
How to make that possible? Lewis’s call for laws requiring greater transparency and disclosure of corporate actions, a kind of First Amendment for the business pages, is probably impractical — and anyway, laws tend to get ignored when companies run into serious trouble. What is more, plenty of clues were ignored by the business press in Enron’s case.
No, the answer has to lie in the hands of the media themselves. Developing journalists who are capable of tackling an Enron takes time and the investment of resources. Publications such as The Wall Street Journal and the Financial Times have already recognised this requirement. Among other changes, training is taken much more seriously than it used to be.
For the next year or two, every business story will have to face a lot more scrutiny. Until the Enron scars are healed, no one will take anything on trust. The real test for the media will come a little farther off, when the good times next start to roll and the new Enrons start to emerge.
I added the following message to http://www.trinity.edu/rjensen/crossborder.htm
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Italy on the Grand Tour (Travel, Art History, Photography) http://www.getty.edu/art/exhibitions/grand_tour/index.html
My friend Ed Scribner wrote the following message:
Speaking of salary data, the KTLA-TV "Cyber Guy" this morning mentioned the following CEO salary database maintained by AFL-CIO:
http://www.aflcio.org/paywatch/index.htm
Ed ---- Ed Scribner New Mexico State
Reply from Dennis Who? I couldn't quite make out the last name in this message)
MEMORANDUM We need your support.
Dear kindhearted friends ...
Now that the holiday season has passed, please look into your heart to help those in need. Enroll executives in our very own country are living at or just below the seven figure salary level ... right here in the land of plenty. And as if that weren't bad enough, they will be deprived of it as a result of the bankruptcy and current SEC investigation.
But now, you can help! For only $20,835 a month, about $694.50 a day (that's less than the cost of a large screen projection TV), you can help an Enron executive remain economically viable during his time of need. This contribution by no means solves the problem, as it barely covers their per diem, but it's a start. Almost $700 may not seem like a lot of money to you, but to an Enron executive, it could mean the difference between a vacation spent in DC, golfing in Florida, and a Mediterranean cruise. For you, seven hundred dollars is nothing more than rent, a car note, or mortgage payments. But to an Enron executive, $700 will almost replace his per diem. Your commitment of less than $700 a day will enable an Enron executive to buy that home entertainment center, trade in the yearend Lexus for a new Ferrari, or enjoy a weekend in Rio.
HOW WILL I KNOW I'M HELPING? Each month, you will receive a complete financial report on the executive you sponsor. Detailed information about his stocks, bonds, 401(k), real estate, and other investment holdings will be mailed to your home. You'll also get information on how he plans to invest his golden parachute. Imagine the joy as you watch your executive's portfolio double or triple! Plus upon signing up for this program, you will receive a photo of the executive (unsigned -- for a signed photo, please include an additional $50.00). Put the photo on your refrigerator to remind you of other peoples' suffering.
HOW WILL HE KNOW I'M HELPING? Your Enron executive will be told that he has a SPECIAL FRIEND who just wants to help in a time of need. Although the executive won't know your name, he will be able to make collect calls to your home via a special operator just in case additional funds are needed for unexpected expenses.
YES, I WANT TO HELP! I would like to sponsor an Enron executive. My preference is checked below: [ ] Mid-level Manager [ ] Director [ ] Vice President (Higher cost; please specify which department)
[ ] President (Even higher cost; please specify which department)
[ ] CEO (Contribution: Average Enron janitor monthly salary x 700) [ ] Entire Company [ ] I'll sponsor an Exec most in need. Please select one for me.
SPECIAL LIMITED TIME OFFER Already an Enron supporter? Don't worry, in this troubled economy, there are many executives who need your help. Ford today is laying off 35,000. The NASDAQ is deflated. Now you can show your patriotism and do something about it. The Invisible Hand will allow supporters to substitute executives from any downtrodden company listed on*edcompany.com. You will never own a Bentley, wear hand-tailored silk shirts, or have a gentleman's gentleman; why deprive a worthy executive from ascending, and more importantly, from maintaining the lifestyle he so richly deserves? Imagine the feeling of satisfaction, the pure joy of knowing that your sponsor ex-executive at the former spiltmilk.com will be able to have his caviar and eat it too. *It's just that easy -- do it now!* Please charge the account listed below ___________ per day and send me a picture of the Enroll executive I have sponsored, along with my very own Enroll "Keep America Strong, Sponsor an Enron Executive: Ask Me How!" T-shirt to wear proudly. Your Name: _______________________ Telephone Number:_______________________ [ ] MasterCard [ ] Visa [ ] American Express [ ] Discover Account Number: _______________________
Exp. Date:_______ Signature: _______________________Mail completed form to "The Invisible Hand" or call 1-900-2MUCH now to enroll by phone. Note: Sponsors are not permitted to contact the executive they have sponsored, either in person or by other means including, but not limited to, telephone calls, letters, e-mail, or third parties. Keep in mind that the executive you have sponsored will be much too busy enjoying his free time, thanks to your generous donations. Contributions are not tax-deductible.
Hartford Black History Project http://www.hartford-hwp.com/HBHP/index.html
The Moonlit Road http://www.themoonlitroad.com/godschillun/intro_godschillun.asp
Hall of Black Achievement (HOBA) --- http://www.bridgew.edu/HOBA/
International treaties designed to globalize standards that currently exist only the U.S. have advocates and opponents staking claims to what is copyright and copywrong --- http://www.wired.com/news/politics/0,1283,50658,00.html
Most Admired Companies According to Fortune Magazine, March 4, 2002, pp. 64-70 --- http://www.fortune.com/lists/mostadmired/index_alpha.html
Company Industry Rank Overall Score A.G. Edwards, Inc. 5 6.19 Abbott Laboratories 9 4.91 ABM Industries, Incorporated 6 5.31 Ace Hardware 5 6.55 ADC Telecommunications Inc. 8 4.47 Administaff Inc 4 6.42 Adobe Systems 6 6.04 Adolph Coors Company 6 6.29 Advanced Micro Devices, Inc. 7 6.11 Aetna 9 4.19 Affiliated Computer Services, Inc. 3 6.73 AFLAC, Inc. 6 6.47 Agilent Technologies 3 6.29 Ahold USA 4 6.66 Airborne Freight Corporation 5 3.98 Air Products & Chemicals 6 6.07 AK Steel Holding 6 5.05 Alaska Air Group, Inc. 4 5.67 Alberto-Culver Company 8 4.89 Albertson's, Inc. 6 5.60 Alcoa, Inc. 1 7.57 Allegheny Technologies Incorporated 4 5.33 ALLTEL Corporation 6 4.87 Amerco 9 3.55 American Electric Power Company, Inc. 4 6.72 American Express Company 1 7.83 American Greetings Corporation 9 5.20 American Home Products Corporation 8 5.32 American Honda Motor 3 6.48 American International Group,Inc. 3 6.74 American Standard Companies, Inc. 7 6.02 America West Holdings Corp. 9 2.84 Amgen, Inc. 6 5.68 AMR Corporation 5 5.66 Anadarko Petroleum Corp. 1 7.16 Anheuser-Busch Companies, Inc. 2 7.23 Anthem Insurance Companies,Inc. 3 6.28 AOL Time Warner Inc. 2 7.33 Apache Corporation 2 7.16 Apple Computer, Inc. 3 5.77 Continued at
http://www.fortune.com/lists/mostadmired/index_alpha.html
"The Shiniest Reputations in Tarnished Times, Fortune Magazine, March 4, 2002, Page 72
The Top Ten for Shareholders, Fortune Magazine, March 4, 2002,
Page 72 --- http://www.fortune.com/lists/mostadmired/index.htmlTop Ten Full List Industry Key Attributes
TOP TEN Total Return Rank Company 2001 1996-2001 1 General Electric -15.1% 21.2% 2 Southwest Airlines -17.3% 33.7% 3 Wal-Mart Stores 9.0% 39.1% 4 Microsoft 52.7% 26.3% 5 Berkshire Hathaway 6.5% 17.3% 6 Home Depot 12.1% 36.0% 7 Johnson & Johnson 14.0% 20.5% 8 FedEx 29.8% 18.5% 9 Citigroup 0.1% 28.9% 10 Intel 4.9% 14.1% Top ten average 9.7 % 25.5 % S&P 500 -11.89% 10.70%
From the Mar. 04, 2002 Issue
"The Shiniest Reputations in
Tarnished Times, Fortune Magazine, March 4, 2002, Page 72 ---
http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206471&page=2&_DARGS=%2Fartcol.jhtml.4_A&_DAV=artcol.jhtml
At a time when business feels beaten down, our ten winners stand tall. FORTUNE
The Global Most Admired Rank 01 Nokia from Finland
Rank 02 Toyota Motor from Japan
Rank 03 Sony from Japan
Rank 04 Nestle from Switzerland
Rank 05 Honda Motor from Japan
Rank 06 BP from Britain
Rank 07 Singapore Airlines from Singapore
Rank 08 L'Oreall from France
Rank 09 Royal Dutch/Shell
Rank 10 Canon
Rumor has it some Big Five accounting firms have delayed the start dates for 2001 graduates, and this is causing concerns on college campuses. The rumors have created quite a buzz on the Internet, inspiring Web site cartoons and stirring up controversy on job-related message boards. But are they true? This article tries to separate out the rumors from the realities. http://www.accountingweb.com/item/72836
Rumor has it some Big Five accounting firms have delayed the start dates for 2001 graduates, and this is causing concerns on college campuses. The rumors have created quite a buzz on the Internet, inspiring web site cartoons and stirring up controversy on job-related message boards. But are they true? This article tries to separate out the rumors from the realities.
Concerns on College Campuses
According to the Wall Street Journal, the concerns on college campuses are real. (Some 2001 grads are still waiting to get started at their new jobs, February 19, 2002.). It said some colleges are changing their recruiting programs in response to the growing risks of delayed start dates and rescinded job offers. Examples:
The Darden Graduate School of Business Administration at the University of Virginia has decided to amend a policy that bars students from further campus interviews as punishment for changing their minds about accepting a job offer. This policy won't apply, if the offer has an altered start date. Darden has also begun posting information on its intranet whenever an employer delays or rescinds an offer.
Harvard Business School has decided to penalize firms that impose long delays on its graduates' start dates and/or rescind job offers. It places these businesses on recruiting probation, meaning they can be banned from campus recruiting for a certain amount of time (up to two years) if they commit another recruiting infraction during the probationary period. In addition, the school places the names of all companies that have been banned or placed on probation on an internal Web site. Web-Site Cartoons and Message Boards
Job-related message boards and cartoons have picked up the theme and implicated some of the Big Five accounting firms as the culprits causing the collegiate concerns. Examples:
Cartoons. Indenture.ac was one of the first web sites to pick up the trend. It featured a cartoon of a recent grad who spends all his sign-up bonus on furnishing his new apartment, then finds out his start date has been postponed for a year. This same site mocks the use of new hires for difficult consulting assignments in a lively song entitled Accidenture.
Message boards. The message boards on Vault.com indicate at least three of the Big Five (Andersen, PricewaterhouseCoopers, and KPMG) have delayed start dates or rescinded job offers. Some excerpts: Andersen. Despite what their HR folks say, they do rescind offers at the last minute - it just happened to me. No signing bonus, no nothing! A word of advice for those considering recent offers with AA: Before starting, get in writing the length of time that they will pay severance, will that include COBRA, and will you be able to keep your signing bonus and relocation expenses. Archjohn, Feb. 1, 2002.
PricewaterhouseCoopers. To all of you 2001 hires who got deferred by PwC Consulting... Do you not feel cheated that PwC failed to assume ownership for its actions? Responsible firms... gave their deferees/pending rejects some sort of pecuniary compensation... whereas what did PwC do... nada! If enough of you report this to the career services department of your alma mater, it can very well be that PwC will be denied future spots on campus for recruiting purposes. Scarlet knight, Feb 16, 2002.
KPMG. Heads Up. I found out last week that my offer was being rescinded. I was told the economy and Enron debacle were causing major concern. Has this happened to anyone else? gerry1234, Jan 30, 2002.
Statements from Big Five Firms
Because some of messages posted on vault.com may be conflicting and/or less than 100% authoritative, the public relations offices of the Big Five were asked directly, “Are you delaying start dates or rescinding job offers?” These were their replies on February 20, 2002:
A spokesperson for PricewaterhouseCoopers Consulting acknowledged, “We have had to stagger or delay start dates. Some June 2001 grads have still not started.”
An Andersen spokesperson said, “We are absolutely honoring our commitments to people to whom we have extended job offers. We have not and will not rescind job offers. This is a longstanding policy that goes to the heart of the integrity of the firm. We stand by employment offers, despite the changing economic conditions which no one can predict. In the economy we're in, we have had to defer some start dates, but we are paying a stipend during the deferral period to assist people until we can bring them on board.”
A spokesperson for KPMG LLP clarified, “Consistent with past KPMG practices, full-time employment of our recent college hires began in early October, the beginning of our fiscal year. We have had instances where, at the student’s request, deferments have been granted until mid-November so that a student can study for the CPA exam while not encumbered by work.”
A spokesperson for Ernst & Young, said, “We stood by all our campus commitments despite the economic downturn. We have not delayed any start dates or rescinded any job offers, and we’re very happy we haven’t had to do that.”
A spokesperson for Deloitte & Touche was not available for comment
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Palaces of the King of Siam --- http://www.palaces.thai.net/
The Berkley Law & Economics Working Papers http://www.bepress.com/blewp/default/
Tricks with Derivatives to Hide Rather Than Manage Risk: What is a tranche besides being a French word for "trench"?
"DEBT TRICKS: Covering Their
Assets," Fortune Magazine, March 4, 2002, by Julie Creswell --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206542
So you think you escaped Global Crossing and Enron? Surprise! Banking's
dastardly debt trick may leave you vulnerable.
For all the talk of what banks have done wrong lately (huge write-downs! swelling bad debt!), they've also done something right: passed the buck.
Turns out it's not just lenders like J.P. Morgan Chase and Citigroup that are on the line for billions in loans to now-bankrupt entities such as Enron and Global Crossing; it's a host of hedge funds, insurance companies, and even retirement plans that bought slickly repackaged debt from them. While these complicated "credit derivatives" helped banks sidestep even bigger losses and possibly prevented systemic stress on the banking system by diffusing liabilities, unwitting investors may soon be in for a rude awakening. "One way or the other, somebody is sitting on a huge amount of risk," says Doug Noland, financial market strategist at David W. Tice & Associates. Indeed, federal banking regulators are increasing scrutiny of moves that push risky transactions off bank balance sheets, while the SEC is looking into PNC Financial for its debt-repackaging dealings. Though only the first repercussions of the credit-derivative fallout have been felt, "there's going to be a huge problem," predicts Noland. "Something's going to blow up."
Here's why: One of the more common hedges banks used is called a collateralized-debt obligation, or CDO, a bundle of around 50 corporate loans that is sliced and diced into pieces called tranches. In theory, the resulting product is akin to a mutual fund--one or two defaults don't taint the whole batch. Each tranche carries a degree of risk, from investment grade to--in trader's parlance--"toxic waste." That's why safety-conscious insurance companies and pension funds snapped up the higher-rated, lower-yielding tranches, while hedge funds and investors seeking higher returns bought the riskier tiers.
Banks love transforming loans into these derivatives because they don't have to reserve as much capital on their balance sheets, which frees up more money for new loans. CDOs are fairly new, but they're the fastest-growing fixed-income sector. In the past five years the market has swelled from a few billion dollars to more than $500 billion. When all goes as planned, investors love CDOs too--they get a steady stream of interest payments.
But this time around everything didn't go as planned. Banks started ramping up CDO sales in the late 1990s when default and bankruptcy rates were at historic lows; that persuaded less experienced investors to bite. Banks "became very good at using financial engineering to make credit risk more palatable to the end buyer," says Charles Peabody, a banking analyst at brokerage firm Ventana Capital. "But that risk just doesn't disappear." The sharp increase in defaults--from telecom startups to Kmart--caught buyers off guard, thus throwing CDOs into downgrades and losses. American Express' financial advisors group learned that lesson the hard way: It bought a batch of CDOs in 1997 to juice returns and last summer was forced to take an $860 million charge related to that ill-fated purchase. Furthermore, "there is a certain lack of transparency" in some types of CDOs, explains Mitchell Lench, senior director of European CDOs for Fitch Ratings. Investors "know the ratings, the industries, and the amount of exposure they have to the industries, but after that, it's kind of a guessing game."
As the aftermath of the credit-derivatives game unfolds, expect to see some angry players.
Bob Jensen's threads on derivatives financial instruments frauds are at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
I added the definition of tranches to http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
Hi Patrick,
The term "better" is a loaded term. One of the main criticisms leveled at IASC standards is that they were too broad, too permissive, and too toothless to provide comparability between different corporate annual reports. The IASC (now called IASB) standards only began ot get respect at IOSCO after they started becoming more like FASB standards in the sense of having more teeth and specificity.
I think FAS 133 is better than IAS 39 in the sense that FAS 133 gives more guidance on specific types of contracts. IAS 39 is so vague in places that most users of IAS 39 have to turn to FAS 133 to both understand a type of contract and to find a method of dealing with that contract. IAS 39 was very limited in terms of examples, but this has been recitified somewhat (i.e., by a small amount) in a recent publication by the IASB: Supplement to the Publication Accounting for Financial Instruments - Standards, Interpretations, and Implementation Guidance http://www.iasc.org.uk/docs/ias39igc/batch6/39batch6f.pdf
In theory, there are very few differences between IAS 39 and FAS 133. But this is like saying that there is very little difference between the Bible and the U.S. Commercial Code. Many deals may be against what you find in the Bible, but lawyers will find it of less help in court than the U.S. Commercial Code. I admit saying this with tongue in cheek, because the IAS 39 is much closer to FAS 133 than the Bible is to the USCC.
Paul Pacter wrote a nice paper about differences between IAS 39 and FAS 133. However, such a short paper cannot cover all differences that arise in practice. One of the differences that I have to repeatedly warn my students about is the fact that OCI is generally converted to current earnings when the derivative hedging contract is settled on a cash flow hedge (this conversion is usually called basis adjustment). For example, if I hedge a forecasted purchase of inventory, I will use OCI during the cash flow hedging period, but when I buy the inventory, IAS 39 says to covert the OCI to current earnings. (Actually, IAS standards do not admit to an "Other Comprehensive Income" (OCI) account, but they recommend what is tantamount to using OCI in the equity section of the balance sheet.)
Under FAS 133, basis adjustment is not permitted under many circumstances when derivatives are settled. In the example above, FAS 133 requires that OCI be carried forward after the inventory is purchased and the derivative is settled. OCI is subsequently converted to earnings in a piecemeal fashion. For example, if 20% of the inventory is sold, 20% of the OCI balance at the time the derivative is settled is then converted to current earnings. I call this deferred basis adjustment under FAS 133. This is also true of a cash flow hedge of AFS investment. OCI is carried forward until the investment is sold.
Although there are differences between FAS 133 and IAS 39, I would not make too big a deal out of such differences. IAS 39 was written with one eye upon FAS 133, and the differences are relatively minor. Paul Pacter's summary of these differences can be downloaded from http://www.iasc.org.uk/cmt/0001.asp?s=490603&sc={65834A68-1562-4CF2-9C09-D1D6BF887A00}&sd=860888892&n=3288
Hope this helps,
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: Patrick Charles [mailto:charlesp@CWDOM.DM]
Sent: Tuesday, February 26, 2002 11:54 AM
To: CPAS-L@LISTSERV.LOYOLA.EDU
Subject: US GAAP Vs IASBGreetings EVeryone
Mr Bolkestein said the rigid approach of US GAAP could make it easier to hide companies' true financial situation. "You tick the boxes and out come the answer," he said. "Having rules is a good thing, but having rigid rules is not the best thing.
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3AHWRLXXC&live=true&tagid=FTDCZE6JFEC&subheading=accountancy
Finally had a chance to read the US GAAP issue. Robert you mentioned IAS 39, do you have other examples where US GAAP is a better alternative to IASB, or is this an European ploy to get the US to adopt IASB?
Cheers
Mr. Patrick Charles charlesp@cwdom.dm ICQ#6354999
"Education is an admirable thing, but it is well to remember from time to time that nothing that is worth knowing can be taught."
Reply from Eckman, Mark S, CFCTR [meckman@ATT.COM]
I would suggest that what Mr. Bolkestein said was a global statement for discussion, and clearly not an independent view. I think the real litmus test for accounting standards is the securities market, and there US GAAP is the clear choice.
Take the example of Daimler Benz to see what an impact this can have. The company had financial statements that showed wonderful profits. But in order to have a listing on the NYSE, they need statements that follow US GAAP. In that conversion, the company went from profitable to money losing, mostly due to "cookie jar" reserves which were a common practice. After adjusting and obtaining the NYSE listing, they successfully offered new securities, met market expectations, grew their market share world wide and acquired Chrysler. None of that would have been possible without the use of US GAAP.
This is not the end of the story as it returns to the current issues on auditing. Another foundation of the security markets is the credibility of the financial statements and the independent audit of those statements. Without that audit, the assurance that Daimler-Benz followed US GAAP would not exist and entrance to the securities markets would not have been possible. It is the combination of GAAP and audit standards that has made it possible for companies to access capital on a global basis.
As to the comment of the rigid nature of US GAAP, that is true in some cases. Quite true regarding the 3% capital minimum on currently on center stage with the Enron SPEs found in EITF 90-15. However, I would also counter that many US GAAP elements are not as prescriptive such as accounting estimates (pension rate of return, depreciation rates, etc.) impairment of assets and materiality.
Take for example FAS 5. This has daily impact in my work, but to consider the concept as rigid defies logic. Show me where to check the box to determine 'probable' or 'reasonably estimated' and I'll change my position.
Mark Eckman
Hi George,
I strongly disagree with your statement that "the options have no value to the holders of the options" when they are out-of-the-money.
In theory, and definitely in FAS 133 and FAS 123, is the recognition that options have value even if they are out-of-the-money. The stockholders are giving up value and the employees are receiving something of great value even if the options are out of the money at the time they vest.
Option value has two components --- intrinsic value and time value.
Intrinsic value arises when spot price exceeds strike price (i.e., when options are in-the-money).
Time value is dependent upon the amount of time remaining while options have a chance to become in-the-money or have a change to become more-in-the-money.
For example, suppose I offer you a strike price of $1.80 put option (or a $2.10 call option) per bushel of corn for the next 24 months. This is not in the money (has no intrinsic value) now, but in the options market somebody will pay for such an option, because there's a possibility that the option will some day be in-the-money. THAT IS THE TIME VALUE OF THE OPTION.
If, however, I offer you a strike price of $1.80 per bushel of corn on an option that expires today, you probably won't pay me a dime, because the spot price of corn today is $1.98 (I'm guessing here because I'm too lazy to look up the actual price). In this instance, the TIME VALUE is zero, because there just is not enough time remaining for the put option to become in-the-money.
That is how time value works. The more time there is, the more derivatives have time value.
If you want to see how the calculation of time value is derived in the case of options, I have two cases that go into detail ad nauseaum. See the CapIT and FloorIT cases at http://www.trinity.edu/rjensen/caseans/ccase.htm
You can find more simple examples at documents the FASB generated for FAS 133 implementation is called "Summary of Derivative Types." This document also explains how to value certain types of derivatives. It can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
Hope this helps.
Bob Jensen
-----Original Message-----
From: glan@UWINDSOR.CA [mailto:glan@UWINDSOR.CA]
Sent: Monday, February 25, 2002 10:45 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Bob Jensen and Denny Beresford quoted in Philadelphia Inquire r!I had thought that accounting firms would be in favour of changes because that would reduce auditor's liability.
In the latter half of the article (as pointed out by Elliot Kamlet ), the article mentions that the accounting firms did not support the the FASB standard requiring companies to record compensation expense on the granting of stock options. The firms mentioned the big divide in the accounting community and also implementation difficulties. ("Battle not worth fighting"). How justified are they? Is the fair value of the options disclosed in the footnotes partly because the value is not reliable or subject to estimates?
I wonder whether the following alternative may have some merits and/or has been debated:
Even if no expense was recorded at the date of the grant (as under APB 25, when exercise price is above market price), why not record an expense at the end of the year if the market price of the shares has risen above the exercise price of the options? One could argue that so long as the options are out of the money (exercise price higher than the market price), the options have no value to the holders of the options but do have value when the market price exceeds the exercise price and hence an expense should be recorded, whether the options have been exercised or not. It should not be very hard to get the market price of the shares at the end of the year.
George Lan University of Windsor
Reply from Ruth Bender, Cranfield School of Manage [R.Bender@CRANFIELD.AC.UK]
I wouldn't dream of arguing with Prof Jensen about option valuation (many thanks for the case study reference), but exec compensation is my research subject, and there are certain reasons put forward as to why Black Scholes and the like aren't really appropriate for valuing executive options:
1. Executives aren't holding a diversified portfolio - they are heavily tied to one company. Therefore, they are bearing a high level of personal risk. One problem that results is that their perception of option value they receive is much less than the option value being given up by stockholders.
2. Because of this risk factor they generally exercise well before the option has expired, so that they can sell the stock and put their money into something 'safer' (ie more diversified)
3. They can't sell the options in a market.
4. The B-S model is (so they tell me) best at valuing options which are tradable, and which have a much shorter lifespan than exec options, which may run up to 10 years
5. If the options are subject to performance conditions (common in the UK, less so in the US) then many of them will never actually vest, anyway - so how do you estimate what the ultimate cost will be.
And, far more importantly - it results in a very large number that reduces profits and makes them more volatile ... :-)
Ruth Bender
Cranfield School of Management UK
Hi Again Ruth,
You wrote:
"Cynical view - It's possibility a bit optimistic to assume that when
they're granted the options they give up other forms of compensation!"
My Illustration:
I am reminded of the true story about one of the top computer science PhD
graduates at Stanford University a few years back. This graduate was so good
that he was receiving offers for well over $150,000 plus a huge cash signing
bonus. He eventually went to work for a company that makes computer games for a
salary of less than half of his other offers and no cash bonus. But the gaming
company gave him stock options that were valued at over $1 million in time value
(not intrinsic value).
Of course he was taking a huge risk. To change his time value into intrinsic value, he had to do everything possible to increase the price of the stock of the gaming company. I have no idea what actually happened later on, but it may not have been pretty after the dot.com crash. Who said options were not risky unless they're hedges?
I think it is always safe to assume that there is a tradeoff in the eyes of the employee and in the eyes of their employers when stock options are granted to employees. Otherwise it would be totally irrational to give the employee something of great value that the employee does not care about. That would be stupid. The company is giving something of value in lieu of something else of value to hire and motivate the employee. Companies like stock options because they can defer the hit on liquidity (vis-à-vis cash outlays for salary and bonus), and they believe that employees are more motivated when their own fortunes directly hinge on the future price of their employer's stock. Employees like stock options because their talent and labors "might" be rewarded far more than having to invest cash salary and bonus checks into other types of investment.
Plus their are some tax advantages to options that add to value. This is a point that you failed to mention in your previous listing of the difference between investment options and employment compensation options. Not being able to exercise the options for a period of time may dampen the BS valuation for an employee, but the tax advantages recover much of this loss in the employee's eyes.
As you say, the $64,000 question is when the company books its liability --- which is indeed a liability that can even be hedged. Interestingly, if a company hedges this liability with a derivative, the fair value of the derivative has to be booked and ajusted to fair value at least every 90 days under FAS 133 and IAS 39 (although hedge accounting probably will not be allowed and the changes in the derivative's value go to current earnings).
The above hedge illustrates the asymmetry in present accounting rules for derivatives. FAS 123 says that employers do not have to book their option liabilities even if they are hedged items, but the hedges of those employee options have to be booked under FAS 133.
Bob Jensen
-----Original Message-----
From: Ruth Bender, Cranfield School of Manage [mailto:R.Bender@CRANFIELD.AC.UK]
Sent: Monday, February 25, 2002 11:49 AM
To: AECM@LISTSERV.LOYOLA.EDU Subject:
Re: Intrinsic Versus Time ValueHi Bob
That's the $64,000 question - if I knew the answer, I could become very rich ... In answer to your questions:
Q1. "My bottom line question to you is whether you think there is no liability from the standpoint of the corporation (or at least not a liability that should be booked)?"
This one's bugged me for years, long before I looked at the exec comp area. My own feeling is that there's a liability for the Shareholders, but not for the Company. So i always used to argue that there was no need for it to go near the accounts - I used to ask 'okay, I see the debit, but where does the credit go?'. But these days, accounting has moved on, and the distinction between Shareholders and Company is being blurred, so that argument is a bit tenuous - I think that shareholders need to be made aware of it, at the very least. But I personally - totally out of tune with the accounting standards people (and pretty much everyone else) - like the idea of notes rather than expenses. (The current UK treatment - which is likely to change - is to give huge detail about each tranche of unexpired options, including dates and exercise prices, and let the shareholdes work it out for themselves.)
Q2. "At what point do you think options should be booked? For example, should it be when they vest? Should it be when the employee can exercise the options (if it differs from the vesting point)? Should it be only when they are exercised?"
Again, I'd put it in notes to the accounts when they are granted, giving details of the exercise prices, so that, as George Lan said, at least shareholders could see if they were in the money. As a practical point, if you keep 'marking to market' each year it's going to produce a lot of volatility in the accounts, for an item that isn't at that time a liability, and may not become one. Once they vest, then I can see a better argument for a on-off charge based on the then-current value of the options.
Q3 "Clearly, employee options have value or they would not be so eager to sacrifice higher salaries for more options. The real issue is when to book that liability to the company."
Cynical view - It's possibly a bit optimistic to assume that when they're granted the options they give up other forms of compensation!
Ruth Bender
Cranfield School of Management UK
ASSOCIATION OF INTERNATIONAL ACCOUNTANTS NEWS: 22 FEBRUARY 2002
AIA 2002 EXAMINATIONS - CHANGE OF DATE**
The Association wishes to advise students and affiliates that the 2002 examination diets will be held on the following dates:
MAY: Wednesday 29 May 2002 Thursday 30 May 2002
NOVEMBER: Wednesday 27 November 2002 Thursday 28 November 2002
Entry forms for the May 2002 examinations will be sent out on Thursday 21 February 2002. Forms must be completed and returned, with the appropriate examination fee, to the Association by Monday 1 April 2002.
If you do not receive an examination entry form please contact Brett Young, Examinations Executive, T: +44 (0)191 482 4409, F:+44 (0)191 482 5578, E: brett_young@aia.org.uk
IAN BALL NAMED CHIEF EXECUTIVE OFFICER OF THE INTERNATIONAL FEDERATION OF ACCOUNTANTS
The Board of the International Federation of Accountants (IFAC) has appointed Ian Ball as the organization's new Chief Executive. Dr. Ball will be responsible for providing strategic and management direction of IFAC and comes at a time when IFAC is strengthening its public interest initiatives.
http://www.aia.org.uk/news/fullstory_index.cfm?fuseaction=detail&storyid=810
MILESTONE REACHED IN BATTLE TO CRACK DOWN ON TAX EVASION
The world's leading economies have reached a long-awaited and much delayed milestone in their attempts to eradicate tax evasion in offshore centres.
http://www.aia.org.uk/news/fullstory_index.cfm?fuseaction=detail&storyid=809
MULTI-DISCIPLINARY PARTNERSHIPS BLOCKED BY EUROPEAN COURT OF JUSTICE
The efforts of the " Big Five" accountancy firms to create multi-disciplinary practices incorporating legal firms have suffered a setback following a ruling of by the European Court of Justice.
http://www.aia.org.uk/news/fullstory_index.cfm?fuseaction=detail&storyid=808
Please Help the Financial Accounting Standards Board
This is a great opportunity for practioners to show that they are interested in responding to FASB calls for comments. For example, do you think the new EDs go far enough? How can we get airlines to book billions of dollars in leased airplanes on the balance sheet? These EDs do not seem to do the job.
As influential House Energy Committee Chairman Billy Tauzin called for a review of accounting rules "across the country and across corporate boards," the Financial Accounting Standards Board continued its relentless drive to strengthen the standards. On February 15, FASB announced the release of a revised limited version of an exposure draft entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections-Amendment of FASB Statement No. 13. The new ED proposes an important change in lease accounting. http://www.accountingweb.com/item/72443
As influential House Energy Committee Chairman Billy Tauzin called http://quote.bloomberg.com/fgcgi.cgi?ptitle=Securities%20Firms%20News&b1=ad_bottom1&br=blk&tp=ad_topright&T=wealthstory.ht&s=APHASPRYVVGF1emlu for a review of accounting rules “across the country and across corporate boards,” the Financial Accounting Standards Board (FASB) continued its relentless drive to strengthen the standards. On February 15, 2002, FASB announced http://accounting.rutgers.edu/raw/fasb/news/index.html the release of a revised limited version of an exposure draft (ED) entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections-Amendment of FASB Statement No. 13. The new ED supplements a previous ED dated November 15, 2001 and proposes an important change in lease accounting.
Together, the two EDs propose to amend four Statements of Financial Accounting Standards (FAS):
FAS No. 4 - Reporting Gains and Losses from Extinguishment of Debt FAS No. 13 - Accounting for Leases FAS No. 44 - Accounting for Intangible Assets of Motor Carriers FAS No. 64 - Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements
Specific proposed changes include the following:
As described in the first ED, companies will no longer be required to classify gains and losses from the extinguishment of debt as extraordinary items, but they will still be allowed to use this accounting treatment in certain circumstances.
As described in the new ED, the accounting for certain types of leases will change, (i.e., sale-leaseback transactions and lease modifications with economic effects similar to sale-leaseback transactions).
The reason for two EDs instead of one is because the second has its roots in the comment letters for the first. Commentators suggested changes they felt would improve financial reporting by eliminating inconsistencies in the various standards. FASB agrees in theory. But it also recognizes that some companies might have structured their leases differently, if the proposed accounting changes had been in effect at the time of the transaction. To ensure these substantive changes get a fair hearing, FASB decided to expose them for public comment as part of its “due process.”
Comments on the revised ED http://accounting.rutgers.edu/raw/fasb/draft/rev_ed_rescission.pdf are due by March 18, 2002.
The item below may help you when you send your letter to the FASB. Perhaps you should complain that the EDs do not go far enough to correct abuses of accounting for synthetic leases.
On February 15, 2002, FASB announced http://accounting.rutgers.edu/raw/fasb/news/index.html the release of a revised limited version of an exposure draft (ED) entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections-Amendment of FASB Statement No. 13. The new ED supplements a previous ED dated November 15, 2001 and proposes an important change in lease accounting. The FASB would like educators and practitioners to respond to these new EDs.
From The Wall Street Journal's Accounting Educators' Reviews on February February 22, 2002
TITLE: Firms Use Synthetic Leases
Despite Criticism
REPORTER: Sheila Muto DATE: Feb 20, 2002
PAGE: B6 LINK: http://online.wsj.com/article/0,,SB101415738191993240.djm,00.html
Trinity University students may go to J:\courses\acct5341\readings\WSJsyntheticLeases.htm
TOPICS: Accounting, Creative Accounting, Disclosure, Financial Accounting, Financial Statement Analysis, Lease Accounting
SUMMARY: The article includes a discussion of the features of synthetic leases and the reasons that they are attractive alternatives to purchases and normal lease agreements.
QUESTIONS:
1.) List the properties of synthetic leases. How are synthetic leases different
from "normal" lease agreements? How are synthetic leases different
from purchasing assets?
2.) Are synthetic leases accounted for as capital leases or operating leases? Support your answer. In what situations is a lease transaction accounted for as a capital lease? How are the financial statements different if a transaction is accounted for as a capital lease versus an operating lease? In substance, does it appear that a synthetic lease is more similar to a purchase or an operating lease? Support your answer.
3.) What is meant by DuGan when he said, "but synthetic leases have a hidden balloon payment."? Should a balloon payment be recorded on the financial statements? Support your answer.
4.) Should companies be prohibited or discouraged from engaging in synthetic leases? Support your answer. Is better disclosure of synthetic lease transactions needed in financial reporting? What changes in financial reporting are needed to provide better disclosure of synthetic lease transactions?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Synthetic leasing is intertwined with special purpose entity ploys to keep debt off the balance sheet. You can read about SPEs at http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
"Firms Use Synthetic Leases Despite Widespread Criticism," by Sheila Muto, The Wall Street Journal, February 22, 2002 --- http://online.wsj.com/article/0,,SB101415738191993240.djm,00.html
The widespread use of so-called synthetic leases by companies to purchase and build everything from new campuses to retail stores is coming under increased scrutiny. But that's not stopping a handful of firms from plowing ahead with the controversial financing method.
A synthetic-lease arrangement allows a company to get the tax benefits associated with owning real estate, while keeping the debt associated with it off its balance sheet. Critics say that such leases are an accounting maneuver that hides potential liabilities and can be used to boost earnings per share.
AOL Time Warner Inc., for one, remains committed to financing the construction of its new Manhattan headquarters at the site of the old New York Coliseum and a new production facility in Atlanta with a $1 billion synthetic lease with Bank of America Corp., according to Michael Colacino of real-estate services firm Julien J. Studley Inc., who worked on the deal for the media giant.
Enron Corp.'s use of off-balance sheet subsidiaries were allegedly used "to conceal lots and lots of debt" and "misdirect people away from understanding" its core business, says Mr. Colacino. In contrast, synthetic leases are "used to finance real estate and equipment that aren't part of the core business of a company." For AOL Time Warner, the synthetic lease is "not a material issue."
A spokeswoman for AOL says a synthetic lease "continues to provide a diversified source of tax advantaged, cost-efficient financing ... our synthetic leases are disclosed in our financial statements, and we believe they are in the best interest of our shareholders."
Cheaper Alternative
In a synthetic-lease deal, a financial institution typically sets up a special-purpose entity that essentially borrows money from the institution to build a facility or purchase an existing one for a company. The special-purpose entity holds the title to the property and leases the property to the respective company. In many cases, the company gets a lower interest rate, which is a floating rate based on the firm's creditworthiness rather than on the value of the real estate, although there are up-front legal and accounting costs. Companies have used synthetic leases to finance equipment purchases as well.
They see them as a cheaper alternative to leasing, purchasing or developing property with traditional loans. For accounting purposes, a company is considered a tenant leasing the property under a synthetic-lease structure. As such, the transaction is treated like a simple operating lease, and the company doesn't have to carry the asset on its balance sheet -- though many companies mention their use in a footnote. That means the company avoids taking depreciation charges against earnings. For tax purposes, the company is considered the owner of the asset. As such, it is entitled to deduct the interest payments and the depreciation of the value of the property.
What's more, typically these lease deals run from three to seven years with options to renew. And that's where potential problems can arise.
Because the leases are short-term, if a company can't renew a synthetic lease because its credit rating has fallen, it may all of a sudden be faced with getting new financing and putting it on its books -- a rude surprise for investors. This might be particularly problematic for companies that are short on cash or have properties whose values have fallen.
"There's nothing wrong with them as a concept," says Gordon DuGan, president of W. P. Carey & Co., a New York-based real-estate investment firm that helps companies get out of synthetic deals, "but synthetic leases have a hidden balloon payment." Given these economic times and the drop in real-estate values in some markets, "you don't want to have to make a payment like that," he says.
Often, these deals lack transparency because the liability a company may have isn't fully divulged. Concern about disclosure prompted an about-face last week by Krispy Kreme Doughnuts Inc., whose previous plan to finance the construction of $35 million manufacturing and distribution plant with a synthetic lease came under fire, touched off by a Forbes magazine story.
The Winston-Salem, N.C., company now says it will finance the facility with a traditional mortgage that will be reflected in its financial statements.
Not Dettered
Other companies, meanwhile, plan to proceed with their plans. In a filing with the Securities and Exchange Commission, Idec Pharmaceuticals Inc. says it plans to develop a new $100 million headquarters campus in the San Diego area and a $300 million to $400 million manufacturing facility in nearby Oceanside, Calif., using "off-balance-sheet lease" arrangements.
Idec Pharmaceuticals Chief Financial Officer Phillip Schneider says that while accountants and lawyers at the San Diego-based biotech company have become "less comfortable" with synthetic leases, "we're still looking at that as an option."
What's more, Mr. Schneider says, "synthetic leases are much lower in cost to the company than a normal lease by about 4%."
Chiron Corp., another biotech company, is proceeding with financing a more than $200 million expansion of its Emeryville, Calif., headquarters, although the deal isn't yet completed, says John Gallagher, a company spokesman.
Mr. Gallagher wouldn't comment on Chiron's reasons for continuing with the synthetic lease deal, but he says the company is "monitoring" reaction to synthetic leases "in light of recent events" involving Enron's off-balance-sheet activity.
Hi George,
That depends upon what you mean by "support." If you mean failing to adhere to any FASB standard in the U.S. on a set of audited financial statements, then auditors are sending an open invitation to all creditors and shareholders to contact their tort lawyers --- lawyers always salivate when you mention the magic words "class action lawsuit".
If you mean sending mean-spirited letters to the FASB, then that's all right, because the FASB is open to all communications in what it defines as "due process."
I am a strong advocate of FAS 133 --- corporations got away with hiding enormous risks prior to FAS 133. Could FAS 133/138 and IAS 39 be simplified? Well that's a matter of opinion. The standards will be greatly simplified if your Canadian friends and my U.S. friends support the proposal to book all financial instruments at fair value (as advocated by the JWG and IASB Board Member Mary Barth). But whether this is a simplification is a matter of conjecture since estimation of fair value is a very complex and tedious process for instruments not traded in active and deep markets. In the realm of financial instruments there are many complex financial instruments and derivatives created as custom and unique contracts that are nightmares to value and re-value on a continuing basis. One needs only study how inaccurate the estimated bond yield curves are deriving forward rates. In some cases, we might as well consult astrologers who charge less than Bloomberg and with almost the same degree of error.
My bottom line conclusion: We could simplify the wording of the financial instruments and derivative financial instruments standards by about 95% if we go all the way in adopting fair value accounting for all financial instruments and derivative financial instruments.
But simplifying the wording of the standard does not necessarily simplify the accounting itself and will add a great deal of noise to the measurement of risk. In the U.S., the banking industry is so opposed to fair value accounting that the Amazon river will probably freeze over before the FASB passes what the JWG proposes. See http://www.aba.com/aba/pdf/GR_tax_va6.PDF
Readers interested in downloading the
Joint Working Group IASC Exposure Draft entitled Financial Instruments: Issues
Relating to Banks should follow the downloading instructions at http://www.aba.com/aba/pdf/GR_TAX_FairValueAccounting.pdf
(Trinity University students may find this on J:\courses\acct5341\iasc\jwgfinal.pdf
).
On December 14, 1999 the FASB issued
Exposure Draft 204-B entitled Reporting Financial Instruments and Certain
Related Assets and Liabilities at Fair Value. I'm not sure where you can find
this buried document at the moment.
(Trinity University students can find the document at J:\courses\acct5341\fasb\fvhtm.htm
).
Bob Jensen
-----Original Message-----
From: glan@UWINDSOR.CA [mailto:glan@UWINDSOR.CA]
Sent: Monday, February 25, 2002 5:33 PM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Intrinsic Versus Time ValueI have seen the credit to be Paid-in Capital- Stock Options or to Stock Options Outstanding rather than to a liability. It would be interesting to learn more about what the accounting firms stand to gain by not supporting FAS133.
George Lan
Population Profile of the United States: 2000 http://www.census.gov/population/www/pop-profile/profile2000.html
"CAREERS: Or Not to
B," Fortune Magazine, March 4, 2002, by Ann Aharrington --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206461
You thought you'd sit out the recession by going to business school? Oops. With
applications way up, top candidates are getting wait-listed--or worse, dinged.
Contrary to what most B-school applicants think, being wait-listed--or denied--doesn't mean you don't have options.
If you're on a wait list View it as an opportunity, not an insult. At most schools it means they see you as qualified and want to admit you, but someone similar got there first or made a more persuasive case. Since you can't control such outside factors, focus on what you can do:
• Address any concerns. At the University of Chicago, the wait list is a means of getting more information, says associate dean Don Martin, because "usually there's something missing"--a gap in employment, an uneven academic record, a letter of recommendation that doesn't have much meat. The way you respond to questions may be as important as what you say. "It does put the applicant in a test situation," says Martin.
• Update, don't inundate. Got a promotion or new responsibilities? By all means, let the school know. But keep your communications relevant, brief, and businesslike. "We appreciate the enthusiasm," says Liz Riley of Duke's Fuqua School of Business. "But we appreciate it in writing."
• Follow instructions. This sounds obvious, but B-schools have surprisingly different approaches to wait lists, says Richard Montauk, author of How to Get Into the Top MBA Programs: "Some want a lot of contact; some want none."
Despite your best efforts, the harsh truth is that top schools end up admitting a fraction of their wait lists in a typical year, and this year could be worse.
If you strike out Take comfort in the example of Dave Magstadt, who was turned down by Harvard, Columbia, and Stanford two years ago, despite a 3.95 GPA and a 750 (out of 800) GMAT score. Today the 25-year-old former Accenture consultant is a Columbia first-year who just accepted a summer job offer from Goldman Sachs.
What changed? Dave did. "I didn't get in for a reason," he says in his Oklahoma twang. "I wasn't ready." Magstadt was young and inexperienced and had little international exposure (important at Columbia). It probably didn't help that he was a white male consultant--a very common profile--who applied in the final round. But his biggest problem was one only he could address: he hadn't articulated what he had to offer, what he wanted from an MBA, and what he wanted to do with it.
Admissions experts say this is one of the most common reasons that people get turned down. That doesn't mean everyone needs a five-year plan (although that can work too). They want to know you, though they may ask in different ways. Julia Min of NYU's Stern School says applicants are asked to describe themselves creatively. People have sent games, haiku, even a jar of salsa--whatever might pique the admission committee's interest.
They also want to know why you want to be at their school. Every admissions director has received essays misaddressed to Stanford or Wharton (watch the cut-and-paste), but the problem goes deeper. It's like writing a generic love letter: It rarely persuades. That's one reason that Stanford's Derrick Bolton recommends applicants visit the schools they're serious about. When you think about it, he points out, the cost of business school (about $100K) plus the lost-opportunity cost in not working can compare to that of a house. "Would you buy a house without looking at it?"
The second time around, Dave Magstadt applied to five schools--earlier this time--and visited them all. He pushed for an overseas assignment from Accenture (which he got), sought out opportunities to manage teams, and began to see the direction he wanted his career to take. And as you know, that made the difference.
Found my birthday there, thought this group might be interested.
Jim McKinney
Howard University-----Original Message-----
Subject: IRS Advisory - Website Used for Identity Theft Importance: High At the felony judges meeting information was given out concerning an IRS advisory. Apparently a website has recently been extensively used by criminals interested in stealing identities. The website is www.anybirthday.com . This website lists millions of birthdays. It also contains addresses and other identifying information. I ran a quick check and found that my wife and I were listed but not our daughter. The memo sent out in the DA's office reflects that their staff information also appeared when checked. There are two aspects to this database. You should remove yourself from this data base for obvious reasons since apparently it has become a very popular tool among scam artists - instructions to follow. The other is you can use this service to rapidly search for people all over the country. To remove your name, go to the website and see if you are listed. If you are, click on the FAQ button, then the "privacy statement" button and finally on the "opt out option" button. You will need to enter your information exactly as it appears on the record you pulled up, and then click the "remove my record" button. This should remove you from the data base. Hints: do not list a middle initial, and dob is day-month-year ie 01JAN99.
Reply from David R. Fordham [fordhadr@JMU.EDU]
I kept trying and sometimes it comes up and other times it doesn't. And when it comes up, it is slow as molasses in the Tunguska.
After waiting the 10 minutes, it finally brought me up, but (along with a couple dozen other people who share my name), it listed me at five different zip codes, four of which I haven't lived in for between 11 and 17 years. -- I'd say this site is of limited usefulness.
Another search yielded my grandfather, who has a very unique name, but has been dead for 22 years! There was no mention of the fact that he's dead. Again, such quality problems degrade the site's usefulness in my mind. Also, the search feature appears to limit your limits, so to speak. My wife has a common name, and thus the search yielded what might be hundreds or thousands of entries.
Being something of an amateur genealogist, I laugh out loud at privacy freaks who complain about sites like this. It would shock and scare the heck out of them if they were to visit their local library and spend an hour or two with the reference librarian learning of the ease with which I, they, or anyone else can find out practically all the information that is offered by any of these sites, including the really good ones.
Ready to be surprised? Visit your local Vital Statistics office in your county courthouse. You (or anyone) can get a copy of birth certificates, marriage licenses, real estate deeds, liens, tax histories, and all kinds of stuff, most of which is indexed, and most of which is available in most counties on microfiche to anyone who walks up to the reader. In the past five years, I've probably been in thirty counties, in Georgia, Virginia, Florida, Maryland, and North Carolina, getting public records, and they have been readily, easily available in every single one. No problem, no hassle, no qualifications, just a few that charge a dollar or two for a hardcopy.
(The only limitation I've run into is that Florida recently starting "covering up" the "cause of death" on death certificates when they make a hardcopy from the microfiche, unless you check a block on the copy request form that says you are a relative. But then, the clerk never asked me to *prove* that I was a relative...)
Some, like Manassas and Fairfax VA, Jacksonville FL, even Statesboro GA, have indexes of public records in the public library, giving the exact book number, fiche number, and/or page number of the record you want as long as you know the name.
Or, go to your public library and ask the reference desk for the "City Directory". Names, places of employment, occupations and positions, former employers, whether you own your home or are renting, etc. etc., all indexed and easy to read. Sitting right there on the shelf, too. Some of the older ones even had salary information.
(There are other sources of salary data, but I'm not going to divulge the details. My wife was amazed to learn that our local libraries have my salary (and those of my colleagues and other public employees) ready and waiting for anyone who walks in. But even private company salary data is available in some cases.)
Most libraries and practically all historical society collections have indexes of birth and marriage announcements from local newspapers. Some even have newspaper indexes (indices?) by person's name appearing in news stories. Many smaller towns and counties publish the real estate transfers and sales prices in the newspaper. A lot of these are indexed by name after a year or two.
Court records are by law open to the public in all but a few cases, and are well indexed. In our county, you can walk into the courthouse, walk right up to a computer terminal, and pull up a driver's driving record, including tickets, insurance "points", etc. back at least 15 years. It is widely used by our local trucking companies to check records of job applicants, but you and I can use it, too, and there is no one around to ask us why we would need it! The terminal is sitting on a counter at the end of an open hallway, with instructions for use.
Privacy pundits are trying to close the barn door, and the horse has gone out, around the track, won the race, and is relaxing in the pasture. The piggies, geese, and laying hens are out, too.
Removing your name from these websites may make it a little more difficult for the "merely curious", but you can bet your bottom dollar it won't stop anyone who desires to create mischief for you. There are too many other avenues and easy (really, really easy) ways to get the information. The web simply makes it accessible to those who don't want to have to find a parking place at the library, city hall, county courthouse, or local historical society. A real identity thief won't be deterred by removing your name from a site like this...
Another couple of pennies from David Fordham
U.S. Businesses Join International XML
Debate
U.S. businesses join international standards body to determine the fate and
shape of XML. http://www.newmedia.com/default.asp?articleID=3412
Bob Jensen's threads on XML are at http://www.trinity.edu/rjensen/xmlrdf.htm
Miserable Melodies --- http://www.miserablemelodies.com/
For example, Leonard Nimoy sings "If I Had a Hammer" and Burt Reynolds belts out "The First One That I Lay With."
Some One Liners
"My Mom said she learned how to
swim when someone took her out in the lake and threw her off the boat. I said,
"Mom, they weren't trying to teach you how to swim."
Paula Poundstone
"Sometimes I think war is God's
way of teaching us geography."
Paul Rodriguez
"Relationships are hard. It's like
a full time job, and we should treat it like one. If your boyfriend or
girlfriend wants to leave you, they should give you two weeks' notice. There
should be severance pay, and before they leave you, they should have to find you
a temp."
Bob Ettinger
"My parents didn't want to move to
Florida, but they turned sixty, and that's the law."
Jerry Seinfeld
"Bigamy is having one wife/husband
too many. Monogamy is the same."
Oscar Wilde
Advice for the day: If you have a lot
of tension and you get a headache, do what it says on the aspirin bottle:
"Take two aspirin" and "Keep away from children"
Author Unknown
A November 2001 message from Ken Lay, CEO of Enron
Happy Thanksgiving!
This past weekend, I was rushing around in Houston, Texas trying to do some holiday season shopping done. I was stressed out and not thinking very fondly of the weather right then. It was dark, cold, and wet in the parking lot as I was loading my car up. I noticed that I was missing a receipt that I might need later. So mumbling under my breath, I retraced my steps to the mall entrance. As I was searching the wet pavement for the lost receipt, I heard a quiet sobbing. The crying was coming from a poorly dressed boy of about 12 years old. He was short and thin. He had no coat. He was just wearing a ragged flannel shirt to protect him from the cold night's chill. Oddly enough, he was holding a hundred dollar bill in his hand. Thinking that he had gotten lost from his parents, I asked him what was wrong. He told me his sad story. He said that he came from a large family. He had three brothers and four sisters. His father had died when he was nine years old. His Mother was poorly educated and worked two full time jobs. She made very little to support her large family. Nevertheless, she had managed to skimp and save two hundred dollars to buy her children some holiday presents (since she didn't manage to get them anything during the previous holiday season).
The young boy had been dropped off, by his mother, on the way to her second job. He was to use the money to buy presents for all his siblings and save just enough to take the bus home. He had not even entered the mall, when an older boy grabbed one of the hundred dollar bills and disappeared into the night. "Why didn't you scream for help?" I asked. The boy said, "I did." "And nobody came to help you?" I queried. The boy stared at the sidewalk and sadly shook his head. "How loud did you scream?" I inquired.
The soft-spoken boy looked up and meekly whispered, "Help me!"
I realized! that absolutely no one could have heard that poor boy cry for help. So I grabbed his other hundred and ran to my car.
Happy Thanksgiving everyone!
Signed,
Kenneth Lay Enron CEO
Bob Jensen's threads on Enron humor are at http://www.trinity.edu/rjensen/fraud.htm#Humor
Steven Filling send me the following link to a video history of Enron. It is in many ways a good summary, although I was turned off by the political overtones aimed at President Bush. The video seems to be politically motivated rather than education regarding the facts.
Energy deregulation took place in 1993, seven years prior to when the Bush/Cheney team took office in Year 2000. Energy deregulation was forced mainly under the influence of Phil and Wendy Gramm. It is not at all clear that Bush or Cheney played a major role after taking office. You can read a timeline at http://www.trinity.edu/rjensen/fraud.htm#bribes
Keep in mind that energy deregulation is not necessarily a bad thing in and of itself. It was a bad thing in the way Enron abused the deregulation with political influence and bribes. By way of analogy, commercial airplanes are good things that were turned into weapons by terrorists. Energy deregulation can be a good thing unless turned into a weapon by greedy investment bankers and traders.
Steve's message is as follows:
Bob -
Wasn't sure if this was included in your enron links.
http://minibytes.mondominishows.com/enron/main.asp
cheers s.
Note from Bob Jensen:
I have to fly from San Antonio to Mason City, Iowa on March 5. Since I will be driving back to San Antonio during our Spring Break, I only needed a one way airline ticket. The price for a one-way ticket was quoted as $685. But the airline's agent recommended that I get the round trip ticket for $335 and throw away the return ticket. Is there anybody named Robert E. Jensen who wants to fly from Mason City to San Antonio in the next six months?
Forwarded by Dick Haar
First, buying paint from an ordinary hardware store:
Customer: Hi. How much is your paint?
Clerk: We have regular quality paint for $18 a gallon and premium paint for $25. How many gallons would you like?
Customer: Five gallons of regular paint please.
Clerk: Great. That will be $90 plus tax.
Now, imagine you are buying paint from an airline.
First you spend days trying to reach them by phone to ask if they have paint.
Nobody answers.
So you drive to an Airline store:
Customer: Hi. How much is your paint?
Clerk: Well, sir, that all depends on quite a lot of things.
Customer: Can you give me a guess? Is there an average price?
Clerk: Our lowest price is $12 a gallon, and we have 60 different prices up to $200 a gallon.
Customer: What's the difference in the paint?
Clerk: Oh, there isn't any difference; it's all the same paint.
Customer: Well, then I'd like some of that $12 paint.
Clerk: When do you intend to use the paint?
Customer: I want to paint tomorrow. It's my day off.
Clerk: Sir, the paint for tomorrow is the $200 paint.
Customer: When would I have to paint to get the $12 paint?
Clerk: You would have to start very late at night in about 3 weeks. But you will have to agree to start painting before Friday of that week and continue painting until at least Sunday.
Customer: You've got to be kidding!
Clerk: I'll check and see if we have any paint available.
Customer: You have shelves FULL of paint! I can see it!
Clerk: But it doesn't mean that we have paint available. We sell only a certain number of gallons on any given weekend. Oh, and by the way, the price per gallon just went to $16. We don't have any more $12 paint.
Customer: The price went up as we were talking?
Clerk: Yes, sir. We change the prices and rules hundreds of times a day, and since you haven't actually walked out of the store with your paint yet, we just decided to change. I suggest you purchase your paint as soon as possible. How many gallons do you want?
Customer: Well, maybe five gallons. Make that six, so I'll have enough.
Clerk: Oh no, sir, you can't do that. If you buy paint and don't use it, there are penalties and possible confiscation of the paint you already have.
Customer: WHAT?
Clerk: We can sell enough paint to do your kitchen, bathroom, hall and north bedroom, but if you stop painting before you do the bedroom, you will lose your remaining gallons of paint.
Customer: What does it matter whether I use all the paint? I already paid you for it!
Clerk: We make plans based upon the idea that all our paint is used, every drop. If you don't, it causes us all sorts of problems.
Customer: This is crazy!! I suppose something terrible happens if I don't keep painting until after Saturday night!
Clerk: Oh yes! Every gallon you bought automatically becomes the $200 paint.
Customer: But what are all these "Paint on sale from $10 a gallon" signs?
Clerk: Well, that's for our budget paint. It only comes in half-gallons. One $5 half-gallon will do half a room. The second half-gallon to complete the room is $20. None of the cans have labels, some are empty and there are no refunds, even on the empty cans.
Customer: To hell with this! I'll buy what I need somewhere else!
Clerk: I don't think so, sir. You may be able to buy paint for your bathroom and bedrooms, and your kitchen and dining room from someone else, but you won't be able to paint your connecting hall and stairway from anyone but us. And I should point out sir, that if you paint in only one direction, it will be $300 a gallon.
Customer: I thought your most expensive paint was $200!
Clerk: That's if you paint around the room to the point at which you started. A hallway is different.
Customer: And if I buy $200 paint for the hall, but only paint in one direction, you'll confiscate the remaining paint.
Clerk: No, we'll charge you an extra use fee plus the difference on your next gallon of paint. But, I believe you're getting it now, sir.
Customer: You're insane!
Clerk: But we're now Canada's only paint supplier! And don't go looking for bargains! Thanks for painting with our Airline.
Next!
I liked the one below about Teaching Accounting in the 1970s. It is so true!
Also forwarded by Dick Haar
Teaching Accounting in 1950:
A logger sells a truckload of lumber for $100.
His cost of production is 4/5 of the price.
What is his profit?
Teaching Accounting in 1960:
A logger sells a truckload of lumber for $100.
His cost of production is 4/5 of the price, or $80.
What is his profit?
Teaching Accounting in 1970:
A logger exchanges a set "L" of lumber for a set "M" of money.
The cardinality of set "M" is 100. Each element is worth one dollar.
Make 100 dots representing the elements of the set "M."
The set "C", the cost of production contains 20 fewer points than set "M."
Represent the set "C" as a subset of set "M" and answer the following
question: What is the cardinality of the set "P" of profits?
Teaching Accounting in 1980:
A logger sells a truckload of lumber for $100.
His cost of production is $80 and his profit is $20.
Your assignment: Underline the number 20.
Teaching Accounting in 1990:
By cutting down beautiful forest trees, the logger makes $20.
What do you think of this way of making a living?
Topic for class participation after answering the question:
How did the forest birds and squirrels feel as the logger cut down the trees?
There are no wrong answers.
Teaching Match in 2000:
A logger sells a truckload of lumber for $100.
His cost of production is $120.
How does Arthur Andersen determine that his profit margin is $60?
Forwarded by Auntie Bev
COMMENTS MADE IN THE YEAR 1957
I'll tell you one thing, if things keep going the
way they are, it's going to be impossible to buy a
week's groceries for $20.
Have you seen the new cars coming out next year? It
won't be long before $5,000 will only buy a used
one.
If cigarettes keep going up in price, I'm going to
quit. A quarter a pack is ridiculous.
If they raise the minimum wage to $1. nobody will be
able to hire outside help at the store.
When I first started driving, who would have thought
gas would someday cost 29 cents a gallon. Guess
we'd be better off leaving the car in the garage.
Kids today are impossible. Those duck-tail hair cuts
make it impossible to stay groomed. Next thing you
know, boys will be wearing their hair as long as the
girls.
I'm afraid to send my kids to the movies any more.
Ever since they let Clark Gable get by with saying
"damn" in Gone with The Wind, it seems every movie
has either hell or damn in it.
I read the other day where some scientist thinks
it's possible to put man on the moon by the end of
the century. They even have some fellows they call
astronauts preparing for it down in Texas.
Did you see where some baseball player just signed a
contract for $75,000. a year just to play ball? It
wouldn't surprise me if someday they'll be making
more than the President.
I never thought I'd see the day all our kitchen
appliances would be electric. They are even making
electric typewriters now.
It's too bad things are so tough nowadays. I see
where a few married women are having to work to make
ends meet.
It won't be long before young couples are going to
have to hire someone to watch their kids so they can
both work.
Marriage doesn't mean a thing anymore - those
Hollywood stars seem to be getting divorced at the
drop of the hat.
I'm just afraid the Volkswagen car is going to open
the door to a whole lot of foreign business.
Thank goodness I won't live to see the day when the
Government takes half of our income in taxes. I
sometimes wonder if we are electing the best people
to congress.
The drive-in restaurant is convenient in nice
weather, but I seriously doubt they will ever catch
on.
There is no sense going to Lincoln or Omaha anymore
for a weekend. It costs nearly $15. a night to stay
in a hotel.
No one can afford to be sick anymore - $35. a day in
the hospital is too rich for my blood.
If they think I'll pay 50 cents for a hair cut, forget it.
>>
>> Before you you know it, mailing a letter will cost a nickel.
>>
Diary Entries of a Young Woman on a Cruise Ship:
Dear Diary,
MONDAY: What a wonderful cruise this is going to be! I felt singularly honored this evening. The Captain asked me to dine at his table.
TUESDAY: I spent the entire afternoon on the bridge with the Captain.
WEDNESDAY: The Captain made proposals to me unbecoming an officer and a gentleman.
THURSDAY: Tonight the Captain threatened to sink the ship if I do not give in to his indecent proposals!
FRIDAY: This afternoon I saved 1600 lives.
Just another day on the river
http://koti.mbnet.fi/~soldier/towboat.htm
A husband is advised, by a psychiatrist to assert himself. "You don't have to let your wife henpeck you! Go home and show her you are the boss!"
The husband takes the doctor's advice. He rushes home, slams the door, shakes his fist in his wife's face and growls, "From now on, you're taking orders from me! I want my supper right now, and when you get it on the table, go upstairs and lay out my best clothes. Tonight I'm going out with the boys, and you are going to stay home where you belong! And, another thing, guess who's going to comb my hair, give me a shave and tie my necktie.....?"
His wife calmly says, "The undertaker........"
Forwarded by Auntie Bev
The 92-year-old, petite, well-poised and proud lady, who is fully dressed each morning by eight o'clock, with her hair fashionably coifed and makeup perfectly applied, even though she is legally blind, moved to a nursing home today. Her husband of 70 years recently passed away, making the move necessary.
After many hours of waiting patiently in the lobby of the nursing home, she smiled sweetly when told her room was ready. As she maneuvered her walker to the elevator, I provided a visual description of her tiny room, including the eyelet sheets that had been hung on her window. "I love it," she stated with the enthusiasm of an eight-year-old having just been presented with a new puppy.
"Mrs. Jones, you haven't seen the room .... Just wait."
"That doesn't have anything to do with it," she replied.
"Happiness is something you decide on ahead of time. Whether I like my room or not doesn't depend on how the furniture is arranged ... it's how I arrange my mind. I already decided to love it ...
"It's a decision I make every morning when I wake up. I have a choice; I can spend the day in bed recounting the difficulty I have with the parts of my body that no longer work, or get out of bed and be thankful for the ones that do. Each day is a gift, and as long as my eyes open I'll focus on the new day and all the happy memories I've stored away ... just for this time in my life. Old age is like a bank account ... you withdraw from what you've put in ... So, my advice to you would be to deposit a lot of happiness in the bank account of memories.
Forwarded by Debbie Bowling
Here's a joke I found that would be good for your bookmarks:
Church Anecdote: A preacher was completing a temperance sermon: with great expression he said, "If I had all the beer in the world, I'd take it and throw it into the river."
With even greater emphasis, he said, "And if I had all the wine in the world, I'd take it and throw it into the river."
And then, finally, he said, "And if I had all the whiskey in the world, I'd take it and throw it into the river."
He sat down. The song leader then stood very cautiously and announced with a pleasant smile, "For our closing song, let us sing Hymn #365: 'Shall We Gather At the River.'"
(the above was from the following: http://www.rinkworks.com/said/bulletins.shtml
Forwarded by Cindy Happy,
Muldoon lived alone in the Irish countryside with only a pet dog for company.
One day the dog died, and Muldoon went to the parish priest and asked, "Father, me dog is dead. Could ya' be sayin' a mass for the poor creature?"
Father Patrick replied, "I'm afraid not; we cannot have services for an animal in the church. But there are some Baptists down the lane, and there's no tellin' what they believe. Maybe they'll do something for the creature."
Muldoon said, "I'll go right away Father. Do ya' think $5,000 is enough to donate for the service?"
Father Patrick exclaimed, "Sweet Mary, Mother of Jesus! Why didn't ya' tell me the dog was Catholic?"
And that's the way it was on March 4, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
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Since this February 25 edition of New Bookmarks came out to be nearly 100 pages, I cut out the Enron scandal updates and pasted them to a new document at http://www.trinity.edu/rjensen/fraud022502.htm
Quotes of the Week
Internet usage
both in school and at home has increased dramatically. The Web has become an
important tool for instruction and administration, as well as a rich source for
information and resource sharing. According to the U.S. Census Report issued in
September 2001, 51 percent of schools had one or more computers in August 2000,
compared to 4.2 percent in December 1998. Nine out of 10 children have access to
a computer - four out of five at school and about two out of three at home.
Two-thirds of homes with a school-aged child have a computer; 53 percent have
Web access. Though computers are more available, they are not equally
distributed.
Educating the Web Community, T.H.E. Journal, February 2002, Page 8
This
unparalleled growth of enrollment for courses delivered via distance education
also prompted a restructuring of the services available to faculty. This growth
expanded the number of faculty teaching students at a distance, a vast increase
in courses offered, and new degree, degree completion, and specialized programs.
The distance education growth experienced by the university prompted the senior
instructional systems designer to evaluate practices and operations. During the
evaluation process, it became apparent that a unique faculty development model
would have to allow faculty to focus on instruction by providing a full range of
services to faculty, including expanding student support services
Mark Fink (See below)
He is having a
field day with the apparent anarchy which he perceives is reigning the field of
accountancy vis-à-vis the *bickering* over the 150 hour rule, the *bickering*
over the XYZ, and now the *bickering* over computerizing what is perceived by
outsiders as a 1940's-era style examination requirement. Maybe we should just
give up and all go join the Information Systems professional organizations. At
least they already have a reputation for being free-spirits, loose cannons,
fruits-nuts-and-flakes. And they don't have to wear coats and ties to their
clients, anymore, either.
David Fordham's Brother-in-Law (See below)
The teen brain
is a work in progress.
Frontline: Inside the Teenage Brain (See below)
One shows
respect for books by using them.
Umberto Eco
DO NOT STAND
AT MY GRAVE AND WEEP
This link was sent to me by Paula Ward --- http://www.cantusquercus.com/9611text.htm
Do not stand at my grave and weep, I am not there, I do not sleep.
(1) I am a thousand winds that blow. I am the diamond glint on snow. I am the sunlight on ripened grain. I am the gentle autumn rain.
(2) When you wake in the morning hush, I am the swift, uplifting rush Of quiet birds in circling flight. I am the soft starlight at night.
Do not stand at my grave and weep. I am not there, I do not sleep. (Do not stand at my grave and cry. I am not there, I did not die!
Text by Mary Frye (1942)Do not stand at my grave and weep. I am not there, I do not sleep.
(3) I am the song that will never end. I am the love of family and friend. I am the child who has come to rest In the arms of the Father who knows him best.
(4) When you see the sunset fair, I am the scented evening air. I am the joy of a task well done. I am the glow of the setting sun.
Do not stand at my grave and weep. I am not there, I do not sleep. (Do not stand at my grave and cry. I am not there, I did not die!
Text by Wilbur Skeels (1996)
We are such
stuff / as dreams are made on
William
Shakespeare
This is such stuff/ as nightmares are
made on:
This passage demonstrates the miserable ethics of investment banking and the
crying need for FAS 133 that went into effect in 1998. The passage is
written by Frank Partnoy, FIASCO: The Inside Story of a Wall Street
Trader (New York: Penguin Books, 1999, ISBN 0 14 02.7879 6, pp. 65-67)
Note especially the customers that were targeted for these high risk derivative
financial instruments.
From a salesman's perspective, he may as well have been selling exploding Ford Pintos. A salesman cared only about making the sale, not about the damage it might cause later. All derivatives salesmen knew that eventually some of their trades would blow up, and some of their clients would then go up in flames. If the losses really got ugly, you always could quit the firm. If you had a reputation for selling dangerous high-margin derivatives, it would be easy to get another job.
From the firm's perspective it was important to make as much money up front as possible on these trades. Take out a big fee, plant the time bomb, walk away, and wait. Of course, after the explosion the derivatives losers would sue, but as long as the firm had made enough money up front and could defend the lawsuit adequately, it would be fine. The important message I took from the disclaimers was this: The way you made money selling derivatives was by trying to blow up your clients.
I examined the two-page term sheet. It said this trade was a one-year bond with a guaranteed annual coupon payment of 11.25 percent. That was a huge coupon, especially given that the bond was issued by a U.S. agency. U.S. agencies are virtually risk-free, and a normal bond issued by one would pay a coupon of maybe half that much. What was the catch?
The formula for principal redemption said the return of the amount you originally invested was linked to the difference in one year between the value of the Thai baht and a "basket" of currencies. This basket was composed of approximately 84 percent U.S. dollars, 10 percent Japanese yen, and 6 percent Swiss francs. If in one year the baht and the basket had changed by the same amount, you would get all of your principal back. So if you bought $100 million of this derivative, and the baht matched the basket, you would receive a whopping $11.25 million coupon plus $100 million in principal, an enormous total return. However, if the changes in the baht and the basket did not match exactly, you might get less than your entire principal amount back; you might even get zero.
Was there any reason to expect the baht to match the basket? First Boston said yes. Thailand had a "managed currency," which meant its central bank, the Bank of Thailand, adjusted the daily value of the baht based on certain variables, including the value of Thai foreign trade.
First Boston had designed this basket to duplicate the formulas they believed the Bank of Thailand was using to manage the baht. Although the Bank of Thailand kept those formulas top secret, First Boston claimed it had discovered them.
If First Boston was right, you would earn the cool, calm 11.25 percent and never realize you had been in the eye of a storm. However, if the Bank of Thailand zigged when you thought it would zag, you would be swept into a monsoon and wiped out. This trade was a perfect example of the tactic cited by the infamous BT salesman: "Lure people into that calm and then just totally fuck 'em." (After a few years in that calm, investors were stunned in July 1997, when the Bank of Thailand announced it was abandoning the formulas, and the baht--together with its associated derivatives--immediately collapsed.)
You might have some questions about this derivative. Who was buying it and why? Were they just speculating, or did they believe First Boston had discovered a secret formula? And if this trade was such a good bet, why was First Boston offering to sell the trade, rather than taking the risks itself? Was First Boston taking the other side of this bet, or were they hedging somehow? Why were U.S. government agencies involved in this trade, issuing bonds linked to a complex formula based on how the Bank of Thailand managed its currency? And most importantly, how much money was First Boston making on the sales of these derivatives?
I asked one of the salesmen a few of these questions, starting with, "Who buys these things, anyway?"
No answer. The salesman refused to tell me. I thought the buyers might include hedge funds, the swashbuckling traders who placed big, sophisticated bets in nearly every market. I mentally ticked off a list of the most sophisticated private hedge funds. They had names like Quantum or Tiger or Gordian Knot. I decided to pester the salesman until I got an answer.
"Is it Quantum?" Quantum, originally started by financier George Soros, was now the largest hedge fund in the world. Quantum and Soros had made (and lost) billions speculating on foreign exchange rates.
"No way. Are you kidding me?" It was a stupid question. The top hedge funds were much too sophisticated to buy this trade from First Boston. They could place such bets on their own, without paying First Boston's hefty fees. Whom did that leave?
"Other investment banks?"
"No again." A second stupid question. Another bank, such as Morgan Stanley or Goldman Sachs, was more likely to be selling the trade than buying it.
"How about mutual funds?" I knew the big funds played in emerging markets derivatives. Could Fidelity or Templeton be a buyer?
"Nope."
"Commercial banks?"
"No."
I was running out of choices. I pressured the salesman to admit who was buying the Thai baht trade.
"Look, I'm not gong to tell you any names, but if I tell you who the main categories of buyers are, will you leave me alone?"
"OK." I cold badger him for names later.
He said, "State pension funds and insurance companies."
"What?" I was shocked.
He just smiled.
"Really?" I asked him. I couldn't believe it. "State pension funds and insurance companies?"
The salesman simply nodded. He said state pension funds were among the biggest buyers of structured notes, of which this Thai trade was but one example. Generally the list of structured note buyers included the State of Wisconsin and several counties in California, including Orange County, although the salesman noted that this Thai trade was small and unusual and that state pension funds and insurance companies typically bought other types of structured notes.
Sate of Wisconsin? Orange County? That seemed ridiculous. Why were they buying these risky derivatives trades? The next thing you know, someone would try to claim Procter & Gamble was a big derivative buyer.
I asked, "What about insurance companies?" They're conservative investors. Why would they buy these structured notes?"
He looked at me as if I were a moron. "Come on. These notes are issued by U.S. government agencies. They're rated AAA or AA, and they're the only way for an insurance company to play the foreign exchange markets. Isn't it obvious?"
The following is quoted from Page 96:
Michael Lipper of the fund-tracking company Lipper Analytical Services said that the warnings applied to mutual funds, too; 475 of 1,728 stock, bond, and balanced funds had invested billions in derivatives, yet such holdings "magically seem to disappear" the day funds have to file statements with shareholders. Although mutual funds are forbidden by government regulation from using leverage to buy securities with borrowed money, the Investment Company Institute, a Washington-based mutual fund trade group, announced that mutual funds not only held derivatives worth $7.5 billion (2.13 percent of total assets), they owned $1.5 billion of the special derivatives called structured notes, of which PERLS was one type. For example, Fidelity Investment's $10 billion Asset Manger fund had $800 million invested in structured notes in the last quarter of 1993, including leveraged bets on Finnish, Swedish, and British interest rates. One note, based on Canadian rates and leveraged thirteen times, had gained 33 percent the previous year; in the first four months of 1994, that same note plunged 25 percent. What was worse, the mutual fund trade groups didn't even seem to know about the purchases of PLUS Notes.
Bob Jensen's other illustrations of how the professions of financial analysis and investment banking are rotten to the core are given at http://www.trinity.edu/rjensen/fraud.htm#Cleland
The following February 21 message was forwarded by George Lan [glan@UWINDSOR.CA]
In addition to trying to catch a tiger by the tail, today's auditors of derivatives may also have to contend with : .
LYONS (liquid yield option notes) .
CATs (certificates of accrual on Treasury certificates) .
COUGRs (certificates of accrual on treasury certificates) .
TIGRs (Treasury investment growth certificates) .
ZEBRAs (zero coupon eurosterling bearer or registered accruing certificates) .
OPOSSMS (option to purchase or sell specified mortgage-backed securities)Journal of Accountancy (November 1990), from which the above definitions come from, has a fascinating glossary of selected financial instruments. The list must be extended by now as it is stated in the glossary that, "Wall Street innovators devise new financial instruments faster than Campbell's make alphabet soup." Some other esoteric names mentioned in the glossary include : flip-flop notes, COPS, DARTS, PIK, STRIPS, Butterfly spread and CIRCUS.
George
Please Try Your Best to Answer Questions Coming In From the World
It is impossible to generalize with respect to professors helping others in the world. Each case has unique circumstances. The privileges that go with being admitted to the academy entail heavy obligations to be a Good Samaritan on the Information Highway. Selfishness breeds dysfunctional selfishness. Generosity breeds functional generosity. People do return favors at times when you least expect it. And even if they don't return a favor, their notes of gratitude just plain make your day!
Always remember that you generally receive as much or more than you give when you help someone else, including complete strangers. Most questions that I research free for others make me a better scholar. Most answers that I dig up can usually improve one or more of my 10,000+ Web documents such that I can now be more proud of that document, especially when I discover that what I'd previously written was totally idiotic.
Most importantly, when you start growing old and senile like me, your discoveries while helping others, discoveries that you also put into Web documents, become part of your extended brain. Anything you can do to improve your Web documents will someday return to help you out of a bind when memory fails.
By setting an example, you inspire others to be more sharing among members of the academy. How many of you are inspired to help when examples are set by a Denny Beresford, a Richard Campbell, a Jagdish Gangolly, a George Lan, an Ed Scribner, a Roger Collins, a Scott Bonacker, an Andrew Priest, a David Albrecht, an Eliot Kamlet, a Roger Debreceny, a Glen Gray, and far-away folks like New Zealand's Robert.Walker, and many others, all of whom share their knowledge freely and frequently? How many of you are really grateful when a professor such as Baruch Lev is willing to provide working research papers at his or her Website? These are Good Samaritans who have special respect in the academy.
How many of you are turned off by the few egotists in the academy who feel that someone should pay for every piece of knowledge they impart other than the words in their published research papers (which indirectly lead to payment due to the merit raise systems of their employers)? A pay-as-you-go system just does not work efficiently or effectively in the knowledge academy.
I am most inclined to help when the request comes from persons not likely to have access to helpers, libraries, T1 lines, and other knowledge resources. For example, requests from students or professors in developing nations are very difficult for me to turn down.
I am inclined to help anybody (even high salaried employees of accounting or business firms) if I think that my answer to their question might help a broader audience such as subscribers to the AECM. Generally if I answer those requests, the person asking the question must agree to my disclosure of his or her email address since I feel that much can be gained from subsequent dialog on the issue from my AECM friends (and you all really are friends out there).
Unreasonable requests such as a request to summarize the history of auditing (the request recently received by Jagdish) can be answered rather quickly by short answers that give very broad guidance such as references to a few books on the history of auditing or a suggestion of how to obtain a helpful Web search using helpers noted at http://www.trinity.edu/rjensen/searchh.htm
Sometimes a complex answer can be reduced to a few suggested search terms to use in the Advanced search site of Google. You, as an "expert," should be familiar with key words or phrases that others may not think of when embarking on a search. For example, when an executive from Rice recently asked me how to find data on hiring of women by accounting firms, I suggested some key words that she claims helped her greatly when she then searched on Google.
It also helps when you maintain over 10,000 documents at your Website. Many questions you then receive are from people who are almost certain that you can find the answer at your own Website after they become hopelessly lost in the swamp that you created. And they are correct in most cases, although sometimes I get mired down in my own Website muck. Getting lost myself is the best lesson that I need to improve the navigation aids to some module among the documents.
And the bottom line is that those of us who are teachers will help our own future students by taking the time to write down (at a Website) answers to questions from strangers, because when your own students one day have the same questions, you can find the answer in your extended (Web) brain.
Obviously, you must draw the line if a person repeatedly wants to turn you into an unpaid research assistant. I've never encountered this uncomfortable situation. You also must draw the line if you are like Jagdish in a situation where you are truly inundated with requests such that it is impossible to find the time for everybody. This is no excuse, however, for not helping as many as you can find some time to help.
Sorry to preach on this one, but if I've inspired just one lurking Good Samaritan out there, it was worth it.
Bob Jensen
-----Original Message-----
From: George Lan [mailto:glan@UWINDSOR.CA]
Sent: Tuesday, February 19, 2002 9:19 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Help requests.Hi Jagdish,
Sounds to me that these are hitch-hikers of the information highway. Generally, one does not have the time, nor is it safe, to give free rides to unknown parties.
I rarely receive any such requests but if I do, I'll ask them to search the library first-- it's part of the learning process.
George Lan
University of Windsor----- Original Message -----
From: J. S. Gangolly <gangolly@CSC.ALBANY.EDU>
To: <AECM@listserv.loyola.edu>
Sent: Monday, February 18, 2002 2:13 PM
Subject: Help requests.For the past few months I have been inundated with requests for all sorts of things from students from all parts of the world. I am appending below some that I got just last week (I have deleted the identity of the senders, though I am tempted to reveal them in public interest). I was wondering if this is a pervasive > phenomena, or I just happen to be a lone unfortunate person.
Jagdish
Message from Scott Bonacker, CPA [scottbonacker@MOCCPA.COM]
In another situation, the way that they handle those kinds of questions is to refer the asker to this URL: http://www.ultratech-llc.com/KB/?File=~Help.TXT where it begins "Every few months or so, the issue of answering newbie questions and whether people are doing sufficient research prior to requesting assistance rages on the various lists. On the one side, we have the 'Everyone was once a newbie' crowd, with the opposing forces made up of the 'Kindly Do Your Homework' contingent."
When it was used on me I thought it was a constructive way to suggest better preparation, and maybe it would be something you could use as well.
Scott Bonacker,
CPA McCullough, Officer & Company,
LLC Springfield, Missouri moccpa.com
February 19 reply from Amelia Baldwin [abaldwin@CBA.UA.EDU]
I admit I have sometimes responded (can you point me to articles on such and such topic? how can i get a copy of this article you wrote?) and sometimes not (please tell me how expert systems have impacted auditing so i can complete this class assignment)...
I agree with the spirit of Bob's email. Unfortunately, few of us are as well organized and prolific as he is at posting our thoughts and work for others to view. I do post a huge amount of info on my websites (last i checked, about 250mb of stuff), but I admit it is neither so thoughtful as Bob's nor so interesting.
In my experience, some requests come from folks who have stumbled on some part of my website (usually created for students, but i don't see any reason to password it either) and have not found enough info for whatever their purposes are and want me to find more for them... heck, I've already found lots for them! Others are just genuinely curious or journalists, and a few are PhD students desperately searching for reference material.
I think it's interesting how the web and other technologies give us this great opportunity to spread knowledge on the one hand, but then adds to our burden to DO IT, on the other.
In my experience, efforts to use technology to deliver information (to students, colleagues, whomever) are still seen by the powers that be as "hobbies" and not worth consideration in P&T decisions. I don't agree, for sure, but clearly many decision-makers' activities lend support to that view. When a tenure committee says it will only consider your website if you print it out and include it in your binder, that's clearly a bad sign.
If you haven't seen this article (dated Friday?) in the Chronicle: "Ever So Slowly, Colleges Start to Count Work With Technology in Tenure Decisions" http://chronicle.com/free/v48/i24/24a02501.htm
:o)
Amelia
February 19 reply from Andy Lymer
I read this thread with interest - as one of the editors (with Andrew Priest) of the AccountingEducation.com community (and the one who gets most the emails to @accountingeducation.com more importantly) I get about 5-10 of these types of requests a day! I have policy that means I answer questions where, like Andrew, the person appears to have done a bulk of the work themselves and are genuinely seeking guidance to help them take the next step. However, I have a standard email that goes to anyone whom I suspect is just emailing me their class assignment and hoping I'll do it for them! The email says its in their interests to do research for class assignments themselves and their tutor would not thank me for doing it for them - if they want to ask a specific question I'll do my best to offer help or point them to someone who can help - but it must be a specific question not a general one.
My twopence (I'm from the UK!) worth on this issue. I am obviously not as generous as Bob - but then I manage to get to sleep every night - which is something I suspect he can't always fit in!
Cheers
Andy Lymer University of Birmingham and AccountingEducation.com
Hi XXXXX,
I receive over 50 email messages a day regarding FAS 133. I generally try to get people started along the right track.
I do have a full-time teaching and research professorship and cannot become a private tutor providing free consulting on a daily basis. Your email inquiries are now running one or two per day.
I am afraid that I will have to limit you to one question per month. I realize how difficult it is to get into FAS 133, but you must realize that I cannot provide consulting to 50 people a day and still do my own work. I answered your first six technical messages, but I cannot be answering two of your questions per day into the future.
You will have to find some other tutor to help with your questions.
I do apologize, and I hope you understand.
Bob Jensen
New Search Engine
A colleague of mine recently showed me a great new search engine called Vivisimo ( http://www.vivisimo.com ). I use Google most of the time . . ., but I now use Vivisimo when the first few Google hits are not fruitful. I find that the classification structure (similar to file explorer) really helps me to "zero-in" on relevant links.
Rick -------------------------
Richard Newmark Assistant Professor of Accounting University of Northern Colorado Kenneth W. Monfort College of Business Campus Box 128 Greeley, CO 80639 (970) 351-1213 Office (801) 858-9335 Fax (free e-mail fax at efax.com) richard.newmark@PhDuh.com http://PhDuh.com
Reply from Aaron Konstam
I identified the problem. That site does not work with netscape of mozilla from linux. On W2k and IE it works fine.
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
My dad in 1914, when he was about two years old, bit the Blakjer Church's organist on the leg while she was playing one of those old fashioned pump organs in front of the congregation. Now pumpers are coming back!
"Coming soon: foot-powered laptops," by John Leyden, The Register, February 15, 2002 --- http://www.theregister.co.uk/content/54/24090.html
A US developer is coming to market with a device which lets users recharge batteries using a foot-operated pump.
The StepCharger, from AladdinPower, gives approximately 20 minutes of laptop power after five minutes of brisk pumping.
This is not a great deal of time but, as AladdinPower customer services rep Max Smith told us, it could come in extremely handy if you're stuck without access to an external power source or a spare battery.
The StepCharger weighs 10.5 ounces and is roughly the size of a paperback book; it can be used to charge anything from satellite phones to digital cameras and video cameras, as well as laptops. In fact it works with most electrical devices with a rechargeable battery. It provides up to six watts charge at 18 Volts DC, according to Smith (who incidentally helped George Best run his businesses in Manchester in the 70s).
The StepCharger is not yet publicly available (contrary to what it says on the AladdinPower Web site). The US Department of Defense has bought an earlier version of the product for landmine testing and detonation (it's suitable as it can be used to generate and release a well-controlled quantity of electrical power).
Unsurprisingly, the DoD is not keen for civilians to use the StepCharger for this application, so AladdinPower is bringing a consumer version to market. This is expected to cost around $150.
The StepCharger provides approx. four times more power than AladdinPower's hand-powered battery charger, which is designed with mobile phones in mind and is already available for $60. AladdinPower is looking for distributors in Europe and Asia.
External links: StepCharger which we reckon is a lot more promising than something else AladdinPower is currently marketing
Related stories Clockwork computer power planned for next year Earth, Wind, Fire and Water hurled into laptop designs
From Syllabus News on February 19, 2002
SAP Funds E-Business Curriculum Development
SAP America, Inc. last week awarded 10 schools curriculum development grants to encourage undergraduate and graduate study of e-business technology. The awards were based on benefits of a project to students and faculty, and the potential for use of integrated business processes and SAP solutions. The top award of $100,000 went to Rutgers University. Other winners were: Widener University, the University of South Dakota, and California State University, Chico, Northern Arizona University, University of Wisconsin, Milwaukee, the University of Missouri, Columbia, the Kelly School of Business of Indiana University, the Haub School of Business of St. Joseph's University, and Drexel University.
Company Sets Up E-Business Marketplace Testbed
SAP also said it would fund a simulated e-business marketplace at four universities. The initiative, to be called the SAP Simulated Marketplace for Advance Research and Teaching (SMART), is designed to give students first-hand experience with demand across the supply chain, system development and maintenance, and decision-making across a company's value chain. It will be developed by the University of South Dakota; California State University, Chico; University of Missouri; Queensland University of Technology, Australia; and the University of Sao Paulo, Brazil. Schools participating will function as component suppliers, original equipment manufacturers, customers and subcontractors. Transactions will be conducted using the mySAP.com suite of e-business applications.
eCollege Expects to Hover at Breakeven This Year
eCollege, a provider of technology and services for online higher education programs, said it expects to see a pre-tax profit of $500,000 to $2 million in 2002, as well as student fee growth of between 30 to 45 percent. Oakleigh Thorne, the company's chairman, said he expects the company to be "fluctuating around breakeven in the first two quarters." eCollege develops online degree programs for universities. Its clients include National University; Seton Hall University; University of Colorado; DeVry University, Inc.; Kentucky Virtual High School; and Microsoft Faculty Center.
For more information visit: http://www.eCollege.com
"Mangomind" enables you to access and share files such as Microsoft Office for Windows, accounting software files such as QuickBooks, Peachtree and more with your staff and clients. Instantly access up-to- date documents from your home, remote offices, or that vacation hideaway from a secure, central Internet workspace and share them with multiple people in real time. Only authorized users can access files. This easy-to-use and affordable solution starts at just $29.95 per month for up to five unique users. AccountingWEB Members can try it Free for 30 days! Just go to http://www.mangosoft.com/accountingweb/ and click on the Free 30-Day Trial button or call toll free 888-886- 2646 and mention Code AWEB for your Free 30-Day Trial.
Bob Jensen's threads on P2P file sharing are at http://www.trinity.edu/rjensen/napster.htm
Bob Jensen's threads on webledgers are at http://www.trinity.edu/rjensen/webledger.htm
Hi Aaron,
For every downer (e.g., Jane Buck's memo below), there are two or more uppers in distance education.
What I can never quite understand is why the AAUP officials and their hero, David Noble, repeatedly cheer for every downer and hiss at or remain silent about successful programs that are proving to be win/win/win situations for students, faculty, and their universities --- http://www.trinity.edu/rjensen/000aaa/theworry.htm
I find automatic negativism of the AAUP to be non-academic among members of the academy who are supposed to look at both sides of every issue fairly. Why can't the AAUP for once consider how distance education is often benefiting the learning public instead of constantly fighting to rid the world of distance education degree programs? Distance education is a wave of the future that faculty should try to improve and make better for the benefit of learning constituencies?
I do not applaud distance education's failure at SUNY-Buffalo! I am not saying that in this instance that Jane Buck is applauding its failure. What I don't find, however, is any AAUP official sending out a single news message for a successful program. They seem to never miss sending out messages on detected failures. And never once have I seen David Noble giving credit where credit is due for a distance education success. Do I smell academic biases here?
Distance education using modern technologies goes far beyond the realm of "hapless" correspondence courses of the 19th and 20th Centuries --- http://www.trinity.edu/rjensen/000aaa/updateee.htm
My threads on distance education are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
Thanks for forwarding Jane Buck's downer about SUNY-Buffalo.
Bob Jensen
An Upper for Distance Education
"Online MBA programs grow in popularity," by Jerry LaMartina, Kansas City Star Online, July 15, 2001 --- http://www.kcstar.com/item/pages/moneywise.pat,business/37749b46.714,.html
In or out of the Kansas City area, you can earn an MBA in your pajamas if you want.
Online coursework, also known as "distance learning," is growing more common at many colleges and universities. Some offer a few courses online, but others offer entire degree programs with the computer as the classroom.
Richard St. Clair, regional academic director for Webster University in Kansas City, said the school was in its first year of offering online MBA coursework.
Webster offers its entire degree program online, St. Clair said. The curriculum reflects a typical MBA program with some additional electives.
About 14 students in the Kansas City area are getting their degree online. Between 250 and 300 students worldwide do online coursework at Webster, with 80 percent to 90 percent of those doing the entire degree online, he said.
"I'm teaching an organizational development course online, and I know the students better than I would in a traditional classroom," St. Clair said. "I have students from all over the world working on team-based activities for the class. Now that's a rich experience for the students."
Students in online programs tend to communicate more with each other and with the instructor, St. Clair said. Some people might think online coursework is sterile and isolating, but the human touch -- albeit virtual -- can be highly developed.
Webster administers exams online, too. If anomalies surface in students' work, he will call them to talk about it. Otherwise, the school relies on students' integrity to ensure that they are actually the ones taking the tests, St. Clair said.
Tuition for Webster's online coursework costs 10 percent to 15 percent more than for standard courses, while the online student's computer must have Windows 95 or 98 and at least a 120 mHz processor, a 28.8k modem and 32mb of RAM, he said.
Another area school, Keller Graduate School of Management, has been offering its entire MBA online for two years and partial coursework even longer, said Mike Haverty, regional manager.
Tuition at the Kansas City school costs about 35 percent more for online courses than for traditional ones, Haverty said. Students must go to a school center or an other location that is proctored to take exams.
David Overbye, director of curriculum for Keller, agreed that the social and intellectual interaction among students and instructors was greater with online courses. Students communicate in online forums or "threaded discussions." Online students have more time to think and prepare researched, substantiated opinions than do students in traditional classrooms, Overbye said.
Randy Womack of Prairie Village finished his MBA with Keller in April. Womack owns a home-based business called Firehouse Window Cleaning and has a bachelor's degree in electronics from the DeVry Institute of Technology.
He completed about a quarter of his coursework online and said it provided a good change of pace from traditional class settings.
"Online you ended up with a lot more reference materials," he said. "In class I'm not too shy about speaking up," but for the shy student online classes help ease anxiety, he said. He also communicated more with his online instructors than with those for traditional classes.
"I think it lends itself to flexibility," Womack said. "The deeper you want to dig, you can."
Erik Gordon, director of MBA programs at the University of Florida's Warrington College of Business, said the school had offered an entire MBA online for two years. About 40 students have participated each year, Gordon said.
Students must go to campus once at the end of each term for exams. They also meet fellow students, their professors and the next term's professors, who give introductory lectures on their classes. Regardless of where they live, the school requires this on-campus meeting. Prospective students should weigh the cost before they decide to start the program, Gordon said.
Tuition for Warrington's online MBA costs three times as much as its standard MBA program, as does the school's weekend executive MBA program. Gordon acknowledged the greater cost but said students tended to view an MBA as an investment in their futures.
"We've done it for two years now. We've found that students figure out how to jell as a team, and their feedback to us is that they think they've had a great team experience," even better than the experience of students in traditional settings, he said.
The downside of the online approach is the hard work, time and money needed to develop strong courses, Gordon said. The school has its own team of technology developers that creates courses with customized features to make communication among students and instructors as effective as possible, and it is expensive.
"Students don't want classes in which instructors simply post lectures on the Web," he said. Students must have the ability to collaborate while doing their coursework, because MBA curricula -- and the work world -- are so dependent on teamwork, he said.
Not all area MBA programs have an online component.
Wendy Acker, MBA director at Avila College, said Avila offered online courses in some undergraduate programs but not for its MBA students.
"We have certainly discussed the possibility," Acker said. "But I couldn't visualize us offering our entire degree program online. We're a fairly small, liberal arts college." Avila does not have the resources to serve that niche, she said.
John Suter, administrator of Park University's MBA program, said Park also did not offer online courses for its MBA students -- for now.
"I imagine to stay competitive we're going to have to," he said.
Nicolas Koudou, director of Park's MBA program, agreed. The university intends to create online courses in the program, although the cost of doing it could be prohibitive. In the meantime, he recognizes the value of the traditional classroom setting.
"In the classroom, my students tell me that businesses need interaction of the traditional sort," he said.
A Second Upper for Distance Education
"Faculty on the Move: Rethinking Faculty Support Services," by Mark L. Fink, Syllabus, February 2002, pp. 27-29 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=6076
The growth of faculty teaching courses via distance education also increased significantly (at The University of Toledo). In the past year alone, more than 20 faculty members have ventured into the distance education arena. Making any reorganization even more imperative is the impact of faculty teaching more courses. Typically, faculty taught one or two courses per term. Today, faculty are teaching upwards of 21 courses per academic year. The exponential nature of doubling enrollments, new faculty, and faculty teaching more courses, moved the Instructional Design team evaluate its faculty development operations.
This unparalleled growth of enrollment for courses delivered via distance education also prompted a restructuring of the services available to faculty. This growth expanded the number of faculty teaching students at a distance, a vast increase in courses offered, and new degree, degree completion, and specialized programs. The distance education growth experienced by the university prompted the senior instructional systems designer to evaluate practices and operations. During the evaluation process, it became apparent that a unique faculty development model would have to allow faculty to focus on instruction by providing a full range of services to faculty, including expanding student support services.
Back in the early stages of the division, it was achievable for faculty to develop courses by being trained in all aspects of course development. Technology skills were shared with faculty that would enable them to "do it all." Using mid-level software applications, course management skills (e.g., loading students into a course), and increasing faculty knowledge in instructional systems design (ISD), faculty were compelled to manage a diverse range of tasks, and were therefore limited in the time available for instructing other courses.
Needs Assessment
The evaluative process made it clear that faculty could not continue to "do it all." While a handful of faculty enjoyed continuously learning new technological skills and Web devices, the majority did not have the time or motivation to be all things to all courses. Therefore, it was determined by the needs assessment that a reorganization of the process was necessary for continued success. The needs assessment found that faculty desired to spend their already compressed time focusing on interacting with students, rather than spending hours designing hypermedia for distance education delivery.
Additionally, the assessment found that faculty with more time to focus on content could provide greater creativity in reaching students through superior interaction, improved sequencing of content, enhanced assessment instruments, and innovative group projects that stimulate the students' cognitive gain.
In searching for an operational model that would work in the context of the division of distance learning, it became evident that no such model existed: The division is self-supporting, the courses are taught by faculty approved by their respective college and department, and the technologies utilized vary by course.
The growth and the analysis proved two things. First, the self-supporting nature of the division required an implementation that merged corporate instructional design operations with those of high education. Not only did instructional design services necessitate following a corporate model (using ROI, CBA, etc.); it had to maintain the rigorous standards of instructional design practices for the academy. The instructional design work completed at the university had to increase in efficiency and effectiveness. The task of transitioning a team of instructional designers, visual artists, network specialists, and instructors required that faculty were no longer perceived only as colleagues, but as clients.
The assessment proved that any re-engineering should follow standards of the corporate community. The standards as defined by the American Society of Training and Development (ASTD) were incorporated with the standards set by education through the International Society for Technology in Education (ISTE) and the best practices recommended by the American Federation of Teachers.
Client Services Approach
After evaluating the needs assessment and standards, it was determined that the division could serve faculty and students best by providing a complete range of client services. This includes a laundry list of services to enable faculty—and students—to have the greatest opportunity to engage in the process of learning within the virtual walls of the academy. In assisting faculty in course development, the ISD team can create a complete course for the faculty member, including an ISD design, Web-based content pages, photography, graphical imaging, original artwork, animation, video, audio, and other related services for the course.
Given such a dramatic shift in distance learning operations, it was necessary that the structure reflect the philosophical shift to faculty-as-client. The Client Services Model (CSM) provides a unique perspective at developing courses to be taught at a distance by consulting with clients to ensure that the needs of the students, the faculty, and the university are met.
Several considerations were made in developing this model. As the division is responsible for providing distance education opportunities for all the colleges, dividing Instructional Design work by college appeared logical at first glance. After investigating this possibility, it was determined that there would not be a transfer of knowledge across disciplines. For example, if an instructional designer working for a client in the physical sciences designed a problem-based learning (PBL) instrument, the instrument—or a component of that instrument—might prove beneficial in a social science. Although this works well in higher education, cross-disciplinary design still had to be managed like a corporate ISD Department. Because of faculty constraints on time, it was necessary that faculty know whom to contact to resolve a certain issue. Although that instructional designer may have the answer for the client, the client is responsible for seeing that the person responsible for the issue within the division is informed.
Faculty Process
Although it appears that the CSM requires a larger staff, the staffing is comparatively less than many institutions with fewer courses. When a faculty member is confirmed as teaching a distance learning course, the director of distance learning notifies the IT specialist. The senior instructional designer assigns an instructional systems design team for the client. The team consists of an instructional systems designer with formal knowledge in learning theories partnered with a visual/digital artist. Next, the instructional design team schedules an orientation meeting with the new client explaining the services available from the Division of Distance Learning.
The client is the content expert, the mentor, the instructor, and the director of the course. The orientation includes training on the course portal used and "homework." The client considers the new possibilities that the delivery media will provide for course interaction and presentation, or discovers what will not transfer well from the traditional classroom. Although printed materials are given to all clients at this orientation, each meeting varies based on the characteristics of the client, the course, and the objectives of the instructional materials. Meetings with the client continue on a regular basis to provide continuous quality improvements.
Continued at http://www.syllabus.com/syllabusmagazine/article.asp?id=6076
A Downer for Distance Education
Forwarded by Aaron Konstam [akonstam@trinity.edu]
THE STATE UNIVERSITY OF NEW YORK at Buffalo's School of
Management pulled the plug on its 18-month-old Web-based M.B.A. program last week. The business school joins a growing list of institutions that have concluded that online programs aren't worth the expense and hassle.
See http://chronicle.com/free/2002/02/2002022001u.htm
Jane Buck, Ph.D.
National President American Association of University Professors
"SUNY-Buffalo Drops Online M.B.A. Program," by Katherine S. Mangan, Chronicle of Higher Education, February 20, 2002 --- http://chronicle.com/free/2002/02/2002022001u.htm
The State University of New York at Buffalo's School of Management pulled the plug on its 18-month-old Web-based M.B.A. program last week. The business school joins a growing list of institutions that have concluded that online programs aren't worth the expense and hassle.
Only 35 students signed up for the two pilot courses offered in the fall of 2001. Buffalo had hoped to expand its course offerings and enroll 1,000 students by January of this year. However, administrators decided not to market the program aggressively when it became clear that they didn't have the money to sustain it.
"Each course has to have an instructor, a graduate assistant, technical people to be there in case the connection breaks down, as well as someone to design the course," said Howard G. Foster, associate dean for academic programs at the business school. "We've found these courses to be very labor-intensive."
In order to recoup its costs, the business school would have had to charge around $23,000 for the two-year program. While that's far less than many private schools charge, it is more than double the in-state tuition for Buffalo's traditional M.B.A. program.
Many faculty members resisted teaching in the program, either doubting that online courses were as effective as classroom-based instruction, or worrying that teaching the courses would take too much time. Professors who teach online often report that getting up to speed on the technology can be frustrating and time-consuming, and that students expect them to be available around the clock.
Like several other business schools whose efforts to expand online have been derailed, Buffalo was burned by an outside partner that failed to live up to its promises. (See an article from The Chronicle, October 5, 2001.)
The Albany-based Institute for Entrepreneurship, which ran into financial and management problems, gave the school only about $65,000 of the $200,000 it had promised, Mr. Foster said. No one at the institute was immediately available for comment.
Mr. Foster said he hasn't given up on the idea that the program might be resurrected, but he said it wouldn't be easy.
"I'm convinced there's a market out there," he said. "The challenge is covering the costs, deploying the faculty, and getting these courses developed."
"Online dating booming in Europe," CNN News, February 15, 2002 --- http://www.cnn.com/2002/TECH/internet/02/13/internet.dating/index.html
LONDON, England (CNN) -- More Europeans than ever before were going online on Valentine's Day, in an attempt to find romance on the Internet.
Dating sites were reporting great increases in registered members as people become more confident using the Internet.
Analysts say people seeking partners online are willing to pay a subscription fee for quality services -- and ones that charge fees are more likely to survive in the future than free sites.
Daniel Stevens, an analyst at Jupiter Media Metrix, told CNN there had been a healthy growth in online dating due to a booming Internet population.
Online dating might attract more people because users can be anonymous, and members are instantly matched as they sign in, he said.
The global dating site Match.com, which says its services have led to more than 1,400 marriages, 75 children and hundreds of thousands of relationships worldwide, is reporting an increase in registered users all over Europe.
During the last two months of 2001, the number of new registered Match.com members grew by 45 percent in Germany, 39 percent in the Netherlands, 27 percent in Spain, 48 percent in France, 39 percent in Italy, and 26 percent in Denmark, vice-president Joe Cohen said.
In the first month of this year alone there had been an increase of 50 percent new UK members registering their profile with Match.com, bringing the total number of UK members to 100,000, he said.
Match.com and uDate.com, which is another global site also reporting a rise, charge a subscription fee of $24.95 a month for users to receive and answer mail from other members. It is free to place a profile on the site.
Continued at http://www.cnn.com/2002/TECH/internet/02/13/internet.dating/index.html
News From the International Forum on Accountancy Development (IFAD) --- http://www.ifad.net
Background At the World Congress of the International Federation of Accountants held in Paris in 1997, James Wolfensohn, President of the World Bank, issued a number of challenges to the accounting profession. One was that the profession was not doing enough to enhance accounting capacity and capabilities in developing and emerging nations. This assessment was accepted by the Council of IFAC and the then President of IFAC, Frank Harding, held discussions with the then Vice President and Controller of the World Bank, Jules Muis, regarding the need to work jointly in this area. Frank Harding suggested that the expertise of the accounting profession and the financial resources of the World Bank and other international financial institutions, when combined and using both their contacts, could be harnessed in the interests of meeting some or all of the needs set out in Wolfensohn's challenge. Following that discussion, there were a number of meetings between potentially interested parties and it was agreed to create the International Forum on Accountancy Development (IFAD). The first meeting of IFAD took place in New York in June 1999. Subsequent meetings have been held in October 1999 in Paris, in March 2000 in Washington, D.C. and in November 2000 in London.
Objectives of IFAD Given the background to its formation, IFAD's draft objectives focused on the development of accounting capacity and capabilities in the developing and emerging nations. However, as a result of the discussion on the IFAD Vision, the first two meetings produced a significantly wider statement of objectives focusing on common world-wide issues in addition to the originally envisaged focus on the developing and emerging economies.
The objectives of IFAD are to:- a. promote understanding by national governments of the value of transparent financial reporting, in accordance with sound corporate governance; b. assist in defining expectations as to how the accountancy profession (in both the public and private sectors) should carry out its responsibilities to support the public interest; c. encourage governments to focus more directly on the needs of developing countries and economies in transition (hereinafter referred to jointly as 'developing countries'); d. help harness funds and expertise to build accounting and auditing capacity in developing countries; e. contribute to a common strategy and framework of reference for accountancy development; and f. promote co-operation between governments, the accountancy and other professions, the international financial institutions, regulators, standard setters, capital providers and issuers.
IFAD has provided a mechanism through which those with an interest in raising reporting and auditing practices can communicate and can develop the partnerships necessary to promote change in an effective and efficient manner.
At the same time as Wolfensohn was issuing his challenge to the accounting profession, world markets were experiencing the impact of the East Asian financial crisis. Amongst the matters highlighted in the analysis of causes of the crisis was the quality of financial information and its variability from country to country. Although the lack of agreed high quality and common practices for financial reporting cannot be realistically considered as a cause of the crisis, the poor quality of the reporting almost certainly made it more difficult to assess the scale of the crisis and to put in place the measures to stabilise the economies and reverse the damage.
When I went to the IFAD site, I found a link to the following:
TWENTY-THREE INTERNATIONAL ACCOUNTANCY FIRMS LAUNCH EFFORT TO CREATE A GLOBAL QUALITY STANDARD FOR AUDITING
(London 19 January 2001) -- Twenty-three international accountancy firms met in London Thursday to develop a Global Quality Standard for firms conducting transnational audits. The intention is to ensure consistent, high-quality auditing practices worldwide as a means of protecting the interests of cross-border investors and other economic decision-makers and of promoting financial market stability. The International Federation of Accountants (IFAC) sponsored the meeting, and the firms will operate as a new section of IFAC known as the Forum of Firms."The launch of the Forum of Firms is another significant step in implementing the plan IFAC adopted last year to strengthen its role as the global standard-setting, self-regulatory and representational body for the profession's audit and assurance-related services," said Tsuguoki (Aki) Fujinuma, President of IFAC. "Commitment to the obligations of membership in the Forum will raise the standards of the international practice of auditing and will strongly serve the interests of the users of the profession's services," he continued.
Globalisation of business and commerce has highlighted the inadequacy of financial reporting and auditing in accordance with purely national standards. Decision-makers need assurance that the financial information on which they base their decisions is transparent, consistent, comprehensive and comparable across national boundaries. Through their commitment to a Global Quality Standard, audit firms that are members of the new Forum of Firms will be able to provide this assurance.
Membership in the Forum of Firms is open to any firm that has or is interested in accepting transnational audit appointments, provided the firm:
- agrees to conform to the Forum's Global Quality Standard, and
- agrees to subject its assurance work to periodic external quality assurance reviews.
- The Forum's Global Quality Standard is likely to include:
- having audit policies and a methodology for conducting transnational audits in accordance with International Standards of Auditing,
- complying with the IFAC Code of Ethics,
- maintaining training programmes to keep partners and staff up to date on international developments in financial reporting, and
- maintaining quality control standards and conducting regular quality assurance reviews to monitor compliance with the firm's policies and methodology.
The Forum of Firms will operate on a provisional basis until IFAC and the participating firms agree on a formal constitution and operating procedures. Considerable work has already been done and the intent is to move from provisional to permanent standing in the next few months."Our meeting yesterday made very good progress on constitutional and operating issues, and there is a high degree of enthusiasm for moving forward as quickly as possible," said Dr. Karl Ernst Knorr, member of the Executive Board of BDO in Germany, who was elected Chairman of the provisional Forum of Firms.
The creation of the Forum of Firms is just one prong of a four-pronged program to restructure and strengthen IFAC. Other aspects of the program include:
- the introduction of a programme for monitoring the compliance of IFAC member bodies (153 professional institutes in 113 countries) with IFAC standards,
- the strengthening of the processes and broadening of the membership of the International Auditing Practices Committee, which sets International Standards on Auditing, and
- the establishment of a Public Oversight Board to oversee the activities of IFAC and the Forum of Firms that affect the public interest.
The IFAC strengthening programme, in turn, fits into the broader initiative to improve the quality of financial reporting and auditing around the world that is being implemented under the auspices of the International Forum on Accountancy Development (IFAD). IFAD brings together more than 30 international public and private organizations, including those representing the accounting profession, regulators, standard-setters, development banks and agencies, governments, and users and preparers of financial information. IFAD was first presented with a "vision" for improving financial reporting and auditing on a worldwide basis in June 1999. IFAD participants endorsed the initiative at their meeting in October 1999."After 18 months of consensus-building and planning, the IFAD 'vision' is now taking concrete form. The agreement to move ahead on the IFAC Forum of Firms is a significant milestone. The coming year will see more, equally important implementation steps. Success will depend upon the commitment of all the interested parties represented in IFAD," said Richard Findlater, a senior partner in Ernst & Young, who participated in the Forum of Firms meeting and represents his firm in IFAD.
IFAC is the worldwide organization for the accountancy profession. Its mission is to develop and enhance the profession to enable it to provide services of consistently high quality in the public interest. Its current membership consists of 153 professional accountancy bodies in 113 countries, representing more than two million accountants in public practice, education, government service, industry and commerce.
I also found the following:
IFAC COMMENTS ON ACCOUNTING FIRMS' GAAP 2000 REPORT (New York 18 January 2001) -- The International Federation of Accountants (IFAC) welcomes the major accounting firms' new report, GAAP 2000: A Survey of National Accounting Rules in 53 Countries IFAC President, Tsuguoki (Aki) Fujinuma said: "The Report is a critical first step in understanding the current international accounting environment. It will assist the profession to play its part in improving worldwide accounting practices." The report contains summary comparisons of national accounting rules against International Accounting Standards (IASs). The great merit of this study is that it allows for easy comparison against one single benchmark. Diverse groups can benefit from the study. Investors will certainly want to know that standards differ from one country to the next, making caution necessary in the cross-border use of financial reports. Governments, regulators, standard setters, international organizations and NGOs (non-governmental organizations) also will find the report informative. It provides them a "snapshot" of the situation as of the end of 2000.
The GAAP 2000 report is one part of a worldwide undertaking to address World Bank President James Wolfensohn's challenge to the accounting profession to "Push the agenda for international harmonization of accounting standards to meet the needs of the global marketplace." He presented this challenge at the World Congress of Accountants, sounding a warning and call to action to preparers and users of financial statements regarding the impact of weak reporting in an economy that is increasingly global and increasingly reliant on information.
This call to action led to the creation by IFAC and the World Bank of the International Forum on Accountancy Development (IFAD). It has created the partnership necessary to encourage improvement in global accounting and auditing practices. IFAD brings together the key international players in the field of accounting including the regulators, the major accounting firms, investors and such organizations as the International Accounting Standards Committee (IASC), the Bank for International Settlements (BIS), the World Bank, regional development banks, the IMF, OECD, UNCTAD and others. Each has a critical role to play in improving the quality of financial reporting around nthe globe. The first step in achieving IFAD's program was to assess the state of accounting internationally. The major firms' report was prepared in response to this need.
Some Technology Resources Available to Educators
"Accountability: Meeting The Challenge With Technology," Technology & Learning, January 2002, Page 32 --- http://www.techlearning.com/db_area/archives/TL/2002/01/accountb.html
Bob Jensen's threads on tools are at http://www.trinity.edu/rjensen/000aaa/thetoolsa.htm
Bob Jensen's threads on resources are at http://www.trinity.edu/rjensen/000aaa/newfaculty.htm
Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm
Bob Jensen's educational technology documents are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
A Clever Way to Stop Some Types of Cheating
Hossein Nouri [hnouri@TCNJ.EDU]
I am assigning a comprehensive take-home problem to my managerial accounting course. In order to force students to do the problem at least by themselves, I am giving different versions of the problem. I prefer students to do the problem using spread sheet. However, I am concerned that one student creates the formula for all parts of the problem on the spread sheet and other students just plug-in the numbers and hand it to me. Do you have any suggestion how this can be avoided? Most of our students use the college's labs to do their assignments, with few using their own computers.
Hossein Nouri, PhD, CPA, CFE
Accountancy Program School of Business
The College of New Jersey
P.O.Box 7718 Ewing, NJ 08628-0718 Tel. (609)771-2176
Fax (609)637-5129 Email: hnouri@tcnj.edu
Reply from Elliot Kamlet [ekamlet@BINGHAMTON.EDU]
Write a macro (or get MIS people to help) to require that the students enter their name as soon as they open the spreadsheet. That name should then be placed in some cell someplace and the column hidden, and in addition the name should appear in some prominent place (say cell A1), then the macro should disable itself. You will know where the name is and can find it when they submit the project. Then just match names.
They can still get around it but some who cheat will probably get caught.
Elliot Kamlet
Reply from Gadal, Damian [DGADAL@CI.SANTA-BARBARA.CA.US]
Here is some Visual Basic to accomplish your spreadsheet task (NOTE: you have two options you can try):
: Put this into the "ThisWorkbook" : folder.
Dim strGenName As String Private Sub Workbook_Open()
done = False While Not done strGetName = InputBox( _
prompt:="Please enter your name.", _
Title:="UserName")
done = True
Wend
Sheets("Sheet1").Range("A1").Value = strGetName 'Option 1: Put name into a hidden sheet
Sheets("Sheet2").Range("A1").Value = strGetName
Worksheets("Sheet2").Visible = xlVeryHidden 'Option 2: Put name into a hidden cell
Sheets("Sheet1").Range("A2").Value = strGetName
Rows("2:2").Hidden = True End Sub
Bob Jensen's threads on cheating are at http://www.trinity.edu/rjensen/plagiarism.htm
From InformationWeek Daily on February 20, 2002
The Computer As Laboratory
Biotechnology companies are driving drug development from the laboratory to the data center. When it takes years of research and millions of dollars to bring a single drug to market, it makes sense for companies to put the burden of success or failure on IT environments that provide high-throughput computing and integrated access to research. Finding ways to effectively manage data that's critical to the development of lifesaving drugs was the focus Tuesday at the BioSilico 2002 conference in New York.
The four greatest challenges to the biotechnology and pharmaceuticals industries are data integration, data volume and computational throughput, security, and process control and knowledge management, says Vijay Pillai, director of Oracle Life Sciences' software development group. Oracle and hardware vendors such as IBM, Compaq, and Hewlett-Packard say they're working together to deliver database and database integration software to help meet these challenges.
With "in silico" research, the computer becomes the laboratory, says Bill Blake, Compaq's VP of high-performance technical computing. The automotive and aerospace industries have been using mathematical models for years to study vehicle performance. "Life sciences industries like biotechnology and pharmaceuticals are now turning their attention to the hardware, software, and networking capacity necessary to reduce the latency of data availability," he says. The biotechnology industry in particular places strenuous demands on its IT systems as these companies turn their focus from the study of genes and proteins to more complex subject matter such as cells and tissue samples.
"This increasingly complex research is fueled by the pharmaceutical industry's demand to discover new drugs," Blake says. "The pharmaceutical industry turns technology into product and profit." Biotechnology is an industry of high risk and high reward, says Srini Chari, IBM Life Sciences' senior manager of solution architecture and strategy: "Many decisions regarding which drugs to develop and how to develop them are made with incomplete data." - Larry Greenemeier
For more, see Lilly Cures Inefficiency With IT http://update.informationweek.com/cgi-bin4/flo?y=eF8z0BcUEY0V20BWqd0Aj
Genetic Research Drives High-End Computing http://update.informationweek.com/cgi-bin4/flo?y=eF8z0BcUEY0V20BWqe0Ak
Count To 10, Then Read This
Keep a close eye on the guy in the next cubicle. If his download times out because of network congestion, you could be in for some serious trouble.
So says a new study measuring "Web rage," or violence caused by Internet-related frustration, performed by U.K.-based polling firm Market & Opinion Research International. The poll found that more than half of all Internet users experience Net frustration on a weekly basis, and one out of 10 users deal with it daily.
When people get mad at the Internet, they take out their anger in the real world. Seven percent of respondents say they hit their equipment. Four percent pound on their desks. And 2% say they've become so upset they've hit the person who sits next to them. Surfers say that slow-loading Web sites are the biggest cause of irritation, followed by unhelpful help buttons and sites that require users to enter personal details before gaining access.
But there may be more to Web rage than just aggravating downloads, says Mark Gorkin, an expert on workplace stress and operator of StressDoc.com. "I think this is a sign more of the transitory and vulnerable nature of the workplace today and the sense that people are feeling like they're just pawns," he says. "This is how the anger gets worked out, through attacking computers or even other workers." Gorkin says management needs to work harder to repair frazzled nerves and rebuild worker confidence. In the meantime, raging Web surfers should take some time away from the keyboard. "Don't shortchange yourself when it comes to physical exercise," he says. "If you're feeling that stressed, get away, walk around for a while." - David M. Ewalt
Has your computer ever inspired you (or a co-worker) to violence? Tell us how you cope with the stress in the Listening Post: http://update.informationweek.com/cgi-bin4/flo?y=eF8z0BcUEY0V20Nmm0AZ
Frontline: Inside the Teenage Brain ---
http://www.pbs.org/frontline/shows/teenbrain/
The teen brain is a work in progress.
Innovation of
the Week
The Secret Lives of Numbers --- http://www.turbulence.org/Works/nums/index.html
The authors conducted an exhaustive empirical study, with the aid of custom software, public search engines and powerful statistical techniques, in order to determine the relative popularity of every integer between 0 and one million. The resulting information exhibits an extraordinary variety of patterns which reflect and refract our culture, our minds, and our bodies.
For example, certain numbers, such as 212, 486, 911, 1040, 1492, 1776, 68040, or 90210, occur more frequently than their neighbors because they are used to denominate the phone numbers, tax forms, computer chips, famous dates, or television programs that figure prominently in our culture. Regular periodicities in the data, located at multiples and powers of ten, mirror our cognitive preference for round numbers in our biologically-driven base-10 numbering system. Certain numbers, such as 12345 or 8888, appear to be more popular simply because they are easier to remember.
Humanity’s fascination with numbers is ancient and complex. Our present relationship with numbers reveals both a highly developed tool and a highly developed user, working together to measure, create, and predict both ourselves and the world around us. But like every symbiotic couple, the tool we would like to believe is separate from us (and thus objective) is actually an intricate reflection of our thoughts, interests, and capabilities. One intriguing result of this symbiosis is that the numeric system we use to describe patterns, is actually used in a patterned fashion to describe.
We surmise that our dataset is a numeric snaphot of the collective consciousness. Herein we return our analyses to the public in the form of an interactive visualization, whose aim is to provoke awareness of one's own numeric manifestations.
The Secret Life of Numbers by Golan Levin, et. al. (February 2002) is a commission of New Radio and Performing Arts, Inc., for its Turbulence web site. It was made possible with funding from The Greenwall Foundation. Further information here.
Reply from David R. Fordham [fordhadr@JMU.EDU]
I'm very surprised, Bob, that you didn't point out that the book's premises are somewhat compromised by the oversight of not differentiating between the secret lives of "numbers", and the secret lives of mere "symbols".
For example, the popularity of "486" and "1040" -- just to pick two of the more notable samples -- do not stem from the *numbers" 486 and 1,040. Rather, it stems from the fact that society uses the *symbols* of "486" and "1040" to represent something relatively unrelated to the actual *numbers* 486 and 1040. And telephone numbers, however easy to remember, are not true "numbers" anymore, either. My phone, for instance, is not the 5405683024th phone in my area of Virginia. My office is not the 329th in the building, or even the 29th room of the third floor, and the 3rd floor is not really the *third* floor of the building, either. Thus, the "numbers" aren't really numbers as much as they are mere symbols which allow ordinal ranking or serial sequencing, much as ordering something alphabetically.
There is a fascinating field addressing the symbolism vis-à-vis ordinality and sequentiality used in modern society. The battery nomenclature (C, D, AA, AAA, etc.), the model railroad classifications (G, O, HO, N, etc.), the microwave radio band designations (C, L, K, X, etc.), not to mention tennis scoring (love 15 30 40 game), and a host of other entertaining whims and fancies are sure to give hours of pondering and thought to those philosophically inclined.
Incidentally, don't overlook the historical event coming up Wednesday! At 2 minutes after eight in the evening, it will be 2002 2002 2002. Get it? Write it with punctuation and you get 20:02 20/02, 2002. This hasn't occurred for over a thousand years: 10:01 in the morning on January 10, 1001)! And it will never, ever happen again because the clock only goes up to 2400. So enjoy 20:02 20/02 2002 on Wednesday!
Now, aren't you glad you work in a profession which values numbers! --- ;-)
David Fordham
James Madison University
Reply from George Lan [glan@UWINDSOR.CA]
A Trivia Question:
Although I do not play much tennis anymore, I could never quite understand the game's scoring (love 15 30 40 game). Is love, the euphemism for zero, used in other instances and why is the difference between love and 15 not the same as the gap between 30 and 40? Is it easier to keep track of the scoring than 0,1, 2, 3 and game? Also imagine writing "love" on a student's assignment in the place of zero!!! :-0,
G.L.
Reply from Tev Estrin [testrin@HOME.COM]
Hi George
Just a bit of trivia I happen to know about. The game of tennis started as a French game and was imported by the British. They kept and anglisized some of the scoring terminology however so that a score of zero which the French had dubbed L'Ouef or goose egg was transliterated as love which it has remained.tev
At Trinity University we subscribe to this accountancy knowledge base.
Accounting regulations and concepts that were once simple and objective have become increasingly complex and voluminous. In today's environment it is essential to find the right information - quickly. PricewaterhouseCoopers Comperio is your one-stop source for financial reporting and assurance literature from authoritative bodies around the world. For your FREE 30-day trial of Comperio, visit us at http://www.accountingweb.com/go/www.pwcglobal.com/comperio
The U.S. Securities and Exchange
Commission says it wants companies to put all their financial filings on their
own websites, including records of insider stock sales --- http://www.wired.com/news/business/0,1367,50414,00.html
"SEC to Firms: Use Your Websites," by Joanna Glasner, Wired
News, February 14, 2002:
The SEC also said it wants companies to make records of insider trades -- which currently can be submitted on paper -- available in electronic format and online.
Although public companies already have to submit most filings to Edgar, the government's public securities database, SEC officials said the proposed new rules would make vital information "more readily available to investors in a variety of locations."
Louis Thompson, president of the National Investor Relations Institute, called the proposal a welcome development, in that it indicates the SEC has recognized the role of company websites in disseminating information.
"The assumption that individuals are cruising Edgar for information is a bit of a folly," Thompson said. "They're much more apt to go to a company website."
The SEC's proposal comes as securities regulators are facing pressure to tighten disclosure rules following the collapse of Enron, which has been criticized for not revealing its extensive debt obligations in prior securities filings.
Besides adding requirements for Web posting, the SEC said it wants companies to submit certain filings more quickly, announce new developments such as debt ratings changes and include more detail about accounting methods in public documents.
"It'll be very helpful in terms of the overall transparency of the market," said Paul Maco, a partner at Vinson & Elkins and former director of the SEC's office of municipal securities.
Although most companies already post investor information on their websites, the SEC proposal would take the practice a step farther. It would require that companies immediately post every filing submitted electronically to the SEC, and not only select documents like annual and quarterly reports.
One reason for making companies post data on their websites is that investors will get information more quickly than they would on Edgar, the government's database for filings.
Currently, filings are only made publicly available on Edgar 24 hours after they are filed, and investors who want real-time information have to rely on privately run sites like FreeEdgar.
Another reason for putting data on company websites is that it could make it easier for investors to check for new filings or receive e-mail alerts when new documents come in, John Nester, an SEC spokesman, said.
Nester said it will take several months for the SEC's proposal to take effect, if it ever does. The agency must first publish a formal draft and collect comments on it from the public.
Last week, the SEC proposed more than a dozen disclosure rules to give investors a better picture of publicly traded companies sooner. But many IT departments don't have the tools in place to deliver the numbers. http://update.informationweek.com/cgi-bin4/flo?y=eF830BcUEY04e0BWl10At
Bosch Universe (Art and Art History) --- http://www.boschuniverse.org/
The Girl Scouts (in a research survey) discovered that about 30 percent of teenaged girls have been harassed online, and they hold a media conference to talk about it. Noah Shachtman reports from New York --- http://www.wired.com/news/culture/0,1284,50413,00.html
The February 2002 issue of Issues in Accounting Education will be in the mail soon.
If you purchased electronic access you can now view this issue through the American Accounting Association's new electronic publications system at http://aaahq.org/ic/browse.htm
Beginning with this issue, Issues in Accounting Education will no longer include Teaching Notes associated with the cases it publishes. Those Teaching Notes will now be available only online, limited to full members of the American Accounting Association.
For the February 2002 issue of Issues in Accounting Education, full members may use the following URL, Username, and Password to access the Teaching Notes:
Craig
[Craig Polhemus, American Accounting Association]
You can probably rent them for laughs
at Blockbuster
The 100 Worst Films of the 20th Century --- http://www.thestinkers.com/100stinkers.html
For nearly three years, this site has solicited visitor's suggestions for the worst films ever made. That list ("100 Years, 100 Stinkers"), was finalized on December 31, 2000. A final ballot was posted on January 1, 2001 and for ten weeks, visitors could vote. Below are the top twenty vote getters.
20. Ishtar
19. Barb Wire
18 Godzilla (1998)
17. Anaconda
16. Stop or My Mom Will Shoot
15. Ace Ventura 2: When Nature Calls
14. The Avengers
13. Grease 2
12. The "Look Who's Talking" Sequels
11. Jaws 4: The Revenge
10. Waterworld
9. The Blair Witch Project
8. Showgirls
7. It's Pat
6. Speed 2: Cruise Control
5. Spice World
4. Howard The Duck
3. Batman & Robin
2. Wild Wild West
1. Battlefield Earth
From Information Week Daily on February 15, 2002
**Major Companies Ready New Online Job Site
A new employer-backed online job board could be to Monster.com and HotJobs.com what airline-backed travel site Orbitz is to Travelocity and Expedia. DirectEmployers.com, to be unveiled Tuesday, is backed by more than 15 international companies, including IBM, Intel, Lockheed Martin, Nestle, Raytheon, Sprint, and Unisys. Participants span industries from advertising to aerospace.
The site, run by the E-Recruiting Association, a nonprofit established by senior human-resources execs from the participating companies, will offer a gateway to companies' own recruiting Web sites, cutting out the commercial online recruiting sites in the online job-seeker strategy.
Monster, Yahoo Inc.'s HotJobs, and thousands of other online recruiting sites receive the majority of their revenue from companies using their service to post job advertisements. But Monster won't lose its pre-eminent position just yet, thanks in part to massive brand strength, says Chris Boone, International Data Corp.'s E-recruiting analyst. "There would have to be a huge, critical mass of companies to make a dent in Monster.com's market share," he says, noting the job board's Super Bowl commercial as only one aspect of its million-dollar marketing campaign.
Online recruiting is one of the most profitable ventures for the Internet. Earlier this week, Yahoo completed its acquisition of Monster competitor HotJobs. The Internet portal won HotJobs in a successful hostile bid against Monster to diversify its revenue channels. - Elisabeth Goodridge
For more, see: Yahoo To Scoop Up HotJobs http://update.informationweek.com/cgi-bin4/flo?y=eF3w0BcUEY0V20BVcJ0Au
Best Practices For E-Recruiting http://update.informationweek.com/cgi-bin4/flo?y=eF3w0BcUEY0V20BWh20Ac
Bob Jensen's career helpers are at
http://www.trinity.edu/rjensen/bookbob1.htm#010304Careers%20in%20Accountancy
February 15, 2002 Message from David Mazzotta [dmazzotta@provide.net]
Hi Bob.
I love reading your bookmarks and I just noticed you linked up the Fortune magazine list of 100 Best Companies to Work For.I had a little fun deconstructing that article on my personal weblog: http://www.damsite.blogspot.com/2002_02_01_damsite_archive.html#9583320 Thought you might enjoy it.
Best, David Mazzotta www.damsite.blogspot.com
My module on this Fortune ranking of firms is at http://www.trinity.edu/rjensen/book02q1.htm#021502
A nice summary of the Consumer Price Index --- http://minneapolisfed.org/economy/calc/hist1913.html
Bob Jensen's links to economic indicators are at http://www.trinity.edu/rjensen/bookbob1.htm#econstatistics
Debbie Bowling forwarded the information below.
"Court to Decide on Web Copyrights," by Gina Holland, iWon News, February 19, 2001
WASHINGTON (AP) - The Supreme Court agreed Tuesday to intervene in a fight over copyrights, deciding whether Congress has sided too heavily with writers and other inventors.
The outcome will determine when hundreds of thousands of books, songs and movies will be freely available on the Internet or in digital libraries.
Groups challenging copyright law argued that justices should protect the public's right to material.
The Bush administration urged the court to reject the groups' appeal. Because copyrighted material can be used under some circumstances, "the concerns and values reflected in the First Amendment are therefore fully satisfied," Solicitor General Theodore Olson wrote the court.
The Constitution authorizes Congress to give authors and inventors the exclusive right to their works for a "limited" time. In 1790, copyrights lasted 14 years. Now it's 70 years after the death of the inventor, if the person is known.
Lawrence Lessig, attorney for the challengers, said the latest 20-year extension approved by Congress in 1998 is ill-timed and unconstitutional.
"Just as the time that the Internet is enabling a much broader range of individuals to draw upon and develop this creative work without restraint, extensions of copyright law are closing off this medium to a broad swath of common culture," he wrote.
The challengers include organizations and businesses that specialize in former copyrighted material, like books, movies and songs. The U.S. Circuit Court of Appeals for the District of Columbia ruled that they "lack any cognizable First Amendment right to exploit the copyrighted works of others."
The Bush administration said Congress promotes progress by giving people rights to their material. The administration also defended lawmakers' decision to apply the 20-year extension to all current copyrighted material, not just future.
"Congress was entitled to establish a system of copyright that treats authors in a more evenhanded fashion," Olson wrote in the government filing.
The 1998 copyright changes, known as the Sonny Bono Copyright Term Extension Act, bring U.S. rules in line with those in the European Union.
Congress extended the term of copyright 11 times in the past century, said law professor Mark Lemley, representing the non-profit Internet Archive.
Lemley told the Supreme Court that copies of old books, movies and sound recordings are being lost before they can be archived. He said in 1930, 10,027 books were published but as of last year, all but 174 were out of print.
If it wasn't for the law, "digital archives could inexpensively make the other 9,853 books published in 1930 available to the reading public starting in 2005," he wrote. If the law "still stands, we must continue to wait, perhaps eternally, while works disappear and opportunities vanish."
Settling another copyright battle, the court ruled last year that free-lance writers have online rights to their work. That decision affected tens of thousands of articles that were in regular newspapers and magazines that had been reproduced in electronic form. In another case in 1991, justices said that telephone directory listings generally are not protected by copyright law.
The case is Eldred v. Ashcroft, 01-618.
---
Appeals Court decision: http://cyber.law.harvard.edu/eldredvreno/legaldocs.html
CARNEGIE FOUNDATION NEWS
NEW BOOK -- Disciplinary Styles in the Scholarship of Teaching and Learning: Exploring Common Ground
The Carnegie Foundation for the Advancement of Teaching recently collaborated with the American Association for Higher Education to publish Disciplinary Styles in the Scholarship of Teaching and Learning: Exploring Common Ground.
The book features 10 sets of disciplinary scholars responding to an orienting essay that raises questions about the history of discourse about teaching and learning in the disciplines, the ways in which disciplinary "styles" of discourse influence inquiry into teaching and learning, and the nature and roles of interdisciplinary exchange.
Carnegie Senior Scholar Mary Taylor Huber and Sherwyn Morreale with the National Communication Association edited the volume.
Carnegie President Lee S Shulman wrote the foreword. Disciplines represented in the book are chemistry, communication studies, engineering, English studies, history, interdisciplinary studies, management sciences, mathematics, psychology, and sociology.
In presenting their own field's "sounds and silences" on the topic of teaching and learning, the authors hope to contribute to a common language for trading ideas, enlarging the pedagogical imagination, and strengthening scholarly work.
The book looks at how the attention to teaching and learning has intensified over the past 10 to 20 years in quantity, quality and participation. The authors suggest that more teaching faculty are bringing innovations into the classroom, and many are beginning to inquire systematically into its effect on their students' learning.
There is evidence of this increased awareness and activity in the number of journals and scholarly society conference sessions about examined teaching, and a shift from the sharing of teaching tips and anecdotes to scholarly research on teaching and learning.
The book is available through the American Association for Higher Education, One Dupont Circle, Suite 360, Washington, DC 20036. Phone: 202/293-6440, Fax: 202/293-0073, or website: http://www.aahe.org/pubs/
The Introduction, written by Huber and Morreale, and Table of Contents are available online at: http://www.carnegiefoundation.org/eLibrary/situating.htm
Hi Duke,
There are no simple tutorials for FAS 133. The problem with FAS 133 is that accountants typically do not have the finance background to understand derivatives. Experts in derivatives generally do not have the accounting background to understand FAS 133 (which assumes an understanding of FAS 115, FAS 52, and various other standards).
There are expensive workshops given by the larger accounting firms, but these are generally too short to do much good.
The FASB has a tutorial CD, but this is somewhat dated and has not been an overwhelming success.
For an introduction to derivatives, I suggest that you begin with the FASB document that can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
The above document, however, will not help you with the accounting. For the accounting, I suggest that you begin with http://www.trinity.edu/rjensen/caseans/000index.htm
The above links will lead you to various examples and tutorials, but none that I know of really help beginners with FAS 133 unless you really understand derivatives.
I am afraid that the only real answer is to first learn about derivatives and then dig into FAS 133 itself with great care looking at all the illustrations and keeping my glossary ever at your side. My glossary is at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
If you get serious about wanting to attend workshops, Ira Kawaller may be able to help at http://www.kawaller.com/
I used to deliver traveling workshops in the major cities, but this became too much of a drain on my time. Plus I think that FAS 133 is just too tough to present well in short workshops. It is better to dig in and then ask questions. Remember that there are no stupid questions when it comes to FAS 133.
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: Duke Bushong [mailto:dukb@pacbell.net]
Sent: Tuesday, February 19, 2002 1:53 AM
To: rjensen@trinity.edu
Subject: hedgingProfessor Jensen, I have an accounting background. I wish to learn about accounting for hedges(credit swaps, derivative's, etc). Is there an online resource that is available.. this is very important to me.
Thank you,
Duke Bushong Ph 760.630.8642
Hi Daniel,
The answers to my FAS 133/138 cases and examples are no longer secret. You can find my solutions files (badly organized I'm afraid) at http://www.cs.trinity.edu/~rjensen/
I suggest that you begin by going to
the file at
http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
Especially note the discussion of the shortcut method at the end of the above
document.
One of the best documents the FASB generated for FAS 133 implementation is called "summary of Derivative Types." This document also explains how to value certain types. It can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
And my glossary with other examples is at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
Hope this helps!
Bob Jensen
-----Original Message-----
From: Daniel [mailto:dtoole@eircom.net]
Sent: Monday, February 18, 2002 5:35 AM
To: rjensen@trinity.edu
Subject: Derivatives TutorialsHi Bob,
My name is Daniel Toole and I am a fourth year BSc (Mgmt) undergraduate at the Dublin Institute of Technology, Ireland. I am in the process of researching a dissertation on the availability of substitute securities for pricing and hedging private debt instruments in the absence of a reliable government yield curve. In this regard I am interested in looking at your tutorials on the derivation of yield curves, specifically swap curves. I came across your site through a key word search on google and find it very informative. If possible, can you please forward me the location of your "secret URL's? If you require confirmation of my status, I can have my supervisor e-mail you. Thank you in advance.
Daniel
Hi Donna,
If your client uses variable rate debt as the hedged item, there is cash flow risk and you can hedge this with an interest rate swap. If the hedge and the hedged item are both based on LIBOR, you have eliminated interest rate risk of the combined cash flows and should qualify for the shortcut method as explained in Paragraph 132 of FAS 133. In fact, your example is a lot like Example 5 of Appendix B that begins in Paragraph 131. You can read my discussion of Example 5 at http://www.cs.trinity.edu/~rjensen/133ex05.htm
The Example 5 Excel workbook solution is at http://www.cs.trinity.edu/~rjensen/133ex05.xls
Note in my Excel workbook above how complicated the derivation of fair values of interest rate swaps can become. You have to go to Bloomberg terminals and derive swap (yield) curves. One advantage of the shortcut method is that it allows you to assume that the value of the hedge exactly offsets the value of the hedged item. If the hedged item is easier to value (e.g., if there is a daily market price on the bonds), then you have saved yourself a lot of time and expense of valuing the swap and testing for hedge ineffectiveness.
Whenever possible, interest rate hedges are designed to qualify for the shortcut method.
You can read more about this under my definition of "Yield Curve" at http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
For a better understanding about how FAS 138 impacts upon FAS 133 in this regard, go to the definitions of "benchmarking" at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#B-Terms
Hope this helps!
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: Donna Jones [mailto:djones@tssllp.com]
Sent: Friday, February 15, 2002 12:46 PM
To: rjensen@trinity.edu Subject: FAS133I am wrestling with the requirements of FAS133 as it relates to a client of mine. It is probably a simple case, if there is such a thing, and deals with an interest rate swap. The client has debt through industrial development bonds with a variable rate based on LIBOR. They entered into a swap agreement to fix the interest rate though final maturity of the bonds. This would qualify as a cash flow hedge, I think. The counter party to the agreement has valued the agreement (a market to market value) at year end. I assume I will set this up as a liability (who knew 2 1/2 years ago rates would fall this low) through accumulated other comprehensive income.
My confusion is related to assessing the hedge effectiveness. It appears that this is imperative to qualify for hedge accounting and determine the ineffective portion of the hedge. I am not sure how to document this assessment. If the hedge meets the requirements for the shortcut method of accounting, does this ease the assessment documentation requirements? Would this mean that there would never be an ineffective portion and all changes in the FMV of the hedge would be posted through accumulated other comprehensive income? Basically, they have posted interest paid on the swap agreement through interest expense.
I would appreciate your advice on this case. The information I found on your website was extensive but the requirements are extremely confusing to me. Unfortunately, I am the first partner in my firm to tackle this issue. Please let me know if you need more details of the agreement.
Thank you,
Donna Jones
Thomas, Stout & Stuart LLP
PO Box 2220 Burlington, NC 27216
Phone: (336)226-7343 Fax: (336)229-4204 http://tssllp.com/
Hi Again Donna,
In this added message to you, I am going to feature a quote from a fascinating book by Frank Partnoy. I also want to point you to an important paper by Ira Kawaller. But before doing so, I am going to give you more background that you ever hoped for or perhaps even want.
My purpose is to give your more background on the Shortcut Method and to demonstrate why it is so important for your clients to qualify for the Shortcut Method whenever possible. You can read the following definition in my glossary at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#S-Terms
Shortcut Method = steps to computing interest accruals and amortization adjustments for interest rate swaps that have no ineffectiveness. The main attractiveness of the shortcut it that for interest rate swaps, quarterly testing for hedge ineffectiveness is not required. Whenever possible, firms seek to use the shortcut method. For interest rate swap cash flow hedges the short-cut method steps are listed in Paragraph 132 on Pages 72-73 of FAS 133. For fair value hedges, see Paragraph 114 on Page 62 of FAS 133. See FAS 133 Paragraph 68 for the exact conditions that have to be met if an entity is to assume no ineffectiveness in a hedging relationship of interest rate risk involving an interest-bearing asset/liability and an interest rate swap.
I will digress now and explain the background of FAS 133. FAS 133 arose because of the spectacular increase in the popularity of certain types of derivative instruments, particularly interest rate swaps (that hedge fair values or cash flows) and cross-currency swaps for interest rates and foreign exchange (FX) risk. In the case of both interest rate swaps and cross-currency swaps of interest rate risk, the FASB goofed in the original FAS 133. In the case of interest rates, the goof was to assume that firms hedge sector spreads rather than benchmarked rates. In the case of cross-currency swaps, the goof was to not allow for simultaneous hedging of both interest rate risk and FX risk in the same swap derivative contract. This was rectified in FAS 138 that you can read about at http://www.cs.trinity.edu/~rjensen/000overview/mp3/138intro.htm
Except for futures contracts (that settle for cash daily), there was no fair value accounting for financial instruments derivatives prior to FAS 133 in the U.S. and IAS 39 internationally. Most derivatives like forward contracts and swaps were not booked at all until maturity when cash settlements took place. FAS 133/138 requires booking of most derivatives and subsequent adjustment of the carrying values of the derivatives to fair value at least every 90 days.
Originally, the FASB wanted to book changes in derivative value to current earnings even though such changes are not realized until cash settlements take place. If that became the required accounting treatment, FAS 133 would have been about 20 simple paragraphs, and there would have been no need for the FAS 138 amendments of FAS 133. However, corporate America complained loudly that this simplistic treatment of changes in derivative instrument fair value would lead to reporting asymmetries for hedging contracts that are highly misleading. Their point was well taken in theory. If the hedged item (such as bonds payable) remained at historical cost and the hedging contract (such as an interest rate swap) was carried at current fair value, the changes in the hedge's fair value would create extreme volatility in earnings. Furthermore, such changes in earnings are unrealized and might be perfectly offset by unbooked changes in value of the hedged item. Accounting reality would, thereby, be far removed from economic reality in the case of effective hedges.
The FASB listened to its constituencies and decided to lessen the impact of unrealized changes in hedging contract values on current earnings per share. Doing so added over 500 paragraphs to FAS 133 plus the added paragraphs in the FAS 138 amendments to FAS 133. It left us with the most complex and convoluted standard in the history of accountancy.
Now I will outline at the key issues of hedging ineffectiveness in FAS 133:
1.
Hedge accounting is primarily of interest to your clients because it allows changes in the fair value of a derivative hedge to be offset by something other than current earnings. In the case of cash flow hedges and FX hedges, the offset is usually to Other Comprehensive Income (OCI). In the case of fair value hedges, the offset is either to an account called "Firm Commitment" for unbooked purchase commitments or the hedged item itself for booked assets or liabilities. In the latter case, the historical cost rule of accounting for the hedged item is suspended in favor of fair value accounting for the booked hedged item during the hedging period, after which the accounting reverts back to historical cost. You can read more about this by looking up such terms as "cash flow hedge," "fair value hedge," and "foreign currency hedge" in my glossary at http://www.cs.trinity.edu/~rjensen/000overview/mp3/138intro.htm
2.
Not all economic hedges qualify for hedge accounting, in which case the changes in value of the hedge contract impact directly upon current earnings. Your clients will nearly always want to have their hedges qualify for hedge accounting under FAS 133/138. They will, thereby, avoid the volatility of current earnings caused by fair value adjustments of derivative contracts (other than futures contracts).
3.
FAS 133 requires, except in the case of the Shortcut Method, testing of hedge effectiveness at the time the derivative instruments are adjusted for changes in fair value. To the extent that a hedge is deemed ineffective, the ineffective portion must be charged to current earnings rather than to the permitted offsets such as OCI, Firm Commitment, or the fair value offset debit or credit to the hedged item itself. Testing for effectiveness can be a very complicated process and is highly inaccurate (as you will see in Partnoy's passage quoted below). The importance of qualifying for the Shortcut Method is stressed in a paper by Ira Kawaller cited below.
4.
Testing for hedge effectiveness of interest rate swaps is perhaps the most complicated aspect of any hedge accounting under FAS 133. Appendix A of FAS 133 is devoted to issues of effectiveness testing (although that appendix does not delve into the more complex issues of hedge effectiveness testing of interest rate swaps). Testing for interest rate swap hedge effectiveness requires an understanding of yield curves known as swap curves and an understanding of how to derive forward prices from spot prices on such curves. You can read (and possibly weep) more about how this process works at http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
5.
Testing for hedge effectiveness of interest rate swaps is a highly inaccurate process that may give rise to hedge ineffectiveness simply due to the inaccuracy of valuing the interest rate swap (at least every 90 days) relative to the valuing of the hedged item itself (say a bond) that may be valued with great accuracy because it is traded on the open market. In other words, the hedged item (e.g., a bond) can be valued with great accuracy whereas its hedge (the interest rate swap) is a customized derivative contract that is not traded in the open market and can only be valued with great inaccuracy.
6.
The importance of the Shortcut Method (which only applies to qualified interest rate swap hedges) is that hedge effectiveness does not have to be tested when the swap is adjusted to fair value. This avoids the tedium of having to go to Bloomberg terminals and derive the swaps curves. More importantly, it avoids the inaccuracy of these swaps curves in valuing the swap. This, in turn, avoids having to book hedge ineffectiveness to current earnings when, in fact, the ineffectiveness is fiction arising only from inaccuracies in estimation of swap (yield curves).
Now let me quote from a truly fascinating book that I am reading at the moment (perhaps one of the most valued books that I have ever read in my life).
In a clever but
somewhat dubious marketing pitch for PERLS, DPG salemen often bragged
that the investor's "downside risk was limited to the initial
investment." These words appeared as boilerplate throughout
Morgan Stnley's marketing documents and almost always generated snickers
from the salesmen. One of the ironic selling points of PERLS ---
and many other derivatives my group later sold --- was that the most a
buyer could lose was everything
(Note from Jensen: The buyer would not lose everything in the case of a hedge rather than a speculation). . . . Some PERLS buyers had no idea that the bet they were making by buying PERLS typically was a bet against a set of "forward yield curves." (Note from Jensen: In the case of an interest rate swap, these are called swap curves.) Forward yield curves are a basic, but crucial, concept in selling derivatives. The most simple "yield curve" is the curve that describes government bond yields for various maturities. Usually the curve slopes upward because as the maturity of a government bond increases, its yield also increases. You can think about this curve in terms of a bank Certificate of Deposit. Your are likely to get a higher rate with a five-year CD than with a one-year CD. A yield curve is simply a graph of interest rates of different maturities. There are many different kinds of yield curves. The "coupon curve" plots the yields of government coupon bonds of varying maturities. The "zero curve" plots the yields of zero coupon government bonds of varying maturities (more about zero coupon bonds, also known as Strips later in the book). The coupon and zero curves are elementary, and you can find the quotes that make up these curves every day in the business section of most newspapers. The Wall Street Journal also includes a summary of daily trading activity in such bonds in its Credit Markets column. Note from Bob Jensen: The most important part of this passage begins now: But the most important yield curve to derivatives salesmen is one you won't find in the financial pages --- the forward yield curve, or "forward curve," Actually, there are many forward curves, but all are based on the same idea. A forward curve is like a time machine: it tells you what the market is "predicting" the current yield curve will look like at the same forward in time. Embedded in the current yield curve are forward curves for various forward times. For example, the "one-year forward curve" tells you what the current yield curve is predicting the same curve will look like in one year. The "two-year forward curve" tells you what the current yield curve is predicting the same curve will look like in two years. The yield curve isn't really predicting changes in the way an astrologer or palm reader might, and as a time machine, a forward curve is not very accurate. If it were, derivatives traders would be even richer than they already are. Instead, the yield curve's predictions arise almost like magic but not quite, out of arbitrage --- so called riskless trades to capture price differences between bonds --- in an active, liquid bond market. Continued on Page 58 of the book.
|
The important point is that the value of the interest rate swap derivative contract (the hedge) is usually an "inaccurate" estimate, whereas the value of the hedged item (e.g., a bond) may be highly accurate. If the hedge qualifies for the Shortcut Method under FAS 133, then the need to use such inaccurate value estimates in hedge effectiveness testing is avoided. The value change in the hedge can be assumed to be perfectly correlated (that is negatively correlated) with the value change in the hedged item. Changes in value of the hedge thereby are assumed to perfectly offset changes in the value of the hedged item in the case of a fair value hedge.
For students seeking to learn more
about derivatives and hedges, there are some important free papers by Ira
Kawaller at http://www.kawaller.com/articles.htm
. Several of the more important papers related to the topic at hand are
noted below:
- "Yield Curve Implications of Interest Rate Hedges," A Chicago Mercantile Exchange Strategy Paper. Originally published as "Hedge Interest Rates Now. . . Before It's Too Late," Journal of Derivatives, Spring 1998
- "The New World Under FAS 133 – (Strategies Involving Cross-Currency Interest Rate Swap Contracts)," GARP Review, December 2001/January 2002
- "FAS 133: System Worries," Bank Asset/Liability Management, May 2001.
- "The Impact of FAS 133 on the Risk Management Practices of End Users of Derivatives," Association for Financial Professionals, May 2001
- "The New World Under FAS 133 – (Strategies Involving Cross-Currency Interest Rate Swap Contracts)," GARP Review, December 2001/January 2002
Differences between tax and FAS 133 accounting are discussed in the following paper by Ira Kawaller and John Ensminger:
"The Fallout from FAS 133," (With John Ensminger), Regulation (The CATO Review of Business and Government), Vol. 23, No. 4, 2000.
With respect to the Shortcut Method, I want to call your attention to the following December 2000 message from Ira:
Hi Bob,
I wanted to alert you to the fact that I've added a new article to my site, " The Impact of FAS 133 Accounting Rules on the Market for Swaps, " which just came out in the latest issue of AFP Express. It deals with the consequences of not qualifying for the shortcut treatment when interest rate swaps are used in fair value hedges. (It's not pretty.)
,
I'd be happy to hear from you.
Ira
Kawaller & Company, LLC
(718) 694-6270
kawaller@idt.net
www.kawaller.com
HEDGING WITH
INTEREST RATE SWAPS
Applying these rules to interest rate risks requires an understanding that both fair value hedge accounting and cash flow hedging will be used, depending on the nature of the interest rate exposure. Specifically, if the intention is to manage the risk of uncertain interest expenses or revenues associated with a variable-rate debt security, then cash flow treatment is appropriate. If the intention is to manage the risk associated with a fixed-rate security, on the other hand, fair value hedge treatment is required. Consider two examples. In a case where an investor holds the fixed-rate security as an asset, the fair value hedge treatment may be reasonable and intuitive. After all, the hedger’s objective is to safeguard its value. Locking in some value for this security is perfectly consistent with the fair value hedge approach. In contrast, however, the hedger who issues fixed-rate debt and decides to swap from fixed to floating reflects a different kind of thinking. The objective of this hedge is not to offset present value effects, but to generate prospective cash flows that, when consolidated with the debt’s coupon payments, will result in a total interest expense that replicates the outcome of a variable-rate loan. It is well known that interest rate swaps generate precisely this set of cash flows, which suggests that cash flow hedging rules should be followed. But this is not the case. When the hedged item is a fixed-rate security, the FASB has mandated that fair value accounting is the only applicable accounting treatment. Unfortunately, in many cases, this requirement will foster an accounting result that is at odds with the economics of the transactions. This seeming ineffectiveness is a consequence of the requirement to use fair value hedge accounting. It does not result from the hedge being inappropriate or badly designed. The shortcut method will circumvent this problem. Qualifying to use shortcut treatment, however, requires that the features of the swap (i.e., the notional amount, payment and reset dates, and rate conventions) match precisely to those of the debt being hedged. If they do, the change in the carrying amount of the hedged item is set equal to the gains or losses on the swap, net of swap accruals, rather than to the change in the value of the bond due to the risk being hedged. Thus, the resulting accounting under the shortcut method replicates the current "synthetic instrument" accounting. Without the shortcut, you get something else. MEASURING HEDGE INEFFECTIVENESS To get a better idea of how serious failing to qualify for the shortcut treatment can be, consider the FASB’s own example,* in which a hedger issues five-year, fixed-rate debt. The debt has a par value of $100,000 and a coupon rate of 10%. The hedging instrument is a five-year swap, receiving 7% fixed and paying LIBOR. The risk being hedged is the benchmark LIBOR-based swap rate. The example assumes a flat yield curve, which simplifies the calculations. According to the FASB’s calculations, a 50-basis point change in the LIBOR-based swap rate will foster a change in the fair value of the swap of $1,675. If the hedger elects, and qualifies for, the shortcut method, the $1,675 would be used for both the swap and the adjustment to the carrying amount of the debt. These two contributions to earnings would be exactly offsetting, so that the ultimate effect on earnings would distill to interest accruals of the debt and the swap, respectively. The synthetic instrument outcome would be realized, where the effective interest rate would be LIBOR plus 3%. (The 3% spread over LIBOR comes from the difference between the 10% fixed rate on the debt versus the 7% fixed rate on the swap.) Without the election of the shortcut method, the swap would generate the same income consequences as above, but the adjustment to earnings from the hedged item’s response to the change in the LIBOR-based swap rate would be different—$1,568 instead of $1,675. This seemingly small difference of $107 is misleading, however. On a yield basis, this discrepancy translates to an interest rate effect of 43 basis points, i.e.
So the question is: If a company is considering swapping from fixed- to floating-rate debt, and the result could end up being 43 basis points—or more—away from the intended outcome, will that company still go ahead with the hedge? For the many (possibly the vast majority of ) potential swappers, this magnitude of uncertainty will be unacceptable and the answer will be no. The recourse will be to take whatever steps are necessary to ensure that the prospective hedge will qualify for the shortcut method. GOOD NEWS The good news is that if entities do qualify for the shortcut treatment, the requirement to document that the hedge will be highly effective becomes moot. The act of qualifying ensures effectiveness. The bad news is that the criteria for qualifying are restrictive. The underlying debt securities have to be "typical," presumably lacking bells and whistles that may have served to reduce costs for issuers in the past. Thus, for those firms with "atypical" debt on their balance sheet, either as assets or liabilities, for which the shortcut method is prohibited, the perfectly functioning interest rate swap will no longer work. And for those cases where the debt security qualifies but the terms of the associated swap do not match up properly, firms will likely want to trade out of their existing swap positions and enter into swaps that do qualify for shortcut treatment. In the longer run, the appetite for anything but plain vanilla swaps may all but disappear if concerns about potential income volatility come to dominate in the decision about which hedging strategy or tool to employ. Continued at http://www.kawaller.com/pdf/Impact.pdf
|
One Man's Eye (Photography History and Appreciation) --- http://www.onemanseye.com/
Richard Campbell called my attention to the following series:
"Con man: A lesson for our
times," by Christopher Byron MSNBC CONTRIBUTOR --- http://www.msnbc.com/news/706567.asp
First in a 5-part series: Enron’s fiasco recalls the 1980’s tale of teenager
Barry Minkow and the ZZZZ Best investor swindle
FESSING UP AND FORGIVENESS
What follows is Barry’s story, much of which has never been revealed until now. He told it to me after he got out of federal prison in 1995, having done 7 1/2 years in stir for his role in the affair. I’ve decided to tell it now, if for no other reason than to remind us of two things that are germane to the Enron scandal: No one ever sets out in life with the goal of winding up in prison, and secondly, that the necessary first step to redemption is fessing up… only after which can come forgiveness and ultimately, peace.
History has a funny way of bringing events into sharper relief the further way we get from them, and the ZZZZ Best Affair was no exception. The scandal unfolded in Los Angeles nearly two decades ago, but the actors and their stage props could have been lifted straight out of the headlines from the final blowout phase of the dot-com era almost twenty years later. The man at the center of the action - Barry Minkow - was barely 16 when economic hardship and the loneliness of late adolescence converged to put him on a track that would end in Terminal Island federal penitentiary. As a member of a working class family in the working class town of Reseda, Calif. outside Los Angeles, Barry hadn’t had an easy life under the best of times. What’s more, like any teenager, he wanted to be accepted, to fit in. But Barry didn’t make friends easily, he was under-sized and underweight, and bigger kids enjoyed pushing him around. Advertisement
To compensate, he started going to a gym in his neighborhood and weightlifting — the Valley Gym and Health Club. He wanted to make himself so huge no one would mess around with him. Also, it was a way to blow off steam at his family, in particular his dad, who somehow seemed to be letting the family down when his real estate business fell apart at the start of the 1980s and he had trouble reestablishing himself in anything else. At times the money got so tight at the Minkow household that the gas company would come over and shut off the heat and hot water, and Barry and the rest of the family would have to take showers at friends’ houses. There was an older guy at the gym named Danny, who always carried around a wad of money. He drove a new truck, and seemed to have everything in control. He was big: 6’ 3”, and he had plenty of muscles. He took a liking to Barry and turned him on to steroids. Barry looked up to him. He seemed to fill a void created by his dad.
A BUSINESS IS BORN When Barry got to high school, he landed a job after school cleaning carpets. One day he went to clean Danny’s carpet and right out of the blue Danny offered to set Barry up in business by buying him his own cleaning equipment. He lent Barry $1,600, and asked for repayment at an interest-only rate of $200 per week.
Barry agreed, though he was only 16 years old. When he told his parents, he left out the “interest only” part because Danny had told him to. There seemed to be something fishy about the deal, but it was exciting and he wanted to go forward with it anyway, so he did what Danny said. In the least, the idea of having his own carpet cleaning business seemed a way to mock and humiliate his dad, who’d gone bankrupt in real estate and now couldn’t find another job. So it would be Barry to the rescue, saving the entire Minkow family from the ruination that his own father had been powerless to fend off.
But Barry also had a secret motive: He wanted to impress a girl in his class named Lisa Petrov.
She lived almost around the corner from his house, in a bigger and better place on Keswick Street. The place had a palm tree in front. It looked grand. In fact, everything about Lisa Petrov seemed grand.
Every 10th grade boy has a Lisa Petrov in his life, and Barry was no exception. She was the embodiment of every secret desire he’d ever known. She was blonde, brown-eyed, and had a voice like Melanie Griffith’s — all raspy and seductive. She was the head of the cheerleading squad. He died for her every night.
Lisa was the ultimate trophy date, and every boy in Cleveland High wanted her, but Barry couldn’t even get her to look his way. He tried everything he knew, and mostly his schemes just blew up in his face. For example, he had a part-time job working behind the takeout counter at an after school hangout in the Valley known as Foster Freeze. He told Lisa to come over one afternoon and he’d give her free food. She did. He gave her a shake, burgers, and fries and she left.
Barry thought, “I’ve got it made in the shade with that move…” Lisa would be his! Unfortunately, the manager had spotted him and he got fired, and after that Lisa just didn’t want to know him. Besides, she didn’t need to. Lisa could have anyone she wanted, so what did she want with Barry Minkow? He was funny looking, he was Jewish — and he couldn’t even steal a burger and fries for her from the Foster Freeze.
Lisa had bigger fish to fry. She had a coterie of homely, suck-up girls who hung around her wherever she went and constantly reinforced her belief in herself. They’d eat by themselves at a table in the lunchroom, and all the guys would simply stare. Lisa didn’t need to date the jerks from Cleveland High at all; she could have any guy she wanted, from anywhere — even from out of town. She actually dated guys from college! This was a woman of the world! Basically, Cleveland High was just some temporary dirt under her shoes.
It really tore Barry up inside. He was from a struggling, cash-strapped family, he wasn’t good looking, and he desperately wanted Lisa to pay attention to him.
That’s when Danny popped up with his offer, and Barry figured, well, this ought to do it for sure! If he had his own business, then Lisa Petrov would absolutely have to notice him. Besides, wasn’t that what Jewish kids did ... become businessmen?
In the end, this scheme also failed, for it turned out that his timing was off. Lisa was a year ahead of him in class, and when he turned senior and really had ZZZZ Best cookin’, Lisa had already graduated, and had gone off and married a baseball pitcher for the Kansas City Royals. But the events set in motion by Barry’s crush on her would, in short order, reach far beyond Reseda, Calif., as the angling young 10th grader from Grover Cleveland High got swept up in the twisted morality of ’80s era capitalism at its worst.
Reply from Dee Davidson on February 20, 2002
All the segments of the Barry Minkow story are now posted. This is an incredible story and a lesson for all. It reminds me of the story of the young man in a European rural community who stole his neighbors sheep until he was caught. As punishment, his forehead was branded with the letters ST, for sheep thief. In atonement for his crime, he chose to do good works among the village for many years. In old age he died. All of villagers went to his funeral and several asked the priest why the man had worn the letters ST on his forehead. The priest replied with the story of the crime. One of the village leaders responded with, "Oh, I always thought it stood for Saint."
dee davidson
Accounting Systems Specialist
Marshall School of Business Leventhal School of Accounting
University of Southern California 213.740.5018 dgd@marshall.usc.edu
Message from Graziella Michelante [michelante@eiasm.be]
With this message, we would like to remind you the following events :
Workshop on Accounting and Economics V
When : June 20-21, 2002
Where : Madrid, Spain
Web site : http://www.eiasm.be/events/WsAccountingEconomics.html
International Conference on Accounting, Auditing & Management in Public Sector Reforms
When : September 5-7, 2002
Where : Dublin, Ireland
Web site : http://www.eiasm.be/events/WsDublin.html
On February 13, 2002 there was a feature on ABC Evening News on television that claimed that airlines were keeping debt on their leased airplanes off the balance sheet. I asked some people to comment on how this is possible.
Reply from John Brozovsky [jbrozovs@mail.vt.edu]
Hi Bob:
Actually the airline case is very long standing. They have been designing their leases to take advantage of capital lease rules since they were promulgated. If you define the life of an airplane to be 21 years than a 15 year lease (which seems to be the most common lease term) does not constitute 75% of the useful life.
Personally I like a suggestion that the Aussie's bought up a few years ago--capitalize any lease that is over one year in length. However, I am not sure this went any further than the talk stage.
John
Reply from Tom Oxner [TOxner@MAIL.UCA.EDU]
According to an article from Business Week (January 28, 2002, pg 36-37) both UAL and AMR have a great deal of off-balance sheet debt in SPE's. Each of these companies has a little less than $8 billion in debt in SPE's which is not shown on their balance sheets. Most of these SPE's are in partnerships with various banks. I would assume that the banks may own the other 3% of the SPE, but that was not stated in the article.
Tom Oxner
Reply from William.Mister@colostate.edu
I have been doing some work on UAL for my financial statement analysis class. Some quick and dirty figures from the 2000 10K show debt/equity without including operating lease obligations is 1.37. With operating leases included the ratio is 3.67. Reported LT Debt and capital leases is 7,119 million. My calculation of the PV of the operating lease obligations is 11,926 million using 10%. Be careful and redo this figures before using them. I once before made an error. :-)
William G. (Bill) Mister
Reply from Murat Tanju [MTanju@WWW.BUSINESS.UAB.EDU]
They actually apply GAAP by not meeting the four conditions of capitalization within the SPE. The profession should not allow off B/S financing! There are also noncancellable operating leases for 30 years or longer where asset and liabilty are off B/S under GAAP that should be brought on B/S but we don't have normative accounting. (Sorry I got carried away!).
Murat N. Tanju
Professor of Accounting
Phone # 205.934.8822 Fax # 205.975.4429
From The Wall Street Journal's Accounting Educators' Reviews on February 14, 2002
TITLE: SEC Still Investigates Whether
Microsoft Understated Earnings
REPORTER: Rebecca Buckman
DATE: Feb 13, 2002
PAGE: A3
LINK: http://online.wsj.com/article/0,,SB1013558932799654480.djm,00.html
T
OPICS: Financial Accounting
SUMMARY: Microsoft is undergoing a continuing SEC investigation into whether the company has understated its revenues. Questions relate to issues in unearned revenue.
QUESTIONS:
1.) What is conservatism in accounting? Is it an accepted practice?
2.) In general, what is unearned revenue? How is it presented in the financial statements? When is this balance recognized as earned? What accounting adjustment is made at that time?
3.) Why must Microsoft record some unearned revenues from software sales? Could that practice be supported through reserves of some cash accounts?
4.) Given Microsoft's recent experiences in testifying against allegations of violating federal antitrust laws, why might the company want to understate its income?
5.) Why does the former Microsoft employee, Mr. Pancerzewski, say that "he disagrees that there is no harm in a company understating its income"? Do you think there could be problems in understating income even for companies that are not facing charges of earning excess profits through anti-competitive practices?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Debbie Bowling forwarded the link below:
"Reports: Computer Associates probed over ‘pro forma’ accounting: Software firm says it hasn’t been contacted by investigators," MSNBC News, February 20, 2001 --- http://www.msnbc.com/news/711818.asp
NEW YORK, Feb. 20 — Federal prosecutors have opened a preliminary inquiry into whether Computer Associates International Inc. deliberately overstated its profits to inflate its stock price and enrich its senior executives, the New York Times reported on Wednesday
SINCE OCTOBER 2000, the Islandia, N.Y.-based software company has reported its financial results using a nonstandard ”pro forma” accounting practice that makes its profits and sales seem much larger than under standard accounting rules, the Times said. Former employees have said that Computer Associates began using pro forma accounting because it had run out of ways to inflate its results under standard accounting rules and had to find a new method, the Times said. Early on Wednesday, Computer Associates issued a statement in response to a similar report by the Long Island newspaper Newsday, in which the company said it had not been contacted by the authorities regarding any investigation, and did not know what, if anything, was being investigated. The report said investigators are looking into whether the company has properly distinguished between revenues it receives from the sale of software and the fees it charges to service, upgrade and maintain those software products. Advertisement
“The reporting of our financial results has always been in accordance with all applicable accounting principles,” the company statement said. “If there are questions, we look forward to being contacted and to having the opportunity to defend against hearsay and what we believe will prove to be unwarranted concerns,” the company added. The assistant U.S. attorney for the Eastern District of New York, which oversees Long Island, appeared interested in setting up interviews with former Computer Associates employees but did not indicate whether he planned to issue subpoenas, the Times said.
The collapse of Enron Corp. has resulted in new scrutiny of unusual corporate accounting methods. More technology business news
Bob Jensen's threads on pro forma reporting are at the following two sites:
http://www.trinity.edu/rjensen//theory/00overview/theory01.htm
From the Stanford Law School Securities Fraud Database --- http://securities.stanford.edu/1022/TTWO01-01/
Take-Two Interactive CASE INFORMATION
Summary: According to a Press Release dated December 21, 2001, the complaint alleges that during the Class Period defendants materially misrepresented Take-Two's financial results and performance for each of the quarters of and full year of fiscal 2000, ended October 31, 2000, and each of the first three quarters of fiscal 2001, ended January 31, 2001, April 30, 2001 and July 31, 2001, respectively, by improperly recognizing revenue on sales to distributors. On August 24, 2001, the truth about the Company's financial condition began to emerge when the effects of defendants' scheme began to negatively impact the Company's financial results. It was not until December 14, 2001 and December 17, 2001, however, that the market began to learn that defendants had caused the Company to improperly recognize revenue for products shipped to distributors, where the distributors did not have a binding commitment to pay for the products, in direct contravention of GAAP. Significantly, defendants' unlawful accounting practices enabled defendants to portray Take-Two as a financially strong company that was experiencing dramatic revenue growth, and which was poised for future success when, in fact, the Company's purported success was the result of improper accounting practices. On December 14, 2001, following rumors of a possible restatement of Take-Two's financial results, Take-Two's common stock fell 31% --$4.72 a share to $10.33 per share. During the Class Period, Take-Two shares traded as high as $24.50 per share. Defendants were motivated to misrepresent the Company's financial results, by among other things, their desire to sell approximately 900,000 shares of Take-Two common stock during the Class Period at artificially inflated prices for proceeds of over $15 million.
INDUSTRY CLASSIFICATION: SIC Code: 7372 Sector: Technology Industry: Software & Programming
NAME OF COMPANY SUED: Take-Two Interactive Software Inc.
COMPANY TICKER: TTWO COMPANY WEBSITE: http://www.take2games.com
FIRST IDENTIFIED COMPLAINT IN THE DATABASE Fischbein, et al. v. Take-Two Interactive Software Inc., et al. COURT: S.D. New York DOCKET NUMBER: JUDGE NAME: DATE FILED: 12/18/2001 SOURCE: Business Wires CLASS PERIOD START: 02/24/2000 CLASS PERIOD END: 12/17/2001 TYPE OF COMPLAINT: Unamended/Unconsolidated PLAINTIFF FIRMS IN THIS OR SIMILAR CASE: Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY) One Pennsylvania Plaza, New York, NY, 10119-1065 (voice) 212.594.5300, (fax) , Rabin & Peckel LLP 275 Madison Avenue, New York, NY, 10016 (voice) 212.682.1818, (fax) , email@rabinlaw.com Schiffrin & Barroway, LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com
TOTAL NUMBER OF PLAINTIFF FIRMS: 3
Enron Updates for February 25, 2002
In Congressional hearings on the Enron collapse, Professor Baruch Lev of New York University's Stern School of Business gave the House Committee on Energy and Commerce a short but insightful lesson on the "axis of evil" confronting the accounting profession today. When introducing Professor Lev, Committee Chairman W. J. "Billy" Tauzin said, "If there were a Nobel Prize for Accounting, it would surely have been awarded to Baruch Lev." If his testimony helps lawmakers navigate through this crisis, he may still get that prize. http://www.accountingweb.com/item/71516
IT Braces Against New Enron Aftershock First, companies with accounting woes saw wary investors dump shares. Now, these same firms face a related, and potentially more serious, threat -- class action lawsuits. http://www.newmedia.com/default.asp?articleID=3396
As Questions Mount, Telecoms Get Spinning Global Crossing was one of the first telecommunications firms to become the recipient of regulatory scrutiny following Enron's implosion, but it is not likely to be the last. Trying to head criticism off at the pass, two telecoms are busy spinning their explanations. http://www.newmedia.com/default.asp?articleID=3393
How about improvement of Andersen's verifications of management reports? This is not something new that is needed in the way of auditing standards. It has been a standard ever since the Mckesson & Robbins scandal in 1938. A crisis in public accounting was provided by the celebrated McKesson & Robbins case. McKesson & Robbins, Inc., whose financial statements had been audited by Price Waterhouse & Co., had inflated inventory and receivables by $19 million dollars through falsification of supporting documents. The auditors merely accepted inventory and receivables balances reported by management without bothering to even verify their existence in McKesson & Robbins.
Auditors should verify all major transactions and not confine verifications to inventories and receivables. Does it take an Enron scandal for accounting firms to go beyond inventory and receivables verification?
Why would Andersen sit for over four years without independently verifying what outside equity holders invested in SPEs, especially since the amounts were so vital to financial statements. The fact that Enron put up half of one outsider's equity investment is what triggered the restatement of financial statements and was a key event in the collapse of the company. Why didn't Andersen independently verify what management reported for so many years and then get into a panic when Enron finally disclosed that it lied? Aren't auditors hired to protect investors from management lies?
To me, an auditor's legal defense built upon a contention that management lied to the auditors just does not hold water. Auditors are supposed to independently verify what management provides them, especially on really big-deal items.
All that aside, the actions and possible misdeeds of a few auditors should not cast a shadow over the other (84,000?) professionals in Andersen. Andersen has some of the best professionals in the world and some of the most ethical professionals in the world.
But that does not mean that questions should not be raised about the following:
1. Internal quality controls system-wide that protect the international firm from a bad local audit. For example, why weren't the lead partners on the Enron audit rotated frequently? It would seem that David Duncan was verifying the golf handicaps of Enron top brass more than he was verifying outside investment in SPEs year after year.
2. Why complain about accounting standards so vocally after the horse is out of the barn when Andersen and virtually all other large accounting firms have so actively pressured the FASB and the SEC to not have tougher accounting and auditing standards? See http://www.trinity.edu/rjensen/fraud.htm#Blame
Bob Jensen
-----Original Message-----
From: E. Scribner [mailto:escribne@NMSU.EDU]
Sent: Monday, February 18, 2002 1:30 PM T
o: AECM@LISTSERV.LOYOLA.EDU Subject:
Re: Arthur Andersen Conference CallIt was refreshing in a way to hear directly from the auditors instead of through the lens of the newspapers and without the pressure of Congressional questioning. Maybe I'm still in denial, but I sense a tone of integrity among the auditors that I don't sense among the prominent Enron officials. I certainly want to believe Andersen, but the call didn't provide enough information to enable a judgment on most points. They still seem to be caught between allegations of duplicity at the worst or negligence at best.
The call didn't alleviate my concern that the magnitude of the Enron fees influenced the Houston office's professional skepticism. There also seemed to be confusion between statements to the effect that auditors don't cause companies to collapse but we've got to make some changes. (The conclusion seemed to be, however, that the only changes needed are to improve the accounting standards for SPE consolidation and to take certain steps, albeit reluctantaly, to satisfy public misperceptions--e.g., that consulting conflicts with independence.) The call stressed that the audit was fine except for one blown judgment call and one side-letter that was concealed by the client; the harsh move of firing the lead auditor stemmed from the shredding activity.
But if one missing side-letter can produce such disastrous results, how can an auditor stay with an engagement that is so vulnerable?
As far as influencing my counseling of students, the call had no effect, as best I can read myself. I've always tried hard to give the students the facts as I know them and let them make their own employment decisions.
Hope this vague answer at least stimulates further comments.
Ed Scribner
New Mexico State University
Las Cruces, NM, USA
February 19, 2002 Message from Elliot Kamlet [ekamlet@BINGHAMTON.EDU]
I understand that Andersen's position on Enron is that David Duncan, acting as a rogue partner, has probably overlooked what he did not want to see. It was explained to me by a senior New York partner that Andersen is such a good place to work because of the high degree of freedom afforded to individual partners and that would have to change.
Then I read (again) the story of Andersen and Baptist Foundation of Arizona and see a clear case of the partner who was in charge of the Lincoln Savings & Loan audit who then was in charge of the Baptist Foundation of Arizona audit, who should have provided a warning to Andersen. However, according to this story, he informed other partners and lawyers in Chicago and still nothing happened. I think I was more upset by this story than Enron?
See the story at
http://online.wsj.com/article/0,4286,SB1014067925637124880,00.html?mod=Page+One
Elliot Kamlet
This is a great opportunity for academics to show Denny Beresford that they are interested in responding to FASB calls for comments. For example, do you think the new EDs go far enough? How can we get airlines to book billions of dollars in leased airplanes on the balance sheet? These EDs do not seem to do the job.
As influential House Energy Committee Chairman Billy Tauzin called for a review of accounting rules "across the country and across corporate boards," the Financial Accounting Standards Board continued its relentless drive to strengthen the standards. On February 15, FASB announced the release of a revised limited version of an exposure draft entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections-Amendment of FASB Statement No. 13. The new ED proposes an important change in lease accounting. http://www.accountingweb.com/item/72443
As influential House Energy Committee Chairman Billy Tauzin called for a review of accounting rules “across the country and across corporate boards,” the Financial Accounting Standards Board (FASB) continued its relentless drive to strengthen the standards. On February 15, 2002, FASB announced the release of a revised limited version of an exposure draft (ED) entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections—Amendment of FASB Statement No. 13. The new ED supplements a previous ED dated November 15, 2001 and proposes an important change in lease accounting.
Together, the two EDs propose to amend four Statements of Financial Accounting Standards (FAS):
FAS No. 4 - Reporting Gains and Losses from Extinguishment of Debt
FAS No. 13 - Accounting for Leases
FAS No. 44 - Accounting for Intangible Assets of Motor Carriers
FAS No. 64 - Extinguishments of Debt Made to Satisfy Sinking-Fund RequirementsSpecific proposed changes include the following:
- As described in the first ED, companies will no longer be required to classify gains and losses from the extinguishment of debt as extraordinary items, but they will still be allowed to use this accounting treatment in certain circumstances.
- As described in the new ED, the accounting for certain types of leases will change, (i.e., sale-leaseback transactions and lease modifications with economic effects similar to sale-leaseback transactions).
The reason for two EDs instead of one is because the second has its roots in the comment letters for the first. Commentators suggested changes they felt would improve financial reporting by eliminating inconsistencies in the various standards. FASB agrees in theory. But it also recognizes that some companies might have structured their leases differently, if the proposed accounting changes had been in effect at the time of the transaction. To ensure these substantive changes get a fair hearing, FASB decided to expose them for public comment as part of its “due process.”
Comments on the revised ED are due by March 18, 2002.
One of my students forwarded this link.
"PwC: Sharing the Hot Seat with Andersen? PricewaterhouseCoopers' dual role at Enron and its controversial debt-shielding partnerships has congressional probers asking questions," Business Week Online , February 15, 2002 --- http://businessweek.com/bwdaily/dnflash/feb2002/nf20020215_2956.htm
So far in the Enron scandal, Arthur Andersen has borne all the weight of the accounting profession's failures. But that's about to change. BusinessWeek has learned that congressional investigators are taking a keen interest in PricewaterhouseCoopers' role -- or roles -- in deals between Enron and its captive partnerships. A congressional source says the House Energy & Commerce Committee is collecting documents and interviewing officials at PwC.
At issue is the firm's work for both Enron and those controversial debt-shielding partnerships, set up and controlled by then-Chief Financial Officer Andrew Fastow. On two occasions -- in August, 1999, and May, 2000 -- the world's biggest accounting firm certified that Enron was getting a fair deal when it exchanged its own stock for options and notes issued by the Fastow-controlled partnerships.
Investigators plan to question the complex valuation calculations that underlie the opinions. Enron ultimately lost hundreds of millions of dollars on the deals. A PwC spokesman says the firm stands by its assessment of the deals' value at the time.
OVERLAP. Perhaps more significantly, Pricewaterhouse was working for one of the Fastow partnerships -- LJM2 Co-Investment -- at the same time it assured Enron that the Houston-based energy company was getting a fair deal in its transactions with LJM2. In effect, PwC was providing tax advice to help LJM2 structure its deal -- the first of the so-called Raptor transactions -- while the accounting firm was also advising Enron on the value of that deal.
Pricewaterhouse acknowledges the overlapping engagements but says its dual role did not violate accounting's ethics standards, which require firms to maintain a degree of objectivity in dealing with clients. The firm says the work was done by two separate teams, which did not share data. PwC's spokesman says LJM2's tax structure wasn't a factor in its opinion on the deal's valuation. And, the spokesman says, each client was informed about the other engagement. That disclosure may mean that the firm's actions were in the clear, says Stephen A. Zeff, professor of accounting at Rice University in Houston.
Lynn Turner, former chief accountant at the Securities & Exchange Commission, still has questions. "The standard [for accountants] is, you've got to be objective," says Turner, who now heads the Center for Quality Financial Reporting at Colorado State University. "The question is whether [Pricewaterhouse] met its obligation to Enron's board and shareholders to be objective when it was helping LJM2 structure the transaction it was reviewing. From a common-sense perspective, does this make sense?"
"NO RECOLLECTION." PwC's contacts on both sides of the LJM2 deal were Fastow and his subordinates. BusinessWeek could not determine whether Enron's board, the ultimate client for the fairness opinion, knew of Pricewaterhouse's dual engagements. But W. Neil Eggleston, the attorney representing Enron's outside directors, says Robert K. Jaedicke, chairman of the board's audit committee, has "no recollection of this conflict being brought to the audit committee or the board."
In any case, Capitol Hill's interest in these questions could prove embarrassing to Pricewaterhouse. The firm is charged with overseeing $130 million in assets as bankruptcy administrator of Enron's British retail arm. On Feb. 12, SunTrust Banks said it had dumped Arthur Andersen, its auditor for 60 years, in favor of PwC. And given the huge losses Enron eventually suffered on the LJM and LJM2 deals, the energy trader's shareholders may target PwC's deep pockets as a source of restitution in the biggest bankruptcy in American history.
The fairness opinions were necessary because Enron's top financial officers -- most notably Fastow, the managing partner of LJM and LJM2 -- were in charge on both sides of these transactions. Indeed, both of PwC's fairness opinions were addressed to Ben F. Glisan Jr., a Fastow subordinate who became Enron's treasurer in May, 2000. Glisan left Enron in November, 2001, after the company discovered he had invested in the first LJM partnership.
SELLING POINT. Since the deals were not arms-length negotiations between independent parties, Pricewaterhouse was called in to assure Enron's board that the company was getting fair value. Indeed, minutes from a special board meeting on June 28, 1999, show that Fastow used PwC's fairness review as a selling point for the first deal.
That complex transaction was designed to let Enron hedge against a drop in value of its investment in 5.4 million shares of Rhythms NetConnections, an Internet service provider. PwC did not work for LJM at the time it ruled on that deal's fairness for Enron. The firm valued LJM's compensation to Enron at between $164 million and $204 million.
The second deal, involving LJM2, was designed to indirectly hedge the value of other Enron investments. That deal was even more complex, and PwC's May 5, 2000, opinion does not put a dollar value on it. Instead, it says, "it is our opinion that, as of the date hereof, the financial consideration associated with the transaction is fair to the Company [Enron] from a financial point of view."
"CRISIS OF CONFIDENCE." Some documents associated with LJM2 identified Pricewaterhouse as the partnership's auditor. A December, 1999, memo prepared by Merrill Lynch to help sell a $200 million private placement of LJM2 partnership interests listed the firm as LJM2's auditor. In fact, KPMG was the auditor. The PwC spokesman says his firm didn't even bid for the LJM2 audit contract. Merrill Lynch declined to comment on the erroneous document.
The PwC spokesman acknowledges that congressional investigators have been in touch with the firm. "We are cooperating with the [Energy & Commerce] Committee," he says. On Jan. 31, the New York-based auditor said it would spin off its consulting arm, in part because of concerns that Enron has raised about the accounting profession. "We recognize that there is a crisis of confidence," spokesman David Nestor told reporters. As probers give Pricewaterhouse a closer look, that crisis could become far more real for the Big Five's No. 1.
Roger Collins forwarded this link.
"Enron creditors question cash 'hole'," BBC News, February 15, 2002
--- http://news.bbc.co.uk/hi/english/business/newsid_1822000/1822853.stm
February 15, 2002 Message From Miklos A. Vasarhelyi [miklosv@ANDROMEDA.RUTGERS.EDU]
Would continuous Audit have prevented the Enron mess?
A well performed continuous audit would certainly have much earlier brought to light the Enron operational problems, and across the value chain resource flow analytics identified resource discontinuities. While the facts on Enron are not yet clear, arguably a well performed traditional audit would also have detected many of problems. The key difference would be on the timeliness of the problem detection (much sooner), the nature of the assurance provided (that can be the assurance of processes not necessarily of the eventual financial report), the nature of the assurance process (closer to secondary supervision than of ex-post facto archival review), and the audit technology used ( heavy reliance on inter-process analytics, models of processes, and alarming).
What is the continuous audit (assurance) methodology?
Continuous auditing is a type of auditing which produces audit results simultaneously with, or a short period of time after, the occurrence of relevant events. The need of assurance of the integrity of information processes arises in many situations. The traditional financial audit is an instantiation of this process. This particular form of assurance includes a set of corporate measures represented by GAAP and a 'independent' third party assurer.
The continuous assurance methodology utilizes online information technology to provide potentially many different forms of assurance including a form that expands the "traditional financial audit, and makes it more sensitive to extraordinary transactions as some observed in the Enron case.
What is different between the traditional and the continuous audit?
The continuous audit (assurance) is close to a supervisory process where the analytical methods of traditional audit are extended by the examination of continuous flows of data and a series of models of expected system behavior and consequent data content. Alarms extend the nature and scope of the assurance process bringing it closer to operations with the intrinsic advantages and disadvantages of this process change.
In a continuous audit there is software the continuously monitors company transactions and compares its generic characteristics to their observed / expected characteristics. If significant discrepancies occur, alarms are triggered that must be acknowledged by operational managers, auditors, and top management.
In the Enron case its transactions with SPEs were abnormal in nature and detectable as abnormal. Many of the ratios of Enron's sub-entities would not have been coherent with its competition and would trigger evaluation. An end-to-end flow analysis (and monitoring) of Enron's component value additions would not reconcile and call for audit procedures that looked for non-disclosed entities.
How does continuous assurance relates to continuous reporting?
As continuous assurance depends on continuous flows of transaction data as well as analysis of level variables, a fully deployed assurance system will be an overlay to a continuous measurement system. Continuously measuring financial data flows and account levels entails a continuous reporting system. Most large US corporations today already keep internal reporting on a continuous basis in critical variables such as cash (for treasury management), payables (to take advantage of discounts), inventory and production (for just-in-time), etc.
In addition to continuous measurement of flow variables continuous assurance methodology requires the development of a comprehensive system of models (and standards) that allow for comparisons with continuous data flows. This system of models can be of great value to break down value added in an auditee and to point out non reported entities and discontinuities in value.
What should be different in the audit model to deal with lack of independence? Does continuous assurance resolve this problem?
Environmental standards and controls are necessary for obtaining objectivity and independence both in the traditional as well as in the continuous audit environment. Corrupt managements, economically interested assurors, and lack of objectivity will always happen to a certain degree. Continuous assurance methodologies can be used to force the identification of these events, to allow for multi-party process monitoring, and to bring to light data inconsistencies that arise in bad or corrupt business models.
While the traditional US regulatory model is rather anachronistic using old technology to measure and monitor 21st century corporations, both companies, audit local offices, audit firms, and the government could benefit from monitoring flows and analytics creating a better set of overviews, checks, and balances. An Italian Bank (BIPOP Carire) has used online technology to provide continuously updating reports of its financial health to Italian authorities.
Could the continuous assurance model radically change the scenario government supervision, auditor policing, and detection of audit failure?
Conceivably, companies could be required to provide summary continuous reports along a wide range of flow related variables to the government (or other supervisory authority) to monitor key processes. The government would be positioned as one of the multiple stakeholder of business and reports / model / data flow tailored to its supervisory, legal, and statutory needs.
While there is the illusion that one set of disclosures should satisfy external reporting needs, the modern corporation has many stakeholders with different information needs and objectives. These stakeholders could pay and get separate information structures and specific online assurances that would pay for itself in the form of the reduction of their risks. Real-time covenant monitoring would decrease banking risks, asset impairment monitoring would reduce insurance risk, etc...
Would the continuous assurance process have detected the problems / existence of the related party partnerships that plagued Enron?
Yes. With this particular problem in mind, data flows and models could be developed that would question (and require justification) the large non-repetitive data and resource flows between Enron and the partnerships. These flagged (alarmed transactions) would have to be formally explained by management, and ratified as normal by auditors. Conceivably, a reporting system could be put in place to call to the attention of supervisory authorities these anomalies that would serve as a timely deterrent of some of these problems. A library of validity tests, developed in a continuous audit environment, including tests of related party transactions, overlapping management, double-dipping, conflict of interests , insider trading, trading by managers, can be developed and applied on a consistent basis.
Could laws be enacted to provide more efficient monitoring of publicly held companies?
Clearly, the laws, standards, and practices that currently rule business entity measurement and assurance are anachronistic. They were developed over the last centuries and decades taking in consideration a substantially different type of business entity, control environment, and data processing capabilities. Legislation compliance and monitoring are expensive processes (even after the technological revolution) but can today be performed at much narrower thresholds of error. There is little doubts that much tighter regulation can be devised and implemented. It is up to societal mores to decide on its desirability.
Miklos A. Vasarhelyi
KPMG Professor of AIS
Rutgers University
315 Ackerson Hall
180 University Avenue
Newark, NJ 07102
(973) 353 5002
(201) 454 4377 (cell)
http://raw.rutgers.edu/miklos
The board of directors of SunTrust Banks, Inc. voted this week to end its 60-year-old relationship with Big Five firm Andersen and has agreed to hire PricewaterhouseCoopers to perform the company's audit work in the future. The bank claims its decision had nothing to do with Andersen's recent problems stemming from its controversial Enron audit. SunTrust was Andersen's largest banking client, responsible for more than $3 million in annual fees. http://www.accountingweb.com/item/72155
From Business Week's Online Insider on February 15, 2002
THE BETRAYED INVESTOR In the 1990s, a new class of investors--millions of working Americans pouring cash into stocks and mutual funds--became a powerful economic and political force. They bought into the idea that stocks could only make them richer. Then the market bubble burst--and then came Enron. Now, many feel misled by Wall Street, corporations, accountants, and Washington. The strength of the recovery hinges on winning back investors' confidence.
Available to subscribers: http://www.businessweek.com/premium/content/02_08/b3771001.htm?c=bwinsiderfeb15&n=link60&t=email
Available to all readers (Monday, February 18, 2002): http://www.businessweek.com/magazine/content/02_08/b3771001.htm?c=bwinsiderfeb15&n=link60&t=email
From Accounting Education.com on February 15, 2002 --- http://accountingeducation.com/news/news2543.html
Title: DELOITTE & TOUCHE CEO JIM COPELAND - IDEAS TO ENHANCE FINANCIAL SYSTEM Source: Deloitte Touche Tohmatsu Country: United States of America
Date: 11 February 2002
Contributor: Andrew Priest
Web: http://www.deloitte.comStrengthening the American financial system will require a series of careful, specific changes rather than statements and ideas that only address perception, according to James E. Copeland, Jr., Chief Executive Officer of Deloitte & Touche and its global parent Deloitte Touche Tohmatsu.
"We can go for a quick fix and feel better for a while," Mr. Copeland said today in a speech at the National Press Club, "or we can make the tough changes needed to build lasting confidence in our system of financial reporting." He continued, "Public perception determines behavior, but we must remember it is the facts that determine the consequences."
Among the several steps Mr. Copeland proposed in his speech was the creation of an independent oversight board, similar to the National Transportation Safety Board, to investigate instances of business failures and report to the public with a comprehensive explanation of the cause and recommendations to avoid a recurrence. While not a substitute for the governance and disciplinary changes required to enhance accounting and auditing, Mr. Copeland said, such a panel would make a major contribution by methodically analyzing cause and dispassionately spelling out recommendations for improvement. "With that kind of information in place, the public, industry, and policy makers have an authoritative framework for action."
Mr. Copeland outlined issues that he believes must be part of the debate around reforming the profession. First among them, he said, is to make certain that the accounting profession and the SEC develop and maintain a constructive working relationship that he said had deteriorated over the past decade. "The Commission can't do its work without a strong, robust auditing profession, and the profession can't do its job effectively without the power, authority and support of the commission," he said.
"The leaders of our profession and the SEC over that period of time should be embarrassed by our failure to work better together - I know I am," Mr. Copeland said. "We let our lack of trust in each other get in the way of our public responsibility to work together," he added. "The important thing now is to rebuild bridges and reassure investors that the twin watchdogs of the capital markets are on the job and working together," he said.
Additional ideas that Mr. Copeland suggested included the following: Establishment of criminal penalties for providing false information to an auditor.
Adoption by accounting firms of several recommendations of the Public Oversight Board's Panel on Audit Effectiveness.
Use of a set of Key Performance Indicators to help dilute today's obsession with Earning Per Share as a financial measure.
Public reporting on quality-of-earnings discussions held with audit committees and on a range of results that different accounting policies or assumptions would produce.
Report on a range of results that different accounting policies or assumptions would produce. "Until all parties are ready to focus on the real issues and their solutions," Mr. Copeland concluded, "we will not begin to make the kinds of reforms that will actually strengthen the system. We need to spend our time on finding new and better ways to provide better, more accurate, and more relevant financial reporting information to the investing public."
Mr. Copeland also commented on the decision earlier this week by Deloitte to separate Deloitte Consulting. "We reached this decision with great regret," he said, "because we firmly believe the perception of conflict has always been just that, a perception." Mr. Copeland said it was necessary for Deloitte to take the step so that clients were not forced to choose between "the best auditing firm in the world or the best consulting firm in the world." He said it was ironic that Deloitte was forced to take this step because "over the past five years no other Big Five firm has come close to our audit quality record."
Bob Jensen's threads on Suggested Reforms for the accounting profession are at http://www.trinity.edu/rjensen/fraud.htm#SuggestedReforms
As the first step in a comprehensive program of accounting reforms, the Securities and Exchange Commission has announced it intends to release proposed rules for expanded disclosures. Find out how these rules will affect you and your clients. http://www.accountingweb.com/item/72097
Five former chairmen of the Securities and Exchange Commission testified before the Senate Committee on Banking, Housing, and Urban Affairs on February 12, 2002 on the issues that have arisen as a result of the Enron collapse. A key topic was their shared frustration with the process for setting accounting principles. They urged Congress to find a way to free the Financial Accounting Standards Board from the business pressures of constituencies and funding dilemmas. http://www.accountingweb.com/item/72093
STATEMENT OF JAMES G. CASTELLANO
CHAIR,
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
FEBRUARY 14, 2002
Testifying before the House Energy and Commerce Committee (Subcommittee on
Communications, Trade and Consumer Protection), James G. Castellano, chairman of
the American Institute of Certified Public Accountants, today expressed the
accounting profession's support for reform - both of the current accounting and
auditing system and for enhancement and modernization of the broader financial
reporting system.
http://ftp.aicpa.org/public/download/news/stmt_jgc_021402.pdf
Thank you, Chairman Stearns, Ranking Minority Member Towns and other distinguished members of the committee for permitting me to testify today on the adequacy of current accounting standards. I am Jim Castellano, Chairman of the Board of the American Institute of Certified Public Accountants. Corporate accountability is of great importance to the continued strength of the American economy and confidence in our capital markets. In order for our capital markets to function effectively and for our economy to allocate resources efficiently, it is essential that business enterprises report accurately and fairly to investors and that investors perceive that they do so. Our economy needs both the fact and appearance of credible financial reporting.
The business collapse of Enron last year has shaken the faith of America, and of the world, in our financial markets. The personal tragedy to Enron’s employees, retirees, and investors goes far beyond the dollars and jobs they have lost. And this tragedy occurred despite the fact that we have the freest, most open, transparent, and dynamic financial market in the world. The accounting profession has also been deeply disturbed by what has occurred. We are proud of our history of serving the public interest by providing assurance to the investors that the financial statements of public companies fairly present, in all material respects, the financial position of these companies'.
The Enron business failure has added additional pressures on our economy and raised questions concerning confidence in our capital markets. Legitimate questions are being asked about corporate ethics and governance, including the role of a company’s board of directors and its audit and finance committees, internal controls, compliance with accounting and audit standards and other SEC reporting requirements, financial reporting transparency, the adequacy of the current financial reporting model, the auditor disciplinary and quality review process, how analysts use available financial information in making buy/sell recommendations to investors, and other issues.
While no one has all the facts and relevant information about the failure, it appears to be the result of many contributing factors, all of which need to be addressed to restore investor confidence in the system. Our profession has zero tolerance for those who do not adhere to the rules. The AICPA and its members are committed to the goal of assuring that investors and creditors have the highest quality of financial information. We will take the necessary steps to restore public confidence in the accounting profession and capital market system, and will work with Congress to develop meaningful public policy reform.
My goal today will be to touch on some of the reforms we have supported and will continue to support for the accounting and auditing system, and to suggest additional reforms which we as CPAs believe will strengthen the financial reporting system.
Capital should be deployed where it can be most productive. At the root of productive capital investment is the availability of timely, reliable and meaningful information. The success of our capital markets depends upon informative, reliable financial reporting – often referred to as "transparency." Three critical conditions must exist for investor information reporting to be meaningful. There must be:
1. Adequate reporting standards that provide full transparency of all meaningful and relevant information to investors;
2. Compliance with those reporting standards, including appropriate auditing;
3. Timely access to, and sufficient user understanding of, the information available.
ADEQUACY OF CURRENT ACCOUNTING STANDARDS AND REPORTING SYSTEM
The current accounting model has historically performed well. But to work for today's economy, it must be modernized. Economic change has moved much more swiftly than accounting for such changes has adapted. Intellectual capital has become the greatest engine for corporate growth. Yet, accounting is still based on hard assets – physical plant and related items for producing goods. Many companies, like those in advertising, produce revenues based almost exclusively from knowledge work. Knowledge work has become the key to all companies’ effectiveness. Even companies producing tangible goods have become highly dependent on intangible sources of revenues and competitive advantage.
Changes in business prospects have made quarterly reports outdated. Timely information has always been prized, but the pace of change in corporate dynamics and earnings capabilities has made it much more important. Corporate diversification, alliances of all sorts, the rate and depth of economic change, and transnational relationships have enormously changed the risks facing modern corporations. The relative absence of up-to-date information with which to assess corporate earning capacity coupled with the pace of change, helps explain the volatility of today’s share prices. Meanwhile, the use of the Internet for economic communications has been exploding. Real-time disclosure of selected financial information – that is, information that can be useful to investors without creating competitive disadvantage to companies – on the Internet is clearly foreseeable. Investors need more frequent corporate financial and non-financial disclosures (i.e. on-line, real-time) to make informed investment decisions.
The accounting profession was first among those convinced the accounting model needed to be modernized. From 1991-1994, a special committee of the American Institute of Certified Public Accountants (AICPA) studied the state of business reporting.1 The committee’s greatest achievement was its research on the needs of investors and creditors. The research showed that investors have many unmet information needs. This evidence was new because investors and creditors do not actively make their information needs known to the accounting community.
The findings on information needs should have been a loud wake-up call to those who depend on the disclosure system or have responsibility for it. Investors and creditors are, figuratively speaking, the customers of financial reporting. More precisely, because corporations seek capital from investors and creditors, investors and creditors are customers of the corporation’s sale of securities. Monetary exchanges do not take place without information, and the better the information about a prospective purchase, the better the purchaser’s chance to make a satisfactory pricing assessment. Putting the same point in terms of investors’ purchases of securities, the better the information they have the lower the risk of poor investment or credit decisions.
The report concluded that investors' needs were not being fully met. It described needs that go far beyond what is required by the current financial reporting model. In fact, to capture the idea of reporting non-financial information, the report adopted the broader term “business reporting.” The report contained an illustrated, comprehensive model of business reporting designed by the Special Committee, as well.
Business reporting is wider than financial statements. It should include non-financial information and presentations outside the financial statements. The Special Committee’s business reporting model was not limited to financial statements, although it at all times includes them, in recognition of their importance to investors and creditors. The “accounting model” has in the past referred only to financial statements, but in the future it will refer as well to business reporting to investors and creditors.
It is very disappointing that the report was produced seven years ago and so little has been done in response. If investors’ needs were not being met seven years ago, they are likely being met even less today. Calls for reform have come from many different sources, including nonaccountants. They include former SEC Commissioner Steven M. H. Wallman, economist Robert E. Litan, and Yale School of Management dean and former Under Secretary of Commerce for International Trade Jeffrey E. Garten. Wallman has written on his own and with Margaret Blair as part of a Brookings Institution project on intangibles. Litan joined Peter Wallison in a project for the AEI-Brookings Joint Center for Regulatory Studies.
Garten recommended that companies be given incentives to provide more information on intangible assets and performance metrics, in a report by a group commissioned by the SEC. Economists recognize the importance of intellectual capital as a source of economic growth, which means a source of revenue. For example, Brad DeLong wrote, "Economic development has become less and less about accumulating more and more physical capital and more and more about the creation and deployment of intellectual capital."2 A 1996 United States General Accounting Office report said: "[T]he current reporting model does not provide information about important business assets. As a result, historical cost-based financial statements are not fully meeting users’ needs."
In the broadest sense, if we are going to modernize the accounting model, we must focus on these things:
· First, a broader "bandwidth" of information, such as was endorsed by the AICPA’s Special Committee;
· Second, different distribution channels, namely, the Internet;
· And third, increased reporting frequency, ultimately, on-line, real-time reporting.
The root problem is the mismatch between widespread agreement that users’ information needs are not being met and the lack of consensus on how best to meet those needs. Efforts to modernize business reporting must be accelerated, but where should they start?
Reform should address unreported intangibles, off balance sheet activity, non-financial performance indicators, forward-looking information, enterprise opportunity and risk, and more timely reporting. These could become time-consuming projects. However, we support the following list of near term reforms.
NEAR TERM REFORMS:
The FASB should issue standards-level guidance on the location, form, and content of non-financial information that would supplement the historical financial statements. In particular, the FASB should address non-financial performance indicators, unrecorded intangible assets, and forward-looking information. The FASB should determine whether such supplementary reporting should be required, based on experience with voluntary reporting or any other relevant factors it chooses to bring to bear.
As part of the its standards-level guidance, the FASB should make explicit that for purposes of its mandate, disclosures that supplement the financial statements can be desirable to meet users’ needs, even if the disclosures go beyond what some believe is necessary to understand the financial statements. The broader criterion of information useful for making investment and credit decisions should apply. In addition, in the same guidance, the Board should make more explicit the tension between the desirability of comparability and of relevance in business reporting, making clear that users’ needs can at times be satisfied best by relevant information that is not comparable across a population of companies.
The FASB, working with the SEC, should begin a project to consider revising the frequency of reporting based upon the needs of users utilizing the capabilities of modern accounting software and telecommunications.
The accounting profession stands ready to sponsor projects to help the FASB and the SEC complete the projects recommended above in the shortest reasonable timeframe.
These recommendations to the FASB are compatible with its adoption of its project on intangibles.5 The project would establish standards for disclosures about intangible assets not recognized as assets in the financial statements. The proposed project follows the publication of a study by the FASB staff which identified four possible intangibles projects.6 We strongly support the FASB’s adoption of the proposed agenda item. Although the project will entail some difficult subjects, it should be put on a fast track.
OTHER REFORMS
Support for reform should not be limited to standard setters, regulators, and those whose oversight can take on formal qualities. All interested parties – including but not limited to the accounting profession, the investment community, registrants, creditors, and the financial industry – should be actively and constructively engaged. They should be united by the common goal of improving the national welfare by empowering investors with better information and thereby spurring growth-creating capital allocation.
For example, we recommend reforms in the following areas:
OFF BALANCE SHEET DISCLOSURES:
We encourage FASB to reprioritize its project agenda and move quickly on its consolidation project to address off-balance sheet disclosure transparency issues. Existing accounting rules for special purpose entities should be reviewed for possible accounting abuses and new types of financing vehicles.
REPORTS ON EFFECTIVENESS OF INTERNAL CONTROLS:
In the near term, company management should be required to make an analysis and assertion as to the effectiveness of the company’s internal control apparatus. The auditor should be required to attest to and report separately on the effectiveness of the management assertion. Management and auditor’s reports on internal controls could make a positive and cost effective contribution to the assurance system and will improve investor confidence in the integrity and reliability of financial statements issued by those who access the capital market. In the wake of the savings and loan collapse, congress placed similar requirements on depository institutions and their auditors.
DISCLOSURES BY COMPANY MANAGEMENT:
Stock Options:
The FASB working with the SEC should require expanded disclosure of stock options received by the company management.Insider Trading:
Currently, company insiders do not have to disclose stock sales on the open market until the month after the transaction at the earliest. We believe it would make more sense to require disclosure of the intent to sell shares PRIOR to the transaction. In addition to the SEC, all other interested parties such as employees, shareholders, retirees, and pension fund managers should be notified.Other Disclosures:
We encourage the SEC to initiate additional rulemaking action to enhance disclosures in public company filings related to other management disclosure issues. The AICPA recently endorsed a petition to the SEC calling for more disclosure in a company’s proxy statement about a company’s liquidity, off-balance sheet entities, related party transactions and hedging contracts.We are encouraged by the SEC’s desire to make rapid progress on business-reporting reform and its desire to achieve timely and more informative filings that can help better inform investors without harm to the SEC’s investor-protection mission. It should consider carefully the relevant recommendations of the ABA Committee on Federal Regulation of Securities 7 and revisit the proposals made in 1996 by the SEC’s own Advisory Committee on the Capital Formation and Regulatory Processes. The Congress should support these efforts.
MANAGEMENT DISCUSSION AND ANALYSIS OF OPERATIONS:
As auditors, we also stand ready to provide additional assurances over management’s discussion and analysis (“MD&A”). Our responsibility, under a traditional audit, is to read the MD&A and consider whether such information is materially inconsistent with the financial information presented in the audited financial statements. We are not required to render a report on our findings; rather we are only required to inform management of our findings if we believe the information is materially inconsistent. Because as a profession we believed that audit committees and boards of directors may want additional assurances relative to MD&A, we introduced, in June 2001, a new audit level service to examine the MD&A. This service, which is separate from our traditional audit, examines MD&A for the purpose of expressing an opinion as to whether:
a) The presentation includes, in all material respects, the required elements of the rules and regulations adopted by the SEC.
b) The historical financial amounts have been accurately derived, in all material respects, from the entity’s financial statements.
c) The underlying information, determinations, estimates, and assumptions of the entity provide a reasonable basis for the disclosures contained therein.
While the demand for this additional voluntary examination has been slow to develop, we hope that more audit committees and board members will avail themselves of this added assurance.
AUDITOR RESPONSIBLITY:
We also need new audit strategies and technologies. In an ideal world, companies would be producing the new disclosures with the desired frequency over the Internet; auditors would be providing contemporaneous assurance that the information was reliable; investors would benefit from better decision making information; productive corporations would benefit from a lower cost of capital; and the economy would be growing with more stability and promise, even than now.
To accomplish this result, not only must the reporting model change but also the focus of auditing must change. Steps toward this new direction have already begun. Auditors in this new world would be reporting on information systems. They would be focusing heavily on preventive controls and providing assurance that information systems were operating effectively and sufficiently to produce reliable information. The transition is also going to demand personnel of the highest caliber. But there will still be pitfalls even in this scenario. While new disclosures could be produced, and the auditors could provide assurance over the systems producing the disclosures, there is still the threat of management overriding the systems and preparing fraudulent and untruthful disclosures. That is why our profession, even before these recent Enron events, has been working on improving auditing standards and guidance to help auditors better detect fraud. Two of the more noted proposed changes, among others, are explicit procedures addressing the risk of management override of controls and required procedures to evaluate the business rationale for significant unusual transactions. A draft of this new standard, intended to elicit public comments, will be issued by month's end with the expectation of issuing a final standard by the end of the year.
In addition to these changes, we are also looking at the following reforms:
We are reviewing the adequacy of professional auditing standards regarding all issues emanating from Enron, including audit procedures from related party transactions, special purpose entities, hedging contracts, internal controls established by the finance or audit committees, and working paper and record retention, and others. We will work with the SEC, FASB and Members of Congress on these recommendations.
We believe it should be illegal to lie to your auditor in the same way for example, that it is a illegal to lie to a prosecutor. We would support legislation or regulations that would accomplish that.
The AICPA, is committed to working diligently with Congress and the SEC to develop a new regulatory model that improves and goes beyond the current self-regulatory processes. While the current self-regulatory model provides for significant public oversight over the existing peer review process, there is no public oversight over discipline. This new model would affect all firms doing SEC audits. We will diligently work to improve the profession's peer review and disciplinary process as it relates to auditors of SEC registrants. We strongly support moving from public oversight to public participation and increasing the transparency, effectiveness, and timeliness of the process. We will work with the Congress and the SEC to strengthen regulation of the profession as they implement a system that incorporates active public participation to enhance discipline and quality monitoring.
Non-Audit Services
We will not oppose prohibitions on auditors of public companies from providing financial systems design and implementation and internal audit outsourcing. We believe such prohibitions will help to restore the public's confidence in the financial reporting system.
Preparing For the Future
Now: But there is another way of viewing this scenario. The disclosures could be produced, and auditors could find themselves inadequately prepared to provide assurance to investors about the information’s reliability. The transition to new reporting and auditing models is going to demand not only new audit approaches but personnel of the highest caliber. With this in mind, the profession has been working actively in the following areas:
Continuous Auditing.
Continuous auditing or continuous assurance involves reporting on short time frames and can pertain to either reporting on the effectiveness of a system producing data or more frequent reporting on the data itself. An AICPA task force has concluded that the enabling technologies, if not the tools, required to provide continuous assurance services, are, for the most part, currently available. Their actual implementation will evolve with progressive adoption of the concept and the emergence of appropriate specialized software tools. Work is needed, however, to better understand the market potential for continuous assurance. A clearer insight is needed into both users’ needs as well as decision-makers’ perceptions of the value of this service. A marketing study of user needs would help assess the types of key performance indicators, system reliability issues, and financial and non-financial information that would benefit users. Depending on corporate platforms and established monitoring processes used for other purposes the costs of providing continuous auditing or assurance will vary. Therefore, further research is also needed to better understand how the potential purchasers of these services, such as management, boards and institutional investors, perceive the value of continuous assurance relative to the current model of periodic assurance.
XBRL. XBRL
Extensible Business Reporting Language is a freely available internet-based language for business reporting. It is a framework that provides the business community a standards based method to prepare, publish, reliably extract and automatically exchange business reports of companies and the information they contain. Whatever new reporting standards are considered appropriate, it is likely to be richer in disclosure than what we have today and will need XBRL to facilitate.SysTrust.
SysTrust is an assurance level service that independently verifies the reliability of a particular system (including a financial reporting system) against a framework of standards that address security, availability and integrity. Providing a freely available benchmark for what makes a system reliable, SysTrust is designed to provide assurance to boards of directors, corporate management, and investors that the systems that support a business or a particular activity are reliable.Performance Measures and Value Measurement.
The Value Measurement and Reporting Collaborative (VMRC) is the culmination of years of discussion about the need to change the reporting model. Numerous reports, white papers and books have cited the need for better information to be disclosed by publicly traded companies, not merely more information. Over the past year, the AICPA has been approached by a number of organizations that claim to have the solution to the need for better disclosure. While some companies are already taking steps to report information that investors want, currently these efforts are isolated and may not be comparable between companies. Rather than work with one organization, the AICPA and the Canadian Institute of Chartered Accountants are establishing the VMRC as a means to allow the various stakeholders to work together to determine the best methodology for reporting. Current suggestions include, but are not limited to, reporting of non-financial measures, intangible assets or a combined discounted cash flow and risk analyses. Specifically, the collaborative will:· Understand the needs of the user community/stakeholder groups;
· Determine what is currently taking place in the field;
· Undertake an in-depth review of 7 or 8 alternative approaches to value measurement and reporting;
Further, this new framework, which will work in conjunction with the current model, will move the current reporting forward not in an incremental step, but in the revolutionary change that is needed today.
Student Recruitment.
The AICPA has embarked on a new student marketing and recruitment plan, designed to attract more students - and the best students - to the accounting profession. This five-year, $25 million initiative is targeted toward late high school and college students, and is interactive in its approach, using web-based business simulations and games, college TV networks and other technology-based techniques to reach this important generation of young people. The campaign will help students understand the important role that CPAs play in all facets of the business world, and the important responsibilities CPAs have in helping businesses and individuals succeed.
In conclusion, I maintain that Congress and others should carefully consider these reforms as they are essential to restore investor confidence in the financial reporting system. I can assure you that the CPA profession wants, as I know you do, to assure that
this future comes about for the benefit of shareholders, consumers, and indeed, all American citizens.
Thank you for this opportunity to express our views.
Bob Jensen's summary of these and other proposed accountancy and auditing reforms in the wake of the Enron scandal can be found at http://www.trinity.edu/rjensen/fraud.htm#SuggestedReforms
Grant Thornton's Five-Point Plan to Restore Public Trust --- http://www.gt.com/publictrust/default.asp
Grant Thornton has asked the other major US accounting firms to embrace our five-point plan to restore public trust. Our plan emphasizes that leaders of those firms must set a tone that once again places the firms’ professional responsibilities ahead of all other business considerations.
As the leading global firm dedicated to serving the needs of middle-market companies, Grant Thornton is aware of the competitive pressures for firm growth. However, Grant Thornton’s most valued principle is an uncompromising commitment to professional excellence. Growth should never be at the expense of public trust. We are concerned about the impact of the Enron debacle on all SEC registrants and the entire accounting profession.
Harvey Pitt, Chairman of the SEC, working with the AICPA, has proposed new measures to regulate the profession, by establishing a new autonomous board to address (1) disciplinary actions and (2) monitoring. Five major firms have announced they would stop providing internal audit and certain technology consulting services to their publicly held audit clients.
While we applaud the SEC and AICPA’s action and the announcement by the five firms, these measures alone are not enough to restore public trust in our profession and do not address all the issues. Undoubtedly, the accounting profession buried its head in the sand and pretended for far too long that no conflicts of interest exist when auditors provide certain consulting services to publicly held audit clients. However, the profession must address the failure by some in the top management of the accounting firms to set a tone that puts professional responsibilities ahead of all other business considerations and an accounting framework that is rules based as opposed to principles based. As a starting point to address all the issues, we urge those parties who are involved in serving the public interest -- auditors, directors and regulators -- to embrace our five-point plan.
The audit service is designed to improve the quality of information for decision makers. Indeed, assurance services, which encompass auditing, are defined as those professional services that improve the quality of information, or its context, for decision makers. This definition provides the framework for those services, including advisory and tax services, which an auditor can provide without creating the appearance of a conflict of interest.
We offer the following five recommendations to send a strong message to the global financial community that the accounting profession is serious about the integrity of the audit process and restoring public trust. Others have brought forward well-intentioned solutions that unfortunately, are not in the public interest. Legislative intervention is not the right solution. The accounting profession needs to provide strong leadership, but cannot do so effectively until it addresses all the issues.
- The actions of the management of the major firms must make it clear that nothing is more important than their professional responsibility. The policies of those firms, including reward systems, must reflect an uncompromising commitment to professional excellence. In addition, all the major firms must collectively agree to limit the nature and extent of services provided to publicly held clients. Such agreement should extend beyond yesterday’s announcement by specifying that the firms will only provide assurance, advisory and tax services to their publicly held audit clients. For example, certain consulting services such as outsourcing should be prohibited. We must change our business models significantly in response to the demands from the public. To do otherwise ignores a fundamental precept: that businesses set priorities based on those drivers that have the greatest impact on earnings. Assurance, advisory, and tax services must once again be the business drivers and focus for the auditors of SEC registrants.
- Audit committees must do a better job of protecting shareholder interests. They must challenge management and the auditors on the treatment of significant accounting issues. They must be diligent in determining that their auditing firms are free of conflicts of interest. Audit committees must ensure that the auditor’s primary responsibility is to the shareholders and that the auditor’s relationship with management is clearly subordinate to such responsibility. The audit committee plays a critical role in this regard. The regulators need to take the steps necessary to reinforce the audit committee’s need to be truly independent of management. Audit committees must be vigilant in performing their duties to ensure that the appropriate auditor-client relationship is maintained and that management is challenged on all significant transactions, including the underlying business purpose of those transactions.
- The SEC must amend its rules for proxy disclosures of auditor’s fees to require separate disclosure of fees for (1) assurance and advisory services, i.e., those services that meet the definition for assurance services, (2) tax services and (3) all other services. The current proxy rules for disclosure of the fees paid to the auditors, which resulted from a compromise, are misleading because services that do not give rise to a conflict of interest are inappropriately combined with services that can and, in some instances, have created conflicts of interest.
- We urge the use of a principles based approach for all standards setting areas: accounting, auditing and independence. In addition, the auditing standards should be expanded to incorporate a forensic approach. A year ago, the previous administration at the SEC fueled a public debate that effectively killed the Independence Standards Board and its proposed principles based independence framework. Those same individuals conveniently continue to ignore that this framework, properly constructed and implemented, would have addressed some of the very issues that we are trying to solve today. The current rulebook approach for all standards setting fosters a culture of "if the rulebook does not specifically forbid it, it must be okay," where there is more concern about the form of transactions than their substance. A principles based framework for setting standards provides greater assurance to the public that management, auditors and those responsible for corporate governance will do the right thing.
- We believe that Grant Thornton has an excellent auditing methodology and we are willing to share our best practices with others. We assume that others feel the same about their methodology. Accordingly, we urge the AICPA to coordinate a review of the audit methodologies of the major accounting firms. The best practices of these firms should be shared with the entire accounting profession. This unprecedented sharing of best practices by the major firms would serve the public interest by ensuring that all audits of SEC registrants follow the best practices of the leaders of the profession.
The global accounting profession is at a crossroads. In order to regain public confidence, strong leadership is required. Grant Thornton urges the other major US firms to support this five-point plan to restore the public trust and confidence in the accounting profession, which has historically served so ably to make the US capital markets the strongest in the world.
Bob Jensen's summary of these and other proposed accountancy and auditing reforms in the wake of the Enron scandal can be found at http://www.trinity.edu/rjensen/fraud.htm#SuggestedReforms
Under pressure to set accounting standards for the kinds of special purpose entities that kept debt off Enron's balance sheet, the Financial Accounting Standards Board, in February 2002, has tentatively decided on an approach and directed its staff to begin writing an exposure draft. http://www.accountingweb.com/item/72237
Bob Jensen's threads on SPEs can be found at http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
In a landmark vote, Disney shareholders voted to reject the proposal that would have prohibited the company from using the same firm to provide auditing and consulting services. In spite of the shareholder vote giving the company the right to seek auditing and consulting services from the same firm, Disney Chairman and Chief Executive Michael Eisner announced company plans to separate audit and consulting services among outside providers. http://www.accountingweb.com/item/72840
Bob Jensen's threads on suggested reforms in accounting firms are at http://www.trinity.edu/rjensen/fraud.htm#SuggestedReforms
Stephen Cutler, director of the Division of Enforcement of the Securities and Exchange Commission, said the SEC is asking Congress for more power to punish corporate wrongdoers. The SEC is asking for added authority to impose penalties on officers and directors through administrative cases that do not require federal court proceedings. http://www.accountingweb.com/item/72446
Questions about accounting at IBM resulted in analysts expressing worries about the value of Big Blue's stock, and the resulting ripple sent the Dow Jones industrial average down 1.6 percent on Tuesday. IBM share prices dropped to below $100 on Tuesday after a report in Friday's New York Times raised the issue of how the earnings on a $300 million gain were reported to shareholders. http://www.accountingweb.com/item/72700
Questions about accounting at IBM resulted in analysts expressing worries about the value of Big Blue's stock, and the resulting ripple sent the Dow Jones industrial average down 1.6 percent on Tuesday. IBM share prices dropped to below $100 on Tuesday after a report in Friday's New York Times raised the issue of how the earnings on a $300 million gain were reported to shareholders. IBM stock has lost more than 8% in two days.
According to The New York Times, IBM booked the $300 million gain on the sale of an optical unit in December. The New York Times stated that IBM should have accounted for the sale as a one time gain. Instead, the paper reported, IBM referred to the company's fourth-quarter profits in a recent conference call, indicating profits had grown due to increased productivity and higher sales of certain products.
IBM claims the company disclosed the sale adequately in two press releases in December. "IBM's accounting is conservative and fully compliant with all regulatory standards," said Carol Makovich, a company spokeswoman.
A Wall Street investment firm, Prudential Securities, questioned the firm's complex accounting procedures and suggested that such complexities would weigh on IBM's share price. Prudential analyst, Kimberly Alexy, said that long-standing concerns about IBM's earnings "engineering" would hurt the stock in the coming year.
Hi Bill,
Andersen and the other firms "shifted their focus from prestige to profits --- and thereby transformed the firm. "
The same thing happened in Morgan Stanley and other investment banking firms. Like it or not, the quote below from Frank Partnoy (a Wall Street insider) seems to fit accounting, banking, and other firms near the close of the 20th Century.
From Page 15 of the most depressing book that I have ever read about the new wave of rogue professionals. Frank Partnoy in FIASCO: The Inside Story of a Wall Street Trader (New York: Penguin Putnam, 1997, ISBN 0 14 02 7879 6)
************************************************
This was not the Morgan Stanley of yore. In the 1920s, the white-shoe (in auditing that would be black-shoe) investment bank developed a reputation for gentility and was renowned for fresh flowers and fine furniture (recall that Arthur Andersen offices featured those magnificent wooden doors), an elegant partners' dining room, and conservative business practices. The firm's credo was "First class business in a first class way."
However, during the banking heyday of the 1980s, the firm faced intense competition from other banks and slipped from its number one spot. In response, Morgan Stanley's partners shifted their focus from prestige to profits --- and thereby transformed the firm. (Emphasis added) Morgan Stanley had swapped its fine heritage for slick sales-and-trading operation --- and made a lot more money.
************************************************
Bob Jensen
-----Original Message-----
From: William Mister [mailto:bmister@LAMAR.COLOSTATE.EDU]
Sent: Tuesday, February 19, 2002 11:05 PM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Andersen againI refer you back to the Fortune article some years ago (old timers may remember it) that referred to then AA&Co as the "Marine Corp of the accounting Profession." In those days there were no "rogue partners." I wonder what changed?
William G. (Bill) Mister
William.Mister@colostate.edu
I thought you might be interested in the latter portion of a former student's current resume. She is about to graduate from the Harvard Business School and is looking for a job. I had a similar student, Gabe Knapp, who was a major auditor for Andersen and had a great deal of responsibility for auditing derivative financial instruments before going to the HBS. He graduated last May from Harvard and is now big time with Microsoft.
Now consider the last part of a woman's resume who is just finishing up at Harvard. Will her work experience, prior to going to Harvard, help or hurt her in the job market?
My main purpose in sharing part of her resume is to show you how complicated the derivatives and structured financing operations in large corporations can become. In so many ways I have to sympathize with the auditing firms that lament over having a tiger by the tail when trying to account for these derivatives and in trying to apply the tangled web of FAS 133/138 requirements. I teach FAS 133/138, and I give thanks every night that I'm not the auditor on the line when having to audit deals that were being set up as described below. Would you want to have been in the shoes of the auditor trying to follow this young woman (fresh out of college) around Enron's global world? I say "no way!"
trinity university san antonio, tx Bachelor of Science degree in Business Administration. Dean’s List. Vice-president: Black Student Union. Captain: Varsity volleyball team, All-Region and All-Conference Athletic Awards, Academic All-Region Award. |
ENRON ENERGY SERVICES LONDON, ENGLAND Senior Analyst - Outsourcing Developed standard pricing models for the UK’s newly formed energy outsourcing group. Initiated customer contact. Collaborated on key facets of new business development including deal structuring and contract negotiation. Constructed valuation models that estimated savings derived from superior management of assets. Assessed clients’ needs and incorporated their requirements and commodity price forecasts into models. Led effort to develop database of customers’ historic utility bill information with IT. Determined format most useful for quick, replicable pricing procedure given thousands of data points and customer specific requests. Analyzed London’s commercial real estate market extensively as due diligence for potential deal worth $20MM. Evaluated additional outsourcing deals for a brewery, a supermarket chain, and a hotel chain. Ranked #2 analyst of 200+ analysts in eastern hemisphere end of year performance evaluation. |
enron middle east houston, tx Analyst - Project Finance Member of project finance team tasked with securing financing for $150MM power plant in Gaza, the first to exclusively serve Palestine. Developed skills in financial modeling, negotiating loan documents, and equity and debt structuring. Spent substantial amount of time working in Palestine. Performed sensitivity analyses and evaluated financing alternatives in an effort to mitigate risks associated with project done in a developing part of the world. Managed relationships between potential lenders, Palestinian partners, lawyers, auditors and team members with concerns regarding financial projections. Consolidated all financial analyses for the prospectus. Contributed to successful $19.8MM IPO on Palestine Securities Exchange. Served as an appointed member of Analyst Advisory Board, a seven-person committee that worked with Enron’s Office of the Chairman to facilitate communication and address analyst concerns. |
enron north america houston, tx Analyst - Risk Management Provided daily support to derivatives trader. Administered natural gas risk management book worth $100MM. Facilitated communication between financial and physical traders and book administrators. Explained complex trade structures and described impact on individual books. Reorganized risk book to minimize delays in trade confirmation and forward curve dissemination. Resolved trade disputes with outside counterparties. Forecasted position and P&L movements based on market variables. Calculated P&L and created daily position reports. Booked and confirmed trades. |
Mentor in Big Brothers Big Sisters. Teacher’s aid at dual-language elementary school. MS 150 Ride volunteer. |
Conversant in Spanish. Extensive travel throughout Europe, Asia, and Middle East. HBS Volleyball Club member. |
Hi George,
Among all your points, I agree with Point 3 the most. In fact, I added Systemic Problem 10 at http://www.trinity.edu/rjensen/fraudConclusion.htm
With respect to profit motive, I am basically in agreement with Milton Friedman concerning the legitimacy of the profit motive as long as you stay within the bounds of the law and professional ethics. When I was an auditor with Ernst & Ernst (that dates me), prestige in accounting firms was considered a necessary condition for profit. Auditors were expected to behave, look, and perform their jobs with extreme dignity. I got home from my first audit because I was wearing a blue blazer instead a a dark suit.
In those days, we really felt like we were auditing "truth." Contracts were relatively simple and transactions were generally pretty easy to track and verify. Now the auditor finds a short path leading to a computer that is then connected in a mysterious way to 22,837 computers in scores of nations around the globe. The transactions are unbelievably complex, and the contract terms are written in a language that almost nobody can understand. Financing does not fall into simple debt and equity categories, payment obligations are structured in cascaded derivatives.
Probably the most serious problem over the years is that clients just got bigger and bigger with mergers, acquisitions, and partnering agreements. In my days, bank audits were relatively simple. Now a bank is a financial institution selling derivatives, selling stock, selling insurance, partnering in real estate deals and other joint ventures in China, and on and on and on. It would not surprise me if banks started death care services alongside their wills and trust services such that Grandma could set up her wills, trust, and cremation services in one simple visit to her bank.
The problem of audit complexity is greatly magnified by the problem of size of the client. Accounting firms have a lot of fixed cost invested in hiring, training, and developing knowledge bases to assist employees around the world. What does a Big 5 firm invest daily in a knowledge base covering accounting, auditing, and tax topics in multiple countries and in multiple languages? What does this firm invest each day scouting for news events to alert employees and clients on happenings around the world? All that fixed cost has to be recovered somewhere.
In my auditing days, the knowledge bases were mostly in shelves of books that were kept in the office "library." Today, the knowledge bases reside in enormous databases that costs millions and millions of dollars to develop and maintain.
Everything got big, Big, BIg, bIG, and then BIGGGG! To pay for BIGGGG, audit firms began to depend on their BIGGGG clients to recover fixed costs and to make a profit (although the growth profits from auditing became minor relative to the growth in profits from consultancy).
This growing dependency on fewer and fewer BIGGGGG clients destroyed the independence of auditors. In wasn't the consultancy nearly as much as it was the size of the audit client. For example, in my days banks were mostly locally-owned, and if they had branches, the branches could not extend beyond the boundary of a given state like Texas, Iowa, Minnesota, Colorado, etc. Now Bank of America is everywhere in the world, especially after its merger with Nations Bank. How can any auditing firm that has Bank of American afford to walk away from such a client if an intractable auditing dispute arises?
The dependence on big clients maimed the integrity of the system. Lynn Turner suggests that large clients be rotated every five years between firms that are qualified to perform the audits. I think this is unrealistic. The fixed cost of setting up to do the Bank of America audit takes millions and millions of dollars in hiring, training, and modifying knowledge bases. When the audit baton is passed after five years, what happens in the firm giving up such an enormous audit? What happens in the firm whose turn it is to "rent" the Bank of America audit or the GE audit or the Microsoft audit for the next five years?
Auditing firms gave up their prestige when their clients became aware that their auditors were little more than puppies yapping at their accounts receivables and senior partners who, at the drop of a hat, could round out a foursome on the links of Scotland on any given Saturday.
There are no easy solutions, and most of what I read is either enormously expensive surgery (cutting out the consultancy) that won't save the patient or cosmetic surgery (e.g., setting up a new oversight board) that cannot possibly have the resources, talent, and energy to save the patient. I think we should do like the insurance companies have done to try to set up realistic claim services to save the patient and at the same time minimize the civil lawsuits
See at http://www.trinity.edu/rjensen/fraudConclusion.htm
Bob Jensen
-----Original Message-----
From: George Lan [mailto:glan@UWINDSOR.CA]
Sent: Wednesday, February 20, 2002 11:45 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Andersen againHi Bob, I agree that the move "from prestige to profits" is having adverse effects but was wondering whether there are changes as well:
1. The Guy Noir radio sketch of a few postings ago was hilarious -- I did recall a passage where the accountant mentioned that "we are more welcoming today" or something along that line.
2. In the old days, the accounting firms were making lots of money and there were less competition and so they could afford to be genteel, selective and "discriminative." ( e.g. the old boys club).
3. In the old days, things were generally just simpler to audit.
4. In the old days, scandals are kept as secretive as possible; today they are probed by the media and other parties and broadcast all over the world. Today, the parties affected also have more recourse than in the good old days.
Overall, the positives (let's call them credits) to the profession may balance the negatives (debits).
George Lan
University of Windsor
Since this February 25 edition of New Bookmarks came out to be nearly 100 pages, I cut out the Enron scandal updates and pasted them to a new document at http://www.trinity.edu/rjensen/fraud022502.htm
Be the hit of your next party with some Bubba Teeth. Cindy Mundy clued me into http://www.bubba-teeth.com/
Keep your eyes
wide open before marriage, half shut afterwards.
Ben Franklin
Forwarded by Don Van Eynde
How many dogs does it take to change a light bulb?
GOLDEN RETRIEVER:
The sun is shining, the day is young, we've got our whole lives ahead of us, and
you're inside worrying about a stupid burned out bulb?
BORDER COLLIE:
Just one. And then I'll replace any wiring that's not up to code.
DACHSHUND:
You know I can't reach that damned stupid lamp!
ROTTWEILER:
Make me.
LAB:
Oh, me, me!!!! Pleeeeeeeeeeeeeze let me change the light bulb! Can I? Can I?
Huh? Huh? Huh? Can I?
MALAMUTE:
Let the Border Collie do it. You can feed me while he's busy.
JACK RUSSELL TERRIER:
I'll just pop it in while I'm bouncing off the walls and furniture.
POODLE:
I'll just blow in the Border Collie's ear and he'll do it. By the time he
finishes rewiring the house my nails will be dry.
COCKER SPANIEL:
Why change it? I can still pee on the carpet in the dark.
DOBERMAN PINSCHER:
While it's dark, I'm going to sleep on the couch.
BOXER:
Who cares? I can still play with my squeaky toys in the dark...
MASTIFF:
Mastiffs are NOT afraid of the dark.
CHIHUAHUA:
Yo quiro Taco Bulb.
IRISH WOLFHOUND:
Can somebody else do it? I've got this hangover...
POINTER:
I see it, there it is, there it is, right there...
GREYHOUND:
It isn't moving. Who cares?
AUSTRALIAN SHEPHERD:
First, I'll put all the light bulbs in a little circle...
OLD ENGLISH SHEEP DOG:
Light bulb? I'm sorry, but I don't see a light bulb.
GERMAN SHEPHERD:
All right, everyone stop where you are! Who busted the light? I SAID STOP WHERE
YOU ARE!!!
HOUND DOG:
ZZZZZZZZZzzzzzzzzz
THE CAT:
Dogs do not change light bulbs. People change light bulbs. So the question is:
How long will it be before I can expect light?
Somehow, my brother-in-law, who is an architect, found out about this before me. I just received a razzing email from him about it. He and I have been having a friendly running argument about the "professionalism" of our respective professions. -- or to be more accurate, an argument about whether accounting deserves to still be called a profession.
He is having a field day with the apparent anarchy which he perceives is reigning the field of accountancy vis-a-vis the *bickering* over the 150 hour rule, the *bickering* over the XYZ, and now the *bickering* over computerizing what is perceived by outsiders as a 1940's-era style examination requirement. Maybe we should just give up and all go join the Information Systems professional organizations. At least they already have a reputation for being free-spirits, loose cannons, fruits-nuts-and-flakes. And they don't have to wear coats and ties to their clients, anymore, either.
David Fordham
James Madison University
Forwarded by Dick Haar
A Guide to Better Health
Place four worms into four separate jars:
Place the first worm into a jar of alcohol.
Place the second worm into a jar of cigarette smoke.
Place the third worm into a jar of sperm.
Place the fourth worm into a jar of soil.
After one day:
The first worm -- dead
Second worm -- dead
Third worm -- dead
Fourth worm -- alive
Lesson: As long as you drink, smoke and have sex, you won't get worms.
Forwarded by Auntie Bev
This guy was lonely and so he decided life would be more fun if he had a pet.
So he went to the pet store and told the owner that he wanted to buy an unusual pet. After some discussion, he finally bought a centipede, which came in a little white box to use for his house.
He took the box back home, found a good location for the box, and decided he would start off by taking his new pet to the bar to have a drink.
So he asked the centipede in the box, "Would you like to go to Frank's with me and have a beer?" But there was no answer from his new pet.
This bothered him a bit, but he waited a few minutes and then asked him again, "How about going to the bar and having a drink with me?"
But again, there was no answer from his new friend and pet.
So he waited a few minutes more, thinking about the situation. He decided to ask him one more time; this time putting his face up against the centipede's house and shouting, "Hey, in there! Would you like to go to
Frank's place and have a drink with me?
Scroll down!!!!!!!!!!!!!
WAIT! YOU ARE GOING TO LOVE THIS!
A little voice came out of the box: "I heard you the first time! I'm putting on all my dad-burn shoes."
Forwarded by Auntie Bev
Dear God, Please put another holiday
between Christmas and Easter. There is nothing good in there now.
Ginny
Dear God, Thank you for the baby
brother but what I asked for was a puppy. I never asked for anything before. You
can look it up.
Joyce
Dear Mr. God, I wish you would not make
it so easy for people to come apart. I had to have 3 stitches and a shot.
Janet
Dear - God if we come back as
something, please don't let me be Jennifer Horton - because I hate her.
Denise
Dear God, It rained for our whole
vacation and is my father mad! He said some things about you that people are not
supposed to say, but I hope you will not hurt him anyway.
Your friend (I am not going to tell you who I am).
Dear God, I read the bible. What does
begat mean? Nobody will tell me.
Love, Alison
Dear God, How did you know you were
God?
Charlene
Dear God, Is it true my father won't
get in Heaven if he uses his bowling words in the house?
Anita
Dear God, I bet it's very hard for you
to love all of everybody in the whole world. There are only 4 people in our
family and I can never do it.
Nan
Dear God: Did you really mean Do Unto Others As They Do Unto You, because if you did then I'm going to fix my brother. Darla
Dear God, I like the story about
Chanuka the best of all of them. You really made up some good ones.
Glenn
Dear God, My Grandpa says you were
around when he was a little boy. How far back do you go?
Love, Dennis
Dear God, Who draws the lines around
the countries?
Nan
Dear God, It's o.k. that you made
different religions but don't you get mixed up sometimes?
Arnold
Dear God, Did you mean for giraffes to
look like that or was it an accident?
Norma
Dear God, In bible times did they
really talk that fancy?
Jennifer
Dear God, What does it mean you are a
jealous God? I thought you had everything.
Jane
Dear God, How come you did all those
miracles in the old days and don't do any now?
Seymour
Dear God, Please send Dennis Clark to a
different camp this year.
Peter
Dear God, Maybe Cain and Abel would not
kill each other so much if they had their own rooms. It works with my brother.
Larry
Dear God, I keep waiting for spring but
it never did come yet. Don't forget.
Mark
Dear God, You don't have to worry about
me. I always look both ways.
Dean
Dear God, My brother told me about
being born but it doesn't sound right.
Marsha
Dear God, If you watch in Church on
Sunday I will show you my new shoes.
Mickey D.
Dear God, Is Pastor Bob Coy a friend of
yours, or do you just know him through business?
Donny
Dear God, In Sunday School they told us
what you do. Who does it when you are on Vacation?
Jane
Dear God, We read Thomas Edison made
light. But in Sunday School they said you did it. So I bet he stoled your Idea.
Sincerely, Donna
Dear God, I do not think anybody could
be a better God. Well, I just want you to know but I am not just saying that
because you are God.
Charles
Dear God, It is great the way you
always get the Stars in the right places.
Jeff
Dear God, I didn't think orange went
with purple until I saw the sunset you made on Tuesday. That was Cool.
Eugene
An I liked this one best:
Dear God, I am doing the best I can.
Frank
Forwarded by Dr. and Mrs. William Brent Carper [TeamCarp@link.net]
WHY WE LOVE CHILDREN
A small boy is sent to bed by his father. Five minutes later...."Da-ad...." "What?" "I'm thirsty. Can you bring drink! of water?" "No. You had your chance. Lights out." Five minutes later: "Da-aaaad....." "WHAT?" "I'm THIRSTY. Can I have a drink of water??" "I told you NO!" If you ask again, I'll have to spank you!!" Five minutes later......"Daaaa-aaaad....." "WHAT!" "When you come in to spank me, can you bring a drink of water?"
It was that time, during the Sunday morning service, for the children's sermon. All the children were invited to! come forward. One little girl was wearing a particularly pretty dress and, as she sat down, the pastor leaned over and said, "That is a very pretty dress. Is it your Easter Dress?" The little girl replied, directly into the pastor's clip-on microphone, "Yes, and my Mom says it's a bitch to iron."
A little boy was doing his math homework. He said to himself, "Two plus five, that son of a bitch is seven. Three plus six, that son of a bitch is nine...." His mother heard what he was saying and gasped, "What are you doing?" The little boy answered, "I'm doing my math homework, Mom." "And this is how your teacher taught you to do it?" the mother asked. "Yes," he answered. Infuriated, the mother asked the teacher the next day, "What are you teaching my son in math?" The teacher replied, "Right now, we are learning addition." The mother asked, "And are you teaching them to say two plus two, that son of a bitch is four?" After the teacher stopped laughing, she answered, "What I taught them was, two plus two, THE SUM OF WHICH, is four.
When I was six months pregnant with my third child, my three year old came into the room when I was just getting ready to get into the shower. She said, "Mommy, you are getting fat!" I replied, "Yes, honey, remember Mommy has a baby growing in her tummy." "I know," she replied, but what's growing in your butt?"
"Lead us
not into temptation," she prayed, "but deliver us from email."
Prayer of a small Child
Also forwarded by Auntie Bev
PREGNANCY Q & A
Q: Should I have a baby after 35?
A: No, 35 children is enough.
Q: I'm two months pregnant now. When will my baby move?
A: With any luck, right after he finishes college.
Q: What is the most reliable method to determine a baby's
sex?
A: Childbirth.
Q: My wife is five months pregnant and so moody that
sometimes she's borderline irrational.
A: So what's your question?
Q: My childbirth instructor says it's not pain I'll feel
during labor, but pressure. Is she right?
A: Yes, in the same way that a tornado might be called an air
current.
Q: When is the best time to get an epidural?
A: Right after you find out you're pregnant.
Q: Is there any reason I have to be in the delivery room
while my wife is in labor?
A: Not unless the word "alimony" means anything to
you.
Q: Is there anything I should avoid while recovering from
childbirth?
A: Yes, pregnancy.
Q: Our baby was born last week. When will my wife begin to
feel and act normal again?
A: When the kids are in college.
"ESTROGEN ISSUES"
10 WAYS TO KNOW IF YOU HAVE "ESTROGEN ISSUES"
1. Everyone around you has an attitude problem.
2. You're adding chocolate chips to your cheese omelet.
3. The dryer has shrunk every last pair of your jeans.
4. Your husband is suddenly agreeing to everything you say.
5. You're using your cellular phone to dial up every bumper
sticker
that says: "How's my driving-call
1-800-***-."
6. Everyone's head looks like an invitation to
batting-practice.
7. You're convinced there's a God and he's male.
Forwarded by Auntie Bev
Remember when......?
REMEMBER....
When the worst thing you could do at school was smoke in the bathrooms, flunk a test or chew gum. And the banquets were in the cafeteria and we danced to a juke box later, and all the girls wore fluffy pastel gowns and the boys wore suits for the first time and we were allowed to stay out till 12 p.m.
When a '57 Chevy was everyone's dream car. . . to cruise, peel out, lay rubber and watch drag races, and people went steady and girls wore a class ring with an inch of wrapped dental floss or yarn coated with pastel frost nail polish so it would fit her finger.
And no one ever asked where the car keys were 'cause they were always in the car, in the ignition, and the doors were never locked. And you got in big trouble if you accidentally locked the doors at home, since no one ever had a key.
Remember lying on your back on the grass with your friends and saying things like "That cloud looks like a..."
And playing baseball with no adults to help kids with the rules of the game. Back then, baseball was not a psychological group learning experience-it was a game.
Remember when stuff from the store came without safety caps and hermetic seals 'cause no one had yet tried to poison a perfect stranger.
And...with all our progress...don't you just wish...just once...you could slip back in time and savor the slower pace...and share it with the children of the 80's and 90's...
So send this on to someone who can still remember Nancy Drew, The Hardy Boys, Laurel & Hardy, Howdy Doody and The Peanut Gallery, The Lone Ranger, The Shadow Knows, Nellie Belle, Roy and Dale, Trigger and Buttermilk as well as the sound of a real mower on Saturday morning, and summers filled with bike rides, playing in cowboy land, baseball games, bowling and visits to the pool...and eating Kool-Aid powder with sugar.
When being sent to the principal's office was nothing compared to the fate that awaited a misbehaving student at home.
Basically, we were in fear for our lives, but it wasn't because of drive by shootings,drugs, gangs,etc.
Our parents and grandparents were a much bigger threat! But we all survived because their love was greater than the threat.
Didn't that feel good, just to go back and say,
Yeah, I remember that!
Up in heaven, the pastor was shown his eternal reward. To his disappointment, he was given only a small shack. but down the street he saw a taxi driver being shown a lovely estate with gardens and pools.
I don't understand it," the pastor said. "My whole life, I served God with everything I had and this is all I get, while a mere cabby is given a mansion?"
"It's quite simple," St. Peter said. "When you preached, people slept; when he drove, people prayed.
Joel Bergman, Readers Digest, February 2002, p. 131.
Note from Bob Jensen: This is what worries me based upon what student claim gets them through my courses.
And that's the way it was on February 25, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
Bob
Jensen's New Bookmarks on February 15, 2002
Bob
Jensen at Trinity
University
Jerry Trites from Canada and I have proposed doing two workshops on electronic reporting and electronic commerce. The first of these is for August 14 in San Antonio (AAA Annual Meetings) and November 23 in Los Angeles (Asian Pacific Conference). I received the following message from Jerry on February 14, 2002:
Hi Bob,
Following is the URL for the website for my new e-business textbook. Thought you might be interested.
http://www.pearsoned.ca/trites/
Jerry,
p.s. When will we hear back from AAA re the San Antonio conference?
Gerald Trites, CA*CISA, FCA
Gerald Schwartz School of Business and Information Systems,
St Francis Xavier University,
Antigonish, Nova Scotia
Phone: (902) 867-5410 Fax: (902) 867-3352 Cell: (902) 867-0977
Home page: http://iago.stfx.ca/people/gtrites/index.html
Enron Updates
There were so many Enron updates his week that I put them in a special module near the end of this edition of New Bookmarks.
Click here to go to the current updates on the Enron scandal.
Click here to go to my master Enron scandal document where current highlights are somewhat buried.
A Poem for Valentines Day --- http://www.mamarocks.com/leave.htm
Quotes of the Week
CPA =
Completely Prostrate Amateurs
The Guy Noir Prairie Home Companion sketch with Ken Lay and an "Andersen
partner" is now playable with RealAudio at:
http://www.prairiehome.org/performances/20020209/ram_files/06_noir.ram
(The best part is the testimony of "President Bush.")
In E.B. White's classic children's book Charlotte's Web, there's a scene in which Templeton the rat has just stuffed himself with the garbage left behind after a fair. "What a night," he says. "What feasting and carousing. Never have I seen such leavings, and everything well ripened and seasoned with the passage of time and the heat of the day. Oh it was rich, my friends, rich." That's what happens at the end of a fair or a carnival. After all the crowds and the excitement, what remains is nothing more than half-eaten cotton candy and assorted other trash. And so it is with the 1990s bull market. The tech-stock hawkers, mindless speculators, and clueless dot-commers have pulled up their stakes, and what we're left with is a bunch of smelly debris. The problem is, our digestive tracts aren't like Templeton's. We can't eat this stuff.
There's something terribly rotten with American business right now, and it's making a lot of us sick. All the new-economy lying and cheating that went on back in the '90s has come back to bite us in the you-know-what. And now it's judgment day. No more excuses. No more extended deadlines, extra lines of credit, or skeevy numbers. No more "just trust us." No more b.s. Even as Wall Street gazes hopefully at signs of a recovery, the market is ruthlessly separating the haves (as in, your numbers are on the level) from the have-nots (your numbers stink!). "It's sell first and ask questions later on anything that doesn't look clean,'' says Steve Galbraith, chief investment officer at Morgan Stanley.
Obviously, the
trigger event here was the Enron scandal, which would give even Templeton the
rat indigestion. Yes, Enron may have been a rogue operation, but its collapse
has forced us to shine a halogen light on the books of America's public
companies, and what we're seeing sure ain't pretty. In the last couple of days
of January alone, stocks of Tyco, Cendant, Williams Cos., PNC, Elan, and
Anadarko were brutally punished for alleged or acknowledged accounting problems.
Andy Serwer in "Dirty Rotten Numbers," Fortune, February 18,
2002, Page 75. http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206333
Tyco |
| It's impossible to tell from the financial statements just how much of the conglomerate's earnings growth is being generated from its continual stream of acquisitions--and how much is actually sustainable. |
|
Williams Cos. |
| Management admits it's in a fog about how to account for more than $2 billion in debts owed by a former subsidiary. No sign yet of a fourth-quarter earnings release. |
|
J.P. Morgan Chase |
| Investors are only now discovering that the bank may lose billions from its dealings with Enron. The company's financial statements provide no mention of the exotic offshore vehicles that it used to do business with the fallen energy company. |
|
Calpine |
| Last year the SEC instructed it to change the way it presents Ebitda in its annual report. |
|
RSA Security |
| In 2001 the company began booking sales as soon as its software was shipped to distributors--why wait until an end user actually purchased it? The SEC is investigating whether the change was adequately disclosed to investors. |
|
Boeing |
| Instead of burying stock compensation expenses deep in the footnotes, Boeing actually puts them in the income statement. |
|
Amerada Hess |
| The oil company chooses to expense unsuccessful exploration costs as soon as they're incurred rather than spread them out over several years. |
|
FPIC Insurance |
| Insurance companies can manipulate earnings by playing with reserves for claims. FPIC recently adopted a more conservative approach to setting up reserves--a method that lowers today's earnings. |
|
Synopsys |
| Some software companies boost earnings by booking all the revenues from a multiyear contract as soon as the product is shipped. Synopsys instead books revenues evenly throughout the contract's life. |
|
Wal-Mart |
| A new accounting rule involving goodwill amortization will increase the 2002 earnings of many companies--management talent has nothing to do with it. Wal-Mart has already fessed up and disclosed the earnings boost the rule change will give it. |
|
But the single
biggest reason behind the recent spate of God-awful accounting has got to be the
rise of the cult of the shareholder. Simply put, over time so much focus
has been placed on levitating companies' stock prices that many executives will
do almost anything --- legal or otherwise --- to make it happen.
Ibid. Page 78.
But perhaps
the best place to focus attention is on the audit committee of boards of
directors. Warren Buffest proposes that the audit committee have a Q&A
session with auditors (for a list of his suggested questions as well as others'
proposals for reform, see "This system's broke. Here are the few good
suggestions on how to fix it").
Ibid. Page 82
Turner
suggests that auditors should be required to rotate clients after several years.
He also suggests that companies be required to file an 8-K (an SEC report of a
noteworthy corporate event) if and when a CFO leaves the company, explaining why
he left. (Think Andy Fastow and Enron here for a minute!) Harvey Goldschmid, the
Columbia law professor, proposes an independent accountancy board (with teeth!)
for the auditing community. Arthur Levitt agrees with Goldschmid and adds,
"The independent board must have subpoena power.''
Ibid. Page 82
Arthur Levitt
The former SEC chairman, who's now a senior consultant
to the Carlyle Group in Washington, D.C., has never been shy about speaking his
mind when it comes to questionable accounting. Levitt says that during his
tenure the accounting profession lobbied against reforms that could have
prevented some of the problems currently vexing investors. He favors
establishing an independent oversight board that has real teeth and calls for
diminishing the power of the AICPA, the accounting profession's trade group. The
worst-case scenario? Doing nothing, he says. That could erode investors'
confidence in the market and drive stock prices down.
http://www.fortune.com/articles/206334.html
Harvey Goldschmid
He's been a professor of law at Columbia University in
New York since 1970, and he's of counsel at Weil Gotshal & Manges.
Goldschmid worked in Arthur Levitt's SEC as general counsel and special senior
advisor. He's keenly aware of the pressure CEOs now face when it comes to making
the stock of their company go up and stay up. "Previously the CEO's job was
much more secure. Today, with CEOs that much more accountable for their stocks'
performance, they are under greater pressure to keep the share price up."
Like Levitt, he favors a new independent accountancy board for auditors.
Goldschmid has been recommended by Sen. Tom Daschle to be appointed an SEC
commissioner.
http://www.fortune.com/articles/206334.html
Jack Ciesielski
From his offices in downtown Baltimore, Ciesielski
publishes the deeply penetrating Analyst's Accounting Observer. And for an
accounting newsletter, it's a good read. For the past five years Ciesielski has
published an unscientific year-in-review history of accounting, including major
blowups. As you might imagine, the number of black eyes has grown, from two in
1997 to 22 last year. What should be done? "One thing would be to make
companies file their 10-Qs and earnings press release with pro forma numbers at
the same time; that way investors could compare pro forma numbers with GAAP
numbers." That would prevent companies from focusing investor attention on
squishy pro forma numbers and away from GAAP.
http://www.fortune.com/articles/206334.html
Warren Buffett
Three years ago the Berkshire Hathaway CEO proposed
three questions any audit committee should ask auditors:
(1) If the auditor were solely responsible for preparation of the company's financial statements, would they have been done differently, in either material or nonmaterial ways? If differently, the auditor should explain both management's argument and his own.
(2) If the auditor were an investor, would he have received the information essential to understanding the company's financial performance during the reporting period?
(3) Is the company following the same internal audit procedure the auditor would if he were CEO? If not, what are the differences and why? Damn good questions.
http://www.fortune.com/articles/206334.html
IBM's best-known tricks for generating earnings growth--share buybacks and a reliance on earnings that are a result of its overfunded pension plan--are fairly easy to understand. There's nothing inherently wrong with either of those--or with IBM's success at managing down its tax rate, another earnings enhancer. The issue is more the scale of such activity. For instance, from 1995 through 2001, IBM spent around $44 billion buying back shares, a move that enables a company to report higher earnings per share because there are fewer shares. That sum is only a hair less than the company's total net income of $45.5 billion during the same period. Longtime critics like Grant's Interest Rate Observer contend that there must be better uses for the cash than creating the illusion of growth, and that IBM is engaging in a "slow-mo LBO."
At the same time, Big Blue's increasing reliance on pension-plan earnings has drawn sharp criticism from disgruntled IBMers and accounting sleuths. (Last year the SEC rejected a proposed resolution from a group of retirees and employees that would have stopped IBM from determining executive compensation based on profits that include pension-plan earnings. The group contends that executives were getting rich at their expense.) In 1997, IBM's pension plan contributed almost nothing to corporate earnings, but in 2000, according to Jack Ciesielski, who writes the Analyst's Accounting Observer, the plan contributed $1.2 billion, or 10%, of IBM's $11.5 billion in pretax profits. Some $200 million of that is due to the fact that IBM raised its expected rate of return on its plan assets from 9.5% to 10%--an odd move in a sliding market. In the first nine months of 2001, IBM's pretax profits fell 1.2%, but Ciesielski calculates that without the pension kick, profits would have fallen 3.7%. The problem is that income from the pension plan doesn't belong to shareholders, so shareholders shouldn't include it when calculating the price they're willing to pay for IBM's shares.
At least these
IBM practices can be discerned by anyone who can read a balance sheet. The
bigger problems for investors are those that are less visible. For instance,
while IBM brags about keeping expenses in check, investors have no way of
gauging the facts independently. IBM includes all sorts of things--from asset
sales to income to royalties and licensing--in its expense line. And big
restructuring charges--most recently a $2.2 billion charge in 1999 that was
camouflaged by a $4.1 billion gain on asset sales--can inflate profits in future
years. One analyst says that as a result of such charges, IBM could be
benefiting by as much as $400 million a year at the operating-income line.
Bethany McLean, ," Fortune, February 18, 2002, Page 70
--- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206326
"Oh, I
can't help myself," Mr. Skilling said, according to the tape. "You
know what the difference is between the state of California and the
Titanic?"
Mr. Skilling traveled to California, where a protester hit him in the
face with a cream pie.
Kenneth L. Lay strode onto a ballroom stage at the Hyatt Regency Hill Country Resort in San Antonio, walking between two giant screens that displayed his projected image. Before him, bright light from the ballroom's chandeliers spilled across scores of round tables where executives from the Enron Corporation (news/quote) waited to hear the words of Mr. Lay, their longtime chairman and chief executive.
This meeting of hundreds of Enron executives in the first week of January 2001 was a time of revelry, a chance to celebrate a year when business seemed good — even better than good. At night, according to executives who attended, Champagne and liquor flowed from the open bar, while fistfuls of free cigars were available for the taking. Executives could belly up to temporary gambling tables for high-stakes games of poker. Others found their excitement in the company- sponsored car race; one executive had even hired a truck to transport his three Ferraris from Houston for the event.
Now, as waiters wearing bolo ties scurried about, the executives listened eagerly to Mr. Lay's descriptions of Enron's recent year of success, and the new successes that were within reach. Already, Enron was near the top of the Fortune 500, a multibillion- dollar behemoth that had moved beyond its roots in the natural gas business to blaze new trails in Internet commerce. For 2001, Mr. Lay said, the company would take on a new mission, one that would define everything it did in the months to come: Enron would become "the world's greatest company." The words replaced his image on one of the screens.
. . .
On June 12, Jeff Skilling was featured as the final speaker at the Strategic Directions technology conference in Las Vegas, where he planned to share his vision of how Enron was creating a robust trading market in cyberspace. The executive who introduced him noted that Enron was being hailed as "America's most innovative company" and that Mr. Skilling had been declared "the No. 1 C.E.O. in the entire country."
With that, a video tape shows, Mr. Skilling bounded onto the stage, tieless and in a sports coat. The Internet, he told the crowd, had barely begun to show its usefulness to business. American industry would be transformed by its prowess, and the future of Enron would be found there, he said. "We couldn't do what we're doing now without the technology of the Internet," he said.
After a lengthy speech, Mr. Skilling asked for questions from the assembled crowd. One of the last questioners asked Mr. Skilling for his thoughts about the power crisis in California, and what the state should have done differently to avoid its problems.
"Oh, I can't help myself," Mr. Skilling said, according to the tape. "You know what the difference is between the state of California and the Titanic?"
The crowd laughed appreciatively.
"I know I'm going to regret this," Mr. Skilling said, almost to himself.
He looked back at the audience. "At least when the Titanic went down, the lights were on," he said.
State officials reacted in outrage when they heard of Mr. Skilling's jest, and the bad relations between California and Enron worsened. Nine days later, Mr. Skilling traveled to California, where a protester hit him in the face with a cream pie.
But that public pratfall was minor compared to the damage being inflicted on Enron's stock. By mid-June, its stock price had fallen below $50 a share, alarmingly close to those "trigger" prices that had once seemed so ludicrously remote. One trigger — at $47 — was embedded in the Raptor partnerships, which had been propped up so painstakingly in the spring. On Monday, July 23, Enron's stock closed at $46.66. It would never rise above $47 again.
As the stock price fell, the Fastow partnerships that had insulated Enron from losses for years came under increasing pressure, pressure that would ultimately send Enron into a death spiral.
By then, the world inside Enron would seem very different. On Aug. 14, stunning the market, Jeff Skilling announced he was resigning after just six months as chief executive, citing undisclosed personal reasons. He left assuring investors that the finances of Enron had never been better.
"Web of Details Did Enron In as Warnings Went Unheeded," by Kurt Eichenwald and Diana Henriques, The New York Times, February 10, 2002
The article by Eichenwald and Henriques is the best summary of the 200+ page Powers report that I have seen to date.
My hunch is that with the lights on, Jeff Skilling saw the giant iceberg looming at the bow of Enron's flag ship.
When Teaching
Loses Its Excitement, It's Time To Retire.
Leonard Quart (See Below)
But these are such exciting and dynamic times of change in the world, why would
teaching lose its excitement?
Musicians don't retire; they stop when there's no
more music in them.
Louis Armstrong
This has nothing to do with academics or accountancy, except possibly by analogy. However, with everything being taken so seriously at the moment (e.g., War on Terrorism, Enron's deceptions, Andersen's quality controls and ethics, future of accountancy, health care insurance, world poverty, environmental degradation, moral degradation, and state of the world economy), perhaps you should just take a moment to lighten up, listen to, and say farewell to Peggy if you have audio on your computer --- http://www.mamarocks.com/peggy.htm
Is
That All there Is?
If that's all there is my friend
Then let's keep dancing
Let's break out the booze
And have a ball
If that's all there is.......
AECMers should remember to RSVP for our August 15 Tribute to Barry Rice where we will "break out the booze and have a ball." Instructions for sending a RSVP to Debbie are given at http://www.trinity.edu/rjensen/party081502.htm
And a Happy New Year to you Amy and the rest of your wonderful colleagues in Hong Kong!
Hi Bob,
Wishing You A Happy, Healthy and Productive Chinese Year of Horse!!!!!!!!!
Dr. Amy H. Lau
Chair Professor & Head Department of Accountancy
The Hong Kong Polytechnic University
Hung Hom, HONG KONG
Tel: 852-2766-7046 Fax: 852-2365-9303 email address: acahllau@inet/polyu.edu.hk
Enron Updates
There were so many Enron updates his week that I put them in a special module near the end of this edition of New Bookmarks.
Click here to go to the current updates on the Enron scandal.
Click here to go to my master Enron scandal document where current highlights are somewhat buried.
And now I move on to the really big scandals.
Office of Management and Budget: Budget of the United States Government http://www.whitehouse.gov/omb/budget/fy2003/index.html
To: My
Accounting Theory Class
From: Bob Jensen
RE: The Reason Benchmarking Was Introduced in FAS 138
I asked the student teaching team for February 18 to talk somewhat about benchmarking. I belatedly discovered that I had not updated the definition of benchmarking in my FAS 133 glossary. That has now been updated at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#Benchmark
It is important to understand how the FASB goofed when it focused on hedging of sector spreads in FAS 133. That was rectified by the FAS 138 amendments that introduced the concept of benchmarking for hedging of interest rate risk.
I provide an link to an extensive illustration of benchmarking at http://www.cs.trinity.edu/~rjensen/000overview/138bench.htm
Students should read the introduction to that illustration, but students on February 18 are not required to fully comprehend that example. That will come later in the course.
Dr J
Hi Kevin,
How is your talented wife doing these days? Is she still doing any distance education.
I provide an illustration related to
your question at in the fx01s.xls Excel workbook at
http://www.cs.trinity.edu/~rjensen/mfrFX/FX/
If the hedged item has no cash flow risk, it has fair value risk. For example, a fixed rate bond payable has no cash flow risk, but the market price fluctuates inversely with interest rates. Suppose a firm wants to take advantage of possible lowering of interest rates possibly buying back its bonds payable in the future. If the interest rates plunge, it becomes very expensive to buy back those bonds. The firm can initially, hedge against a rising buy-back price by hedging the fair value of the bonds payable. In doing so, however it creates cash flow risk of the combined hedged item and the hedging derivative (such as an interest rate swap).
Conversely, if the bonds are floating rate bonds, there is no market value risk, but there is cash flow risk. The firm can hedge cash flow risk, but that will create value risk. You must have one or the other types of risk.
The FASB took all sorts of flak when FAS 133 did not allow a single hedging derivative to hedge both interest rate risk and FX risk in the same derivative. You can listen to one pro complain about the issue prior to FAS 133 at
Audio of J.C. Mercier, BankBoston MERC30.mp3
Other audio clips are available at http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm
I've not worked the BigWheels case, but you can read the following in "Implementation of SFAS 138, Amendments to SFAS 133," by Angela L. J. Hwang, Robert E. Jensen, and John S. Patouhas, The CPA Journal, November 2001, pp. 54-56 --- http://www.nysscpa.org/cpajournal/2001/1100/dept/d115401.htm
One important provision of SFAS 138 is that it allows joint hedging of interest rate risk and foreign exchange (FX) risk in one compound hedge. SFAS 138 widens the net of qualified FX hedges to include the following:
Foreign currency-denominated (FCD) assets or liabilities can be hedged in fair value or cash flow hedges. However, cash flow hedges of recognized FCD assets or liabilities are permitted only when all the variability in the hedged items’ functional currency equivalent cash flows is reduced to zero. Unrecognized FCD firm commitments can be hedged in fair value or cash flow hedges. Prior to SFAS 138, hedge accounting for foreign currency risk exposures was limited to fair value hedges of unrecognized FCD firm commitments, cash flow hedges of forecasted FCD transactions, and net investments in FCD foreign operations.
Example. FCD items (e.g., a fixed-rate bond in deutsche marks) are subject to two underlying risks: fair value risk in terms of changes in German interest rates, and changes in the FX rates (between the deutsche mark and the U.S. dollar). Before SFAS 138, the debtor would first hedge the interest rate risk by locking in the combined value of the bond and swap at a fixed amount in marks with a swap in which variable interest was received and fixed interest was paid. Then another derivative contract, such as a forward contract to hedge against the possible fall of the mark against the dollar, would hedge the combined FCD value for FX risk. Under SFAS 133, the FCD debt was remeasured (via the income statement) based on the prevailing spot rate of exchange and the derivative was marked to market (also via the income statement). However, these two adjustments rarely match, creating unintended earnings volatility.
Under the SFAS 138 amendments, it is now possible to acquire a single compound derivative to hedge the joint fair value risk of interest rate and FX movements. One such derivative is a cross-currency interest swap, which would receive a fixed interest rate in foreign currency and pay a variable interest rate in domestic currency. SFAS 138 permits these recognized FCD assets and liabilities to be designated as the hedged items in fair value or cash flow hedges.
I provide an illustration related to
your question at in the fx01s.xls Excel workbook at
http://www.cs.trinity.edu/~rjensen/mfrFX/FX/
The FASB issued a cross-currency hedging illustrations that I never have been able to figure out. It is incomprehensible if you want to derive all of the numbers in the FX hedging illustrations at http://accounting.rutgers.edu/raw/fasb/derivatives/examplespg.html
Thus far the FASB has not provided any help in comprehending the above incomprehensible examples.
Hope this helps a little. The
index to my FAS 133 documents is at
http://www.trinity.edu/rjensen/caseans/000index.htm
Bob Jensen
-----Original Message-----
From: Kevin Lightner [mailto:Kevin.Lightner@sdsu.edu]
Sent: Tuesday, February 12, 2002 3:56 PM
To: rjensen@trinity.edu
Subject: DerivativesBob
I'm trying to learn something about derivatives, but am not having a great deal of success. I was wondering if you could help me with a few items. Which accounting entries represent the proper accounting for the combined foreign currency and interest rate swap in the "BigWheels Case"? Is this swap a "fair-value hedge? Would the entries and the type of hedge be different if the interest exchange required BigWheels to exchange fixed dollar payments (at a rate higher than 10%) for the receipt of fixed payments in francs (for the amount needed to service the 10% franc bond interest payable)? Any help you can give me would be greatly appreciated. Thanks.
Kevin
Kevin M. Lightner, Ph.D.
Professor of Accounting School of Accountancy
San Diego State University
Office: SS2427 Phone: 594-3736
Email: Kevin.Lightner@sdsu.edu
I hope this does not apply extensively to accounting recruitment. Fortunately, the world needs new auditors and tax accountants on the downswing as well as the upswing of the economy. So would my accounting students please focus on classes since most of you already have your jobs lined up.
B-School News A MAD SCRAMBLE FOR INTERNSHIPS Summer jobs this year are few and far between. That's sparking a flurry of new thinking by administrators and students alike.
No one is interested in classes. Everyone is focused on recruiting. That's how first-year MBA student Sarah Jane Gunter, 31, describes the scene at Wharton Business School at the University of Pennsylvania. It's a picture students could paint at just about any B-school in February, as they begin on-campus interviewing for summer internships: Competition is fierce.
For good reason: This year's outlook for internship hiring is bleaker than usual -- worse even than last year's. On-campus recruiting is down 30% to 35% at the University of Georgia's Terry College of Business, while the Broad School at Michigan State University, Kellogg Graduate School of Management at Northwestern, and many others are noting slower years. Because of the weak economy, says Randall Williams, MBA career services director at the University of California, Irvine's B-school, "we've seen students who did everything right be up against fewer job opportunities."
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/bschools/content/feb2002/bs2002027_2247.htm?c=bwmbafeb13&n=link1&t=email
Are Women More Ethical and Moral?
One interesting sidebar on this was an NBC News feature last night on February 6. It was pointed out that most of the bad deeds in the Enron scandal were committed by men (e.g., Skilling, Lay, Fastow, and Duncan). Most of the white knights in whistle blowing have been women (the show featured three of those women). The implication was that we should place more trust in the feminine gender. Sounds good to me!
What NBC News overlooked was the Mata Hari of the Enron Scandal --- Wendy Gramm --- http://www.trinity.edu/rjensen/fraud.htm#bribes
Reply from Roger Collins [rcollins@cariboo.bc.ca]
Bob, I was turning out what passes for my "home office" earlier today and came across the Winter 1997 issue of Contemporary Accounting Research (Vol 14, #4). One of the articles therein (page 653) is entitled:
"An Examination of Moral Development within Public Accounting by Gender, Staff Level and Firm" by Bernardi, R and Arnold, D F (Sr)
The authors' dataset covers 494 managers and seniors from five "Big Six" firms.
According to the abstract;
"The results indicate a difference in the average level of moral development among firms.....Second, female managers are at a significantly higher average level of moral development than male managers. In fact, average scores for male managers fell between those expected for senior high school and college students. The data suggest that a greater percentage of high-moral-development males and a low-moral development females are leaving public accounting than their respective opposites. These results indicate that the profession has retained, through advancement, males who are potentially less sensitive to the ethical implications of various issues."
- all of which leads me to wonder whether your comments (about Enron) re our needing more female executives wasn't right on target - and also, which accounting firms ranked where in "average level of moral development".
Roger
Associate Professor
UCC School of Business
I created a new module at http://www.trinity.edu/rjensen/fraud.htm#Women
The Internal Revenue Service issued a nationwide alert to taxpayers warning them not to fall victim to one of the "Dirty Dozen" tax scams. These schemes take several shapes, ranging from false claims of slavery reparations to illegal ways of "untaxing" yourself. http://www.accountingweb.com/item/70990
Distance Education Magazines and Journals http://www.trinity.edu/rjensen/crossborder.htm#Resources
"Graphical Sleight of Hand: How can auditors spot altered exhibits that appear in annual reports?" by Deanna Oxender Burgess, Journal of Accountancy, February 2002, pp. 45-51 --- http://www.aicpa.org/pubs/jofa/feb2002/burgess.htm
EXECUTIVE SUMMARY | |
GRAPHS
IN CORPORATE ANNUAL REPORTS may have an altered vertical
scale and often report a more favorable picture than warranted by the
underlying financial information. Auditors can perform a real service
for their clients by pointing out the existence of graphical
alterations in financial statements and helping companies avoid
potential “earnings management” problems.
AUDITORS ARE NOT REQUIRED to corroborate or test additional financial information reported in corporate annual reports, such as data in ratios and graphs. However, auditors should consider whether such information is materially inconsistent with the financial statements. A PROPERLY CONSTRUCTED GRAPH that begins with a vertical scale of zero has no disparity between the picture and the numbers. There are high-tech and low-tech solutions auditors can use to detect vertical scale alterations less obvious to the eye. ASSESSING MATERIAL INCONSISTENCIES involves auditor judgment. Auditors should consider the materiality guidance outlined in the SEC’s SAB no. 99 in preparing financial statements and performing audits of them. PRACTITIONERS ENGAGED TO EXAMINE MD&A should explore the materiality implications of graphical alterations and to what extent they lack reliability or representational faithfulness. Intentionally altered graphs mask trends and the real-life events they purport to convey. |
|
DEANNA OXENDER BURGESS, CPA, PhD, is an assistant professor of accounting at Florida Gulf Coast University in Fort Myers. Her e-mail address is dburgess@fgcu.edu. |
Road Signs From Around the World
Bartolomeo Mecanico --- http://www.elve.net/
Technology Workshop from the AICPA
"Show-and-Tell in Real Time," by Kimpberly Killmer and Nashwa George, Journal of Accountancy, February 2002, pp. 57-63 --- http://www.aicpa.org/pubs/jofa/feb2002/killmer.htm
“I can solve that problem,” you reply confidently. “With just a few keystrokes and mouse clicks, I can link the Excel cells to the appropriate slides in PowerPoint so that when the accounting department changes the spreadsheet data, those numbers will change immediately in PowerPoint, too.”
HOW IT’S DONE
This article will demonstrate how to create such a link. Since all integrated software suites—which typically include a word processor, a spreadsheet, a database and a presentation application—allow users to create links between any of its applications so that data changes in one will be reflected in the other, what you learn here also can be adapted for use in other office suite applications.
For this demonstration, using the 2000 version of Microsoft Office Suite, we’ll demonstrate how to convert an Excel spreadsheet into a chart and then paste and link it to a slide in PowerPoint.
As you know, it’s a cinch to simply copy a chart created in Excel and paste it into another application. However, that method only lets you create a static image. If the Excel numbers change and you want them to be reflected in the copy made in the other application, you’ll have to make the changes manually. If, however, you link the original spreadsheet to the copy, changes in the original will flow automatically to the copy—in this case to a PowerPoint slide. To accomplish that, we’re applying a technology called OLE (object linking and embedding).
Accounting Theory Update
"CPAs Find 'Real Options' for Business Valuation," Journal of Accountancy, February 2002, Page 22 --- http://www.aicpa.org/pubs/jofa/feb2002/cpa2biz.htm#c2
CPA valuators are increasingly finding that clients are asking for more than just a final number in their estimates. Instead, the market is pushing CPAs for a more holistic approach. And CPAs are responding with a new school of practice called real options theory.
“Real options theory is connected more to operational or corporate theories, as opposed to the financial aspects of the investing arena,” explains Steven E. Sacks, a CPA and the CPA2Biz senior product manager in charge of BV issues. “Heretofore, the recognized valuation methods have been inadequate for forecasting revenue streams and have completely ignored the opportunities management can avail themselves of through different courses of action.”
These different courses of action can result in a difference between the price of a business as measured by the stock market value and the intrinsic value, a concept typically used by financial analysts, explains Sacks, who was an advocate of the BV mission at the AICPA long before joining CPA2Biz.
Take some real world examples: Time Warner’s merger with AOL to expand its distribution network via an online environment. Yahoo!’s decision to extend its portal services into the Internet auction business. Or, eBay’s purchase of Half.com and Butterfield & Butterfield.
Bob Jensen's threads on real options are at http://www.trinity.edu/rjensen/realopt.htm
Bob Jensen's accounting theory threads are at http://www.trinity.edu/rjensen/theory.htm
Tuning The World (History, Radio, Communication) http://www.tuningtheworld.com/center.cfm
On December 12, 1901, during a fierce storm, Guglielmo Marconi received the first transatlantic signal atop Signal Hill in St. Johns, Newfoundland. An aerial attached to a kite picked up the faint but recognizable three dosts of a Morse Code "S." Long distance communication was no longer just an idea. It was a reality.
CBC celebrated the 100th anniversary of Morconi's adventure with a series of programs and broadcasts. To commemorate Marconi's adventure, we present the Global Sampler --- an interactive global sound and image experience that celebrates what Marconi made possible: the connection of lives and stories across the globe.
New Online Distance Education Program of the Week: A Self-Paced Learning Experiment in the Ourso College of Business at Louisiana State University
"LSU Expands Distance Learning Program Through Online Learning Solution," by Thomas Lynch, T.H.E. Journal, January 2002, pp. 47-48 --- http://www.thejournal.com/magazine/vault/A3846.cfm
Louisiana State University (LSU) and its Ourso College of Business, like many leading universities, had the challenge of providing the highest quality of education to as many students as possible with limited physical space and resources. The implementation of an online learning program is alleviating the need for more classrooms by providing instructors, like myself, with the means to publish lecture material online, as well as giving students an alternative for accessing the information from a lab or residence instead of physically coming to a lecture hall. Students had been accessing online resources through two campuswide learning management systems - CourseInfo by Blackboard and SemesterBook, developed by LSU's division of computing services - which provided a navigational framework for content and communication with instructors.
I was eager to add streaming audio and video to make online offerings more engaging than sitting in a lecture hall, but the experts at LSU told me my desires were problematic and unachievable due to technical problems. Realizing I had no multimedia production experience, limited Internet bandwidth connections and minimal university support staff, there appeared to be no way to employ streaming video to my PowerPoint slides.
Integrating Streaming Media
In spring 2000, Tegrity Inc. was invited to demonstrate their WebLearner platform to the technical systems administrators at LSU. The technical problem was trying to integrate streaming video with the PowerPoint slides so students could see a lecture that referred directly to slides on their computer, with the added challenge that most of the students have 28.8K modems. The Tegrity platform solved this problem in two ways. First, it dramatically reduced the time and effort required to record audio and video in sync with the classroom PowerPoint presentations. Second, it delivered high-quality, indexed modules at connection speeds as low as 28.8K, which is essential for practical, inexpensive viewing by all students.
Frankly, the demonstration im-pressed me because I could use the portable WebLearner Studio by simply rolling it into any free classroom with a standard whiteboard and record my lecture using my PowerPoint slides. And since I had already used the standard Microsoft PowerPoint, the learning curve was minimal. Tegrity software is integrated into Microsoft Office and uses Windows Media as its audio/video delivery format.
LSU was impressed enough to buy the WebLearner system. Immediately after the system arrived, I placed all of my lectures on CourseInfo using streaming video for my courses. To do so, I produced more than 100 online modules in less than half a semester without any production assistance or technical support from the university, except for their assistance in placing the files on a special server. My "recording studio" became any available classroom with a whiteboard, PowerPoint and the Tegrity mobile WebLearner Studio I brought in.
Replacing the Traditional Classroom
With Tegrity and CourseInfo I realized the traditional classroom was no longer needed, but was unsure as to how my students and the university administrators would react to it. I offered my students three options:
1. I could continue lecturing the class as I had always done, and the students could use the recordings optionally for review purposes. 2. I could stop lecturing, and students could rely solely on the Tegrity files. 3. I also gave each student the option of either staying for a live lecture, or leaving after the first 15 minutes and viewing the recording at their leisure.
In order to encourage participation and ownership in the decision to use WebLearner, I used CorseInfo to create a forum where students could share their opinions regarding which use of the Tegrity files they preferred. I discovered the students had a rather heated debate over the use of Tegrity, but within two weeks a consensus emerged on the third option.
As the semester progressed, I told the students they were required to come to scheduled class time, which was three hours once a week. I lectured for about 15 minutes, then excused those students who wished to go and learn the material exclusively via Tegrity. I then lectured the material in the traditional method to the students who remained in the classroom.
An Effective Means of Teaching
At first, a few students left after the first 15 minutes; but by midsemester, every member of the class left. Some had technical challenges getting started, and others were not immediately comfortable with the new approach. But eventually all of the students were very positive about their Tegrity experiences. They thought it was much better than the traditional method of lecturing and discussion.
Basically, the students mastered the material during self-paced study. This approach allowed them to review my lectures as many times as they wished, because they found the Tegrity files available to them for repeated viewing and reviewing at their convenience. Surprisingly, almost every student reviewed my lectures several times, which reinforced my ego and helped make up for the exodus after the first 15 minutes of class. By the end of the semester, I found that the grades for the first semester when we used Tegrity were slightly better than when we took the traditional approach. Clearly, the new approach is an effective means of teaching lessons, reinforcing material that has already been taught, and maximizing the existing physical space and technological resources within a university.
"Fostering the Student-Centered Classroom Online," by Kevin T. McNulty, T.H.E. Journal, February 2002 --- http://www.thejournal.com/magazine/vault/A3855.cfm
Digitizing the Classroom
Arguably, the electronic classroom promotes a student-centered learning model as much as any pedagogical practice. If the teacher is reliable about publishing a course description, a syllabus or calendar, assessment tools and student grades online, then the student has the opportunity to take individual ownership of their learning in a setting where communication is clear and expectations are understood. By maintaining such documents and resources online - always ready for student or parent perusal - the teacher is fostering clearer communication of expectations and responsibilities. If it is agreed upon in the beginning that the Web site has all the vital information about the class, then the student should be able to access the classroom site from anywhere to get important information about the class.
Second, the classroom Web site asserts the educational voice in an electronic world, where education can often be the last thing on the minds of the students who are using their computers to access the Internet. In conversations with students, I have discovered their online usage typically occurs after school and/or after dinner; and they primarily use it to chat with a particular online community. Such a community is typically made up of friends from school, but it also allows for a relatively safe way to meet new people. But when used as a common meeting place for learners, students who visit the classroom Web site do not do so just to chat. Often, they access it to peruse a current assignment, check its rubric, complete the assignment, turn it in via e-mail, post comments on the latest classroom topic of discussion, check their current grade or send a message to a classmate. Whatever the reason, students are now using the Internet for much more than instant messaging.
I publish classroom assignments on the Internet for selfish reasons as well. As any teacher will tell you, it can be a hassle when a student who is woefully behind asks for the assignment. The perfect dodge is to direct them online. Personally, I find that conversations such as these epitomize the student-centered classroom wonderfully. If it is online, it is their responsibility to get it. I don't have the headache of reassigning it, and the student has the opportunity to turn it in for partial credit. Furthermore, it simplifies things for students who are absent from class but want to stay current. For example, a student wrote me an e-mail saying she was home sick, but was able to view comments fellow students made during a classroom discussion. She was still able to turn in her homework on time. Another student, who was taken out of state for a family matter, e-mailed me saying I should keep the site up because it kept him up to date. Other students found it useful, but hesitated to throw complete support behind it. One student mentioned that although the site is useful for checking on assignments, it may not be as helpful for those without computers at home.
Continued at http://www.thejournal.com/magazine/vault/A3855.cfm
The College Board, in conjunction with College-board.com, has launched a new Web site as part of an effort to improve professional development opportunities and resources for education professionals interested or involved in the Advanced Placement program. AP Central ( www.apcentral.collegeboard.com) was built by and for the AP teaching community, with more than 100 teachers and college faculty involved in its development.
Could Harvard's proposed reform be the reform that we all need in academe?
Note Summers' intentions for the new Harvard University:
From Business Week Online on February 8, 2002
HARVARD
As the new president of the nation's leading university, former Treasury Secretary Lawrence Summers plans nothing short of an overhaul. He wants to stiffen grading, transform tenure reviews, persuade professors to spend more time with undergraduates, and nearly double the size of Harvard's campus. But given the virtual autonomy of the university's 12 schools and colleges, he'll need to persuade a lot of ego-driven people to join in the quest. Does he stand a fighting chance?
Available to Business Week subscribers: http://www.businessweek.com/premium/content/02_07/b3770001.htm?c=bwinsiderfeb08&n=link60&t=email
Available to all readers (Monday, February 11, 2002): http://www.businessweek.com/magazine/content/02_07/b3770001.htm?c=bwinsiderfeb08&n=link60&t=email
Note that Trinity University students and staff can access Business Week archives free.
It's paid for by the library, and is available to all students, faculty and staff at Trinity at no additional charge. Abstract coverage starts in 1984; full text coverage dates from 1996.
"Rethinking Teaching for the Knowledge Society," by Diana Laurillard, Educause Review, January/February 2002, pp. 16-25 --- http://www.educause.edu/ir/library/pdf/erm0201.pdf
A New Approach to University Teaching
If adopted, Propositions 5 and 6 would constitute a new approach to university teaching. The technology can do only so much. On its own, it cannot offer academics what they need to adapt their teaching to the needs of the digital age. With this new approach, however, they would be able to do more. For this approach to be successful, there has to be a common understanding of the nature of learning at the university level, and acceptance that teachers must become reflective practitioners, and an intention by university management to create the conditions that foster and reward this rather different approach. Without a change in the approach, new technology will not serve universities in meeting the challenge of mass higher education and lifelong learning for the knowledge society. the digital age will find its own ways of managing without us.
From the Scout Report on February 8, 2002
Three on the National Science Digital Library A Spectrum of Interoperability:
The Site for Science Prototype for the NSDL http://www.dlib.org/dlib/january02/arms/01arms.html
Components of an NSDL Architecture: Technical Scope and Functional Model [.pdf] http://www.arxiv.org/abs/cs.DL/0201027
Core Services in the Architecture of the National Digital Library for Science Education (NSDL) [.pdf] http://arxiv.org/abs/cs.DL/0201025
The National Science, Mathematics, Engineering, and Technology Education Digital Library (NSDL) is the National Science Foundation's (NSF) ongoing effort to build a comprehensive science digital library. These three articles collectively describe the philosophical and pragmatic approach of the Core Integration team. The solutions address the issues of economic cost, extensibility, and interoperability for a project with ambitious five-year targets (1 million users, 10 million digital objects, and ten thousand to one hundred thousand collections). In the first article (published in January 2002 D-Lib Magazine) the Cornell University team lead by William Arms describes the preliminary work done to develop a working model for NSDL. The second resource authored by David Fulker and Greg Janée (published in January 2002 arXiv Report) outlines the technical architecture for NSDL and defines the "technical scope and a functional model." Published in the same issue of arXiv Report, the third resource by Carl Lagoze et al. describes the interoperability structure for this initial stage of NSDL's development. Issues of heterogenous metadata management in a central repository, search and discovery services, rights management, and user interface are all addressed. These three articles are required reading for anyone interested in the future of digital libraries and cooperative efforts to harness the educational power of the Web. Note: For information on the Internet Scout Project's involvement in NSDL, see http://scout.cs.wisc.edu/nsdl-reports/
Finfacts Worldwide Cost of Living Survey 2001 http://www.finfacts.com/costofliving.htm
Both interesting and informative, Finfact’s Worldwide Cost of Living Survey for 2001 compares prices of more than 200 items in 144 cities across the globe. Using New York City, which ranked tenth in 2001, as an absolute (at 100%), the survey compares relative costs of living in major metropolitan areas worldwide, particularly in major financial and commercial hubs. Ranking first, second, and third respectively, Tokyo, Moscow, and Hong Kong enjoy placement at the top of the list. Given the current state of the economy, it is nice to see that there are actually many places where a cup of coffee is a lot more expensive than it is here.
Bob Jensen's links to economic statistics are at http://www.trinity.edu/rjensen/bookbob1.htm#EconStatistics
Virtual Typewriter Museum (History) ---
http://www.typewritermuseum.org/
There's also a bit of erotica here.
Virtual Motion Picture History
Internet Moving Images Archive --- http://www.archive.org/movies/
Westward by Sea: A Maritime Perspective on American Expansion, 1820-1890 (History) http://memory.loc.gov:8081/ammem/award99/mymhihtml/mymhihome.html
American History and Art from New England http://www.memorialhall.mass.edu/
Banished Words List --- http://www.lssu.edu/banished/
Examples include the following:
DISENFRANCHISE - "Somewhere along the line, somebody stumbled into it thinking he was saying 'disfranchise.' It caught on, and for more than 30 years we've been subjected to this negative-positive abomination. What's next? 'Disenable'? - Mike Bunis, Key West, Florida.
"The term has been frequently applied to describe voters who have experienced difficulty in following directions." - J. H. Jaroma, Sault Ste. Marie, Micihigan. "Our country cannot possibly hold that many victims." - Linda, Kansas City, Missouri.
FRIG and FRIGGING - A sneaky way of getting a version of the dreaded 'F' word on the radio and TV. Is there anything one can't say on the airwaves these days? - Merri Carol Wozniak, Sault Ste. Marie, Michigan.
SYNERGY - nominated by many, including John from Medicine Hat on Lindy Thorsen's CBC radio show out of Regina, Saskatchewan.
"It's used as a weasel-word, as in, 'There might be some synergy between our companies,' instead of 'We want to make some money off of you.' It's one of those words that's used by salespeople the way a parrot uses profanities - they blather away without a clue as to its meaning." - Gervase Webb, London, England. "A favorite of politicians and bureaucrats, and used to make one sound smart. It comes from the Greek sunergos, which means 'working together.' Why not just say that? I'll bet most people using the word can't define it." - Ken Marten, Hamtramck, Michigan. "It's a blanket term used by people so they won't have to actually articulate their business case in a meaningful way." - T. Conte, Woodstock, Ontario.
RAMP UP - Often used to suggest an increase in productivity or your product's effectiveness.
"Whatever happened to the word 'increase'? - Lance Rivers, Sault Ste. Marie, Mich. "Whoever started it should be made to ramp up (walk) the plank." - Howard E. Daniel, Kailua, Hawaii.
EDGY - "Supposedly referring to creative work that is provocative and interesting, the word now has become a signal that someone is trying to 'market' yet another piece of contrivedly offensive hack work. We should limit the word to physical things that have edges, such as an 'edgy coffee table.'" - Ron LaLonde, Inuvik, Northwest Territories, Canada.
INFOMMERCIAL - "Is everyone else as tired of this as I am? If a commercial lasts for 30 minutes, it's a PROGRAM. It's also boring!" - John King, Oceanside, California.
404lounge --- http://www.404lounge.net/index.php3
Art, History, Photography
One of the most beautiful, funny, and in many instances funky and freaky sites
on the Web --- http://www.404lounge.net/index.php3
Good Teaching: A Matter of Living the Mystery
This essay by Parker J. Palmer is excerpted with permission from Change, Jan/Feb, 1990. An expanded version of this article appeared in Change, the award-winning bi-monthly magazine focusing on higher education topics ranging from teaching and learning to policy, finance, and technology to minority issues. Published by Heldref Publications, Change is under the editorial direction of the American Association for Higher Education
That article is online at http://accounting.rutgers.edu/raw/aaa/aen/winter00/fd01.htm:
Craig [Craig Polhemus, American Accounting Association]
Also see "The Party's
Over," by Leonard Quart, Academe, January/February 2002 ---
http://www.aaup.org/publications/Academe/02JF/02jfqua.htm
When Teaching Loses Its Excitement, It's Time To Retire.
And then go to
"Academia, Then and Now," by Ernst Benjamin, Academe,
January/February 2002 ---
http://www.aaup.org/publications/Academe/02JF/02jfben.htm
From an AAUP perspective, which is seldom in favor of distance education and
newer technologies but does focus upon some systemic problems in higher
education.
"Honesty and Honor Codes," by Donald McCabe and Linda Klebe Treviño, Academe, January/February 2002 --- http://www.aaup.org/publications/Academe/02JF/02jfmcc.htm
Students cheat. But they cheat less often at schools with an honor code and a peer culture that condemns dishonesty.
A recent editorial in the Cavalier Daily, the University of Virginia’s student newspaper, opened with the statement, "The honor system at the university needs to go. Our honor system routinely rewards cheaters and punishes honesty." In the wake of a highly publicized cheating scandal in an introductory physics course at the university, it was easy to understand the frustration and concern surrounding Virginia’s long-standing practice of trusting students to honor the university’s tradition of academic integrity.
We could not disagree more, however, with the idea that it’s time for Virginia or any other campus to abandon the honor system. We believe instead that America’s institutions of higher education need to recommit themselves to a tradition of integrity and honor. Asking students to be honest in their academic work should not fall victim to debates about cultural relativism. Certainly, such recommitment seems far superior to throwing up our hands in despair and assuming that the current generation of students has lost all sense of honor. Fostering integrity may not be an easy task, but we believe an increasing number of students and campuses are ready to meet the challenge.
Bob Jensen's threads on plagiarism are at http://www.trinity.edu/rjensen/plagiarism.htm
From the University of Wisconsin Library
Africa Focus: Sights and Sounds of a Continent --- http://africafocus.library.wisc.edu/
Us old guys went to college when men were men and the women were locked in a vault by 10:00 p.m. In 1972 when my family accompanied me to the Stanford University campus (for a year in a think tank), we rented our Maine home to a professor of sociology at the University of Maine. He told us that on his daughter's application to Vassar, she could choose a male roommate if she so desired. Now applicants can choose their roommates on the Web.
From Syllabus News on February 5, 2002
Students to Pick Rooms, Roommates Via Web
Incoming freshmen at Kennesaw State University will use their personal computers this week to make room and roommate assignments for the upcoming academic year via the Internet. The school has turned to Atlanta-based WebRoomz.com, a web-based roommate matching service that lets students examine online profiles and e-mail potential roommates to find those matching their living habits and personality.
For more information, visit: http://www.ksuhousing.com .
Western Governors University Meeting Access Goals
The Western Governors University released its annual report, which said the private, non-profit university, founded by 19 western governors, is achieving its goals to expand access to higher education, especially for working adults. WGU President Bob Mendenhall said, "the constraints on time due to work and family commitments are access issues ... so the flexibility provided by WGU's online, competency-based model is very appealing to a broad spectrum of students." WGU currently has about 2,500 students enrolled, up from 500 students one year ago. The average WGU student is 40 years old, and over 90 percent work full-time.
For more information, visit: http://www.wgu.edu
Computer Maker Distributes Economic Courseware
Compaq Corp is making content from the World Economic Forum (WEF), held in New York last week, available to high schools, colleges and universities via the Forbes.com website. The manufacturer is also producing dedicated Internet programming focusing on economic issues of particular interest to developing countries. Among the universities scheduled to receive the World Economic Forum electronic library produced by Compaq are Oxford University, the London School of Economics, UCLA, USC, Georgetown University, MIT, the University of Florida, the University of Miami, Florida State University, Yale, Princeton and Northwestern University.
For more information, visit http://www.weforum.org .
Reading a-z: A Complete Online Reading Program http://www.readinga-z.com/
"The Business of Bankruptcy: CPAs can't make a bad economy go away, but they can provide value to clients on the ropes," y Victoria Zunitch and Michael Hayes, Journal of Accountancy, February 2002, pp. 35-39 --- http://www.aicpa.org/pubs/jofa/feb2002/zunitch.htm
EXECUTIVE SUMMARY | |
A
CPA FIRM WITH A CLIENT filing for bankruptcy has a
responsibility to serve the client as well as an opportunity to
compete for some of the work on the case—and through it develop a
specialty. The need for bankruptcy services is expected to grow for a
while.
CPAs SOMETIMES ARE THRUST into the field when a client goes broke, but a firm that has time to plan can develop the niche strategically. The bulk of bankruptcy work comes from attorney referrals. A PERUSAL OF THE PUBLIC RECORDS of your local bankruptcy court and the U.S. Trustee Office will identify the accountants, lawyers, trustees, examiners and other advisers who are players in your market. THE EXACTING BILLING requirements of the court affect every novice in bankruptcy work and are a continual challenge even for seasoned practitioners. CPAs are at minimum risk because the court’s first administrative priority is to cover the expenses of a bankruptcy. DURING A BANKRUPTCY, debtors, creditors’ committees, trustees and other entities need CPA services. A firm should look first for clients that need services it already provides, such as tax preparation or monthly reports. CONFLICT-OF-INTEREST CONSIDERATIONS usually require the work to be parceled out to several accounting firms, which means attorneys are always looking for new CPAs with whom to work. |
|
VICTORIA M. ZUNITCH is a freelance business writer based in New York. Her e-mail address is VZwriter@hotmail.com MICHAEL HAYES is a senior editor on the JofA. Ms. Hayes is an employee of the AICPA and her views, as expressed in this article, do not necessarily reflect the views of the Institute. Official positions are determined through certain specific committee procedures, due process and deliberation. |
From Smart Stops on the Web, Journal of Accountancy, February 2002, Page 25 --- http://www.aicpa.org/pubs/jofa/feb2002/news_web.htm
Intro to Bankruptcy Law
www.bankruptcylawinstitute.comThis site offers information on Chapter 7, Chapter 11 and Chapter 13 bankruptcy law, forms and court filing procedures. Users can access online tutorials on the following topics: types of bankruptcy, the structure of bankruptcy law, exemption and property law, and how to calculate equity.
Bankruptcy-Law Links
www.agin.com/lawfindThe law firm Swiggart & Agin, LLC, in Boston hosts the Bankruptcy Lawfinder, offering users related information and resources. Site sections include courts and cases, regulations and statutes. The bankruptcy law resources section includes links to the American Bankruptcy Institute, a directory of companies in Chapter 11 proceedings and the Center for Debt Management.
Bob Jensen's Threads on Professional Practice, Fees, Choosing Accountants, Financial Advisors, and Consultants --- http://www.trinity.edu/rjensen/fees.htm
From Smart Stops on the Web, Journal of Accountancy, February 2002, Page 25 --- http://www.aicpa.org/pubs/jofa/feb2002/news_web.htm
Business Advice for Mom and Pop
www.efamilybusiness.comThis site offers information about off-site presentations on topics such as succession and continuity, and strategy, planning and family-business policies. Free articles written by internal staff include these titles: “Supporting the Successor” and “Estate Fairness for Children In and Out of the Business.”
Make Your Practice Perfect
www.business-management-consulting.comLooking for information on business processes, changes in management, corporate governance, e-business practices, HR and strategic planning? Find them all in this site’s management-resources section. Business news articles cover topics such as IT and software companies, layoffs and changes, and stunning growth.
Virtual M&A Adviser
www.maadvisor.com“Issues, trends and strategies for successful mergers and acquisitions” are featured here. Registered guests can access the discussion forum and download section, as well as receive discounts at the online store. The discussion forum includes general questions and answers about mergers and acquisitions, and the download section includes audio clips, documents and speeches from industry leaders on M&A issues.
For Dot-Com Buyers and Sellers
www.webmergers.comCurrent statistical data on dot-com fire sales and the dot-com marketplace, news of Internet shutdowns and resource-pooling mergers as well as articles on buying-and-selling strategies are available here. Users can read stories such as “Buying a European Technology Company—Key Questions,” “Five Tips for Sellers of Dot-Coms” and “M&A Outlook for Internet Consulting Firms.”
Small-Business Resource
www.businessownersideacafe.com ( formerly www.ideacafe.com)Small-business owners can find information on starting and running a business here. An ask-the-experts forum, discussion threads and shared tips add to the site’s content. Business names, e-commerce, marketing and working at home are some of the topics in the CyberSchmooz area. Membership is free and gives access to information on business awards, contests and grants.
SBA Addresses 9/11
www.sbaonline.sba.govThe Small Business Administration (SBA) created a large disaster-assistance section on its Web site in response to the events of September 11th. Visitors will find links to local assistance programs and to state and federal disaster loans and grants. Other resources include the SBA’s answer desk for questions about financing and starting a small business.
Disaster-Recovery Information
www.fema.govThe Federal Emergency Management Agency (FEMA) site added three sections after the terrorist attacks on the United States. Victims Benefits and Assistance lists organizations addressing individual and business-related concerns, contact information and victims’ eligibility requirements. The New York Recovery News section has links to city and state emergency-management offices. Information About Anthrax gives U.S. Postal Service updates.
Find the Perfect Job
www.jobfactory.comFinding a new job or changing careers just got a lot less stressful. This site features JobSpider, a search engine for positions by title and location, as well as JobFactory’s own list of 250 top career sites. Plus, users can find links to more than 23,000 Web sites that post available jobs and want ads from most online U.S. newspapers.
Bob Jensen's small business helpers are at http://www.trinity.edu/rjensen/bookbob1.htm#SmallBusiness
Important Database of the Week --- From the Scout Report on February 1, 2001
LLRX.com: Business Filings Databases http://www.llrx.com/columns/roundup19.htm
This column from Law Library Resource Xchange (LLRX) (last mentioned in the September 7, 2001 Scout Report) by Kathy Biehl becomes more interesting with every revelation of misleading corporate accounting practices. This is a straightforward listing of state government's efforts to provide easy access to required disclosure filings of businesses within each state. Each entry is clearly annotated, describing services offered and any required fees (most services here are free). The range of information and services varies considerably from very basic (i.e. "name availability") to complete access to corporate filings. The noteworthy exception here is tax filings. Most states do not currently include access to filings with taxing authorities.
I added the above to my evolving monster on accounting and securities fraud at http://www.trinity.edu/rjensen/fraud.htm
Trend of Decline in the Numbers of Accounting Majors in U.S. Colleges
Hi Ianth,
I don't think the correct term is "avoiding" accounting as a major. What happened in the New Economy of the 1990s is that students were afforded tempting opportunities by dot.com and other high technology firms providing get-rich-quick stock option opportunities. Six years ago I had a newly-minted accounting graduate accept a first-time job offer to be a company's CFO with incentives that could make him a millionaire in a few years. He made a about $250,000 before his firm went belly up.
Accounting programs lost majors primarily to finance in a time when there were great job opportunities other than banks and computer/information systems where firms were desperately looking for top majors at huge starting salaries.
Now that much of the competition has dried up in terms of job opportunities, good old steady accounting opportunism are looking more attractive to more students.
However, the Enron mess complicates the picture and firms are starting to spend a fortune to regain their career attractiveness to college graduates.
By the way, one other selling feature of accountancy is that much of the work can now be done from the home without even having to go into the office. This is not true of many other careers.
The decline has been going on over several years. Probably the most important thing the large public accounting firms and many corporations are doing is offering on-the-job internships, usually in the senior year and sometimes in the summers between the Jr/Sr year and between the sr/grad year in the over 40 states that require a fifth year (usually a masters degree).
Virtually all of the senior accounting majors at Trinity University get internships for 8 weeks in the last term of their senior year. They then return for two courses taken on campus for the remaining seven weeks. This is the so-called "Texas Model" that is used by virtually all Texas colleges, including UT Austin.
Virtually all seniors return with job offers in hand even though they still have one year of graduate school remaining in order to sit for the CPA examination.
Another thing the firms have done is greatly increase starting salaries, training opportunities, and benefits.
The firms are always willing to help professors by providing visiting speakers and hosting student receptions where former graduates (usually) return to campus to tell existing students what life is like in the real accounting world.
Most importantly, firms are doing more to make life better on the job and to provide faster and better reward systems. Special attractions are made for women and minorities.
Go to http://www.trinity.edu/rjensen/bookbob1.htm#010304Careers%20in%20Accountancy
Big Five firm PricewaterhouseCoopers has retained its top 10 spot on Working Mother magazine's annual list of the "100 Best Companies for Working Mothers." The other Big Five firms are represented on the Top 100 list as well. Find out what it takes to make the grade. http://www.accountingweb.com/item/60271
Deloitte & Touche is out to prove it is still the number one firm when it comes to Big Five recognition of female employees. The firm expects to double its female partner and director ranks over the next five years. http://www.accountingweb.com/item/48313
Promoting women CPAs (certified public accountants) (an analysis of the report of the Upward Mobility of Women Special Committee) --- http://www.nysscpa.org/cpajournal/old/07551184.htm
American Society of Women Accountants --- http://www.aswa.org/
Occupational Outlook Handbook --- http://stats.bls.gov/oco/oco1001.htm
High Paying Careers for Women --- http://www-instruct.wccnet.org/~kstrnad/career/nontrad.html
Women on the Move --- http://www.insight-mag.com/insight/00/02/art-12.htm
Students interested in a career in accounting can find all the answers they need with just one click of the mouse. The Illinois CPA Society announces the launch of an exciting new Web site that is devoted to providing students of all ages with valuable resources and the latest accounting career information. http://www.accountingweb.com/item/60145
The flashy link is at http://www.futurecpa.org/futurecpa/index.htm Career site for the Maryland Society of CPAs --- http://www.tomorrowscpa.org/
The Wall Street Journal has launched CollegeJournal, a free site for undergraduate, graduate, and MBA students providing job- search and career-guidance information. Content is supplied by The Wall Street Journal's editorial resources as well as an editorial team dedicated to the CollegeJournal. http://www.accountingweb.com/item/60143
There are many other places to look for career opportunities in accounting. Examples are listed below:
http://www.aicpa.org/nolimits/index.htm
http://www.rutgers.edu/Accounting/raw/ima/students.htm
http://www.accounting.com/
http://www.accountingjobs.com/
http://www.careerbank.com/
http://www.tax-jobs.com/
http://www.financialjobs.com/
http://www.jobexchange.com/
And there are some other helpful sites.
http://www.uwm.edu/~ceil/career/jobs/index.html
(from our good friend Ceil Pillsbury)
http://www.accountingstudents.com
http://www.accountingweb.com http://www.careers-in-business.com/
http://www.rutgers.edu/Accounting/raw/aaa/placemnt.htm
(for higher education)
http://www.accountingeducation.com /
http://members.tripod.com/kibrahim/contents.html (International)
http://dir.yahoo.com/Social_Science/Economics/Accounting_and_Auditing/Employment/Jobs/
Some Accounting Career Information from SUNY- Fredonia --- http://beech.ait.fredonia.edu/careers.htm This is a great website with lots of useful links about accounting careers, continuing education, and certification specialties. In particular, note the Accounting Career Information Link at http://beech.ait.fredonia.edu/careersac.htm
Hope this helps.
Bob Jensen
-----Original Message-----
From: Dugan, Ianthe [mailto:Ianthe.Dugan@wsj.com]
Sent: Monday, February 11, 2002 1:04 PM
To: 'rjensen@trinity.edu'
Subject: WSJ storyHi. Can you please help me out with a story about the accounting professoin? I am writing about the decline in enrollment by accounting majors, and trying to round up good stories about accounting firms (or corporations) doing anything new and dramatic to entice a dwindling number of candidates. Can you please help me illustrate this story? Thank you.
Ianthe Jeanne Dugan
Staff Writer The Wall Street Journal
100 Avenue of the Americas New York, NY 10013
212-274-7999 ianthe.dugan@wsj.com (Temporarily relocated from World Financial Center)
JP Brown's Serious LEGO Robot --- http://www.jpbrown.i8.com/
It's not easy being good these days, at least if you're an employer. Suffering through the recession, American businesses have cut back on everything, which means they've slashed perks and fired lots of workers. In this dark time of cuts and layoffs, what makes a company fit for FORTUNE's list of the 100 Best Companies to Work For? Fortune gave companies credit for coming up with creative ways to keep employees satisfied, and for offering generous severance and compassion when they had to make cuts. These companies also rose to the occasion following the tragedy of Sept.11, and that is what being one of 100 Best is all about --- http://www.fortune.com/lists/bestcompanies/
The following accounting firms are in the "Top 100 Best Companies to Work For":
Rank 7
Plante & Moran
http://www.fortune.com/lists/bestcompanies/snap_1063.html
Rank 35
Deloitte
& Touche
http://www.fortune.com/lists/bestcompanies/snap_407.html
Rank 87
Ernst
& Young
http://www.fortune.com/lists/bestcompanies/snap_486.html
Fortune's Selections of the Best Companies to Work For
http://www.fortune.com/lists/bestcompanies/
The Top 25 winners are ranked below:
Rank Company Number of Employees 1 Edward Jones 27,092 2 Container Store 1,987 3 SAS Institute 8,309 4 TDIndustries 1,368 5 Synovus Financial Corp. 11,022 6 Xilinx 2,649 7 Plante & Moran 1,240 8 Qualcomm 6,314 9 Alston & Bird 1,338 10 Baptist Health Care 4,068 11 Frank Russell 1,397 12 Hypertherm 604 13 CDW Computer Centers 2,781 14 Fenwick & West 626 15 Cisco Systems 37,546 16 Granite Rock 792 17 Beck Group 652 18 East Alabama Medical Center 1,846 19 Goldman Sachs Group 22,585 20 JM Family Enterprises 3,227 21 International Data Group (IDG) 11,113 22 Stew Leonard's 1,729 23 American Century 2,937 24 J.M. Smucker 2,380 25 Vision Service Plan 2,283
Other Rankings by Fortune at http://www.fortune.com/
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One thing that I noticed is that some of the top winners advertise in Fortune Magazine? Could this possibly influence the rankings?
| Company |
| Rank |
| U.S. Employees |
| % Women |
|
| ||||||||
| Bright Horizons Family Solutions |
| 60 |
| 12,141 |
| 97% |
|
| ||||||||
| Baptist Health Care |
| 10 |
| 4,068 |
| 82% |
|
| ||||||||
| Third Federal Savings & Loan |
| 36 |
| 1,017 |
| 80% |
|
| ||||||||
| East Alabama Medical Center |
| 18 |
| 1,846 |
| 78% |
|
| ||||||||
| Griffin Health Services |
| 43 |
| 1,111 |
| 78% |
|
| ||||||||
| Lands' End |
| 53 |
| 4,150 |
| 77% |
|
| ||||||||
| St. Luke's Episcopal Health System |
| 86 |
| 3,886 |
| 77% |
|
| ||||||||
| Vision Service Plan |
| 25 |
| 2,283 |
| 72% |
|
| ||||||||
| First Tennessee |
| 66 |
| 6,875 |
| 72% |
|
| ||||||||
| AFLAC |
| 33 |
| 3,251 |
| 71% |
|
| ||||||||
| Nordstrom |
| 84 |
| 41,933 |
| 71% |
|
| ||||||||
| American Express |
| 91 |
| 49,019 |
| 67% |
|
| ||||||||
| Synovus Financial |
| 5 |
| 10,995 |
| 66% |
|
| ||||||||
| Discovery Communications |
| 89 |
| 1,531 |
| 64% |
|
| ||||||||
| VHA |
| 38 |
| 1,416 |
| 63% |
|
| ||||||||
| Paychex |
| 42 |
| 7,406 |
| 63% |
|
| ||||||||
| Edward Jones |
| 1 |
| 25,324 |
| 62% |
|
| ||||||||
| Container Store |
| 2 |
| 1,677 |
| 62% |
|
| ||||||||
| McCutchen, Doyle, Brown & Enersen |
| 54 |
| 702 |
| 61% |
|
| ||||||||
| LensCrafters |
| 56 |
| 15,760 |
| 60% |
|
| ||||||||
| Starbucks |
| 58 |
| 51,914 |
| 60% |
|
| ||||||||
| Capital One |
| 32 |
| 17,468 |
| 59% |
|
| ||||||||
| Wal-Mart Stores |
| 94 |
| 1,007,509 |
| 59% |
|
| ||||||||
| Fenwick & West |
| 14 |
| 626 |
| 58% |
|
| ||||||||
| International Data Group |
| 21 |
| 2,113 |
| 58% |
|
| ||||||||
| Arbitron |
| 52 |
| 1,085 |
| 58% |
|
|
This past week, InfoTech Partners North America, Inc. had the opportunity to present its 2002 Technology Predictions at Management Summit to over 100 of the leading CPA firms and Associations in the country. See what they predict for 2002. http://www.accountingweb.com/item/70721
This past week, InfoTech Partners North America, Inc. had the opportunity to present its 2002 Technology Predictions at Management Summit to over 100 of the leading CPA firms and Associations in the country. Below we have recapped our predictions to share of our view of the year ahead.
- Paperless audit a reality: With firms effectively utilizing Document Container programs, there will a strong transition to paperless audits, which will turn out to be a huge step towards completely digital firms, especially now that there are viable products from CCH, CaseWare, PPC and McGladrey.
- Microsoft owns Us July 31: With new licensing programs and without suitable software alternatives, we will all climb onto the Microsoft bandwagon this summer and firms will standardize on the annual licensing agreement for our desktop software in the same manner as we have with our tax, research and virus applications.
- Suite strategies emerge: CCH, Intuit and the RIA Group want ALL of your business and will provide you with both technical and financial reasons to “keep it in the family.” CCH leads off by expanding their web presence with Global FX and Execusite. Intuit/Lacerte expand connectivity between their accounting products and their NetTax solution (as well as built in depreciation).
The Thompson family (CSI, PPC, RIA, CLR), even though late to the paperless game, will pull it off with their Virtual Office suite integration. In the end, we accountants win!
- Intuit becomes powerhouse: QuickBooks will expand its coverage in both CPA Firms and small business through a combination of traditional and web-based solutions. They have edged into the mid-market and are working with third-parties to develop customized integration for vertical markets. While somewhat early in the process, we think they will deliver and further reduce the accounting choices out there for small business accounting.
- Technology will be underutilized: Despite logic and education, CPA firms will continue to place a low priority on training as we fight short-term profitability concerns. Studies continue to show that training has a very strong corresponding return and the top demand of CPA firm personnel we consult with is to get training… any training!
- CRM=snake oil for most: Customer Relationship Management applications will eat up a lot of time and money in many CPA firms this year. CRM appears to be this year’s buzzword so be cautious and remember the investment that many firms made in contact management applications a few years ago. The majority of those systems failed at that time, because the firm was not willing to change its culture and processes to utilize the applications. CRM applications are vastly more complex and the firm’s owners and staff will have the make a huge cultural transformation to make it effective. Will this happen? NOT!
- PDA Wars ensue: Microsoft’s Pocket PC will expand its foothold causing some unlikely alliances. Even though we love our Palm OS devices, we think they will only dominate the PDA market for another 18-24 months and then the Pocket PC will have adequate battery life and be more cost-effective becoming a viable alternative. Just as Internet Explorer took over Netscape Navigator and the Outlook took over the PIM market, we think that the Pocket PC will dominate PDAs. In the short-run, we are still recommending the Handspring products and feel that the combined phone/PDAs offered by Handspring, Samsung and Kyocera will allow us to eliminate one “tool” from our tool belt. We think the Palm-OS companies will develop ties with telecommunications providers to roll out more product and we would like to see the innovative baby take over the stodgy parent to create a larger more aggressive company.
- Security concerns are notched up: Even with last year’s high profile events, firms will make an effort to improve security, but will only get serious after a major breach. We would encourage all of you to verify your firm is protected and to start using encryption (such as VeriSign Digital Certificates) whenever transferring any confidential data to clients.
- Web fears subside: As the cost to service clients becomes less expensive and more reliable on the web, we will transition applications to the Internet. We feel it is a case of economics and education. Once we can produce a tax return cheaper and with less maintenance via the web and we become comfortable with the reliability of our Internet connection. Firms will start out using these services as a remote access option if they don’t have Windows Terminal Server/Citrix, which will set the stage for others to be confident to try it. In any case, we would encourage you to fill out your OWN organizer online and import it into your tax return.
- Video Conferencing Effective: As bandwidth continues to become cheaper, we will see multi-office firms implement conferencing solutions to reduce travel time and get outside input. With the cost at just over $1,100 for a firm with two locations joined by a broadband connection, we will start implementing IP-based video conferencing to reduce travel time and include other offices in firmwide training.
Personal Bonus: Commercial wireless connectivity: We believe there will be a proliferation of wireless connections in our homes and public businesses such as Starbucks, so we will add this capability to laptop units for those that travel or work in commercial environments. Firms will continue to be slow to adopt wireless connections within their own firms because of security concerns.
Businesses must review their operations in order to contain and reduce costs. Those that do so will achieve short-term savings and will also benefit from the longer-term impact this review could have on business strategy, operations, and overall company value. More than a dozen areas for getting started are suggested in PricewaterhouseCoopers' "Growing Your Business" publication at: http://pwcglobal.com/Extweb/pwcpublications.nsf/docid/C60FA6EAD39A75A0852569ED007FA244
Bob Jensen's threads on cost containment and managerial accounting are at http://www.trinity.edu/rjensen/ecommerce/managerial.htm
Update on Course Design and OKI
"Designer of Free Course-Management Software Asks, What Makes a Good Web Site?" by Jefferey R. Young, The Chronicle of Higher Education's interview with Charles Kerns, one of the Open Knowledge Initiative (OKI) management team, January 21, 2002 --- http://chronicle.com/free/2002/01/2002012101u.htm
What makes a good course Web site? That's one of the questions facing Charles F. Kerns, education-technology manager for academic computing at Stanford University, as he helps design a new course-management system that will be free for any college to use.
The effort to create the course-management system, called the Open Knowledge Initiative, is led by Stanford and the Massachusetts Institute of Technology and also involves several other colleges. The group plans to release a series of software modules to help professors teach both classroom and online courses, as well as a set of technical specifications that will let programmers at other colleges develop compatible software.
Before working on the Open Knowledge project, Mr. Kerns led the Stanford Learning Lab, a division of the university that does research and development into using technology in education.
Q. What makes a good course Web site?
A. There's a lot of activities that you can engage in on the computer, but if you just slap them together as an add-on to a course without really thinking about how it fits in with all the other things in the course, it doesn't make much sense. So I don't really like to think about a course Web site; I like to think about all the learning activities and how they work together.
I'd say a good Web site is one that doesn't just sort of hang out there as an independent entity, but is an important part of teaching for the course.
Let me give you an example of one. When I was in the Learning Lab, we worked for several years with the human-biology program here at Stanford, and one of the issues that we had was how to get an understanding of the misconceptions and the knowledge of the students by using weekly assignments -- and how to grade them with limited resources. So the research team at the Learning Lab developed a system where we have multiple-choice questions, and then the multiple-choice questions also have a free-text entry area for putting in a rationale for the answer.
Pedagogically, this is sound ... and it also helps in time management, because you can sort the questions for the most frequently missed questions. So you can be very efficient in looking at where students have problems, and then you can look at their answers in the rationales and find out what the misconceptions are.
Q. What are some misconceptions about designing course Web sites?
A. One of the big problems is if you think the instructor has to do an upfront information-design task that might take six months. Then it's such a high barrier to using technology and multimedia. But if you let the students, as part of their research, post the material on the site ... then you don't have to go through this long authoring process ahead of time, and you can take the role you normally do as a professor -- critique student work.
You probably don't write a textbook the first time you start teaching the class. ... Making an engaging Web site with all of the content is not the really important part of course Web sites -- it's the communication aspect [that's important].
Q. What are the biggest challenges for designing the Open Knowledge Initiative?
A. One is the wide range of skill levels of our faculty. We have many faculty who could write this [software], and we have many faculty who use e-mail and the Web, and that's about it. We have this wide range of skill levels, so how do we support across this?
We also have different practices in different disciplines. ... We have a lot of peer-reviewed writing assignments in our writing courses, but we have nothing quite like that in our engineering and science courses. There's lots of variants for different departments, so how do we accommodate all this, and these different skill levels, and have something for the student that looks coherent?
Q. So is one of the unique aspects of the Open Knowledge Initiative the attempt to accommodate the teaching needs of different disciplines?
A. The idea is that in this open-source system, you can make modules, and they will work [together]. For instance, if I got a grant to build something, then I could build a module that was focused on my problem -- let's say in product design, or mechanical engineering, or English. Then I could use the other tools that were already there for gradebooks and announcements and that sort of thing, but I'd have my module that focused on my specific needs.
That's Step 2 for us right now, though. Step 1 is to have a basic system that covers things like posting documents, making announcements, giving quizzes, having a home page. That's a star we can almost reach. We're getting close.
Bob Jensen's threads on the tools and OKI are at http://www.trinity.edu/rjensen/000aaa/thetools.htm
Associated Colleges of the South (ACS) Online Course Materials --- http://pieria.acs.southwestern.edu/ibbin/ibGate.exe?LOADPAGE=%2ffaculty%2fcoursematerials.htm
New Online Courses From Fathom --- http://www.fathom.com/
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* Free Seminar* PHILOSOPHY AND THE HISTORY OF IDEAS from Cambridge University Press examines how philosophy can help historians understand the past by exploring the history of ideas as well as that of events: http://www.fathom.com/link.jhtml?cid=731&page=course&id=10701059
* Short e-Course * THE INTELLECTUAL AND CULTURAL HISTORY OF THE US: THE CRISIS OF VICTORIANISM, a new course from Columbia University, examines the reaction against Victorian values that took place at the end of the nineteenth century among educated young American men and women who felt that their cultural inheritance no longer suited life in a modern, industrial society: http://www.fathom.com/link.jhtml?cid=732&page=course&id=57705001
ere's just a sampling of new courses currently open for enrollment:
* Budgeting and Financial Planning http://www.fathom.com/link.jhtml?cid=684&page=course&id=42704200
* Build Customer Rapport 1 http://www.fathom.com/link.jhtml?cid=684&page=course&id=39703632
* Cost-Benefit Solutions http://www.fathom.com/link.jhtml?cid=684&page=course&id=39703623
* Define Your Core Business http://www.fathom.com/link.jhtml?cid=684&page=course&id=39703639
* Developing Marketing Strategy: Fundamentals of Marketing http://www.fathom.com/link.jhtml?cid=684&page=course&id=42704413
* E-commerce: An Introduction http://www.fathom.com/link.jhtml?cid=684&page=course&id=50704700
* Introduction to Corporate Finance http://www.fathom.com/link.jhtml?cid=684&page=course&id=33702668
* Introduction to Securities Markets http://www.fathom.com/link.jhtml?cid=684&page=course&id=33702653
Search for more online courses in Fathom's Course Directory: http://www.fathom.com/link.jhtml?cid=725&page=directory
Book Recommendation: Competing On Value, by Mack Hanan & Peter Karp
Presents a new approach to selling that emphasizes not competing on the basis of the best price, but the highest value--i.e. demonstrating to current and prospective customers that using your products or services will either cut their costs or improve their revenues. http://www.amazon.com/exec/obidos/ASIN/0814450369/accountingweb
Weren't we supposed to have media players sorted out by now? Adam investigates why we're still dealing with too many choices and too few standards --- http://hotwired.lycos.com/webmonkey/99/24/index4a.html
A single player for all audio and video on the Web would make life easier for both developers and consumers. There are a few choice products, such as RealOne and UltraPlayer, which try to bridge the player gap and handle all of your multimedia tasks. However, with the steady stream of new compression standards and emerging media formats, developers are constantly playing catch-up. Also, the debate over digital rights management will have a tremendous impact on Web-based media in the future. So will we ever get a sleek, sophisticated, hassle-free means of delivering and receiving multimedia over the Web? If yes, which player will realize this dream?
Unfortunately, it all boils down to a popularity contest: The player that gains the most momentum with users is the one most likely to come out on top. But, and as you may remember from high school, popularity rarely has much to do with quality. The key is to make sure that we examine all our options, find the best one, and use it, use it, use it.
Civil War at the Smithsonian --- http://civilwar.si.edu/
Hi Jeff,
The best sources are the books on derivatives. Some are cited along with my documents links at http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
Bob Jensen
-----Original Message-----
From: Jeffrey XXXXX
Sent: Thursday, February 07, 2002 9:41 AM
To: rjensen@trinity.edu
Subject: Derivatives Fair ValuationDear Dr. Jensen,
Good day.
I appreciate your article posted on the internet, dealing with FAS 133 and comparing the methods in obtaining the fair value of derivatives.
I'm quite new to the derivatives world, and would like to know if you could recommend other possible resources to help me understand better the concepts of deriving fair values of interest rate swaps.
Thank you very much.
Jeff
Keeping Up With Financial Instruments Derivatives
In 2000, ISDA filed a letter to the Financial Accounting Standards Board (FASB) urging changes to FAS 133, its derivatives and hedge accounting standard. ISDA’s letter urged alterations to six areas of the standard: hedging the risk-free rate; hedging using purchased options; providing hedge accounting for foreign currency assets and liabilities; extending the exception for normal purchase and sales; and central treasury netting. The FASB subsequently rejected changes to purchased option provisions, conceded some on normal purchases and sales, extending the exception to contracts that implicitly or explicitly permit net settlement, declined to amend FAS 133 to facilitate partial term hedging and agreed to consider changing the restrictions on hedge accounting for foreign currency.
ISDA ®INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.http://www.isda.org/wwa/Retrospective_2000_Master.pdfYou can read a great deal about energy derivatives in The Derivatives 'Zine at http://www.margrabe.com/Energy.html
Other topics include the following:
The Derivatives 'Zine by Dr. Risk
THE WILLIAM MARGRABE GROUP, INC., CONSULTING, PRESENTS
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DEVIL'S DD Ask Dr. Risk!
- Free answers: Dr. Risk promises any correspondent from a business domain with a website (e.g., Mack@CSFB.com) at least a five-minute response to your important question, as soon as he has a free moment, probably within one month.
- Fast answers: If you absolutely, positively will have to have an answer overnight, set up your consulting account, ahead of time, with the William Margrabe Group, Inc.. Introductory offer: $300 / hour with one-minute granularity. If we can't provide the answer, we'll refer you to someone who can. If we can't refer you, we'll inform you fast for free.
- No answers: LDiablo@hotmail.com, Chris1492@aol.com, BillyG@MSN.com, and Desperate@Podunk.edu, etc. can no longer count on even brief answers, unless their questions are sufficiently intriguing. Sorry.
A question of sufficiently general interest to make it into the 'Zine, tends to generate a more comprehensive response. All questions and answers become the property of The William Margrabe Group, Inc
The above sources are not much good about accounting for derivatives under FAS 133, FAS 138, and IAS 39. For that, go to the following two sources:
http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
Message from Gary Kleinman
Dear Rita,
I received Dr. Jensen's forwarding of your e-mail seeking resources about auditor-client negotiations. Dr. Dan Palmon of Rutgers University Grad. School of Mgt and I have written extensively about these negotiations, especially the behavioral aspect. Among other things, we have a forthcoming article--soon to appear in Group Decisions and Negotiations--discussing the issues that may arise theoretically and empirically, a book entitled "Auditor-Client Relationships: A Multi-faceted Analysis" published by Markus Wiener Publications, Inc. (Princeton, NJ), and an auditor-client negotiation game and instructors' notes that appeared in the Journal of Accounting Case Research in 2000. Previously, we had published a behavioral model of these negotiations in Group Decisions and Negotiations. All of these works are almost solely behavioral, drawing on personality theory, role theory, organizational behavior and organizational theory literatures, sociology of the professions, and the regulation literature. Specific bibliographic details of these papers can be found on my website at
http://gklei49593.tripod.com/researchinterests .
I will forward to you later the forthcoming Group Decisions and Negotiations article since the final draft is stored on another computer. Hopefully, these pieces (all behavioral) will be of help.
Gary Kleinman, Ph.D.
Fairleigh Dickinson University
Teaneck, NJ 201-568-3628 Gklei49593@cs.com
Message from Glen L. Gray [vcact00f@csun.edu]
Rita,
You might check with The IIA. They have a whole course on the topic.
Their web site is http://www.theiia.org
Glen
Hi Rick,
GAAP requires that individual's use exit (liquidation) value accounting. See "Personal Financial Statements," by Anthony Mancuso, The CPA Journal, September 1992 --- http://www.nysscpa.org/cpajournal/old/13606731.htm
Bob Jensen
-----Original Message-----
From: Richard Newmark [mailto:richard.newmark@PHDUH.COM]
Sent: Tuesday, February 12, 2002 2:40 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Tax BaseHow would you measure an individual's GAAP income? Should individuals report their income using accrual accounting?
Rick
If you
know any accounting educators with helpful materials on the web, please ask them
to link their materials in the American Accounting Association's
Accounting Coursepage Exchange (ACE) web site at
http://accounting.rutgers.edu/raw/aaa/ace/index.htm
Please send these professors email messages today and urge them to share as much
as they can with the academy by easily registering their course pages with ACE.
Our ACE sharing Professor of the Week is J. Efrim Boritz, our Canadian colleague from the University of Waterloo --- http://www.arts.uwaterloo.ca/ACCT/courses/acc651/
The online version of this course is the result of a grant from the Gordon H. Cowperthwaite Foundation
This course benefits from the support provided by the University of Waterloo Centre for Information System Assurance.
Online Resources
Course Description This course consists of five major parts:
Objectives of the Course 1. To help you develop a broad understanding of risks introduced by information technology (IT) and general controls and application controls used to reduce such risks to a tolerable level. 2. To help you build practical skills sufficient to review and evaluate controls in IT-based systems under limited supervision. 3. To help you develop insights into emerging IS assurance services such as WebTrust and SysTrust. 4. To help you develop an understanding of computer-assisted auditing techniques; and to help you build practical skills to use them under limited supervision. Pre-requisites: Prior course covering information systems concepts, systems development life cycle, and management issues. Approach On Tuesdays all the sections of the course will meet in the same location at the same time (MC 1085). The Tuesday class will consist of lectures, videos, guest speakers, software demonstrations, and so on. Some Tuesday classes will be followed by tutorial workshops designed to help you complete the assignments. On Thursdays, the various sections of the class will meet separately to discuss assigned cases and other materials. We place great emphasis on these class discussions as a means of developing and refining your understanding of the key topics covered in this course. Consequently, an important part of your grade is allocated to class participation. Attendance will be taken. Because we believe in "learning by doing" we have incorporated a number of assignments dealing with the most important skill areas addressed by this course. Assignments will be due on the Thursday following the workshop. There will be a mid-term exam and a final exam. The exams will be common to all the sections. To help you prepare for these exams, a copy of a past exam is available on the course web site. Constructive suggestions for improvement are most welcome! Required Texts
The course website and newsgroup will be used extensively during the course as a communication medium. You are responsible for keeping informed about the contents of the website and the information posted on the newsgroup.
Class Participation A large part of this course will be devoted to case discussions. The Class Participation mark will be judged by the instructors based on your attendance and involvement in class discussions. The points allocated to this part of your grade will be assigned based on the following classification: A 10 marks - Comes to most classes prepared; actively participates in discussion; indicates mastery of topics B 7 marks - Comes to most classes prepared; actively participates in discussion; but, often indicates incomplete mastery of topics discussed C 4 marks - Does not actively participate in class discussion; but, indicates mastery of topics when called upon by instructor F 0 marks - Does not come to most classes prepared. Mid Term Exam A mid-term exam worth 15% of the overall grade will be held during one of the class periods. The exam will cover all the required readings, lectures, assignments and class discussions. The mid-term exam material will be 50% case and 50% short answer or multi-choice questions covering text and lecture content. Final Exam A final exam worth 45% of the overall grade will be held during the exam period. (If you choose to do the optional assignment, the final exam will be worth 35% of your overall grade.) The final exam will be 50% case, 25% assignment-based and 25% short answer or multi-choice questions, covering text and lecture content. Assignments Assignments will be posted on the course website. There are six mandatory assignments, each worth 5% of the overall grade, and one optional assignment worth 10% of the overall grade. If you choose to do the optional assignment, your final exam will be worth 35% of the overall grade. If you choose not to do the optional assignment, your final exam will be worth 45%. Except for the Literature Appreciation assignment, group work is permitted, but is not required. Maximum group size is four. Please note that the material covered in the assignments is examinable, so all group members should be involved. Assignment schedule Assignments will be discussed in the Tuesday lecture/tutorial preceding the assignment due date. There will be time to ask clarifying questions in the class. The goal of the workshop will be to bring you close to completing the assignment, leaving only cosmetics and final touches to be done after the class. The assignment will be due on the following Thursday and will be returned and taken up about two weeks later. Due dates will be strictly observed. Assignments must be prepared using word processors and other computer aids such as flowcharting packages, business graphics packages, spreadsheets, etc. Up to 20% of the grade assigned to hand-in work will be allotted to grammar, spelling, presentation format, writing style and creativity. The balance will be for content, correctness, completeness, logic, etc.
|
Bob Jensen's threads on shared course materials are at http://www.trinity.edu/rjensen/000aaa/thetools.htm
In November 2001, EDUCATIONAL TECHNOLOGY REVIEW (ETR), originally a print journal, is available as an online publication --- http://www.aace.org/pubs/etr/
|
Online Education News from Fathom
* Semester-Length Course * CHARACTER EDUCATION: A COMPREHENSIVE FRAMEWORK AND INTRODUCTION from the University of San Diego presents a framework and sets of standards that can aid in the teaching and learning process for values and ethics. Class starts February 12: http://www.fathom.com/link.jhtml?cid=687&page=course&id=3200
* Semester-Length Course * TECH CONNECT: INTEGRATING TECHNOLOGY INTO THE SCIENCE CURRICULUM from the University of San Diego focuses on how educational technology such as software applications and the Internet can be used to create meaningful learning experiences for students. Class starts February 19: http://www.fathom.com/link.jhtml?cid=688&page=course&id=3215
* Semester-Length Course * PRINCIPLES AND PRACTICES OF TEACHING EXCEPTIONAL LEARNERS IN THE REGULAR CLASSROOM from the University of San Diego, addresses the implications of sensory, motor, cognitive, language, and behavior problems for children with disabilities. Class starts February 14: http://www.fathom.com/link.jhtml?cid=689&page=course&id=59705320
Search for more online courses in Fathom's Course Directory: http://www.fathom.com/link.jhtml?cid=690&page=directory&id=0
Web Page Design Innovations
From the Scout Report on February 1, 2002
Advanced CSS Layouts: Step by Step http://www.webreference.com/authoring/style/sheets/layout/advanced/
Most Web sites are designed with HTML tables, which can be an arduous task. Making sites that are accessible and standards-compliant requires a separation of markup and content, and CSS is the best way to accomplish this. This Web page by Rogelio Vizcaino Lizaola and Andy King offers a step- by-step CSS layout tutorial on how to create WebReference table-like layouts (that behave well with small window sizes and large fonts), while avoiding some of the bugs and problems discovered in other implementations. Target browsers include all of the generation five and greater browsers on both Windows and Macintosh platforms.
Bob -
I didn't know until I received your update that your father had passed away. Our condolences. I read the letter and he sounded like a great fellow. The part about being a farmer and having to not only face a problem but accept it and fix it is so true.
There is a book around called Bunkhouse Logic by Ben Stein that covers that topic very well and I have recommended it several times to youngsters who are having a hard time adapting to life's challenges.
Again, sorry for your loss.
Dick & Geri
There is a list of Ben Stein's books at
http://www.geocities.com/Hollywood/Lot/1633/books.html
This list includes a book called Making of a Dad
Say it isn't so Fred!
One World Journeys: Mercury Rising --- http://www.oneworldjourneys.com/climate/
"Where's the smart money? Money of the future may almost literally talk," Economist, February 7, 2002 --- http://www.economist.com/science/displayStory.cfm?story_id=975746
AMERICAN banknotes bear the motto “In God we trust”. A humorous extension to this phrase—ascribed, unofficially, to the National Security Agency—is “All Others, we monitor”. That joke, though, may soon pale into reality, for such a phrase might well be a suitable slogan for the cash of the future.
Radio-frequency identification tags (RFIDs) are widgets that are used all over the world for granting access to secure areas. They are also used to track anything from books to pallets to cattle to Prada handbags. Their advantage is that each tag (and therefore each object) can be identified uniquely. That makes them different from, say, bar codes, which merely identify classes of object. Also unlike bar codes, RFIDS can be read remotely without having to be in the line of sight of the reader. In recent years, their manufacturers have been drooling over the possibility of tagging banknotes. The advantages envisaged are a combination of authentication, anti-counterfeiting and tracking.
In the money The guts of a typical RFID tag are a microchip and an antenna (often a coil of wire). These may be sandwiched inside an encapsulating plastic. There is no battery. When a tag is “interrogated” by a reading machine operating at the right radio frequency, the antenna picks up a small amount of electromagnetic energy that it uses to power the chip. The tag then broadcasts data in the chip back to the reader.
A new generation of RFID tags produced by companies such as Texas Instruments in America, Hitachi in Japan and Infineon Technologies in Germany, has broken through barriers of size (less than 1mm across and ½mm thick), cost, flexibility and durability, to a point where such tags can be embedded inside sheets of paper, such as banknotes.
The distance from which tagged banknotes could be read would depend on the exact specifications of the chips that were used. It would probably be somewhere between 10cm and a metre. One form of the technology can read 30 notes a second, although the tags have to be separated from each other by a distance of at least 2cm to reduce interference. Initially, therefore, bundles of notes could not be read; but notes being issued from cash machines, or passing from customers to tills, could.
The technology remains relatively expensive (20-30 cents a chip), and there is still work to be done hammering out what people want in the way of security standards, durability and the amount of information that can be stored. But Infineon says that these problems could be ironed out within 30 months, and possibly much faster than that. Critics sound a warning, however, that long delays are likely in reaching an international agreement on a cryptographic security standard.
One bank, at least, seems interested in the idea. Late last year, Electronic Engineering Times reported that the European Central Bank (ECB) was working with “technology partners” to embed the tags into euro notes by 2005—as a means of foiling counterfeiters. The ECB will only say of the project, “we don't want to talk about this.” Nevertheless, two chip manufacturers, Philips and Infineon, admit to having signed confidentiality agreements with some firms in the industry. Hitachi says it has been discussing the issue with European banknote makers.
Obviously, such tags would make counterfeiters' lives far more difficult. But according to De La Rue, a British firm that is one of the world's leading “security” printers and paper makers, the ECB is already aware of many new anti-counterfeiting technologies that would be just as robust as, and less expensive than, RFID. If this is the case, the additional benefits of RFID banknotes—such as the greater ease with which cash could be tracked—are the likeliest explanation for why the technology is now attracting serious consideration.
Continued at Continued at http://www.economist.com/science/displayStory.cfm?story_id=975746
Yale professor David Gelertner has developed software that gives bigwigs easy access to all their company documents. Will it help to prevent nefarious activities, or just assist in covering the tracks? --- http://www.wired.com/news/exec/0,1370,50250,00.html
Communicating Between Databases
From the Scout Report on February 1, 2002
The Lemur Toolkit for Language Modeling and Information Retrieval http://www-2.cs.cmu.edu/~lemur/
Sponsored by the Advanced Research and Development Activity in Information Technology (ARDA) under its Statistical Language Modeling for Information Retrieval Research Program, the Lemur Project has recently announced the availability of the Lemur Toolkit for Language Modeling and Information Retrieval, version 1.0. The Lemur Toolkit is designed to help carry out research in areas such as ad hoc and distributed retrieval, cross-language IR, summarization, filtering, and classification. The toolkit supports indexing of large-scale text databases, the construction of simple language models for documents, queries, and more. The system, which is written in C and C++ languages, is designed as a research system to run under Unix operating systems, although it can also run under Windows. As part of the Lemur Project, the Lemur Toolkit is a collaboration between the Computer Science Department at the University of Massachusetts and the School of Computer Science at Carnegie Mellon University.
From Syllabus News on January 29, 2002
e-Learning Firm Readies Section 508 Compliance
e-Learning software developer SmartForce said 5,000 hours of its e-learning content conforms with the accessibility standards under Section 508 of the Rehabilitation Act. Section 508 requires government agencies to ensure its employees and other people with disabilities have equal access to IT services. The company has worked with Octavia Corp. since last June to make its content and "learning paths" accessible using screen readers and other assistive technologies. The partnership will yield other accessibility approaches, including accessibility reviews, consulting, training, and legacy content conversion and remediation, the companies said.
the SmartForce homepage is at http://www.smartforce.com/
MORE ON GOOD COURSE WEBSITE DESIGN
In the summer of 2001, the University of Oregon Library System's Web Publishing Curriculum was redesigned to incorporate many of the newer standards, including HTML 4.01 and Cascading Style Sheets. The site, aimed at developers in colleges and universities, includes web page design tutorials, guidelines for good practice, and a collection of handouts for use in web publishing workshops.
The site is available at http://libweb.uoregon.edu/it/webpub/
Firm Adapts University Content for Corporations
E-learning company Cenquest signed deals with IBM and Microsoft to develop online university-based education programs for their employees. In each case, Cenquest is working with an established university to augment a degree program's curriculum with company-specific content. IBM staff can earn a master's degree in technology commercialization from the University of Texas at Austin; Microsoft employees are participating in accredited technology management courses from Oregon Health & Science University. Cenquest said the programs will allow corporations to gain unprecedented control over their investment dollars currently spent in tuition-reimbursed education programs.
For more information, visit: http://www.ic2.org/msdegree
San Diego State Picks Voice Recognition System
San Diego State University and California National University of San Diego have installed the IntelliSpeech speech recognition application from System Development Company, Inc., a supplier of PC-based attendant consoles and directory systems. The software provides a telephone directory database accessible via the spoken word. Callers can say the name of the person they wish to speak with, have access to multiple end-points for connectivity -- including pagers and cell phones -- and use a "barge in" feature allowing users to connect to the person they wish to speak with rather than listening to lengthy welcome messages.
For more information, visit: http://www.sdsu.edu
Gratz College Announces Online Courses
Gratz College, the oldest independent college of Jewish studies in the western hemisphere, has announced registration for five online course for the spring 2002 academic term. Interested students can take the courses for credit toward a Gratz College credential, undergraduate or graduate transfer credit, or for general study. Each course will be taught by a Gratz College professor and will meet in real-time, weekly, in the evening. Students must be available at class times and have access to a computer with speakers.
For more information, visit: http://www.gratzcollege.edu
From CIT Infobits Newletter on January 31, 2002
WHAT MAKES A GOOD COURSE WEBSITE?
The Chronicle of Higher Education recently interviewed Charles Kerns, one of the Open Knowledge Initiative (OKI) management team members, to get his views on designing instructional websites. In "Logging In With . . . Charles Kerns: Designer of Free Course-Management Software Asks, What Makes a Good Web Site?" (by Jeffrey R. Young, THE CHRONICLE OF HIGHER EDUCATION, January 21, 2002), Kerns shares what he has learned as part of a project to develop standards for course-management systems. The article is available online at http://chronicle.com/free/2002/01/2002012101u.htm )
OKI is a collaborative effort of MIT, Stanford, and six other higher education institutions that "addresses a critical need in higher education: meaningful, coherent, modular, easy-to-use internet-based environments, for assembling, delivering and accessing educational resources . . . [and] seeks to drive collaboration and spark an open-source developer community to build a sustainable support model." OKI's mission is not to compete with the learning management systems market, but to offer architectural and functional specifications and a proof-of-concept implementation at OKI institutions. For more information about OKI, link to http://web.mit.edu/oki/
The Chronicle of Higher Education [ISSN 0009-5982] is published weekly by The Chronicle of Higher Education, Inc., 1255 Twenty-third Street, NW, Washington, DC 20037 USA; tel: 202-466-1000; fax: 202-452-1033; Web: http://chronicle.com/ To subscribe contact Circulation Department, The Chronicle of Higher Education, 1255 23rd Street, NW, Washington, DC 20037 USA; tel: 800-728-2803 or 740-382-3322 (outside U.S.); email: circulation@chronicle.com; Web: http://chronicle.com/about-help.dir/subscrib.htm
HUMANITIES SCHOLARS AND INFORMATION TECHNOLOGIES
The Scholarly Work in the Humanities Project set out to discover how humanities scholars conduct their research and to learn how academic libraries can better serve this community. The project report, SCHOLARLY WORK IN THE HUMANITIES AND THE EVOLVING INFORMATION ENVIRONMENT, by William S. Brockman, Laura Neumann, Carole L. Palmer, and Tonyia J. Tidline, is now available online in either HTML or PDF formats at http://www.clir.org/pubs/abstract/pub104abst.html The report is published by the Digital Library Federation and the Council on Library and Information Resources (December 2001; ISBN 1-887334-90-4).
Some of the study's findings show:
"There is a sense among humanities scholars, except for those who work almost exclusively with obscure primary sources, that use of technology makes the research process easier, faster, and more up-to-date."
"Remote access to library catalogs and finding aids integrates travel efficiently into scholars' programs of research. Scholars are able to find out what is available-and not available-much more easily than in the past."
"Views on the quality and utility of Web resources vary greatly. The Web is used more for teaching than for research."
"Concerns about the archival stability of digital resources have made scholars wary of electronic publication and of the maintenance of personal files in electronic form. The potential instability of electronic texts threatens humanists' fundamental assumptions about the reliability of their resources."
The Council on Library and Information Resources (CLIR) "embraces the entire range of information resources and services, from traditional library and archival materials to emerging digital formats, and the entire network of organizations that gather, catalog, store, preserve, distribute, and provide access to information." CLIR collaborates with many associations, networks, and scholarly societies and serves as the administrative home to the Digital Library Federation. For more information, contact CLIR, 1755 Massachusetts Avenue, NW, Suite 500, Washington, DC 20036 USA; tel: 202-939-4750; fax: 202-939-4765; email: info@clir.org; Web: http://www.clir.org/
OVERSOLD AND UNDERUSED: COMPUTERS IN THE CLASSROOM By Larry Cuban Cambridge, MA: Harvard University Press, 2001; ISBN: 0-674-00602-X
Larry Cuban, Stanford University Professor of Education (Emeritus), "argues that when teachers are not given a say in how the technology might reshape schools, computers are merely souped-up typewriters and classrooms continue to run much as they did a generation ago. In his studies of early childhood, high school, and university classrooms in Silicon Valley, Larry Cuban found that students and teachers use the new technologies far less in the classroom than they do at home, and that teachers who use computers for instruction do so infrequently and unimaginatively."
The book is available for online browsing at http://www.hup.harvard.edu/catalog/CUBOVE.html
MULTIMEDIA RESOURCES
The University of North Carolina at Chapel Hill Center for Instructional Technology (CIT) announces new, expanded, and updated documentation for those who are interested in exploring digital multimedia. The documents were written in collaboration with multimedia support professionals from a range of departments at UNC-Chapel Hill.
Recommended Resources -- bibliography of print- and web-based resources for multimedia. http://www.unc.edu/cit/guides/irg-12.html
Software Applications -- a survey of commonly used multimedia software applications (such as Macromedia Flash and Adobe Premiere) together with examples of how they might be used in an instructional setting. http://www.unc.edu/cit/guides/irg-15.html
Glossary of Terms http://www.unc.edu/cit/guides/irg-14.html
The software survey is designed especially to help newer users distinguish among some of the common multimedia software applications currently available; the glossary and bibliography are geared for users with all levels of expertise.
SVG is an open-standard vector graphics format that lets you add high-quality graphics and animation to Web pages using plain text commands. It's the powerful combination of dynamic two-dimensional vector graphics and Extensible Markup Language (XML). Simply put, SVG creates small file sizes for faster Web page downloads, offers unlimited color and font choices, and that's just the beginning. Find out more about SVG at http://www.w3.org/Graphics/SVG/Overview.htm8
WEBSITE FOR WEB ACCESSIBILITY RESOURCES
The CIT's new website on web accessibility may be of interest to Infobits readers. The site includes accessibility guidelines, tools for making your web pages accessible, and links to readings and tutorials. The site is at http://www.unc.edu/webaccess/
Bob Jensen's threads on Section 508 of the Rehabilitation Act are at http://www.trinity.edu/rjensen/290wp/290wp.htm#Section508
The Crystal Palace (Victorian, Architecture, History, Art, Photography) http://www.iath.virginia.edu/london/model/
National Gallery of Art: Aelbert Cuyp http://www.nga.gov/exhibitions/2001/cuyp/index.htm
Andrew Priest called my attention to
the fact that Tyco spent $US8 billion in its past three fiscal years on
more than 700 acquisitions that were never announced to the public. The story is
at http://au.news.yahoo.com/020205/2/3vlo.html
The auditing firm was PricewaterhouseCoopers.
Balancing the Books -- by the Book For
primers on small-business accounting, entrepreneurs can look to the Web and the
business sections of their local libraries
http://www.businessweek.com/smallbiz/content/feb2002/sb2002021_8853.htm?c=bwfrontierfeb05&n=link2&t=email
Bob Jensen's small business helpers are at the following two Websites:
Top 10 Organizations Receiving Most Patents http://www.uspto.gov/web/offices/com/speeches/02-01.htm
Living With Wildlife Program --- http://www.livingwithwildlife.org
From Information Week Between the Lines on February 5, 2002
Business Technology: ROI Mania Is Upon Us
Business as usual? What does that mean anymore? In this rigid, scrutinize-every-expense-till-it-screams climate, it would hardly be surprising to hear that a software entrepreneur is beta testing an application that measures the ROI of ROI analyses while playing Elvis Costello's "Watching The Detectives" in the background.
Companies must need such a tool, because ROI mania has seized the business world in a headlock, and a smackdown and quick pin are, by all accounts, imminent.
"This ROI analysis for the proposed CRM project should be interesting--I'm really excited about heading up the project."
"Wait a minute--did you get it approved?"
"No, the CRM project hasn't been approved. That's the point--our ROI analysis is going to help us make the decision on whether it should be."
"You're not listening: Forget about the CRM project; have you gotten approval for starting your ROI analysis?"
"You're scaring me. What the hell are you talking about?"
"OK, lemme slow down a little. You're on the company E-mail system, right?"
"Very funny."
"Then you must have received the memo late last week from the CFO about ROI projects, right?"
"It's in my in-box, but it's pretty massive, so I didn't read it. So what?"
"Well, Einstein, her royal CFOness says that in the interest of increasing shareholder equity and focusing our resources on only those projects that improve our bottom line, no new ROI analyses can be started without first getting her approval on whether the time and resources spent on doing that analysis will provide an appropriate return."
[Blank stare.]
"I'm not kidding. See, what she said was, ever since the cafeteria found as a result of its mandatory ROI analysis of how it prepares food that boiled all-goat hot dogs are more profitable to the company than grilled all-beef hot dogs, and as a further result switched to the all-goat boiled variety, our emergency-room medical claims have skyrocketed and sick leave has doubled."
"And I'm not so happy about the 'special composite protein deli sandwich' five days a week, either, even if it's only $4.95."
"Yeah, whatever. The point, pinhead, is unintended consequences."
[Silence.]
"Un-in-tend-ed con-se-quen-ces."
"You mean like when that NFL kicker made a field goal and jumped up and down to celebrate but tore a ligament in his knee while he was doing it?"
"Yeah, well, something like that. See, let me speak your language: It's like that arcade game, Whack A Mole: When you hammer one problem down, it triggers another one to pop up, and by solving one you might really not have made any progress because you've just unleashed another."
"So we're not allowed to play Whack A Mole at lunchtime anymore?"
[Sigh.] "Earth to knucklehead: This is why the CFO says we can't do any ROI analyses unless we've completed and received her sign- off on the ROI of that ROI analysis."
"But what about the CRM project?"
"Listen, you gotta stop thinking small or you're not going to get anywhere around here. Focus, my dippy friend, focus: The CRM project is the tail, and the ROI analysis of the CRM project is the dog, but the ROI measure of the ROI analysis of the CRM project is the owner of the dog, and she holds the leash."
"Well, why didn't you say so in the first place? So instead of just doing the approved $7 million, 12-month ROI analysis of the $5 million, eight-month CRM project, I should first get approval for, say, just a cool $1 million to do an eight-week ROI justification of the CRM-ROI analysis? Now, that makes sense--it only pushes the CRM project out 14 months, which the vendor says is average for our industry."
"Rockefeller, I do believe you've got it."
Bob Evans is editor- in-chief of InformationWeek. E-mail him at mailto:bevans@cmp.com Join in on the discussion at: http://update.informationweek.com/cgi-bin4/flo?y=eFuZ0BcUEY0V10NvU0Am
Bob Jensen's threads on ROI are at http://www.trinity.edu/rjensen/roi.htm
History of the United States Capitol --- http://www.access.gpo.gov/congress/senate/capitol/index.htm
Dear Statistical Analyst:
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Legacy Tobacco Documents Library http://legacy.library.ucsf.edu./
A Message from K Badrinath on January 25, 2002
Dear Mr. Jensen:
To cut a potentially long introduction short, I am associated with the leading vendor of treasury software in India, Synergy Log-In Systems Ltd. Shall be glad to share more on that with you should you be interested.
The reason for writing this is, while negotiating the minefield called FAS 133, courtesy your wonderful Glossary on the net, I came across apparantly contradictory statements under two different heads about whether held-to-maturity securities can be hedged items:
HELD-TO-MATURITY
Unlike originated loans and receivables, a held-to-maturity investment cannot be a hedged item with respect to interest-rate risk because designation of an investment as held-to-maturity involves not accounting for associated changes in interest rates. However, a held-to-maturity investment can be a hedged item with respect to risks from changes in foreign currency exchange rates and credit riskAVAILABLE-FOR-SALE
Held-to-maturity securities can also be FAS 133-allowed hedge items.Help!!
K. Badrinath
Hello K. Badrinath,
I think your confusion comes from the fact that FAS 138 amended Paragraph 21(d) as noted below.
Original Paragraph 21(d) .
If the hedged item is all or a portion of a debt security (or a portfolio of similar debt securities) that is classified as held-to-maturity in accordance with FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, the designated risk being hedged is the risk of changes in its fair value attributable to changes in the obligor's creditworthiness or if the hedged item is an option component of a held-to- maturity security that permits its prepayment, the designated risk being hedged is the risk of changes in the entire fair value of that option component. (The designated hedged risk for a held-to-maturity security may not be the risk of changes in its fair value attributable to changes in market interest rates or foreign exchange rates. If the hedged item is other than an option component that permits its prepayment, the designated hedged risk also may not be the risk of changes in its overall fair value.)FAS 138 Amendment of Paragraph 21(d)"
[Hedged Item] If the hedged item is all or a portion of a debt security (or a portfolio of similar debt securities) that is classified as held-to-maturity in accordance with FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, the designated risk being hedged is the risk of changes in its fair value attributable to credit risk, foreign exchange risk, or both.
Related paragraph changes are noted in Appendix B of FAS 138.
Hedge accounting for held-to-maturity securities under FAS 133 is especially troublesome for me. You can get hedge accounting treatment for for creditworthiness risk and certain prepayment option fair value changes, but you cannot get hedge accounting for interest rate risk. The FASB reasoning is spelled out in Paragraphs 426-431.
Keep in mind, however, that the derivative used to hedge a held-to-maturity security must be adjusted to fair value at least every 90 days with changes it its value going to current earnings.
Hedges of securities classified as available-for-sale do not take the same beating under FAS 133. Without a hedge, FAS 115 rules require changes in value of AFS investments to be booked, but the offset is to OCI rather than current earnings. Paragraph 23 of FAS 133 reads as follows:
Paragraph 23
If a hedged item is otherwise measured at fair value with changes in fair value reported in other comprehensive income (such as an available-for-sale security), the adjustment of the hedged item's carrying amount discussed in paragraph 22 shall be recognized in earnings rather than in other comprehensive income in order to offset the gain or loss on the hedging instrument
Foreign currency risk is somewhat different under Paragraph 38 for AFS securities.
Some key paragraphs from FAS 133 are as follows:
Paragraph 4(c)
Paragraphs 4c, 38, and 479 of FAS 133 state that a forecasted purchase of an available-for-sale can be a hedged item, because available-for-sale securities are revalued under SFAS 115 have holding gains and losses accounted for in comprehensive income rather than current earnings.Paragraph 54
At the date of initial application, an entity may transfer any held-to-maturity security into the available-for-sale category or the trading category. An entity will then be able in the future to designate a security transferred into the available-for-sale category as the hedged item, or its variable interest payments as the cash flow hedged transactions, in a hedge of the exposure to changes in market interest rates, changes in foreign currency exchange rates, or changes in its overall fair value. (paragraph 21(d) precludes a held-to- maturity security from being designated as the hedged item in a fair value hedge of market interest rate risk or the risk of changes in its overall fair value. paragraph 29(e) similarly precludes the variable cash flows of a held-to-maturity security from being designated as the hedged transaction in a cash flow hedge of market interest rate risk.) The unrealized holding gain or loss on a held-to-maturity security transferred to another category at the date of initial application shall be reported in net income or accumulated other comprehensive income consistent with the requirements of paragraphs 15(b) and 15(c) of Statement 115 and reported with the other transition adjustments discussed in paragraph 52 of this Statement. Such transfers from the held-to-maturity category at the date of initial adoption shall not call into question an entity's intent to hold other debt securities to maturity in the future.Paragraphs 426-431
Prohibition against Hedge Accounting for Hedges of Interest Rate Risk of Debt Securities Classified as Held-to-Maturity
426. This Statement prohibits hedge accounting for a fair value or cash flow hedge of the interest rate risk associated with a debt security classified as held-to-maturity pursuant to Statement 115. During the deliberations that preceded issuance of Statement 115, the Board considered whether such a debt security could be designated as being hedged for hedge accounting purposes. Although the Board's view at that time was that hedging debt securities classified as held-to-maturity is inconsistent with the basis for that classification, Statement 115 did not restrict hedge accounting of those securities because constituents argued that the appropriateness of such restrictions should be considered in the Board's project on hedging.
427. The Exposure Draft proposed prohibiting a held-to-maturity debt security from being designated as a hedged item, regardless of the risk being hedged. The Exposure Draft explained the Board's belief that designating a derivative as a hedge of the changes in fair value, or variations in cash flow, of a debt security that is classified as held-to-maturity contradicts the notion of that classification. Respondents to the Exposure Draft objected to the proposed exclusion, asserting the following: (a) hedging a held-to-maturity security does not conflict with an asserted intent to hold that security to maturity, (b) a held-to-maturity security contributes to interest rate risk if it is funded with shorter term liabilities, and (c) prohibiting hedge accounting for a hedge of a held-to-maturity security is inconsistent with permitting hedge accounting for other fixed-rate assets and liabilities that are being held to maturity.
428. The Board continues to believe that providing hedge accounting for a held-to- maturity security conflicts with the notion underlying the held-to-maturity classification in Statement 115 if the risk being hedged is the risk of changes in the fair value of the entire hedged item or is otherwise related to interest rate risk. The Board believes an entity's decision to classify a security as held-to-maturity implies that future decisions about continuing to hold that security will not be affected by changes in market interest rates. The decision to classify a security as held-to-maturity is consistent with the view that a change in fair value or cash flow stemming from a change in market interest rates is not relevant for that security. In addition, fair value hedge accounting effectively alters the traditional income recognition pattern for that debt security by accelerating gains and losses on the security during the term of the hedge into earnings, with subsequent amortization of the related premium or discount over the period until maturity. That accounting changes the measurement attribute of the security away from amortized historical cost. The Board also notes that the rollover of a shorter term liability that funds a held-to-maturity security may be eligible for hedge accounting. The Board therefore decided to prohibit both a fixed-rate held-to- maturity debt security from being designated as a hedged item in a fair value hedge and the variable interest receipts on a variable-rate held-to-maturity security from being designated as hedged forecasted transactions in a cash flow hedge if the risk being hedged includes changes in market interest rates.
429. The Board does not consider it inconsistent to prohibit hedge accounting for a hedge of market interest rate risk in a held-to-maturity debt security while permitting it for hedges of other items that an entity may be holding to maturity. Only held-to-maturity debt securities receive special accounting (that is, being measured at amortized cost when they otherwise would be required to be measured at fair value) as a result of an asserted intent to hold them to maturity.
430. The Board modified the Exposure Draft to permit hedge accounting for hedges of credit risk on held-to-maturity debt securities. It decided that hedging the credit risk of a held-to-maturity debt security is not inconsistent with Statement 115 because that Statement allows a sale or transfer of a held-to-maturity debt security in response to a significant deterioration in credit quality.
431. Some respondents to the Task Force Draft said that a hedge of the prepayment risk in a held-to-maturity debt security should be permitted because it does not contradict the entity's stated intention to hold the instrument to maturity. The Board agreed that in designating a security as held-to-maturity, an entity declares its intention not to voluntarily sell the security as a result of changes in market interest rates, and "selling" a security in response to the exercise of a call option is not a voluntary sale. Accordingly, the Board decided to permit designating the embedded written prepayment option in a held-to-maturity security as the hedged item. Although prepayment risk is a subcomponent of market interest rate risk, the Board notes that prepayments, especially of mortgages, occur for reasons other than changes in interest rates. The Board therefore does not consider it inconsistent to permit hedging of prepayment risk but not interest rate risk in a held-to-maturity security.
Paragraph 533(2)(e)
For securities classified as available-for-sale, all reporting enterprises shall disclose the aggregate fair value, the total gains for securities with net gains in accumulated other comprehensive income, and the total losses for securities with net losses in accumulated other comprehensive income, by major security type as of each date for which a statement of financial position is presented. For securities classified as held-to-maturity, all reporting enterprises shall disclose the aggregate fair value, gross unrecognized holding gains, gross unrecognized holding losses, the net carrying amount, and the gross gains and losses in accumulated other comprehensive income for any derivatives that hedged the forecasted acquisition of the held-to-maturity securities, by major security type as of each date for which a statement of financial position is presented.
Bob Jensen's documents to FAS 133 are linked at http://www.trinity.edu/rjensen/caseans/000index.htm
Giving Hackers Their Due http://www.internetnews.com/dev-news/article/0,,10_965531,00.html
Official Site of the 2002 Olympic Games http://www.saltlake2002.com/x/f/frame.htm?u=/news/slocmain_front.asp
US Census Bureau: 2001 Statistical
Abstract of the United States
http://www.census.gov/prod/2002pubs/01statab/stat-ab01.html
Faculty Compensation
From Academe, March/April 2001 --- http://www.aaup.org/publications/Academe/01ma/ma01toc.htm
Highlights of the report:
Average faculty salaries increased 3.5 percent from 1999–2000 to 2000–2001, an increase of 0.1 percent adjusted for inflation.
• For the fourth consecutive year, faculty salary levels increased after adjusting for inflation, but the increase fell to 0.1 percent.
• Salaries of continuing faculty rose by 5.3 percent, a real increase of 1.9 percent, the lowest increase in four years.
• Increases tapered off despite strong economic performance in the preceding years. In light of recent signs of an economic slowdown, that may signal the end of a four-year pattern of salary gains. Moreover, the fact that the all-rank increase is less than the increases for each rank means that as faculty have retired, their positions have not been filled through promotions but by lower-salaried, lower-ranked faculty.
• The average faculty member earns 26 percent ($15,299) less than the average highly educated professional.
• The gap between salaries at private and public universities continues to widen and may increase further if the public-sector downturn is not reversed quickly. Salaries at doctoral institutions and "elite" universities continue to increase relative to other institutions. Salary disparities are also rising within institutional types. Consequently, faculty salaries and salary increases are increasingly disparate overall.
• That is especially true at the top of the distribution, where a group of "elite" universities have salaries with which few other institutions can compete. The comparative standing of institutions is quite stable, and the continuing advantage of major research universities is least susceptible to change.
• Salary disparities among disciplines are also accelerating and reflect the importance of external markets relative to internal institutional constraints and purely academic markets.
• The disparity between male and female salaries persists and, in some respects, continues to widen. Men earn 6.5 percent more than women in public institutions, 5.9 percent more in independent institutions, and 10 percent more in research institutions.
• As the disparity between the salaries of the best-paid and the least well paid faculty increases, so must concern about the ability of less well funded institutions to compete for well-qualified faculty, especially in high-demand fields where there are the most student employment opportunities and social need.
Unless otherwise indicated, the data in this report were provided by institutions responding to the AAUP Faculty Compensation Survey and were compiled and edited by AAUP staff. Any questions concerning the data should be addressed to Ernst Benjamin, director of the survey. For additional copies of the report, contact the AAUP, 1012 Fourteenth St., NW, Suite 500, Washington, DC 20005-3465.
(202) 737-5900.
Survey Table of ContentsReport of the Chair of the Committee on the Economic Status of the Profession
TABLE 1 Percentage Increases in Average Monetary and Real Salaries for Institutions Reporting Comparable Data for Adjacent One-Year Periods, and Percentage Change in the Consumer Price Index, 1971–72 through 2000–2001
TABLE 2 Salary Disadvantage of Average All-Rank Faculty (Salary $60,070) Compared with Other Professionals
TABLE 3 Growing Salary Differences Among Professor-Rank Faculty by Institutional Type, Selected Years 1984–85 to 2000–2001
TABLE 4 Difference in Average Faculty Salary at the Fifth, Fiftieth, and Ninety-Fifth Percentiles in the Institutional Pay Distribution, Within Category and Rank, 1990–91 and 2000–2001
TABLE 5 Percentage of Institutions with Average Increase in Salary Levels, 1994–95, 1996–97, 2000–2001
TABLE 6 Comparison of Average Salary by Discipline Quartiles, 1979–80, 1989–90, 1990–2000
TABLE 7 Institutions That Pay the Highest Salaries to Men and Women, 2000–2001
TABLE 8 Institutions Included in AAUP Survey in 2000–2001 As a Percentage of Institutions Included in 1999–2000
Survey Report Tables
TABLE 1 Percentage Change in Salary Levels and Percentage Increases in Salary for Continuing Faculty, by Category, Affiliation, and Academic Rank, 1999–2000 to 2000–2001
TABLE 2 Percentage of Institutions and Percentage of Faculty by Average Increase in Salary Levels, by Affiliation and Category1999–2000 to 2000–2001
TABLE 3 Percentage of Institutions and Percentage of Faculty by Average Increase in Salary for Continuing Faculty, by Affiliation and Category, 1999–2000 to 2000–2001
TABLE 4 Average Salary and Average Compensation Levels, by Category, Affiliation, and Academic Rank 2000–2001 (Dollars)
TABLE 5 Average Salary for Men and Women Faculty, by Category, Affiliation, and Academic Rank, 2000–2001 (Dollars)
TABLE 6 Average Salary, by Region, Category, and Academic Rank, 2000–2001 (Dollars)
TABLE 7 Average Compensation by Region, Category, and Academic Rank, 2000–2001 (Dollars)
TABLE 8 Percentage of Individual Faculty Members, by Salary Class Interval, Category, and for Upper Three Academic Ranks, 2000–2001
TABLE 9 Percentile Distribution of Institutions, by Average Salary, Average Compensation, and Academic Rank, 2000–2001 (Dollars)
TABLE 10 Average Institutional Cost of Fringe Benefits per Faculty Member and Average Cost for Faculty Members Receiving Specific Benefits, in Dollars and As a Percentage of Average Salary, by Affiliation, Category,and Itemized Benefits, 2000–2001 (All Ranks)
TABLE 11 Percentage of Faculty on Tenure-Track Appointments and Percentage of Faculty with Tenure Status, by Affiliation, Academic Rank, and Gender, 2000–2001
TABLE 12 Percentage Distribution of Faculty, by Rank, Gender, Category, and Affiliation, 2000–2001
TABLE 13 Number and Percentage of Faculty, Average Salary, Average Compensation, Average Fringe Benefits, and Percentage of Tenured Faculty, by Category and Academic Rank, 2000–2001
TABLE 14A Number of Campuses Surveyed and Number of Campuses Included in Tabulations, by Category and Affiliation, 2000–2001
TABLE 14B Number of Institutions Surveyed and Number of Institutions Included in Tabulations, by Category and Affiliation, 2000-2001
TABLE 15 Number of Full-Time Faculty and Average Salary Levels in Preclinical Departments of Medical Schools, by Department, Affiliation, and Academic Rank, 1999–20000
Faculty Salary And Faculty Distribution Fact Sheet, 2000-2001 (April 2001)
The Annual Report on the Economic Status of the Profession - 1999-2000
A new and updated report should be in the forthcoming April 1002 issue of Academe.
Data Reports from Higher Education Data Sharing (HEDS) Consortium --- http://www.heds.fandm.edu/
Enron Scandal Updates on February 14, 2002
The February 14 Enron scandal updates were moved to http://www.trinity.edu/rjensen/fraud021402.htm
Oh Oh Again: PricewaterhouseCoopers lax audits of Gazprom
Welcome to the first issue of BusinessWeek Online's European Insider. This weekly newsletter contains highlights of news, analysis, commentary, and regular columns that cover Europe specifically, as well as other stories with wide international impact.
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EUROPEAN BUSINESS
Gazprom: Russia's Enron?
Angry investors are accusing PricewaterhouseCoopers of lax audits of Gazprom. Did the accounting firm ignore the energy giant's insider dealing and shady asset transfers?
http://www.businessweek.com/magazine/content/02_07/b3770079.htm?c=bweuropefeb13&n=link1&t=email
NEWS ANALYSIS
Can UBS Tame Enron's Wild Traders?
That's the key question facing the Swiss bank as it prepares to take over the Texas company's energy-trading business
I added this to Bob Jensen's threads on accounting and securities fraud at http://www.trinity.edu/rjensen/fraud.htm
Message in Reply to John Donahue at Trinity University
Hi John,
There are some activists with a much longer and stronger record of lamenting the decline in professionalism in auditing and accounting. For some reason, they are not being quoted in the media at the moment, and that is a darn shame!
The most notable activist is Abraham Briloff (emeritus from SUNY-Baruch) who for years wrote a column for Barrons that constantly analyzed breaches of ethics and audit professionalism among CPA firms. His most famous book is called Unaccountable Accounting.
You might enjoy "The AICPA's Prosecution of Dr. Abraham Briloff: Some
Observations," by Dwight M. Owsen --- http://accounting.rutgers.edu/raw/aaa/pi/newsletr/spring99/item07.htm
I think Briloff was trying to save the profession from what it is now going
through in the wake of the Enron scandal.
I suspect that the fear of activists (other than Briloff) is that complaining too loudly will lead to a government takeover of auditing. This in, my viewpoint, would be a disaster, because it does not take industry long to buy the regulators and turn the regulating agency into an industry cheerleader. The best way to keep the accounting firms honest is to forget the SEC and the AICPA and the rest of the establishment and directly make their mistakes, deceptions, frauds, breakdowns in quality controls expensive to the entire firms, and that is easier to do if the firms are in the private sector! We are seeing that now in the case of Andersen --- in the end its the tort lawyers who clean up the town.
The problem with most activists against the private sector is that they've not got much to rely upon except appeals for government intervention. That's like asking pimps, whores, and Wendy Gramm to clean up town. You can read more about how Wendy Gramm sold her integrity to Enron in the following two links:
Bob Jensen
The February 14 Enron scandal updates were moved to http://www.trinity.edu/rjensen/fraud021402.htm
A Bit of Humor and Misc. Modules of the Week
Cartoon Forwarded by Dick Haar
A message to Bob Jensen from Chris Faye
The only thing I can't understand is your failure to report to your office until 5:00 AM this morning.
It is quite clear to me from the overwhelming volume of interesting and learned material that you pack into your web site that your normal arrival is several hours before 5:00 AM. On the other hand, it is also clear to me the sheer volume of the work that you do is such that the time you leave your office must be some time after 5:00 AM the day following. It would mathematically follow then that you clearly must be arriving at your office sometime before you have left it from the previous day. And this would be true 365 days a year. Since your updated book marks clearly indicate that as far as you are concerned it is February 5th, it is also clear that this means that you have already gained 3 days so far this year. Since you have done this in only 32 actual days according to the calendars that the rest of us ordinary mortals use, it means that you will roughly gain about 34.22 days every 365 days. On a daily basis, the same ratio works out to about 2.25 hours. In short: you are gaining about 2.25 hours per day.
So if you persist in not getting to work until 5 in the morning, it means that you can't leave from the day before until around 7:15 AM that same day.
What puzzles me about this, is that the math seems to dictate that you could leave at 7:15 AM, but you would still have to remain there working in order to gain the necessary additional time. While you could do this by doing your work on sufficiently fast jets traveling backward through time zones, I recognize that as accountant you undoubtedly know how to do it without going through all that trouble. I suppose you are doing it through some sort of off-balance sheet entry--I just hope you are making adequate disclosure.
Best regards,
Chris
September 11 Pictures on Special Note
THESE ARE REALLY SOMETHING TO SEE. These are different than any I have seen before.... These are truly some awesome pictures. Follow the directions below. WHEN YOU GET TO THE #20 PICTURE, HIT MORE, THIS GIVES YOU 8 MORE SCENES, THEN HIT END FOR A BIT OF TEXT.
>Pictures were taken by a non professional which I think is truly amazing. There are 20 pictures in all so keep hitting next. When you get to the last one go back to the 1st one to see how the view had changed. This guy must have a fantastic camera! --- http://camazotz.com/wtc/1.html
Bev Koebrich [auntiebev@mediaone.net]
Although tax law is not regarded as exciting by most, every so often the creative interpretation of the rules by taxpayers can make even a mundane tax case most interesting. 2001 was no exception, as taxpayers who were called to court tried to justify how they creatively applied the complex rules of federal tax law. http://www.accountingweb.com/item/70471
Forwarded by Kevin Kobelsky [kobelsky@MARSHALL.USC.EDU]
The Accountant
The Academy Awards site says "Two brothers whose farm is on the brink of
bankruptcy consult an accountant who has some highly unconventional money-making
suggestions" How Enronesque. The character here seems like he's got a
quite a personality...--- http://www.ginnymule.com/accountant/gallery.html
The O'Dell brothers are desperate. The Accountant is here to help. Not just to save the family farm, but to stop a national conspiracy, and prove that Billy Bob Thornton ain't a real person.
How far will these boys go to save a way of life? Fires, amputations... cold-blooded murder?
Elliot Kamlet found us Morgan Miller's Review --- http://www.filmthreat.com/Reviews.asp?File=ReviewsOne.inc&Id=1667
"The Accountant" takes place on a large Southern farm. Although it's filled with grand fields and wide open space, this farm feels small and claustrophobic. In fact, it feels like the stage. As I was watching this film, I felt as if I were at the theater, maybe off-Broadway somewhere. In particular, I was reminded of Edward Albee. Writer/Director Ray McKinnon plays the Accountant. With his big sideburns, his quaffed pompadour, and his thin face, the Accountant is quite an eccentric. He drives up to the farm in a 1935 Chevy Truck; he emerges clad in a dusty old brown suit, as if he were a creature from another era altogether.
David O'Dell (Eddie King), a farmer, is in a lot of trouble financially. He's steeped in so much debt that he cannot afford to maintain his family's fifth generation farm. Tommy (Walton Coggins), his less idealistic, more modernized brother, is responsible for bringing in the Accountant. Once he adds up the facts and figures, the Accountant tries to find a way to save the O'Dell Farming Dynasty. The schemes and solutions he concocts are of a frightening nature, involving possibly the murder of Mrs. O'Dell in order to benefit from her life insurance policy.
Nothing ever really happens in "The Accountant." This film is all talk. Ray McKinnon's darkly-comic analysis of an incarcerated Southern culture is not unlike Edward Albee's observations about the captivity of New York City's unsuspecting inhabitants in his one act play, "Zoo Story." The Accountant himself shares certain similarities with Albee's aggressive vagrant Jerry. Just as Jerry was trying to force the unsuspecting Peter see his cage, the Accountant tries to do the same for David O'Dell.
The Accountant, in his ramblings, believes the United States to be involved in a conspiracy against the South. Southern culture is disappearing. He forces David to form doubts about his idol, Billy Bob Thornton. Is he even a real person? Or has Thornton just been a creation of the corporate establishment?
Ray McKinnon, himself a native of Georgia, may be sincere with the messages contained within his story, but his methods of translating them to the screen are questionable. What we have here is essentially a stage play occupied by three characters who drone on and on with one speech after another for thirty-eight straight minutes. It feels flat. As a result, "The Accountant" fails to live up to its potential. While it's crisply and sharply shot on 35mm, and in widescreen, the film itself lacks visual interest. The compositions are rather bland and two-dimensional. It would have been a much more absorbing experience had McKinnon chosen to go a step further and taken advantage of the tools of cinema, in order to create a more involving world for his quirky characters to occupy.
Forwarded by Auntie Bev
Did you ever notice: When you put the 2 words "The" and "IRS" together it spells "THEIRS
In an Enron tort litigation trial, the defense attorney was cross-examining a pathologist.
Attorney: Before you signed the death certificate, had you taken the auditor's pulse?
Coroner: No.
Attorney: Did you listen to the heart?
Coroner: No.
Attorney: Did you check for breathing?
Coroner: No.
Attorney: So, when you signed the death certificate, you weren't sure the man was dead, were you?
Coroner: Well, let me put it this way. The man's brain was sitting in a jar on my desk. But I guess he still managed to audit Enron.
Forwarded by Mark Eckman
I don't know if you read or like Dave Barry's work, but this one is just too good to pass up.
Explaining the Enron collapse through simple financial terms
By DAVE BARRY
Knight Ridder TribuneIf you're an average layperson, your grasp of high finance consists of knowing your ATM code. So you're probably bewildered by this scandal surrounding the collapse of Enron, which had been the seventh-largest corporation in America.
Today we're going to explain the Enron story, using simple financial terms that you can understand, such as "dirtballs."
Q. How, exactly, did Enron make money?
A. Nobody knows. This is usually the case with corporations whose names sound like fictional planets from Star Wars. Allegedly, Enron was in the energy business, but when outside investigators finally looked into it, they discovered that the only actual energy source in the entire Enron empire was a partially used can of Sterno in the basement of corporate headquarters. Using a financial technique called "leveraging," Enron executives were able to turn this asset into a gigantic enterprise whose stock was valued at billions of dollars.
Q. What does "leveraging" mean?
A. Lying.
Q. Why didn't Wall Street realize that Enron was a fraud?
A. Because Wall Street relies on "stock analysts." These are people who do research on companies and then, no matter what they find, even if the company has burned to the ground, enthusiastically recommend that investors buy the stock. They are just a bunch of cockeyed optimists. When the Titanic was in its death throes, with the propellers sticking straight up into the air, there was a stock analyst clinging to a railing, asking people around him where he could buy a ticket for the return trip.
Q. So the analysts gave Enron a favorable rating?
A. Oh, yes. Enron stock was rated as "Can't Miss" until it became clear that the company was in desperate trouble, at which point analysts lowered the rating to "Sure Thing." Only when Enron went completely under did a few bold analysts demote its stock to the lowest possible Wall Street analyst rating, "Hot Buy."
Q. What other stocks are these analysts currently recommending?
A. Mutual of Taliban.
Q. Doesn't Enron have a board of directors whose members are responsible for overseeing the corporation?
A. Yes. They are paid $300,000 a year.
Q. So how could they have allowed this flagrant deception to go on?
A. They are paid $300,000 a year.
Q. But didn't Enron have outside auditors? Why didn't they discover and report these problems?
A. Yes, Enron had one of the most venerable auditing firms in the nation.
Q. What do you mean by "venerable?"
A. We mean "stupid." As a result, Enron executives were able to deceive the auditors via slick and sophisticated accounting tricks.
Auditor: OK, so you're saying you made $600 million in profit.
Executive: Correct.
Auditor: Can I see it?
Executive: Sure! It's right here in my desk! UH-oh! The drawer is stuck!
Auditor: Wow! Just like last year!
Q. What should be done to punish the Enron executive dirtballs who, knowing the company was in trouble, cashed in their own stock and screwed thousands of small investors?
A. In the interest of putting this ordeal behind us, we believe they should receive only a slap on the wrist.
Q. Really?
A. With a hatchet.
Q. Isn't that a pretty severe punishment?
A. Actually, it has been deemed harmless.
Q. By whom?
A. Wall Street analysts.
Accounting Instructions From Donald Ramsey
Does this make any sense?
Permanent Accounts Evergreens
Temporary Accounts Continuing Perennials
Noncontinuing Annuals
Prior Period Corrections Weeds
Forwarded by Glen Gray
A company is interviewing candidates for a new position.
The first candidate is an engineer. The interviewer says, "I only have one question, what is 2 plus 2?" The engineer pulls out his calculator and punches in the numbers and says, "4.000000."
The next candidate is a lawyer. She says 4, but wraps her answer in legalize.
The third candidate is a CPA. When asked what is 2 plus 2, he looks around and looks at the interviewer and says, "Whatever you want it to be."
Cheese Racing --- http://www.cheeseracing.org/
Forwarded by Auntie Bev,
In
his Sunday sermon, the minister used "Forgive
Your Enemies" as his subject. After the sermon, he
asked how many were willing to forgive their
enemies. About half held up their hands.
Not satisfied, he harangued the congregation for
another twenty minutes and
repeated his question.
This received a response of eighty percent. Still
unsatisfied, he lectured
for fifteen more minutes and repeated his
question. All responded except one
elderly gentleman in the rear.
"Mr. Jones, are you not willing to forgive your
enemies?"
"I don't have any." "Mr. Jones, that is very
unusual. How old are you?"
"Ninety-six." "Mr. Jones, please come down in
front and tell the congregation how
a man can live to be ninety-six and not have an
enemy in the world."
The old man teetered down the aisle, slowly turned
to face the congregation,
and said, "I outlived the Sons of Bitches!"
THE PERKS OF BEING OVER 50
1. Kidnappers are not very interested in you.
2. In a hostage situation you are likely to be released first.
3. No one expects you to run into a burning building.
4. People call at 9 PM and ask, "Did I wake you?"
5. People no longer view you as a hypochondriac.
6. There is nothing left to learn the hard way.
7. Things you buy now won't wear out.
8. You can eat dinner at 4 P.M.
9. You can live without sex but not without glasses.
10. You enjoy hearing about other people's operations.
11. You get into heated arguments about pension plans.
12. You have a party and the neighbors don't even realize it.
13. You no longer think of speed limits as a challenge.
14. You quit trying to hold your stomach in, no matter who walks into the room.
15. You sing along with elevator music.
16. Your eyes won't get much worse.
17. Your investment in health insurance is finally beginning to pay off.
18. Your joints are more accurate meteorologists than the national weather service.
19. Your secrets are safe with your friends because they can't remember them either.
20. Your supply of brain cells is finally down to manageable size.
21. You can't remember who sent you this list.
And that's the way it was on February 15, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
I want to thank all of you who sent condolences regarding the death of my father.
Even though Dad will no longer be able to attend, I still want to invite all AECMers to our August 15, 2002 party --- http://www.trinity.edu/rjensen/party081502.htm
Those of you who want to read about my dad may be inspired by an excellent letter written by a relative in our family (Chris Faye) who worked with Dad for many years. Go to http://www.trinity.edu/rjensen/dad01.htm
I added the link to Chris Faye's own father's wonderful booklet written many years ago entitled "The Conversation of the Devil With the Dying Christian."
Quotes of the Week
He is a man of sense who does not grieve for what he
has not, but rejoices in what he has.
Epictetus (That pretty well sums up my father)
In its
original meaning, a "professor" was not someone with esoteric
knowledge and technique. Instead, the word referred to a person able to make a
profession of faith in the midst of a dangerous world. All good teachers, I
believe, have access to this confidence. It comes not from the ego but a
soul-deep sense of being at home in a world despite its dangers. This is the
authority by which good teachers teach. This is the gift they pass onto their
students. Only when we take heart as professors can we "give heart" to
our student--and that, finally, is what good teaching is all about.
George Lan noted that he came across the above quotation at the end
of an article in Accounting Education News (2000 Winter Issue) on
"GOOD TEACHING: A Matter of Living the Mystery" by Professor Palmer
(page 8).
My answer in the aftermath of the
Enron scandals, albeit naive, is that
auditing firms must begin to "insure" their services much like
insurance companies insure against liability with limits as to what they will
pay such as limits to liability in automobile accidents. Clients should
decide how much auditing liability insurance they are willing to purchase as a
component of the total audit fee. The insured liability limit should
be publicized on Page 1 of a corporate annual report and in stock price listings
in newspapers and on the Internet. Accordingly, the amount of insured
audit liability would then become an important input into investor and creditor
decisions. Firms paying for lower audit liability would then pay the price
by having a higher cost of capital. This does not mean that all audits
should not be held accountable to identical high auditing standards or that
audit insurance claims can be filed for stock price declines. Claims
should only be filed when there is evidence of audit negligence and/or fraud.
Bob Jensen at http://www.trinity.edu/rjensen/damages.htm
The Andersen accounting firm is being blamed for a skimpy audit of
Fredericks of Hollywood. I wonder if the scanty audit evidence has already
been shredded.
(See below)
It is not true that people stop pursuing dreams
because they grow old;
they grow old because they stop pursuing dreams.
Gabriel Garcia Marquez
As quoted from a recent email message from Ceil Pillsbury
Some Dreams Get Let Down
In all, "about 18,000 to 20,000 employees lost money because their
retirement accounts were invested in Enron stock," says Karl Barth, an
attorney for Hagens and Berman, a Seattle law firm that's suing the energy
trader on behalf of the employees. Chances for quick recovery appear
nonexistent; the lawsuits won't be completed for years, corporate bankruptcy
filings typically send shareholders to the back of the creditors line and, on
Jan. 15, the New York Stock Exchange delisted Enron's stock.
http://www.salon.com/tech/feature/2002/01/17/401k/index.html
Andersen is
10% to Blame for the Enron Scandal
The Houston Audit Partner Does Not Have the Backbone to Stand Up to the Client
or Walk Away
Phil Livingston, President of Financial Executives International (FEI)
http://www.fei.org/download/Enron_1-18-02.ppt
Bob Jensen's commentary on this 10% idea is at http://www.trinity.edu/rjensen/damages.htm
The founder-namesake of the Enron-racked accounting
megafirm (Arthur Andersen) was born in 1885,
the stalwart son of new Norwegian immigrants, and to his dying day in 1947 at
age 61, he maintained a passion for preserving Norwegian history. He even held
an honorary degree from St. Olaf College. And would you believe he straightened
out the finances of a pioneering energy empire and won his reputation for
honesty by keeping it from bankruptcy? Is that a cosmic joke, or what? Not if
you bought Enron stock at $80 a share, it's not.
Ken Ringle Washington Post Staff Writer --- http://www.trinity.edu/rjensen/history.htm#AndersenHistory
(There are some humorous and some sobering parts of this article by Ken Ringle
that Don Ramsey pointed out to me.)
The New York Yankees today released their 4th
Quarter 2001 pro forma results. Although generally accepted scorekeeping
principles (GASP) indicate that the Yankees lost Games 1 and 2 of the 2001 World
Series, their pro forma figures show that these reported losses were the result
of nonrecurring items, specifically extraordinary pitching performances by
Arizona Diamondbacks personnel Kurt Schilling and Randy Johnson. Games 3 and 4
results, already indicating Yankee wins, were not restated on a pro forma basis.
Ed Scribner, New Mexico State
More on pro-forma at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#ProForma
I have been invited to participate on a panel in Denver. I sent the following message to my fellow panelists.
Hello Fellow Panelists,
I may be the last professor in the world who terribly regrets the recent decisions of large CPA firms to divorce themselves from their consultancy practices in the wake of the Enron scandal. This may be a disaster for our profession.
Although my thoughts regarding what I will speak about on this panel are still in the embryo stage, I am considering comments related to the following:
- Will the auditing profession become a railroad in the jet age?
- Does CPA Mean Career Passed Away? This is an older document that has suddenly become more relevant to the future of our profession.
http://www.trinity.edu/rjensen/cpaaway.htm
The SEC's Clever Approach to Training
"SEC to Naive Investors: 'Gotcha'" Wired News, January 30, 2002 --- http://www.wired.com/news/business/0,1367,50125,00.html
McWhortle Enterprises seems like the perfect investment for the post-Sept. 11 world: a solid company, praised by analysts and customers, selling a handheld biohazard detector guaranteed to beep and flash in the presence of anthrax or other deadly germs.
Only one problem: The company doesn't exist.
McWhortle Enterprises is a government hoax cloaked in respectability and planted on the Internet, waiting to deliver a lesson about the risks of online investing to unsuspecting consumers.
The Securities and Exchange Commission, the principal agency behind the fictitious company, said Wednesday it has seeded the Internet with three such websites laying in wait to say "gotcha" to naive investors.
"In a perfect world, everyone would read our educational brochures before they ran into a scam, but they don't," said SEC chairman Harvey Pitt.
Officials from the SEC and the other agencies involved said they had no ethical problems with using a hoax to educate consumers.
"There's clearly no intent here to do anything but educate the public in a way that might actually catch people's attention and make them realize they were that close to being scammed," aid Barbara Roper of the Consumer Federation of America. "You need to make the risk real to people."
On Friday, the SEC issued a fake news release on behalf of McWhortle, saying the company would go public Wednesday, with company president Thomas McWhortle III holding a news conference at SEC headquarters. The release was distributed mainly to Web sites by a service for financial news. Financial news agencies that received the fake release were warned.
The release touted the company's "Bio-Hazard Alert Detector," described as a battery-powered device that fits in a jacket pocket and beeps in the presence of all known biohazards.
After the release was sent, the McWhortle website received more than 150,000 visits in three days, the SEC said.
Pitt, introduced at the news conference as Thomas McWhortle, said real fraud websites inspired the project. "The crooks figured this out a long time ago and it's about time we used the exact same tactics to fight back," he said.
The site has glowing testimonials from an analyst with a "major investment banking firm" and the chief financial officer of a "Fortune 100 Company." The website also includes an audio interview with the company president.
Those who continued clicking to invest their money got the punchline: "If you responded to an investment idea like this ... you could get scammed!"
The website notes that it was created by the SEC, the Federal Trade Commission, the North American Securities Administrators Association and the National Association of Securities Dealers to alert investors to potential online frauds.
Admitting to the hoax, the site says the agencies and groups created the site because of an increase in investment scams preying on fears of anthrax and other biohazards.
"This site shows some of the telltale signs of online investment fraud," the site says. "Promises of fast and high profits, with little or no risk, are classic red flags of fraud."
To avoid scams, the SEC advises potential investors to do their own research to make sure a company exists, that its products are genuine and its claims legitimate.
In August, 23-year-old Californian Mark Jakob was sentenced to nearly four years in prison for issuing a phony press release to manipulate the price of stock in the high-tech firm Emulex. The SEC had said Jakob's actions defrauded investors out of $110 million.
Since the recent anthrax-by-mail scare, the FTC has warned more than 100 website operators to stop making unproven claims about devices for bioterrorism protection and treatment, including dietary supplements, gas masks that may not work as advertised and ultraviolet lights falsely touted as anthrax killers.
Distance Education News of the Week --- http://scpd.stanford.edu/scpd/courses/courselets/clets.asp
The Stanford Center for Professional Development (SCPD), working with School of Engineering faculty, is developing a comprehensive portfolio of courselets - self-contained, integrated sets of web-based learning materials and tools designed as a custom tutorial and offered online in support of Stanford engineering, science and engineering management courses. The two-year project is supported by a $400,000 grant from the Alfred P. Sloan Foundation with additional resources from Stanford University.
Stanford Online Courselets: Leveling the Learning Field, On- and Off-Campus, January 16, 2002
Courselets Project at a Glance.
Frequently Asked Questions.
What a Great Idea --- Give Copytalk a Try!
"The Last Word in Dictation. Period," by David Pogue, The New York Times, January 24. 2002 --- http://www.nytimes.com/2002/01/24/technology/circuits/24STAT.html
Copytalk is a glorified dictation service. From any phone, you dial Copytalk's toll-free number. At the tone, you dictate, for example, an e-mail message. Between 3 and 20 minutes later, the message you dictated is sent on its merry way across the Internet (with or without your review, at your option), looking exactly as if it came from your desktop PC.
The system relies on the world's most sophisticated speech-recognition system: a person wearing headphones. Because you're simply leaving a message for a transcriptionist, the results are far more accurate, and the system far more flexible, than you would get using speech-recognition software like NaturallySpeaking.
You might say, for example: "O.K., this e-mail's going out to Bill G., that's B-I-L-L G, at Microsoft.com. The subject is Windows XP, and the body is, let's see: `Dear Bill, Thanks for Windows XP.' No wait, make that, `Thanks a bunch for Windows XP.' Then, going on: `It's incompatible with my virus software, my printer and my wife. Can you fix it? Sincerely, Frank.' Oh, and also CC it to Steve B. at Microsoft.com. And I'd like to review it before you send it."
In other words, you dictate precisely as you would to a personal assistant. Copytalk says that its transcriptionists even try to correct spelling, grammar and muddled ZIP codes, which they check against the city information in addresses that you dictate.
If you have a Palm-based organizer, Copytalk gets even more interesting. You can dictate anything you can store on your organizer: datebook appointments, to-do items, memos, expense-report items, addresses and phone numbers and so on. In the process you can exploit the full range of Palm software features. You might say, for example, "I want a new appointment, called `Gadget-obsession therapy,' repeating every Monday, Wednesday and Thursday at 2:30 p.m., through May 30. Give me an alarm 20 minutes in advance. Oh, and attach a note to this appointment that has the phone number: Technophiles Anonymous, (212) 555-4433."
A Palm-savvy transcriptionist at Copytalk takes all of this down. The next time you sync your organizer with your Windows PC, the Copytalk software connects to the Internet and downloads the freshly transcribed material. A minute later the new appointment appears on the appropriate days, as though you had scratched it in yourself.
If your cellphone is your organizer (because it's a hybrid from Samsung, Handspring or Kyocera), or if you have equipped your organizer with some kind of modem and Palm's Mobile Internet Kit, life is even better: the new entries are entered into its calendar, address book, to-do list and so on, computerlessly.
If you're calling from a number that the service doesn't recognize or from an office whose phone system uses extension numbers, you have to plug in your phone number and password to prove that you're you.
But when you dial the service from your cellphone or home, the service immediately recognizes you and prompts you to begin dictating. That's when Copytalk begins to take on a life of its own, turning your phone into something like a magic voice recorder. You press Copytalk's speed-dial number on your phone, the call is answered before even one ring, and you're ready to dictate — all within five seconds.
On your cab ride back from a conference, for example, you can rattle off the contact info from the business cards that rained on you — and then throw them away. Recording business-travel expenses is another big payoff: it's hard to forget to bill your boss for some expenditure if you record it by voice while you're still expending.
Continued at http://www.nytimes.com/2002/01/24/technology/circuits/24STAT.html
The Copytalk Website is at http://www.copytalk.com/index.htm
Bob Jensen's threads on speech recognition are at http://www.trinity.edu/rjensen/245gloss.htm
Important Site of the Week
University of Maryland, Human-Computer Interaction Lab http://www.cs.umd.edu/hcil/
The Human-Computer Interaction Lab (HCIL) at the University of Maryland conducts research on advanced user interfaces and their development processes. Interdisciplinary research teams study the entire technology development life-cycle which includes the initial technology design, implementation issues, and evaluation of user performance. Through this work we have developed new theories, methodologies, and technologies.Our current work includes new approaches to: information visualization, interfaces for digital libraries, multimedia resources for learning communities, zooming user interfaces (ZUIs), technology design methods with and for children, and instruments for evaluating user interface technologies.
Events
Things going on at the HCIL, and past events as wellAwards
Awards that HCIL members have wonHCIL Organization
The administrative structure of the HCILRelated Organizations
Other places on and off campus that the HCIL has a connection toPictures
See who we are :)In The Press
Places the HCIL has been in the press
The Knowledge Economy and Postsecondary Education 2001 Report http://www.nap.edu/books/0309082927/html/
Innovation of the Week
It's supposed to be impossible, but an obscure tech company insists it has created the technology to compress data far greater than anything that exists today --- http://www.wired.com/news/technology/0,1282,49599,00.html
"Surrounded by Sound Ingenious software makes ordinary stereo speakers come alive," by Fiona Harvey, Scientific American --- http://www.sciam.com/2002/0202issue/0202technicality.html
Lying on a beach at Devon on the south coast of England in 1990, Alastair Sibbald had a curious thought. He could hear the seagulls in front of him over the sea and the sheep behind him on the cliffs, each separate and distinct. How was it, he wondered, that he could place these sounds so accurately in space? And could a computer program replicate this three-dimensional aural experience?
Now Sibbald has the answers. As chief scientist at Sensaura, a company based in Middlesex, England, he has spent the past decade developing software that acts like a digital ventriloquist. Sensaura's programs enable ordinary computer speakers, television sets and headphones to create the illusion that sounds are coming from anywhere around a listener's head. The technology has been incorporated into the audio chips used in tens of millions of personal computers. Last November the Royal Academy of Engineering recognized the magnitude of Sensaura's accomplishment by giving the company the MacRobert Award, Britain's most prestigious engineering prize.
To truly appreciate the glories of three-dimensional audio, one must hear it firsthand. On a recent visit to Sibbald's office, I sat in front of a pair of speakers and listened to a series of sounds that had been modified using Sensaura's software. I heard a bumblebee buzz loudly in my ear, then retreat to a point a few feet away. Then I heard the bee fly around the room and return to buzz in my other ear. I could actually point to the exact place where I thought the bee was. The insect seemed to speed up and slow down, its movements controlled by the software. When the bee was replaced by a growling jaguar, the effect was so realistic I nearly jumped out of my seat.
Human beings typically rely on both ears to get an accurate measurement of where sounds are coming from. My hearing is severely reduced in my left ear, but the software worked despite this problem. Although the sound was best when I was seated in the "sweet spot" between the speakers--equidistant from both--I could turn my head or move from side to side without destroying the illusion.
Generating three-dimensional sounds from a pair of speakers is no easy task. Sibbald started with the basic principles of hearing. The brain relies on several clues to determine where a sound originates. A vital clue is deduced from the effect of the outer ears, which modify sounds before they reach the eardrum. Sibbald likens the effect to blowing across the top of a bottle--if you blow at a certain angle, you produce a distinctive tone. The various parts of the outer ear are shaped to produce different resonances, and the brain learns that these resonances are associated with sounds entering the ear at different angles.
Continued at - http://www.sciam.com/2002/0202issue/0202technicality.html
When I first began reading a novel about derivatives, two paragraphs in the Preface really caught my attention. Those paragraphs read as follows:
Derivatives have become the largest market in the world. The size of the derivatives market, estimated at $55 trillion in 1996, is double the value of all U.S. stocks and more than ten times the entire U.S. national debt. Meanwhile, derivative losses continue to multiply.
Of course, plenty of firms made money on derivatives, including Morgan Stanley, and the firm's derivatives group is thriving, even as derivatives purchases lick their wounds. Some clients tired of having their faces ripped off or being blown up, and business declined briefly in 1995 and 1996. Many of us quit during this period, some leaving for less brutish firms.
(Continued on Page 15)
Frank Partnoy in FIASCO: The Inside Story of a Wall Street Trader (New York: Penguin Putnam, 1997, ISBN 0 14 02 7879 6)
We have been following the transition of public accountants from the most trusted profession in the United States to one of the least trusted. It is interesting how this transition is taking place amidst a somewhat similar transition in investment banking and securities trading in general. The following quotation from the above Preface may really open your eyes:
From 1993 to 1995, I (Frank Parnoy) sold derivatives on Wall Street. During that time, the seventy or so people I worked with in the derivatives group at Morgan Stanley in New York, London, and Tokyo generated total fees of about $1 billion --- an average of almost $15 million a person. We were arguably the most profitable group of people in the world.
My group was the biggest moneymaker at the firm by far. Morgan Stanley is the oldest and most prestigious of the top investment banks, and the derivatives group was the engine that drove Morgan Stanley. The $1 billion we made was enough to pay the salaries of most of the firm's ten thousand worldwide employees, with plenty left for us. The managers in my group received millions and millions in bonuses; even our lowest level employees had six-figure incomes. An many of us, including me, were still in our twenties.
How did we make so much money? In part, it was because we were smart. I worked with the greatest minds in the derivatives business. We mastered the complexities of modern finance, and it is no coincidence that we were called "rocket scientists." (Page 15)
This is the part that indirectly relates to the changing business model of public accountants.
This was not the Morgan Stanley of yore. In the 1920s, the white-shoe (in auditing that would be black-shoe) investment bank developed a reputation for gentility and was renowned for fresh flowers and fine furniture (recall that Arthur Andersen offices featured those magnificent wooden doors), an elegant partners' dining room, and conservative business practices. The firm's credo was "First class business in a first class way."
However, during the banking heyday of the 1980s, the firm faced intense competition from other banks and slipped from its number one spot. In response, Morgan Stanley's partners shifted their focus from prestige to profits --- and thereby transformed the firm. (Emphasis added) Morgan Stanley had swapped its fine heritage for slick sales-and-trading operation --- and made a lot more money.
Other banks --- including First Boston, where I worked before I joined Morgan Stanley --- could not match Morgan Stanley's aggressive sales tactics. By every measure, the firm had been recast. The flowers were gone. The furniture was Formica. Busy managers ingested lunch, if at all, at a crowded donut stand jammed between two hallways along the trading floor. Aggressive business practices inspired a new credo: "First class business in a second class way." After decades of politesse, there were savages at Morgan Stanley."
(Continued on Page 14 of the book cited above).
Added notes from Bob Jensen
I was sitting in Times Square (where I was Program Director for the 1994 American Accounting Association Annual Meetings in the Marriott Marquis Hotel) and captured an address by the Chairman of the American Accounting Association (Denny Beresford) quoting that until 1993 he thought derivatives were "something a person his age took when prunes did not quite do the job." You can hear my MP3 recording of Denny's remarks (along with related and free audio and video clips) at http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm#Introduction
Bob Jensen's overviews of accounting for derivative financial instruments, including cases and case solutions, can be found at the following two links:
Bob Jensen's threads on derivatives frauds can be found at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
How the professions of financial analysis and investment banking became rotten to the core is elaborated upon at http://www.trinity.edu/rjensen/fraud.htm#Cleland
Early 1995 Warning Signs That Bad Guys Were Running Enron and That Political Whores Were Helping
There were some warning signs, but nobody seemed care much as long as Enron was releasing audited accounting reports showing solid increases in net earnings. Roger Collins sent me a 1995 link that lists Enron among the world's "10 Most Shameless Corporations." I guess they are reaping what was sewn.
Shell BHP ADM CHIQUITA ENRON <-------------- DOW CHEMICAL JOHNSON & JOHNSON 3M DUPONT WARNER-LAMBERT |
by Russell Mokhiber and Andrew Wheat
http://www.essential.org/monitor/hyper/mm1295.04.html
The module about Enron in 1995 reads as follows:
Enron's Political Profit Pipeline
In early 1995, the world's biggest natural gas company began clearing ground 100 miles south of Bombay, India for a $2.8 billion, gas-fired power plant -- the largest single foreign investment in India.
Villagers claimed that the power plant was overpriced and that its effluent would destroy their fisheries and coconut and mango trees. One villager opposing Enron put it succinctly, "Why not remove them before they remove us?"
As Pratap Chatterjee reported ["Enron Deal Blows a Fuse," Multinational Monitor, July/August 1995], hundreds of villagers stormed the site that was being prepared for Enron's 2,015-megawatt plant in May 1995, injuring numerous construction workers and three foreign advisers.
After winning Maharashtra state elections, the conservative nationalistic Bharatiya Janata Party canceled the deal, sending shock waves through Western businesses with investments in India.
Maharashtra officials said they acted to prevent the Houston, Texas-based company from making huge profits off "the backs of India's poor." New Delhi's Hindustan Times editorialized in June 1995, "It is time the West realized that India is not a banana republic which has to dance to the tune of multinationals."
Enron officials are not so sure. Hoping to convert the cancellation into a temporary setback, the company launched an all-out campaign to get the deal back on track. In late November 1995, the campaign was showing signs of success, although progress was taking a toll on the handsome rate of return that Enron landed in the first deal. In India, Enron is now being scrutinized by the public, which is demanding contracts reflecting market rates. But it's a big world.
In November 1995, the company announced that it has signed a $700 million deal to build a gas pipeline from Mozambique to South Africa. The pipeline will service Mozambique's Pande gas field, which will produce an estimated two trillion cubic feet of gas.
The deal, in which Enron beat out South Africa's state petroleum company Sasol, sparked controversy in Africa following reports that the Clinton administration, including the U.S. Agency for International Development, the U.S. Embassy and even National Security adviser Anthony Lake, lobbied Mozambique on behalf of Enron.
"There were outright threats to withhold development funds if we didn't sign, and sign soon," John Kachamila, Mozambique's natural resources minister, told the Houston Chronicle. Enron spokesperson Diane Bazelides declined to comment on the these allegations, but said that the U.S. government had been "helpful as it always is with American companies." Spokesperson Carol Hensley declined to respond to a hypothetical question about whether or not Enron would approve of U.S. government threats to cut off aid to a developing nation if the country did not sign an Enron deal.
Enron has been repeatedly criticized for relying on political clout rather than low bids to win contracts. Political heavyweights that Enron has engaged on its behalf include former U.S. Secretary of State James Baker, former U.S. Commerce Secretary Robert Mosbacher and retired General Thomas Kelly, U.S. chief of operations in the 1990 Gulf War. Enron's Board includes former Commodities Futures Trading Commission Chair Wendy Gramm (wife of presidential hopeful Senator Phil Gramm, R-Texas), former U.S. Deputy Treasury Secretary Charles Walker and John Wakeham, leader of the House of Lords and former U.K. Energy Secretary.
Bob Jensen's threads on the Enron scandal are at http://www.trinity.edu/rjensen/fraud.htm
The Andersen accounting firm is being blamed for a
skimpy audit of Fredericks of Hollywood
I wonder if the scanty audit evidence has already been shredded.
As Andersen struggles to regain its stature, it finds itself fighting on a number of fronts: New York City Controller William Thompson is considering rescinding Andersen's automatic approval to do business for the city; the General Accounting Office issued a report that disclosed an accounting error in NASA's 1999 audit performed by Andersen; Andersen is being sued by investors in Styling Technology, a California beauty products company, and by Frederick's of Hollywood for negligence that allegedly led the company to file for bankruptcy in 2000. http://www.accountingweb.com/item/70674
"Unaccountable in Washington," by Michael Granof and Stephen A. Zeff, The New York Times, January 23, 2002 (if you cannot download this article, I am certain that Steve Zeff at Rice University will send you a copy via email. His email address is Stephen A. Zeff [sazeff@rice.edu]
The latter portion is quoted below:
The story begins in the 1970's and 1980's, when members of Congress, most from oil-producing states, pressured the Financial Accounting Standards Board and the Securities and Exchange Commission not to demand tougher standards for financial reporting in the petroleum industry. At the time, it was clear that the lawmakers were serving corporate interests, not those of investors. Now it's clear that this was only a warm- up act.
While the F.A.S.B. is a private organization financed by industry, the board's authority comes from the S.E.C. requirement that corporations follow the standards its sets. If Congress is unhappy with an F.A.S.B. standard, it can pass a law directing the S.E.C. to ignore it.
From 1991 to 1994, members of Congress prevented the F.A.S.B. from issuing a standard that would have forced companies to take a charge against earnings when they issue employee stock options. Congress persisted in this course of action even though investors like Warren Buffett and the S.E.C. itself supported the F.A.S.B.'s initiative, saying options should be counted as an expense on earnings statements in the same way other forms of compensation are.
The driving forces behind the Congressional opposition were major industrial corporations and special-interest groups representing small, high-tech companies. If companies counted options as compensation, they argued, earnings would decline and stock prices would suffer. Members of both houses called for hearings and introduced bills that would have hamstrung the F.A.S.B. in its attempt to bring clarity to this important issue. In fact, in 1994, 88 members of the Senate voted for a "sense of the Senate" resolution in which they informed the F.A.S.B. that its proposed standard would have "grave economic consequences" for entrepreneurial ventures.
At one point in the debate, Senator Joseph Lieberman, Democrat of Connecticut and now chairman of the committee that will convene tomorrow's first hearing, introduced a bill that would have effectively destroyed the F.A.S.B.'s authority to set standards for financial reporting. The bill, proposed as an amendment to the Securities Exchange Act of 1934, would have required the S.E.C. to vote on every statement issued by the board. In the face of this proposed legislation, the F.A.S.B. had no choice but to drop its proposal to amend the way options are accounted for.
In the 1997-1998 session, the F.A.S.B. tried to rewrite the rules affecting derivatives, financial devices whose worth is determined by the value of another entity, whether it be government bonds, pork bellies or, as was the case with some of Enron's derivatives, the price of natural gas. Derivatives are complicated and risky, and the F.A.S.B. in its new rules sought to ensure that corporate financial statements accurately reflected those risks. This time, in the face of opposition from members of both parties in Congress, the F.A.S.B. was able to withstand the pressure. It issued its new standards in 1998.
But adversity quickly followed this minor success. In the 1999-2000 session, members of Congress once again intervened, this time to place barriers in the path of proposed standards on mergers and acquisitions and the way corporations involved in them account for the value of intangible assets like good will. The F.A.S.B. had wanted to change the way companies account for some costs in such deals, forcing them to write them off over a shorter period of time. Companies opposed the change, saying the increased costs would reduce their earnings, and lobbied Congress against the change. In the face of such opposition, once again the F.A.S.B. was required to make a strategic retreat.
Yet the true cost of all this Congressional meddling is even greater than the sum of its parts. Taken collectively, these proposed standards would have merely tweaked the existing accounting model. What is necessary is a comprehensive overhaul of the model itself. The model was designed for the industrial era. It worked fine when plants, equipment, inventories, accounts receivable — stuff you could see and touch — were what made a company tick. It fails miserably when the critical resources of a firm are software, intellectual capital, brand names and fiscal wizardry.
Few accountants will deny that the F.A.S.B. was unable to close accounting loopholes as rapidly as Enron and Andersen created them. And few will deny that fast and loose reporting practices are all too common in the corporate world.
Yet Congress has not allowed even a modest tweaking. Imagine, then, the outcry if the F.A.S.B. actually got serious about true reform of the current accounting model. Among the changes it might propose are restoring to the balance sheet many liabilities, like certain kinds of leases, that are now considered "off balance sheet"; adjusting reported earnings for changes in current prices of assets; and recognizing and amortizing the many intangible assets that are currently not even seen on balance sheets.
Each of these changes could have helped regulators and investors see the Enron-Andersen debacle coming, or even helped to prevent it. By sending a message that such changes are not remotely welcome or politically possible, Congress paved the way for the current crisis. Congressional involvement in financial standard-setting has been pure politics, fueled by a system of campaign financing that distorts the pursuit of the nation's legislative agenda. If members of Congress are sincere about identifying and correcting weaknesses in the standards used for financial reporting, then they should investigate the old-fashioned way: follow the money. They are likely to find a trail that leads to the nearest mirror.
From The Wall Street Journal's Accounting Educator Reviews on January 22, 2002
TITLE: Deciphering the Black Box
REPORTER: Steve Liesman
DATE: Jan 23, 2002 PAGE: C1 LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1011739030177303200.djm
TOPICS: Accounting, Accounting Theory, Creative Accounting, Disclosure,
Disclosure Requirements, Earnings Management, Financial Analysis, Financial
Statement Analysis, Fraudulent Financial Reporting, Regulation, Securities and
Exchange Commission
SUMMARY: The article discusses several factors that have led to financial reporting that is complex and difficult to understand. Related articles provide specific examples of complicated and questionable financial reporting practices.
QUESTIONS:
1.) What economic factors have led to the complexity of financial reporting?
Have accounting standard setters kept pace with the changing economic
conditions? Support your answer.
2.) What determines a company's cost of capital? What is the relation between the quantity and quality of financial information disclosed by a company and its cost of capital? Why are companies reluctant to disclose financial information?
3.) Explain the difference between earnings management and fraudulent financial reporting? Is either earnings management or fraudulent financial reporting illegal? Is either unethical? Could earnings management ever improve the usefulness of financial reporting? Explain.
4.) Discuss the advantages and disadvantages of allowing discretion in financial reporting.
5.) Refer to related articles. Briefly discuss the major accounting or economic situation that has caused complexity in the financial reporting of each of these companies. What can be done to make the financial reporting more useful?
SMALL GROUP ASSIGNMENT: How much discretion should Generally Accepted Accounting Principles allow in financial reporting? Support your position.
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Bob Jensen's accounting theory
online documents are at http://www.trinity.edu/rjensen/theory.htm
The above module was added to http://www.trinity.edu/rjensen//theory/00overview/theory01.htm
The Financial Accounting Standards Board has released for public comment a proposal for a new project on "Issues Related to the Recognition of Revenues and Liabilities." In many respects, this is a back-to-basics project that will reexamine fundamental concepts. But don't let the theoretical considerations deter you from reading this proposal. There are at least three important reasons why you should take the time to study the proposal and send your comments to FASB. http://www.accountingweb.com/item/70671
Bob Jensen's threads on revenue recognition are at http://www.trinity.edu/rjensen/ecommerce/eitf01.htm
Thank you Richard. I have added your message to my threads on cost analysis of education technology and distance education at http://www.trinity.edu/rjensen/distcost.htm
I can always count on you for interesting messages Richard.
Bob
-----Original Message-----
From: Fern, Richard [mailto:Richard.Fern@EKU.EDU]
Sent: Friday, January 18, 2002 4:21 PM
To: rjensen@TRINITY.EDU
Subject: online costing resourcesBob:
Well, after 3 months, I finally have some additional resources on online costing for you:
Here's an NEA link but it's only part of the full document: http://www.nea.org/nr/nr010405.html
Brian Morgan at Marshall University has an online costing worksheet with back up documentation: http://webpages.marshall.edu/~morgan16/onlinecosts/
Western Interstate Commission for Higher Education has a costing handbook and case book available for free download: http://www.wiche.edu/Telecom/projects/tcm/proj-products.htm#Handbook
The Mellon Foundation has many projects going on: http://www.ceutt.org/
I have particularly found the report: Milam, John, Ph.D. Cost Effective Uses of Technology in Teaching: Final Report on the Mellon-Funded GMU Cost Study, (Mellon Foundation Report, and November 8, 2000) very useful since it gives a lot of practical guidance. The Milam report is not online (that I can find) but I can send you a Word version of it if anyone requests it.
Hope this helps.
Thanks for your suggestions.
Richard Fern
Bob Jensen's threads on costs and cost management of distance education and education technologies are at http://www.trinity.edu/rjensen/distcost.htm
Authors like the idea that publishers don't get involved in their promotional websites, saying the autonomy allows them to be more creative --- http://www.wired.com/news/culture/0,1284,49865,00.html
See also:Less than 10 percent of author websites are created or maintained by publishers, leaving established and debut novelists alike to their own devices. And that might be for the best.
Tracy Chevalier, author of the best-seller Girl With a Pearl Earring, prefers it this way. After all, no publisher support also means no publisher interference
• | Web Readings Replace Real Ones |
• | Online Library Expands Database |
• | There's no biz like E-Biz |
"Web Readings Replace Real Ones," by M.J. Rose, Wired News, September 25, 2001 --- http://www.wired.com/news/culture/0,1284,47036,00.html
"It May Finally Be Showtime For DVRs," by Christopher Stern, The Washington Post, January 18, 2002; Page E01 --- http://www.washingtonpost.com/wp-dyn/articles/A242-2002Jan18.html
A year ago, the future of digital video recorders -- those boxes that automatically record television shows on a hard drive -- looked uncertain.
Consumers just weren't embracing the new technology, despite a run of television and print advertising. Most didn't even really understand what the things did.
But in the last few months the picture has begun to clear up. Of the two pioneers in the field, TiVo Inc. has emerged as a market leader, while SonicBlue Inc.'s ReplayTV has been reenergized under new ownership. About 1 million homes now have a digital recorder, counting hardware offered by satellite broadcasters and Microsoft's Ultimate TV.
Essentially, a digital video recorder, or DVR, stores programs on a hard drive instead of videotape. Users can record a show just by highlighting its title in an onscreen program guide and tapping a button on the remote; tap it twice and the show will be recorded every time it airs. And because the hard drive also automatically stores whatever's on, users can even pause or rewind live television.
Over this holiday season, some analysts saw TiVo round a corner with the public. Demand for the devices outstripped supply at some stores and online retailers, said Gordon Hodge, an analyst with Thomas Weisel Partners.
"I think DVR technology is really catching on," said Hodge, who suspects that TiVo may even beat his estimate of selling 90,000 devices in the final three months of last year.
Continued at http://www.washingtonpost.com/wp-dyn/articles/A242-2002Jan18.html
Interesting Sites of the Week
From The Scout Report on January 18, 2002
A+ Country Reports http://www.countryreports.org/
A fantastic resource for students, teachers, tourists, and anyone else interested in the globe, A+ Country Reports offers a wealth of information on all of the countries of the world. Like the CIA's World Factbook (last mentioned in the September 28, 2001 _Scout Report_ ), A+ Country Reports presents up-to-date information on population, geography, economy, history, and politics. Aside from that, however, the site presents a lively array of extras that don't figure in the CIA's matter of fact dossiers, things such as audio clips of national anthems and links to current weather reports. As the site itself boasts, through a list of quotes from current reviews, A+ Country Reports is particularly appealing to teachers and younger students, and it's obvious why it's appealing, given its attention to the kinds of details kids demand -- bright graphics, large fonts, and Flash-automated features among them. For those interested in sharing what they have learned or already know, there is also a discussion area and links to sites for further study.
Two on Napster New Napster http://www.napster.com
Pay Napster http://www.mp3newswire.net/stories/2002/paynapster.htmlCurrently undergoing beta testing, the new Napster aims to create a product that reconciles issues related to copyright, at least in part by charging for use. The Napster site gives an overview of what's to come, replete with FAQ and screen shots of the new software. The second site gives a critical review from one of the beta testers. If you choose to use it, the new version of Napster should be available to the general public sometime later this year.
Bob Jensen's threads on P2P are at http://www.trinity.edu/rjensen/napster.htm
FindTutorials http://www.findtutorials.com/
FindTutorials offers hundreds of tutorials and professional online IT and Softskills training courses that are available for a variety of disciplines and skill levels. In addition, it offers an online e-mail system, an IT job database with thousands of daily updated positions, and a host of additional resources on internet training skills. With simple to use navigational tools and a "sophisticated in-house developed site search", finding information to meet your requirements merely takes the click of a button.
Ru Paster vs. Gonzaga Student Privacy Case Goes to Court http://dailynews.yahoo.com/h/ap/20020111/pl/scotus_college_privacy_1.html
State of Washington Supreme Court Decision: John Doe v. Gonzaga University http://www.cdlaw.com/cases/2ds/05_01/69456-7.htm
Family Educational Rights & Privacy Act (FERPA) http://www.ed.gov/offices/OM/ferpa.html
FERPA Info http://personalinfomediary.com/FERPA_info.htm
Snohomish School District Family Educational Rights and Privacy Act (FERPA) http://www.sno.wednet.edu/rsc/ferpa-complete.htm
Mr. Paster, who graduated in 1994, sued the university for negligence, defamation, and invasion of privacy under FERPA and was awarded $1.15 million in 1997. However, that decision was overturned two years later by the State Court of Appeals, which found that the university adhered to state law. Last June, the Washington State Supreme Court reinstated the $1.15- million award, ruling that Gonzaga University had violated Mr. Paster's privacy and civil rights by revealing the information in his educational records. The case will soon be heard by the U.S. Supreme Court. The first site contain an article detailing the case and court decisions, the second site gives the full-text of the Washington State Supreme Court decision, and the final two sites give in-depth information concerning FERPA's regulations, and the last site outlines FERPA's model notification rights for elementary, secondary, and post secondary institutions.
Tips for Promoting Your Site
Hi Bill,
Can I paste your message into my next Edition of New Bookmarks?
Firstly, I recommend that you scan the following document to find the link to "Tips for Promoting Your Site." You will probably find other links of interest. http://www.trinity.edu/rjensen/bookbob4.htm#Evaluation
Hope this helps!
Bob
-----Original Message-----
From: c. w. spinks [mailto:cspinks@trinity.edu]
Sent: Saturday, January 19, 2002 9:27 AM
To: Jensen, Robert Subject: How to Publish a SiteBob, I have put up my first issue of my online journal Trickster's Way ( http://www.trinity.edu/org/tricksters/ )
I have been sending out notice to folks that I know and have registered with some of the free search engines, I have added met tags, and although I appear in a Google search, I still registered with Yahoo. Since you do lots of online stuff, do you have suggestions on how I can spread word of my journal?I do plan to talk to Chris Nolan about a library connect, but wonder if I will simply have to wait for word to spread or are there other ways I can be proactive (without being too much of a pain in the butt) about making the site known.
This is not a commercial site, and as an academic site is meant to be available to scholars and students in the field.
Thanks for any suggestions you may have.
..billspinks
mailto:cspinks@trinity.eduC. W. (Bill) Spinks,
English Dept, Trinity University
715 Stadium Drive, San Antonio, Texas 78212 USA office: 210-999-7577 fax: 210-999-7578
-----Original Message-----
From: Irene Polizogopoulou [mailto:ipol80@hotmail.com]
Sent: Wednesday, January 23, 2002 5:20 PM
To: rjensen@trinity.edu
Subject: Info for an Msc student
I am taking an Msc in Telematics Management and would appreciate your answer to the following:1. Explain the terms : Open and Distance learning , Distance education , The Virtual classroom , Virtual learning , Learning in the Information society and E-learning . According to your opinion how the users can benefit themselves from each of the above?
[Jensen, Robert]I'm not certain about "open" learning. It seems to be an ambiguous term that probably applies more to admission standards than distance learning per se (although distance learning can be more open to low-income students who do not have local education alternatives). Distance learning can apply to modules where students are not in direct contact with instructors for portions of the learning experience even though the course itself is onsite. Distance education generally refers to education where most of the learning takes place without face-to-face contact with other students and the instructor (even though the communication may be intense via computer networking and teleconferencing).Some writers make a distinction between Distance Education (via TV) versus distributed education (via the Internet), but I think this is a confusing distinction in these times of distributed video via the Internet.The virtual classroom generally refers to distance education where students meet simultaneously via chat rooms or teleconferencing rather than traditional face-to-face classrooms. Virtual learning refers to distance learning and/or simulations in place or real-world settings.Learning in the information society generally implies using the Internet as the world's library as a major part of the course.E-learning generally means distance education for a fee, usually in the context of education and training delivered by for-profit companies.2. Compare and give advantages and disadvantages between a stand-alone and a Distance Learning application.
[Jensen, Robert]I think the distinction applies mainly to a course (e.g., a video course) where students must stand alone with little or no communication with instructors or each other versus a distance learning course with intense communications with instructors and other students. A good example of the intense variety is Amy Dunbar's use of instant messaging as described at http://www.trinity.edu/rjensen/book01q3.htm#dunbar3. Do you beleive that Distance Learning has a real chance to be established as a tool in education and professional training? According to your opinion what are the main obstacles not permitting the wide spread and usage of Distance learning?
[Jensen, Robert]
I am a strong advocate if the distance learning takes place with intense (at least daily) communications between instructors and other students.You can read more about the advantages and disadvantages of distance education in the following documents:4. Do you beleive that Teleworking has a real chance to be established and used in the professional market?
[Jensen, Robert]
This offers immense advantages and efficiencies by eliminating travel time and travel expense. Note how Amy Dunbar now teachs for a major university as a full-time faculty member who never haves to leave her home except for non-teaching duties that now and then require her presence on campus. See at http://www.trinity.edu/rjensen/book01q3.htm#dunbarAmy proves that the right person at the helm can make it all work better.I will use the answers for the Multimedia course exams I am having in a few weeks. It is very difficult for me to find the appropriate answer as I come from the Computer Engineering field so it would be very helpfull to hearing from you.I understand that your time must be very crucial. Therefore it would be helpfull to give me a brief analysis on the above issues or even your opinion as I unfortunately do not either have time reading books or searching the internet for such big issues. I had tried though , but could not manage to find the appropriate answer in a few sentences.Please forward this message in any case to get some answer from professors related to the above issues.Thank you in advance for your help,Regards,Polizogopoulou Irene
From Syllabus News on January 22, 2002
Campus Pipeline Unveils Web Upgrade, Six Products
Education software developer Campus Pipeline Inc. unveiled an upgrade of its Web Platform and six new products designed to extend the platform's capabilities across the campus enterprise and to give users greater ability to customize. The Web Platform 3.1 integrates on a central network campus applications including student information systems, learning management systems, academic resources and campus news. The new products provide handheld-device access, personalized content delivery, and portal-building tools for groups, classes, and campus organizations. The new version also includes a new Course Portal feature for easier access to course tools, and portal content, directory, and messaging server upgrades.
For more information, visit: http://www.campuspipeline.com
Schools Broadcast Sports to Student, Alumni Desktops
The University of Oklahoma, Iowa State University and Texas Tech University have begun webcasting a subscription-based video and audio sports programming to the desktop PCs of fans, students, and alumni. The weekly sports and campus-news broadcasts are sent via a web video-streaming technique by CABC Inc., a Dallas- based digital-media company. CABC said it establishes the online channel and handles production costs until the subscriber base reaches critical mass. Thereafter, the universities and CABC share costs and revenue. Steve Uryasz, associate athletic director with Texas Tech, said the technology allows the school to send "... high- quality broadcasts to fans at their desktops, and it's another way to raise money for athletics."
For more information, visit: http://www.cabcconnection.com/cabcdemos
University of Michigan B-School/Fry Multimedia. The University of Michigan Business School has picked Fry Multimedia to redesign and reengineer its web site. The site will include customized sections for the school's various constituencies, including current students, prospective students, alumni, faculty and staff, recruiters and corporate supporters.
A Long-Standing Critic of Distance Education, David Noble, Blasts it Once Again
"New Book by Critic of Distance Education Describes Privacy Threats," by Jeffrey R. Young, The Chronicle of Higher Education, January 18, 2002 --- http://chronicle.com/free/2002/01/2002011801u.htm
Distance education threatens the privacy of students and professors because online class discussions can be monitored in ways that are impossible in traditional classrooms, argues David Noble, a history professor at York University, in Toronto, and a well known critic of technology.
Mr. Noble's latest critiques of distance education, along with revised versions of earlier salvos that first circulated online, are collected in a new book, Digital Diploma Mills (Monthly Review Press).
Mr. Noble says the privacy of students and professors online is a particularly important issue in the wake of the September 11 terrorist attacks, because "governments have vastly enlarged their powers of surveillance, and surveillance of electronic communication in particular."
Some software packages for delivering online courses can automatically capture and store the texts of all online class discussions, or collect detailed information about what students look at online. That worries Mr. Noble, who says that if the material is stored and archived, it could be possible for law-enforcement officials to demand transcripts of class discussions.
"Certainly administrators and political authorities will be in a position to monitor any and all such activities as never before, remotely and discreetly, without permission or acknowledgment," writes Mr. Noble. "And they will have ready access to extensive electronic records of course content and communications."
Much of the new material in Mr. Noble's book focuses on the influence of the U.S. government -- and particularly the military -- on the continuing evolution of online distance education. He worries that the program could lead the military to bring greater standardization to distance education.
In particular, Mr. Noble focuses on the U.S. military's eArmyU, a $453-million program that will allow enlisted soldiers to take courses and earn degrees online through partner colleges.
The project was announced in 2000, just as some commercial distance-education efforts by colleges and companies were beginning to falter, says Mr. Noble. He argues that the demand for online education was not as great as colleges had anticipated, and he sees the government's project as an effort to bolster the use of technology in education.
Continued at http://chronicle.com/free/2002/01/2002011801u.htm
Bob Jensen's threads about other concerns in distance education and technology in education in general are at http://www.trinity.edu/rjensen/000aaa/theworry.htm
Bob Jensen's threads on education technologies are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
Hi Ruth,
You can read about the history of SPEs
at http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
I updated the document somewhat after receiving your message.
The Now Infamous 3 Percent
Rule
The source of the now infamous 3 percent asset value rule is EITF 90-15 from the
Financial Accounting Standards Board (FASB).
Emerging Issues Task Force pronouncements do not carry the weight as official FASB standards, but they are used for GAAP guidance in the absence of such standards. Other SPE-related EITF pronouncements are highlighted at http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
EITF documents can be obtained from the
FASB at http://accounting.rutgers.edu/raw/fasb/
They are not free.
Hope this helps.
Bob Jensen
-----Original Message-----
From: Ruth Bender, Cranfield School of Manage [mailto:R.Bender@CRANFIELD.AC.UK]
Sent: Thursday, January 31, 2002 2:34 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: US GAAP and EnronCould someone point me in the direction of the bit of US GAAP that says that Enron didn't need to consolidate because there was a 3% outside shareholder. The rules here in the UK are somewhat different, and I need to be able to explain this simply to students and executives.
(I'm actually a finance lecturer rather than accounting, but it's different to go into a class these days without being asked to give a rundown of creative accounting ...)
No need to clutter up the list with replies - please contact me at r.bender@cranfield.ac.uk
Thanks very much
Ruth Bender
Cranfield School of Management UK
Say What? An Accounting Professor?
But the omissions on the Web sites, with their whiff of shame, seem to go beyond that. Accountants are clearly out of style, even among accountants. School admissions dropped 25 percent in the last four years. Some speak of a ''crisis in accounting.'' W. David Albrecht, a professor of accounting at Bowling Green State University in Ohio, who runs a Web site, is among them. It's not hard to make him for a member of the profession -- skinny, stooped, with russet hair and mustache, he peers into a computer screen with the words ''I love acctng'' on it. He knows that the culture has turned against him. Even the admissions committee at Bowling Green, he says, avoids the stereotypical accounting candidate in its search for future titans of economies yet unborn: ''In the current environment, people think they don't need bookkeepers. They don't need number crunchers.'' They want financial leaders that ''people who come into contact with will respect.'' But ''accounting students tend to be the same kinds of people as always, people who were attracted to bookkeeping in high school,'' Albrecht says. ''They like keeping track of things.'' He considers the talent ''essential.''
Source: This Doesn't Add Up, by D.T. Max, The New York Times, January 28, 2002 --- http://www.nytimes.com/2002/01/27/magazine/27WWLN.html
A Very Informative Message from Roger Debreceny [rogerd@NETBOX.COM]
Some years ago (1997), the AICPA mounted a research program and a "White Paper" on Auditor Independence. The documents are available at http://www.aicpa.org/members/div/secps/isb/white.htm . The White Paper was entitled "Serving The Public Interest: A New Conceptual Framework For Auditor Independence". Sections of the White Paper show a delightfully refreshing view of the profession, given recent events. Section H, for example, is entitled "The Misplaced Regulatory Focus on the Performance of Non-Audit Services" and includes the sub-section, "Insurers Today Perceive No Independence Problem Associated with Non-Audit Services." Ah, were this only so :^) .
More seriously, the report notes:
"As explained in Section III, liability is no theoretical risk. In recent years, the costs associated with actual or threatened litigation have reached staggering levels for accounting firms. While often found to have no basis, aggregate legal claims against the six largest accounting firms (the "Big Six") exceeded $30 billion at the end of 1992."
In Appendix B "An Economic Analysis of Auditor Independence for a Multi-client, Multi-service Public Accounting Firm" authored by Rick Antle, Paul A. Griffin, David J. Teece and Oliver E. Williamson, the following data is reported:
"Auditors' liability is significant and provides incentives to maintain auditor independence.
Auditors' actual and potential losses from litigation play a large role in determining auditors' incentives. Losses from litigation contributed to the 1990 bankruptcy of Laventhol & Horwath, at one time the seventh largest accounting firm. In 1993, the six largest accounting firms (hereafter, the Big Six) incurred more than $1 billion in costs of judgments, settlements and legal defense. Although rarely alleged to be a cause of loss, auditor independence is an issue in litigation. Impairing independence at the level of the accounting firm would invite an avalanche of litigation."
Later in the sub-section:
"Accounting firms invest in their reputations, part of which is a reputation for independence. Honest clients want independent auditors. A crucial feature of the modern, multi-client accounting firm is that any threat to the firm's independence threatens its entire stream of audit revenues. These revenue streams are substantial. For example, the aggregate audit revenues of the Big Six in 1996 exceeded $6 billion."
I have seen no later data on the run-rate of liability costs, but this at least gives a flavour of the liability environment.
Roger
My answer, albeit naive, is that
auditing firms must begin to "insure" their services much like
insurance companies insure against liability with limits as to what they will
pay such as limits to liability in automobile accidents. Clients should
decide how much auditing liability insurance they are willing to purchase as a
component of the total audit fee. The insured liability limit should
be publicized on Page 1 of a corporate annual report and in stock price listings
in newspapers and on the Internet. Accordingly, the amount of insured
audit liability would then become an important input into investor and creditor
decisions. Firms paying for lower audit liability would then pay the price
by having a higher cost of capital. This does not mean that all audits
should not be held accountable to identical high auditing standards or that
audit insurance claims can be filed for stock price declines. Claims
should only be filed when there is evidence of audit negligence and/or fraud.
Bob Jensen at http://www.trinity.edu/rjensen/damages.htm
Forwarded by Brent Carper
Feudalism
You have two cows. Your lord takes some of the milk.Fascism
You have two cows. The government takes both, hires you to take care of them, and sells you the milk.Communism
You have two cows. Your neighbors help take care of them and you share the milk.Totalitarianism
You have two cows. The government takes them both and denies they ever existed and drafts you into the army. Milk is banned.Capitalism
You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.Enron Venture Capitalism
You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more.
You can find related Enron "humor" at http://www.trinity.edu/rjensen/fraud.htm#Humor
An article in Business Week entitled "How Governance Rules Failed at Enron" questions the effectiveness of today's audit committees. The article draws three lessons from the Enron collapse in an effort to help guide future regulation. http://www.accountingweb.com/item/69330
Bob Jensen's Enron threads are at http://www.trinity.edu/rjensen/fraud.htm
A Message on January 17, 2002 from Ceil Pillsbury [ceil@UWM.EDU]
Last month I posted a message regarding six accounting majors who had cheated in my class. Thank you for the responses with ideas about teaching ethics. It turned out that six other accounting majors had cheated in a different class and my original concern grew so much that I decided to take at look at the literature on academic misconduct (Thank you to Bob Jensen his usual helpful links).
Essentially, the research says that the problem is far more widespread than professors want to acknowledge (and business students are among the worse cheaters). BUT the literature also indicates that academic misconduct can be significantly reduced by raising student awareness of the issues through class discussion, signed honor codes, and having students know that real enforcement with significant penalties is occurring. Given Enron, and the significant fallout which is going to occur, I think it is very easy to tie the need for academic integrity into the need for professional integrity.
Along these lines I am attaching three documents I have prepared which I will be using in my class from now on. I have had several students review these documents with positive feedback. I would also appreciate any feedback you have.
My plan is to lecture about ethics and then to have students read the letter on the need for academic and professional integrity. After that there is an ethics worksheet for the students to complete and an honor code for them to sign.
I sense that I do not speak for myself alone when I say that my classes have become so packed with trying to cram in the ever burgeoning standards that I haven't paid nearly enough attention to ethics in the last few years. If anyone shares that concern and finds the attached materials may be of help please feel free to make any use of them desired.
I also now have an easy to use cheating software program from the University of Virginia that was used to catch 122 Physics students plagiarizing. It is available free of charge at
http://www.plagiarism.phys.virginia.edu
Regards,
Ceil
Ceil's documents are also available at http://www.cs.trinity.edu/~rjensen/cheating/
Bob Jensen's threads on cheating are at http://www.trinity.edu/rjensen/plagiarism.htm
-----Original Message-----
From: Ceil Pillsbury [mailto:ceil@UWM.EDU]
Sent: Sunday, January 20, 2002 5:04 PM
To: AECM@LISTSERV.LOYOLA.EDU Subject: Baltimore Sun and University of Virginia cheatingThe Baltimore Sun issue that has the great Enron accounting cartoon Barry mentioned also has a very interesting article about what the University of Virginia is now doing to try to stregthen their honor code. They have raised 1.4 million dollars from alums in four months toward their $2,000,000 endowment fund. Their Honor Endowment will likely pay for ethics seminars and promotional videos and CDs. It also talks about what other schools are doing.
Article at:
http://www.sunspot.net/news/nationworld/bal-te.md.honor20jan20.story?coll=ba
Cartoon at:
http://www.sunspot.net/news/opinion/cartoons/bal-opinion-kal0117.cartoon?col
I added the following module on Accounting Careers for Women at http://www.trinity.edu/rjensen/bookbob1.htm
Hi Kay,
Fist I might warn you that most salary surveys (for men and women) are badly out of date. The maximum salaries listed are often less than the starting salaries for our current accountancy graduates. Also, clerical accounting usually gets mixed in with public accountancy and higher-level professional careers in accountancy. This is especially problematic in studies of accounting salries for women since such a high proportion of working clerical accountants are women (for reasons that I won't go into here).
I will make you do some of the work. You will find quite a few interesting hits if you search for "AICPA Statistics Women" without the quote marks in the "All the words" box at http://www.google.com/advanced_search
I think you will find other interesting hits with other combinations of words at the above site. For example, try "AICPA Careers Women".
Also note the following links:
Big Five firm PricewaterhouseCoopers has retained its top 10 spot on Working Mother magazine's annual list of the "100 Best Companies for Working Mothers." The other Big Five firms are represented on the Top 100 list as well. Find out what it takes to make the grade. http://www.accountingweb.com/item/60271
Deloitte & Touche is out to prove it is still the number one firm when it comes to Big Five recognition of female employees. The firm expects to double its female partner and director ranks over the next five years. http://www.accountingweb.com/item/48313
Promoting women CPAs (certified public accountants) (an analysis of the report of the Upward Mobility of Women Special Committee) --- http://www.nysscpa.org/cpajournal/old/07551184.htm
American Society of Women Accountants --- http://www.aswa.org/
Occupational Outlook Handbook --- http://stats.bls.gov/oco/oco1001.htm
High Paying Careers for Women --- http://www-instruct.wccnet.org/~kstrnad/career/nontrad.html
Women on the Move --- http://www.insight-mag.com/insight/00/02/art-12.htm
Ceil's great site --- http://www.uwm.edu/~ceil/accounting/index.html
A Bentley College Site --- http://ecampus.bentley.edu/dept/ocs/grad/listing.html#ACCOUNTING%20CAREER%20RESOURCES:
Statistics regarding accounting and finance careers for women in the military are available at http://www.militarypartners.com/Links/Military_Lifestyle/Women.htm
Huge Database --- http://www.accountantsworld.com/list/default.asp?adv=google&tar=cpa
Linked from http://www.accountantsworld.com
I might note a few excerpts (a sampling only) from previous editions of my weekly newsletter called New Bookmarks at http://www.trinity.edu/rjensen/bookurl.htm
From the Harvard Business School American Women in the Emerging Industrial and Business Age http://www.library.hbs.edu/hc/unheard_voices/
A Web Site for Women www.ivillage.com
A Gender Gap in Startup Funding What do women want? For starters, greater access to venture capital, according to a new survey http://www.businessweek.com/smallbiz/content/dec2001/sb20011214_3179.htm?c=bwfrontierdec18&n=link1&t=email
Women in Academe – Still Hungry After All These Years --- http://www.aaup.org/pr01613.htm
"Women impeded by tech downturn," by Peter Deleveti, San Jose Mercury News, October 29, 2001 --- http://www.siliconvalley.com/docs/opinion/wiretap/pd103001.htm
Choices are Not So Great for Many Women More women are going online to seek an education. But technology isn't freeing modern women already working two shifts -- it's adding a third shift in the home, according to a new report --- http://www.wired.com/news/school/0,1383,46689,00.html
Women Engineer Tech Success --- http://www.wired.com/news/women/0,1540,43413,00.html
MentorNet founder Carol Muller finds working women to help female students
explore technical vocations. But getting the education and the job is only part
of the battle for equality.
"Earning Differences Between Women and Men" http://www.dol.gov/dol/wb/public/wb_pubs/wagegap2000.htm
Women on the Web" winner Patricia Beckman has created animation for everyone from Dreamworks to ABC --- http://www.wirednews.com/news/culture/0,1284,43239,00.html
Women In American History --- http://www.britannica.com/women/
Hope this helps!
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business
Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210)
999-8134 Email: rjensen@trinity.edu
http://www.trinity.edu/rjensen
-----Original Message-----
From: Kay Henry [mailto:henryk@rice.edu]
Sent: Friday, February 01, 2002 3:46 PM
To: rjensen@TRINITY.EDU
Subject: Referred by David AlbrechtProfessor Jensen:
David Albrecht thought you might have some information or statistics on women in accounting. Our complete correspondence is below (including a compliment for you!), but my basic question is this:
Do you know where I could get the latest statistics on percentages of women CPAs and women accounting graduates at the Bachelor's and Master's level? The study on the American Women's Society of CPAs website is dated 1996, and I couldn't find any statistics on the AICPA website.
I am presenting this weekend to a regional meeting of the AWSCPA. Any information you have would be most welcome.
Many thanks,
Kay Henry
Director, MBA for Executives Rice University
"Is your computer inviting voyeurs? Embarrassing, private text files find their way onto the Net, " by Bob Sullivan, MSNBC January 14, 2002 --- http://www.msnbc.com/news/686184.asp
There it was, just sitting out there on the Internet, for all to see. “The keys to the condo are located in a lock box mounted on the wall outside the entry door. The combination is 0-8-3-6.” The recipient of the instructions, Catalina, is only weeks away from a long-awaited vacation at a ski resort, but she had no idea that her computer was telling the world where she was going, when she would be there, and how to break into her rental condo until MSNBC.com contacted her
WHEN YOU LEAVE for vacation, you certainly don’t want the world to know when and where you are going. But that’s one of the unintended consequences of file-sharing programs with names like Gnotella and BearShare. The programs are essentially software front-ends to a file-sharing system known as Gnutella — it’s not quite heir to the Napster throne, but a place where plenty of free, illegal music swapping still goes on. But music isn’t the only thing being shared. Videos, audio files, even text documents and spreadsheets can be swapped — and often are, by accident. It’s akin to taking the Microsoft Windows “My Documents” folder and placing it out on the Internet for all to see. Monte Phillips, retired hobbyist and former Air Force radar technician, has made himself into a one-man posse who hunts down such recklessly broadcast information and warns potential victims. He passed Catalina’s condo reservation confirmation letter to MSNBC.com.
SENSITIVE INFORMATION
But Phillips has seen much worse in his surfing. He regularly spots personal letters and memos, files containing various usernames and passwords, Word documents containing bank account numbers with PIN numbers. Once he learned about intense negotiations taking place between a small Canadian firm and a major U.S. energy company.Compromised business documents can’t compare to the government information he says he’s spotted, however. Among them, over 200 case files and private correspondence from a Texas district attorney’s office, files from a computer at an Army base in Korea, even Advertisement
background check files generated soon after Sept. 11 on a person of Arab descent living in the United States from what appeared to be an federal investigator’s computer. “Everyone worries about sophisticated hackers, but people don’t realize that the threat is themselves,” Phillips said. “They haven’t got a clue about the technology they are using, and don’t stop and think what it is they are leaving about.” Monte Phillips has found all kinds of embarassing and revealing documents using file swapping service Gnotella. Often, Phillips will find a phone number attached to the documents he finds, so he calls up the “victim.” He’s not completely comfortable digging through the information but figures it’s the equivalent of opening a wallet to find out whom to return it to. After the initial shock, most victims thank him for his efforts. Why is he spending so many of his retired hours telling Internet users to cover up their naked computer files? “Oh, it’s probably a character defect,” he laughed. “I was born and raised on a farm in Nebraska — if the neighbor’s bull gets out, you just get him back inside their fence, and let the neighbor know. I haven’t got any halos.”
HOW DOES IT HAPPEN?
Catalina’s real name and other details of her trip are being withheld to protect her family; but she was shocked to find files from her computer had been accessed from a file-sharing network. “Unbelievable,” she said.Initially, she had no idea how it happened, but after a few questions remembered that her 10-year-old son uses a music-swapping program named “BearShare.” “I will certainly take measures to stop this,” she said. Catalina’s situation is typical — children often sign up their home computers for services that parents don’t quite understand. Suddenly, the family’s financial spreadsheets can be found using a simple search like “accounts” in a file swapping service. But children don’t account for files from a district attorney’s office making their way onto the Net. Also typical is when one person in the office signs up for a service, not understanding how it can expose critical company files also on that computer.
Use of the programs, which are generally considered a serious security risk by experts, seems to be somewhat common among U.S. government offices. A quick scan by MSNBC.com found hundreds of megabytes of music — including about 50 Beatles songs, 50 Jim Croce songs, and perhaps 100 John Williams compositions, among many others — shared out from a computer operated by a Naval Hospital called the Bureau of Medicine and Surgery in Beaufort, South Carolina. That irks Phillips. “None of these programs belong on business or government computers, period,” he said. “There is no ethical justification for it.” Attempts to reach the technicians at the Naval Hospital weren’t immediately successful.
USERS TO BLAME
Shaun Sidwall, the software developer who created Gnotella, said he sympathized with users who accidentally place personal items before the public. But ultimately, the user — and not his software — is to blame.“You know (accidents) happen... It is surprising to see every once in while what people share,” he said. But he argues that outside the occasional embarrassing realization, he doesn’t think many users have actually been victimized accidentally shared files. “Most users of the network aren’t searching for that kind of stuff. So chances are very few people have actually been maliciously affected by this,” he said. Sidwell designed the software to generally only share out files placed in a specific, safe folder on a user’s computer. But inexperienced users are apparently making much wider swaths of their personal files available to the network — in some cases, sharing their entire hard drives, for example. Because there might be a legitimate reason to do that, Sidwell resisted the notion of limiting Gnotella so it couldn’t make all files on a computer available. Those using file-sharing programs — or allowing their kids to do so — should be very careful about exactly what files and directories are open to the world. If there’s any confusion, the safest way to protect yourself is to use a separate hard drive. Or deploy an even more aggressive tactic, like Phillips. “My personal solution is to have a separate machine entirely for this,” he said. “And if there’s any files on your computer you don’t want the world to, store them on a zip disk or floppy, and take them out of the computer.”
Message from Ron Huefner [rhuefner@ACSU.BUFFALO.EDU]
For those needing a break from Enron, the SEC today issued its first enforcement action in the area of pro-forma earnings. AAER 1499, regarding Trump Hotels and Casino Resorts, Inc., may be found at
http://www.sec.gov/news/headlines/trumphotels.htm
Ron Huefner
"SEC Brings First Pro Forma Financial Reporting Case Trump Hotels Charged With Issuing Misleading Earnings Release," FOR IMMEDIATE RELEASE 2002-6 --- http://www.sec.gov/news/headlines/trumphotels.htm
Washington, D.C., January 16, 2002 — In its first pro forma financial reporting case, the Securities and Exchange Commission instituted cease-and-desist proceedings against Trump Hotels & Casino Resorts Inc. for making misleading statements in the company's third-quarter 1999 earnings release. The Commission found that the release cited pro forma figures to tout the Company's purportedly positive results of operations but failed to disclose that those results were primarily attributable to an unusual one-time gain rather than to operations.
"This is the first Commission enforcement action addressing the abuse of pro forma earnings figures," said Stephen M. Cutler, Director of the Commission's Division of Enforcement. "In this case, the method of presenting the pro forma numbers and the positive spin the Company put on them were materially misleading. The case starkly illustrates how pro forma numbers can be used deceptively and the mischief that they can cause."
Trump Hotels consented to the issuance of the Commission's order without admitting or denying the Commission's findings. The Commission also found that Trump Hotels, through the conduct of its chief executive officer, its chief financial officer and its treasurer, violated the antifraud provisions of the Securities Exchange Act by knowingly or recklessly issuing a materially misleading press release.
"This case demonstrates the risks involved in mishandling pro forma reporting," said Wayne M. Carlin, Regional Director of the Commission's Northeast Regional Office. "Enforcement action can result if a company fails to disclose information necessary to assure that investors will not be misled by the pro forma numbers."
Specifically, as set forth in the Order, which is available on the Commission's website, the Commission found that:
- On Oct. 25, 1999, Trump Hotels issued a press release announcing its quarterly results. The release used net income and earnings-per-share (EPS) figures that differed from net income and EPS calculated in conformity with generally accepted accounting principles (GAAP), in that the figures expressly excluded a one-time charge. The earnings release was fraudulent because it created the false and misleading impression that the Company had exceeded earnings expectations primarily through operational improvements, when in fact it had not.
- The release expressly stated that net income and EPS figures excluded a $81.4 million one-time charge. Although neither the earnings release nor the accompanying financial data used the term pro forma, the net income and EPS figures used in the release were pro forma numbers because they differed from such figures calculated in conformity with GAAP by excluding the one-time charge. By stating that this one-time charge was excluded from its stated net income, the Company implied that no other significant one-time items were included in that figure.
- Contrary to the implication in the release, however, the stated net income included an undisclosed one-time gain of $17.2 million. The gain was the result of the termination, in September 1999, of the All Star Café's lease of restaurant space at the Trump Taj Mahal Casino Resort in Atlantic City. Trump Hotels, through various subsidiaries, owns and operates the Taj Mahal and other casino resorts. The Company's executive offices are in New York City, and its business and financial operations are centered in Atlantic City.
- Not only was there no mention of the one-time gain in the text of the release, but the financial data included in the release gave no indication of it, because all revenue items were reflected in a single line item.
- The misleading impression created by the reference to the exclusion of the one-time charge and the undisclosed inclusion of the one-time gain was reinforced by the comparison in the earnings release of the stated earnings-per-share figure with analysts' earnings estimates and by statements in the release that the Company been successful in improving its operating performance. Using the non-GAAP, pro forma figures, the release announced that the Company's quarterly earnings exceeded analysts' expectations, stating:
Net income increased to $ 14.0 million, or $ 0.63 per share, before a one-time Trump World's Fair charge, compared to $ 5.3 million or $ 0.24 per share in 1998. [Trump Hotels'] earnings per share of $ 0.63 exceeded First Call estimates of $ 0.54.In addition, the release quoted Trump Hotels' chief executive officer as attributing the stated positive results and improvement from third-quarter 1998 to improvements in the Company's operations.
- In fact, had the one-time gain been excluded from the quarterly pro forma results as well as the one-time charge, those results would have reflected a decline in revenues and net income and would have failed to meet analysts' expectations. The undisclosed one-time gain was thus material, because it represented the difference between positive trends in revenues and earnings and negative trends in revenues and earnings, and the difference between exceeding analysts' expectations and falling short of them.
- On Oct. 25, the day the earnings release was issued, the price of the Company's stock rose 7.8 percent; subsequently, analysts learned of the one-time gain. On Oct. 28, the day on which an analysts' report and a news article revealing the impact of the one-time gain were published, the stock price fell approximately 6 percent.
The Commission found that Trump Hotels violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Company was ordered to cease and desist from violating those provisions.
For information about the use and interpretation of pro forma financial information, see the cautionary advice for companies and their advisors at http://www.sec.gov/news/headlines/proforma-fin.htm and the investor alert recently issued by the Commission at http://www.sec.gov/investor/pubs/proforma12-4.htm.
Contact: Wayne M. Carlin tel.: (646) 428-1510
Additional Materials
Order re: Trump Hotels & Casino Resorts, Inc. SEC Caution Regarding "Pro Forma" Financials Investor Alert Regarding "Pro Forma" Financials
Preliminary statistical data show the difference between operating (pro forma) earnings and net income under generally accepted accounting principles reached an all-time high in 2001. These statistics cover the largest U.S. public companies, collectively known as the Standard & Poor's 500. A timely analysis by TheStreet.Com shows why investors should be concerned. http://www.accountingweb.com/item/70533
Bob Jensen's threads on pro-forma reporting can be found in the following two documents:
http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#ProForma
Whether you are a CPA sending tax information back and forth to your clients, or a company trying to pass invoices to your customers, secure, private delivery of these documents is paramount to your relationship. http://www.accountingweb.com/item/69313
For photographers and photo critics!
photoSIG --- http://www.photosig.com/
A message from Ira on January 23, 2002
The AFP Exchange just published an article, "Risk Management -- Getting Started", which you can find at http://www.kawaller.com/pdf/AFPGS.pdf . It represents the philosophy and orientation of ForwardVue technologies –- a software development firm that has engaged me as a “consulting partner.”
ForwardVue is dedicated to providing risk management solutions to non-financial commercial customers seeking to manage their market exposures with greater discipline and objectivity. To learn more about ForwardVue and its capabilities, go to its website at http://www.forwardvue.com -- or call me.
You will also find additional information about derivatives, risk management, and FAS 133 in the various articles posted on the Kawaller & Company website: http://www.kawaller.com
Please feel free to contact me with any questions, comments, or suggestions.
Ira Kawaller Kawaller & Company, LLC kawaller@kawaller.com (718) 694-6270
Our tax expert from U. Conn., Amy Dunbar, provides the following helpers for professors seeking to deduct leave of absence expenses:
Go to www.irs.gov , scroll down to bottom of page, click on "Forms & Pubs, then click on "Publications and Notices," scroll down to Pub 463, "Travel, Entertainment ...," click "Retrieve Selected File," then click on "2001 Publ 463 Travel, Entertainment, Gift, and Car Expenses ( 361K)." Have fun reading.
Subsequently, she added the following:
The IRS just changed its website. The link is the same, but now there is a search box titled Forms and Publications Finder. Just type in 463. So much easier.
I think she means fun reading for tax accountants.
Following up on Amy's helper, I might note the AAUP's 2002 Tax Guide for professors at http://www.aaup.org/catalogue/2002tax.htm
The second edition of AAUP book entitled Paychecks: A Guide to Conducting Salary-Equity Studies for Higher Education Faculty is available.. See http://www.aaup.org/catalogue/01Payad.htm
Patrick Charles sent the following message on January 24, 2002
Since the fall of napster, it has been difficult for me to find a good file sharing software, Professor Jensen mentioned Gnuetella, I did not like it, well I just found this software http://www.neo-modus.com/
I like it. Worth a look. Check it out, you can share all files, excel, docs, mp3, it has a lot of potential for changing the way accountants can work.
Bob Jensen's threads on P2P file sharing are at http://www.trinity.edu/rjensen/napster.htm
Teenagers Really Do Think Differently, Information Week Newsletter on January 15, 2002
Judging by the reaction of our readers to last week's column, teenagers really do think differently than the rest of us. Here are some responses to our look at the teenage mystique.
* "[I'm] the father of one of those teenagers who is prepared to spend hours sending E-mail messages to friends who live less than a block from our house rather than picking up the phone or visiting. The minds of today's teenagers are wired differently from my generation, the baby boomers. I still read manuals when I get new software. My daughter just experiments, tries things, and if one thing doesn't work, she tries another. If she can't figure it out intuitively, she walks away and picks another application to use."
* "Indeed I wonder (and both equally dread and hope) how my infant son will one day be explaining how he programmed the nanotechnology horde of grass-eating microbots to eat the top 17.6% of each blade of grass on my lawn instead of having to mow it himself."
* "My son not only knew more about the colleges he considered, but he also knew more people that were going to them and to many others. Now in school, he gets 'instant' comparisons from his friends and acquaintances about similarities and differences between campuses in terms of both academics and social life. ... What is it going to be like for managers who have employees who compare their style with those of others, not just within a company, but far outside? What will it be like to recruit when your pool of applicants is very likely talking to one another?"
* "Why would [teenagers] type out E-mail messages on a postage- stamp-sized keypad rather than speak to the person across the aisle? Two reasons: Using the secret language of text messaging gives them a sense of belonging to a special group--marketers are all too familiar with this compulsion in teens. The second reason is often ignored: Teens want privacy. If they spoke aloud, your friend could listen in."
* "They also want to do things differently than the rest of society (their elders) because it's an expression of their youth, their own newness. ... Anyone who takes the trouble to keep an open mind and avoid getting stuck in intransigent personal political positions can also participate. In a time of rapid technological and social change, this is often a good approach to life."
* "Most important, they use their time to 'train': either receive 'training' from other teenagers, or provide 'training' to other teenagers. The transfer of knowledge is critical, and fun. Adults, probably busy with the above issues (pay bills, clean house, raise teenagers), don't participate in 'training.'"
* "We'll be able to understand today's generation if we practice uninhibited thought and reasoning. Wouldn't you think just like today's teenagers if you didn't have those boundaries and obstacles like time and money that you understand so well now? Remember when Columbus said he was going to discover a new world when the earth was flat, or remember John Kennedy saying we were going to put a man on the moon? Were they just teenagers, or uninhibited thinkers?"
* "I occasionally ask my Boy Scouts about technology, and recently I asked them what game system is cool. ... I was amazed at how quickly they generated responses, including a complete analysis of the Xbox graphics chipset with improvement suggestions by one 13-year-old."
* "These kids are mentally flexible in a way that's often difficult for older people to comprehend, but not for those of us with active imaginations and a strong will to live in the here and now--those of us who want to continue to create and produce."
* "... an intense desire to succeed: this last one is the one us adults underestimate. We as grownups have lost the magic of that time. Do you remember the urgency and passion with which you wanted things when you were young? And the almost-magical 'rush' you received if you did manage to beg your way to it successfully? When you think of it, youth is filled with all sorts of passions that create drives the likes of which few adults ever experience." - Bob Evans is editor-in-chief of InformationWeek. E-mail him at mailto:bevans@cmp.com . Add your own youthful thoughts about this column at: http://update.informationweek.com/cgi-bin4/flo?y=eFf30BcUEY0V10NvU0As
Bob Jensen's Bottom-Line on the Enron Scandal
I wrote the first draft entitled "Bottom-Line Commentary of Bob Jensen:
Systemic Problems That Won't Go Away" at
http://www.trinity.edu/rjensen/fraud.htm#Bottom
Comments and corrections are welcomed!
A Very Frank and Very Concise Summary of the Enron Mess from the President of the FEI
Andersen is
10% to Blame for the Enron Scandal
The Houston Audit Partner Does Not Have the Backbone to Stand Up to the Client
or Walk Away
Phil Livingston, President of Financial Executives International (FEI)
http://www.fei.org/download/Enron_1-18-02.ppt
The President of the FEI, Phil Livingston, also had this to say about the ethical problems of having top corporate executives who were former auditors of the corporation in the January 18 FEI Newsletter:
HIRING PERSONNEL FROM YOUR AUDITOR
It is increasingly clear that the number of former Andersen employees in financial management at Enron was a large contributor to Enron's collapse. Not only can such a situation cause the auditor to be less critical of its former fellow employees, but it can taint the audit team's independence, as they are clearly conscious of a possible career with the client. This is especially true when so many have taken this path. I spoke recently to a leading CFO at a large company on the subject, and he described their pre-existing policy of not hiring audit firm personnel until a substantial waiting period has passed (I think he said three years; it may have been five).I think this hiring policy had far more impact on the situation than the consulting work. I still think that issue is a red herring.
I strongly encourage you to adopt a policy that closes the revolving door with your audit firm. This is an action you can take immediately, and be proactive toward improving auditor independence. You should enact it as a formal policy of the audit committee. Further, to make it most effective, you should formally notify your auditor of this policy.
The Washington Post has reported that an internal Andersen e-mail message prompted top management to consider dropping Enron as a client as early as February 2001 because of concerns about bookkeeping irregularities. Andersen insists that the conversation last February was "routine" and "consistent with our client engagement assessment policies." http://www.accountingweb.com/item/69337
Easy and
Entertaining Readings On Derivative Financial Instruments
(The Trading Instruments of Choice at Enron)
Beware: His name seems to be spelled Partnoy in some references and Portnoy in others.
On January 18 on CSPAN national television, a leading Justice Department prosecutor in the Enron scandal, Michael Greenberger, gave a high recommendation with respect to Frank Partnoy's readable books on derivatives financial instruments and their scandals. Frank Partnoy is a professor of law at San Diego State University and was a former derivatives financial instruments trader --- http://www.acusd.edu/usdlaw/fac_adm2.html
F.I.A.S.C.O. : The Inside Story of a Wall Street Trader by Frank Partnoy
- 283 pages (February 1999) Penguin USA (Paper); ISBN: 0140278796
http://www.amazon.com/exec/obidos/ASIN/0140278796/qid=1011447343/sr=1-1/ref=sr_1_10_1/103-5792381-7321402FIASCO is the shocking story of one man's education in the jungles of Wall Street. As a young derivatives salesman at Morgan Stanley, Frank Partnoy learned to buy and sell billions of dollars worth of securities that were so complex many traders themselves didn't understand them. In his behind-the-scenes look at the trading floor and the offices of one of the world's top investment firms, Partnoy recounts the macho attitudes and fiercely competitive ploys of his office mates. And he takes us to the annual drunken skeet-shooting competition, FIASCO, where he and his colleagues sharpen the killer instincts they are encouraged to use against their competitiors, their clients, and each other. FIASCO is the first book to take on the derivatves trading industry--the most highly charged and risky sector of the stock market. More importantly, it is a blistering indictment of the largely unregulated market in derivatives and serves as a warning to unwary investors about real fiascos, which have cost billions of dollars.
Ingram In this behind-the-scenes look at one of the world's top Wall Street investment firms, Partnoy recounts his experience during the annual drunken skeet-shooting competition where he and his colleagues sharpen the killer instincts they're encouraged to use against competitors, clients, and each other.
FIASCO: Blood in the Water on Wall Street by Frank Partnoy
(October 1997) W.W. Norton & Company; ISBN: 0393046222
http://www.amazon.com/exec/obidos/ISBN%3D0393046222/103-5792381-7321402The game of Russian roulette is alive and well and living on Wall Street, where it's known as the derivatives market. In his aptly named book F.I.A.S.C.O., Frank Partnoy, a former derivatives trader at Morgan Stanley, exposes the seamier side of high-stakes finance. Derivatives are securities whose worth is determined by the value of other securities; according to Partnoy, however, the derivatives market is an elaborate illusion performed with smoke and mirrors. In fascinating, frightening detail Partnoy describes several of Morgan Stanley's slick deals that, in his eyes, are just this side of outright fraud. More than just dishonest, the bait-and-switch tactics Wall Street traders employ to rig the markets are downright dangerous, since the massive debt these deals conceal will inevitably come back to haunt the dealmakers.
F.I.A.S.C.O. could be subtitled Portrait of the Trader as a Young Man, for Frank Partnoy is indeed young, and his short tenure on Wall Street left him sadly disillusioned but much wiser. His book will leave you wiser, too--and probably very worried
"Some Policy Implications of Single-Stock Futures" (2001) by Frank Partnoy http://www.law.wfu.edu/courses/secreg-Palmiter/Handout/LawReviews/Portnoy-Stock-Futures.htmlABSTRACT:
On Dec. 15, 2000, Congress approved the use of single-stock futures. This essay analyzes some of the policy issues related to that approval. In particular, I discuss (1) the benefits and costs of margin rules applicable to single-stock futures, (2) the amendments to the securities laws to cover single-stock futures in areas such as insider trading and market manipulation, and (3) some potential benefits associated with the use of single-stock futures to avoid restrictions on shorting stock (e.g., the elimination of so-called "parent-subsidiary" anomalies, as when 3Com was worth less than Palm even though 3Com owned 95 percent of Palm's stock).
Document: Available from the SSRN Electronic Paper Collection: http://papers.ssrn.com/paper.taf?abstract_id=261896Paper ID: U San Diego Law & Econ Research Paper No. 10
Contact: FRANK PARTNOY
Email: Mailto:fpartnoy@acusd.edu
Postal: University of San Diego School of Law
5998 Alcala Park
San Diego, CA 92110-2492 USA
Phone: 619-260-2352
Fax: 619-260-4180Paper Requests:
Contact: Theresa A. Hrenchir, Director of Special
Projects, University of San Diego School of Law, 5998 Alcala Park,
San Diego, CA 92110-2492. Phone: (619) 260-7438. Fax: (619)
260-6815 Mailto:hrenchir@acusd.edu
Bob Jensen's threads on derivatives scandals are at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
His concise summary of derivatives in connection with the Enron scandal is at "Betting the Farm: Where's the Crime?" at http://www.trinity.edu/rjensen/fraud.htm#Farm
A message from Professor Scofield on January 18, 2002
Given the high student interest in Enron and its complexity, I have been looking for a piece of the puzzle on which Intermediate-level students could research and write. I finally decided on the stock subscriptions topic. The project is posted at my class website at http://www.utpb.edu/courses/scofield/ACCT3302/PA2.htm and my students are about three weeks away from beginning it. I wanted to invite the scrutiny and feedback of any Intermediate instructors on AECM before students begin the assignment. Any comments are welcome.
Barbara W. Scofield, PhD, CPA
Coordinator of Graduate Business Studies
The University of Texas of the Permian Basin
4901 E. University Odessa, TX 79762 915-552-2183 FAX 915-552-2174 scofield_b@utpb.edu
In a $2.1 billion action against accounting firm Grant Thornton, a Baltimore Circuit Court is investigating a possible violation involving the withholding and willful destruction of audit records in a manner likened to the contemporary but more- publicized Enron case. A court action also alleges that a former director of risk management and senior partner of the firm, "willfully, knowingly, and intentionally destroyed (client) documents with the full understanding that litigation was imminent." http://www.accountingweb.com/item/69042
Big Five firm Ernst & Young has been hit with a lawsuit by Bull Run Corp., a company that provides, among other things, marketing and event management services to universities, athletic conferences, associations, and corporations. The lawsuit alleges that E&Y failed to discover material errors in its audit of a company that Bull Run acquired in late 1999. http://www.accountingweb.com/item/69888
Bob Jensen's threads of securities frauds are at http://www.trinity.edu/rjensen/fraud.htm
Credit Suisse First Boston -- the investment bank that managed some of the most hyped stock offerings of the Internet boom era -- agrees to pay a $100 million fine for improperly pumping up share prices --- http://www.wired.com/news/business/0,1367,49930,00.html
See also:New IPO Rallying Cry: This is War |
Bankrupt? So What? Lawyers Ask |
If you think auditors have conflicts of interest, such conflicts pale in the presence of security analysts and investment bankers who are rotten to the core. See http://www.trinity.edu/rjensen/fraud.htm#Cleland
"A new wave," The Economist, Jan 17th 2002 --- http://www.economist.com/science/displayStory.cfm?Story_ID=939889
Until now. Akram Aldroubi, of Vanderbilt University in Nashville, Tennessee, and Karlheinz Gröchenig, of the University of Connecticut, have described a new way of sampling analogue signals that could overcome many limitations of Shannon's method. Although this technique may have only a small effect on everyday applications, such as the recording of music, it could revolutionise fields such as body-scanning that need to process information by the bucketful.
Democratic Senators have introduced a bill that would protect workers from complete financial devastation in situations like the Enron collapse, where a company goes under without warning. The Pension Protection and Diversification Act of 2001, would protect workers by ensuring that individual retirement account plans limit the amount of employer stock each worker may hold and encourage diversification of investment of plan assets. http://www.accountingweb.com/item/69183
Changes in the AICPA's Code of Professional Conduct & UAA now allow CPAs to accept commissions in 40 of the 50 states. Increase both you and your client's cash flow while providing them a value-added service. Here's How! Make DGI part of your client's A/R strategy to collect on slow paying or delinquent accounts and you receive a commission on collected accounts. For 25 years DGI has delivered professional and ethical collection services to clients such as United Parcel Service, Toshiba, Kyocera Mita, Bausch & Laumb and hundreds of others around the globe. DGI is not an accounting firm, so there is no risk of competition. Call 800-562-7795 or visit the AccountingWeb.com at http://www.davisandgoldmark.com/accountingweb.htm to learn more and get started.
Internet Copies and PowerPoint Printings
IMHO, Try PP print function. At bottom left, choose Handout, 3 per page, and Pure Black and White (saves alot of ink by eliminating background colors).
CM -----Original Message-----
From: Accounting Education using Computers and Multimedia[mailto:AECM@LISTSERV.LOYOLA.EDU]
On Behalf Of Patricia Doherty Sent: Wednesday, January 30, 2002 10:29 AM
To: AECM@LISTSERV.LOYOLA.EDU Subject: Re: print power point slidesNow THAT is really neat! I had seen handouts that looked this way, but never thought about how people made them. I just tried it with one of my (shorter) class shows, and it was very quick and easy. Don't know which rock I've been living under, that I never learned this. Kathryn Hansen wrote:
Within PowerPoint you can "send" the PowerPoint file to Word so that the slides come up as three per page with space or lines next to each slide for students to take notes. I then save the Word file and upload those to my Blackboard site. I find that uploading a Word file takes much less time than uploading PowerPoint files. Kathy HansenCSU-LA -- Patricia A. Doherty Department of Accounting Boston University School of Management 595 Commonwealth Avenue Boston, MA 02215 1-617-353-4415 FAX 1-617-353-6667
Instructor in Accounting Coordinator, Managerial Accounting
From Syllabus News on January 15, 2002
SMU, BU Join To Offer Project Management Training
TrainingTrack, Boston University's training network, said it would join forces with Southern Methodist University's Advanced Computer Education Centers to offer project management training in the Houston, Texas area. The TrainingTrack network, which is composed of regional training companies and schools that distribute and market Boston University's IT and management training programs, will provide area professionals with daytime and evening project management training beginning this month. Tom Bonesteel, director of SMU's training centers, said affiliating with BU's program will give the SMU subsidiary a turnkey project management offering that's flexible enough for area professionals.
For more information, visit: http://www.engr.smu.edu/soe_acec.html .
Online Enrollment Nearly Triples for Commercial College
Corinthian Colleges, Inc., a for-profit, post-secondary education company, said registrations for its online courses for the quarter ending in December, 2001, rose 171 percent compared to the same quarter last year. Course registrations for the fall term increased to 3,456, setting a company record. The company also said it added 14 new online courses in accounting and criminal justice for the January term in response to rising demand. In addition, two new campuses started offering online courses during the January term, bringing the total number of locations to 19. Currently, the company offers 80 courses online. Corinthian's chairman David Moore said the growth "reflects the increasing popularity of this flexible learning alternative as well as the quality of our curricula and dedication of our faculty."
The Corinthian College homepage is at http://www.cci.edu/
Blackboard to Acquire Prometheus from GW University
Blackboard Inc. said it would take over the Prometheus course management system from its developer, George Washington University. The agreement provides Prometheus, which had grown into a free-standing software development business at GWU, expanded resources to service partner universities and staff. The partners noted that about 30 percent of Prometheus' 65 university licensees run one of the three systems in Blackboard's e- Education suite -- Blackboard 5: Learning System; Blackboard 5: Community Portal System; and Blackboard: Transaction System. Blackboard was founded in 1997 at Cornell University and has become the largest e- education enterprise software company in the market.
Bob Jensen's threads on Blackboard are at http://www.trinity.edu/rjensen/blackboard.htm
Prometheus is the software engine used by many of the largest distance education providers such as Fathom.
See http://www.trinity.edu/rjensen/290wp/290wp.htm
Customer Relations Management
Study Outlines Successful CRM Process Research and benchmarking firm Best Practices, LLC has released a new study, "Countdown to Customer Focus: A Step-By-Step Guide to CRM Implementation," designed to reveal CRM tools and processes that world-class companies use to retain current clients, increase per-customer revenue and extend the longevity of customer relationships. http://www.newmedia.com/default.asp?articleID=3331
For those of you like me who spend a
lot of time daydreaming about the next meal.
Chowhound --- http://www.chowhound.com
At its January 9, 2002 meeting, following a rash of well- publicized complaints about the slowness of the accounting standard-setting process, the Financial Accounting Standards Board (FASB) decided to forge ahead on three new frontiers. http://www.accountingweb.com/item/68394
A Tribute to Martin Luther King, Jr. --- http://www.liu.edu/cwis/cwp/library/mlking.htm
What are IRS auditors looking for when they look at attorneys? Construction companies? Auto dealerships? There is a resource available on the IRS Web site that describes the Market Segment Specialization Program, a program that focuses on developing highly trained examiners for a particular market segment. Check it out today. http://www.accountingweb.com/item/69001
A unique travel site (simulation?) that you have to see to
believe.
AA Roads --- http://www.aaroads.com/
Who Would Buy That? (Marketing, Auctions) http://www.whowouldbuythat.com/
Frontline: Inside the Terror Network --- http://www.pbs.org/frontline/shows/network/
Roger Collins called my attention to this item from The Register on January 15, 2002 --- http://www.theregister.co.uk/content/7/23677.html
Hewlett-Packard Co and Deloitte Consulting LLC have formed a global alliance that will - John O'Brien writes - see the two companies jointly provide software and services for clients in the manufacturing sector.
Palo Alto, California-based Hewlett-Packard, said it teamed up with New York-based Deloitte Consulting to develop its Netaction product lifecycle management software for Deloitte's customers in the manufacturing sector, which includes firms like Brother Industries, Cargill and Hewlett Packard. Deloitte will also provide IT consulting and software integration services as part of the joint sales and marketing agreement.
George Bathurst, software manager for HP services said: "The deal is part of a broader strategy to work with partners, particularly in software where no one vendor can provide all the solutions. The deal is not in the same vein as our vertical industry alliance with PwC, as we have no formal legal ties, and it should go on indefinitely." Bathurst claims the alliance has already secured some multi-million dollar deals among US manufacturing firms including Nestle and Wrigley's, although it has yet to win any contracts in the UK.
This is the latest move by HP to build up its list of IT consulting partners, since failing to acquire PricewaterhouseCoopers' consulting arm in November 2000 for $20bn.
Last June, the company formed a global alliance with PwC Consulting to target the aviation sector, and compete for contracts against industry heavyweights IBM Global Services and EDS, which together account for about 20 per cent of the global market. In May, the company extended an enterprise resource planning (ERP) outsourcing agreement with Accenture Ltd which it signed three years earlier, and claims to have signed over 15 contracts, including a major SAP implementation for energy services firm Halliburton Co.
HP's services arm faced another set back in November 2001, after Sungard Data Systems outbid it for bankrupt business continuity services firm Comdisco Inc, a company that would have added 1,300 consultants and $440m in annual revenue to HP's existing 29,000-person, $7bn outfit. The company is also in the process of acquiring Compaq Global Services, through its $25bn merger with rival Compaq. This would give the new HP combined IT services revenue of $14bn (FY00), pushing it into third place in the worldwide rankings, although some way behind EDS ($18.5bn) and IBM Global Services ($31.6bn). It remains doubtful whether the merger will actually go ahead, and this would prove the biggest body blow yet to HP's services aspirations.
John Topple, global alliances manager at HP, told us: "There are no further acquisition plans in services following the merger, but we will continue growing it through alliances. We have a program in place, which will make further agreements with systems integrators and cover different markets. And we are currently talking to Deloitte about work in the insurance and outsourcing sectors."
From Indiana University: Every novel published
in the United States from 1851 to 1875
Wright American Fiction (1851-1875) http://www.letrs.indiana.edu/web/w/wright2/
"A Sprinkle of Porn, Art, Feminism," by Robin Clewley, Wired News, January 21, 2001 --- http://www.wired.com/news/culture/0,1284,49685,00.html
See also:She's the first to admit she's a whore. Working as a prostitute and porn star for years, she can accept, even embrace, the term.
But her resume shows that she's also fully capable in the roles of artist, filmmaker and yes, even PhD candidate.
See also: • Peepshow Gets an Artistic Implant • Smut Glut Has Porn Sites Hurting • 'Real' Plea: Make Love, Not Porn • Discover more Net Culture
"Annie Sprinkle would say that her feminist mother would come into her room and tell her she was either going to be a whore or an artist," said Linda Williams, professor at the University of California at Berkeley who specializes in film history, pornography and feminist theory. "That's what sets her apart. She is both."
Sprinkle, who holds a master's in Human Sexuality and is currently working toward a PhD at the Institute for Advanced Study of Human Sexuality in San Francisco is one of the artists featured in the upcoming exhibition, Peepshow 28.
The exhibition will run at the Lusty Lady men's clubs in Seattle, Washington, Feb. 7-21, and in San Francisco, California, from Feb. 14-28.
Sprinkle's contribution to the exhibit is a digital video titled The Art of the Loop, a collection of 8-millimeter pornographic films from the 1950s to the 1980s. She felt it was important to document "our erotic heritage."
"Porn has had an enormous impact on our culture," Sprinkle said. "But there's no archive, no refrigeration process for these films. And they're self-destructing quickly."
Sprinkle said she liked the old, funky and decomposing quality of the films, but digitized her work for preservation purposes.
Filmmaking talents aside, Sprinkle has combined her interests in sexuality and art through performance art, photography, writing and teaching for almost two decades. Her work has appeared at the Museum of Modern Art, the Whitney Museum of Art and the New Museum of Contemporary Art. Her latest book, Hardcore from the Heart: The Pleasures, Profits and Politics of Sex in Performance, explores the tension between feminism and pornography and the power relations that exist in any art that makes use of the female body.
But Sprinkle emphasizes she is not the first artist to demonstrate how the pornography industry and sexuality go hand in hand.
"I think it's widely known that the sex industry is the biggest supporter of artists, not the NEA (National Endowment for the Arts)," Sprinkle said. "Geishas were artists. In the film Dangerous Beauty the prostitute was a poet. Since Burlesque, there's always been a long tradition of art and sex."
Sprinkle said many similarities exist between the porn world and the art world.
"Both have lots of lights, and people buy tickets," she said. "But there are also great people in both industries, as well as a fair share of horrible people."
Sprinkle said she was attracted to Peepshow 28 because this time around, art was being brought into porn.
"I think it's an ambitious project, and I'm all for it," she said.
Williams said she is considering giving extra credit to her film students who go to the exhibit.
"I think there's no question that some pornographic films have artistic value," Williams said. "There are some exceptional porn makers who care about art. And Annie Sprinkle is one of them."
Peepshow Gets an Artistic Implant |
Smut Glut Has Porn Sites Hurting |
'Real' Plea: Make Love, Not Porn |
The Internet is a "wonderful instrument," says Pope John Paul II, but it needs to be regulated because of its degrading and damaging potential --- http://www.wired.com/news/culture/0,1284,49910,00.html
Take a look at some of the obstacles that may prevent you from reaching certain objectives during the communication process. http://www.accountingweb.com/item/68957
Accounting for Argentine Currency Devaluation
From FEI Express on January 15, 2002
As many members are considering year-end reporting implications, the issue we should be considering is this: should the Argentine devaluation be considered a Dec. 31, 2001 event for accounting and reporting purposes, and if so, what is the appropriate exchange rate to use? The SEC has not yet made a ruling, and as the Argentine markets only finally reopened on Friday, it is not certain when or if they will.
In the absence of new SEC guidance, accounting firms are looking to existing guidance for answers. It is recommended that, in working with their accountants, members consult FASB Statement 52, Foreign Currency Translation, paragraph 26, which states, "If exchangeability between two currencies is temporarily lacking at the transaction date or balance sheet date, the first subsequent rate at which exchanges could be made shall be used for purposes of this statement." Members may also want to review EITF Topic D-12, "Foreign Currency Translation - Selection of Exchange Rate When Trading is Temporarily Suspended," which addressed this issue in connection with a lack of exchangeability between the U.S. dollar and the Israeli Shekel at December 31, 1988.
The conclusion reached at that time was to use the rate after devaluation, that was established on Jan. 3, 1989. Although no definitive answer exists at this time, it appears that, based on the information above, the devaluation will be considered as a Dec. 31 event, and a rate of exchange between the U.S. dollar and the Argentine peso of other than one-to-one should be used. We will be sure to update our members immediately as new information becomes available.
Mutual funds that invested in Internet and "growth" technology stocks were the laughingstocks of Wall Street for most of last year. But they've recently staged remarkable recoveries --- http://www.wired.com/news/ipo/0,1350,49791,00.html
From The Wall Street Journal's Accounting Educator Reviews on January 24, 2002
TITLE: Amazon Had First-Ever Profit In
4th Quarter
REPORTER: Nick Wingfield
DATE: Jan 23, 2002
LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1011391206164562000.djm
TOPICS: Earning Announcements, Managerial Accounting
SUMMARY: The Wingfield article relates the surprise felt on Wall Street by the first-ever reported profit for the last quarter for Amazon.com. Factors that led to these results are discussed as well as the long-term outlook for the e-commerce retailer's future.
QUESTIONS:
1.) Is the "new-economy" dead? Can you argue that there is no
fundamental difference between the new- and old-economy? What was the
universally recognized measure of performance in the old economy?
2.) What is a lag indicator of performance? Differentiate it from a lead indicator of performance. How many lead indicators can you list? Can a lag indicator of performance be a lead indicator at the same time?
3.) How long has Amazon.com Inc. been in business? Does it surprise you that this is the first quarter that it has ever posted a profit? What factors are cited explaining the profits for last year's 4th quarter? Is there anything "new" about those factors?
4.) What has happened to Amazon's strategy since its inception? How do they measure success against that strategic vision today and does it differ from its view of their early success?
5.) What outside factor contributed to its reported profit? What does this bode for Amazon's future? What enticements are they offering in the hopes of spurring sales growth?
6.) What are "fulfillment" costs? What are "nonstandard" accounting measures? Why does the article maintain that Amazon's future is murky?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Bob Jensen's threads on pro forma reporting are at http://www.trinity.edu/rjensen/roi.htm
From The Wall Street Journal's Accounting Educator Reviews on January 24, 2002
TITLE: Ex-Official at Leslie Fay Gets
Nine-Year Sentence for Accounting Fraud
REPORTER: Staff Reporter DATE: Jan 21, 2002
PAGE: B2
LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1011571420328020280.djm
TOPICS: Accounting, Accounting Fraud, Accounting Law, Fraudulent Financial
Reporting, Legal Liability, Negligent Misrepresentation
SUMMARY: Paul F. Polishan, the former chief financial officer and senior vice president of Leslie Fay, was convicted of 18 felony counts for his role in overstating the earnings of Leslie Fay between 1989 and 1993. Mr. Polishan was sentenced to serve nine years in prison. Questions deal with accountants' liability and consequences of fraudulent financial reporting.
QUESTIONS:
1.) In what situations is overstating earnings a crime? What other penalties
could result from overstating earnings? Do you think overstating earnings should
result in a prison sentence? Support your answer.
2.) Were Leslie Fay's financial statements audited? What responsibility does the auditor bear concerning the earnings overstatement?
3.) In what situations would an independent auditor be liable under common law for overstated earnings? What defenses are available to the auditor?
4.) In what situations would an independent auditor be liable under civil law for overstated earnings? What defenses are available to the auditor?
5.) In what situations would an independent auditor be liable under criminal law for overstated earnings? What defenses are available to the auditor?
6.) Who is harmed by overstated earnings? How are each of these groups harmed?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
I added the following at http://www.trinity.edu/rjensen/fraud.htm#Bottom
From The Wall Street Journal's Accounting Educator Reviews on January 24, 2002
TITLE: Too Gray for Its Own Good
REPORTER: Baruch Lev
DATE: Jan 22, 2002
PAGE: A20
LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1011663305696657240.djm
TOPICS: Audit Quality, Accounting, Auditing, Auditing Services
SUMMARY: Baruch Lev, Professor of Accounting and Finance at New York University Stern School of Business, discusses the institutional factors that have contributed to low quality audits and makes suggestions for improvement.
QUESTIONS:
1.) What markets have high quality products? List three ways that the auditing
profession differs from these markets.
2.) What are the typical characteristics of markets with high quality products? Are these characteristics present in the auditing profession? Support your answer. How do auditing firms distinguish themselves from competitors?
3.) List three ways that Lev suggests improving the quality of auditing. List two advantages and two disadvantages of each suggestion.
4.) List two things that you think will improve audit quality. How will your suggestions improve audit quality?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Accounting for Goodwill Writedowns
From FEI Express on January 15, 2002
GOODWILL WRITEDOWNS
Last week, AOL Time Warner, Inc. announced a $40 to $60 billion charge resulting from adopting the new accounting rules for goodwill and other intangible assets (SFAS 142). As expected, the stock market had factored in this rule change, and the announcement had little price impact. The goodwill was generated in last year's AOL Time Warner merger, when technology stocks were over-valued across the board. This charge will be the first, and probably the largest, of many such charges companies will be taking as they adopt the new rules effective for Jan. 1, 2002. An informal FEI poll taken last October indicated that 30% of responding companies expected to be taking impairment charges when they adopt FAS 142 (see http://www.fei.org/finrep/polling.cfm ).Of some concern is the impression the press has given recently, suggesting that the new rules represent a convenient opportunity for companies to get impaired goodwill off the books "below the line." The rules clearly require companies to differentiate between impairment charges resulting from the new SFAS 142 methodology, and charges resulting from "significant adverse changes in business climate" or "unanticipated competition." Only those impairments resulting from the change in accounting method go "below the line."
Unfortunately differentiating between the two may not be an easy task. Members have indicated that implementing these new standards often involves making lots of difficult choices and judgment calls. See the guidance on our Web site, at: http://www.fei.org/finrep/files/analysisStatements.pdf
Also, interpretive guidance from the EITF, Topics D-100 and D-101, appears on the FASB website at: http://accounting.rutgers.edu/raw/fasb/
Finally, watch for the "Webinar" recording from our recent Business Combinations Conference, which we plan to offer on the FEI Web site shortly. That conference received excellent reviews and dealt directly with the issue of FAS 141-142 implementation.
Beginning November 2003, CPA candidates will go to Prometric Computer Testing Centers (formerly Sylvan) and take computer- administered tests. Find out why at least one insider believes all candidates should plan to finish the CPA exam prior to the changeover. http://www.accountingweb.com/item/69922
This analysis of what makes great companies great has been hailed everywhere as an instant classic and one of the best business titles since In Search of Excellence. Built to Last identifies 18 "visionary" companies and sets out to determine what's special about them. http://www.amazon.com/exec/obidos/ASIN/0887307396/accountingweb
The American Institute of Certified Public Accountants (AICPA) has issued guidance on the timely subject of related parties and related-party transactions. Download this free kit today. http://www.accountingweb.com/item/68740
A message from Paul Williams on January 21, 2001
For a more thoughtful and analytical discussion of "moral breakdown" (the current one about which the rant below laments began in the 19th century) see Chapter 7 of Andrew Abbott's, Chaos of disciplines (University of Chicago Press, 2001).
Sleuths Probe Enron E-Mails
Message on January 16 from E. Scribner [escribne@NMSU.EDU]
In case you or your students are interested in the process of document recovery following the much-publicized recent destruction efforts, there's an interesting Enron-related discussion at
http://www.wired.com/news/business/0,1367,49774,00.html
Ed Scribner
New Mexico State
Argentina's limit on cash withdrawals from banks is a boon for the electronic banking business, changing a culture where people traditionally feel more secure with cash in hand than cash on paper --- http://www.wired.com/news/business/0,1367,49543,00.html
I noticed that you were a teacher and just wanted to show you a neat program called GradePal. It helps teachers track, manage, and calculate grades. But the neat thing is it automatically builds a web site for each class where you can post news, notices, handouts, homework, pictures, grades and more. You even get your own URL and it's SOO EASY to use.
GradePal is an extremely powerful grade management tool. It helps teachers track, manage and calculate grades as well as track and manage news, handouts, lesson plans, tasks, homework's, assignments and much more. The service is unique in that it automatically creates a student-parent web site for all of your classes where students or parents can check grades, news, homework, handouts, etc.
It enhances communication to both students and parents plus increases teacher appreciation.
Check it out if you want... http://www.gradepal.com
A great site for hikers!
The Trail Database --- http://www.hejoly.demon.nl/
Hi Dale,
Thank you for the correction. I made this statement as a quotation from a speech given by someone else and then asserted that I had no idea who invented dollar value LIFO. Now we know!
Thanks,
Bob
-----Original Message-----
From: Dale Flesher University of Mississippi [mailto:actonya@HOTMAIL.COM]
Sent: Friday, January 25, 2002 1:35 PM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: The Only Invention of Academic AccountantsContrary to a recent statement in this forum, Dollar-Value Lifo (DVL) was not developed by a professor. The father of DVL was Herbert T. McAnly, who retired in 1964 as a partner at Ernst & Ernst after 44 years with the firm. Throughout his career, McAnly was known as "Mr. LIFO."
Although he did not develop LIFO, which had been around for decades in the form of the base-stock method, he did develop DVL after the Internal Revenue began accepting LIFO from all types of companies. The Treasury would probably never have agreed to allow all companies to use LIFO (in 1939) had they been able to prognosticate McAnly's idea. He first described the concept in an address delivered at the Accounting Clinic and the Central States Accounting Conference in Chicago in May 1941. His concept was finally accepted by the IRS following the Hutzler Brothers Co. case in 1947 (8 TC 14 (1947)). He later worked with the Treasury Department trying to get more practical regulations relating to LIFO.
Dale L. Flesher
Professor of Accountancy University of Mississippi
January 17, 2002 Message from Barnes & Noble: eBooks Newsletter from Barnes & Noble.com
Dear eBook Reader:
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******
FREE SHIPPING ON THE BOOKS YOU NEED FOR CLASS! Our College Textbooks Store has great prices on a huge selection of new and used books. Remember: FREE SHIPPING saves you even more. Just buy two or more items and your whole order ships free of charge. So, while you're getting your books don't forget to stock up on music, CDs and more. http://service.bfast.com/bfast/click/bnmarket?siteid=39166271&bfpage=textbks
Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm
Gary Larson's Vision of Bob Jensen's World
A History Quiz Forwarded by Dick Haar
A noted psychiatrist was a guest speaker at a large gathering, and his blonde hostess naturally broached a subject of which the doctor was most at ease. "Would you mind telling me, Doctor," she asked, "how you detect a mental deficiency in somebody who appears completely normal?"
"Nothing is easier," he replied. "You ask a simple question which anyone should answer with no trouble. If he or she hesitates, that puts you on the track."
"What sort of question?" asked the hostess.
"Well, you might ask her or him, 'Captain Cook made three trips around the world and died during one of them. Which one?'"
The woman thought for a moment, then said with a nervous laugh, "You wouldn't happen to have another example would you? I must confess I don't know much about history."
Forwarded by Don and LaDonna
Diesel Fitter
Sven and Ole worked together and both were laid off, so they went to the unemployment office. Asked his occupation, Ole said, "Panty stitcher. I sew the elastic onto ladies cotton panties."
The clerk looked up panty stitcher. Finding it classified as unskilled labor, she gave him $300 a week unemployment pay.
Sven was asked his occupation. "Diesel fitter" he replied. Since diesel fitter was a skilled job, the clerk gave Sven $600 a week.
When Ole found out he was furious. He stormed back into the office to find out why his friend and coworker was collecting double his pay.
The clerk explained, "Panty stitchers are unskilled and diesel fitters are skilled labor."
"What skill?" yelled Ole. "I sew the elastic on the panties, Sven puts them over his head and says, "Yah, diesel fitter."
Forwarded by Auntie Bev
Subject: Rules for Life - A 12-Step Programme
Sometimes we just need to remember WHAT the Rules of Life really are....
1. Never give yourself a haircut after three margaritas.
2. You need only two tools. WD-40 and duct tape. If it doesn't move and it should, use WD-40. If it moves and shouldn't, use the tape.
3. The five most essential words for a healthy, vital relationship "I apologize" and "You are right."
4. Everyone seems normal until you get to know them.
5. When you make a mistake, make amends immediately. It's easier to eat crow while it's still warm.
6. The only really good advice that your mother ever gave you was, "Go! You might meet somebody!"
7. If he/she says that you are too good for him/her--believe them.
8. Learn to pick your battles; ask yourself, 'Will this matter one year from now? How about one month? One week? One day?'
9. Never pass up an opportunity to pee.
10. If you woke up breathing, congratulations! You have another chance!
11. Living well really is the best revenge. Being miserable because of a bad or former relationship just might mean that the other person was right about you.
12. Work is good, but it's not that important. Retirees know this for sure!
Forwarded by Bob Overn
On the outskirts of a small town, there was a big, old pecan tree just inside the cemetery fence. One day, two boys filled up a bucketful of nuts and sat down by the tree, out of sight, and began dividing the nuts.
"One for you, one for me. One for you, one for me," said one boy. Several dropped and rolled down toward the fence. Another boy came riding along the road on his bicycle. As he passed, he thought he heard voices from inside the cemetery. He slowed down to investigate. Sure enough, he heard, "One for you, one for me. One for you, one for me." He just knew what it was. "Oh my", he shuddered, it's Satan and the Lord dividing the souls at the cemetery. He jumped back on his bike and rode off.
Just around the bend he met an old man with a cane, hobbling along. "Come here quick", said the boy, "You won't believe what I heard! Satan and the Lord are down at the cemetery dividing up the souls." The man said, "Beat it kid, can't you see it's hard for me to walk." When the boy insisted though, the man hobbled to the cemetery.
Standing by the fence they heard, "One for you, one for me. One for you, one for me..." The old man whispered, "Boy, you've been tellin' the truth. Let's see if we can see the devil himself." Shaking with fear, they peered through the fence, yet were still unable to see anything. The old man and the boy gripped the wrought iron bars of the fence tighter and tighter as they tried to get a glimpse of Satan. At last they heard, "One for you, one for me." And one last "One for you, one for me. That's all. Now let's go get those nuts by the fence, and we'll be done."
... They say the old man made it back to town a full 5 minutes ahead of the boy on the bike.
Forwarded by Maria
Martha's Way: Stuff a miniature marshmallow in the bottom of a sugar cone to prevent ice cream drips.
My Way: Just suck the ice cream
out of the bottom of the cone for Pete's sake, you are probably lying on
the couch with your feet up eating it anyway.
***************************************************************************
Martha's Way: To keep potatoes from budding, place an apple in the bag with the potatoes.
My Way: Buy Hungry Jack Mash
Potato Mix and keep it in the pantry for up to a year.
***************************************************************************
Martha's Way: Spray your Tupperware with nonstick cooking spray before pouring in tomato based sauces and there won't be any stains.
My Way: Feed your garbage
disposal and there won't be any leftovers.
***************************************************************************
Martha's Way: When a cake recipe calls for flouring the baking pan, use a bit of the dry cake mix instead & there won't be any white mess on the outside of the cake.
My Way: Go to the bakery. They'll
even decorate it for you.
***************************************************************************
Martha's Way: If you accidentally over-salt a dish, drop in a peeled potato and it will absorb the excess salt. My Way: If you over-salt a dish while you're cooking that's too darn bad.
My motto is: I made it, you will eat it, I don't care how bad it tastes! ***************************************************************************
Martha's Way: To determine whether an egg is fresh, immerse it in a pan of cool, salted water. It sinks, it's fresh, but if it rises to the surface, throw it away.
My Way: Eat, cook or use the egg anyway. If you feel bad later, you will know it wasn't fresh. ***************************************************************************
Martha's Way: To cure a headache, take a lime, cut it in half and rub it on your forehead. The throbbing will go away.
My Way: Martha, dear, the only reason this works is because you can't rub a lime on your forehead without getting lime juice in your eye, and then the problem isn't the headache anymore; it is because you are now blind. ***************************************************************************
Martha's Way: Don't throw out all that leftover wine. Freeze into ice cubes for future use in casseroles and sauces.
My Way: What leftover wine? ***************************************************************************
Martha's Way: Potatoes will take food stains off your fingers. Just slice and rub raw potatoes on the stains and rinse with water.
My Way: Mashed potatoes will now be replacing the anti-bacterial soap in the handy dispenser next to my sink. ***************************************************************************
Martha's Way: Place a slice of apple in hardened brown sugar to soften it.
My Way: Brown sugar is supposed to be "soft"? ***************************************************************************
Martha's Way: Now look what you can do with Alka-Seltzer: To clean a toilet, drop two tablets in, wait 20 min, brush and flush. To remove a stain from a vase or glass cruet, fillwith water and drop in two tablets. To polish jewelry, drop twoAlka-Seltzer tabs into a glass of water and immerse jewelry for two minutes. To clean a thermos bottle, fill with water and drop in four tabs and let sit for an hour or more (if necessary).
My Way: (a real time saver) Put your jewelry, vases and thermos in the toilet. Add a bottle of Alka-Seltzer tabs and you have solved a whole bunch of problems at once. For the really bold......drop in your dentures too!
Forwarded by Dick Haar
A CENTURY AGO--THE YEAR IS 1901, ONE HUNDRED YEARS AGO--
What a difference a century makes--
1. The average life expectancy in the US was forty-seven.
2. Only 14 percent of the homes in the US had a bathtub.
3. Only 8 percent of the homes had a telephone. A three-minute call from Denver to New York City cost eleven dollars.
4. There were only 8,000 cars in the US and only 144 miles of paved roads.
5. The maximum speed limit in most cities was 10 mph.
6. Alabama, Mississippi, Iowa, and Tennessee were each more heavily populated than California. With a mere 1.4 million residents, California was only the 21st most populous state in the Union.
7. The tallest structure in the world was the Eiffel Tower.
8. The average wage in the US was 22 cents an hour.
9. The average US worker made between $200 and $400 per year.
10. A competent accountant could expect to earn $2,000 per year, a dentist $2,500 per year, a veterinarian between $1,500 and $4,000 per year, and a mechanical engineer about $5,000 per year.
11. More than 95 percent of all births in the US took place at home.
12. Ninety percent of all US physicians had no college education. Instead, they attended medical schools, many of which were condemned in the press and by the government as "substandard."
13. Sugar cost four cents a pound. Eggs were fourteen cents a dozen, and coffee cost fifteen cents a pound.
14. Most women only washed their hair once a month and used borax or egg yolks for shampoo.
15. Canada passed a law prohibiting poor people from entering the country for any reason.
16. The five leading causes of death in the US were:
a) Pneumonia and influenza
b) Tuberculosis
c) Diarrhea
d) Heart disease
e) Stroke
17. The American flag had 45 stars. Arizona, Oklahoma, New Mexico, Hawaii, and Alaska hadn't been admitted to the Union yet.
18. The population of Las Vegas, Nevada was 30.
19. Crossword puzzles, canned beer, and iced tea hadn't been invented.
20. There was no Mother's Day or Father's Day.
21. One in ten US adults couldn't read or write. Only 6 percent of all Americans had graduated from high school.
22. Marijuana, heroin, and morphine were all available over the counter at corner drugstores. According to one pharmacist, "Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and the bowels, and is, in fact, a perfect guardian of health."
Forwarded by Earl Beatty
QUOTES FROM SPORTS COMMENTATORS
Murray Walker: "The lead car is absolutely unique, except for the behind it which is identical."
Greg Norman: "I owe a lot to my parents, especially my mother and father."
Alan Minter: "Sure there have been injuries and deaths in boxing - but none of them serious."
Terry Venables: "If history repeats itself, I should think we can expect the same thing again"
Ron Atkinson: "He dribbles a lot and the opposition doesn't like it you can see it all over their faces."
David Coleman at the Montreal Olympics: "There goes Juantorena down the back straight, opening his legs and showing his class."
SHOPPING MATH
A man will pay $2 for a $1 item he needs.
A woman will pay $1 for a $2 item that she doesn't need.
LONGEVITY
Married men live longer than single men, but married men are a lot more willing to die.
COMPREHENSION
There are 2 times when a man doesn't understand a woman - before marriage and after marriage.
HOW TO STOP PEOPLE FROM BUGGING YOU ABOUT GETTING MARRIED
Old aunts used to come up to me at weddings, poking me in the ribs and cackling, telling me, "You're next."
They stopped after I started doing the same thing to them at funerals
Forwarded by Dick Haar,
Three sisters, ages 92, 94 & 96 live in a house together.
One night the 96 year old draws a bath. She puts one foot in and pauses. She yells down the stairs, "Was I getting in or out of the bath?"
The 94 year old yells back, "I'll come up and see." She starts up the stairs and pauses. "Was I going up the stairs or down?"
The 92 year old is sitting at the kitchen table having tea listening to her sisters. She shakes her head and says, "I sure hope I never get that forgetful." She knocks on wood for good measure. Then she yells, "I'll come up and help both of you as soon as I see who's at the door."
Forwarded by Auntie Bev
And that's the way it was on February 5, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
Quotes of the Week
The earliest
records of transactions that had features of derivative securities occur around
2000 BC in the Middle East. (Page 338)
Geoffrey Poitras, The Early History of Financial Economics 1478-1776 (Chelten,
UK: Edward Elgar)
http://www.trinity.edu/rjensen/book01q3.htm#Poitras
During the
Greek and Roman civilizations, transactions involving elements of derivative
securities contracts had evolved considerably from the sale for consignment
process. Markets had been formalized to the point of having a fixed time
and place for trading together with common barter rules and currency systems.
These early markets did exhibit a practice of contracting for future delivery. (Page
338)
Ibid
Like forward
contracts, the use of options contracts or "privileges" has a long
history. (Page 339)
Ibid
The heuristics
of an options transaction involves the payment of a premium to acquire a right
to complete a specific trade at a later date. These types of transactions
appear not only in early commercial activity but also in other areas. For
example, an interesting ancient reference to (sic) options-like transactions can
be found in Genesis 29 of the Bible where Laban offers Jacob an option to
marry his youngest daughter Rachel in exchange for seven years labour.
(Page 339)
Ibid
What is
surprising is that it took over 4000 years (Until FAS 133 in June of 1998)
to finally requiring the booking of derivatives into the ledger. However,
Laban's contract falls outside the scope of FAS 133 if Rachel cannot readily be
converted into cash.
Bob Jensen AT http://www.cs.trinity.edu/~rjensen/000overview/mp3/133intro.htm
As regards
your reference to developing Frodos, I suspect that we can increase the volume
and integration of ethics by as much as we like, into as many of our programs as
we like, without having the slightest effect. Why? Because this is not a matter
of learning but of attitude and culture. When students leave university they
join a firm; a firm is a different culture from that of a university, and
graduates not only change their attitudes as a result of their early experiences
in a firm - they EXPECT to have them changed. Some of those experiences may lead
them to attitudes and actions - either Faustian bargains by reason of their own
inclinations, or group acculturation/pressure - which would never be condoned by
those "out of the loop". Those people who don't fit in with the firm's
culture won't survive too long; that could well include those who refuse to
adjust their ethical standards to what the firm sees as its reality.
Roger Collins
Demand for
business education continues to grow, with an ever-increasing demand from every
corner of the globe. It certainly isn't "business as usual" for
institutions of higher education. According to the AACSB International
Management Education Task Force, the context for management education for
traditional business education providers is shifting. Business schools face new
competitors, different customer segments and needs, and alternative modes for
delivery.
Theme of the forthcoming "Forging the Future" annual meeting of the
AACSB International, April 7-9, 2002 ---
http://www.aacsb.edu/Annual/2002/index.html
The Jensen's booked a band and scheduled a party for August 15, 2002 in San Antonio for all subscribers to the AECM. The party is a tribute to the AECM's founding father Barry Rice from Loyola College in Maryland. You can read about the party at http://www.trinity.edu/rjensen/party081502.htm
If you subscribe to the AECM (free), you are invited to the party. You can subscribe to the AECM at http://pacioli.loyola.edu/aecm/
If you are subscribed to the AECM, please tell us if you plan to attend the party. Send my secretary, Debbie Bowling, an email message telling her how many of your party will be attending our party. Her email address is rbowling@trinity.edu
The Saga of Auditor Professionalism and Independence
Packers Versus the Giants: A Great Ethics Video Clip
Contextual Integrity and Contextual Ethics
The major problem with integrity is that there is nearly always a time when integrity either is or should be compromised in certain situations, usually situations where there is no harm done by a "white lie" or a "silence" about something that otherwise would cause harm or embarrassment. What is confusing is that second order effects are not always taken into account! For example, the direct effects of what Brett Favre did for Michael Strahan on surface seemed like a good thing to do at the time. But think of those second order effects:
What students must learn is that situational integrity/ethics compromise the system, degrade the legitimate achievements of their peers, and become inherently unfair. Questions regarding those situations include the following:
For a continuation of this theme, go to http://www.trinity.edu/rjensen/fraud.htm#Professionalism
Betting the Farm: Where's the Crime?
The story is as old as history of mankind. A farmer has two choices. The first is to squeeze out a living by tilling the soil, praying for rain, and harvesting enough to raise a family at a modest rate of return on capital and labor. The second is to go to the saloon and bet the farm on what seems to be a high odds poker hand such as a full house or four deuces.
When CEO Ken Lay says that the imploding of Enron was due to an economic downturn and collapse of energy prices, he is telling it like it is. He and his fellow executives Jeff Skilling and Andy Fastow had indeed bet the farm six years ago on a relatively sure thing that energy prices would rise. They weren't betting the farm (Enron) on a literal poker hand, but their speculations in derivative financial instruments were tantamount to betting on a full house or four deuces. And as their annual bets went sour, they borrowed to cover their losses and bet the borrowed money in increasingly large-stake hands in derivative financial instruments.
Derivative financial instruments are two-edged swords. When used conservatively, they can be used to eliminate certain types of risk such as when a forward contract, futures contract, or swap is used to lock in a future price or interest rate such that there is no risk from future market volatility. Derivatives can also be used to change risk such as when a bond having no cash flow risk and value risk is hedged so that it has no value risk at the expense of creating cash flow risk. But if there is no hedged item when a derivative is entered into, it becomes a speculation tantamount to betting the farm on a poker hand. The only derivative that does not have virtually unlimited risk is a purchased option. Contracts in forwards, futures, swaps (which is really a portfolio of forwards), and written options have unlimited risks unless they are hedges.
Probably the most enormous example of betting on derivatives is the imploding of a company called Long-Term Capital (LTC). LTC was formed by two Nobel Prize winning economists (Merton and Scholes) and their exceptionally bright former doctoral students. The ingenious arbitrage scheme of LTC was almost a sure thing, like betting on four deuces in a poker game having no wild cards. But when holding four deuces, there is a miniscule probability that the hand will be a loser. The one thing that could bring LTC's bet down was the collapse of Asian markets, that horrid outcome that eventually did transpire. LTC was such a huge farm that its gambling losses would have imploded the entire world's securities marketing system, Wall Street included. The world's leading securities firms put up billions to bail out LTC, not because they wanted to save LTC but because they wanted to save themselves. You can read about LTC and the other famous derivative financial instruments scandals at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
Given Enron's belated restatement of reported high earnings since 1995 into huge reported losses, it appears that Enron was covering its losses with borrowed money that its executives threw back into increasingly larger gambles that eventually put the entire farm (all of Enron) at risk. As one reporter stated in a baseball metaphor, "Enron was swinging for the fences."
Whether or not top executives of a firm should be allowed to bet the farm is open to question. Since Orange County declared bankruptcy after losing over $1 billion in derivatives speculations, most corporations have written policies that forbid executives from speculating in derivatives. Enron's Board of Directors purportedly (according to Enron news releases) knew the farm was on the line in derivatives speculations and did not prevent Skilling, Fastow, and Lay from putting the entire firm in the pot.
So where's the crime?
The crime lies in deceiving employees, shareholders, and investors and hiding the relatively small probability of losing the farm by betting on what appeared to be a great hand. The crime lies in Enron executives' siphoning millions from the bets into their pockets along the way while playing a high stakes game with money put up by creditors, investors, and employees.
The crime lies is accounting rules that allow deception and hiding of risk through such things as special purpose entities (SPEs) that allow management to keep debt off balance sheets, thereby concealing risk.
In Enron's case, the gray zone of the crime lies in how responsible the victim is in putting the letters of risk into a sentence. Enron, Andersen, security analysts, and investment banks all claim claim that they followed the "letters" of GAAP and the law. But the letters were convoluted into alphabet soup that one can argue is intended to prevent the Board of Directors, the Audit Committee, employees, shareholders, and the public at large from putting the letters into that poker sentence: "THE ENTIRE ENRON FARM IS ANTEED INTO THE POT!"
At least one analyst, David Tice, pieced the above sentence from the Year 2000 annual report of Enron and reported the risk of implosion in his newsletter. Another short seller, Jim Chanos, did the same thing and made a fortune short selling Enron's stock while at the same time warning other investors. However, most investors and employees listened more to the glowing forecasts of Enron's management who failed to spell out how they were betting
So who should pay?
I hesitate to answer that, but I really like the analysis in three articles by Mark Cheffers that Linda Kidwell pointed out to me. These are outstanding assessments of the legal situation at this point in time.
I have greatly updated my threads on this, including an entire section on the history of derivatives fraud in the world. Go to http://www.trinity.edu/rjensen/fraud.htm
Note especially the following link to Mark Cheffers' articles at --- http://www.accountingmalpractice.com.
Lessons from the Enron Collapse Part I - Old line partners wanted ... http://www.accountingmalpractice.com/res/articles/enron-1.pdf
Part II - Why Andersen is so exposed ... http://www.accountingmalpractice.com/res/articles/enron-2.pdf
Part III - An independence dilemma http://www.accountingmalpractice.com/res/articles/enron-3.pdf
I added the above links to my professionalism threads at http://www.trinity.edu/rjensen/fraud.htm#Professionalism
Bob Jensen's threads on derivative financial instruments are at http://www.trinity.edu/rjensen/caseans/000index.htm
Should the deceivers go to prison?
I think those most responsible for the deception should be given the same alternative as they gave to many older employees at Enron. They should be allowed to work full-time at minimum wage jobs until they become sixty five years of age. Then they should be forced to live only on Social Security benefits until death.
Bob
Jensen's Threads
on Accounting Fraud, Forensic Accounting, Securities Fraud, and White
Collar Crime http://www.trinity.edu/rjensen/fraud.htm Bob
Jensen's Threads on Accounting Theory
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A message from Gary Kleinman GKlei49593@cs.com on January 12, 2002
Dear Dr. Jensen,
You might be interested in a book on auditor independence that Dr. Dan Palmon of the Rutgers University Graduate School of Management (Newark, NJ) and I (Dr. Gary Kleinman) recently published. The book develops a comprehensive theoretical model of auditor-client relationships. To do so, it draws very heavily on theories originating in psychology, social psychology, sociology, organizational behavior, organization theory and related literature on inter-organizational relationships and regulation. It includes theory-based discussions of influences on the independence of the auditor that range from individual personality, role set membership influences, group membership issues, control systems within the organization, a model of audit firm and client firm relationships, and so on.
The specific title and publishing information is: G. Kleinman and D. Palmon (2001). Understanding Auditor-Client Relationships: A Multi-Faceted Analysis. Markus Weiner Publications, Inc. Princeton, NJ.
The imprint is the Rutgers Series in Accounting Research.
For your information, I have taken the liberty of attaching a Word file containing the preface (here labelled abstract) and the foreword to the book. The latter was written by Dr. Jesse Dillard. I hope you find it interesting.
Sincerely,
Dr. Gary Kleinman
Fairleigh Dickinson University Teaneck, NJ
Follow-up Note From Bob Jensen
Readers might be interested in a paper that I discovered by searching the Internet using the search word Kleinman http://accounting.rutgers.edu/raw/aaa/2001annual/cpe/cpe4/38PublicCoverSight.pdf
A link to the Kleinman and Palmon book discussed above --- http://oasis.orst.edu/record=b2169452
I added this material to my history threads at http://www.trinity.edu/rjensen/history.htm
Also see http://www.trinity.edu/rjensen/fraud.htm#Professionalism
New Threads
Bob Jensen's Threads on Accounting,
Business, Economic, and Related History
http://www.trinity.edu/rjensen/history.htm
Ian Whitchurch pointed out that the 8TH WORLD CONGRESS OF ACCOUNTING HISTORIANS
The papers presented at the Congress are now available for download (in pdf format) --- http://www.emp.uc3m.es/noved/8wcah.htm
AACSB International has an immediate opening for a Director of Finance and Accounting --- http://www.aacsb.edu/Employment/ad_index.html
If you have an "interesting link" to suggest for any of the categories or if you have a new category you'd like added, please send an Email to maryjo@aacsb.edu.
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AAA Accounting Coursepage Exchange (Note this link Tracey) |
AACSB International Counterpart Associations Worldwide |
Articles and Netlinks of interest to Business Majors |
Beta Gamma Sigma (The Honor Society for AACSB International Accredited Business Programs) |
Centers for International Business and Research (CIBER) |
Disciplinary Associations |
Executive MBA Council |
Information on Business School Graduate Admissions |
MBA Information (general and specific) |
The Management Courses Information Site - Details of 2000 education, training and development courses from 265 Schools in over 65 countries |
The Technology Source - Articles focusing on the challenge of integrating information technology tools in teaching and in managing educational organizations. |
AACSB International collects information on a variety of interesting topics. See what interests you!
AACSB International Member Schools Assisting Economically Disadvantaged Communities AACSB International Member Schools With Executive Education Centers AACSB International Member Schools With Family Business Programs AACSB International Member Schools With Social Entrepreneurship Programs Current Business School Deans at AACSB International Member Schools With Former Significant Corporate/Government Positions Former Business School Deans Now in University Executive Positions Largest Single B-School Donations From Individual Donors New or Renovated Business School Buildings Women Business School Deans
Please Weep for Captain Harvey Pitt: Under Either Scenario He's Headed for Heartbreak Hotel
Harvey Pitt was Andersen's lawyer before he heeded the call to public service just a few months ago to become Captain of the USS SEC. He took command of the ship at a time when the beleaguered Big Five accounting firms had been terrorized by the former USS SEC Captain Osama Levitt and Osama's Chief Accountant Omar Turner. Before being exiled to Heartbreak Hotel, Osama and Omar inflicted grave damage on the Big Five public accounting firms. Jeremy Kahn puts it this way:
The American Institute of Certified Public Accountants (AICPA), the industry's professional association, points out that accountants examine the books of more than 15,000 public companies every year; they are accused of errors in just 0.1% of those audits. But oh, the price of those few failures. Lynn Turner, former chief accountant of the Securities and Exchange Commission, estimates that investors have lost more than $100 billion because of financial fraud and the accompanying earnings restatements since 1995. Perhaps the most glaring example of self-regulation's deficiency has been accountants' unwillingness to deal with conflicts of interest. Over the years, the major auditing firms have transformed themselves into "professional services" companies that derive an increasing portion of revenues and profits from consulting: selling computer systems, advising clients on tax shelters, and evaluating their business strategies. In 1999, according to the SEC, half of the Big Five's revenues came from consulting fees, vs. 13% in 1981. ... "I
think we had lots of smoking guns," says former chairman Arthur
Levitt. Two years ago the accounting industry waged a bitter
battle with Levitt over the issue of auditor independence. He
had considered asking the firms to curtail consulting, but backed off
after encountering stiff resistance from the accountants and their
friends in Congress. |
Captain Pitt took over for Levitt with promises to heal SEC relations with the Big Five by never challenging their fundamental rights of the Big Five to serve management and investors simultaneously with both independent audits of systems that their consulting family helped design and operate through consulting practices.
Indeed, when it turned south, the USS SEC may have become the Good Ship Lollipop in tropical waters had it not immediately crashed into the Andersen Iceberg following the Enron scandal.
- For details of the Enron scandal, see http://www.trinity.edu/rjensen/fraud.htm
- For details of the SPEs that allowed Enron to conceal its debt with off-balance sheet financing and speculation, see http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
Suddenly, Captain Pitt is overseeing a zero-sum game of survival in which he must pick a winning side and a losing side. Whatever the decision, powerful forces are going to fling him overboard to join his predecessors in Heartbreak Hotel.
- Scenario 1: Andersen Gets Hammered by the SEC and the SEC Sinks SPEs
If the SEC investigation finds the auditing firm severely negligent and in violation of conflict of interest professionalism and he vows to put an end to the evil SPEs, Captain Pitt will be an instant media hero, a beloved Captain who plucked Enron employees and investors out of the thrashing sea and resuscitated their lives. But to do so, Captain Pitt must turn on his former Andersen benefactors whom he served so diligently in the past as a lawyer for their firm. Even worse, when he steps down from the SEC he will be branded with a scarlet letter and will be banned for ever again being counsel to any public accounting firm or corporation. In short, media heroes can still end up on the floor of Heartbreak hotel
- Scenario 2: Andersen Gets Whitewashed by the SEC and the SEC Only Rearranges SPE Deck Chairs
If the SEC investigation finds Andersen's auditors to be noble and independent victims, like the investing public and Enron's employees, of the dastardly greed of Enron's pirates (Jeff Skilling, Andy Fastow, and Ken Lay), then Captain Pitt will be true to his word and adored as a peach of a Captain by public accounting firms. He might bestow upon them more than they'd hoped for when he took command of the USS SEC. But his commission will be short lived. The powerful Chairman of the House Energy and Commerce Committee, John Dingell (D-Mich.), will have this peach diced and sliced and then toss the Pitt on the floor of Heartbreak Hotel. Former Captain Harvey Pitt will be so maligned in the media that he would be blacklisted and possibly disbarred.
Of course there are other scenarios that are less extreme, but it would seem that passions run too high in the Enron scandal. The Enron collapse ruined the lives of too many people for Harvey Pitt to avoid ending up on the floor of Heartbreak Hotel. Of course this will greatly please Osama Levitt and Omar Turner in the Heartbreak Hotel. If he brings along his own Chief Accountant, Bob Herdman, they will at last have four players for games of contract bridge.
Harvey Pitt is in for the fight of his life. In my opinion, SPEs are so important to companies worldwide that the SEC, the FASB, the IASB, and virtually all other standard setters dare not go to battle with industry over SPE or substitutes, by whatever names, that allow certain types of debt to stay off the balance sheets.
The following quotations can be found at http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
Dingell
Takes Pitt to Task in Wake Of Enron Debacle; Full Investigation Sought Rep. John Dingell (D-Mich.) Dec. 5 strongly questioned the "tenor and tone" of Securities and Exchange Commission Chairman Harvey Pitt's recent remarks that of late, his agency has not "always been a kinder and gentler place for accountants." "Your choice of words sends the wrong message to auditors, to the SEC staff, and to the investing public," the Michigan Democrat charged. He said that notwithstanding Pitt's prior legal representation "of a substantial segment of the accounting profession," he expects a thorough SEC investigation of the Enron matter--as well as "any and all other matters involving your former clients." Dingell included with his letter, released Dec. 6, a list of 16 accounting questions related to Enron that he asked Pitt to consider in the course of the SEC's investigation. The questions addressed Enron's "complex web" of off-balance sheet special-purpose entities, as well as "insider" stock sales and Enron's 401(k) retirement plan. Dingell's final inquiry: "Who profited from Enron's complex business structure. Where did all the money go?" Enron, a Houston-based energy-trading company, filed for Chapter 11 bankruptcy Nov. 30 after its stock price collapsed. In recent weeks Enron acknowledged that between 1997 and the third quarter of 2001, it overstated profits by some $586 million. The scope of regulatory inquiry into the collapse is said to include Big Five accounting firm Andersen LLP's audit work for the troubled company. Wrong Message In his letter, Dingell harkened back to Pitt's first address as SEC chairman, in which he heralded a "new era" of cooperation with the American Institute of Certified Public Accountants (33 SRLR 1553, 10/29/01). In that address, Dingell noted, Pitt "observed to an audience of accountants that the SEC 'has not, of late, always been a kinder and gentler place for accountants.' " "After noting your representation of the AICPA and each of the Big Five accounting firms for the past two decades," Dingell continued, "you lamented that 'somewhere along the way, accountants became afraid to talk to the SEC, and the SEC appeared to be unwilling to listen to the profession,' and you vowed that 'those days are ended.' " "I am deeply troubled by the tone and tenor of your remarks," Dingell, who is ranking member of the House Energy and Commerce Committee, stated. "Your choice of words sends the wrong message to auditors, to the SEC staff, and to the investing public." In particular, the lawmaker said, Pitt's message "appears to be that the rules will not be implemented as vigorously as they should be. I trust that this is not what you meant to convey and that you will correct any misunderstanding at the earliest possible time. This is critical, given the plummeting confidence of investors in the integrity of financial reporting at this time." High Mark at Agency In other remarks, Dingell told Pitt that he "may choose to repudiate the legacy of your predecessor, Arthur Levitt. But make no mistake about it," Dingell asserted, Levitt's tenure, "and that of his team on these issues--former Chief Accountant Lynn Turner and former Director of Enforcement Richard Walker--represent a high mark at the SEC in fighting financial fraud, and the standard against which you will be measured. Notwithstanding your prior representation of a substantial segment of the accounting profession," Dingell emphasized, "I expect you and your agency to conduct a vigorous and fair investigation of the Enron matter and of any and all other matters involving your former clients." In connection with the foregoing, Dingell commented that committee Chairman W.J. "Billy" Tauzin (R-La.). has opened an investigation into the collapse of Enron and the events that led up to it, with a view toward hearings next year. Saying he intends to participate in the bipartisan probe, Dingell asked Pitt to consider a number of questions in connection with the SEC's investigation that he--Dingell--"will seek answers to at an appropriate time." SEC Response In a Dec. 6 letter responding to Dingell's concerns, Pitt said he is "at a complete loss" as to why the lawmaker found his remarks "about working with, and listening to, the accounting profession ... troubling." Apologizing "for what must have been a lack of articulateness," Pitt said he did not intend to suggest that securities laws and regulations will not be vigorously enforced. "Vigilant enforcement, however, is not inconsistent with openness and accessibility," the SEC chief stated. Saying the government, "and the SEC in particular, ... must be a service industry," Pitt said that in the past, those the commission works with, including the regulated community, have found the agency unapproachable--"or even outright hostile." "I am determined to change that course of action and to renew or repair relationships that have been harmed in the past," Pitt told Dingell. He said the commission's "adversarial attitude" toward industry and the profession in recent hears has not yielded positive results. "Indeed," he wrote, "we are seeing evidence of problems with the prior Commission's approach in the matters you cited, which the current Commission is now compelled to investigate." Finally, Pitt thanked Dingell for the questions he posed regarding the committee's inquiry into the Enron situation. "We look forward to responding to your, and the Committee's, questions at an appropriate time," Pitt advised. Text of the correspondence is available on the House Energy and Commerce Committee Democrats' Web site at http://www.house.gov/commerce_democrats/press/107ltr106.htm.
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http://www.quicken.com/investments/news_center/article/printer.dcg?story=/news/stories/dj/20011218/on20011218000371.htm
Senator Eyes End To
Enron-Type Special-Purpose Entities WASHINGTON -(Dow Jones)- U.S. Senate Commerce Committee Chairman Fritz Hollings, D-S.C., pledged Tuesday to introduce legislation to eliminate the sorts of financial accounting that led to the financial collapse of Enron Corp. (ENE, news, msgs). At a committee hearing on the Enron debacle, Hollings called for legislation to eliminate the use of special-purpose entities, which are partnerships or trusts through which companies keep their debt off the books and, in Enron's case, overstate earnings. Hollings said such off-the-balance-sheet transactions should end in order to protect investors. Hollings also was highly critical of the amount of insider stock selling by top Enron officials. He noted that Enron Chairman Kenneth Lay and former Chief Executive Jeffrey Skilling each sold shares in recent months for more than $60 million, while members of Enron's board sold shares worth more than $160 million. "The selling of Enron was prolific," Hollings said, calling the insider selling "a screaming red flag." If Enron officials felt the stock was undervalued, as they publicly attested, "why were they cashing in?" Hollings said. Hollings also said there was plenty of blame for the "shenanigans" associated with Enron's collapse, which he likened to a "cancer." He cited Enron's role in persuading the Commodity Futures Trading Commission against the Clinton administration's call for regulation of energy derivatives, and subsequent congressional action to exempt from regulation the highly complex energy derivatives Enron's special-purpose entities engaged in. "We are all guilty for letting it happen," Hollings said of Enron's collapse. Sen. Byron Dorgan, D-N.D., chairman of the committee's consumer affairs panel, described Tuesday's hearings as the first of several that will delve into the roles in Enron's financial collapse played by: Enron officials; Arthur Andersen, Enron's outside auditor; Wall Street analysts, and regulators. "This is about an energy company that morphed into a trading company involved in hedge funds and derivatives. It took on substantial risks, created secret off-the-books partnerships and, in effect, cooked the books under the nose of their accountants and investors," Dorgan said. Dorgan noted that Lay, Enron's chairman and chief executive, has agreed to testify at a future hearing. Dorgan also said the committee will invite Skilling, Enron's former chief executive, and Andrew Fastow, Enron's former chief financial officer, to testify at the same hearing. "Was this just bad luck, incompetence and greed, or were there some criminal or illegal actions, as has been suggested by the accounting firm that reviewed Enron's books?" Dorgan said. |
What can be said in favor of SPEs in light of the Enron scandal?
I had a hunch that SPEs started because of the FAS 13 standard that eliminated treating most capital leases as off-balance-sheet debt.
I asked a former Chairman of the Financial Accounting Standards Board to provide me with his off-the-wall remembrances of the history of SPEs in the United States. His reply is near the beginning of the document at http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
You can read his two highly
enlightening response messages near the top of the document at
http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
Also see Bob Jensen's Threads on
Accounting, Business, Economic, and Related History
http://www.trinity.edu/rjensen/history.htm
"The History and Rhetoric of Auditor Independence Concepts," by Sara Ann Reiter and Paul F. Williams --- http://les.man.ac.uk/IPA/papers/44.pdf
This paper presents an historical and rhetorical analysis of auditor independence concepts. This analysis is relevant as the newly formed Independence Standards Board in the U.S. is beginning work on a conceptual framework of audit independence to use as a basis for regulation. Debate about independence concepts has a long history and some elements of the accounting profession are suggesting that a radical turn away from historical and philosophical conceptions of independence is currently needed. Independence concepts are both defined and limited by the metaphors used to convey them. These metaphors in turn reflect culturally significant narratives of legitimation. Both the metaphors and legitimating narratives surrounding auditor independence are historically rooted in the moral philosophy framework of the ethics of rights. Current independence proposals represent a shift from the profession=s traditional moral philosophy grounding to a basis in economic concepts and theory. The character of the independent auditor is changing from "judicial man” to "economic man.” A number of consequences to the standing of the profession in the public's eyes, as well as to its internal character, may arise from the changing narrative of auditor independence
Messages from Paul Williams and Elliot Kamlot on January 11, 2002
-----Original Message-----
From: Paul Williams [mailto:williamsp@COMFS1.COM.NCSU.EDU]
Sent: Friday, January 11, 2002 7:40 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Professionals
Has the time finally arrived when serious discussion needs to occur about the absurdity of "independence" and having profit motivated individuals perform an activity that they apparently have no spirit for? The classic functionalist notion of professional connoted someone who performed an activity for its own sake and performing it excellently was the objective (MacIntyre's notion of the excellence of a practice). Doing it only for the money, though it is the model of human nature that dominates our discourse, is not conducive to one becoming a "classic" professional. And if classic professionalism is indeed an impossiblity in a world jaded by "wealth creation," then, since the audit function is essentially a regulatory activity, let regulators do it. On 10 Jan 02, at 17:04,
PaulElliot Kamlet wrote:
> If Andersen doesn't quit it, we accountants will go from professionals to
> clowns. I'm ready to sue them for their impact on the profession of which
> I am a member! >
Reply from Bob Jensen on January 11, 2002
Try to sue the government for a bad audit or a bad investigation. At least when the Big Five lets investors down, investors can unleash tort vultures that hover over the Big Five offices daily waiting for a chance to swoop down. Investors like the University of California are suing Andersen big time at the moment, but try suing the SEC if it should happen to conduct a bad investigation of Andersen and Enron.
What we have to keep in mind is how easy it is for large industries (whether or not they are oligopolies) to manipulate government watchdogs in virtually all types of government in any part of the world. I am not at all in favor of turning audits over to bureaucrats directly under the thumbs of government leaders --- bureaucrats immune from lawsuits because they work for the government. How many of our present watchdog agencies such as the FPC, the FDA, etc. are more like chearleaders than regulators for the industries they are supposed to be watching over?
Consider the Enron scandal. It is still unclear, at the start of the investigation, just how "independent" Andersen was in its internal and external auditing performance. It is clear, however, that many top government officials in both the Executive and Legislative branches of U.S. government were directly involved as employees of Enron, its industry friends, or its auditor.
The Vice-President of the U.S. is a very close friend of Enron's CEO Ken Lay, and President Bush admits to a rather long friendship dating back to his days as Governor of Texas. Our Attorney General Ashcroft has had to bow out of the Justice Department's new criminal investigation of Enron because of large donations to Ashcroft by Enron and his close ties with Enron executives. It turns out that many of our top government bureaucrats are former Enron employees who probably got their appointments because of Enron's ties with top government leaders. Even the new Chairman of the SEC, Harvey Pitt, was a Lawyer for Enron's internal and external auditors (Andersen).
My point is that investors should not sleep easier if the SEC or some other government agency becomes the auditor of business firms. If fact, I think it will become an even bigger nightmare of influence peddling, because elected officials sell out so easily and cheaply. The present system has huge flaws, but I think it works better than the Agriculture Department works in preventing frauds in farm subsidy programs.
Try to sue the government for a bad audit or a bad investigation. At least when the Big Five lets investors down, investors can unleash tort vultures that hover over the Big Five offices daily waiting for a chance to swoop down. Investors like the University of California are suing Andersen big time at the moment, but try suing the SEC if it should happen to conduct a bad investigation of Andersen and Enron.
Perhaps independence is the wrong goal. Possibly public accounting auditors should someday "insure" their audits and cut out the tort lawyers.
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
"We're The Front Line For Shareholders," by Phil Livingston (President of Financial Executives International), January/February 2002 --- http://www.fei.org/magazine/articles/1-2-2002_president.cfm
At FEI's recent financial reporting conference in New York, Paul Volcker gave the keynote address and declared that the accounting and auditing profession were in a "state of crisis." Earlier that morning, over breakfast, he lamented the daily bombardment of financial reporting failures in the press.
I agree with his assessment. The causes and contributing factors are numerous, but one thing is clear: We as financial executives need to do better, be stronger and take the lead in restoring the credibility of financial reporting and preserving the capital markets.
If you didn't already know it and believe it deeply, recent cases prove the value of a financial management team that is ethical, credible and clear in its communications. A loss of confidence in that team can be a fatal blow, not just to the individuals, but to the company or institution that entrusts its assets to their stewardship. I think the FEI Code of Ethical Conduct says it best, and it is worth reprinting the opening section here. The full code (signed by all FEI members) can be found here.
FEI's mission includes significant efforts to promote ethical conduct in the practice of financial management throughout the world. Senior financial officers hold an important and elevated role in corporate governance. While a member of the management team, they are uniquely capable and empowered to ensure that all stakeholders' interests are appropriately balanced, protected and preserved. This code provides principles which members are expected to adhere to and advocate. They embody rules regarding individual and peer responsibilities as well as responsibilities to employers, the public, and other stakeholders.
All members of FEI will:
- Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.
- Provide constituents with information that is accurate, complete, objective and relevant.
So how did the profession reach the state Volcker describes as a crisis?
- The market pressure for corporate performance has increased dramatically over the last 10 years. That pressure has produced better results for shareholders, but also a higher fatality rate as management teams pressed too hard at the margin.
- The standard-setters floundered in the issue de jour quagmire, writing hugely complicated standards that were unintelligible and irrelevant to the bigger problems.
- The SEC fiddled while the dot-com bubble burst. Deriding and undermining management teams and the auditors, the past administration made a joke of financial restatements.
- We've had no vision for the future of financial reporting. Annual reports, 10Ks and 10Qs are obsolete. Bloomberg and Yahoo! Finance have replaced the horse-and-buggy vehicles with summary financial information linked to breaking news.
- We've had no vision for the future of accounting. Today's mixed model is criticized one day for recognizing unrealized fair value contractual gains and alternatively for not recognizing the fair value of financial instruments.
- The auditors dropped their required skeptical attitude and embraced business partnering philosophies. Adding value and justifying the audit fees became the mandate. Management teams and audit committees promoted this, too.
- Audit committees have not kept up with the challenges of the assignment. True financial reporting experts are needed on these committees, not the general management expertise required by the stock exchange rules.
The problem clearly rests with all parties. But financial executives are the front line and by far the most responsible party for protecting and enhancing the shareholders' investment. We recognize it already. The auditors are nothing but a backstop - and one with a large and frayed mesh.
We have to do better on the front line, and we have to work closely with the new team in Washington to get off the old tracks and onto to a more positive and proactive path to a modern reporting and accounting model. This is not a 10-year project. It needs to happen quickly.
A message from Patrick Charles on January 12, 2001
Things are destined to get worse before they get better. The SEC has the accounting industry's pit bull as its chair. In addition, Bush has nominated two new SEC commissioners, both of whom are former partners of big five accounting firms -- Paul Atkins, a partner with PricewaterhouseCoopers, and Cynthia Glassman of Ernst & Young.
That gives the accounting industry absolute control over what was once the top cop on the corporate crime beat.
Get ready for more Enrons.
Patrick Charles [charlesp@CWDOM.DM]
You can read more about such
matters at Bob Jensen's Threads on Accounting, Business, Economic, and Related
History
http://www.trinity.edu/rjensen/history.htm
Please pass this revised message on to anybody that you sent my first stupid message to on the check cashing fee matter below.
As Curtis Brown pointed out, I overstated my fears in the case if banks wave the fee for customers depositing checks in their own accounts. This, in fact, is the case and I apologize to the banking industry for overlooking this point. Erin Byers of Wells Fargo correctly called my initial message a lot of bull, but did point out the following:
There is one shred of truth in the article. All banks are required by regulation to offer Electronic Transfer Accounts (ETAs). An applicant who does not have an adverse file with a reporting company cannot be denied an ETA. All deposits to an ETA must be by direct deposit. Checks may not be written on an ETA, but the customer must be allowed unlimited, free ATM and teller window transactions. Fees for overdrafts and charge-backs are capped at $3.00. Statements are fully truncated and there cannot be a monthly service fee for the account.
Erin Byers appears to disagree with the Consumer Reports article below on the cost of processing a cashed check. Consumer Reports cites a Federal Reserve study setting the cost at thirty-six cents, whereas Erin and probably most other bank officials contend that it is much higher.
I was alerted to the December 3 court decision in the following article which is not in error (only my editorializing was in error):
You can understand a bank refusing to cash a bad check. But what's up when big banks won't honor a valid check drawn against good funds on deposit in their own vaults? Increasingly, banks will pay up only if the bearer of the check pays a check-cashing fee of $3 or more. And now that trend promises to speed up after big national banks scored a victory in December, when a U.S. District Court in Texas nullified a state consumer-protection law that prohibited certain check-cashing fees. "I predict you'll see more legal action by banks in other states if this court ruling stands," says John Heasley, executive vice president of the 600-member Texas Bankers Association. Banks already collect a multitude of fees from account holders. Now, check-cashing fees are designed to hit up noncustomers: everyone from employees cashing a paycheck at their employer's banks, to people who bank elsewhere but want payment right now, to low-income consumers with no bank account anywhere. Bank One began charging $3 in the late 1990s and now does so in 13 of the 14 states where it has branches. In August 2000, JP Morgan Chase began charging 1.5 percent of the check's face value with a minimum $5 fee. Bank of America levied its $3 fee in June. The fees go beyond covering expenses. A 1999 study by the Federal Reserve Bank says it costs big banks only 36 cents to cash a check drawn on one of their own customer's accounts. And that cost is already figured into what the account holder pays for the checking account. Lawsuits have been filed in several states, with consumers mostly losing. The Texas suit is the first in which banks sued to assert their right to charge. Bank of America, Bank One, Chase, Comerica Bank-Texas, and Wells Fargo Bank Texas argued that federal banking regulations allow them to charge fees to their customers and preempt a Texas law requiring banks to pay the full face value of a check drawn on their customer's account if the account has sufficient funds. In court filings, the banks defined "customers" to include people "whose only relationship with the national bank is to use its ATM or to present a check for payment." Randall James, Texas' banking commissioner, maintained that federal regulations don't allow banks to charge noncustomers--that is, anyone not having an account with the bank, as defined by Texas' Uniform Commercial Code. On Dec. 3, a U.S. District Court judge declared the Texas law "unenforceable, null, and void." James says he'll ask the Texas attorney general to appeal. The outcome of this case could have broad implications. Alabama, Georgia, North Dakota, South Dakota, and Tennessee have similar laws that may now be challenged. Banks in states without such laws may become emboldened to impose check-cashing fees. Consumers Union believes check-cashing charges should be prohibited. Most checking-account holders already pay to have their deposits disbursed according to their check-writing wishes; check bearers should not have to pay a second time.
Consumer Reports, February 2002, pp. 8-9 |
Banks, like accounting firms are merging toward monopoly --- http://www.smartpros.com/x32482.xml
And as last year's merged banks are swallowed by even larger rivals this year, the number of people who feel the unpleasant effects is likely to rise, say industry pundits.
More than 8,000 bank mergers have been closed since 1980, according to the Federal Reserve Board, and the Gramm-Leach-Bliley Act of 1999 opened the door for still more combinations among financial institutions of all kinds. This year's survey is the first in which American Banker asks consumers their opinions about the trend. Their answers are sobering, if not all that startling.
The survey finds that those touched by mergers tend to be less satisfied than other consumers and are more likely to perceive worsening service quality at their primary financial institutions. Though 51 percent of those whose main financial institution merged in the last year say they were "very satisfied" overall with the company, far more of those not affected by a merger, 66 percent, give the same answer.
In many cases, this year's survey of 1,001 households lends credibility to the conventional wisdom that mergers are disruptive, bringing branch closings and layoffs, higher fees, new systems and other changes that can affect customers' experiences.
People who give combinations an unfavorable rating bring up a variety of factors when asked why bank mergers are bad. Nearly 29 percent complain of poor or impersonal service or the feeling that their financial institution does not care about them. About 24 percent worry that consolidation reduces competition, and 20 percent say combinations lead to higher costs and less efficiency-exactly the opposite of arguments bank executives usually make when explaining a deal's rationale.
Among respondents who have favorable opinions of mergers, about one in four, 26 percent, cite a larger variety of products and services when asked how they think mergers can be good for them. About 18 percent say mergers reduce costs or boost efficiency; 10 percent like the larger number of branches or ATMs; and 10 percent think mergers produce better interest rates. Only 7 percent of those with a positive opinion of bank mergers, however, say better service results.
Industry analysts do not need a survey to tell them how people feel. They see it in the numbers of customers who, in the words of one federal banking official, "vote with their feet" by taking deposits down the street to a competitor. "What (customers) have done is to send a resoundingly loud message that high-quality customer service has a direct link to safety and soundness," says Samuel P. Golden, ombudsman and senior deputy comptroller of the currency, whose agency regulates national banks.
And there are signs that some of the nation's largest and most merger-happy institutions are beginning to take a fresh look at how they approach combinations.
Continued at http://www.smartpros.com/x32482.xml
"Plagiarism: IT-Enabled Tools for Deceit?" by Phillip D. Long, Syllabus Magazine, January 2002, Page 8 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=5916
The other day, a call came in to a faculty support team from an instructor with what has become an increasing concern: a paper submitted for a class assignment didn’t seem representative of the student’s prior work. Red flags were raised. Was this a case of plagiarism? How could the professor check?
Faculty fear of plagiarism is, sadly, legitimate. Web sites continue to proliferate offering term papers, short essays, and reports of one sort or another at anywhere from $7 to $30 per page. Their increasing availability certainly suggests there is a market.
While we condemn submitting the words of others in place of one’s own, we fail to look at why this happens. The answer is not so simple. Some of the transgressions collected under the plagiarism banner include failure to attribute the source of an extensive quotation, not formally recognizing the originator of an idea, using phrases of others without indicating so with quotation marks, and, of course, wholesale downloading of term papers. Some transgressions are omissions, others a failure to understand the ethics of copyright.
No faculty member should tolerate a downloaded paper. There are software tools that can help. Send the text of a student’s paper to one of a number of services that will search the Internet for matches. A handful are free, but the majority, like the paper sites, are commercial ventures, and their effectiveness varies. Depending on the sophistication of the comparison tool, subscription paper sites may be inaccessible. But they assuage some faculty anxiety and catch those students whose laziness extends not just to writing the paper but to the method of procuring it.
How do they work? Most rely on statistically based vocabulary cross-checking and comparison of structural recurrences in text passages. For example, www.turnitin.com uses a plagiarism-checking algorithm that appears to rely on word similarity or identity. This assumes that most students will not bother to make wholesale lexical or structural changes to the material they copy.
Other services develop a digital “fingerprint” that is used to search across a wider swath of possible Web sources. But they do so at a cost of their own. The submitted papers may be added to the plagiarism-checking databases, violating the student’s intellectual property rights in the process.
Plagiarism isn’t limited to text, however. The increasing complexity of software programs makes it harder to detect the use of computer code copied from one program and inserted into another. Alex Aiken at the University of California, Berkeley, has developed an open source software program for comparing software code for similarity ( www.cs.berkeley.edu/~aiken/moss.html ).
Continued at http://www.syllabus.com/syllabusmagazine/article.asp?id=5916
|
Selected
Anti-Plagiarism Sites
Plagiarism.org Self-described “online resource for educators concerned with the growing problem of Internet plagiarism.” www.plagiarism.org and www.turnitin.com Plagiarized.com “The Instructors Guide to Internet Plagiarism.” www.plagiarized.com PaperBin.com A commercial service that checks student papers against its paper database. It bills itself as a plagiarism-prevention service. www.paperbin.com HowOriginal.com A free service that checks a 1K chunk of text against Internet resources for plagiarism. Written samples are not added to their database. www.howoriginal.com EVE (Essay Verification Engine) A downloadable application that performs complex searches against text, Microsoft Corp. Word files, and Corel Corp. WordPerfect files. www.canexus.com PlagiServe A free site that checks against paper mill sites to find copied text. www.plagiserve.com Anti-Plagiarism Resources The Center for Academic Integrity An association of more than 225 institutions that provides a forum for identifying and promoting the values of academic integrity. www.academicintegrity.org What is Plagiarism? Guidelines from the Georgetown University Honor Council. www.georgetown.edu/honor/plagiarism.html Avoiding Plagiarism Guidelines from the Office of Student Judicial Affairs at the University of California, Davis. http://sja.ucdavis.edu/avoid.htm
|
Bob Jensen's threads on plagiarism are at http://www.trinity.edu/rjensen/plagiarism.htm
Hello Professor Jensen,
Your print copy of EDUCAUSE Review, Volume 37, Number 1, will be mailed soon. The Table of Contents below gives you a peek at the articles in this issue. The full issue is online at http://www.educause.edu/pub/er/erm02/erm021w.asp
Reflections by BILLY E. FRYE The greatest responsibility of colleges and universities today is to create a solid, consistent link between the changes needed to take advantage of emerging opportunities and the mission and basic values of the institution. http://www.educause.edu/ir/library/pdf/erm0200.pdf http://www.educause.edu/ir/library/lrpdf/erm0200.pdf (non-graphic)
Rethinking Teaching for the Knowledge Society by DIANA LAURILLARD By taking a more professional approach to teaching, higher education institutions can exploit the new information technologies to meet the challenge of mass higher education and lifelong learning for the knowledge society. http://www.educause.edu/ir/library/pdf/erm0201.pdf
In Pursuit of the Learning Paradigm by DONALD P. BUCKLEY With learning-centered technologies, the current generation of higher education faculty and institutions has the first opportunity to enable a transition to pedagogies based on an understanding of the cognitive development of learning. http://www.educause.edu/ir/library/pdf/erm0202.pdf
A "Bridge" for Trusted Electronic Communications in Higher Education and the Federal Government by MARK A. LUKER The Higher Education Bridge Certification Authority (HEBCA) holds promise for enabling trusted electronic communications between campuses and government agencies using standard campus systems for identification and authorization. http://www.educause.edu/ir/library/pdf/erm0203.pdf http://www.educause.edu/ir/library/lrpdf/erm0203.pdf (non-graphic)
DEPARTMENTS
techwatch Information Technology in the News http://www.educause.edu/ir/library/pdf/erm0204.pdf
Leadership Today's CIO: Leader, Manager, and Member of the "Electronic Orchestra" by CAROL A. CARTWRIGHT http://www.educause.edu/ir/library/pdf/erm0205.pdf
New Horizons The WAP Rap by ALBERT DeSIMONE http://www.educause.edu/ir/library/pdf/erm0206.pdf
policy@edu New Responsibilities in the Post-September 11 World by GARRET SERN http://www.educause.edu/ir/library/pdf/erm0207.pdf
Viewpoints Improving the Outcomes of Education: Learning from Past Mistakes by STEPHEN C. EHRMANN http://www.educause.edu/ir/library/pdf/erm0208.pdf
Homepage The Effective Practices and Solutions Service: A Big Hit by JULIA A. RUDY http://www.educause.edu/ir/library/pdf/erm0209.pdf
From the Fathom Newsletter on
Business and Economics on January 10, 2002
The Fathom homepage is at http://www.fathom.com/
* Short e-Course * PROSPECTING FOR BUSINESS INFORMATION, a short online course from the New York Public Library, is designed to help small business owners, job-hunters, grant seekers, investors, advertisers and others navigate Web- and library-based company information services for business research. Also includes temporary access to databases from LexisNexis, infoUSA and Standard and Poor's. New class starts January 24: http://www.fathom.com/link.jhtml?cid=627&page=course&id=49704701
* Free Seminar * NETWORKS AND NETWAR: THE FUTURE OF TERROR, CRIME AND MILITANCY is a free online seminar from RAND that explores ways in which information- age communication technologies have benefited terrorist and/or civil society organizations. The seminar is free; simply follow the checkout process to enroll: http://www.fathom.com/link.jhtml?cid=628&page=course&id=21701735
* Learning Materials * A RISK WORTH TAKING? PORTFOLIO DIVERSIFICATION IN INTERNATIONAL INVESTING from Xanedu is a DigiPack containing articles from major publications such as the Journal of Financial Planning, Barron's, Financial Analysts Journal, and the Journal of Portfolio Management that examine risk assessment in international investing: http://www.fathom.com/link.jhtml?cid=629&page=course&id=14701301
* Semester-Length Course * THE SPORTING GOODS INDUSTRY, an online course from Sports Business University, provides students with an understanding of how distribution, financial and marketing principles apply to the sporting goods industry. Use the Internet to explore the effect of recent fashion trends and on how the introduction of new products and licensing has influenced the size and future potential of the industry: http://www.fathom.com/link.jhtml?cid=630&page=course&id=4701040
Search for more online courses in Fathom's Course Directory: http://www.fathom.com/link.jhtml?cid=631&page=directory
FREE BUSINESS AND ECONOMICS FEATURES
*** PERSPECTIVES ON GLOBAL CONFLICT ... Anti-Terrorism Foreign Aid In an report from Columbia International Affairs Online, international consulting firm Oxford Analytica considers on the changing nature of US foreign assistance priorities in the aftermath of the September 11 terrorist attacks: "President George Bush has announced nearly 1 billion dollars in new aid to support Pakistan and to assist refugees in Afghanistan and that country's neighbours..." http://www.fathom.com/link.jhtml?cid=632&page=feature&id=122445
*** WORLD TOMORROW ... The Future of Money Ian Angell, professor at the London School of Economics and Political Science, shows how people are bypassing government money to form hundreds of other currencies in this enlightening video presentation: "Invented in Canada, there are already hundreds of these LETS (Local Exchange Trading Schemes) in the UK alone..." http://www.fathom.com/link.jhtml?cid=633&page=feature&id=2104
Twelve Angry Megabytes
Cybercourts Set for Tech Trials Michigan will become the first state to allow
companies to sue each other over the Internet. While proponents point to cost
savings and forward thinking, critics say the loss of face-to-face interaction
will be a detriment --- http://www.wired.com/news/business/0,1367,49689,00.html
Many educators, including me, have misinterpreted the concept of OpenCourseWare (OCW) as envisioned by MIT and some other major universities.
"OpenCourseWare: Simple Idea, Profound Implications," by Phillip D. Long, Syllabus Magazine, January 2002, pp. 12-16 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=5913
On April 4, 2001, Charles Vest, president of the Massachusetts Institute of Technology, announced the beginning of the OpenCourseWare project (OCW) in a press conference that was simultaneously Web cast. “As president of MIT, I have come to expect top-level innovative and intellectually entrepreneurial ideas from the MIT community.... I have to tell you that we went into this expecting that something creative, cutting-edge, and challenging would emerge. And, frankly, we also expected that it would be something based on a revenue-producing model—a project or program that took into account the power of the Internet and its potential for new applications in education. OpenCourseWare is not exactly what I had expected.” Frankly, neither did anyone else.
What is OCW?
Since its inception, OCW has been misunderstood. The academic world has seen one or another online degree program or commercial venture stake a claim to its part of cyberspace. OCW is not about online degree programs. It isn’t even about online courses for which students can audit or enroll. That’s what it isn’t. What, then, is it?
OCW is a process—not a set of classes. This process is intended to make the MIT course materials that are used in the teaching of almost all undergraduate and graduate subjects available free online to any user in the world.
The goal of OCW is to provide the content that supports an MIT education. Ultimately, the OCW Web resource will host the materials for more than 2,000 classes taught at MIT, presented with a coherent interface that will include sophisticated search algorithms to explore additional concepts, pedagogies, and related attributes across the site as well as within a course.
The OCW announcement elicited varied reactions. Many wondered how this effort differs from any number of instances where universities have made their course Web sites available to the public, all or in part. The more cynical expressed admiration for the public relations success. The announcement made the front page of the New York Times, but skeptics asserted that OCW would be nothing more than a traditional Web site dressed up with a new acronym. But the elegance is in its simplicity. The closer one looks, the more one sees.
Still, an important and often overlooked implication of OCW is another aspect of what it is not—it is emphatically not an MIT education. This has been emphasized by Vest and other spokespeople for the initiative, but it bears repeating. It is the firm tenant of OCW that the core of an MIT education is the interaction between students and faculty in an environment that invites and supports inquiry and questioning. OCW makes no claim or effort to encapsulate this on the Web.
Competing Demands
Even given the support generally garnered on the MIT campus, some obstacles must be overcome if OCW is to be successfully implemented and maintained.
• Time. The prospect of putting up the content of some 2,000 courses in the next 10 years is daunting for anyone, even on a campus like MIT. This is all the more challenging given the one thing faculty members have least available—time. The enthusiasm and commitment toward the project is tempered by the uncertainty surrounding the level of effort faculty will be required to invest to make content suitable for OCW.
Teaching and research remain prime concerns for faculty throughout institutions of higher education nationwide and abroad. A project like this must not add significantly to the workload of already challenged faculty members, nor can it detract from their current commitments. A research question for such an effort is therefore: How can we assemble and distribute content with minimal faculty involvement?
• Reusable learning objects. A corollary to the time-constrained faculty member is the requirement that learning objects created for a course must be found suitable for other purposes, such as OCW. Faculty members cannot be expected to create content twice, once for teaching and again for presentation to the broader academic public. Thus, a second objective for the project is understanding the requirements for transformation of learning objects from their in-class instructional use to their representation as meaningful content for those interacting out of the context of the faculty/student/course/setting intersection.
• Production process. Putting together a Web site for a course is, despite current technologies to assist site designers, a significant effort. Currently, trade-offs are made in order to achieve some degree of scalability in the various systems used to aggregate content for teaching. For example, learning management systems may provide a limited suite of templates with form-based content uploading, designed to distribute the labor required to ingest and position the content within the site’s framework. The trade-off is often restricted pedagogical flexibility and relatively basic, cosmetic design choices for the reduction in the effort needed to auto-generate large numbers of course “shells.” A project such as that undertaken by OCW must incorporate new opportunities to achieve scalability for content development while not entirely sacrificing individuality in site design.
Courseware as Product
The higher education community has become subject to a new force in recent years. The trend has been referred to as “education as a good” (Schlais, 2001), describing the increasing trend toward the privatization of knowledge. Colleges and universities, in his view, are becoming more and more like vendors to students, who perceive themselves as customers of college education services. During the boom of online distance education—curtailed only recently by the general economic recession—competition for students among universities led to increasing costs. Revenues were sought to replace declining public subsidies and to support competitive consumerism. Not-for-profit subsidiaries of traditional colleges, for-profit private universities, and corporations emerged, seeking to gain a larger share in what seemed an infinitely expanding demand for anywhere, anytime learning.
The privatization of knowledge has many manifestations. One is the frightening rise in the cost of scholarly journals. The pattern is familiar to anyone working in the academy. Schlais describes the conundrum like this: “A faculty member spends years of her life learning, researching, thinking, organizing, teaching, and writing. Her university invests substantially during this process. She publishes the fruits of her labor in a highly respected journal. And finally her library buys a subscription to the journal, sometimes costing in the tens of thousands of dollars per year.” Something is amiss, and our library colleagues have been painfully aware of it for years.
Copyright and legal interpretations deepen the concern. According to the World Trade Organization (WTO), and the General Agreement on Trade in Services, education is an international commodity. In the United States, compliance with the WTO agreements was accomplished in part by the enactment of the Digital Millennium Copyright Act in 1998. Jessica Litman described the relevance of these changes in her book, Digital Copyright: Protecting Intellectual Property on the Internet (2001):
“1. The use of digital works, including viewing, reading, listening, transporting, etc., requires a reproduction of the original of the work in a computer’s memory. 2. Copyright statutes give clear and exclusive control over reproduction (as defined above) to the copyright holder. 3. For each use of the copyrighted material, that is, each viewing, listening, transfer, the user needs to have the statutory privilege of the copyright holder.”
Faculty members at MIT, as well as other universities, are concerned that their intellectual property may be locked away from their peers, as well as potential students, behind proprietary barriers. Participating in OCW is a proactive statement that “reflects the idea that, as scholars and teachers, we wish to share freely the knowledge we generate through our research and teaching” (Miyagawa, 2001). As Vest noted, “OpenCourseWare looks counterintuitive in a market-driven world.” Indeed.
A New Model of Scholarly Sharing?
OCW is often thought of as the educational content equivalent to the open source software movement. The analogy is appealing and reflective of many, but not all, of its goals. Taking a closer look at what constitutes open source software might help.
Continued at http://www.syllabus.com/syllabusmagazine/article.asp?id=5913
Bob Jensen's threads on education
technologies are linked at
http://www.trinity.edu/rjensen/000aaa/0000start.htm
Dear Bob,
Some of your links to The Irascible Professor are out of date. Owing to the demise of Excite@Home, The Irascible Professor has moved to a new web hosting provider.
The new URL is http://irascibleprofessor.com
All the good stuff should be accessible at this new address.
Thanks for your comments about our work.
Sincerely,
Dr. Mark H. Shapiro
Editor and Publisher The Irascible Professor http://irascibleprofessor.com
My original comments in New Bookmarks
on June 7, 2000 are at http://www.trinity.edu/rjensen/book00q2.htm#060700
This is an "Irreverent Commentary on the State of Education in America
Today."
The Big Five accounting firms, in cooperation with the American Institute of CPAs, have issued a detailed list of risk factors to consider when preparing and communicating financial results for 2001. The document, "Impact of the Current Economic and Business Environment on Financial Reporting," also includes suggestions for how management, audit committees and auditors can contribute to a clear understanding of a company's health. http://www.accountingweb.com/item/68060
Derivative
Financial Instruments Frauds ---
http://www.trinity.edu/rjensen/fraud.htm
Hi Ceil,
I don't recall a table on derivatives fraud alone, and I would think that this would be extremely difficult to compile since derivatives fraud interacts in such complicated ways with other types of fraud. For example, in the Enron scandal, derivatives are playing a huge role, but these interact with insider dealings (especially those of Andy Fastow) and SPEs hidden everywhere. Also, you cannot attribute all derivatives fraud to bad accounting. Nor can you assert that bad accounting for derivatives is intentional fraud.
While at the SEC, Lynn Turner (see Forbes, 1/7/2002, Page 89) estimated that investors lost more than an average of $20 billion per year due to financial fraud and the accompanying earnings restatements (but these were not all derivatives related by any means). This does not include frauds related to bad accounting that was not detected and restated (which is probably much greater).
Derivatives fraud is on the rise since it is so easy to write derivatives contracts that befuddle the experts. For example, take a look at my Sixty Minutes video clip and try to make any sense out of a typical derivatives contract entered into by Orange County --- http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm#Introduction
You might take a look at The Devil's Derivatives Dictionary at http://www.margrabe.com/Devil/DevilF_J.html
The classic and enormous scandal was Long Term Capital led by Nobel Prize winning Merton and Scholes (actually the blame lies more with their devoted doctoral students). There is a tremendous (one of the best videos I've ever seen on the Black-Scholes Model) PBS Nova video explaining why LTC collapsed. Go to http://www.pbs.org/wgbh/nova/stockmarket/
Unbooked derivatives caused the collapse of Long Term Capital, and Orange County.
It has been reported that Insurance companies probably lose as much or more money to derivatives fraud than any other source --- http://www.quatloos.com/scams/insfraud.htm The nature of the insurance business makes it exceptionally vulnerable.
We owe much to Roy Davies for documenting many types of derivatives fraud scandals --- http://www.ex.ac.uk/~RDavies/
A reference on financial fraud that
also covers some derivatives fraud scandals can be found at http://www.ex.ac.uk/~RDavies/arian/scandals/
I like the following quote:
Derivatives, non-existent gold reserves and copper futures have been the stuff of frauds on an almost incomprehensible scale. The activities of Nick Leeson, Toshihide Iguchi, Yasuo Hamanaka and other star traders have made the bank robbing activities of Jesse James and the outlaws of the old Wild West seem like pathetic, kindergarten stuff in comparison. This is a guide with lots of links to information on these and other lesser-known financial scandals. While most of the cases in these pages involve real or suspected criminal activity a few are included simply because the scale of the incompetence or greed makes them scandalous.
In particular, take a look at "Gambling on Derivatives Hedging Risk or Courting Disaster?" at http://www.ex.ac.uk/~RDavies/arian/scandals/derivatives.html
Derivatives and Fraud
The best known case is that of Barings Bank which collapsed after Nick Leeson lost enormous sums of money by gambling that the Nikkei 225 index of leading Japanese company shares would not move materially from its normal trading range. That assumption was shattered by the Kobe earthquake on the 17th January 1995 whereafter Leeson attempted to conceal his losses.In May 1999 Swedish authorities fined Credit Suisse First Boston 2 million Swedish kronar because of an attempt by the Flaming Ferraris group of traders to manipulate the Swedish stock market index.
Mispriced options were used by NatWest Capital Markets to conceal losses and the British Securities and Futures Authority concluded its disciplinary action against the firm and two of its employees, Kyriacos Papouis and Neil Dodgson, in May 2000.
In March 2001 a Japanese court fined Credit Suisse First Boston 40 million yen because a subsidiary had used complex derivatives transactions to conceal losses.
An even better reference on derivatives fraud can be found at http://www.ex.ac.uk/~RDavies/arian/scandals/classic.html
Bankers who hire money hungry geniuses should not always express surprise and amazement when some of them turn around with brilliant, creative, and illegal means of making money.
I think it is safe to conclude derivatives accounting is in a state of chaos in terms of helping investors comprehend risks in derivatives contracts. These contracts can be enormously complex, convoluted, and leveraged.
FAS 133/138 made some giant strides, but as of yet nobody (especially academics) can comprehend the complexities of these standards. By way of illustration, I will throw out an example to the world and defy anybody to come up with an explanation. After releasing the really confusing FAS 138, the FASB issued some examples to better understand FAS 138. I finally mastered the benchmarking example (it was not easy). See http://www.cs.trinity.edu/~rjensen/138bench.htm
The original FAS 138 examples from the FASB can be downloaded from http://accounting.rutgers.edu/raw/fasb/derivatives/examplespg.html
But I've never found anybody (including experts at the FASB) that can explain the Section 2 Example 1: Fair Value Hedge of a Fixed-Rate Foreign-Currency-Denominated Loan in Which all of the Variability in the Functional-Currency-Equivalent Cash Flows is not Eliminated (Fixed to Variable Scenario. I think somebody at Goldman generated this illustration on a Bloomberg Terminal without ever comprehending what went on inside the computer. In any case, the world would be forever indebted if somebody would explain how to derive the numbers in this example and the remaining examples in what is the worst document ever published by the FASB.
I am sorry to have become sidetracked with my frustrations on this, but everybody is confused about how to account for derivatives while the derivatives foxes are stealing all the hens.
I discuss the havoc this is causing in financial accounting textbooks at http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm#PHBwarnings
My take on fraud is summarized at http://www.trinity.edu/rjensen/fraud.htm
That document just keeps growing by leaps and bounds.
Andersen is no more at fault than most of the other big firms. For example, why did it take an expose at Forbes to prompt PwC to restate some outrageous accounting at MicroStrategies --- http://www.washingtonpost.com/wp-dyn/articles/A6157-2002Jan6.html
Bob Jensen
-----Original Message-----
From: Ceil Pillsbury [mailto:ceil@uwm.edu]
Sent: Tuesday, January 08, 2002 9:20 AM
To: 'rjensen@trinity.edu'
Subject: cleverBob,
What a clever analogy. What a mess (Enron). I am so discouraged.
I have spent lots of time in your bookmarks and was sure that I saw this table that told how many billions had been lost in derivative scandals in there but now I can't find it. Do you know what I am talking about? You really are amazing Bob--I am certain that no one has made a bigger contribution to helping their colleagues than you!
Ceil
Update Message from Bob Jensen
Ceil found the derivatives scandals reference mentioned above and I added it to my threads on derivatives fraud at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
A message from Ira Kawaller on January 13, 2002
Hi Bob,
I wanted to alert you to the fact that I posted another article on the Kawaller and Company website, "The New World Under FAS 133." It came out in the latest issue of the GARP Review. It deals with the economics and accounting considerations relating to the use of cross-currency interest rate swaps. The link below brings you to the paper:
http://www.kawaller.com/pdf/garpswaps.pdf
I also posted a new calendar of events, at
http://www.kawaller.com/schedule/calendar.pdf
To navigate to the links in this email message, click on them. If that does not work, copy the link and paste it into the address field of your browser.
Please feel free to contact me if you have any questions, comments, or suggestions. Thanks for your consideration.
Ira Kawaller kawaller@kawaller.com
http://www.kawaller.com
Bob Jensen's documents on FAS 133, FAS 138, and IAS 39 are at http://www.trinity.edu/rjensen/caseans/000index.htm
How to find an organization
Businesses
Not-for-Profit Organizations
If you know the name of a non-profit organization, you can find a raft of data in their IRS 990 tax returns at http://www.guidestar.org/index.jsp
Bob Jensen's links to other directories are at http://www.trinity.edu/rjensen/bookbob1.htm
The following is an advertisement that appeared in The AccountingWeb newsletter on January 11, 2002. I am repeating it here as courtesy to my friends at Bentley College for a job well done.
Our accounting Master of Science degrees are designed for every facet of today's changing business world. Choose the first program in Massachusetts to gain the AACSB's separate accountancy accreditation, Bentley's MS in Accountancy, and receive an up-to-date education in the major areas of accounting. Or select our MS in Accounting Information Systems - the first in New England, focusing on the high-tech field of information-based accounting services. Whichever advanced path you choose, your career will keep pace with this ever-changing business. For more information, visit us on the web at http://www.bentley.edu/gr/ac
Forwarded by Debbie Bowling
Webopedia Who can remember every single computer and Internet term and acronym that floats around in cyberspace? We can't, so we sometimes visit the Webopedia site to check up on an acronym or three. The Webopedia site contains definitions, search engines, news, job information, and much more. Check it out at the link below this tip.
Click here to visit Webopedia! --- http://www.pcwebopedia.com/
Among all of Bob Jensen's thousands of documents on Trinity University's Web server, the most frequently hit site is his Technology Glossary at http://www.trinity.edu/rjensen/245gloss.htm
The Technology Source, January/February 2002
The purpose of The
Technology Source (ISSN 1532-0030), a peer-reviewed bimonthly
periodical published by the Michigan
Virtual University, is to provide thoughtful, illuminating articles
that will assist educators as they face the challenge of integrating
information technology tools into teaching and into managing educational
organizations. We welcome your participation. Please use the discussion
option available in each article to respond to that article. Send your
comments and suggestions about the publication to James
L. Morrison, editor. Consider submitting
an article for publication consideration. Sign
up for an announcement of each new issue of The Technology
Source. |
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Note: Our site utilizes cascading stylesheets (CSS) in order to create the format and layout of the issues and articles. If you are experiencing difficulties, we recommend that you download the most recent version of Netscape Navigator or Microsoft Internet Explorer, both of which adhere to CSS standards.
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U.S. retail and property service Homestore.com joins the list of companies investigating possible accounting irregularities. In a recently-filed Form 8-K, the company said that it expects to restate its nine-month financial results and reduce the revenue figure by as much as $95 million to better reflect the nature of on-line advertising transactions that should have been accounted for as barter transactions. http://www.accountingweb.com/item/68490
Problems with barter transactions
are elaborated upon in my threads at
http://www.trinity.edu/rjensen/ecommerce/eitf01.htm
"A New Methodology for Evaluation: The Pedagogical Rating of Online Courses," by Nishikant Sonwalkar, Syllabus Magazine, January 2002, 18-21 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=5914
This article proposes a means of numerically evaluating various attributes of an online course and then aggregating these into an "Overall Rating." Obviously, any model for this type of aggregation will be highly controversial since there are so many subjective criteria and so many interactive (nonlinear) complexities that lead us to doubt and additive aggregation.
The author follows up on two previous
articles in Syllabus Magazine (November and December 2001) a
pedagogical learning cube. This January 2002 article takes a giant leap
by aggregating metrics of six media types, five learning styles, and five
types of student interactions (not to be confused with the model's component
interactions). The pedagogy effectiveness index expressed as a summative
rule
I have all sorts complaints about an additive summation index of components that are hardly independent. However, I will leave it to the reader to read this article and form his or her own opinion.
In January of 2002, The Washington Post ran a series about the MicroStrategy, Inc scandal and the religious fervor of its explosive CEO named Michael Saylor. The series is described at http://www.washingtonpost.com/wp-dyn/articles/A11452-2002Jan7.html
About
this series
This series of articles is based on interviews with Michael Saylor and more than 100 people who have known, watched or worked with him. It is also based on court documents, MicroStrategy memos and internal e-mails. Part
I Part
II Part
III Part
IV (Wednesday) |
One item of special interest is the fact that the Big Five accounting firm Pricewaterhouse Coopers (PwC) did nothing to re-state some really bad accounting until that bad accounting was made public in a Forbes article. The following quotation is from Part II of the above Washington Post series:
"We believe it would be appropriate for us to retract the previously audited financial statement of December 1999," Dirks said, according to a source familiar with that conversation. He suggested that MicroStrategy issue a press release announcing it would be restating its revenue figures from the previous quarter.
Dirks focused on a large deal that MicroStrategy had struck the previous fall with NCR Corp, a computer equipment and services firm. MicroStrategy sold $27.5 million worth of software and services to NCR for NCR to "resell" to its own customers. As part of the transaction, MicroStrategy agreed to pay $25 million in stock and cash to NCR for one of its business units and a data warehousing system. Some stock analysts saw the deal as a virtual revenue wash, but MicroStrategy still issued a press release on Oct. 4, 1999, hailing its "52.5 million agreement with NCR." MicroStrategy recorded $17.5 million in sales from the NCR deal in the quarter that ended that Sept. 30. NRC accounted for the deal in the following quarter.
Without that $17.5 million, MicroStrategy's revenue for the third quarter would have dropped nearly 20 percent from the previous quarter, instead of growing by 20 percent. It would have reported a loss of 14 cents a share instead of a profit of 9 cents. And it would have fallen well below Wall Street's expectations, making it unlikely its stock price would have risen as much as it did the following month, when Saylor and a group of company insiders sold shares at a collective value of $82 million.
The firm's accountants had approved MicroStrategy's financial statements until as late as Jan. 26, 2000. They were acting now, they privately told MicroStrategy officials, in response to the Forbes article, which had examined the NCR deal in detail. Citing an ongoing client relationship with MicroStrategy, Pricewaterhouse refused to respond to several written questions for these articles. Dirks and Martin also declined to comment through Pricewaterhouse spokesman Steven Silber.
"Wait," Saylor said to Dirks and Martin, his voice cracking, "you guys signed off on this." If MicroStrategy issued a press release, he said, "there will be a collapse of confidence and trust in our company that will cause great collateral damage."
Everyone agreed to talk again the next morning. Lynch bought cigarettes, and neither he nor Saylor slept that night.
At midnight Washington time, Saylor and Lynch called the Arlington home of MicroStrategy's chief counsel, Jonathan Klein. This set off a flurry of sleep-jangling calls between Klein, other MicroStrategy attorneys, executives and members of the company's board of directors.
On the Road Again
Late on Tuesday, Lynch returned to Washington to join a group of MicroStrategy accountants, lawyers and board members who were meeting with Pricewaterhouse. Saylor continued his roadshow, except for a trip back to Washington where he announced that he would spend $100 million of his own money to start a free online university, a plan that was previewed on the front page of The Washington Post.
Back on the road, Saylor would call Klein in Washington after every pitch for updates. The meetings centered on small computations, arcane rules and subjective analyses, but Saylor told his executives they were really about something else: "Whether we live, or whether everything will end."
Lynch slept a total of eight hours over those five days. The numbers they discussed fluctuated widely.
On Sunday, March 19, at 4 p.m., MicroStrategy's board of directors, made up of many of the prominent local businessmen Saylor had cultivated during his rise, convened around a large table in a 14th-floor conference room of the company's Tysons Corner offices. In addition to Saylor, Terkowitz and Ingari, the board included Worldcom Corp. Vice Chairman John Sidgmore, who had joined the board a week before, entrepreneur Jonathan Ledecky; and MicroStrategy co-founder Sanju Bansal. The board voted to issue an accounting restatement the next day.
At the end of the day, they were joined by top company executives, lawyers and a crisis public relations team that was brought in from New York. "It will be a PR victory for us if our stock doesn't drop 100 points tomorrow," Ledecky said.
But Saylor grew more frustrated by what he was hearing. He became especially agitated with Ralph Ferrara, a securities law expert from the Washington office of Debevoise & Plimpton who spoke to the board about the accounting problems. As Ferrara was making a point about the possible ramifications of the restatement, Saylor cut him off, according to two sources who were in the room. Saylor told Ferrara that none of the information he was providing was new to him.
"If you know all this," Ferrara snapped back, "then you've ruined your company."
Stunned, Saylor remained silent for several minutes while Ferrara continued, sources recalled. Saylor, who does not remember this specific exchange, said he never acted in any way that would have "ruined the company," and if Ferrara had accused him of it, he would have responded immediately.
After Ferrara continued for a few minutes, the sources said, Saylor began banging his palm on the table in boredom. He said Ferrara was lingering on unimportant detail and he told him to move on to the next item. "Michael, my D and O [directors and officers] insurance only covers me up to $15 million," Ledecky said, glaring at Saylor. "After that, they come after my own assets. So I want to hear this." Saylor's eyes bulged, he went silent again and Ferrara continued.
Saylor recalls the tension in that meeting to be a result of "our company heading into a horrifically difficult period." Up until six days before, he added, "everyone told me I was doing a perfect job."
As midnight approached on March 19, Saylor called his family to inform them of the announcement to come. He spoke longest to his mother, Phyllis Saylor, the dominant figure in Michael's life. She doted on her son, and friends said Saylor often credited her with instilling a belief that he could "do great and enormous things."
"There's gonna be a lot of bad publicity," Saylor explained to his mother, who had recently accompanied her son to the White House millennium party. "People will write bad things about me."
Bob Jensen's threads on
securities and accounting fraud are at
http://www.trinity.edu/rjensen/fraud.htm
>>Does this kind
>>of message > look
>>familiar?
You can remove these annoying
>> symbols once and for all with a nifty little Internet utility that
enables you to copy and paste the symbol-filled message into a magic stripping
window, click a button, and presto! ---
http://www.accountingweb.com/item/67354
From Syllabus News on January 8, 2002
Fla. College Launches Sample Online Course
St. Petersurg College in Pinellas County, Fla., launched a sample online mini-course that is accessible from the home page of the college's campus web site. The sample course, titled "Introduction to Online Learning," includes a video welcome from the instructor, a course syllabus, brief reading and writing assignments, a group discussion board, chat rooms, email, and a quiz visitors can take. The navigation of the site is based in WebCT, the software system that the school uses to deliver online courses. By exploring this sample class, prospective online students can get a feel for what online learning is like and whether they're comfortable with it, according to SPC provost Dr. Jim Olliver.
For more information, visit: http://e.spcollege.edu
Texas Instruments Unveils Educational Handheld
Texas Instruments last week announced the launch of an educational handheld computer, dubbed the Voyage 200 personal learning tool (PLT). The company said the unit combines the functionality and three times the Flash memory of the TI-92 Plus, a graphing tool for college advanced math. The computer comes with an icon desktop, which enables users to navigate among handheld applications, a large display with 128 by 240 pixel imaging, and a QWERTY keypad. Other features of the unit include Cell Sheet, a spreadsheet application; StudyCards, an electronic flashcard application; Notes, an application for taking notes; and Statistics with List Editor, an analytical program that can be used with data collection for performing inferential and advanced statistical analyses.
For more information, visit: http://education.ti.com/voyage200
At its January 9, 2002 meeting, following a rash of well- publicized complaints about the slowness of the accounting standard-setting process, the Financial Accounting Standards Board decided to forge ahead on three new frontiers. http://www.accountingweb.com/item/68394
Xerox Corporation served notice on Monday that it plans to dispute the Securities and Exchange Commission's ruling of improper treatment of accounting for leases. The SEC has been investigating Xerox for the past 18 months and has concluded that the method Xerox uses for accounting for sales leases has resulted in financial reporting that is not in accordance with generally accepted accounting principles. http://www.accountingweb.com/item/68557
KPMG was "fired" as Xerox's auditing firm.
internet.com's network of more than 160 Web sites is organized into 16 channels:
Internet Technology http://internet.com/it
E-Commerce/Marketing http://internet.com/marketing
Web Developer http://internet.com/webdev
Windows Internet Technology http://internet.com/win
Linux/Open Source http://internet.com/linux
Internet Resources http://internet.com/resources
ISP Resources http://internet.com/isp
Internet Lists http://internet.com/lists
Download http://internet.com/downloads
International http://internet.com/international
Internet News http://internet.com/news
Internet Investing http://internet.com/stocks
ASP Resources http://internet.com/asp
Wireless Internet http://internet.com/wireless
Career Resources http://internet.com/careers
EarthWeb http://www.earthweb.com
Apple's next-generation iMac makes an early appearance on the Web and newsstands Sunday. The flat-screen computer is disclosed a day early in Time magazine's Canadian edition --- http://www.wired.com/news/mac/0,2125,49517,00.html
The new iMac will range in price from $1,299 to $1,800, with the top-of-the-line model featuring Apple's (AAPL) DVD-burning SuperDrive.
According to the Time article, Jobs is (predictably) counting on the otherworldly looks of the machine to convert Windows users into die-hard Mac faithful. The machine is described as chiefly his idea, based on a Zen-like opposition to clutter. It was then embraced by Jonathan Ive, Apple's "it-boy" design guru responsible for of the company's recent models, including the first iMac and the ill-fated Cube. The machine was two years in the making, the magazine reports.
Jobs describes at length the company's "digital hub" strategy to the Time reporter, his theory that if you have a Mac, all your digital equipment, from cameras to PDAs to music players, will work better.
To that end, the new iMac will come loaded with a variety of Apple's iTools consumer software: iTunes, iMovie, iDVD, as well as iPhoto, a brand new photo-editing application that Jobs will also unveil on Monday.
Macintosh fans have long expected a complete revamp of the hugely popular colored-plastic iMacs, which many analysts say saved the company when it was released in 1998. Rumors of a new flat-panel iMac have been swirling for months, gaining ground in early December, when a Morgan Stanley analyst report speculated on the possibility.
See also:
Mac
Boxes Make Nice Couches
'Cutout'
Macs a Real Passion
Apple
Gives Tech Good Name
LCD
iMacs Due at Macworld
iWalk
Looks More Like iWish
Latest
From Mac: the iHype
Search News
When you want to search for an Internet, e-Commerce, or e-Business phrase, it may be best to start at http://search.internet.com/
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
Bob Jensen's ecommerce threads are at http://www.trinity.edu/rjensen/ecommerce.htm
When you want to search for an
education phrase, go to
http://www.trinity.edu/rjensen/searchh.htm#education
Microsoft readies its mass-market pen-computing machine, but are Tech buyers interested?
"Tablet Offers High Risk, High Reward." byy Aaron Ricadela, Informationweek.com, December 17, 2001 --- http://www.informationweek.com/story/IWK20011213S0008
Microsoft distinguished engineer Chuck Thacker has taken enough stabs at building a super-PC that the customary high-tech hyperbole seems out of place when describing his current pet project--and Microsoft's latest big bet. For the past five years, Thacker has been toiling in Microsoft's research labs and product-development centers to craft the Tablet PC, a new kind of personal computer that Microsoft says could change the way users work with machines. Just as important, Microsoft says, its Tablet PC technology--a platform for building portable systems that communicate wirelessly and recognize users' handwritten notes, drawings, and dictation--could help re-invent user interfaces to all Windows software. Thacker has been down this road before. In 1973, while at the Xerox Palo Alto Research Center, he helped build the Alto, the first system that used a bit-mapped display to render crisp WYSIWYG text and graphics, was networked via Ethernet, and made extensive use of a mouse. PARC researchers called the machine an "interim Dynabook," thinking it might be a bridge to what they envisioned as a personal, graphically driven system that users could tuck under their arms and take anywhere. "Interim has been about 30 years," says Thacker, who in the early 1990s worked on Digital Equipment Corp.'s Lectrice project, a pen-based PC that was never completed. "Some of us have been taking a run at this every eight or nine years for most of our careers," he says. "This time, it seems certainly possible that we have a winner."
If the Tablet PC succeeds, it could usher in a so-far elusive era of information sharing in which business users tote slate-shaped computers into meetings to jot down notes, edit documents and drawings by hand, then plug in a keyboard for desktop work. The Tablet PC is "the opportunity for Microsoft to go out to a lot of people who say the PC is too hard to use, and for the first time add a new graphical user interface," says David Ditzel, vice chairman and chief technology officer at chipmaker Transmeta Corp.
But the potential for failure is also high. The Lectrice, Apple Computer's Newton, AT&T's Eo, and Microsoft's own Pen Windows are just a few products on the pen-computing scrap heap. Hitachi, Fujitsu, and other vendors sell ruggedized tablet-style Windows computers, but they're bulky, aimed mostly at vertical markets, and sell only a few hundred thousand units a year. It's tough to tell how willing companies will be to spend the $2,000 to $2,500 per unit that Tablet PCs will cost, Microsoft says, especially at a time when most are cutting back their IT budgets. "We usually don't purchase version-one models," says Lynn Brenton, director of engineering systems at Lithonia Lighting, a subsidiary of Atlanta manufacturer National Service Industries Inc. She's excited about the Tablet's versatility but says, "we'd probably let it be introduced in a year, wait about six months, then put it in our budget."
Microsoft's market pitch at last month's Comdex trade show in Las Vegas was designed to pump more enthusiasm into customers. Chairman and chief software architect Bill Gates featured the Tablet PC prominently in his customary show-opening keynote address. The speech kicked off a year-long campaign by Microsoft aimed at showing IT buyers why they should consider opening their wallets for a largely untested tool. "Sending E-mail or working collaboratively on a document are instantly more productive and exciting experiences when you can take your PC just about anywhere," Gates says. "Microsoft is incredibly invested in the success of the Tablet PC."
Continued at - http://www.informationweek.com/story/IWK20011213S0008
Bob-
Maybe you've already reviewed this, but I'm sending it along, in case you haven't.
This is from the Harrow Technology Report (THTR)
for January 7, 2002. He describes a very interesting tool, the basics which I have included below. I tried it, and it works just as he describes.
Paul
Paul Krause..paul@PaulKrause.com
Accounting & MIS.... http://www.csuchico.edu/~pkrause
California State University
A message from Jeff Harrow at http://www.theharrowgroup.com/about.htm
You may know me from my years of having authored Compaq's "Rapidly Changing Face of Computing" technology journal.
I've now struck out on my own as a technology consultant, and this Web site (which has no affiliation with Compaq) will develop into the place where I can keep you informed of what I'm doing. It will also be the hub of how we can share our continuing insights into the worlds of computing and technology that surround us, which are changing almost every aspect of how we each work, live, and play.
Of course, everything is a bit transitory and subject to change as I find just the right formula to continue our joint learnings about the incredible double-exponential growth of computing and its related technologies. But in the interim, I'd like to introduce you to:
Where We're HeadingI've been saying for many years, that the only constant is change, yet with these changes come undreamed-of opportunities. I'm excited about the incredible changes and opportunities that we have ahead of us, such as:
- How computing power is set to explode through advances in traditional semiconductor technology, molecular computing, quantum computing, DNA computing, and in ways we have yet to consider;
- How storage densities and fiber bandwidth are improving so fast that they leave the vaunted Moore's Law in the dust;
- How nanotechnology is preparing the way to change the very nature of the "things" around us;
- And many more.
And most importantly, of what happens as all of these advances "come together," synergistically giving us far more than the "mere" sum of the parts.
An Example.
You may be familiar with the concept of the "Space Elevator" that was popularized by science fiction author Arthur C. Clarke (http://flightprojects.msfc.nasa.gov/fd02_elev.html and http://www.spacedaily.com/news/future-01f.html).
Basically, this is an incredibly strong cable that goes from the surface of the earth to a space station in geosynchronous orbit, with elevators running up and down. Easy and (comparatively inexpensive) access to orbit.
When Clarke proposed this "ridiculous" concept in 1979 in The Fountains of Paradise, it was clearly a fanciful idea -- no material on Earth was strong enough to build such a cable. But now we find that the almost accidentally-discovered carbon nanotubes are far stronger than steel -- quite strong enough to produce just such a cable (once, that is, we figure out how to join these immensely tiny nanotubes into a long cable.)
Now, let's consider another new carbon nanotube development -- that under just the right conditions, these tiny, strong fibers turn into semiconductors, forming the basis for transistors similar to, although far smaller than, the transistors that form the core of today's silicon chips! (http://www.research.ibm.com/resources/news
/20010425_Carbon_Nanotubes.shtml)Could we end up with cables one hundred times stronger than steel, that are also innately computing devices?!? Could semiconducting carbon nanotubes also be built into common building materials, in the way that glass fibers form fiberglass, creating "active" floors and walls? If so, perhaps the terms "smart house" and "intelligent office" will take on a whole new meaning...!
And this is just one hint of how the synergy between a growing number of fields is likely to change just about everything.
So, I hope you will join me on this fascinating journey, as the convergence of computing, communications, content, telecommunications, and the physical and medical sciences boldly take us where we've never been before. It's going to be a fascinating, if more than occasionally an unnerving journey, but one which we and our businesses don't dare ignore, least we get quickly left behind!
It's not just that Convergence is moving quickly, but that the RATE at which it's changing is accelerating! That's double-exponential growth. And it will surely change all the rules.
Welcome to the home of The Harrow Technology Report. Remember, click here to sign-up!, and together, we'll explore where these things lead!
Please note my Email address has just changed to
Jeff@TheHarrowGroup.com
History, Sociology, and Communcation
Chinese Propaganda Poster Pages --- http://www.iisg.nl/~landsberger
From the AccountingWeb on January 9, 2002
The Top 20 Stories on AccountingWEB http://www.accountingweb.com/item/64801
Top Ten Selling Books On AccountingWEB in 2001 http://www.accountingweb.com/item/63294
The AccountingWEB Hot Topics Page http://www.accountingweb.com/news/hottopics.html
Client Newsletters http://www.accountingweb.com/item/53083
Highlights of the 2001 Tax Legislation http://www.accountingweb.com/item/48712
What to do to help with the crisis of losing your purse or wallet: Make an MS Word Password Protected Document
Bob Jensen's Advice:
As soon as possible, take photocopies of every card (both sides) in your
wallet or purse. Also photocopy your passport and other documents that
might be lost while traveling. Then carry and/or store them in a safe
place. Better yet, scan the images into an MS Word document. Add
Website, phone, email, and postal address information not on each card.
In your MS Word document recommended above, add password protection to that document using the menu choices (Tools, Protect Document). Then carry two or more floppy disks that contain copies of your MS Word file. Then if you lose your wallet or purse on a trip, you can beg somebody at a hotel or airport to let you read your file in an emergency. In doing so, you will have convenient access to vital information that you need. You can ship at least one copy in your shipped luggage, and you and your spouse might carry copies in carry-on luggage. You may have trouble with a floppy disk in your pockets if you walk through a metal detector at the airport. However, if you have a copy burned onto a CD, the metal detector will not affect the disk.
I suggest that you
add to the MS Word document, the entire table entitled "What to Do If
Your Purse or Wallet is Missing" at http://www.trinity.edu/rjensen/
or at http://www.trinity.edu/rjensen/fraud.htm
You have to scroll down a bit to find that table.
The key organizations to phone when your purse or wallet is missing are as follows:
- Local Police
- Equifax: 1-800-525-6285
- Experian (formerly TRW): 1-888-397-3742
- Trans Union: 1-800-680-7289
- Social Security Administration (fraud line): 1-800-269-0271
Stop Annoying Telemarketing Calls
I have had great results using my
Telezapper that I purchased from Radio Shack for about $50 --- http://www.telezapper.com/default.asp
The Telezapper is a one-time purchase and very easy to install.
No preventative is perfect, but for Texans the new preventatives offered by the Texas PUC-Customer Protection Division are the best opportunities for putting an end to unwanted telemarketing calls.
The main new option is to get on the Texas "No Call Lists" and renew these registrations every three years at http://www.texasnocall.com/ (or phone 1-866-896-6225)
Beginning on January 1, 2002, you can add your name, address and telephone number to state-sponsored “No Call Lists,” which will identify you as someone who does not wish to receive telemarketing calls. You can choose to register a residential telephone number for one or both of two “No Call Lists” sponsored by the Public Utility Commission (PUC.)
STATEWIDE “DO NOT CALL” LIST
The first list, a statewide “Do Not Call List,” will apply to all telephone marketers operating in Texas. There is a registration charge of $2.25 for each residential phone number to be included in this list only. Your registered residential telephone number(s) will remain on this list for three years.
“ELECTRIC NO CALL LIST”
The second list has been created to prevent calls only from Retail Electric Providers (REPs) and telemarketers calling about your electric service. There is a registration charge of $2.55 for each number placed on the “Electric No Call List.” Numbers placed on this list will remain on the list for five years. Both residential and business numbers can be registered for the “Electric No Call List.”
HOW DO I SIGN-UP?
At www.TexasNoCall.com - Utilize the Internet for an easy, automated method that provides instant registration. The site is available 24 hours a day, 7 days a week, 365 days a year. To register by mail, use the printable registration form at www.TexasNoCall.com, or request a registration form by calling 1-866-TXNOCAL(L) (1-866-896-6225) or writing: TEXAS NO CALL, P.O. Box 313, E. Walpole, MA 02032. To register by phone, call toll-free 1-866-TXNOCAL(L) (1-866-896-6225.)
Online and telephone registrations must be paid by credit card. Mailed applications may be paid by personal check or credit card. Residential customers may register for both “No Call Lists” at a cost of $4.80.
Companies that conduct telemarketing activities should call 1-866-896-6225, or read the Telemarketing FAQ for compliance information and additional details regarding Texas’ “No Call Lists
ASSISTANCE FROM THE PUC | ||||
Questions: | Call:
1-866-797-4839 (TTY 1-877-864-4725) Visit: http://www.powertochoose.org http://www.puc.state.tx.us |
|||
Complaints: | Write:
PUC – Customer Protection Division, P.O. Box 13326, Austin, TX
78711-3326 Call: 1-888-782-8477 (TTY 1-800-735-2988) Online: Complaint form at www.TexasNoCall.com Email: customer@puc.state.tx.us |
I also added the above module to my other listings of how to prevent being ripped off, how to report frauds, and what to do if you lose your purse or wallet. Go to http://www.trinity.edu/rjensen/fraud.htm#ThingsToKnow
Awards for Dumb Decisions in the Communications Industry
Statues of Limitations, The Net Economy, December 10, 2001, pp. 20-26 --- http://www.theneteconomy.com/article/0,3658,s%253D0%2526a%253D19844,00.asp
Most Confused Performance by a Supplier
Dumbest Decision by a Service Provider
Biggest Financial Shock
The No-Brainer (Worst Move of the Year)
Ugliest Surprise of the Year
Best Disappearing Act by a Telecom Ceo
Customer Dissatisfaction Award
A friend asked me to locate some directories of international consulting firms:
Yahoo Links
- Business Management Consulting Resources - providing management consulting resources, informative articles, news, and services for managers and consulting professionals.
- FindConsultancy.com - for firms in the US and UK with online services and client search.
- Management Consultant Network International - features conferences, associations, publications, stories, and research information.
- Top-Consultant.com - guide to management consultancy firms with news, company profiles, and career information in management and internet consulting.
The Efficiency of Consulting Firms --- http://www.csd.bg/economic/mainefcons.htm
A rather interesting study that also discusses consulting feeshttp://www.bigfivetalent.com/consulting_associations.html
Asia --- http://www.isop.ucla.edu/eas/GWC/gwc%20consultfirms5.htm
Also see http://www.isop.ucla.edu/centers/
A message from Roselyn Morris [rm13@BUSINESS.SWT.EDU]
Hello Roselyn,
We don't hear from you very often on the AECM, but when we do it is POW!
It's beginning to sound like we need to take a closer look at the long-standing warnings from Abe Briloff on the melt down of professionalism in public accounting.
Your experiences are entirely consistent with the pathetic auditors described in a piece that Ed Sribner informed us about last December. The link is at http://www.computerworld.com/itresources/rcstory/0,4167,KEY73_STO66354,00.html
The above article describes how superficial and useless the auditors are in face of computerized transactions.
If they are going to be so incompetent then they could at least be a little more courteous.
Bob Jensen
-----Original Message-----
From: Roselyn Morris [mailto:rm13@BUSINESS.SWT.EDU]
Sent: Friday, January 11, 2002 1:45 PM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Oh No!I am president of the Board of Directors of a higher education authority, which provides secondary financing for student loans. By nature of that position, I am chairman of the audit committee. From that experience, I know that I do battle with the auditors annually. The auditors did not see any reason to meet with the audit committee until they were threatened with dismissal. I know that I have asked hard questions and do not allow the auditors to take the easy way out. I am continuing being told by the auditors that I am the only one asking these questions and that I am wasting valuable time, especially for a small client. The quality of the audit from the Big Five firm is of questionable quality. I continually find mistakes, and for the last two of three years the audit report draft was completely wrong. As I press hard, the auditors annually let me know that the audit is a small audit ($100,000 annually for the authority, and $35,000 for a subsidiary) and that there are more valuable and worthwhile jobs to be done. Why is the authority using Big Five auditors then? Because is required by the bond covenants. The Big Five have worked hard to get all the publicly traded and SEC audit work, but want to make more money through the big audits or consulting only.
In working with the audit committee, I have found that real-world auditors don't know what the standards or the profession require, only what that particular Big Five firm requires. The real-world auditors do not want to know those things because most of those auditors are putting in their time at the Big Five in order to get a bigger paying job.
As an academic, what can we do?
Roselyn E. Morris, PhD, CPA
Associate Dean College of Business Administration
Southwest Texas State University San Marcos, Texas 78666-4616 Phone (512)245.2311 Fax (512)245.8375 e-mail: rm13@business.swt.edu
It's a lot like saying our enemies make us tougher!
Computer worms and viruses were let loose online in record numbers in 2001, costing billions. But some coders say they are performing "community service" by finding product flaws and teaching the less savvy about security --- http://www.wired.com/news/technology/0,1282,49483,00.html
A couple of professors that I interact with almost daily keep contending that distance education is dying. I think they have not just looked very hard at what is really happening.
Hi XXXXX Professor of Engineering,
My threads on distance education assessment and accreditation are at http://www.trinity.edu/rjensen/assess.htm
One of the best success stories for
an online educator is given at http://www.trinity.edu/rjensen/book01q3.htm#Dunbar
If you download her online document, please note the student evaluations on
the last page.
With more than 100,000 online students registered online at the University of Wisconsin, most faculty and staff have become comfortable creating online content. The challenge today is to improve online learning by making the content more engaging and interactive while making it accessible to all. We are particularly interested in tools that can be used to create world-class learning objects. Today, unfortunately, seamless movement of content between learning systems is still a large issue.
I suspect that if you look long and hard, you will find that the University of Wisconsin offers some online undergraduate engineering courses for credit. You will also find some at other state universities. For example, note the reference to distance education in engineering at http://www.uidaho.edu/evo/distglan.html
Texas Tech has distance education engineering courses --- http://aln.coe.ttu.edu/
I cannot imagine that Texas A&M and many other state universities have not offered some accredited engineering courses.
Carnegie-Mellon has a huge distance education program in Software Engineering.
In 1999 one in three U.S. colleges offered some sort of accredited degree online, and approximately one million students took online classes (13 million take traditional classes only)
The following are merely samples of what you will find documented at http://www.trinity.edu/rjensen/crossborder.htm
"Online MBA programs grow in popularity," by Jerry LaMartina, Kansas City Star Online, July 15, 2001 --- <http://www.kcstar.comhttp:///item/pages/moneywise.pat,business/37749b46.714,.html>
The Duke Global MBA with a tuition of $100,000 has now graduated over 600 students around the world and is "The Hottest Campus on the Internet" according to Business Week Magazine --- http://www.businessweek.comhttp:///1997/42/b3549015.htm
Stanford University now grosses over $100 million from its online course, most notable of which is the ADEPT Masters of Engineering Program --- http://stanford-online.stanford.edu/
The University Alliance of "accredited" distance education courses --- http://info.bisk.com/index.asp?Source=51s23
Forbes Best on the Web Directory --- http://www.forbes.com/bow/http://b2c/main.jhtml
Army University Access Online --- http://www.adec.edu/earmyuhttp:///earmyu.html
This five-year $453 million initiative was completed by the consulting
division of PriceWaterhouseCoopers (PwC). Twenty-four colleges are delivering
training and education courses online through the U.S. Army's e-learning
portal. There are programs for varying levels of accomplishment, including
specialty certificates, associates degrees, bachelor's degrees, and masters
degrees. All courses are free to soldiers. By 2003, there is planned capacity
is for 80,000 online students. The PwC Program Director is Jill Kidwell --- <http://www.adec.edu/earmyu/kidwell.html>
Pwc e-Learning Network Fact
Sheet on Army University --- http://www.adec.edu/user/current/200http://0/factsheet.html
The U.S. IRS offers Internet education opportunities. IRS employees who want to get ahead in the organization are heading back to the classroom - 21st century style. College level courses in accounting, finance, tax law, and other business subjects will be available on the Internet to IRS employees. http://www.accountingwebhttp://.com/item/46816/101
You will find many more international
distance education links at http://www.trinity.edu/rjensen/crossborder.htm
Many are from prestigious universities.
Setting itself up as a direct competitor to TMP (which owns Monster.com), Yahoo has acquired HotJobs. Look for these players to either seriously differentiate themselves, seriously expand their services or seriously go under. http://update.networkcomputing.com/cgi-bin4/flo?y=eFc30BboXO0V40BEzx0A3
Intel Inside versus Sanmina Inside
Form Information Week, January 9, 2002
For IBM PC Manufacturing
Cost-cutting IBM is abandoning the PC-making business. All IBM-branded PCs made in the United States soon will be assembled by Sanmina-SCI as part of a $5 billion, three-year contract. Sanmina will buy an IBM factory in North Carolina, which builds NetVistas, for an undisclosed sum.
IBM already outsources PC manufacturing for Europe, the Middle East, and Africa sales to a Scottish contractor. Sanmina now will manage that contract. IBM says all 900 employees at the Research Triangle Park plant will be offered jobs with Sanmina at the same salary. IBM will continue to design and market the NetVista line and will still make its ThinkPad laptops at an IBM plant in Mexico. Company execs declined to estimate savings the deal may generate.
Last year, IBM exited the cutthroat retail-PC market in an effort to shore up profits. For the third-quarter 2001, the company reported that desktop revenue declined 30% compared with the previous year. IBM's Personal and Printing Systems Group, which sells PCs, posted a year-over-year decline in pretax income of 180%. Meanwhile, competitor Compaq's PC dependence is fueling opposition to its proposed buyout from Hewlett-Packard.
Yet, IBM PC Products and Services general manager Fran O'Sullivan says the company won't exit PCs altogether. O'Sullivan says the ability to supply large corporate customers with a full range of computing products remains strategically important. "PCs represent an important part of our overall E-business infrastructure," says O'Sullivan. Technology Business Research analyst Bob Sutherland says the strategy makes sense. "Many large customers prefer a single source for all their computing needs." - Paul McDougall
For more on IBM, visit IBM Defies Downturn With Solid Third Quarter http://update.informationweek.com/cgi-bin4/flo?y=eFdB0BcUEY0V20TZZ0Ap
The hype is almost always better than the actual product, but at least an actual product makes it to the shelf. The really annoying ones are those that never arrive. Here's Wired News' annual list of products promised but never delivered --- http://www.wired.com/news/technology/0,1282,49326,00.html
Forwarded by Patrick Charles
Ernst & Young to embark on hiring spree for IT-enabled services
By Imran Qureshi, Indo-Asian News Service
Bangalore, Jan 6 (IANS) The lure of the lucre in business process outsourcing (BPO) is set to make global consultant major Ernst and Young to embark on a major hiring spree in India.
BPO means delegating IT-enabled business process of a company to a third party who owns, administers and manages a wide range of processes such as human resources, finance and accounting, supply chain management and customer care.
Ernst and Young's Shared Services Location, the BPO services unit, is expected to begin operations next month with about 100 seats to process tax returns of its clients in the U.S.
And the number would soon grow to 500. It would be scaled up further in a phased manner, said a senior company official.
"It's true that this is the first time we are going in for such mass hiring. But that is precisely the nature of the business," said Pankaj Dhandharia, partner, Ernst and Young.
"It will be exclusively for our U.S. practice," he told IANS. The consultant major currently employs about 1,000 people in the country.
India is positioned to be a global player for providing offshore business process outsourcing services as the demand for such services grow in countries like Australia, New Zealand, Singapore, Indonesia, Taiwan and Japan, according to IT consultancy firm Gartner.
Gartner has predicted that worldwide BPO services will grow from $119 billion in 2000 to $234 billion in 2005. Some Asia Pacific countries, especially India and the Philippines, are well placed to capitalise on the opportunities.
Ernst and Young audits 18.4 percent of the Business Week's global 1,000 companies and is one of the world's leading professional services organisation that helps companies the world over identify and capitalise on business opportunities.
Its mass recruitment drive in India comes in the backdrop of a large number of U.S. companies cutting costs by outsourcing time and capital intensive business processes to countries like India, Australia, China, Israel and Ireland.
Indian IT-enabled service companies charge between $6 and 15 an hour, just half of the man-hour expenditure in Australia that does a lot of outsourcing works for the U.S. credit card companies.
Companies are spending $6,000 to $10,000 per person on training graduates but "the returns can be phenomenal," said Dhandharia.
According to a study, the IT-enabled services market in India will be worth $9 billion by 2004 and $17 billion by 2008, providing employment to 800,000 people. Currently, the voice and data customer service centres provide employment to just 50,000 people.
"The biggest customer for business process management is the financial services industry. And we are already into processing tax returns of our clients in the U.S.," said the Ernst and Young official.
The company has booked three floors of MindTree House in the southern part of India's IT capital for its BPO services.
The IT-enabled service has already attracted the attention of the tech bellwethers like Infosys Technologies, India's second-largest software exporter, and Wipro.
Wipro has invested $10 million in Spectramind, a New Delhi-based IT-enabled services company, and Infosys has set up a separate division to deal with BPO.
The entry level in the new activity is much easier to the big names of the Indian IT industry because they already have a client base. Unlike Ernst and Young and others, who hire simple graduates, companies like Infosys would be hiring IT professionals to service their clients.
"The difference between Indian companies in this sector and other countries would emerge sooner than expected. Value proposition would be linked more to improved service, better quality management and enhanced productivity levels," says Dhandharia of Ernst and Young.
Companies in India undertake BPO projects in the insurance sector, banks, healthcare, accounting, payroll processing, human resource performance appraisal and digitisation of data apart from tax returns.
LinkageXpress is the hand-tailored, targeted link poplarity service for your site. Because targeted link popularity = targeted traffic, our service increases your search engine relevancy and drives buyers to your site. Our URL for linking is http://www.linkagexpress.com .
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Hi Kate,
I did not have an answer to your problem, so I asked some friends. John Garlick replied as shown below. His email address is John Garlick [jgarlick@AIKENELECTRIC.NET]
Bob Jensen
-----Original Message-----
From: John Garlick [mailto:jgarlick@AIKENELECTRIC.NET]
Sent: Sunday, January 06, 2002 11:07 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: In Search of An Answer to a MS Access QuestionI have experienced the same problem. What I found out is that someone has created a sub-database (linked to the table) and has their database open using some of my information. If you delete the data in your database, it will impact their database adversely so the message is displayed. Also, this could be because the relationships from one table to another (referential intergity is being used) and the records can not or should not be deleted as the related field in the table is the one in the one to many or one to one field in the referential intergity relationship. Try both of these and if it does not fix the problem, then it is beyond my knowledge!
-----Original Message-----
From: Katherine.J.Lopez@andersen.com
Sent: Sunday, January 05, 2002 10:17 AM
To: rjensen@trinity.edu
Subject: Re: In Search of An Answer to a MS Access QuestionHi Dr. Jensen,
I have an Access question I was hoping you could help me with.
Background: My firm has recently converted its Access database from Office 97 to Office 2000. We have a shared database with no locked files. The following problem never occurred prior to conversion.
Problem: When I delete a large number of records in a table (ex. 500 records) I receive the following error message, “Could not update; currently locked.” When I click okay the following message appears, “Do you want to suppress further error messages telling you why records can’t be deleted? If you click no, a message will appear for every record that can’t be deleted.” I click ‘yes’, then the screen then goes white as the computer processes the request and when it is finished most the records are deleted. However, one record shows up as not being deleted followed by a multitude of blank line (normally over 100), but the blank lines are actually filled with data. (You can see the data if you select the lines, hit delete and cancel out.)
The same process can delete the records I was not able to delete; only I have to use smaller batches. (I have no problem deleting 30 rows at a time.)
I think the problem revolves around the shared access, if I copy the file from the network to my desktop I am able to delete 800+ records at a time. Do you know if Access 2000 treats how the database is shared differently than Access 97? Or, do you know of another reason this may be happening?
Thanks for your help,
Kate Lopez
Lichens of North America --- http://www.lichen.com/
"FROM THE COUNTING HOUSE TO THE MODERN OFFICE: EXPLAINING ANGLO-AMERICAN PRODUCTIVITY DIFFERENCES IN SERVICES SINCE 1870," by Stephen Broadberry and Sayantan Ghosal, University of Warwick, October 12, 2001 --- http://www.warwick.ac.uk/fac/soc/Economics/seminars/broadberry.pdf
The United States overtook Britain in comparative productivity levels for the whole economy primarily as a result of trends in services rather than trends in industry. U.S. overtaking of Britain in market services occurred during the transformation from the “counting house” to the “modern office”, as low-volume, high-margin business gave way to high-volume, low-margin business with multiple operating units managed by a hierarchy of salaried executives. This transformation was dependent on technologies that improved communications and information processing, and occurred first in transport and communications, before spreading to distribution and finance. The pattern of diffusion across sectors in the United States was influenced by the nature of demand and the degree of shelter from competition. The overall diffusion of modern office technology was also dependent on the existence of appropriate “social capabilities”: a labor force that was both well-educated and willing to accept an intensification of the labor process, with high levels of standardization and monitoring. The technologies were slower to diffuse in Britain as a result of lower levels of education and stronger labor force resistance to intensification.
Playing by the Accounting Systems' Rules Antiquated accounting systems often get the last word when it comes to online media performance. http://www.newmedia.com/default.asp?articleID=3310
The Accounting Systems
Agencies and their clients tend to have highly structured processes and software packages that demand the firms work in a particular way. Most of these systems were developed back in the days before cable and syndication. We're talking about when the Grateful Dead was a hot new band, back in the days of the Kennedys. This stuff was programmed on dumb terminals, complete with vacuum tubes and data cards.
Those business process models, developed when our mothers and fathers were worried about Vietnam, have locked us into a fairly simplistic way of purchasing media. Media just wasn't that complicated back then. We had three networks. The biggest challenge was dealing with all the periodicals, which had recently multiplied into the tens and even hundreds.
Even as the media have proliferated, we've managed to keep patching these ancient systems with figurative spit and duct tape. Large accounting-system companies come out with new "modules" that allow new pieces of information to be shoveled into the existing database.
Senior managers love these new modules because it allows them to compare the new media to the existing data they've collected over time. They can bill their clients through the same systems and not have to worry about changing over to something new and expensive. And, of course, managers love charts, and these systems pump out an amazing number of charts.
The downside comes when the managers' lust for charts causes them to direct their buyers to make irrational deals, just so they can be crammed into these relatively simplistic databases.
This happened all over the place when the online stuff got going. The Donovan system, for instance, wasn't capable of tracking much online data, so the company recommended customers use their print module. The more advanced agencies found that the outdoor module worked better, but neither was very good at capturing the bulk of the important performance data. These systems just aren't designed for campaigns with direct response metrics.
Worse still, any performance they do track has to be entered manually from the data sources. There isn't any data interchange between, say, the Donovan system and the major banner servers.
Next week, I'll cover the step-by-step process of dealing with the accounting systems, including wrestling with data entry. Then we'll be able to see what types of data analyses we can wring from these systems.
(1/7/2002) By Tig Tillinghast
Bob Jensen's threads on this topic are at http://www.trinity.edu/rjensen/ecommerce.htm
An Accounting Theory Final Examination, The Open Polytechnic of New Zealand Semester Two, 2000, http://www.topnz.ac.nz/info/services/pdf/71300_00_2.pdf
Bob Jensen's threads on accounting theory are at http://www.trinity.edu/rjensen/theory.htm
History and Travel
Motel Postcards from the Era of the Open Road --- http://www.lileks.com/postcards/motels/splash.html
"XML: Plugging into 'Standard' Hybrids," eWeek, January 7, 2002by Renee Boucher Ferguson --- http://www.eweek.com/article/0,3658,s%253D1884%2526a%253D20656,00.asp
It was supposed to be so simple. XML would enable companies to move beyond paper-, e-mail- and electronic data interchange-based commerce to the world of Internet transactions. Having such an open platform was supposed to provide a lower-cost way for developing applications that would be universally accessible to all of a company's business partners.
Now, more than three years after XML's introduction, IT shops implementing industry-specific variants find themselves looking at multiyear, multimillion-dollar projects that leave two fundamental obstacles unchallenged: how to shift partners from trading through traditional means to trading with XML and how to interoperate with other industries.
These vertical-industry XML flavors for many companies have created walls around their Internet trading software that require more code to be written and more expense incurred to make sure that some potential buyers or suppliers can take part in business-to- business e-commerce.
What's needed now, in the view of IT managers, software vendors and analysts, is a horizontal XML blueprint of sorts to describe a syntax and vocabulary that vertical industries can use to interoperate with B2B trading software from other verticals. ebXML (electronic business XML) is being touted as one solution—not just another XML variation but an architecture that provides a horizontal messaging framework.
Other cross-industry standards in the works include UBL (Universal Business Language) and XSL (Extensible Stylesheet Language).
However, until a universal standard or set of standards is agreed upon, vertical industries will continue to support individual XML standards that do not interoperate.
Continued at http://www.eweek.com/article/0,3658,s%253D1884%2526a%253D20656,00.asp
PBS: American Experience: Mount Rushmore --- http://www.pbs.org/amex/rushmore/
"The Internet's Invisible Hand," by Katie Hafner, The New York Times, January 10, 2001 --- http://www.nytimes.com/2002/01/10/technology/circuits/10NETT.html
For all that growth, the Net operates with surprisingly few hiccups, 24 hours a day — and with few visible signs of who is responsible for keeping it that way. There are no vans with Internet Inc. logos at the roadside, no workers in Cyberspace hard hats hovering over manholes.
Such is yet another of the Internet's glorious mysteries. No one really owns the Net, which, as most people know by now, is actually a sprawling collection of networks owned by various telecommunications carriers. The largest, known as backbone providers, include WorldCom (news/quote), Verizon, Sprint and Cable & Wireless (news/quote) USA.
What, then, is the future of this vital public utility? Who determines it? And who is charged with carrying it out?
For the Internet's first 25 years, the United States government ran parts of it, financed network research and in some cases paid companies to build custom equipment to run the network. But in the mid-1990's the Net became a commercial enterprise, and its operation was transferred to private carriers. In the process, most of the government's control evaporated.
Now the network depends on the cooperation and mutual interests of the telecommunications companies. Those so-called backbone providers adhere to what are known as peering arrangements, which are essentially agreements to exchange traffic at no charge.
"Peering fits right in with the overly loose way the Internet is provided," said Scott Bradner, a senior technical consultant at Harvard University, "which is unrelated commercial interests doing their own thing." Mr. Bradner, co-director of the Internet Engineering Task Force, an international self-organized group of network designers, operators and researchers who have set technical standards for the Internet since the late 1980's, said that peering remains a remarkably robust mechanism.
And for now, capacity is not a particularly pressing problem because the backbone providers have been laying high-speed lines at prodigious rates over the last few years.
"We've got a lot of long-distance fiber in the ground, a lot of which isn't being used, but it's available," said Craig Partridge, a chief scientist at BBN Technologies, an engineering company that oversaw the building of the first network switches in the late 1960's and is now owned by Verizon.
Still, the fear that the Net is not up to its unforeseen role still gnaws at prognosticators. Consider the gigalapse prediction.
In December 1995, Robert Metcalfe, who invented the office network technology known as Ethernet, wrote in his column in the industry weekly Infoworld that the Internet was in danger of a vast meltdown.
More specifically, Dr. Metcalfe predicted what he called a gigalapse, or one billion lost user hours resulting from a severed link — for instance, a ruptured connection between a service provider and the rest of the Internet, a backhoe's cutting a cable by mistake or the failure of a router.
The disaster would come by the end of 1996, he said, or he would eat his words.
The gigalapse did not occur, and while delivering the keynote address at an industry conference in 1997, Dr. Metcalfe literally ate his column. "I reached under the podium and pulled out a blender, poured a glass of water, and blended it with the column, poured it into a bowl and ate it with a spoon," he recalled recently.
The failure of Dr. Metcalfe's prediction apparently stemmed from the success of the Net's basic architecture. It was designed as a distributed network rather than a centralized one, with data taking any number of different paths to its destination.
That deceptively simple principle has, time and again, saved the network from failure. When a communications line important to the network's operation goes down, as one did last summer when a freight-train fire in Baltimore damaged a fiber-optic loop, data works its way around the trouble.
It took a far greater crisis to make the Internet's vulnerabilities clearer.
On Sept. 11, within minutes of the terrorist attacks on the World Trade Center, the question was not whether the Internet could handle the sudden wave of traffic, but whether the servers — the computers that deliver content to anyone who requests it by clicking on a Web link — were up to the task.
Executives at CNN.com were among the first to notice the Internet's true Achilles' heel: the communications link to individual sites that become deluged with traffic. CNN.com fixed the problem within a few hours by adding server capacity and moving some of its content to servers operated by Akamai, a company providing distributed network service.
Mr. Bradner said that most large companies have active mirror sites to allow quick downloading of the information on their servers. And as with so many things about the Net, responsibility lies with the service provider. "Whether it's CNN.com or nytimes.com or anyone offering services, they have to design their service to be reliable," he said. "This can never be centralized."
Bob Jensen's threads on Internet
security are at
http://www.trinity.edu/rjensen/ecommerce/assurance.htm
Seems to be a necessary but not sufficient condition for success in the Turkey world!
My cousin Chris Faye and his wife Ruth from Mankato, Minnesota wrote the following:
With respect to the picture on the enclosed card: Ruth took it at a time that we did not have a full compliment of customers. Earlier this year, we routinely had a breakfast fly-in of 33 turkeys.
One of the interesting things is that make turkeys "fanning" is a courtship ritual. Please note the total disinterest on the part of the female.
This is not so much funny as it is fun and informative. It was forwarded by Dick Haar!
Have some fun by inserting your birth date into the slot.. It will give you a time capsule of that day ---
http://www.dmarie.com/timecap/
The "Advanced" button will give you an entire month of headlines in the month of your birth or any other month of interest to you. I learned that one day before I was born, the an important headline reads "King Zog of Albania marries Countess Geraldine of Hungary" My own birth in Esterville, Iowa did not seem to have made any headlines, not even in Estherville.
Forwarded by Bob Overn
Dyslexics have more fnu
Clones are people, two
Entropy isn't what it used to be
Microbiology Lab Staph Only!
Santa's elves are just a bunch of subordinate Clauses
Eschew obfuscation
186,000 miles/sec (300,000km/sec): Not just a good idea, it's the LAW!
Air Pollution is a mist-demeanor
Atheism is a non-prophet organization
Does the name Pavlov ring a bell?
Editing is a rewording activity
Help stamp out and eradicate superfluous redundancy
I used to think I was indecisive, but now I'm not sure
My reality check just bounced
Rap is to music, what Etch-a-Sketch is to art
What if there were no hypothetical questions?
Energizer bunny arrested, charged with battery
No sense being pessimistic, it probably wouldn't work anyway >>
Forwarded by Auntie Bev
Psychiatry and Proctology:
Two doctors opened an office in a small town and put up a sign reading "Dr. Smith and Dr. Jones, Psychiatry and Proctology."
The town council was not too happy with that sign, so the doctors changed it to "Hysteria's and Posteriors."
This was not acceptable either, so in an effort to satisfy the council, they changed the sign to "Schizoids and Hemorrhoids." No go!
Next they tried "Catatonics and High Colonics." Thumbs down again.
Then came "Manic-depressives and Anal-retentives." Still not good.
How about "Minds and Behinds"? Unacceptable again.
So they tried "Lost Souls and Butt Holes." Still no go.
Nor did "Analysis and Anal Cysts," "Nuts and Butts," "Freaks and Cheeks," or "Loons and Moons" work either.
Almost at their wits' end, the doctors finally came up with a business slogan they thought might be acceptable to the council.
"Dr. Smith and Dr. Jones, Odds and Ends."
"APPROVED!"
For those of us that remember those old Burma Shave signs on successive fence posts. Forwarded by Bob Overn
DON'T LOSE YOUR HEAD
TO GAIN A MINUTE
YOU NEED YOUR HEAD
YOUR BRAINS ARE IN IT
Burma-Shave**
DROVE TOO LONG
DRIVER SNOOZING
WHAT HAPPENED
NEXT IS NOT AMUSING
**Burma-Shave**
BROTHER SPEEDERS
LET'S REHEARSE
ALL TOGETHER
GOOD MORNING NURSE
**Burma-Shave**
CAUTIOUS RIDER TO
HER RECKLESS DEAR
LET'S HAVE LESS BULL
AND LOTS MORE STEER
**Burma-Shave**
THE MIDNIGHT RIDE
OF PAUL FOR BEER
LED TO A WARMER
HEMISPHERE
**Burma-Shave**
SPEED WAS HIGH
WEATHER WAS NOT
TIRES WERE THIN
X MARKS THE SPOT
**Burma-Shave**
AROUND THE CURVE
LICKETY--SPLIT
IT'S A BEAUTIFUL CAR
WASN'T IT?
**Burma-Shave**
PASSING CARS WHEN
YOU CAN'T SEE
MAY GET YOU
A GLIMPSE OF ETERNITY
**Burma-Shave**
NO MATTER THE PRICE
NO MATTER HOW NEW
THE BEST SAFETY DEVICE
IN THE CAR IS YOU
**Burma-Shave**
A GUY WHO DRIVES
A CAR WIDE OPEN
IS NOT THINKIN'
HE'S JUST HOPIN'
**Burma-Shave**
AT INTERSECTIONS
LOOK EACH WAY
A HARP SOUNDS NICE
BUT ITS HARD TO PLAY
**Burma-Shave**
BOTH HANDS ON THE WHEEL
EYES ON THE ROAD
THAT'S THE SKILLFUL
DRIVER'S CODE
**Burma-Shave**
THE ONE WHO DRIVES
WHEN HE'S BEEN DRINKING
DEPENDS ON YOU
TO DO HIS THINKING
**Burma-Shave**
PASSING SCHOOL ZONE
TAKE IT SLOW
LET OUR LITTLE
SHAVERS GROW
**"Burma-Shave"
Little Jethro and his family were visiting the big city for the first time. In the lobby of the fancy hotel where they were staying, Jethro and his father stood marveling at the elevator with its blinking lights and shiny doors.
After a couple of minutes Jethro asked, "Pa, what in the tarnation is that thing?"
"I do not rightly know, son," Pa replied.
Just then an old woman approached and stepped carefully into the elevator. The doors slid shut, and when they re-opend a few moments later, out stepped a beautiful young blonde in a summer dress,
"Boy," Pa said quietly. "Go and get your Ma."
Readers Digest, January 2002, p. 115
I have a son and a daughter living in Maine. I put my son Marshall's recent pictures on the Internet at http://www.cs.trinity.edu/~rjensen/marshall/
These are professional-quality photographs. It's amazing what he has done as a beginner in digital photography. What is outstanding is his use of light and, in some cases, his combination of close-up foreground and focused background.
And that's the way it was on January 16, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on
the Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at
http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
Quotes of the Week
The precious
present is not something that someone gives you. It is a gift that you give
yourself.
The Precious Present by Spencer Johnson, 1992
As quoted in a recent email message from Brent and Betty Carper in Egypt
Of the two
sets of money-making one ... is a part household management, the other is retail
trade: the former is necessary and honourable, the latter a kind of
exchange which is justly censured; for it is unnatural, and a mode by
which men gain from one another. the most hated sort, and with the
greatest reason, is usury, which makes a gain out of money itself, and not from
the natural use of it. for money was intended to be used in exchange, but
not to increase at interest. And this term usury, which means the birth of
money from money, is applied to the breeding of money, because the offspring
resembles the parent. wherefore of all modes of making money this is the
most unnatural.
Aristotle on Interest and Usury, Politics (III, 23)
Money is a
recursive function, defined, layer upon layer, in terms of itself. The era when
you could peel away the layers to reveal a basis in precious metals ended long
ago. There's nothing wrong with recursive definitions . . . But formal systems
based on recursive functions, whether in finance or mathematical logic, have
certain peculiar properties. Godel's incompletemess theorems have analogies in
the financial universe, where liquidity and value are subject to varying degrees
of definability, provability, and truth. Within a given financial system, (i.e.,
a consistem system of values) it is possible to construct financial instruments
whose value can be defined and trusted but cannot be proved without assuming new
axioms that extend beyond the system's reach.
G.B. Dyson, Darwin Among the Machines: The Evolution of Global
Intelligence(Reading, MA: Addison-Wesly Publishing Company, 1997, p. 167)
As quoted at http://www.trinity.edu/rjensen/231wp/231wp.htm
"When Warren Buffett spoke on campus a few months ago, he said you ought not to invest in something you don't understand," said Dennis Beresford, Ernst & Young executive professor of accounting at the University of Georgia.
Beresford, a
former chairman of the standards-setting Financial Accounting Standards Board,
even bought "a few shares'' of Enron in October when the price dropped
below book value. But he didn't hold them for long.
(See Enron Scandal Updates Below)
But the review
of Andersen reflected the limitations of the peer-review process, in which each
of the so-called Big Five accounting firms is periodically reviewed by one of
the others. Deloitte's review did not include Andersen's audits of bankrupt
energy trader Enron Corp. -- or any other case in which an audit failure was
alleged, Deloitte partners said yesterday in a conference call with reporters.
David S. Hilzenrath, The Washington Post, January 3, 2002 (See Below)
Warnings to Users of Financial Accounting Textbooks
A frustration that I am having with a
textbook I adopted for a course probably applies to virtually all other
financial accounting textbooks released after 1999
I briefly outline my frustration at http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm
My appeal is that all users of financial accounting books carefully check to see if FAS 133/138 impacts on all chapters have been cited. If not, please beg those authors to issue errata sheets for all false or misleading passages that are impacted by FAS 133 and FAS 138.
It would also help for all textbook users to share their discovered textbook errors in any accounting book on the AECM listserv. Please help professors and students in other universities avoid teaching false or misleading accountancy and finance.
Subscribers of the AECM are probably
overlooking a great opportunity to share discovered errors in the published
literature. Have you found errors were noting?
The AECM free subscription site is at http://pacioli.loyola.edu/aecm/
The FASB staff has
prepared a new updated edition of Accounting for Derivative
Instruments and Hedging Activities. This essential aid to
implementation presents Statement 133 as amended by Statements 137 and
138. Also, it includes the results of the Derivatives Implementation
Group (DIG), as cleared by the FASB through December 10, 2001, with
cross-references between the issues and the paragraphs of the Statement.
“The staff at the FASB has prepared this publication to bring together in one document the current guidance on accounting for derivatives,” said Kevin Stoklosa, FASB project manager. “To put it simply, it’s a ‘one-stop-shop’ approach that we hope our readers will find easier to use.” Accounting for Derivative Instruments and Hedging Activities—DC133-2 Prices: $30.00 each copy for Members of the Financial Accounting Foundation, the Accounting Research Association (ARA) of the AICPA, and academics; $37.50 each copy for others. International Orders: A 50% surcharge will be applied to orders that are shipped overseas, except for shipments made to U.S. possessions, Canada, and Mexico. Please remit in local currency at the current exchange rate. To order:
|
The Following Made This Grown Man Cry! Will the FAS 133 Flood Ever Crest?
New FAS 133 Derivatives Implementation Group (DIG) Pronouncements
- Issue A21—Existence of an Established Market Mechanism That Facilitates Net Settlement under Paragraph 9(b)
(Released 12/01)
- Issue A22—Application of the Definition of a Derivative to Certain Off-Balance-Sheet Credit Arrangements, Including Loan Commitments
(Released 12/01)
- When a Loan Commitment Is Included in the Scope of Statement 133 (Refer to Issue C13)
(Released 12/00)B12—Embedded Derivatives in Beneficial Interests Issued by Qualifying Special-Purpose Entities
(Released 10/99; Revised 10/12/01)Issue B34—Period-Certain Plus Life-Contingent Variable-Payout Annuity Contracts with a Guaranteed Minimum Level of Periodic Payments
(Released 10/01)Issue C13—When a Loan Commitment Is Included in the Scope of Statement 133
(Released 01/01; Revised 12/01)Issue C16—Applying the Normal Purchases and Normal Sales Exception to Contracts That Combine a Forward Contract and a Purchased Option Contract
(Cleared 09/19/01; Revised 12/19/01)Issue C17—Application of the Exception in Paragraph 14 to Beneficial Interests that Arise in a Securitization
(Released 10/01)C18—Shortest Period Criterion for Applying the Regular-Way Security Trades Exception to When-Issued Securities
(Released 10/01)Issue C19—Contracts Subject to Statement 35, Statement 110, or Statement of Position 94-4
(Released 10/01)Issue D2—Applying Statement 133 to Beneficial Interests in Securitized Financial Assets (a Resolution of the Issues Raised in Implementation Issue D1)
(Released 10/01) (Adobe Acrobat Reader required)Issue E18—Designating A Zero-Cost Collar with Different Notional Amounts As a Hedging Instrument
(Cleared 3/21/01; Revised 11/21/01)Issue E19—Methods of Assessing Hedge Effectiveness When Options Are Designated as the Hedging Instrument
(Cleared 3/21/01; Revised 11/21/01)
- Issue E21—Continuing the Shortcut Method after a Purchase Business Combination
(Released 10/01)- Issue F11—Hedging a Portfolio of Loans
(Cleared 09/19/01)*Issue G1—Hedging an SAR Obligation
(Cleared 02/17/99; Revised 11/21/01)Issue G11—Defining the Risk Exposure for Hedging Relationships Involving an Option Contract as the Hedging Instrument
(Cleared 6/28/00; Revised 11/21/01)Issue G22—Using a Complex Option as a Hedging Derivative
(Cleared 09/19/01)Issue G23—Hedging Portions of a Foreign-Currency-Denominated Financial Asset or Liability Using the Cash Flow Model
(Cleared 09/19/01) (Adobe Acrobat Reader required)Using a Forward Contract to Hedge a Forecasted Foreign Currency Transaction That Becomes Recognized
(Cleared 3/21/01; Revised 11/21/01) (Adobe Acrobat Reader required)Issue H16—Reference in Paragraph 40(e) about Eliminating All Variability in Cash Flows
(Cleared 09/19/01)Issue J19—Application of the Normal Purchases and Normal Sales Exception on Initial Adoption to Certain Compound Derivatives
(Cleared 12/19/01)New and Revised Issues Posted on December 28, 2001
Download the issues posted on December 28, 2001, which includes marked drafts of the two cleared Issues that were revised on December 19, 2001.Issues Posted on December 21, 2001
Download the issues that were posted on December 21, 2001.Revised Issues Newly Posted on December 10, 2001
Download a marked draft of the cleared Issues that were revised on November 21, 2001 to remove any implied inconsistencies with Statement 133 Implementation Issue No. G20, "Assessing and Measuring the Effectiveness of a Purchased Option Used in a Cash Flow Hedge," and posted on December 10, 2001.Index—Statement 133 Implementation Issues
· Download Index and Issues—Sections A-C
· Download Index and Issues—Sections D-K
All issues as of December 28, 2001.Issues with Tentative Guidance
Download tentative guidance as of December 28, 2001.Issues with Cleared Guidance
· Download Cleared Issues-Sections A-C
· Download Cleared Issues-Sections D-K
Guidance that has been formally cleared by the Board as of
December 28, 2001.
IAS 39 Implementation Guidance
Supplement to the
Publication
Accounting for Financial Instruments - Standards, Interpretations, and
Implementation Guidance
http://www.iasc.org.uk/docs/ias39igc/batch6/39batch6f.pdf
Also see Bob Jensen's
Interest Rate Swap Valuation, Forward Rate Derivation, and Yield Curves
for FAS 133 and IAS 39 on Accounting for Derivative Financial Instruments --- http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
If your students are snoring through your accounting courses, consider adopting some accounting fiction on the lighter side.
Search Warning of the Week
Beyond HTML: Security concerns with Google Now that Google is indexing a wide range of document types beyond HTML and plain text formats, potential security concerns are cropping up, both for searchers and webmasters. http://www.newmedia.com/default.asp?articleID=3297
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
Bob Jensen's security threads are at http://www.trinity.edu/rjensen/ecommerce/assurance.htm
The American Accounting Association Annual Meetings begin August 14, 2002 in San Antonio. Actually, Bob Jensen has proposed an all-day workshop beginning on August 13, but I will delay providing details about that until our plans are firmed up and approved by the AAA.
The purpose of this module is to suggest that arrive early in San Antonio on July 20 or 21. YOU WILL YELL WOW amidst 35,000 other attendees at the ever-bigger and ever-better annual SIGGRAPH Event --- http://www.siggraph.org/
Why do we say "Happy" New Year every year with tears in our eyes?
Celebrate the beginning of the Year 2002 with some great music. You must, however, wait until the pointer swings around to 12 --- http://www.riversongs.com/Flash/2002.html
Yahoo! E-Commerce Sales Up 86% Internet portal Yahoo! Inc., saying that its 2001 holiday e-commerce sales were 86 percent above last year's, launched an Unwanted Gifts Showcase and Post-Holiday Sales Center. http://www.newmedia.com/default.asp?articleID=3301
Why Should I Use JavaScript? There are a lot of organizations and individuals wanting to know when, how and why to use JavaScript. Used effectively, it can take a plain site (even a personal site on a budget) and make it extraordinary. http://www.newmedia.com/default.asp?articleID=3296
Bob Jensen's modest JavaScript tutorials are at http://www.trinity.edu/rjensen/HelpersVideos.htm#JavaScript
Wow Innovation of the Week
XBRL Express --- http://www.edgar-online.com/xbrl/
The XBRL Express web site is intended to function as a market place for companies and organizations wishing to display their XBRL statements and where XBRL developers can demonstrate their applications and tools. If you have XBRL compliant statements or created an application or a demo and wish to have it demonstrated on this page, please click here for more information.
Extensible Business Reporting Language (XBRL), formerly code-named XFRML, is an open specification which uses XML-based data tags to describe financial statements for both public and private companies. XBRL benefits all members of the financial information supply chain... [more]
Access company financials by industry, generated in XBRL format, as well as the source documents, and taxonomies used...[more]
If your company has generated your own financials in XBRL format, you can have them added to the repository. For more information email xbrl@edgar-online.com.
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Bob Jensen's threads on XBRL are at http://www.trinity.edu/rjensen/xmlrdf.htm
"Just talk to me," The Economist, December 6, 2001 --- http://www.economist.com/science/tq/displayStory.cfm?Story_ID=885022
Speech recognition: At long last, speech is becoming an important interface between man and machine. In the process, it is helping to slash costs in business, create new services on the Internet, and make cars a lot safer and easier to driveIn the early days of computing, information was put into computers by flipping switches. After this came the relative sophistication of loading programs and data by means of punched cards or punched paper-tape. These were followed in their turn by such devices as the keyboard, the mouse, the trackball, the joystick, the touchpad and the touch-sensitive screen. Throughout all this, speech—the most natural, and perhaps the most effective, interface between people and computers—has remained largely neglected. Apart from some modest developments in software for desktop dictation in the 1990s, the only time most people have talked to their computers has been when cursing them.
All this is changing. Already, speech recognition is a not-uncommon feature at the call-centres of telephone companies, financial-service providers and airlines in the United States. In Japan and Europe, meanwhile, speech recognition is being adapted for use as a hands-free input device for motor cars.
Technologies such as automatic speech recognition (ASR), speaker verification and text-to-speech generators (see article) are catching on fast. They promise to deliver access to information and services anytime and anywhere that there is telephone. With more than 1 billion phones in the world and new subscribers being added to the global networks at double-digit rates, the enthusiasm is understandable. What is really driving the enthusiasm for the technology is not just that people are used to talking over telephones and so need little encouragement or training. They have also proved themselves willing to pay a premium for such services.
Continued at http://www.economist.com/science/tq/displayStory.cfm?Story_ID=885022
Bob Jensen's threads on speech recognition are at http://www.trinity.edu/~rjensen/245glosf.htm#Speech1
XML Report for Wednesday, January 2, 2001
XML Report, a weekly electronic complement to Application Development Trends, provides independent, timely insight to XML's impact on the tools, technologies and trends affecting corporate business application development.To see if you qualify for a FREE subscription to Application Development Trends, go to http://www.adtmag.com and Click on the "Free Print Subscription" button.
For additional articles and a complete archive of the XML Report visit us at: http://www.adtmag.com. ===============================================================
In this issue of XML Report:
Integration: Analysts: bull market for Web services
E-Business: XML: The mouse that roared
=============================================================== Integration Analysts: bull market for Web services by Rich Seeley
In the midst of the current recession, there is a bull market for Web services, says ZapThink LLC, a Waltham, Mass., based consulting firm. In a recent report, the XML specialists said the distributed computing technology based on XML standards and the Internet has captured the eye of corporate IT operations.
With industry heavyweights like Microsoft and IBM pushing hard to rapidly improve Web services technology, ZapThink analysts predict the Web services market will grow from $380 million in 2001 to $15.5 billion in 2005.
"With the amount of coverage, excitement, and interest in Web Services, one would think that Web services is all that XML has to offer." said Ronald Schmelzer, senior analyst at ZapThink.
But beyond the marketing hype, Schmelzer agrees that Web Services represent the next step in making computer resources easily accessible via the Internet.
Schmelzer and ZapThink predict that more than half of the $15.5 billion annual Web Services market by 2005 will go to platforms, such as Microsoft's .NET.
Sharing other pieces of the high technology pie, will be product categories ZapThink identifies as:
Web Services Application Delivery Suites (Consisting of Application Suites, Portal Vendors, and Client-oriented delivery) Web Services Operations Management (Billing, metering, etc.) Web Services Communities (Web Services for sale or distribution)
According to Schmelzer, the major drivers of Web Services are planned implementations to improve enterprise integration, both EAI and data integration; B2B integration, replacing aging EDI-based applications; and content management applications.
While Bill Gates has been grabbing headlines, his rivals at Sun Microsystems still have the leading platform for Web Services. Schmelzer's survey of corporate IT departments finds that "58% of test, pilot, and live implementations in the next 12 months are on the J2EE platform."
For more on the ZapThink report, click on http://www.zapthink.com/.
For more on Integration go to: http://www.adtmag.com/section.asp?section=integration
Bob Jensen's threads on XML are at http://www.trinity.edu/rjensen/xmlrdf.htm
Wow Education Software Award Winners
From Syllabus News on December 31, 2001
The Software & Information Industry Association (SIIA) has picked finalists for its 2002 "Codie" awards, honoring excellence in software products and services. The awards will be announced at the SIIA annual conference on April 15 and are the only peer-recognition program in the software industry, says SIIA, which represents 1,200 companies.
In the category of "Best Postsecondary Instructional Solution," the finalists were:
-- Blackboard 5.5 from Blackboard Inc.
-- EndNote V5, from ISI Research
-- LexisNexis Current Issues Universe, from LexisNexis
-- Mobile Mentor Software from Palm Inc.
-- Office HoursLive.com, from HorizonLiveIn the category of "Best Educational Total Comprehensive Solution," finalists were:
-- Campus Pipeline 3.0 Web Platform from Campus Pipeline
-- McGraw-Hill Learning Network from McGraw-Hill Inc.
-- Netschools Orion from Netschools Corp.
-- Plateau 4 Learning Management System from Plateau
-- SchoolNet, from SchoolNet Inc.In the category of "Best New Education Solution," finalists were:
-- academic.com from Academic Systems
-- KnowledgeBox from Pearson Broadband
-- SchoolNet, from SchoolNet
-- www.classroom.com, from Classroom Connect
-- www.learning.com, Learning.comFor more information, visit: http://www.siia.net
From online grocery delivery services to rich Internet stock portfolios, a lot of things vanished in 2001. Joanna Glasner takes a look back at the way things were. "It was the worst of times, it was the worst of times." --- http://www.wired.com/news/ebiz/0,1272,49235,1162b6a.html
Several accounting firms divested themselves of their consultancy divisions during 2001. KMPG Consulting and Accenture, formerly known as Andersen Consulting, floated initial public offerings and have maintained a comfortable position on Wall Street. http://www.accountingweb.com/item/67859/#Public
Top Websites for the Year 2001 (Yahoo Yells Yahoo!)
The Year in Review Part I --- http://docs.yahoo.com/picks/
Continued from last week, you will find Part II of Yahoo's 2001 Picks of the Year...
(The Part I listing was in my January 1, 2002 Edition of New Bookmarks)
- le piano graphique - music never looked so good. (Featured June 4)
- Levitated - light as a feather, stiff as a board. (Featured November 19)
- McSweeney's: Weekly NFL Picks - whether or not you like football, Jeff Johnson is a funny man. (Featured September 10)
- Men Who Look Like Kenny Rogers - these guys are "on a train bound for nowhere." (Featured June 25)
- Mojo Magazine - across the pond and into our ears. (Featured March 19)
- NASA's Visible Earth - here, there, and everywhere. (Featured March 5)
- New Yorker, The - the talk of the town. (Featured February 19)
- OddTodd: Laid-Off - coffee, Pringles, late-afternoon naps, and fudge-striped cookies. (Featured November 11)
- Orisinal - melt away the minutes when you're feeling gamey. (Featured November 26)
- Paint By Numbers - the Smithsonian puts color in all the right places. (Featured April 23)
- Pet Shop Boys Song-by-Song Commentary - "What have I, what have I, what have I done to deserve this?" (Featured April 9)
- Picturing the Century - freezing change, ugliness, and bravery. (Featured March 19)
- Pseudo Dictionary - a different place for words to live. (Featured January 29)
- September 11 Web Archive - a day we'll never forget. Part of the Internet Archive. (Featured October 22)
- Slap Shot Tribute - "old-time hockey, like Eddie Shore." (Featured October 29)
- Stephen's Guide to the Logical Fallacies - you can't be serious. (Featured January 8)
- Taquitos.net - snacking it in. (Featured January 29)
- They Rule - the view is exceptional from where "they" sit.(Featured October 22)
- TRL by Sarah - if you just can't get enough of Carson. (Featured April 16)
- turbulence - artists in the full upright position. (Featured December 10)
- Underwater Archaeology - don't hold your breath. (Featured June 4)
- What Is a Print? - the MoMA shows you the meaning of etch. (Featured April 30)
- Who's the Boss? Resource, The - who's the oddly obsessive fan? (Featured November 26)
- William Girdler - a picture's worth a couple of words. (Featured February 19)
- WMOB: The Wiretap Network - an unexpected slice of the mafia life. (Featured May 28)
Personal Finance Links
Articles of Interest to Retirees www.aarp.org Financial Tools From A–Z (including financial calculators) http://www-sci.lib.uci.edu/HSG/RefCalculators1A.html |
Bob Jensen's Personal Finance Helpers:
How-To for Small Biz www.office.com
Bob Jensen's helpers for small business are at http://www.trinity.edu/rjensen/bookbob1.htm#SmallBusiness
On the heels of the Enron scandal, the current Ground Zero of the auditing world, the XYZ Credential vote could not have come at a worse time. I am sorry that it failed and hope that practicing accountants and accounting educators will take a careful look at the long-term future of the public accountancy profession. Auditing is becoming a commodity with a very low profit margin in the age of technology when computers are increasingly taking over the audit function. Computer manufacturers know full well that there is not much future in relying upon "commodities" for a long-term strategy. New products and services in this technology paradigm shift are essential to the viability of this profession. Otherwise it is CPA Away --- http://www.trinity.edu/rjensen/cpaaway.htm
I highly recommend that every accountant take a look at the following recent article by Bob Elliott
"A Perspective on the Proposed Global Professional Credential," by Robert K. Elliott, Accounting Horizons, December 2001 (available for online paid subscribers at http://aaahq.org/ic/browse.htm )
You have no doubt heard of the proposed global professional credential, under such placeholder names as XYZ or Cognitor, that would supplement the CPA. At this writing, the AICPA and state societies are in the midst of a program to inform AICPA members sufficiently about the new credential to enable them to determine their interests and vote on whether to pursue the project to conclusion. The purpose of this article is (1) to put the project in the context of market forces affecting the accounting profession and all other knowledge-work professions and (2) to present my view of the appropriate skill set for a holder of the new credential.
The need for a new credential is separate from the specific proposal to create one now under consideration. New economic conditions are having profound effects on the knowledge-work professions. As a result, and whether the accounting profession goes ahead with the new credential concept now facing a ballot, one way or another the forces affecting our marketplace will have their effects on the profession’s opportunities and viability. The validity of the new credential concept must be seen in light of these circumstances.
This article is not intended as an indirect entrance into the debate about the new credential, but it does put me squarely in the camp of supporters of the multinational initiative. My position is consistent with my part in the initiative from the start. I contributed to the project’s development. Nevertheless, what I have to say here is broader than most of the debated issues, is my own interpretation of the historic role of the new credential, and presents my own view of the body of knowledge that should define the needed professional.
A few words of background for those readers unfamiliar with the proposal: The AICPA and Canadian Institute of Chartered Accountants initiated the project for a new credential. The conception was at all times international. AICPA representatives worked with members of a consortium of accounting institutes from around the world. All agreed that the profession could not ignore certain market trends without inviting peril or other trends that represent unprecedented opportunities. The reach of the current CPA and CA credentials as brands creating market permissions for new services was approaching its limits. All also agreed that a new, broad international credential was the right response.
The credential would be wholly private (that is, wholly nongovernmental), owned by a global institute, and granted by national credential-granting organizations in participating countries. The national credential-granting organizations would be established by institutions the global institute enfranchised as partners. The AICPA or an affiliate would be an enfranchised partner. The global institute would create ethical and performance standards for member professionals and control the credentialing qualifications, which would be the same in all participating countries. In this sense, and because of the international component of the knowledge that will define the credential, it will be international. (Additional details are available at http:// www.globalcredential.aicpa.org. )
THE NEW MARKETPLACE
Demand for business services has grown astonishingly over the past generation. The CPA profession’s prosperity during this period owes much to that demand. Other professions benefited as well. Moreover, the market for business services promises to grow still further in the future.
Causes
The chief source of the new demand for these services has been the information revolution. It has transformed the economy from industrial to post-industrial—that is, to the so-called “knowledge economy.” The revolution is far-reaching and ongoing. More than anything else, the information revolution created the need for additional business services and service providers and the incredible opportunities that await them. In particular it created a need for professionals who could provide information services.
The information revolution is still young, but the role of information in economies has a very long history. Information technology and information products and services go back to the beginning of mankind: language is information technology, and myth is an information product. Accounting information and law are also information products that go back to ancient times. Audits are information products with centuries’ worth of pedigree. For most of history, information products and services were essential to wealth-creating structures, but they were not the primary way in which people earned their keep, maintained them-selves, and contributed economically to society. Agriculture and later manufacturing were the dominant generators of wealth and well being. Only recently have knowledge work, products, and services become the dominant form of wealth creation.
Some feeling for the chronology is provided by identifying when our society became aware of the information economy. Porat’s (1977) book, which defined the information economy and attempted to measure it, is a useful starting point.
Porat (1977) acknowledged his intellectual debts to predecessors, notably Fritz Machlup (1962), and Peter Drucker began using the expressions “knowledge work” and “knowledge worker” in the 1960s. Even so, the view Porat presented did not suddenly become widespread. A few years later, a Wall Street Journal article referred to “a view-point newly gaining some prominence…a trend as fundamental as ever to have trans-formed the U.S. economy—the switch to an ‘information economy’ from one based on manufacturing” (Janssen 1981, A2).
The concept is broader than computerization. Computers pre-date Porat by many years. IBM led the way in the era of punch-card computers and mainframes, and by 1977 we were almost poised to enter the personal-computer era and a new generation of computing marked by stunning advances in computing power. Apple was formed in that year; Microsoft organized as a partnership in 1975 and incorporated in 1981; Compaq came along a year later. The microprocessor had been invented in 1971. But Porat (1977) was not talking only about the electronic manipulation of data and its transmission to other computers, networks, or terminals—what we are familiar with as the drivers of the information revolution. He included in the information economy all the resources consumed in producing, processing, and distributing information goods and services. Intellectual capital included typewriters, telephones, copiers, computers, and satellite dishes. Information workers included secretaries, clerks, personnel directors, designers, managers, accountants, and lawyers. Information goods and services included not only paper, other office supplies, and telecommunications equipment, but also business consulting and legal advice.
Today most of the noncomputer knowledge-work activities Porat (1977) described are heavily influenced by computers and telecommunications, if not absorbed by them, just as some tax and accounting activities have been taken over by software. The computer- telecommunications revolution now led by the Internet became the mainspring of the information economy, with growing online sales and services, dramatic band-width advances, and new and changing relationships among businesses, employees, customers, and suppliers. The Commerce Department recognized the importance of Internet business last year by unveiling a new index to track its retail sales and the Department’s plans for business-to-business e-commerce data (Dreazen 2000, A2). Meanwhile, computer-aided design and production processes already have a record of success, and people have become accustomed to ever more powerful computers in ever smaller compartments and to getting increasingly more computing power for each dollar spent. The information economy has transformed the business environment. Innovation comes faster; competition is stiffer; and penalties for stasis are greater. The economy relies less on physical capital and more on intellectual capital.
Effects
Because knowledge has become a basic resource, organizations must determine how to make effective use of the knowledge they have and how to create new, productive knowledge. Peter Senge and other writers created a literature about how to enhance an organization’s capacity to learn. Meanwhile, the accounting community is wrestling with the problem of intangibles unreported by GAAP, including corporate knowledge that can be turned to profit. Extreme differences between corporations’ book and market values are attributed in part to unreported intangibles. Both organizational-learning needs and the problem of unreported knowledge “assets” are signs of how dependent our economy has become on knowledge (information) and knowledge (information) systems.
Continued in the printed version and at http://www.newslettersonline.com/user/user.fas/s=604/fp=3/tp=44/04.359_372.pdf?T=open_article,407100&P=article
2001 was not a great year for job security, particularly in the accounting and consultancy professions. Many firms found the need to cut their workforces or offer innovative temporary layoff programs. http://www.accountingweb.com/item/67859/#Layoff
CPA practices have combined with legal practices in other countries for years, but the two have been prevented from working hand in hand in the United States. The New York State Bar recently ruled that American law firms and accounting firms are allowed to have a "side-by-side" alliance, which is opening the door for major changes in both professions. http://www.accountingweb.com/item/67859/#Law
File-sharing programs LimeWire, BearShare, Grokster and Kazaa recently included software that tracks users online. The companies plead ignorance, blaming bundled advertising software --- http://www.wired.com/news/privacy/0,1848,49430,00.html
Bob Jensen's P2P threads are at http://www.trinity.edu/rjensen/napster.htm
I proposed this in the second grade. At last smarter folks are giving it serious consideration.
A Texas engineer who designs power stations has an idea for clean, safe, free energy: Bury power-generating tubes deep in the Earth's crust and tap the energy of the planet's molten core --- http://www.wired.com/news/technology/0,1282,48947,00.html
Anyone thinking Homer's epic about Achilles' shifting allegiances to the Greeks and Trojans is dated might want to check out UCLA's new production. Michael Stroud reports from Westwood, California.
"An Iliad for the 21st Century," by Michael Stroud, Wired News, January 2, 2002 --- http://www.wired.com/news/culture/0,1284,49197,00.html
What happens when one of the world's oldest stories is wedded to cutting-edge technologies on a stage set?
Theater-goers here will discover the answer next summer when UCLA's School of Theater, Film and Television launches a retelling of Homer's The Iliad that incorporates online community, video feeds, digitally projected images, an interactive floor show, and, oh yes, actors.
The idea is to make one of The Iliad's primary themes -- hero Achilles' constantly shifting allegiances to the Greeks and the Trojans -- a metaphor for how 21st century people find their lives shaped by technology and media.
"Our allegiances can change hundreds of times in a day, at the click of a mouse or a remote control," said Jared Stein, the project's playwright and a graduate from the UCLA school. "That weakness of human character, the desire to associate with one group or another, is central to Homer's story."
The play's goal is to deconstruct those modern-day allegiances and help theater-goers discover how they form preferences, whether for toothpaste or Osama bin Laden.
With the world picking sides in the Afghanistan and Palestinian conflicts, the performance at the Los Angeles Theater Center is timely. But UCLA's Iliad will be humorous and light -- more concerned with understanding human nature than blasting it.
UCLA's Hypermedia Lab, the experimental theater department spearheading the project, has played with technology before. Last year, its production of Ionesco's Shakespearean satire Macbett had flourishes such as sensor-packed wands that set off special effects when the witches boiled and bubbled.
For The Iliad, project participants wondered "what would happen if you made technology part of the intrinsic storytelling rather than part of the design?" said Jeff Burke, a UCLA adjunct professor, an electrical engineer and the technology integrator for the performance.
Movies -- which integrate computer-generated characters, environments and special effects into their plots -- are far more advanced than theater in making technology part of the action, Burke noted.
The Iliad performance will actually begin sometime this spring, when UCLA launches online communities of "Greeks" (Los Angelenos) and "Trojans" (outsiders). People will electronically submit information about themselves and receive e-mail "news flashes" from the war front.
The actual performance will incorporate that information into visuals, sound effects, exhibits outside the theater, and other ways that Stein and Burke don't want to disclose for fear of giving away the play's plot.
The interactive exhibits -- held before the performance, during intermission and after the completion -- maintain the same playful sense as the play: Stein offers "Whack-a-Helen" with electronic air guns as an example of what theater-goers may encounter.
The project represents a sharp departure for Stein, whose career (interrupted by film school) has included stints as a child actor, an assistant movie director in Hollywood and a writer for a New York theater troupe.
In this environment, the playwright's job becomes more about creating a formula for the action rather than an actual script; and the eight actors may end up doing a lot of ad libbing based on input from the audience, Stein said.
Continued at http://www.wired.com/news/culture/0,1284,49197,00.html
The last paragraph above ties closely into traditional case method teaching. Technology raises case teaching to a new dimension.
See also:
The
Phone Sex Play's the Thing --- http://www.wired.com/news/culture/0,1284,44258,00.html
Machover
Gives Tolstoy a Makeover --- http://www.wired.com/news/culture/0,1284,48152,00.html
Did
This Musician 'Cell' Out? --- http://www.wired.com/news/culture/0,1284,48152,00.html
Universities having doctoral programs in accountancy and the number of graduates from each school between 1982 and 2000 (the Year 2001 frequency count of 21 is incomplete) --- http://www.jrhasselback.com/jimchart.pdf
Hi Ian,
I forgot about that password message. It is more or less a phony message designed to frustrate my students from looking up answers before they attempt solving my problems.
You can go directly to the listing of my answer files at http://www.cs.trinity.edu/~rjensen/ You do not need a password for the above link.
I agree that you should focus on the FAS 133/IAS 39 materials and wait until fair value accounting begins to make greater strides.
You might be interested in the draft (presently not complete draft) at http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
In particular, have your students study the IAS 39 Supplement linked at http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm#IAS39Supplement I plan to have some excerpts from the above IASB document pasted into my draft over the next three weeks. But there is no reason why your students cannot download the entire Supplement themselves since the IASB provides this document to the world at no charge.
Paul Pacter wrote a handy document comparing IAS 39 and FAS 133, although I think he slightly overstates the similarities. IAS 39 allows most FAS 133 solutions (with some exceptions like basis adjustment), but IAS 39 also allows some solutions that FAS 133 forbids. IAS 39 is just not as detailed in terms of rules. Paul's comparisons are at http://www.iasc.org.uk/cmt/0001.asp?s=100107225&sc={D41D74AC-7D6C-11D5-BE63-003048110251}&n=3288
You might contact Paul to see if he has anything more recent with respect to the JWG draft versus IAS 39. Paul's international accounting Website is terrific at http://www.iasplus.com/index.htm You most certainly require your students to track this Website.
I do not presently have password restrictions to my materials, so you can access anything for free.
Do you mind if I quote your message and my answer in my next (January 8) edition of New Bookmarks? I think other professors around the world are asking the same questions. The archives for New Bookmarks are at http://www.trinity.edu/rjensen/bookurl.htm
Hope this helps!
Bob Jensen
-----Original Message-----
From: Ian Hutchinson [mailto:ian.hutchinson@acadiau.ca]
Sent: Thursday, January 03, 2002 11:53 AM
To: rjensen@trinity.edu
Subject: password request - SFAS 133 tutorialsHi Bob;
Ian Hutchinson here again. I'm finalizing my special topics in accounting course (4th year undergrad) at the moment. Unfortunately I'll only have six 1.5 hour sessions with my students in which to cover off financial instruments material. As you know Canada is still behind in the financial instruments area having adopted no standard comparable to IAS 39 or SFAS 133. Nor has there been much public discussion over the JWG's Draft Standard on Financial Instruments and similar items.
I'm debating how to approach the sessions I have reserved for FI. It seems we are likely to be living with SFAS 133 and IAS 39 for some time so I hesitate to wade into the JWG draft standard. My early thoughts are that I'll review the issues and the standards as they have developed in the US and then take a little time to flesh out differences in SFAS 133 and IAS 39 (the two appear reasonably similar). That done I'll likely turn to the major differences between IAS 39 and the JWG draft standards and explore the differences that have gotten stakeholders riled (no hedge accounting for anticipated transactions etc.)
Have you spent any time comparing the major differences between SFAS 133 and/or IAS 39 and the JWG draft standard?
If I decided to play down the JWG draft standards and work more with the complex issues that surround IAS 39 and SFAS 133 and I may end up going this way given the status of the JWG material at this point could I get access to your tutorials. I will need to review a lot of you material carefully myself both to improve my understanding of SFAS 133 and its isues and to decide where I want to go with this with my students.
Thanks for making so much of your efforts in SFAS 133 and related areas available for the rest of us. Great stuff.
Ian Hutchinson
Selling to the E-Fluentials Who are the "e-fluentials," and how do you reach them? http://www.newmedia.com/default.asp?articleID=3303
"Modest evolutions in gadgetry for 2002," CNN.com, December 21, 2001 --- http://www.cnn.com/2001/TECH/ptech/12/21/consumer.electronics.ap/index.html
Portable MP3 players will shrink in size but hold more songs. Cell phones will double as handheld computers. And televisions will be bigger, sharper -- and cheaper.
These are some of the new -- well, really just mostly improved -- consumer electronic gadgets that will debut in 2002, a year that also promises some modest strides toward the wirelessly connected world that was overpromised a year ago.
Devices such as personal digital assistants, cell phones and combinations of the two will increasingly come with built-in wireless Web access.
Laptop-toters seeking to surf the Web through wireless hubs, their options currently limited, will likely see many more places offer the service as this technology proliferates.
Now that tech jargon like MP3, DVD and PDA have entered the vernacular, the consumer electronics industry is concentrating on next-generation devices, learning from the mistakes and building on the successes of the past few years.
"Expect to see more evolutionary, rather than revolutionary devices," said Andrew Johnson, a market researcher with Gartner Dataquest.
It's a good time for a breather, analysts say -- the industry is at a crossroads, switching from analog to digital technologies, and consumers need time to fully grasp the advantages of the fancy new devices now available.
Some companies are moving cautiously after the bruising economic slowdown in 2001 depressed sales, even of popular mobile phones and handheld computers. Consumers now tend to buy products that fill real needs -- rather than dumping cash on the latest cool gadget, analysts say.
Multifunction electronic devices laden with features have not necessarily been hit products, though many high-tech companies remain optimistic that the future lies with powerful, converged devices such as refrigerators with built-in Internet access or handheld computers that also serve as a cell phone, pager, digital camera, MP3 audio player and TV remote control.
But until consumers -- and not just gearheads -- show a liking to these technologies, and their prices become affordable, some companies are focusing on devices that serve one function well.
The TV/VCR combination wasn't a blockbuster and is now headed in the same direction as VCRs, which have been losing ground to DVD players.
Home media servers arrived in 2001, but didn't fare well either. They digitally store songs on hard disks and have Internet and home network connectivity. But many consumers found them expensive and difficult to use.
Continued at http://www.cnn.com/2001/TECH/ptech/12/21/consumer.electronics.ap/index.html
Put all of your photos onto your computer Scan negatives and slides for great resolution
At a whopping 4.2 mega pixels, PrimeFilm scans offer better image quality than most digital cameras. Your important photos will be preserved forever. The PrimeFilm scanner captures 1800 dots per inch (dpi) to give you 3 times the resolution of the average desktop scanner. That means you can enlarge images approximately 800%. PrimeFilm captures much more image detail at true-life colors than most flatbed scanners; all in 35 seconds per scan. You’ll be able to store all of your slides and film in a raw state, then select them for later retouching and printing. This professional-grade scanner is compatible with PC or Mac and offers USB connectivity.
Continued at http://www.technoscout.com/general/product/product.asp?product=117&site=80477
Professor Jensen,
My name is Dr. Craig Watters and I teach at DePaul University in Chicago. With your permission, I’d like to send you a free sample of the Foundation Business Simulation. Foundation is the simple, quick version of the famous Capstone Business Simulation, the Internet-based simulation adopted by more than 300 universities and colleges. Foundation is designed for: 1. Less business-sophisticated students, or 2. As a brief "broadening experience" in courses with a narrow focus, i.e., Accounting, Marketing, Finance, Production, OM, etc. Foundation is filled with unique features you've never seen in any educational tool. There's no cost or obligation of any kind, and as a fellow educator, I believe you'll find the information interesting and informative. To receive your free materials, please send me your name, school and address. By the way, if you'd also like to see Capstone, please let me know.
Kindest regards, Dr. Craig Watters Management Simulations, Inc. 540 Frontage Road Northfield, IL 60093 877-477-8787
The future of business education is at http://www.capsim.com .
To see it: 1. At "Log onto Capstone or Foundation." use the name "Student and the password, "Foundation". 2. Scroll down to "I. Getting Started" 3. Click "Team Member Guide" Lessons I and II, and "Capstone Spreadsheets."
Dear Robert E. Jensen,
January 3, 2002 Business Week Online's M B A I n s i d e r Vol. IV, No. 1 FOR AN HTML VERSION OF THE MBA INSIDER NEWSLETTER, GO TO: http://www.businessweek.com/bschools/newsletter.htm
T a b l e o f C o n t e n t s:
N e w s & O p i n i o n Meet MIT's Admissions Director
B - S c h o o l s S u r v e y Help Us Improve the B-Schools Channel
G e t t i n g I n MBA Journals: Mid-Term Report
T o o l s & F e a t u r e s Check out our new features and partner content
S t o c k P i c k s & P a n s Get S&P analysts' views on three new stocks each day
W o r d s o f W i s d o m MBA grads offer advice on choosing a B-school and classes
BW Online's C a r e e r s Get the latest news and find the job that's right for you in our Career Center
N e w s & O p i n i o n
Admissions Q&A MEET MIT's ADMISSIONS DIRECTOR A conversation with Rod Garcia, director of masters' admissions at MIT's Sloan School of Management
Q: MIT has a reputation as a school for the technically-inclined, so it's easy for MBA aspirants to make assume that Sloan MBAs have a serious grounding in technology. What's an accurate image of your MBAs?
A: Our students are smart, friendly, hard working, creative, and innovative. They're also caring people, and that's what a lot of outsiders don't know about us. When they come to campus, their image of Sloan will change. That's why we always encourage people to visit. You can't learn all about Sloan by reading brochures.
Our students come from consulting, investment banking, and management. I don't think they're any different from the applicants at other schools.
Q: Is the school aiming to recruit students from different backgrounds?
A: We're always looking for diversity, but you always work with what you have in your application pool. Ideally, you want students who can do the academics, who will thrive here, will enjoy being here for two years, and will be successful when they leave. That's what we want.
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/bschools/content/jan2002/bs2002012_4854.htm?c=bwmbajan3&n=link1&t=email
Updates on the Enron Scandal
Big Five firm Andersen is in the
spotlight, facing legal action after energy giant Enron announced bankruptcy
plans,
and errors in the company's financial statements were made public. 2002 is sure
to bring monumental changes.
http://www.accountingweb.com/item/67859/#Enron
An interview with a former Chairman of the Financial Accounting Standards Board (Denny Beresford)
Bob,
You might be interested in the following link to an article in the Atlanta newspaper that mentions my own economic setback re: Enron.
http://www.accessatlanta.com/ajc/epaper/editions/saturday/business_c3d246cc7171f08b0067.html
Denny
In case it goes away on the Web, I will provide one quote from "INVESTMENT OUTLOOK: ENRON'S COLLAPSE: INVESTORS' COSTLY LESSON Situation shows danger of listening to analysts, failing to understand complex financial reports," Atlanta Journal-Constitution, December 29, 2001 --- http://www.accessatlanta.com/ajc/epaper/editions/saturday/business_c3d246cc7171f08b0067.html
"When Warren Buffett spoke on campus a few months ago, he said you ought not to invest in something you don't understand," said Dennis Beresford, Ernst & Young executive professor of accounting at the University of Georgia.
That's one of the lessons for investors from the Enron case, according to Beresford and others. Another is that "some analysts are better touts than helpers these days,'' Beresford said.
"Enron was a very complicated company,'' he said. "Beyond that, its financial statements were extremely complicated. If you read the footnotes of the reports very carefully, you might have had some questions."
But a lot of individuals and institutional investors did not have questions, even months into the decline in Enron stock.
At least one brokerage house was recommending Enron as a "strong buy" in mid-October, after the stock had fallen 62 percent from its 52-week high last December. The National Association of Investors Corp., a nonprofit organization that advises investment clubs, featured Enron as an undervalued stock in the November issue of Better Investing magazine.
Beresford, a former chairman of the standards-setting Financial Accounting Standards Board, even bought "a few shares'' of Enron in October when the price dropped below book value. But he didn't hold them for long.
"It became clear to me that the numbers were going to be deteriorating very quickly and that the marketplace had lost confidence in the management,'' he said.
On Oct. 16, Enron announced a $1 billion after-tax charge, a third-quarter loss and a reduction in shareholder equity of $1.2 billion. A little more than a week later, Enron replaced its chief financial officer.
On Nov. 8, the company said it would restate its financial statements for the prior four years. On Dec. 2, Enron filed for Chapter 11 bankruptcy protection.
One of the issues in Enron's case is its accounting for hedging transactions involving limited partnerships set up by its then-chief financial officer. Enron's filings with the Securities and Exchange Commission reported the existence of the limited partnerships and the fact that a senior member of Enron's management was involved. But, as the SEC noted later, "very little information regarding the participants and terms of these limited partnerships were disclosed by the company."
"The SEC requires a certain amount of disclosure, but if you can't understand accounting, you're hobbled,'' said Scott Satterwhite, an Atlanta-based money manager for Artisan Partners. "If you can't understand what the accounting statements are telling you, you probably should look elsewhere. If you read something that would seem to be important and you can't understand it, it's a red flag.''
"Andersen Passes Peer Review Accounting Firm Cleared Despite Finding of Deficiencies," by David S. Hilzenrath, The Washington Post, January 3, 2002 --- http://www.washingtonpost.com/wp-dyn/articles/A54551-2002Jan2.html
But the review of Andersen reflected the limitations of the peer-review process, in which each of the so-called Big Five accounting firms is periodically reviewed by one of the others. Deloitte's review did not include Andersen's audits of bankrupt energy trader Enron Corp. -- or any other case in which an audit failure was alleged, Deloitte partners said yesterday in a conference call with reporters.
. .
Concluding Remarks
In its latest review, Deloitte said Andersen auditors did not always comply with requirements for communicating with their overseers on corporate boards. According to Deloitte's report, in a few instances, Andersen failed to issue a required letter in which auditors attest that they are independent from the audit client and disclose factors that might affect their independence.In a recent letter to the American Institute of Certified Public Accountants, Andersen said it has addressed the concerns that Deloitte cited.
Bob Jensen's threads on the Enron scandal are at http://www.trinity.edu/rjensen/fraud.htm
Business Valuation Discussion Group BusValGroup-subscribe@topica.com
This discussion group is headed by Randy Schostag [RSchostag@BUSVALGROUP.COM]
A list of some useful links related to Statistics Education from Juha Puranen, Department of Statistics, University of Helsinki --- http://noppa5.pc.helsinki.fi/links.html
Free Instant Messaging: AOL
Patches AIM Security Flaw ---
http://www.internetnews.com/ent-news/article/0,,7_948261,00.html
Privacy Expert Roots Out True Origin of "XP Flaw" Microsoft's latest security flaw, originally traced to Windows XP, garners serious attention.--- http://www.internetnews.com/dev-news/article/0,,10_945371,00.html
A federal judge rules that the FBI can legally install a stealth device that captures keystrokes. The technique was used to obtain the passwords of accused mobster Nicodemo Scarfo --- http://www.wired.com/news/privacy/0,1848,49455,00.html
The cover will soon be blown on multimedia project "Carnivore," inspired by the FBI's infamous surveillance system. Artists show that sniffing packets can lead to creativity.
"Turning Snooping Into Art," by Noah Shachtman, Wired News, January 5, 2002 --- http://www.wired.com/news/culture/0,1284,49439,00.html
It’s a privacy-busting boogeyman to civil libertarians, an anti-terror panacea to lawmakers. And now Carnivore, the FBI’s infamous Internet surveillance program, has become an inspiration to a group of the Web's leading artists.
In a collaborative art project called, creatively enough, "Carnivore," Flash guru Joshua Davis and digital artist Mark Napier, along with other artists, have crafted programs that create audiovisual representations of data traffic that’s observed and hijacked from a local area network.
In the last six weeks, a few of the artists’ programs have been making their way to the Web. More will be shown when "Carnivore" makes its public premiere at an exhibition of surveillance art opening later this month at Princeton University.
"I wanted to make art that really deals with technology at a core level, art that uses data in its most raw form -- instead of using technology as just a tool to do the same old things," said Alex Galloway, a director at the new media arts group Rhizome that's spearheading the Carnivore project.
In other words, if "Carnivore" was a painting, the data would be the canvas and the oils, not just some new-fangled brush.
The Carnivore project is built on the backs of two widely distributed open source applications. The server uses the TCPdump application to sniff packets traveling over the local area network on which it’s installed -- currently it’s being used at the Rhizome offices. The packet-sniffer reveals everyone who is sending or receiving information on the network. It also reveals the type of data being sent and the content of the data itself.
Once the packets are analyzed, they’re sent through an IRC serving-program to an IRC chat room. The artists’ client programs then translate this ongoing data diatribe into colors, shapes and sounds.
"Amalgamatmosphere," the program designed by Davis (who was called "the best Web designer in the world" by Shift magazine) creates a circular "node" for each person active on the network. The circles change color depending on what the person is doing.
For example, using AOL turns the circle forest green; receiving e-mail, teal; browsing the Web, indigo. The more active the user, the bigger the nodes get and the more gravity they take on, drawing the other circles closer to them. The result is a swirling kaleidoscope that is weirdly hypnotic.
"There’s a rhythm and tone to every activity. You can almost monitor the network base just on what it looks and sounds like. It’s almost like the life force of what is happening on the network," Davis said.
Continued at http://www.wired.com/news/culture/0,1284,49439,00.html
See also:
Carnivore
to Continue Munching
Want
to See Some Really Sick Art?
Eavesdrop
Now, Reassess Later?
Keep an eye on Privacy
Matters
ACLU
Exec Voices Concerns
Where Are They Now? v2.0 Where Are They Now v2.0: More ghosts of technology's past. http://www.newmedia.com/default.asp?articleID=3298
Where Are They Now? v1.0 Where Are They Now? Products and services that have flourished or failed in the last year. http://www.newmedia.com/default.asp?articleID=3295
What struck me is how few of the winners were from top research universities. Many are from industry and/or universities not generally noted for research such as Open University.
"The World Technology Awards 2001: For Technology Innovation," Nature --- http://www.nature.com/nature/wta/
The World Technology Awards have been created by the World Technology Network (WTN) to honour those innovators from across the globe who contribute significantly to the advance of emerging technologies for the benefit of business and society. They especially seek to honour those whose recent work will have the greatest likely long-term impact. All Award winners and finalists, judged by current WTN members, join the WTN's membership.
For details about the WTN, about all of the over 100 Award finalists, and about how to become involved, see http://www.wtn.net. The WTN's media partners in 2001 are Nature and Business Week.
BIOTECHNOLOGY
Winner: Dr Craig Venter, President & CEO, Celera Genomics Inc., USA.
J. Craig Venter, PhD, is the President and Chief Scientific Officer of Celera Genomics Corporation and the Founder, Chairman of the Board and former President of The Institute for Genomic Research (TIGR), a non-profit genomics research institution. Dr Venter was selected for his work on sequencing the human genome.
Between 1984 and the formation of TIGR in 1992, Dr Venter was a Section Chief, and a Lab Chief, in the National Institute of Neurological Disorders and Stroke at the National Institutes of Health (NIH). In 1990, he developed expressed-sequence tags (ESTs), a new strategy for gene discovery that has revolutionized the biological sciences. Over 72% of all accessions in the public database GenBank are ESTs from a wide range of species including human, plants and microbes. Using the EST method, Dr Venter and the scientists at TIGR have discovered and published over half of all human genes. Out of new algorithms developed to deal with hundreds of thousands of sequences, TIGR developed the whole-genome shotgun method that led to TIGR completing the first 3 genomes in history and a total of 20 to date.
In May 1998, Dr Venter and Perkin-Elmer (now known as Applera) announced the formation of Celera Genomics. Celera's goal is to become the definitive source of genomic and medical information, thereby facilitating a new generation of advances in molecular medicine. Celera is building the expertise and information that will enable scientists to transform the way in which human and health problems are diagnosed and treated. On 26 June 2000, Celera announced that it had completed the first assembly of the human genome, which has revealed a total of 3.12 billion base pairs in the human genome. On 16 February 2001, Celera's manuscript on the sequencing of the human genome was published in Science magazine.
Dr Venter has published more than 160 research articles and is one of the most cited scientists in biology and medicine. He has been the recipient of numerous awards, including the 2000 King Faisal Award in Science and was recently selected as a runner up for TIME Magazine's Man of the Year and was selected as Man of the Year for the Financial Times. In addition to receiving honorary degrees for his pioneering work, he has been elected a fellow of several societies including the American Association for the Advancement of Science and the American Academy of Microbiology. He received his PhD in Physiology and Pharmacology from the University of California, San Diego.
Finalists:
- Prof. Makoto Asashima, Professor, Department of Life Sciences, University of Tokyo, Japan.
- Dr Francis Collins, Director, Human Genome Project, National Institutes of Health (NIH), USA.
- Dr Steve Fodor, CEO, Affymetrix, USA.
- Prof. Andreas Pluckthun, Professor, Biochemisches Institut, Universität Zürich, Switzerland.
- Prof. Ingo Potrykus, formerly of the Institute of Plant Sciences, ETH Zürich, Switzerland.
COMMERCE
Winner: Mr Linus Torvalds, Programmer, Transmeta Corp., USA.
Linus Torvalds was selected for his work on Linux and the Open Source Software Paradigm.
Linus Torvalds wrote the kernel of Linux and established the Open Source software model, which is a revolutionary way of creating software. In doing so, he not only designed one of the most important pieces of software ever, but he also created a new paradigm for software engineering.
Linux is one of the most important operating systems, at least as important as UNIX and MSDOS. It is crucial for mobile communication devices, for webservers, for the development of the Internet and for many other areas in computing, networking and information technology.
Linus Torvalds is not only an outstanding software engineer, but also a global community leader (of the open source software community).
Finalists:
- Mr Jeffrey Bezos, Founder, Amazon, USA.
- Prof. Richard Friend, Cavendish Professor of Physics, Optoelectronics Group, Cavendish Laboratory, University of Cambridge, UK.
- Ms Mari Matsunaga, Designer, I-mode, NTT-DoCoMo, Japan; Editor-in-Chief, e-Woman, Japan. Mr
- Tom Siebel, Founder, Siebel Systems, USA.
COMMUNICATIONS TECHNOLOGY
Winner: Mr Robert Metcalfe, Vice-President Technology, International Data Group Inc., USA.
Robert Metcalfe was selected for his work as the inventor of the Ethernet and the founder of 3Com.
Always outspoken, Robert Metcalfe is a walking history of computing and communications, and is never shy to offer his opinion on its future. While at Xerox's famed PARC research facility, he figured out that the best way to connect computers was to use small packets of data and unleashed a torrent of productivity in the office. From this humble beginning at the sedate speed of 3 megabits per second, Ethernet has grown in both speed and scope.
Today, the vast majority of computers in business use Ethernet to connect with each other and the Web. At the time, the world was just discovering personal computers; Metcalfe connected them with his now famous Ethernet protocol. He also expounded on the value of a network by emphasizing that it is the number of connected devices that matters by postulating that a network's value grows proportionately with its number of users.
Bob Metcalfe was born in Brooklyn, New York in 1946. He graduated from the Massachusetts Institute of Technology in 1969 with bachelors degrees in electrical engineering and in management. In 1970, he received from Harvard University a masters degree in applied mathematics and in 1973 his PhD in computer science. His doctoral dissertation, 'Packet Communication', was about the early Internet.
For the next eight years, Metcalfe worked at the Xerox Palo Alto Research Center, where he invented Ethernet, the local computer-networking standard that today connects over 100 million computers to the Internet. In 1979, Metcalfe founded 3Com Corporation, the $6-billion computer-networking company, where he was at various times chairman, president, CEO, vice president of sales and marketing, and general manager of several divisions. He retired from 3Com in 1990. While at Xerox and 3Com, Metcalfe was for eight years a Consulting Associate Professor of Electrical Engineering at Stanford University.
After leaving 3Com, he spent a year as a visiting fellow in the Computer Laboratory at the University of Cambridge, England. Metcalfe now serves on the board of trustees of MIT, where he was 1997–98 President of the Alumni Association. He is on the visiting committee to the Department of Electrical Engineering and Computer Science and on the board of MIT's Technology Review magazine. In 1980, Metcalfe received the Grace Murray Hopper Award from the Association for Computing Machinery (ACM).
In 1988, he received the Alexander Graham Bell Medal from the Institute of Electrical and Electronics Engineers (IEEE). In 1993, Metcalfe received the Exploratorium Award for Public Understanding of Science. In 1996, Metcalfe received the IEEE's highest award, the IEEE Medal of Honor. Metcalfe was elected to the American Academy of Arts and Sciences and to the National Academy of Engineering in 1997. He joined International Data Group in 1992, first as Publisher/CEO of InfoWorld.
He is now a Director, Vice President, and technology pundit — writing columns, giving speeches and organizing conferences, mostly about the Internet. He has written his internationally syndicated column in InfoWorld weekly since 1992, and it is now read by over half a million information-technology professionals in the United States.
Finalists:
- Mr Paul Baran, Chairman of the Board, Com21, USA.
- Dr Jim Clark, Co-founder & Chairman, NetScape, USA; Founder & Chairman, myCFO, USA.
- Mr Irwin Jacobs, Chairman and CEO, Qualcomm, USA.
- Dr Robert Kahn, Chairman, CEO & President, Corporation for National Research Initiatives (CNRI), USA.
DESIGN
Winner: Mr Stefano Marzano, CEO, Philips Design, Italy.
Finalists: Prof. Adriaan Beukers, Professor of Composite Materials and Structures, Faculty of Aerospace Engineering, Delft University of Technology, The Netherlands. Dr Hiroshi Ishii, Associate Professor, MIT Media Lab, Massachusetts Institute of Technology (MIT), USA. Prof. Axel Thallemer, Head of Corporate Design, Festo, Germany. Mr Freeman Thomas, Vice-President, Advanced Product Design Strategy, DaimlerChrysler, USA.
EDUCATION
Winner Dr Venkataraman Balaji, Head/Principal Scientist, International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), India.
- Finalists: Mr Don Cameron, former Executive Director, National Education Association (NEA), USA.
- Prof. Robert McCormick, Director, Learning Schools Programme, Faculty of Education and Language Studies, Open University, UK.
- Dr David Robinson, Faculty Member, Faculty of Science, Open University, UK.
- Dr Peter Whalley, Deputy Director, Multimedia Enabling Technologies Group, Knowledge Media Institute, Open University, UK.
Continued at http://www.nature.com/nature/wta/
"Weird science: David Cohen salutes the weird and wonderful in the world of international scholarly research during the past year," The Guardian, December 17, 2001 --- http://www.guardian.co.uk/Archive/Article/0,4273,4321358,00.html
There are two competing versions of the newsworthy milestones reached by researchers around the world over the past year. One, always well covered on this site, involves such diverse but familiar themes as stem-cell research, the Dead Sea Scrolls, Islamic studies, germ warfare and embryonic cloning.
The other, somewhat less celebrated area involves the kind of bubble-and-squeak items that may never quite achieve any measure of fame in their own right but surely deserve some kind of recognition in any self-respecting wrap-up of academic events in 2001.
In Japan, hard on the heels of a conference paper presented elsewhere revealing the earth-shattering finding by British scientists that female cockroaches lower their standards for a mate as their biological clock runs down, researchers at Tokyo University went a very, very small step further by unveiling the world's first electronically-guided cockroach.
The cockroach, surgically implanted with a micro-robotic backpack that allows researchers to control its movements, is known as Robo-roach, whose implications "for mankind could be immense", said Isao Shimoyama, an assistant professor heading the university's bio-robot research team.
Within a few years, predicted Dr Shimoyama, similarly controlled insects will be carrying mini-cameras or other sensory devices to be used for a variety of sensitive missions - like crawling through earthquake rubble to search for victims or slipping under doors on espionage.
Startling as the Japanese claim may have been, it paled beside a remarkable finding presented by scholar Vinod Purani at an academic conference on the subcontinent earlier in the year: that Indian men at one time were able to fall pregnant and bear children.
According to the Indian Express, Dr Purani, based his paper, Medical Adventures in Shrimad Bhagavadam, on the Hindu scripture, which contains references to male conception and a man's stomach being cut open to allow a male child to be delivered. That last occurrence was probably history's first recorded caesarian as well, he told delegates at the conference.
Another intriguing conference paper, delivered in August, was presented by Patricia Simonet, a researcher at Sierra Nevada College, in Nevada, who reported her discovery that dogs make a fourth distinctive sound pattern (besides bark, growl and whine), which she characterised as being a "pant". The sound - "unmistakably joyous and playful" - cannot be heard by humans but, when played to the 15 puppies sampled by Dr Simonet, causes dogs to move "immediately to a toy area and begin to frolic".
Also in the more off-beat stateside research news, in June, was word of a potential 21st century food being developed for military use by a team headed by Purdue University's Michael Ladisch, a professor of agriculture and biological engineering. The new food, a seemingly ordinary chocolate bar, was said to contain special nutrients to change body temperature, thus making soldiers not only warmer in cold climates but also rendering them "invisible" to an enemy's thermal-imaging equipment.
Another advance for the coming century was flagged in April by Charles Beard, a parasitic disease specialist with the Centers for Disease Control and Prevention, in Atlanta, who told the Los Angeles Times he had created a genetically modified dung that might eradicate Chagas disease, which kills 50,000 people a year in Central and South America. Dr Beard's meticulously manufactured bug dropping - fashioned out of ammonia, ink and guar gumlooks, and reportedly smelling just like the real thing - apparently contains special bacteria that prevent the so-called "kissing bugs" from spreading the disease, which they would do if left to their normal "diet" of eating their parents' dung.
India was also the setting for another of the year's more interesting pieces of published research in the area of public health, Rhinotillexomania In Indian Adolescents, conducted by Chittaranjan Andrade and later published in the respected Journal of Clinical Psychiatry.
Based on a preliminary sample of 200 adolescents from four urban schools, the study found, among other things, that rhinotillexomania occurs at a median frequency of four times per day, and more than 20 times a day in a significant 7.6% of the sample. Rhinotillexomania? That's nose-picking to the rest of us.
In the area of advancing technological research, the Australian physicist, John Keogh, probably surprised many by devoting part of the year to preparing an application for an unexpected patent in his antipodean homeland - for what he called a "circular transportation facilitation device", better known as "the wheel". Dr Keogh later said, a touch unconvincingly, that he did this to highlight problems in a new Australian patent law.
Both Dr Keogh's discovery of the wheel and the rhinotillexomania findings were among the finalists at this year's farcical Ig Nobel Awards, presented at Harvard University, celebrating the most improbable research and discovery of the past 12 months. The event is sponsored by the magazine, Annals of Improbable Research, a kind of Private Eye of the science world, which, in the past, has published articles with titles like Adolescent Dementia and Feline Reactions to Bearded Men, and an apparently serious "scientific" investigation into collapsing Scottish toilets in Glasgow.
Dr Andrade, the rhinotillexomaniologist, was good humoured enough to travel from India to Boston to receive an award for his probing work. His award consisted of a telephone pad attached to two cans mounted on a cheap, wooden plaque.
Continued at http://www.guardian.co.uk/Archive/Article/0,4273,4321358,00.html
Here's a good one we all can use now and then.... Happy New Year
http://www.hangoverguide.com/over/clinic/index.html
Auntie Bev
Oh Oh! Another Blonde Joke
Three women who work in the same office notice that their female boss has started leaving work early every day, so one day they decide that after she leaves, they'll take off early, too. After all, she never calls or comes back, so how is she to know?
The brunette is thrilled to get home early. She does a little gardening, watches a movie and then goes to bed early.
The redhead is elated to be able to get in a quick workout at her health club before meeting a dinner date.
The blonde is also very happy to be home early, but as she goes upstairs she hears noises coming from her bedroom. She quietly opens the door a crack and is mortified to see her husband in bed with HER BOSS! Ever so gently, she closes the door and creeps out of her house.
The next day the brunette and redhead talk about leaving early again, but when they ask the blonde if she wants to leave early also, she exclaims,
"NO WAY! Yesterday I almost got caught!"
OF AGING (Forwarded by Auntie Bev)
A is for arthritis,
B is for bad back,
C is for the chest pains. Corned beef? Cardiac?
D is for dental decay and decline,
E is for eyesight--can't read that top line.
F is for fissures and fluid retention
G is for gas (which I'd rather not mention and not to forget other
gastrointestinal glitches)
H is high blood pressure I is for itches, and lots of incisions
J is for joints, that now fail to flex
L is for libido--what happened to sex?
Wait! I forgot about K!
K is for my knees that crack all the time
(But forgive me, I get a few lapses in my M-memory from time to time)
N is for nerve (pinched) and neck
(stiff) and neurosis
O is for osteo-for all the bones that crack
P is for prescriptions, that cost a small fortune
Q is for queasiness. Fatal or just the flu? Give me another pill and I'll be
good as new!
R is for reflux--one meal turns into two
S is for sleepless nights, counting my fears on how to pay my increasing medical
bills!
T is for tinnitus--I hear bells in my ears and the word "terminal"
also rings too near
U is for urinary and the difficulties that flow (or not)
V is for vertigo, as life spins by
W is worry, for pains yet found
X is for X ray--and what one might find
Y is for year (another one I'm still alive) so Z is for zest
For surviving the symptoms my body's deployed, And keeping twenty-six doctors gainfully employed.
At Last I'm Saved: Bob Jensenf found The Fountain of Youth --- http://www.funnygreetings.com/fountain.htm
Where was God? (Scroll down the
following document)
http://www.oneangel.net/Cards/moon/9/11.html
Bob Jensen's threads are at http://www.trinity.edu/rjensen/JusticeAppeal.htm
And that's the way it was on January 8, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
Quotes of the Week
SPE
= Special
Purpose
Entity
that allows companies bearing as much as 97% of the SPE's debt risk to keep that
debt off the consolidated balance sheet under U.S. Generally Accepted Accounting
Principles. Enron's double dealing former CFO Andy Fastow and former CEO
Jeff Skilling changed the definition of SPE to S
_ _ t Piled
Everywhere!
Quote taken from http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
Enron's
executives will probably claim that they had Enron's auditor, Arthur Andersen,
approving their every move. With Enron in bankruptcy, Arthur Andersen is
now the deepest available pocket, and the shareholder suits are already piling
up.
Benthany McLean (See Below)
Why Enron Went
Bust: Start with arrogance. Add greed, deceit, and financial
chicanery. What do you get? A company that wasn't what it was
cracked up to be."
Benthany McLean (See Below)
In fact , it's
next to impossible to find someone outside Enron who agrees with Fasto's
contention (that Enron was an energy provider rather than an energy trading
company). "They were not an energy company that used trading as part
of their strategy, but a company that traded for trading's sake," says
Austin Ramzy, research director of Principal Capital Income Investors.
"Enron is dominated by pure trading," says one competitor.
Indeed, Enron had a reputation for taking more risk than other companies,
especially in longer-term contracts, in which there is far less liquidity.
"Enron swung for the fences," says another trader. And it's not
secret that among non-investment banks, Enron was an active and extremely
aggressive player in complex financial instruments such as credi8t derivatives.
Because Enron didn't have as strong a balance sheet as the investment banks that
dominate that world, it had to offer better prices to get business.
"Funky" is a word that is used to describe its trades.
Benthany Maclean (See Below)
"I
wouldn't put my money in a hedge fund earning a 7% return," scoffed Chanos,
who also pointed out that Skilling (the former Enron CEO who mysteriously
resigned in August prior to the December 2 meltdown of Enron)
was aggressively selling shares---hardly the behavior of someone who believed
his $80 stock was really worth $126.
Benthany Maclean (See Below)
Under today's
definition of the attest function, the auditor is responsible only for opining
objectively on the board's and management's periodic reports to stakeholders,
based on established standards and rules for such reports (such as generally
accepted accounting principles). Ideally, a future auditor should be directly
responsible to the stakeholders for all knowledge gained in an engagement they
would find useful in their decision making. · As a first step along the road to
the ideal, the profession will probably merely supplement the traditional
opinion on management's assertions-for example with an independent financial
analysis of the entity and early warnings of potential problems, communicated in
most cases to the stakeholders' representatives.
Robert Mednick (Executive Partner in Arthur Andersen), "Reinventing the
audit," Journal of Accountancy, August 1991
The above quotation was sent by Paul Clikeman [pclikema@RICHMOND.EDU]
New From Bob
Jensen
Interest Rate Swap Valuation, Forward Rate Derivation, and Yield Curves
for FAS 133 and IAS 39 on Accounting for Derivative Financial Instruments
See http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
November Brings Increase in E-Commerce Activity Total U.S. spending on online sales increased from $3.6 billion in October to $4.9 billion in November, according to the NRF/Forrester Online Retail Index. http://www.newmedia.com/default.asp?articleID=3280
This module contains two messages from Steve Zeff (Rice University) and one from me. I will begin with my message. Dr. Zeff, former President of the American Accounting Association, is one of our most dedicated accounting historians. In November 2001, Stephen A. Zeff received the Hourglass Award from the Academy of Accounting Historians. His homepage is at http://www.ruf.rice.edu/~sazeff/
Steve's first message below deals with the "state of professional decline" in public accountancy.
His second message (at the bottom) was prompted by my appeal to him to bring more of his vast knowledge of history to bear upon our exchanges on the AECM.
I think both of his messages tell us a lot about the state of affairs that led up to the Enron scandal (which sadly centers in his own home town.)
The only thing that I take exception with is his statement that I am one of the few who really cares about the state of professional decline. There are, in fact, many who have been far more courageous than me to document the decline in professionalism in accounting practice and research, headed by such critical scholars as Steve Zeff, Abraham Briloff, Eli Mason, Tony Tinker, Paul Williams, and others willing to speak out over the past three decades. See http://www.trinity.edu/rjensen/book01q3.htm#082401
Joel Demski's pessimistic remarks are resounding louder after the fall of
Enron --- http://www.cs.trinity.edu/~rjensen/001aaa/atlanta01.htm
I tried to consistently take a more optimistic stance, but the melt down of
Enron has taken its toll on my view of my profession.
I hope you will carefully read the two messages from Dr. Zeff that follow my message below.
Bob
-----Original Message-----
From: Jensen, Robert
Sent: Sunday, December 30, 2001 2:13 PM
To: 'Stephen A. Zeff'
Subject: RE: threads on accounting fraud
Hi Steve,
What a nice message to encounter in my message box. Thank you for the kind words.
I think your remarks should be shared with accounting educators. Would you mind if I place your remarks in my next (probably January 5) edition of New Bookmarks? The archives are at http://www.trinity.edu/rjensen/bookurl.htm
I hear from you so rarely that it is really a pleasure when I get a message from you. I have more respect for your dedication to our craft than you can ever imagine. I wish that you, like Denny Beresford, would share your vast storehouse of accounting knowledge and history with accounting educators on the AECM --- http://pacioli.loyola.edu/aecm/
Our younger accounting educators communicating on the AECM are very bright and skilled in technology, but they are usually a mile wide and an inch deep when it comes to accounting history.
I don't recall if I ever told you this, but your efforts to find Marie in the Rice alumni database led to the subsequent marriage between her and my friend Billy Bender. Both were well into their eighties on the wedding day. They were engaged while both attended Rice University in the 1940s, but the war called Billy away to be a Navy pilot. They had no subsequent contact for over 50 years until you helped Billy find Marie.
Thanks,
Bob
In case you missed it, you might be interested in the following modules that I just added to the Accounting Fraud threads --- http://www.trinity.edu/rjensen/fraud.htm
***********************************
The University of California (UC), the nation's largest university system, has
announced plans to join a class action suit against 29 senior executives of the
failed Enron Corp. and Big Five accounting firm Andersen. The University claims
it lost $145 million in Enron's collapse and seeks to be the lead plaintiff in
the class action suit that is forming. http://www.accountingweb.com/item/67343
***********************************
The Securities & Exchange Commission has launched a formal investigation
into the recent collapse of energy giant Enron Corp. and has subpoenaed records
from Big Five firm Andersen in relation to that investigation. SEC Chairman
Harvey Pitt plans to follow a hard line when it comes to auditors who are
responsible for problems with published financial statements. http://www.accountingweb.com/item/66986
Respectfully,
Bob
**********************************************************************
-----Original Message-----
From: Stephen A. Zeff [mailto:sazeff@rice.edu]
Sent: Sunday, December 30, 2001 1:36 PM
To: rjensen@trinity.edu
Subject: threads on accounting fraudDear Bob:
Yesterday I happened across your Threads on Accounting Fraud, etc. (the Enron case) at http://www.trinity.edu/rjensen/fraud.htm , and I found it to be fascinating reading. I had already seen quite a few of the items, but I knew I could count on you to pull everything--and I mean everything--together. You do wonders on the Internet.
I don't know if you recall seeing my short article, "Does the CPA Belong to a Profession?" (Accounting Horizons, June 1987). The previous year, I was invited by the chairman of the Texas State Board of Public Accountancy to give a 15-minute address to newly admitted CPAs at the Erwin Center in Austin in November. Even though I am not a CPA, I accepted. I asked if they would mind if I were to say something controversial. They said no. Some 2,500 candidates, relatives and friends, and elders of the profession were in attendance, the largest audience to which I have ever spoken. Typically at such gatherings, the speaker enthuses about the greatness of the profession the candidates are about to enter. Instead, I opted to discuss whether the CPA actually belongs to a profession, and my view came down heavily on the skeptical side. Some of the questions I raised are being raised today about the supposedly independent posture of auditors and about the teaching of accounting. Fifteen years have passed, and things don't seem to have changed.
My address raised the question of whether the CPA certification constitutes a union card, a license to practice a trade, or admission to a profession. I reviewed a number of recent trends, including the growing commercialization of the practice of accounting, the increasing number of points of possible conflict between the widening scope of services and the attest function, the decline in the vitality of the professional literature, and the even greater emphasis on the rule-bound approach to teaching accounting in the universities. My conclusion was that accounting was in a state of professional decline that should concern all of its leaders.
Following the address, I expected to be taken to task for using such a solemn occasion, at which speakers are normally heard to celebrate the profession, to deliver a pessimistic message. I was, however, astonished that not one of the professional leaders in attendance uttered a word of criticism. When I pointedly asked several of the senior practitioners for their reaction to my remarks, the general response was a shrug of their shoulders. Yes, professionalism is not what it once was, but there seemed to be little that one could, or should, do to attempt to reverse the trend. This wholly unexpected reaction led me to conclude that I had underestimated the depth and pervasiveness of the malaise in the profession.
I wish you and Erika a Happy New Year.
Steve. --
***************************************************************
Subsequent Message received from Steve ZeffBob:
It's always a delight to hear from you. Yes, of course you have my permission to place my remarks in your Bookmarks.
In fact, a lot of what I know about accounting history was packed into my recent book, Henry Rand Hatfield: Humanist, Scholar, and Accounting Educator (JAI Press/Elsevier, 2000).
For some years in the early 1990s, I wrote to successive directors of the AAA's doctoral consortium to persuade them that a session should be provided on the history of accounting thought. When the directors replied (which was less than half the time), they said that their planned programs were already full with the standard people and the standard subjects. They typically do bring a standard setter in (usually Jim Leisenring), but the last time someone held a session on accounting history at the consortium was in 1987 (I was the presenter, and the students told me that the subject I treated was entirely new to them.).Virtually no top doctoral programs in the country treat accounting history or even accounting theory. They deal only with how to conduct analytical or empirical research, and the references given to the students are, with a few exceptions (Ball and Brown, and Watts and Zimmerman), from the last six or eight years. Small wonder that tyro assistant professors struggle to learn what accounting is all about once they start teaching the subject. Our emerging doctoral students, for years, have had no knowledge of the evolution of the accounting literature, even the theory that is now finding its way in the work of Stephen Penman and Jim Ohlson.
I think that one of the aims of the consortium should be to "round out" the intellectual preparation of the doctoral students. Instead, the consortium goes deeper in the areas already studied.
Keep up the good work. You are one of the very few people in our field who really cares. And you have done a great deal--more than anyone else I know--to broaden the vision and knowledge base of our colleagues.
Steve. --
Stephen A. Zeff
Herbert S. Autrey Professor of Accounting
Jesse H. Jones Graduate School of Management
Rice University 6100 Main Street Houston, TX 77005 tel: (713) 348 6066 fax: (713) 348 5251
Impact of Academic Accounting Research on Practice
-----Original Message-----
From: glan@UWINDSOR.CA [mailto:glan@UWINDSOR.CA]
Sent: Sunday, December 16, 2001 6:36 PM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: UK academics ' research assessedHi Jason,
Thanks for the information. Although this is not related, I was wondering whether you or any AECMer may be aware of any publications that discuss the impact of academic research on the development of accounting standards and regulations. For example, do academics have a lot of impact on accounting in Britain and is that more so than in other countries such as U.S., Australia or Canada? Looking at many introductory financial accounting books in Northern America, the main "accounting hero" who is mentioned is Luca Pacioli, the 15th century Italian monk to whom we ascribed double entry accounting. On the other hand, if one looks at a science introductory book, many names like Darwin, Newton, Galileo, Mendel etc. are prominent.
Do introductory accounting books in the U.K. mention more academics who have contributed to the development of accounting? That could inspire more students to follow the accounting career.
George Lan,
University of Windsor
Hi George,
There are too many confounding variables to assign any kind of numerical weighting to the impact of academic research on accounting and auditing standards.
It is obvious that standard setters cite academic literature and most definitely "listen too" academic researchers either directly or indirectly through the academic researchers that they hire to assist in the standard setting process, including such academics as Paul Pacter, Todd Johnson etc. The FASB and the IASB also have at least one former professor who is likely to be more familiar with the academic literature. The trend is to appoint increasingly sophisticated researchers to these boards, including Katherine Schipper (FASB) and Mary Barth (IASB).
Anecdotally, I think that academic research played a heavy role on the elimination of FAS 33 on current cost and price-level reporting in the U.S. The most influential research in that case was the empirical work of Beaver and his co-authors that pointed to negligible impact of FAS 33 supplemental reports on investment decisions (some of Beaver's conclusions were subsequently challenged by other academic researchers, but these followed the elimination of FAS 33).
What is disappointing are seminal discoveries in academic accounting research (or noteworthy lack thereof). Most seminal discoveries are rooted in accounting practice rather than academic research. In the area of standard setting, this is to be expected. Most standards arise from discovery of new types of contracting such when Salamon Brothers and Bankers Trust "invented" the first interest rate swap for IBM somewhere around 1984. Practicing accountants were struggling with how to account for these swaps long before academics ever heard about such things. Now of course, everybody knows about interest rate swaps since they are used in trillions of dollars of contracting worldwide.
Academic accountants are generally better at analytics, experimentation, and capital markets empiricism than invention. This differs greatly from our friends in science, including computer science, where seminal discoveries commonly give rise to what other academics pounce on for analysis and experimentation. The invention of the laser by a Columbia University professor sitting on a park bench comes to mind. Most of the research that the AAA has designated as seminal really can be traced to earlier "inventions" in accounting practice, economics, finance, and psychology.
You mention Pacioli, a monk who wrote the famous Summa book on algebra around 1494 A.D. Actually, Pacioli's work is more like that of an academic researcher than an inventor. Pacioli did not invent double entry bookkeeping. Summa was a book on algebra, and Pacioli merely modeled the double entry system into algebra as an illustration of modeling. The "invention" of the famous double entry system took place centuries earlier, and the inventor was most likely some practicing accountant, farmer, or entrepreneur.
More recently, activities based costing (ABC) might be considered a "new" invention in the 20th Century. Volumes of academic accounting research studies have been devoted to ABC costing and ABM. But the ABC invention is actually attributed (I think) to cost accountants at John Deere (now Deere Inc.) rather than professors.
The root problem in academic accounting research, especially analytical modeling, is that the assumptions needed for the analytics are too general and/or too unrealistic to extrapolate to a highly complex real world. The second problem is that academic accountants tend not to be where the action is in terms of newer types of contracting. They are more apt to wait until practitioners write about newer forms of contracting or their colleagues in finance and economics write about such contracts in their own working papers.
The same problem arises in behavioral accounting experiments where the lab settings are too simplistic and/or the decision making students or other subjects are not truly making real-world decisions that affect their fortunes and futures.
I suspect standard setters ignore much of the academic research that they consider too artificial --- notably analytical models, behavioral experiments, and simulations. Years ago one FASB board member said as much to me. This particular FASB member was more interested in academic research found in Accounting Horizons rather than The Accounting Review. However, he also listened to his academic staff members who distilled a wider set of academic research.
Bob Jensen
Reply from George Lan
Hi Bob,
Thanks for your edifying response to my query about the relationship between accounting research and practice and differences between research in accounting and in the sciences. It has shed much light on many questions that I had. I believe that it also supports the view that one must develop links with the practice side of accounting in order to be more aware of research problems and opportunities. Furthermore, the fact that Pacioli was more of a mathematician than an accountant also suggests to me that broader based accounting and/or multidisciplinary research, does have value.
George
Reply from Bob Jensen
Hi George
When I was the Program Director for the AAA meetings in NYC years ago (1993?), Joel Demski and Bob Kaplan agreed to share one of the plenary sessions.
I always remember one of Joel Demski's remarks in front of thousands of accounting professors. He asserted that the only academic research invention to be directly placed into accounting practice "probably was dollar-value LIFO."
I am sorry to say that I don't even know who actually invented dollar-value LIFO. It is actually important since that may be the only invention of note by academic accounting researchers.
Knowing Joel, however, this may have been a very sober-faced tongue in cheek assertion.
Bob Jensen
A survey sponsored by CFO Magazine and other industry participants:
"A program to identify and recognize the best practices in human capital management for finance departments."
http://www.bestworkplaces.org/
Patrick Charles charlesp@cwdom.dm
The Auditorium from Arthur Andersen
Free Audio, Video, and PowerPoint Downloads --- http://www.andersen.com/Website.nsf/Content/ThinkTankAuditorium!OpenDocument&highlight=2,video
Hear it, see it, read it
The Auditorium brings together video and audio webcasts on andersen.com. See and hear how Andersen helps you improve business performance and navigate through complex issues like globalization, mergers and acquisitions and information technology strategy.
A global standard: Listen to Andersen Partner Jeannot Blanchet discuss the rise in international accounting standards. > 28k version
SuperConference targets general counsel In these video webcasts, Andersen Legal partners Fiona Walkinshaw, Tony Williams and Phil McDonnell offer suggestions for protecting corporations in matters of mergers and acquisitions, Internet transactions and managing globalization.
Value Rx for Healthcare In these brief video clips, Andersen partner and co-author of "Value Rx for Healthcare," Edward J. Giniat, discusses issues facing the healthcare system and describes how players can create value and improve performance.
London Oil and Gas Symposium Intrepid Energy's Mike Lynch and Statoil's Elisabeth Berges' audio slide presentations offer insights into the roles of various players and the evolution of the U.K.'s energy industry.
Top Websites for the Year 2001 (Yahoo Yells Yahoo!)
The Year in Review Part I --- http://docs.yahoo.com/picks/
- 1000 Journal Project, The - oh, the places they've been. (Featured January 29)
- abandoned places - explore Europe's recent relics. (Featured June 11)
- All My Life For Sale - a man auctions off all of his worldly possessions. (Featured March 19)
- Apple - iMovie Gallery - future directors of America unite. (Featured May 21)
- Artists of Brücke - who knew Germans were such great expressionists? (Featured November 5)
- AskOxford.com - references available upon request. (Featured July 23)
- Beer Advocate - they've got mad hops. (Featured August 27)
- Canberra House, The - stroll through the neighborhoods of Australia's capital. (Featured May 7)
- Combustible Celluloid - jam-packed with fine writing on the subject of film. (Featured October 1)
- Date-My-Sister Project, The - the story of a meddling brother gone too far. (Featured June 11)
- Daypop - links served up piping hot. (Featured November 19)
- Degree Confluence Project - global map project offers up a change in latitude. (Featured January 15)
- Design Not Found - presenting online frustration. (Featured December 3)
- DoubleTake Magazine - photographers are doing' it for themselves. (Featured October 29)
- Found Magazine - some people call it garbage. (Featured June 18)
- Ghost Sites - The E-Failure Museum - if you listen carefully, you can almost hear the Aeron Chairs crying. (Featured February 5)
- Guggenheim.com - the other museums should be listening. (Featured October 15)
- Homestar Runner - he's two to three times better than the next best person. (Featured September 10)
- humanclock.com - where is Morris Day when you need him? (Featured August 6)
- Iron Chef Compendium - if my memory serves me correctly, we liked this one. (Featured August 20)
- John Coltrane - listen and learn -- a site supreme. (Featured October 22)
- Journal E: Interviews 50 Cents - poignant interviews about life in America. (Featured April 23)
- Journey is the Destination, The - a peek into the brief life of Dan Eldon, a photojournalist who was killed on assignment in Somalia, July 1993. (Featured October 22)
- Kicksology.net - the freshest resource for in-depth reviews of phat kicks that give you mad rise. (Featured April 16)
- Last Plane to Jakarta - articles and opinions on music both obscure and popular. (Featured June 25)
Wow Quality of the Year Award (Which normally goes to a business corporation.)
From Syllabus News on September 24, 2001
UW-Stout Takes Baldrige Quality Award
The University of Wisconsin-Stout received the Malcolm Baldrige National Quality Award, winning the presidential award in the newly established education category. This is the third year UW-Stout applied for the award and the second year the university received a site visit. To apply for the award, organizations must detail their achievements in seven key areas, including leadership, strategic planning, student and stakeholder focus, information and analysis, faculty and staff focus, process management, and performance results. The university cited launching Datatel, an integrated system that provides campus users widespread access to data, in applying for the award.
For more information, visit: http://www.quality.nist.gov
From the Syllabus News on December 24, 2001
Commerce Bancorp, Inc., which calls itself "America's Most Convenient Bank," said training courses provided through its Commerce University have received expanded credit recommendations from the American Council on Education (ACE). The bank, whose employees can receive college credit through the program, has received credit recommendations for two customer service training programs. Employees may apply the credit recommendations to college degree programs in which they are participating. Commerce University offers nearly 1,700 courses to employees each year via seven schools related to its areas of operation, including its School of Retail Banking, School of Lending, and School of Insurance.
For more information, visit: http://commerceonline.com
Bob Jensen's threads on distance education and training courses can be found at http://www.trinity.edu/rjensen/000aaa/0000start.htm
Bob Jensen's threads on assessment
and accreditation can be found at
http://www.trinity.edu/rjensen/assess.htm
"Researcher Sees a Big Role for Virtual Reality in Distance Education," by Jeffrey R. Young, The Chronicle of Higher Education, December 20, 2001 --- http://chronicle.com/free/2001/12/2001122001u.htm
Jaron Lanier, the computer scientist who coined the term "virtual reality," says the technology he helped pioneer will, in the near future, become more prominent in distance education: Students in remote classrooms, for instance, might soon listen to lectures from life-size, three-dimensional images of professors who are hundreds of miles away. And the professors might see similar images of distant students raising their hands and asking questions.
Mr. Lanier -- who has visiting appointments at several colleges, including Columbia University and New York University -- is the chief scientist for the National Tele-Immersion Initiative, a collaborative project involving several colleges and private laboratories. The goal of tele-immersion, which is a kind of networked virtual reality, is to give people at geographically distant sites the sense that they are interacting in a shared environment.
Q. What role do you think virtual reality should play in distance education? And how important is it for people to see each other in an educational context?
A. I have never learned to feel fully comfortable lecturing to remote students. I've used various systems, and I try to really be there for students if I'm giving a lecture. To me, teaching is the ultimate performing art, and all performing arts are interactive. You always have to connect with the people, you don't just present, you have to connect. And I find it difficult [online]. ...
It's one thing to give students the illusion that the teacher is really there. What's much harder is to give the teacher the sense that the students are really there. ...
What the students perceive of me matters somewhat. What I perceive of them is actually more crucial, because they just as well could be watching me on a videotape. If I'm in a university environment, and I see a slacker kid falling asleep in the back row, I'll challenge them. And I think that that's absolutely essential. I'm really not comfortable losing that connection.
Q. Do you think that not enough attention is paid in distance education to interaction?
A. Yeah, I think people tend towards a broadcast paradigm. Because, for one thing, it's less expensive, and, for another thing, it's what we're familiar with.
Q. What are the kinds of things that tele-immersion is best for in higher education?
A. Tele-immersion as we've created it in the lab so far is best for small meetings. For academic collaborators and for small seminars, I think tele-immersion could be wonderful. I'm very interested in that.
Most distance-learning proposals are not about that. Usually when people talk about distance learning, they're talking about broadcasting a teacher even further than the 300 undergraduates that we can now cram into a big room. And that's where I'm a little less enthused.
Q. What do you see as the future for virtual-reality technology?
A. We're about to see some of the components that can be used in virtual-reality hardware get a lot cheaper. Like for instance, depending on what happens with the overall economy, I think we're going to see in the next two years or so the introduction of a series of really high-quality and affordable alternative display devices -- you know, like big screens and really nice little projectors and all that kind of stuff. ... At the point where it's cheap enough that it's not a huge risk to play with it, then we'll get a really fair test of whether the market wants this stuff or not.
Q. If that happens, do you think we'll see more virtual-reality technology in the classroom?
A. I have always held to a strong belief that there are great educational applications for this stuff, and I still really believe that. There are a lot of places where I think virtual reality can be a tremendous teaching tool. And the main barrier to exploring that kind of stuff has been the cost of it.
Big Five firm Deloitte & Touche has published a tax guide, Personal Tax Planning 2001. The free guide provides planning and tax saving strategies, outlines the processes for determining an individual's current tax position, and describes methods for choosing tax-saving strategies that are best suited for a variety of tax situations. http://www.accountingweb.com/item/66754
The 73-page booklet includes the following topics:
- The Current Scene
- Year-End Tax Moves: Just Around the Corner
- Future Strategies: Steps to Consider for the Remainder of 2001 and for 2002
- Your Year-End Financial Planning Check-Up
- How a Long-Term Perspective Can Work for You
- Maximizing Income Deferral
- Evaluating Investments on an After-Tax Basis
- Maximizing Family Wealth by Income Shifting
A 2001 and 2002 tax forecasting worksheet is also included in the guide.
Mortgage loan administrators have a new service they can rely on to provide access to real estate tax information from across the country. First American Real Estate Tax Service has launched its Property Locator Service Database, which provides Internet access to real estate tax data from more than 22,000 taxing authorities. http://www.accountingweb.com/item/66218
Wow Helper of the Week from Webmonkey
Embedding
a Windows Media Player --- http://hotwired.lycos.com/webmonkey/01/49/index2a.html
Streaming media adds a little panache to any website, but what if your visitors
can't view it? Not to worry. Let Adam show you how to embed a player right in a
Web page.
Cool Sites (Timelines) of the Week as Forwarded by Chris Nolan
-----Original Message-----
From: Richard Wiggins [mailto:rich@richardwiggins.com]
Sent: Friday, December 21, 2001 11:23 AM
To: Multiple recipients of list
Subject: [WEB4LIB] Google timeline and zeitgeist, 2001This is very cool:
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
Google's New Search Engine (in Beta)
As if there wasn't enough to find on Google, the search engine offers a service that allows users to peruse the goods from more than 600 catalogs --- http://catalogs.google.com/
"A Catalog to Catalog All Catalogs," by Katie Dean, Wired News, December 18, 2001 --- http://www.wired.com/news/holidays/0,1882,49187,00.html
Anyone who's ever marked a page in a catalog to remember to buy that perfect sweater -- only to lose that sweater among dozens of catalogs with dog-eared pages strewn on the living room floor -- will appreciate this:
Google's catalog search combs the pages of more than 600 current catalogs -- 1,500 including back issues –- to help both consumers and corporations find everything from apple butter to zipper doodles.
"Google's mission is to organize the world's information and make it universally accessible and useful," said David Krane, a spokesman
Pages were fed into a bulk scanner -- similar to a copy machine -- then run through an optical character recognition process, which extracts the text from each page. Google then crawls and indexes the text from the pages.
Both consumer and corporate catalogs are accessible through the search. Catalogs were initially collected by Google staff members, but vendors and users may also suggest a catalog.
"The sheer comprehensiveness of the service makes it incredibly useful," Krane said.
For example, a search for "root beer" brought up a list that includes a kids brew-your-own root beer kit from the Grandparent's Toy Connection catalog; a ProLine premium monofilament fish line in root-beer brown from Cabela's; and handsewn moccasins from Nordstrom in root-beer suede.
A beta version of the site launched last Thursday. There's no link to the catalog search from the Google homepage, but it's accessible through Google's advanced search page or catalogs.google.com.
The catalog company's URL, phone number and catalog code are listed at the top of each page, as well the catalog page number. People may also search within a particular catalog using the Google search.
Several catalog companies support the new feature.
"Google is just a great search engine, and we're happy to be there," said Bill Ihle, a spokesman for gourmet food purveyor Harry and David. "Any exposure that we can get is good exposure. It's an additional way to reach the customers."
"I would think that a few more people will find us," said Michael Beard, managing partner of Raven Maps. "We do one big mailing per year, so in that regard that will extend the life of the catalog."
But will holiday shoppers find a use for it at this late date?
"There was no strategic effort to time the beta release of this service for the holiday shopping season," Krane said. "It's more the inverse of that: The tail end of the shopping season provides us a good opportunity to secure feedback."
Continued at http://www.wired.com/news/holidays/0,1882,49187,00.html
The Google search catalog is at http://catalogs.google.com/
See also:
Google's
Gaggle of Discussions http://www.wired.com/news/culture/0,1284,49016,00.html
Toys,
Toys, Toys, Toys, Toys http://www.wired.com/news/holidays/0,1882,48707,00.html
Shippers
Wrestle With Box Issues http://www.wired.com/news/holidays/0,1882,48151,00.html
There's no biz like E-Biz
http://www.wired.com/news/ebiz/
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
Business Week's View of the Future of Technology
2001 and the Future of Tech What came
to pass this year -- pass? B2B, humbled Napster, intact Microsoft, and more --
shows where the industry is going
http://www.businessweek.com/bwdaily/dnflash/dec2001/nf20011227_9634.htm?c=bwtechdec28&n=link2&t=email
NEWS: ANALYSIS & COMMENTARY
A Biotech Boom with a Difference Is the stock runup the real deal?
http://www.businessweek.com/magazine/content/01_53/b3764047.htm?c=bwtechdec28&n=lin11&t=email
PC WORLD PRODUCT REVIEW Sony VAIO RX550
Sony packs great digital tools into a sharp-looking case-- with just a few
design flaws
http://www.businessweek.com/technology/content/dec2001/tc20011227_6965.htm?c=bwtechdec28&n=lin12&t=email
Last week's shuttering of MightyWords is just one in a series of closings by big-name, e-book sellers. But smaller companies are thriving --- http://www.wirednews.com/news/culture/0,1284,49184,00.html
Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm
From Infobits on December 21, 2001
The University of North Carolina at Chapel Hill's Center for Instructional Technology recently revised and updated our guide on multimedia resources. "Multimedia Technology: Recommended Resources" includes recommended books, a list of magazines that cover multimedia topics, and links to multimedia-related associations and conferences.
The resource guide is available at http://www.unc.edu/cit/guides/irg-12.html
Bob Jensen's resource threads are at
http://www.trinity.edu/rjensen/000aaa/newfaculty.htm#Resources
TECHNOLOGY CAN BOTH LIMIT AND EXPAND INTERACTION WITH STUDENTS
In recent articles in THE CHRONICLE OF HIGHER EDUCATION two professors express concerns that the technology they use to connect with their students also can isolate them from their students. Rather than abandoning technology in their teaching, they offer some solutions to overcome limitations of online communication.
In "My Students Don't Know What They're Missing" (The Chronicle of Higher Education, December 21, 2001, p. B5), Frank W. Connolly, professor of computer science and information systems at American University, writes that while email has expanded his ability to communicate with his students, it has also had an isolating effect. "The joy and satisfaction of teaching, for me, has come from students, not other faculty members. But outside the classroom, my interactions with students have mostly evaporated. Students used to drop by my office all the time, and I miss that. They used to come by during office hours to ask a question about a point raised in class or to clarify the requirements for an assignment. After the business part of our conversation was over, we'd chat." Connolly has no desire to reverse the advances technology has made at his institution, but wishes that he had "been more vigilant and seen the consequences. I should have spent more time and energy thinking about how this technical advance would change our campus culture. I anticipated that it would change the way many of us teach and do research, but I failed to think about the subtler consequences." These consequences have caused him to incorporate more personal interaction with his students within his classes in the hope of compensating for the professor/student contact that has been lost outside of classroom.
Subscribers to the Chronicle can read Connolly's essay online at http://chronicle.com/weekly/v48/i17/17b00501.htm
INTERNET UNDER SIEGE
In "The Internet Under Siege" (FOREIGN POLICY, November/December 2001), Stanford University law professor Lawrence Lessig writes that the Internet falls into the category of a "commons" -- a "resource to which everyone within a relevant community has equal access. It is a resource that is not, in an important sense, 'controlled.'" This open access has been key to Internet innovations. "Every significant innovation on the Internet has emerged outside of traditional providers. The new grows away from the old. This trend teaches the value of leaving the platform open for innovation. Unfortunately, that platform is now under siege." New laws and regulations threaten to place controls on the Internet that could stifle future Internet innovations. He urges policymakers to resist because, by protecting existing innovative business models and strengthening the control of copyright holders, policymakers run the risk of keeping out new innovations. The article is available on the web at http://www.foreignpolicy.com/issue_novdec_2001/lessig.html
Foreign Policy: The Magazine of Global Politics, Economics, and Ideas [0015-7228] is published bimonthly by Foreign Policy, 1779 Massachusetts Ave., NW, Washington, DC 20036-2103; tel: 202-939-2230; fax: 202-483-4430; Web: http://www.foreignpolicy.com/
Subscription information is available at http://www.foreignpolicy.com/office/subscribe.html
Books by Lawrence Lessig:
The Future of Ideas: The Fate of the Commons in a Connected World New York: Random House, 2001 ISBN: 0375505784 For more information or to read an excerpt: http://www.randomhouse.com/catalog/display.pperl?isbn=0375505784
and
Code and Other Laws of Cyberspace New York: Basic Books, 2000 ISBN: 0-465-03913-8 For more information or to request an examination copy: http://www.perseusbooksgroup.com/perseus-cgi-bin/display/0-465-03913-8
SELF-PUBLISHING A SCHOLARLY MONOGRAPH
When Harvard University historian Marshall Poe couldn't get his book on seventeenth-century Russian history published, he took matters into his own hands. In "Note to Self: Print Monograph Dead; Invent New Publishing Model" (THE JOURNAL OF ELECTRONIC PUBLISHING, vol. 7, issue 2, December 2001), he explains how he self-published and self-publicized a monograph titled The Russian Elite in the Seventeenth Century: A Quantitative Analysis of the "Duma Ranks," 1613-1713.
First he formed his own informal peer-review panel of experts. Next he "made" the book, formatting the manuscript with a word processor and adding a title page, table of contents, running headers, and index. To make the book more system-independent, he next converted it to Adobe's Portable Document Format (PDF). He put his book on the Web and, using email, marketed it to a list of Slavic history scholars. To get his book reviewed, he sent email to journal editors with the book as an email attachment. Finally, he talked with librarians about getting the book cataloged and into libraries.
Not all scholars will have the patience, persistence, and technical skill to follow Poe's path to publishing; however, for those who will, he presents an encouraging, realistic example to follow.
The Journal of Electronic Publishing [ISSN 1080-2711] is published free of charge on the Web by the University of Michigan Press, 839 Greene Street, P.O. Box 1104, Ann Arbor, Michigan 48106-1104 USA. For more information contact JEP: email: jep-info@umich.edu ; Web: http://www.press.umich.edu/jep/
"What's New in ColdFusion Server 5?" by Cameron Mathews, Webmonkey, December 14, 2001 --- http://hotwired.lycos.com/webmonkey/01/50/index3a.html
When I heard that Macromedia had released the new ColdFusion 5, I wondered what they could have possibly done to expand the functionality of an already great product. From my perspective, version 4.5 had it all: Ease of coding, fast processing ability, and custom tags had become so easy to implement and develop that I could do almost anything I wanted with just a few lines of ColdFusion Markup Language (CFML). Usually new releases offer some performance enhancements, better load-balancing, and other features to help out the administrators of the Web servers that host my applications, but there's usually nothing new for Webmonkeys like me. But ColdFusion 5 is different.
The latest release offers up not only the standard performance enhancements and server management features, but also a bucket-load of features and tools to help out the developer. The amount of code needed to perform many day-to-day coding problems has been slashed to the bare minimum, and you can infuse your site with all kinds of dynamic functionality with little adjustment to your learning curve. The two additions with the most impact, in my opinion, are the addition of User Defined Functions (UDFs) and the <cfgraph> tag. UDFs allow the developer to reuse segments of code and return values without the long process of creating a custom tag, checking the various variables returned by the tag for successful processing, and then outputting the results. Instead, a simple call to a function returns a processed result and can be used in the middle of an expression as easily as standard ColdFusion functions like CreateODBCDate() or DollarFormat(). The <cfgraph> tag removes the need to install (often expensive) third-party custom CFX tags to generate nice graphs and charts to display data in a format other than two-dimensional bar graphs created with tables or just as raw text output.
As for the "techy" improvements, Macromedia has upgraded the Verity search engine, allowing Verity collections to spider the site, support multiple languages, and index Office 2000 documents. Custom logging has also been added, with the <cflog> tag providing an easier way to manage and track errors on the site. The new version also has better memory allocation and releases memory used by applications that occasionally require additional resources, it has upgraded the Crystal Reports integration to include version 8.0, and it has added functionality for ODBC connection creation. All of these improvements are much needed, but for the purposes of this article, I'm going to focus on the changes that help all of you Webmonkeys to develop better, more feature-rich websites, and make your sites easier to maintain.
So, in the pages that follow, we'll be taking a look at the UDFs, the <cfgraph> tag, the ability to create a Query of Queries that requires just a single call to a database to produce nicely filtered results, and the new <cfdump> tag, which makes it easy to debug applications.
Now let's get into it! The software is available from Macromedia directly or from several online retailers, and is available in boxed or downloadable format. The server software can be run on more platforms than ever before, with the Professional Edition supporting Windows 98, Windows NT 4, Windows 2000 SP1, and various versions of Linux. The Enterprise Edition adds Solaris and HP-UX to the list of operating systems. The Professional Edition sells for US$1295, and the Enterprise Edition sells for $4995.
For the purpose of evaluating the new features in ColdFusion 5, you may want to download a trial version.
Once you have the software, download our sample files and let's get started with our discussion of User Defined Functions. (If you need a utility to unzip the sample files, WinZip is available for a small fee.)
Continued at http://hotwired.lycos.com/webmonkey/01/50/index3a.html
Bob Jensen's threads on authoring software are at http://www.trinity.edu/rjensen/290wp/290wp.htm
Form the Scout Report on December 24, 2001
XanEdu Will Distribute Harvard B-School Content
Harvard Business School Publishing, publisher of the "Harvard Business Review" as well as management newsletters and mutlimedia products, said it will make HBR articles and case studies available through the digital CoursePack System from online publisher XanEdu Inc. In an agreement, Harvard Business School case studies, and current and archived articles will be available to faculty and students through XanEdu's online CoursePack offerings, and offline via XanEdu's print pack solution, beginning in January 2002. XanEdu will also offer a printed version of the cases or articles and include a digital key for online viewing. XanEdu is also digitizing issues of the "Wall Street Journal," "The New York Times," and "The Washington Post."
For more information, visit http://www.hbsp.harvard.edu
The XanEdu home page is at http://www.xanedu.com/
Updates on the Enron Scandal
Enron's auditor, Andersen, blames most of the misleading reporting regarding risk on unconsolidated special purpose entities (SPEs) that only require an outside equity interest of 3% to justify keeping the SPE's assets and liabilities from being consolidated on the parent's balance sheet. Enron kept entire power plants and millions of debt off the balance sheet with various SPE arrangements.
This begs the question of why SPEs are allowed when the net effect is to possibly mislead investors about risk by keeping huge amounts of debt off the consolidated balance sheet.
Some sites of interest in this regard are as follows:
The First American Corporation's Jack Murray Reference Library --- http://www.firstam.com/faf/html/cust/jm-entities-outline.html
What's Right and What's Wrong With
Special Purpose Entities (SPEs)
http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
Selected quotations from "Why Enron Went Bust: Start with arrogance. Add greed, deceit, and financial chicanery. What do you get? A company that wasn't what it was cracked up to be." by Benthany McLean, Fortune Magazine, December 24, 2001, pp. 58-68.
Why Enron Went Bust: Start with arrogance. Add greed, deceit, and financial chicanery. What do you get? A company that wasn't what it was cracked up to be."
In fact, it's next to impossible to find someone outside Enron who agrees with Fasto's contention (that Enron was an energy provider rather than an energy trading company). "They were not an energy company that used trading as part of their strategy, but a company that traded for trading's sake," says Austin Ramzy, research director of Principal Capital Income Investors. "Enron is dominated by pure trading," says one competitor. Indeed, Enron had a reputation for taking more risk than other companies, especially in longer-term contracts, in which there is far less liquidity. "Enron swung for the fences," says another trader. And it's not secret that among non-investment banks, Enron was an active and extremely aggressive player in complex financial instruments such as credi8t derivatives. Because Enron didn't have as strong a balance sheet as the investment banks that dominate that world, it had to offer better prices to get business. "Funky" is a word that is used to describe its trades.
In early 2001, Jim Chanos, who runs Kynikos Associates, a highly regarded firm that specializes in short-selling, said publicly what now seems obvious: No one could explain how Enron actually made money ... it simply didn't make very much money. Enron's operating margin had plunged from around 5% in early 2000 to under 2% by early 2001, and its return on invested capital hovered at 7%---a figure that does not include Enron's off-balance-sheet debt, which, as we now know, was substantial. "I wouldn't put my money in a hedge fund earning a 7% return," scoffed Chanos, who also pointed out that Skilling (the former Enron CEO who mysteriously resigned in August prior to the December 2 meltdown of Enron) was aggressively selling shares---hardly the behavior of someone who believed his $80 stock was really worth $126.
Enron's executives will probably claim that they had Enron's auditor, Arthur Andersen, approving their every move. With Enron in bankruptcy, Arthur Andersen is now the deepest available pocket, and the shareholder suits are already piling up.
Bob Jensen's threads and commentaries on the Enron scandal are at http://www.trinity.edu/rjensen/fraud.htm
The gist of the article cited below is that Harvey Pitt was the wrong choice to head the SEC, especially in light of the Enron scandal.
Interesting column by Arianna Huffington for 12/19/01 LA Times can be found at the following link
http://www.ariannaonline.com/columns/files/121901.html
Dave Storhaug [storhaug@BTINET.NET]
The Securities & Exchange Commission has launched a formal investigation into the recent collapse of energy giant Enron Corp. and has subpoenaed records from Big Five firm Andersen in relation to that investigation. SEC Chairman Harvey Pitt plans to follow a hard line when it comes to auditors who are responsible for problems with published financial statements. http://www.accountingweb.com/item/66986
The University of California (UC), the nation's largest university system, has announced plans to join a class action suit against 29 senior executives of the failed Enron Corp. and Big Five accounting firm Andersen. The University claims it lost $145 million in Enron's collapse and seeks to be the lead plaintiff in the class action suit that is forming. http://www.accountingweb.com/item/67343
A message from Marie XXXXX
Mr. Jensen
I am new to the AECM@LISTSERV.LOYOLA.EDU and would like to ask you a question. I am a new instructor of accounting and I am looking at a project to incorporate into my Accounting II class. I have used a stock project in the past. Do you have any suggestions on a project for a Introductory Accounting II class. Thank You for your time.
Marie XXXXX
Reply from Bob Jensen
In light of the recent collapse of energy giant Enron, the corporation finance division of the Securities and Exchange Commission will review the annual reports of the nation's Fortune 500 companies in an attempt to seek out accounting red flags. http://www.accountingweb.com/item/67342
It might be a great student project to create a laundry list of what red flags to look for and provide analyses of how to find such flags.
Seriously Marie, you might have students begin with the list that is provided by Palepu, Healy, and Bernard in the paperback version of Business Analysis & Valuation (South-Western, ISBN 0-324-01565-8). Note especially the red flags listed in Chapter 3, beginning on page 3-11.
The above book has many strong points, but is extremely weak on the latest happenings with respect to derivatives accounting and risk analysis and new concerns in the area of accounting for intangibles. For updates on those two topics, go to the following sites:
Derivative Financial Instruments --- http://www.trinity.edu/rjensen/caseans/000index.htm
Intangibles Accounting --- http://www.trinity.edu/rjensen//theory/00overview/theory01.htm
Derivative financial instruments (including credit derivatives) were the main cannons that sank Enron.
Hope this helps
Bob Jensen
From the Free Wall Street Journal Educators' Reviews for December 20, 2001
TITLE: Enron Debacle Spurs Calls for
Controls
REPORTER: Michael Schroeder
DATE: Dec 14, 2001
PAGE: A4
LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1008282666768929080.djm
TOPICS: Accounting Fraud, Accounting, Accounting Irregularities, Auditing,
Auditing Services, Disclosure, Disclosure Requirements, Fraudulent Financial
Reporting, Securities and Exchange Commission
SUMMARY: In light of Enron's financial reporting irregularities and subsequent bankruptcy filing, Capitol Hill and the SEC are considering new measures aimed at improving financial reporting and oversight of accounting firms. Related articles discuss additional regulation that is being considered as a result of this reporting debacle.
QUESTIONS:
1.) Briefly describe Enron's questionable accounting practices. What accounting
changes are being proposed in light of the Enron case? Certainly this is not the
first incidence of questionable financial reporting. Why is the reaction to the
Enron case so extreme?
2.) Discuss Representative Paul Kanjorski's view of regulation of the accounting profession. What system of accounting regulation is currently in place? Discuss the advantages and disadvantages of both private-sector and public-sector regulation.
3.) What changes are proposed in the related article, "The Enron Debacle Spotlights Huge Void in Financial Regulation?" Do these changes strictly relate to financial reporting issues? Are operational decisions or financial reporting decisions responsible for Enron's current financial position?
4.) In the related article, "Enron May Spur Attention to Accounting at Funds," it is argued that fund managers will "start taking a more skeptical view of annual reports or footnotes . . . they don't understand." Are you surprised by this comment? Do you blame accounting for producing confusing financial reports or the fund managers for investing in companies with confusing financial reports?
TITLE: Double Enron Role Played by
Andersen Raises Questions
REPORTER: Michael Schroeder
DATE: Dec 14, 2001
PAGE: A4 LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1008289729306300000.djm
TOPICS: Accounting, Auditing, Auditing Services, Auditor Independence,
Consulting, Internal Auditing
SUMMARY: In addition to auditing Enron's financial statements, Arthur Andersen LLP also provided internal-auditing and consulting services to Enron. Providing additional services to Enron raises questions about Andersen's independence.
QUESTIONS:
1.) What is independence-in-fact? What is independence-in-appearance? Did
Andersen violate either independence-in-fact or independence-in-appearance? Why
or why not?
2.) If Enron had made good business decisions and had continued reporting positive financial results, would we be discussing Andersen's independence with respect to Enron? Why do we wait until something bad happens to become concerned?
3.) Do you think providing internal auditing and consulting services gave Andersen a better understanding of Enron's business and operations? Should additional understanding of the business and operations enable Andersen to provide a "better" audit? What was wrong with Andersen providing consulting and internal-audit services to Enron?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
--- RELATED ARTICLES ---
TITLE: The Enron Debacle Spotlights Huge Void in Financial Regulation
REPORTERS: Michael Schroeder and Greg Ip
PAGE: A1
WSJ ISSUE: Dec 13, 2001
LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1008202066979356000.djm
TITLE: When Bad Stocks Happen to Good
Mutual Funds: Enron Could Spark New Attention to Accounting
REPORTER: Aaron Lucchetti
PAGE: C1
WSJ ISSUE: Dec 13, 2001
LINK: http://interactive.wsj.com/archive/retrieve.cgi?id=SB1008196294985520800.djm
Bob Jensen's threads and commentaries on the Enron scandal are at http://www.trinity.edu/rjensen/fraud.htm
From Information Week on December 17, 2001
2001 Winners And Losers
Let's cut to the chase (and you can read all their profiles online), who were this year's winners and losers? Here's our take:
Losers: Sun Microsystems, network service providers (E.spire, NorthPoint and WinStar, among others), networking providers (Cisco, Lucent, Nortel), Compaq, pure-play supply chain firms (Manugistics, i2), Nike, Enron, Bluelight.com and content-only Web sites.
Winners: SAP, PeopleSoft, Microsoft .Net, IBM, Fidelity, EDS, Toysrus.com, TechData, Priceline.com, eBay.
Let the arguments begin. Read the whole package online: http://update.internetweek.com/cgi-bin4/flo?y=eFSz0Bdl6n0V30BD3J0Au
Plus, how did our 2000 predictions fare? http://update.internetweek.com/cgi-bin4/flo?y=eFSz0Bdl6n0V30BD3K0Av
How does your company manage customer relationships? Does it give employees adequate access to information in order to respond to customers? How often do you measure the success of customer-relationship initiatives? The editors of InformationWeek are teaming up with Optimize, a new publication from InformationWeek for business-technology leaders, in a brief online survey for the monthly Gap Analysis exploring the best practices in managing customer relationships. To provide your input, please go to http://update.informationweek.com/cgi-bin4/flo?y=eFRV0BcUEY0V20ijx0Ay
Yahoo Memories: The Best of the Best in Retrospect
First Picks of the Week in Selected Weeks Past
http://www.yahoo.com/picks/950813.html
Who knew, on that fateful night in August, 1995 that a franchise was being born? There's the first pick ever, The Squat, a parody of The Spot, and now both sites are long defunct. And, hey, whaddya know, there's Deja News, the previous web-based incarnation of Usenet newsgroups. What goes around comes around, eh? The first Picks of the Week is also noted for its stylish use of bullet points, its smart nod to the still intriguing Conde Nast Traveler site, and its daring reference to Dick Assman.
--------------------
First Paragraph and PBS
http://www.yahoo.com/picks/960205.html
As we so eloquently proclaimed in February of '96, we picked these sites "because we think they are good." With such unbridled excitement surrounding this batch, we scrapped the one-sentence description we'd been employing and described these sites with entire paragraphs, some as long as seven sentences! In addition to being the first "narrative" Picks, they were also the first to mention the PBS site, one we continue to highlight and recommend because of its superior content and design. And we'd be remiss if we didn't mention the World-Wide Sushi Restaurant Reference!, an incredible resource for raw fish lovers. Unfortunately, most of the other sites we chose back then are dead and gone, but if you're interested in seeing what they looked like, utilize the Internet Archive Wayback Machine to venture back in time.
--------------------
First Uncle Chester Reference
http://www.yahoo.com/picks/971124.html
November 1997 saw the introduction of several recurring Picks of the Week characters. A crusty curmudgeon with the heart of a cocker spaniel (literally!), Uncle Chester graced our fictional Thanksgiving Day table and charmed us all with his septuagenarian antics. Another oft-seen player that debuted on this date was Matt Neuman, a very funny man who isn't afraid to be serious, as in "seriously gut-bustingly hilarious." In any case, Uncle Chester made several more cameos in 1997 and 1998, but was eventually canned due to a contract dispute. (He demanded "Friends" money.) Happily, Matt Neuman continues to produce funny material and is still known to pop up in Weekly Picks every now and again.
--------------------
First British Invasion
http://www.yahoo.com/picks/19990222.html
During the halcyon days of early '99, boy bands like the Backstreet Boys and NSYNC were ruling the charts. However, in the spirit of Picks of the Week, we ignored Justin, A.J., Howie, et al, and focused on the bands the British invasion left behind. Wee Willy and the Wombles provided a vehicle for Mark Ryden's art exhibit, while Yogesh, Kamlesh, and Kaushik warbled about mums and curries. But the real winner in this group was a young, brash group called The Picadilly Willies. In fact, several months later, the band's meteoric rise, and subsequent tragic fall, were fodder for a classic Behind the Music.
--------------------
First Monkey Reviewers
http://www.yahoo.com/picks/19990913.html
The first dot-com lampoon starring a cast of reviewing monkeys. Heck, if Epinions could do it, why couldn't a set of super-smart simians? Read why Koko the gorilla awarded the Palm VII only one star out of a possible five, or get Janky the orangutan's take on the taste of Penn Powerserve tennis balls. Shortly after this edition of Picks, venture capital firms throughout Silicon Valley scrambled to set up monkey-driven pet food sites, gorilla-based portals, and broadband for baboons. Sadly, the monkey dot-com bubble burst shortly thereafter, leaving us only this relic of the go-ape late '90s.
--------------------
First Chips and Dips
http://www.yahoo.com/picks/20010129.html
Hands down, the best week of 2001. Thick with quality sites top to bottom, this week probably set more bookmarks than any other week in recent memory. It led off with the then just-underway 1000 Journals Project, an idea that now makes for fascinating browsing. Also featured on this glorious week -- Song Fight!, the place for amateur songsmiths to make their case; Pseudo Dictionary, a language lover's dream; and On the Rail, a behind the scenes look at the food-service biz. The shining star of this week was Taquitos.net, an extensive news and reviews site for every type of chip imaginable. This crunch-tastic site was assuredly one of 2001's best. Speaking of which...Tune in next week for our annual Yahoo! Picks of the Year.
Brotherhood - in memory of the 343 fallen firefighters --- http://www.brotherhoodfdny.com/
Bob Jensen's threads on terrorism are at http://www.trinity.edu/rjensen/JusticeAppeal.htm
From the Fathom Newsletter on December 17, 2001
NEWS FROM FATHOM MEMBER INSTITUTIONS
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
According to a study conducted at the University of Michigan Institute for
Social Research (ISR), 60 percent of Americans report that they have forgiven
themselves for past mistakes and wrong-doing, and nearly three-quarters say they
feel they've been forgiven by God, but only 52 percent say they have forgiven
others and just 43 percent say they have actively sought forgiveness for harm
they have done. The study, published in October in the Journal of Adult
Development, finds that middle-aged and older adults were more likely to forgive
others than were younger adults. http://www.umich.edu/~newsinfo/Releases/2001/Dec01/r121101a.html
New Fathom Courses:
* The Social and Political History and Future of Afghanistan
* Arab Catholicism in the 17th Century
* Arab and Muslim Stereotyping in American Popular Culture
* Free Seminar: The Lindisfarne Gospels * Shakespeare's Early History Plays
The Fathom homepage is at http://www.fathom.com/
Big Picture Book of (Biology) Viruses http://www.virology.net/Big_Virology/BVHomePage.html
Three new security vulnerabilities in Microsoft Corp.'s newest browser give attackers the ability execute arbitrary code and read files stored on target machines. All of the flaws affect Internet Explorer 6.0, and two of them also affect IE 5.5. Microsoft has given all three vulnerabilities critical ratings, its most serious designation --- http://www.eweek.com/article/0,3658,s%253D1884%2526a%253D20036,00.asp
Let's hope that the next generation of accountants will fight crime, fraud, and deception. Next Generation Accountant is a comprehensive research project that examines the future of the accounting and finance professions. --- http://www.nextgenaccountant.com/ On this site you will find: |
||
Research Highlights: | ![]() |
Review a summary of our research findings, learn about emerging job titles, take a skills quiz or get your FREE copy of our research guide. |
![]() |
||
Press Room: | Get the latest press release, read articles about the next generation of accountants or catch up on the latest industry statistics. | |
![]() |
||
Online Chats: | Join our career experts in live discussions about the future of accounting and finance or review the transcripts of previous chats. | |
![]() |
||
Web Cast & Audio Files: | Hear about the future of accounting and finance straight from the experts! This comprehensive online event features a video broadcast, slide presentation, live polling and statistical information. | |
![]() |
||
Career Center: | Stay current with rapidly changing business and professional trends. Our career tips can help you improve your resume writing, interviewing and professional networking skills. |
Book Recommendation: "The 17 Indisputable Laws of Teamwork: Embrace Them and Empower Your Team"
Everyone who works with people realizes that the old autocratic method of leadership simply doesn't work. The way to win is to build a great team. John C. Maxwell has been teaching the benefits of leadership and team building for years. Now he tackles the importance of teamwork head on, writing about teamwork being necessary for every kind of leader, and showing how team building can improve every area of your life. http://www.amazon.com/exec/obidos/ASIN/0785274340/accountingwe
I received the following article from one of my colleagues and thought that some AECMers may find it intriguing. It is a well written opinion piece that many of you may have read in the Chronicle of Higher Education. The author believes that e-mail is causing students to miss the traditional student/faculty interaction that should take place at a university. He also believes that e-mail is leading to more isolation of professors. He offers suggestions to address both issues.
I do not know if the piece represents a single person's opinion or an emerging unintended consequence of the use of information technology in the curriculum. What's your opinion/experience/observation, and do you attempt to address this issue in your classroom?
Thomas
Thomas G. Calderon, Ph.D. Professor of Accounting The University of Akron
This article from The Chronicle of Higher Education ( http://chronicle.com) was forwarded to you from:
From the issue dated December 21, 2001
An Aging World: 2001 --- http://www.census.gov/prod/2001pubs/p95-01-1.pdf
The Free PageOut from McGraw-Hill
Deliver your course online using McGraw-Hill's custom course Website creation tool, PageOut®. PageOut® is hosted by McGraw-Hill and is free to you and your students. Over 60,000 higher education instructors have registered for personal PageOut® accounts.
You will receive a unique Website address that is home for all of the courses you teach. Easy to follow templates help you create your site quickly with a professional design. The PageOut® interactive syllabus is a place where you can add your own content, create web links, post assignments, and link to McGraw-Hill Web content. PageOut® also has announcement, assessment, gradebook, and discussion features!
We are proud to offer you PageOut®, a product that is continually enhanced by suggestions from its users. Check out the new features being integrated for the Spring 2002 term by clicking here: http://pageout.net/page.dyn/intro/new_features
Interested in PageOut®, but don't have any time to devote to it? We can help. A McGraw-Hill Product Specialist will schedule a phone consultation to help you build a site. As you know the Spring 2002 semester is quickly approaching so reserve an appointment now.
To create an instant personal PageOut® account right now, click here: http://pageout.net/page.dyn/rgmid?mid=1000001004457&mln=Jensen
PageNotes, a quarterly newsletter, was developed to communicate the latest PageOut® product enhancements, showcase how users have integrated the tool into their teaching, and more. To read the October 2001 issue of PageNotes, click here: http://pageout.net/newsletter/newsletter.pdf
Are you looking for resources to help you develop and teach your online course(s)? McGraw-Hill has developed the Knowledge Gateway in partnership with CollegisEduprise, Inc. You will find information on best practices for online teaching, steps on how to build an effective online syllabus, tips on how to incorporate McGraw-Hill web content, web links, and a resource library. A second level of the site, termed the Key Advantage, is reserved for McGraw-Hill customers. The area houses free technical and pedagogical support for course management systems and full access to the resource library. Contact your sales representative for the password to access Key Advantage. To visit the site, click here: http://mhhe.eduprise.com/home.nsf
McGraw-Hill is proud to offer you the best course Website creation tool available. We haven't stopped there. Our support team and the Knowledge Gateway provide you with a complete solution for your online teaching needs. Join the McGraw-Hill PageOut® community today!
Kind Regards,
The McGraw-Hill Higher Education Media Technology Team
Bob Jensen's threads on course
authoring resources are at
http://www.trinity.edu/rjensen/290wp/290wp.htm
Message received from knowledgeAndIntelligenceDevice [kidevices@yahoo.com]
CONCEPTUAL FRAMEWORK OF ETHICS & REALITIES IN BUSINESS
Dr. Pratapsinh Chauhan Associate Professor & Head R.D.Gardi Institute of Business Management [SU - MBA Program] Saurashtra University - Rajkot 360 005 [Pratapsinh@lycos.com] &
Dr. Vijay Pithadia Hon. Director K.I. Devices – Project & Faculty Member V.V.P. Engineering College Rajkot 360 005 [Vijaypithadia@lycos.com]
Generally business and society have always been interlinked and interdependent. There can no business without society and no organization of society without business. Moreover developed ad developing societies are in the process of reshuffling in a very radical way. Business satisfies the human requirements of the society and on the other hand society provides necessary resources to business. Modern Executives are becoming aware of the fact that the success of their enterprises depends upon how best they adjust themselves to their new environment. There is a dramatic change from methods of improving the internal allocation of resources to developing strategies which will have to be used to stream line to the changes that take place in the society. Ethics
The word 'ethics' is derived from the Greek word ‘ethos’, which refers to the character. According to Webster’s new collegiate dictionary ethics defines as " the science of moral duty or the science of ideal human character " In the other words moral, Principles, Codes and Postulates are considered as ethics. According to Solomon and Hanson " ethics is thinking in terms of the larger picture not ignoring or neglecting ones own interest and well being but not over emphasizing ones own interest either.
Acknowledgement: We are thankful for assistance of Non teaching staff members namely Mrs. Rani, Mr.Vijay and Mr. Pratap of this University.
Business Ethics
Ethics is invisible governing force behind every human conduct, may be that of an individual or that of an organization. It is a system of moral principles the basis for determining wrong and right actions. Business ethics are the principles, practices and philosophies that guide the business people in their day to day businessmen in a business situation and concerned primarily with the impact of decisions of the society, within and outside business enterprises.
Ethics, Employee & Morality
Employee is an integrated part of business activity and therefore the point related to ethics having importance. An employee's role is complex one, consisting within itself a variety of roles. The role of peer, the role of superior, the role of subordinates, the role of trade union member and the role of representative of concern to the outside world, are but few of the distinct roles and employee has to play simultaneously. In each role he/she is expected top follow certain ethics, these ethics are called as employee ethics. Morals are related to traditional beliefs, customs and conventions that guide man/woman’s social behavior. A great difference exists between ethics and morality because ethics is always based on moral standard and code of conduct developed by proper testing to guide the human behavior and morality is related to accepted conducts, courtesies and conventions of the society.
Reality
Normally it is expected that ethics and reality must be one and the same, but it is not so in most of the cases. The reason is people try to justify their own reasons for their actions. " Is it rational to eat human flesh? " When a question is asked to a cannibal he/she may replied that " It is better than killing thousands of people with an out of bomb" Even they may say that at least we are killing when we are hungry but your people are killing thousands of people for no fault of them in the name of war. This is quite relevant today as the " Americans who were talking about global peace and ethical values, non violence, friendliness, brotherhood are carrying out with war. For the sake of one individual namely - OSAMA BIN LADEN almost outline Afghanistan has gone Indians who take about more ethical values must keep their mouth shut because we have our brothers and sisters living in U.S. of America. Actually what constitutes good ethical behavior has never been clearly defined and in recent years the line differentiating right from wrong has become even more blurred. The root of unethical practices coming from such statements i.e. " Every one does it"," I never thought I’d get caught" or " You have to seize every advantage nowadays" Executives and their organization are responding to this problem from a number of directions. They are writing and distributing codes of ethics to guide employees through ethical dilemmas. In such condition they are creating protection mechanism for employee who reveal internal unethical practices. The root cause of most of the unethical practices is the difference in preaching and practices. Most companies talk about using the ethical means in their work shop and training sessions but force their persons to achieve the target by hook and crook. The pressure from the superiors to achieve the difficult target, force salesperson to use some of the unethical means to reach their goals. In some of the companies the prevailing culture and chain of command force the employees to employ unethical means. Today's manager and executives need to create an ethically healthy environment so that work efficiency, productivity and confront a minimal degree of ambiguity regarding what constitutes right and wrong behaviors. Realities of Business & Society
It is true that reality of business and society has never been a subject for discussion for years. In fact the changing realities of business has made it imperative that executives should incorporate social and political concerns into their decision making process. Changing realities affects widely to the business and society. Business utilizes the available resources tactfully to get the desired results and contributes to the national prosperity. Business activity is influenced by the operation of economic forces of demand and supply as well as even the changes in the economic cycles. Labor and Customer are the two pillars upon which the entire building of business exits in the society. Similarly religion, culture and education are the back ground of the consumers, which affects their buying habits too, which in turn will have to be taken care by the business.
Three Ethical Decision Criteria
According to classification of G.F.Cavanagh et.al. [1981] An individual can use three different criteria in making ethical choices. The first criteria may be known as Utilitarian. In which decisions are made solely on the basis of there out comes. The aim of utilitarianism is to facilitate the greatest good for the greatest number. It is consistent with goals such as efficiency, productivity and high profits. Second Ethical criteria are to focus on Rights. This calls on individual to make decisions consistent with fundamental liberties, right to privacy, to free speech and to due process.
When third criterion is to focus on Justice. This requires individuals to impose and enforce rules fairly as well as impartially so there is an equitable distribution of costs and benefits. It justifies paying people the same wage for a given job, regarding of performance differences and using seniority as the primary determination in such situatuation.
Mentioned criteria has advantages and liabilities a focus on utilitarianism promotes efficiency and productivity but it can result in ignoring the rights of some individuals, particularly those with minority representation in the organization. The use of rights as a criterion protects individuals from injury and is consistent with freedom and privacy. A focus on justice protects the interests of the underrepresented and less power full but it can encourage a sense of entitlement that reduces risk taking, Innovation and productivity. To summarize, ethics is the buzzword of the 1990s. Some think it is a fad and many take it seriously. Ethics however is not new and it has been with us for thousands of years, except that its importance is drawing on us only now in business. People of organizations are increasingly finding themselves facing ethical dilemmas in such situations they are required to define right and wrong conduct accordingly to realities in business.
Suggested Readings
[1] Anita H.S. " Ethics and Business - An introspection " Indian Management, Nov.2000, P.No.86-90 [2] Atul Dhingra" Ethics is making as the differences " Indian Management, July 2000 P. No. 24-27 [3] E.J. Ottensmeyer and G. McCarthy " Ethics in work Place" McGraw Hill, NY, 1996 [4] G.F. Cavanagh et.al." The ethics of organizational Politics" Academy of Management Journal Jun 1981, P.P. 363-74 [5] G.R. Weaver et.al." Corporate ethics practices in the mid 1990's; An empirical study of the fortune 1000 " Journal Of business Ethics, Feb.1999. P.P.283-94
Co - Author Research Paper For the presentation At NGU-MBA Seminar Held on 12th January, 2002 North Gujarat University Patan - India
Paper Entitled
CONCEPTUAL FRAMEWORK OF ETHICS & REALITIES IN BUSINESS
Dr. Pratapsinh Chauhan Associate Professor & Head R.D.Gardi Institute of Business Management [SU - MBA Program] Saurashtra University - Rajkot 360 005 [Pratapsinh@lycos.com]
Dr. Vijay Pithadia Hon. Director K.I. Devices – Project & Faculty Member V.V.P. Engineering College Rajkot 360 005 [Vijaypithadia@lycos.com]
How to Build Customer Relationships Online Marketing is not just about getting an order, it's about getting a customer and keeping them. Nurture your customer relationships with regular e-mails. With regular e-mails you can build relationships and gather market intelligence. http://www.newmedia.com/default.asp?articleID=3275
Bob Jensen's small business links are at http://www.trinity.edu/rjensen/bookbob1.htm#SmallBusiness
Bob Jensen's eCommerce threads are at http://www.trinity.edu/rjensen/ecommerce.htm
IBM researchers make another advance in quantum computing, demonstrating "Shor's Algorithm," which can break large encryption codes --- http://www.wired.com/news/technology/0,1282,49268,00.html
A Gender Gap in Startup Funding What do
women want? For starters, greater access to venture capital, according to a new
survey
http://www.businessweek.com/smallbiz/content/dec2001/sb20011214_3179.htm?c=bwfrontierdec18&n=link1&t=email
Hi Rod,
I compare IAS 39 rules and FAS 133 rules in a special document on portfolio hedging. Go to http://www.trinity.edu/rjensen/acct5341/speakers/133macro.htm
Since the above document has not been updated for some time, please keep me posted on what you find out from PwC.
You can hear audio from some experts on this topic at http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm
Bob Jensen
-----Original Message-----
From: Sherwood, Rod (Elsevier Finance S.A.) [mailto:Rod.Sherwood@ReedElsevier.co.uk]
Sent: Tuesday, December 18, 2001 8:28 AM
To: 'rjensen@trinity.edu' Subject: IAS39 Portfolio HedgingG'Day Bob, There was new guidance released 30/11 by IASB seemingly stating that portfolio interest hedging will qualify for hedge accounting under certain conditions. I've had a read and it seems to be the case but we're getting PWC to confirm that interpretation. I had a look but haven't located anything new on your site in this respect, if I see anything concrete from our advisors I'll email you separately.
Rod Sherwood,
Treasurer & Director, Elsevier Finance SA.
Stimulate the imaginations of children --- http://www.learningcurve.com/home.asp
Although not directly related to accounting education, I thought the results of the most recent 5 yearly research assessment exercise (RAE) in the UK may interest you. The results were announced on 14 December. They may or may not be the only basis for research fund allocation in the next 4 or 5 years, but they have certainly provided the basis for newspapers and universities themselves to generate numerous research league tables. While Cambridge came top, the second place could be Imperial College, London School of Economics, Oxford, or another institution, depending on how you look at the results. There are considerably more controversies as to the ranking of the other universities. The beauty of the RAE lies in the beholder; perhaps more than 20 universities are claiming a place in the top ten.
The raw database is located here: http://www.rae.ac.uk
JASON XIAO [Xiao@CARDIFF.AC.UK]
From Arthur Andersen
Tips and tools: Launching a corporate
university ---
http://www.arthurandersen.com/website.nsf/content/ResourcesLearningandPersonalGrowthTipsandTools!OpenDocument
The next hurdle in e-learning: Content
---
http://www.arthurandersen.com/website.nsf/content/ResourcesLearningandPersonalGrowthResourcesHotIssueeLearning!OpenDocument
"The Geek Syndrome: Autism - and its milder cousin Asperger's syndrome - is surging among the children of Silicon Valley. Are math-and-tech genes to blame?" by Steve Silberman, Wired Archive, December 2001 --- http://www.wired.com/wired/archive/9.12/aspergers_pr.html
Nick is building a universe on his computer. He's already mapped out his first planet: an anvil-shaped world called Denthaim that is home to gnomes and gods, along with a three-gendered race known as kiman. As he tells me about his universe, Nick looks up at the ceiling, humming fragments of a melody over and over. "I'm thinking of making magic a form of quantum physics, but I haven't decided yet, actually," he explains. The music of his speech is pitched high, alternately poetic and pedantic - as if the soul of an Oxford don has been awkwardly reincarnated in the body of a chubby, rosy-cheeked boy from Silicon Valley. Nick is 11 years old.
Nick's father is a software engineer, and his mother is a computer programmer. They've known that Nick was an unusual child for a long time. He's infatuated with fantasy novels, but he has a hard time reading people. Clearly bright and imaginative, he has no friends his own age. His inability to pick up on hidden agendas makes him easy prey to certain cruelties, as when some kids paid him a few dollars to wear a ridiculous outfit to school.
One therapist suggested that Nick was suffering from an anxiety disorder. Another said he had a speech impediment. Then his mother read a book called Asperger's Syndrome: A Guide for Parents and Professionals. In it, psychologist Tony Attwood describes children who lack basic social and motor skills, seem unable to decode body language and sense the feelings of others, avoid eye contact, and frequently launch into monologues about narrowly defined - and often highly technical - interests. Even when very young, these children become obsessed with order, arranging their toys in a regimented fashion on the floor and flying into tantrums when their routines are disturbed. As teenagers, they're prone to getting into trouble with teachers and other figures of authority, partly because the subtle cues that define societal hierarchies are invisible to them.
"I thought, 'That's Nick,'" his mother recalls.
Asperger's syndrome is one of the disorders on the autistic spectrum - a milder form of the condition that afflicted Raymond Babbitt, the character played by Dustin Hoffman in Rain Man. In the taxonomy of autism, those with Asperger's syndrome have average - or even very high - IQs, while 70 percent of those with other autistic disorders suffer from mild to severe mental retardation. One of the estimated 450,000 people in the US living with autism, Nick is more fortunate than most. He can read, write, and speak. He'll be able to live and work on his own. Once he gets out of junior high hell, it's not hard to imagine Nick creating a niche for himself in all his exuberant strangeness. At the less fortunate end of the spectrum are what diagnosticians call "profoundly affected" children. If not forcibly engaged, these children spend their waking hours in trancelike states, staring at lights, rocking, making high-pitched squeaks, and flapping their hands, repetitively stimulating ("stimming") their miswired nervous systems.
Continued at http://www.wired.com/wired/archive/9.12/aspergers_pr.html
"Who killed Excite@home The suspects include AT&T, the Excite and AtHome merger, and cable TV operators," by Todd Wallack, San Francisco Chronicle, December 17, 2001 --- http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/12/17/BU23049.DTL
Where's private detective Sam Spade when you need him?
Thousands of frustrated investors and shareholders are trying to crack one of Silicon Valley's biggest murder mysteries: Who killed ExciteAtHome?
The Redwood City company was one of the flashiest stars of the Internet age,
with a fire-engine red slide in its headquarters. Its market value topped $35 billion. It captured 40 percent of the market for high-speed Internet access. It had more than 30 million users through its network of popular Web sites, including Excite.com and BlueMountain.com. One day, executives predicted, it could even overtake rival AOL as users abandoned their pokey dial-up modems for broadband.
But in a few months, ExciteAtHome could be little more than a memory. InfoSpace bought the Excite.com portal for $10 million last month. ExciteAtHome pulled the plug on 850,000 of AT&T's high-speed Internet subscribers on Dec. 1. And it plans to cut off remaining customers after Feb. 28. After that, "ExciteAtHome intends to cease operations," the company said two weeks ago. No white knights appear to be waiting in the wings for a last- minute dramatic rescue.
To be sure, ExciteAtHome is just one of hundreds of Internet companies to bite the dust since the Nasdaq started careening last year and investors suddenly became more concerned with profits than attracting eyeballs and shattering paradigms.
But ExciteAtHome was no ordinary dot-com. It had 4.2 million paying subscribers. It had the sixth most popular network of Web sites. And it had major backers, ranging from blue-chip venture capitalist Kleiner Perkins Caufield & Byers to telecommunications giant AT&T.
"This is not the type of company that goes out of business," said Rob Lancaster, an analyst with the Yankee Group, a Boston technology research firm.
So what happened? Stock-watchers are buzzing with juicy theories worthy of a pulp fiction novel. Some think ExciteAtHome was just another victim of the dot-com meltdown. Others think AT&T conspired to murder ExciteAtHome to steal the firm's business for itself. Many of the answers could eventually come out in court, as angry investors and creditors line up to sue anyone with deep pockets who might share the blame. William Weintraub, who represents ExciteAtHome bondholders owed $750 million, predicted creditors could sue AT&T and others in the next few weeks.
Meanwhile, nailing the killer has become a popular parlor game in tech circles. Top suspects include:
1. Ma Bell.
No one has been blamed as much for ExciteAtHome's demise as AT&T, ExciteAtHome's largest customer, supplier and shareholder.
Creditors are particularly
miffed about a $3 billion deal AT&T struck with other cable companies last year to gain control of the company, gaining three-quarters of ExciteAtHome's voting stock and several board seats.
As part of the deal, Cox and Comcast earned the right to wiggle out of their exclusive agreements to use ExciteAtHome's service starting in June 2001.
But creditors say ExciteAtHome gained nothing in return. "ExciteAtHome was only hurt by the transaction," said Weintraub, the bondholder attorney.
Ma Bell also persuaded ExciteAtHome to hire AT&T veteran Hossein Eslambolchi, who ordered the cash-strapped company to spend millions of dollars upgrading its network. Eslambolchi returned to AT&T a few months later.
But when ExciteAtHome Chief Executive Patti Hart pleaded with AT&T this summer for a cash infusion to avoid bankruptcy, AT&T refused. Instead, AT&T offered to buy the company's assets in bankruptcy court for $307 million -- a move that would enable it to take over the company without having to buy out other shareholders or fully repay lenders, owed $1.3 billion, critics say.
"AT&T saw a chance to drive them into bankruptcy," said Bob Garrity, one of AtHome's original 40 employees. "They wanted all the money for themselves."
But AT&T officials denied the accusations, pointing out that they invested $4 billion in ExciteAtHome, only to see their shares become worthless when ExciteAtHome filed for bankruptcy. And AT&T received a black eye when ExciteAtHome abruptly pulled the plug on its Internet customers. AT&T insists it did all it could to avoid a shutdown.
"Our customers having service was a No. 1 priority to us," said AT&T spokeswoman June Rochford.
William Randolph Hearst III, the Kleiner Perkins partner who helped found ExciteAtHome, also refused to pin the blame solely on AT&T. "I am not a fan of conspiracy theories," he said. Hearst is a director of the Hearst Corp., which owns The Chronicle.
2. Cable operators.
Some stock-watchers suspect all the cable companies that worked with ExciteAtHome, including Cox and Comcast, helped push it into the grave.
One problem was that the cable operators were fierce rivals. Some ExciteAtHome board members were said to erupt into shouting matches, as companies blamed each other for missteps.
More important, creditors and shareholders say, ExciteAtHome was handcuffed.
It couldn't do anything that might offend its partners, because they controlled the company.
A PriceWaterhouseCoopers report, for instance, found that ExciteAtHome charged cable operators too little for Internet access. ExciteAtHome typically charged cable operators $12 per month for each of their subscribers, who in turn paid cable firms $40 to $50 per month. The PWC report suggested ExciteAtHome needed to charge several dollars more per month to make a profit.
The bondholders called the situation bizarre. "The cable partners were negotiating with themselves," said attorney Weintraub.
In fairness, ExciteAtHome tried to make up the shortfall with online advertising. But when those plans didn't pan out, Hearst said board members never considered adjusting the price they charged cable companies. "It was a conversation that never got started," he said.
Cable companies also fell behind in their payments, exacerbating the cash crunch.
As of a few months ago, cable operators owed the company close to $100 million, Weintraub said, possibly enough money to have pushed ExciteAtHome into bankruptcy.
3. The Excite-AtHome merger.
Many investors and creditors say ExciteAtHome's problems started with the ill-fated wedding. In January 1999, AtHome sent shock waves across the Valley by agreeing to spend $7 billion to acquire Excite, one of the most popular Web sites, with millions of users. Excite just happened to be located next door, separated by a 50-foot-wide plaza. Kleiner also backed both companies, and some say the VC played the role of matchmaker.
The idea was to take a play from AOL's strategy, combining content with Internet access to make ExciteAtHome stand out from DSL and other generic cable modem services.
"It seemed like a good idea at the time," said Lancaster, the Yankee analyst. But Lancaster and Hearst said ExciteAtHome never followed through with the strategy, leaving cable operators free to dump ExciteAtHome and set up their own networks.
Some critics say the merger knocked AtHome off track. It spent hundreds of millions on other Internet companies, investments that eventually soured. It poured resources into several projects, ranging from interactive television to residential DSL, that never became reality. "The company completely lost focus, " said Garrity, one of the original AtHome employees who remained with the company until April 2000. "The two cultures never meshed that well."
It probably didn't help that when Excite's then-Chief Executive George Bell eventually took the helm of the combined firm in 2000, he was rarely in Silcon Valley. Bell, a former media executive, continued to live in Brookline, Mass., a Boston suburb, and communicated largely by teleconference calls. "The management meetings looked like a scene from 'Charlie's Angels,' " one former employee recalled.
4. The decline of online advertising.
But ExciteAtHome's problems weren't completely internal. Like other dot- coms, ExciteAtHome relied heavily on Internet advertising for revenue and profits. As recently as last year, half its revenue came from Excite.com, BlueMountain.com and the rest of its online media business. But the Internet advertising business sputtered after investors pulled the plug on hundreds of fledging dot-coms, who were among the heaviest spenders on banner ads. ExciteAtHome's quarterly media revenues dropped from $77 million to roughly $20 million in just a year.
At the same time, the market value of the Web sites dropped even faster. ExciteAtHome sold BlueMountain for $35 million in September, a pittance compared to the $780 million it paid amid the dot-com boom two years ago.
Hearst said the company had opportunities to sell the media properties to Yahoo or Microsoft in 2000 and even through early 2001, but ExciteAtHome directors rejected the bids as inadequate. But while directors hedged, the Internet market continued to deteriorate and the value of Excite and other properties continued to tumble. By the time ExciteAtHome board members finally agreed to accept the initial bids, Yahoo and Microsoft weren't willing to pay as much.
"There can be a track in a down market where you conclude you've got to sell something, but are so shocked at the price that it does not happen," Hearst said.
But Lancaster thinks it's impossible to point the finger at a single suspect. In some ways, he says, they may have all played a role in ExciteAtHome's death.
"Web Radio Not Making Waves An unfulfilled Internet vision: thousands of low-cost stations to challenge the status quo.Photos," by David Colker, Los Angeles Times, December 13, 2001 --- http://www.latimes.com/technology/la-000098785dec13.story?coll=la%2Dheadlines%2Dtechnology
Jeff Burgess walks into his Bakersfield broadcast studio (his bedroom), checks the transmission equipment (his PC), sits in the studio chair (blue vinyl, purchased used for $2), searches his CD library (cardboard boxes on the floor), adjusts the microphone on the announcer's deck (built by a local carpenter for a 12-pack of beer) and speaks the words that can be heard, potentially, by millions around the world.
"This is Destroy Radio!"
At best, maybe 300 people actually hear Burgess. He and a friend,George Looney are the only announcers on the round-the-clock, Internet-only station that much of the time simply plays rock music at random from a five-CD deck (also purchased used).
Nonetheless, Destroy Radio (http://www.destroyradio.com) is respected enough to receive handout music from some independent labels. On the deck sits a new Christmas single by the Van Bondies, "Ain't No Chimney in the Big House."
The Internet was supposed to give anyone the power to run their very own radio station. For a very few it has, but Internet-only radio has not come close to achieving what its adherents envisioned: that thousands of low-cost personal stations would spring forth to challenge the broadcasting status quo.
No detailed list has been compiled of the number of Internet-only stations founded since publicly accessible, streaming audio tools made them possible in 1995. Given the many that have disappeared into the "server not responding" netherworld, it's probable that far more have died than are currently "on the air."
Earlier this month, radio industry heavyweight Clear Channel pulled the plug on its Internet-only division. Several other major operations are either on the block or rumored to be in financial trouble. No one who watches the field could point to even one steadily profitable Internet-only station.But often that's not what it's about.
"George and I might not be musicians," said Burgess, 36, whose day job is as a real estate appraiser. "But what we do here--the choices we make about music and how we put the mixes together--gives us a chance to be artists, in a way. The way we play our music is our art form."
Internet radio is relatively cheap to produce. The primary piece of hardware required for a serious endeavor is either a high-powered personal computer or a server--costing less than $2,000--dedicated to radio use only. The major software expense is an approximately $2,000 program to run the server. A broadband Internet service provider starts at $50 and increases with the amount of bandwidth used.
Continued at
http://www.latimes.com/technology/la-000098785dec13.story?coll=la%2Dheadlines%2Dtechnology
Hi Professor Jensen,
I am the webmaster for PacificCable.com. We sell computer cables, networking supplies and X10 Home Automation products. Can you please check out our website http://www.pacificcable.com and consider adding a link to us?
Thanks,
Cliff Knopik
Webmaster http://www.pacificcable.com
800-931-3133
Bob Jensen's related bookmarks are at http://www.trinity.edu/rjensen/bookbob4.htm
Resources in Art History for Graduate Students http://www.efn.org/~acd/resources.html
A message from Richard Campbell regarding an online elementary accounting textbook:
New demo on my web site, It requires both the Acrobat Reader and Quicktime Player to view.
http://www.virtualpublishing.net/acrobat.htm
Richard J. Campbell mailto:campbell@VirtualPublishing.NET
History in the News: Middle East History, Society, and Culture Resources http://www.albany.edu/history/middle-east/
Microsoft offers a free fix five weeks after an independent hacker discovers a serious flaw in the newest version of Windows that allows hackers to steal or destroy files or implant rogue software --- http://www.wired.com/news/business/0,1367,49301,00.html
From Syllabus News on December 18, 2001
AOL Launches 'Online Campus' Service
America Online Inc. said last week it would launch the AOL Online Campus, enabling its members to register for offline courses, access career resources, pursue a hobby or complete undergraduate and graduate degrees online. Coursework ranging from GED degrees to college-level business administration, technology and nursing studies would be offered by various education and content providers, including the online University of Phoenix, the University of California Berkley Extension, the Western Governors University, the Public Broadcasting Service, and bookseller Barnes & Noble. AOL developed the Online Campus based on extensive member feedback, including a recent member survey showing 63 percent said they had a high interest in taking a course online.
Bob Jensen's threads on distance education alternatives are at
http://www.trinity.edu/rjensen/crossborder.htm
Arizona State University's MBA High Technology program is equipping students with Compaq iPAQ Pocket PCs, saying access to anytime, anywhere, information is becoming a prerequisite for earning graduate degress. The handheld computers are being distributed pre-loaded with course syllabi, contact information for faculty and staff, an academic calendar, and the graduate admission packet. The school's MBA High Tech students are required to complete a 10-month applied project with a focus on new product development, which requires problem solving, cross-team communication and project management. Brian K. Boyd, faculty director of the program called the iPAQ "an excellent tool to facilitate this kind of information exchange."
For more information, visit: http://www.asu.edu
U.S. Customs Service agents last week seized computers at several universities, including M.I.T., the University of California at Los Angeles, Duke, Purdue, and the University of Oregon, in an effort to shut down what they claimed was a global software piracy network. Investigators said that the piracy ring called itself the "DrinkOrDie" network, and was run by students, university employees, as well as software executives in the U.S., the United Kingdom, Australia, Finland, Norway and Sweden. Investigators said the computers seized contained thousands of copies of pirated business software, including the latest word-processing, spreadsheet, and games programs. The Customs Service said that the universities cooperated in the raid and were not targets of the criminal investigation
Forwarded by Bob Overn
Adventures in Cheating: A guide to Buying Term papers Online, by Seth Stevenson
Posted Tuesday, December 11, 2001, at 11:04 AM PTStudents, your semester is almost over. This fall, did you find yourself pulling many bong hits but few all-nighters? Absorbing much Schlitz but little Nietzsche? Attending Arizona State University? If the answer is yes to any or (especially) all these questions, you will no doubt be plagiarizing your term papers.
Good for you. You're all short on time these days. Yes, it's ethically blah blah blah to cheat on a term paper blah. The question is: How do you do it right? For example, the chump move is to find some library book and copy big hunks out of it. No good: You still have to walk to the library, find a decent book, and link the hunks together with your own awful prose. Instead, why not just click on a term paper Web site and buy the whole damn paper already written by some smart dude? Que bella! Ah, but which site?
I shopped at several online term paper stores to determine where best to spend your cheating dollar. After selecting papers on topics in history, psychology, and biology, I had each paper graded by one of my judges. These were: Slate writer David Greenberg, who teaches history at Columbia; my dad, who teaches psychology at the University of Rhode Island (sometimes smeared as the ASU of the East); and my girlfriend, who was a teaching assistant in biology at Duke (where she says cheating was quite common). So, which site wins for the best combination of price and paper quality? I compared free sites, sites that sell "pre-written papers," and a site that writes custom papers to your specifications.
Free Sites A quick Web search turns up dozens of sites filled with free term papers. Some ask you to donate one of your own papers in exchange, but most don't. I chose one from each of our fields for comparison and soon found that when it comes to free papers, you get just about what you pay for.
EssaysFree.com:
From this site I chose a history paper titled "The Infamous Watergate Scandal." Bad choice. This paper had no thesis, no argument, random capitalization, and bizarre spell-checking errors, ”including "taking the whiteness stand" (witness) and "the registration of Nixon" (resignation). My judge said if they gave F's at Columbia, well ... Instead, it gots a good old "Please come see me."BigNerds.com:
Of the free bio paper I chose from this site, my judge said, "Disturbing. I am still disturbed." It indeed read less like a term paper than a deranged manifesto. Rambling for 11 single-spaced pages and ostensibly on evolutionary theory, it somehow made reference to Lamarck, Sol Invictus, and "the blanket of a superficial American Dream." Meanwhile, it garbled its basic explanation of population genetics. Grade: "I would not give this a grade so much as suggest tutoring, a change in majors, some sort of counseling " OPPapers.com: This site fared much better. A paper titled "Critically Evaluate Erikson's Psychosocial Theory" spelled Erikson's name wrong in the first sentence, yet still won a C+/B- from my dad. It hit most of the important points: ”the problem was no analysis. And the citations all came from textbooks, not real sources. Oddly, this paper also used British spellings ("behaviour") for no apparent reason. But all in all not terrible, considering it was free. OPPapers.com, purely on style points, was my favorite site. The name comes from an old hip-hop song ("You down with O-P-P?" meaning other people's ... genitalia), the site has pictures of coed babes, and one paper in the psych section was simply the phrase "I wanna bang Angelina Jolie" typed over and over again for several pages. Hey, whaddaya want for free?Sites Selling Pre-Written Papers There are dozens of these. I narrowed it down to three sites that seemed fairly reputable and were stocked with a wide selection. (In general, the selection offered on pay sites was 10 times bigger than at the free ones.) Each pay site posted clear disclaimers that you're not to pass off these papers as your own work. Sure you're not. AcademicTermPapers.com: This site charged $7 per page, and I ordered "The Paranoia Behind Watergate" for $35. Well worth it. My history judge gave it the highest grade of all the papers he saw a B or maybe even a B+. Why? It boasted an actual argument. A few passages, however, might set off his plagiarism radar (or "pladar"). They show almost too thorough a command of the literature.
My other purchase here was a $49 bio paper titled "The Species Concept." Despite appearing in the bio section of the site, this paper seemed to be for a philosophy class. Of course, no way to know that until after you've bought it (the pay sites give you just the title and a very brief synopsis of each paper). My judge would grade this a C- in an intro bio class, as its conclusion was "utterly meaningless," and it tossed around "airy" philosophies without actually understanding the species concept at all.
PaperStore.net: For about $10 per page, I ordered two papers from the Paper Store, which is also BuyPapers.com and AllPapers.com. For $50.23, I bought "Personality Theory: Freud and Erikson," by one Dr. P. McCabe (the only credited author on any of these papers. As best I can tell, the global stock of papers for sale is mostly actual undergrad stuff with a few items by hired guns thrown in). The writing style here was oddly mixed, with bad paraphrasing of textbooks which is normal for a freshman side by side with surprisingly clever and polished observations. Grade: a solid B.
My other Paper Store paper was "Typical Assumptions of Kin Selection," bought for $40.38. Again, a pretty good buy. It was well-written, accurate, and occasionally even thoughtful. My bio judge would give it a B in a freshman class. Possible pladar ping: The writer seemed to imply that some of his ideas stemmed from a personal chat with a noted biologist. But overall, the Paper Store earned its pay.
A1 Termpaper (aka 1-800-Termpaper.com): In some ways this is the strangest site, as most of the papers for sale were written between 1978 and '83. I would guess this is an old term paper source, which has recently made the jump to the Web. From its history section, I bought a book report on Garry Wills' Nixon Agonistes for $44.75, plus a $7.45 fee for scanning all the pages the paper was written in 1981, no doubt on a typewriter. Quality? It understood the book but made no critique a high-school paper. My judge would give it a D.
I next bought "Personality as Seen by Erikson, Mead, and Freud" from A1 Termpaper for $62.65 plus a $10.43 scanning fee. Also written in 1981, this one had the most stylish prose of any psych paper and the most sophisticated thesis, but it was riddled with factual errors. For instance, it got Freud's psychosexual stages completely mixed up and even added some that don't exist (the correct progression is oral-anal-phallic-latency-genital, as if you didn't know). Showing its age, it cited a textbook from 1968 and nothing from after 69 (and no, that's not another Freudian stage, gutter-mind). Grade: Dad gave it a C+. In the end, A1 Termpaper.com was pricey, outdated, and not a good buy.
With all these pre-written papers, though, it occurred to me that a smart but horribly lazy student could choose to put his effort into editing instead of researching and writing: Buy a mediocre paper that's done the legwork, then whip it into shape by improving the writing and adding some carefully chosen details. Not a bad strategy.
Papers Made To Order PaperMasters.com: My final buy was a custom-made paper written to my specifications. Lots of sites do this, for between $17 and $20 per page. PaperMasters.com claims all its writers have "at least one Master's Degree" and charges $17.95 per page. I typed this request (posing as a professor's assignment, copied verbatim) into its Web order form: "A 4-page term paper on David Foster Wallace's Infinite Jest. Investigate the semiotics of the 'addicted gaze' as represented by the mysterious film of the book's title. Possible topics to address include nihilism, figurative transgendering, the culture of entertainment, and the concept of 'infinite gestation.' "
This assignment was total hooey. It made no sense whatsoever. Yet it differed little from papers I was assigned as an undergrad English major at Brown. After a few tries (one woman at the 800 number told me they were extremely busy), my assignment was accepted by Paper Masters, with a deadline for one week later. Keep in mind, Infinite Jest is an 1,100-page novel (including byzantine footnotes), and it took me almost a month to read even though I was completely engrossed by it. In short, there's no way anyone could 1) finish the book in time; and 2) write anything coherent that addressed the assignment.
I began to feel guilty. Some poor writer somewhere was plowing through this tome, then concocting a meaningless mishmash of words simply to fill four pages and satisfy the bizarre whims of a solitary, heartless taskmaster (me). But then I realized this is exactly what I did for all four years of college and I paid them for the privilege!
When the custom paper came back, it was all I'd dreamed. Representative sentence: "The novel's diverse characters demonstrate both individually and collectively the fixations and obsessions that bind humanity to the pitfalls of reality and provide a fertile groundwork for the semiotic explanation of addictive behavior." Tripe. The paper had no thesis and in fact had no body: ”not one sentence actually advanced a cogent idea. I'm guessing it would have gotten a C+ at Brown ”maybe even a B-. If I were a just slightly lesser person, I might be tempted by this service. One custom paper off the Web: $71.80. Not having to dredge up pointless poppycock for some po-mo obsessed, overrated lit-crit professor: priceless.
Infinite Jest Introduction Wallace's fictional narrative Infinite Jest is an epic approach to the solicitous and addictive nature of humanity. The novel's diverse characters demonstrate both individually and collectively the fixations and obsessions that bind humanity to the pitfalls of reality and provide a fertile groundwork for the semiotic explanation of addictive behavior. Although Wallace may have actualized the concept of the "addicted gaze" to the literal or physical response to the viewing of Incandenza's coveted film the Entertainment [Infinite Jest], it is manifested symbolically throughout the novel in thedistractions of its characters.
Nihilism
It would appear that Wallace has chosen society's most frequently rejected and denounced individuals as the vehicle for the narrative search for and preservation of the ultimate fix, which is illustrated by the obsession for Incandenza's film. At the same time and despite their diversity and distinctions, these individuals will ultimately represent the inextricable and covert characteristics of nihilistic behavior. School-aged malcontents, drug addicts and the physically challenged all attempt to get a hold of a copy of the film and experience its pleasures at any cost.
Ironically, it was the film maker James Incadenza's habit to regularly observe the depravation of Boston's crowded street milieus, where "everyone goes nuts and mills, either switching or watching" (620). It is not surprising therefore that he should develop a film that would be perceived as the panacea to the entertainment addictions of the masses.
Figurative Transgendering
Wallace devotes a substantial amount of space to the illustration of the contradictions of gender, where the adoption of gender behavior or symbols contrary to the character's true gender can be analyzed. The occasion of Hugh Steeply in drag as he met with Marathe to discuss the emergence of the Entertainment's cartridge may have served the literal purpose of the agent arriving incognito however his devotion to applying feminine mannerisms appear to go above and beyond the call of duty (90). In spite of his practice, Marathe nevertheless describes Steely's appearance as "less like a women than a twisted parody of womanhood" (93).
Wallace also presents the steroid-driven objectives of a number of the female tennis player's like Ann Kittenplan. "who at twelve-and-a-have looks like a Belorussian shot putter" (330). It may be fair to assume that their desire to acquire a manly physique is not entirely confined to the advantages it offers on the tennis court. In his notes, Wallace suggests that the "gratification of pretty much every physical need is either taken care of or prohibited" by the tennis academy (984). Clearly, the administration of steroids or any other drug of choice is prohibited by the ETA considering the wide scale purchase of "clean" urine for the academy's drug testing.
An Endless Jest
Perhaps the most significant example of the addicted gaze is demonstrated not so much in the stationary and fixated attention to satisfying one's obsession but in the demand for the continuous pursuit of it. The halfway house/rehab center, Ennet House, represents the often ineffectual and delusional pursuit of ridding oneself of addiction. A clear example of the deceptive environment of rehab is demonstrated by Lenz's use of cocaine while at the facility. For many of the residents like Lenz, the limitations at Ennet House are often so unbearable that its residents are driven to the use of drugs in order to preserve their sanity. Ironically, Lenz's stash of cocaine works as a contrived temptation that undermines any true potential for ridding himself of his addiction.
Conclusion
Wallace's Infinite Jest is a chaotic amalgam of humanity and the similarly depraved behaviors that they demonstrate in the pursuit of amusement and satisfaction. Although the restrictions to their attainment are clearly represented by the physical entities of the Academy, the Ennet House and the wheelchair, they are also fostered by them.
If Incandenza's "Accomplice" is any indication of the content of the Entertainment, it only reinforces the contention that human nature includes the inherent desire to not only view the depravity and debauchery of human behavior but even more, to participate in it. There is little to ponder why so many of Wallace's characters must depend on their mind and body altering drugs of choice, if not to influence how they are viewed by others then at the very least to make more palatable their own perceptions of self.
John L.'s monologue delivered at one of the AA meetings illustrates the destructive implications of either reasoning: "all the masks come off and you all of a sudden see the Disease as it really is and see what owns you, what's become what you are (347).
References
Nihilism. The Internet Encyclopedia of Philosophy. [online] Available
http://www.utm.edu/research/iep/n/nihilism.htm .Wallace, David Foster. Infinite Jest. New York: Little, Brown & Co., 1996.
Reply from Linda Kidwell [lak@NIAGARA.EDU]
The latest string of commentary on cheating brings us to an obvious but difficult solution. We must do our best, in conjunction with students themselves, to change the cheating culture. Don McCabe, who does so much research on this issue, once wrote that 20% of students will never cheat, 20% will cheat regardless of the consequences, and the remaining 60% can be molded through peer pressure, discussion of academic integrity, honor codes, and the like. Thus we can't do much to stop the creativity of cheaters with cell phones, but we can work on developing and supporting a culture on campus that makes cheating socially unacceptable. Only this way can we really have an impact on cheating.
Those who are interested in the subject of cheating and how to work toward a campus culture that embraces academic integrity should visit the website of the Center for Academic Integrity, at http://www.academicintegrity.org .
I have personally tried to encourage discussions of this nature on my campus through a student project, wherein groups in my auditing class write proposals for an honor code on campus. I have found that this really stimulates discussion and even deep thought on these issues. It also gets them thinking about what type of behavior will be acceptable for them as future accountants. If you are interested, I wrote a paper on the subject: "Student Honor Codes as a Tool for Teaching Professional Ethics" in the Journal of Business Ethics, 2001. And the good news is that this project is having a meaningful impact on campus: Development of an honor code has just been incorporated into the university 5-year plan.
Finally, let me solicit some interest in a fabulous conference for students every year. The National Conference on Ethics in America is held annually on the campus of West Point. Students from 75 universities (including but definitely not limited to the service academies) come together for four days to discuss academic integrity, changing the culture on their campuses, and preparing for being ethical business people after graduation. They are mentored in small groups by faculty for two days and CEOs for one day. I have been fortunate enough to participate as a mentor for the past three years, and I always come away very hopeful and refreshed.
The NCEA organizers are always looking for ways to get new universities involved in the conference. They pay all expenses except travel, and there is no registration fee. There is an annual limit of 2 students per college, but prior year participant schools are always invited back. Students stay for four days on campus, and all meals are provided. Because the campus is regimented for the cadets, there is study time for those who have to miss a few days of classes. If you believe students from your campus would benefit from attending this conference, please e-mail me directly, and I will pass your name on to West Point's Center organizers. I can't tell you what a difference this has made for my students who have attended. Again, let me know if you would like your college involved by e- mailing me directly.
Linda Kidwell, Ph.D.
Niagara University
Reply from John Rodi
The unfortunate part is that this is a poor use of scare resources. I believe that cheating is a matter of ethics and if you cheat you don’t have ethics. Ethics are taught at an early age and the mechanism for justifying the behavior develops at the same time. I am reminded of the student who was blatantly cheating in during one of my final exams. He had simply opened his textbook on the desk and was looking for answers. Several students pointed this out to me and I told them that I was aware of what was happening. They didn’t understand what I why I wasn’t stopping the student.
At the end of the exam I told the student that he was getting an F for a grade on the final exam since I had observed him cheating during the entire examination. He replied with remorse—right. Wrong. He said to me, “If you knew I was cheating why didn’t you stop me so that I wouldn’t have had to waste all this time!” I was advised that he may have had a case had he protested, because I could have been accused of providing him with an opportunity to cheat. I wish that I had made up this story.
John Rodi
El Camino College
Bob Jensen's threads on cheating are at http://www.trinity.edu/rjensen/plagiarism.htm
This article is about a cheating scandal at the University of Minnesota.
http://sports.iwon.com/news/12192001/v6435.html
Do you suppose that one day universities will sue to recover salaries of faculty who do nothing when they discover cheating?
Thanks to Debbie Bowling for the tip on the above link.
Forwarded by Bob Overn
A frog named Kermit Jagger went into the bank and headed straight for the window of a teller named Patricia Wack.
Pat was somewhat surprised because she had never seen a frog in the bank before but decided that someone was playing a trick on her so she decided to go along with the gag. "And, how may I help you, Sir?" she said.
"Oh, I would like a loan please, " Kermit responded.
"Well, I guess that would be O.K. How big a loan go you need?" Pat said.
"Could you make it for $30,000 please?"
"THIRTY-THOUSAND DOLLARS? Pat stammered, I'll need some collateral for that." With that, Kermit reached in his pocket and pulled out an exquisite little ceramic elephant painted with circus colors, and handed it to her.
"Gee, I'll have to see my manager about this." Pat said, as she took the little elephant into her boss's office and asked him what it is.
He said,
IT'S A KNICK KNACK, PATTY WACK.
GIVE THE FROG A LOAN
HIS OLD MAN IS A ROLLING STONE
Bob Jensen's frog story is at http://www.trinity.edu/rjensen/acct5341/speakers/muppets.htm
Forwarded by Auntie Bev
At the drugstore, the clerk was a gent.
From my purchase this chap took off ten percent.
I asked for the cause of a lesser amount;
And he answered, "Because of the Seniors Discount."
I went to McDonald's for a burger and fries;
And there, once again, got quite a surprise.
The clerk poured some coffee which he handed to me.
He said, "For you, Seniors, the coffee is free."
Understand---I'm not old---I'm merely mature;
But some things are changing, temporarily, I'm sure.
The newspaper print gets smaller each day,
And people speak softer---can't hear what they say.
My teeth are my own (I have the receipt),
and my glasses identify people I meet.
Oh, I've slowed down a bit...not a lot, I am sure.
You see, I'm not old...I'm only mature
The gold in my hair has been bleached by the sun.
You should see all the damage that chlorine has done.
Washing my hair has turned it all white,
But don't call it gray...saying "blond" is just right.
My car is all paid for...not a nickel is owed.
Yet a kid yells, "Old duffer...get off of the road!"
My car has no scratches...not even a dent.
Still I get all that guff from a punk who's "Hell bent."
My friends all get older...much faster than me.
They seem much more wrinkled, from what I can see.
I've got "character lines," not wrinkles...for sure,
But don't call me old...just call me mature.
The steps in the houses they're building today
Are so high that they take...your breath all away;
And the streets are much steeper than ten years ago.
That should explain why my walking is slow.
But I'm keeping up on what's hip and what's new,
And I think I can still dance a mean boogaloo.
I'm still in the running...in this I'm secure,
I'm not really old ... I'm only mature
Forwarded by Earl Beatty
The Supreme Court has ruled that there cannot be a nativity scene in Washington, DC this Christmas. This isn't for any religious reason. They simply have not been able to find three wise men and a virgin in the nation's capitol.
There was no problem, however, finding enough asses to fill the stable..
Forwarded by Dick Haar
SANTA IS A WOMAN
I hate to be the one to defy sacred myth, but I believe he's a she. Think about it. Christmas is a big, organized, warm, fuzzy, nurturing, social deal, and I have a tough time believing a guy could possibly pull it all off!
For starters, the vast majority of men don't even think about selecting gifts until Christmas Eve. Once at the mall, they always seem surprised to find only Ronco products, socket wrench sets, and mood rings left on the shelves. On this count alone, I'm convinced Santa is a woman. Surely, if he were a man, everyone in the universe would wake up Christmas morning to find a rotating musical Chia Pet under the tree, still in the shopping bag.
Another problem for a he-Santa would be getting there. First of all, there would be no reindeer because they would all be dead, gutted and strapped on to the rear bumper of the sleigh amid wide-eyed, desperate claims that buck season had been extended. Blitzen's rack would already be on the way to the taxidermist. Even if the male Santa DID still have reindeer, he'd also have the transportation problems because he would inevitably get lost up there in the snow and clouds and then refuse to stop and ask for directions.
Other reasons why Santa can't possibly be a man:
Men can't pack a bag. Men would rather be dead than caught wearing red velvet. Men would feel their masculinity is threatened...having to be seen with all those elves. Men don't answer their mail. Men would refuse to allow their physique to be described, even in jest, as anything remotely resembling a "bowl full of jelly." Men aren't interested in stockings unless somebody's wearing them. Having to do the Ho Ho Ho thing would seriously inhibit their ability to pick up women. Finally, being responsible for Christmas would require a commitment.
I can buy the fact other mythical holiday characters are men: Father Time shows up once a year unshaven and looking ominous. Definite guy. Cupid flies around carrying weapons. Uncle Sam is a politician who likes to point fingers Any one of these individuals could pass the testosterone screening test. But not Santa!!!!
Thank God for women!!
An Interview With God Concerning the Crazy Behavior of Human Beings on the Planet Earth --- http://www.wordsofjoy.com/iwg.htm
And that's the way it was on January 1, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu