Author: Adrienne Gonzalez

Adrienne is a 15-year veteran of the accounting industry, if by "veteran" you mean "vulture prowling the periphery of the profession waiting for something exciting to happen." She has been spewing vitriol on Going Concern since the site was founded in 2009. A former CPA review employee, she has sat through more FAR classes than any CPA exam candidate ever could -- even one who has failed FAR seven times -- and can still recall most of the mnemonics all these years later.

Studying for BEC Leads a CPA Exam Candidate to Drugs

We don’t have any CPA exam questions in the mailbag this week (you slackers) so we’re resorting yet again to trolling the CPAnet forums for good questions. Here’s an excellent one:

I’ve never had an issue studying, I guess it’s mainly because I always had a logical way of figuring stuff out and completing it extremely quick (which is why REG and AUD were so easy). However, BEC is making a fool of me. I can’t seem to figure out how to attack it, and am severely lacking motivation to study it.

I’ve used adderall a few times, and man d, I’ve had a recent serotonin problem .. and now if I take it, it actually triggers panic attacks which I try to avoid like the plague.

Do you guys have any other suggestions?

If you grew up in the 90s, chances are you knew at least a handful of kids diagnosed with ADD and prescribed Ritalin or other amphetamine-based prescription drugs to treat this “condition.” I graduated high school in 1998 and at that point, several enterprising young men and women in my class were funding their car payments by selling their prescriptions to classmates.

Drugs like Adderall and Ritalin are central nervous system stimulants that artificially force dopamine (the natural “happy drug” in your brain usually released when you are doing something you enjoy like reading Going Concern, writing your resignation letter or sleeping with randoms in your office) to the synapses in your brain. This creates the thrill, so you, in turn, look at studying as something enjoyable. Under the influence of these drugs, you could, in theory, also equally enjoy a root canal, colonoscopy, or your 12th straight hour of busy season gruntwork. Perhaps not ironically, this chemical reaction is similar to the one created in your brain when you fall in love.

The problem with taking Adderall to study for the CPA exam (as opposed to taking it to study for finals in college) is that your brain retains exam information better in smaller pieces over a longer period of time. You simply cannot “cram” for the CPA exam. Not to mention the fact that it’s illegal if you’re buying someone else’s prescription and you are supposed to represent the profession in an ethical manner but we won’t get into that.

Instead, try some of these tips to grease your brain up for studying. Trust us, you’ll be happier and healthier in the long run, though maybe not as unusually happy in the short-term.

Try Omega-3s: While the research is a bit sketchy, it is believed that Omega-3 fatty acids improve general brain function and can positively impact memory. You can find Omega-3s in salmon, mackerel, sardines, herring, flax oil, and walnuts or take a quality fish oil supplement daily.

Avoid simple carbs: Simple carbohydrates like white bread are instantly converted to sugar in your body, filling you with empty calories. Too much sugar at once can actually starve your brain of the glucose it needs to function properly, negatively affecting memory and concentration. Instead, try to eat more complex carbohydrates like peanuts, dried apricots, dried beans and yogurt and stay away from quick fixes like candy.

Eat breakfast: If you are working and studying for the CPA exam, breakfast is probably something you haven’t seen in months or years but numerous studies prove that breakfast has a positive effect on how your brain performs. And if you’re a girl, you might want to try oatmeal instead of cereal, it could improve your short-term memory.

Caffeine is OK, in moderation: Caffeine works in a similar way to Adderall except much milder, in moderation. If you must get a fix, try to avoid sugary energy drinks and stick to plain coffee. Adding flavored cream or sugar to coffee adds empty calories that you might regret once you’re actually done with the exam and needing to shed the extra 10 or even 20 pounds you packed on during studying.

BlackBerry PlayBook vs iPad 2: Which Would You Rather Have Your Firm Pay For?

Tablets are the new Pocket PC and while we may question the viability of accountants preparing tax returns on iPads, it might be time to take a look at the new BlackBerry PlayBook versus the iPad2 for all things somewhat work-related. Let’s go!


Pros of the PlayBook:
• features: 7″ LCD display, 1024 x 600 screen resolution, 1 GHz dual-core processor, 1 Gb RAM
• runs Flash so you can watch YouTube videos at the client
• works with Android applications so you have 200,000 Android toys at your disposal
• doesn’t run native email so you have a great excuse for ignoring emails (for now you can use the device as a viewer to connect to your BlackBerry smartphone but cannot actually open emails from the PlayBook)

Pros of the iPad 2:
• features: 9.7″ LED display with 1024 × 768 screen resolution at 132ppi, Apple 1GHz A5 Processor, 512 Mb RAM
• looks awesome
• inspires jealously among your friends who work for broke mid-tier firms
• makes you more likely to get robbed using it on the train, helping you get over your awkward social phobia by forcing you to talk to your would-be thief
• doesn’t run Flash so you won’t be tempted to waste precious time watching YouTube videos at the client (unless you’re clever enough to have a decent converter)
•works with thousands more apps than Android/BlackBerry offerings, allowing you a much larger pool of distractions to access from company PP&E

Though this writer must disclaim this entire article by pointing out that she is a BlackBerry fan, it’s worth pointing out that without playing with one, we have to say the PlayBook is definitely disappointing on the surface. Technology ED is nothing to joke about, and this release was definitely a premature splurt on the face of BB nerds everywhere. No native email? That doesn’t even make sense.

The only selling point on the PlayBook for work may be that many of you already carry around company-issued BlackBerry devices, and we all know management is resistant to change. While iPads have been marketed as convenience devices, BlackBerry has somehow retained its reputation as a work device, allowing a bit of an in when it comes to getting management to spring for a handful of these little toys.

As for increased productivity? We haven’t seen any proof from either device that shows putting one in staff hands leads to any greater enthusiasm for work. Until someone comes up with a mind control app, we’ll keep holding out.

As always, let us know in the comments if you wholeheartedly agree with our obviously biased opinion.

Woman Realizes Her Dream of an Accounting Degree After 19 Years

Whenever you feel unmotivated to get your accounting degree or are concerned you’ve made an awful career decision, just think about this Iowa woman who worked 19 long, tedious-ass years to get her bachelor’s in accounting.

We’re totally OK with this woman being too busy to take the CPA exam, this is the ultimate excuse to be unable to get through the exam in 18 months. Bow to her greatness and insantly feel guilty for being greedy when it comes to compensation and slacking so hard on the job.

In 1992, a gallon of gas cost $1.13, Bill Clinton won the presidential election and Kathy Vitzthum took her first class at Iowa State University.

Vitzthum has taken about one class each and every semester since. For 40 semesters. Since Miley Cyrus was born. Since Charles and Diana split up. Since Ross Perot pulled out his charts and pointer on TV. Since the World Wide Web was in its infancy (and text only).

On May 7, the 48-year-old Vitzthum, who lives in Slater, graduates summa cum laude from Iowa State. She has achieved her goal — a bachelor’s degree in accounting — after juggling family and career with finals and papers for 19 years.

Now, we don’t judge as we all have our different career paths but while congratulating this woman for her epic accomplishment, it’s wise to point out that we don’t necessarily recommend this bundle of choices for just anyone. It’s easiest to go college, then pass the CPA exam or start work (it’s usually easiest to do the exam in-between school and starting work), then get married and/or have kids. You are welcome to do these in any order you like, we just wouldn’t feel right if we didn’t point this out.

I’m not sure what you all were doing in 1992 but I was in 6th grade. Think about that for a minute next time you hate your life and/or career decisions.

Is BEC Still the Junk Drawer of the CPA Exam?

Note from AG: If you have a CPA exam question for us, get in touch and we’ll do our best to answer without making you feel like we don’t like you or somehow disrespect your career decisions. No judgments, least of all from a girl who grew up to write for an accounting tabloid.

Today’s question is a good one because it addresses a CPA exam candidate concern that has been valid since the exam went computerized in 2004. I always call BEC the junk drawer of the CPA exam since up until 2011 it contained all the crap left over from other sections that wouldn’t fit anywhere else. I have consistently heard the same complaint: it is random and no matter how well you prepare, you’re going to see a bunch of off-the-wall material that you never covered. This is pretty standard regardless of which review course you are using, so for the purposes of answering the following question we’ll speak generally (not being familiar with Becker’s 2011 product):

I am taking BEC in May 2011. I have seen people writing in the forum that Becker’s materials are not representative of the exam. I have passed FAR, and I felt Becker/Wiley is very representative (as in “no surprises”). For REG, Becker/Wiley is quite representative (prepared me well enough), but still I have to make guesses. I actually felt like giving up half way on REG because there are many twists in the questions that I have never seen before.

So, for BEC, how do you think I should prepare so that there are not many surprises? I am using Becker/Wiley. I can’t take any surprises…

With sections like FAR and REG, it’s assumed that you took at least a couple general accounting courses in school, which would have taught you journal entries, revenue recognition, inventory and maybe even pension accounting if you overachieved and went for Advanced Accounting. But with BEC, you’re dealing with variance analysis, cost accounting and corporate governance; areas many of you probably avoided in college if you could. Meaning not only is it random, it feels more so because so much of it can be unfamiliar.

That being said, a little birdie told me that COSO, corporate governance, ERM and the other new areas in BEC for 2011 showed up last window in larger amounts than suspected, so be sure to review those areas thoroughly. Remember too that the review courses all get their information from the same source, the AICPA. You can get that info too by checking out the CSOs in detail.

With BEC, you can expect to be tested on six core areas in the following percentages (current as of January 1, 2011):

I. Corporate Governance (16% – 20%)
II. Economic Concepts and Analysis (16% – 20%)
III. Financial Management (19% – 23%)
IV. Information Systems and Communications (15% – 19%)
V. Strategic Planning (10% – 14%)
VI. Operations Management (12% – 16%)

Now go back to your materials, do you see a similar breakdown in what you’re covering? One complaint I heard from someone who prepared for BEC in the first quarter was that her Wiley materials did not cover nearly enough corp governance compared to what she saw on her exam.

Until we have better information, be prepared for the unpredictability of BEC to continue. Looking at 2011 material compared to past years, it does appear that the AICPA has addressed some of that unpredictability to create a more succinct section but don’t expect it to be as streamlined as, say, FAR any time soon. Just a guess!

FASB and IASB Hand-Holding Agenda Nears Completion, Or So We Hear

We’re sure all of you have been anxious for an update since the last FASB/IASB progress report last November, wait no longer.

Here’s what we’re proud of having accomplished since:

• Completed five projects: In the next few weeks the IASB will issue new standards on consolidated financial statements (including disclosure of interests in other entities), joint arrangements and post-employment benefits and both boards will issue new requirements in relation to fair value measurement and the presentation of other comprehensive income.

• Given priority to the three remaining Memorandum of Understanding projects, as well as insurance accounting: The Boards have made substantial progress towards completion of the three remaining MoU projects covering financial instruments accounting, leasing and revenue recognition, as well as their joint project to improve and align US and international insurance accounting standards.

• Provided for further time to finalise their convergence work: The boards have agreed to extend the timetable for the remaining priority convergence projects beyond June 2011 to permit further work and consultation with stakeholders in a manner consistent with an open and inclusive due process. The convergence projects are targeted for completion in then second half of 2011 (however, the U.S. insurance standard, which has not yet been exposed, is targeted for the first half of 2012).

Wait a second, did they really say that putting off more convergence work is an accomplishment? That’s our kind of work right there. IASB Chair Sir David Tweedie and FASB Chair Leslie Seidman didn’t let that little detail deter them from patting themselves on the back for a job well done. Said Sir David, “the convergence programme continues to raise the standard of financial reporting worldwide, delivering much-needed improvements in key areas and providing a solid platform for global high quality standards.” What is that even supposed to mean? Sounds like the same pro-convergence gibberish we’ve been hearing all along.

Someone come get us when this actually means something.

Just How Important Is Research on the CPA Exam?

Today’s fantastic question comes from loyal reader Chloe who wants to know about research. We addressed this way back in September of 2010 but now that the new CPA exam is in the wild and you guys are actually out there taking it, it’s appropriate to revisit.


Question as follows:

My question is about research tabs. In one of your previous articles, you said that Research tabs are worth a lot more now (something like 8 points if I remember correctly).

In the first quarter 2011, I took REG and passed with 88. I got 2 research tabs, which I think I got both wrong (one may be pre-test). I dont really believe that the research tabs has so much weights now. I mean, how can the weighting go from so unimportant to being so important now? Also, my score suggest to me, the research tab may not be worth so much like the 8 points that you mentioned. I tried to ask this same question to my Becker instructor, but she has no idea.

I am going to take AUD in May 2011. I wanted to know what really is the weightage given to research tabs. If I can’t find the correct research, it can mean a lot of collateral damage. U know I mean?

According to the AICPA, task-based simulation problems (TBS) make up 40% of your score in FAR, AUD and REG. Of your seven simulation problems in AUD and FAR and six in REG, one of these for each section is pretest, meaning it does not count towards your score.

The AICPA does not differentiate research from other simulation problems in the 2011 exam, so it should be assumed that each simlet is worth the same amount of points. Because we are unable to determine just how many points are allocated to each TBS, the best we can say is that with the new exam format, you must do moderately well in the simulation part of your exam to pass. The exam is on a plus-point basis and a passing score is not a percent correct, so it would be difficult to determine the actual number of points each TBS is worth.

But we can guess that if TBS problems make up 40% of your score and, in AUD, there are seven of these problems, each one is worth about 6 1/2% of your score (since one is not counted). Do with that information what you will.

In previous incarnations of the exam, candidates could blow an entire simulation (of two) and still pass fairly easily, as long as they did fairly well on the MCQ portion. For the new exam, however, this is fairly impossible since TBS problems are now smaller but more heavily-weighted.

Long story short, treat research problems like they are operational and worth just as much as your other simulations since they are. Don’t forget to take advantage of six months free access to the professional literature so you can practice research ahead of your next exam.

In your case, you probably did pretty well on the MCQ and your other simulation problems or fairly well across the board and actually got the research questions you thought you got wrong. Don’t question it, celebrate it and know you’re that much closer to your CPA. Congrats!

Bureau of Engraving and Printing’s iPhone App For the Blind Seems a Bit Heartless

I know what you’re thinking, what blind person has an iPhone? We thought the same thing when we read this. According to the Bureau of Engraving and Printing, at least 100,000 of them do. Regardless of the believability of that number, we all deserve the right to count our money.

The Bureau of Engraving and Printing (BEP) has developed a free downloadable application (app) to assist the blind and visually impaired denominate US currency. The app is called EyeNote™. EyeNote™ is a mobile device app designed for Apple iPhone (3G, 3Gs, 4), and the 4th Generation iPod Touch and iPad2 platforms, and is available starting today through the Apple iTunes App Store.

EyeNote™ uses image recognition technology to determine a note’s denomination. The mobile device’s camera requires 51 percent of a note’s scanned image, front or back, to process. In a matter of seconds, EyeNote™ can provide an audible or vibrating response, and can denominate all Federal Reserve notes issued since 1996. Free downloads will be available whenever new US currency designs are introduced. Research indicates that more than 100,000 blind and visually impaired individuals currently own an Apple iPhone.

Wait a second, I know adults with perfect visual acuity that cannot work a touchscreen (I bet a lot of them work in your office), how on Earth would a blind person be able to do this?

If you’ve been accused of being fucking blind lately, you can give the free app a spin via iTunes. For the target audience, however, we have some concerns about the practical application and, more specifically, WTF the BEP was thinking.

SEC Warns of Pre-IPO Investment Scams

The SEC seems awfully interested in social media these days, and we assume it has little to do with Caleb’s obnoxious Whole Foods foursquare check-ins. Their latest nemesis? Pre-IPO investment scams purporting to be offering shares in hot non-public companies like Twitter, Facebook and Groupon.

SEC staff is aware of a number of complaints and inquiries about these types of pre-IPO investment scams, which may be promoted on social media and Internet sites, by telephone, email, in person, or by other means.

In September 2010, a judgment order was entered in favor of the SEC based on allegations that a scam artist had misappropriated more than $3.7 million from 45 investors in four states by offering fake pre-IPO shares of companies, including Centerpoint, AOL/Time Warner, Inc., Google, Inc., Facebook, Inc., and Rosetta Stone, Inc. In addition, the Financial Industry Regulatory Authority (FINRA) issued a recent investor alert about these types of scams. While offerings of pre-IPO shares in a company are not uncommon, unregistered offerings may violate federal securities laws unless they meet a registration exemption, such as restricting the private offering to “accredited investors” — investors who meet certain income or net worth requirements.

Investors should be mindful of the risks involved with an offer to purchase pre-IPO shares in a company. As with any investment, we encourage investors to research thoroughly both the investment product and the professional offering the product before making any investment decision.

Since AOL/Time Warner went public in 2006, we have to assume the scam artist referenced above had been at this for quite some time before the SEC was finally able to bring down the heavy hand of justice on dat ass.

If you’re interested in further reading on the subject, check out FINRA’s Pre-IPO Offerings—These Scammers Are Not Your Friends:

In general, offerings of securities must either be registered with the SEC or meet an exemption under the federal securities laws—otherwise the offering is not legal. “Pre-IPO” speculation involves buying unregistered shares in a private company before the initial public offering of securities—and it can range from risky deals to outright frauds.

Wait, does this have anything to do with that whole Goldman Sachs Facebook embarrassment?

Beware emails from Nigerian princes selling pre-IPO shares in hot tech companies, people.

Robert Half Offers New Rules for the Digital Age

Some business etiquette rules in this day and age are common sense (which we hope most of you have at least a little of): tweet as if your boss is watching, don’t threaten to stab your senior on Facebook (especially if said senior is in your friends list), and don’t leave a miserable trail of bad behavior behind on your company laptop when you leave the company.

For everything else that isn’t so clear, Robert Half offers Business Etiquette: The New Rules in a Digital Age, tips and tricks for polishing up your online persona. Here are a few sticky etiquette questions and answers to whet your palate:

Can Facebook postings hurt my job search?

A good rule of thumb is to always post prudently: If you don’t want your employer to see it, get rid of it. A recent survey by our firm revealed that 44 percent of executives review the Facebook presence of potential hires. Even if your account is just for fun, keep it in check. To put your Facebook on a privacy lockdown, click on the drop-down “Account” menu in the top right corner and select “Privacy Settings.” Keep in mind that Facebook may change its privacy features at any time, and you might not be aware of the changes when they occur. Always assume that anything you post online may become public.

Should I friend my boss or coworkers?

This is the $64,000 question, and the feelings of those on the receiving end may provide the answer. (See “Thinking About ‘Friending’ Your Boss on Facebook?” on Page 10 of Business Etiquette: The New Rules in a Digital Age.) If you do connect, utilize privacy settings and different friend lists to control how — and with whom — you share content. Be sensitive to your professional environment: some industries or companies are much more engaged in digital networking than others. If you’re starting a new job, take your cue from others before sending out “friend” requests to your new colleagues.

How responsive should I be to e-mail when I’m on vacation?

It depends on whether you want to have a real vacation. If your “Out of Office” says you’re not checking e-mail on vacation, don’t check and respond to messages. Doing so changes expectations and implies you’re more accessible than you said you’d be. Instead, be considerate to others’ needs while you are out and list a back-up contact in your Out of Office auto response.

We especially like that last one. Remember, being professional isn’t the same as being a bitch, and you are allowed to set reasonable boundaries without giving your partners a stroke while they fume over those damn incorrigible Gen Y kids taking over the office. And if anyone tells you differently, you send them our way and we’ll set them straight.

You can download Business Etiquette: The New Rules in a Digital Age via Robert Half.

Everything You Thought You Knew About How the CPA Exam is Scored is Wrong

I’m 97% sure most CPA exam candidates are confused by the CPA exam’s psychometric scoring, either because it is supposed to be that way or they haven’t done their research. Either way, I once again got the chance to speak with John Mattar, Ed.D., Director of Psychometrics and Research and Mike Decker, Director of Operations and Development, both of the AICPA’s examinations unit. This time we focused on how the CPA exam is scored. Remember that most of this information is already available on the AICPA’s website, check out How the CPA Exam is Scored and the Psychometrics and Scoring section for more detailed, less sarcastic information than what you might find here. That being said, we appreciate John and Mike taking time to humor us anyway.


Of course, no discussion about how the exam is scored would be complete without rehashing last quarter’s somewhat tardy score release issue. John and Mike compared it to buying a new car but driving home in your old car, meaning scoring is going to be a broke down Toyota Tercel for just two more quarters but if you all can be patient, you’ll be spinning around town in that shiny new Lexus by December. “We’re doing everything we can to administer a quality exam, including communicating with candidates,” Mike told us. They also let us know that they will be using NASBA to push out timely information to candidates in the quarters ahead. See? Told you they were listening to candidates’ scoring concerns.

When talking about how the CPA exam is scored, it’s important to remember that candidates take different but equivalent exams. “It’s not possible to say what each testlet is worth because everyone is taking different exams,” said John. That being said, we did manage to get them to tell us that, contrary to popular belief, candidates are not compared to each other when they are scored. How do we know? While we still don’t know how many points each question is worth, John told us “we can say with 100% assurance if two different candidates get the same question, they will both get the same amount of points or credit for getting that question right.” This whole exam scoring thing is feeling less and less insidious by the minute, isn’t it?

For the final time: the CPA exam is not graded on a curve, nor are you compared to everyone who did better than you, nor are you compared to everyone who showed up to Prometric that day or week or month. “The way the exam is scored, candidates are compared to a fixed ability level. They are not compared to each other. If in the next window candidates maybe aren’t as well-prepared, fewer people will pass. They are being compared to a fixed level of ability,” John told us. Twice. Just to make sure we all got it. Got it? Let’s go over it one more time (from the Scoring FAQs):

The CPA Examination is NOT curved. Every candidate’s score is entirely independent of other candidates’ Examination results.

The CPA Examination is a criterion-referenced examination which means that it rests upon pre-determined standards. Every candidate’s performance is measured against established standards to determine whether the candidate has demonstrated the level of knowledge and skills that is represented by the passing score. Every candidate is judged against the same standards, and every score is an independent result.

Are we clear on that? Awesome, moving on…

Pretest questions make up fifteen MCQ in AUD/FAR and twelve in REG/BEC, one task-based simulation in FAR, AUD and REG and one written communication in BEC. The problem with gaming this system is that you can’t, since you have no way of knowing which questions are pretest and which are operational. So just guess equally on all of them as if every single one counts, mmmkay? Pretest questions will resemble operational questions since they are testing whatever is in the Content Specification Outline, meaning IFRS wasn’t tested on a pretest basis last year. What this means for candidates is that nothing outside of the CSOs will EVER be pretested. Maybe not a life-changing piece of information but really useful to know if you are prone to asking “what should I be studying?” and are familiar with the CSOs.

So what’s with the score report you get when you fail that compares you to those who scored between 75 and 80 in that window? Why not compare you to the CPA exam superstars who pulled down 99s without breaking a sweat?

“If you compared [failing candidates] to people that got all the way up to 99, it’s not as useful,” John said. “We want the basis of comparison that is going to be the most meaningful to the people who failed and that group is those that got closest to passing. If I got a 62 and the comparison group includes all the people who got above 90, that isn’t going to help me as much. Most of the people who pass are between 75 – 80.”

While we appreciate the AICPA taking the time to speak with us, we feel it’s important to point out that, at the end of the day, they are the best source of information for candidates. Answers to most of your questions can be found on their website. If you’re having trouble finding something or have a specific question related to the CPA exam, get in touch and we’ll do our best to do the Googling on your behalf.

If the Federal Government Were a Business, It Would Be WorldCom

Deroy Murdock seems to feel that the government should revisit its accounting practices since it appears government accounting is little more than legal fraud. Obviously he has absolutely no idea how accounting really works or he’d call the entire thing fraudulent (I mean, let’s be real, it is and everyone knows it), so let’s humor his opinion for a moment and consider government accounting.

Rep. John Shimkus (R., Ill.) grilled Health and Human Services secretary Kathleen Sebelius about this before the House Energy and Commerce Subcommittee on Health. He wondered how, in essence, the Obama administration could move $500 billion from its left pocket (Medicare) to its far-left pocket (Obamacare) and somehow finance $1 trillion worth of Medicare and Obamacare.

“Your law cuts $500 billion in Medicare,” Shimkus reminded Sebelius at a March 3 hearing. “Then you’re also using the same $500 billion to say you’re funding health-care [reform]. Your own actuary says you can’t do both.”

“So,” the eight-term congressman continued, “are you using it [the $500 billion] to save Medicare, or are you using it to fund health-care reform? Which one?”

Secretary Sebelius confessed: “Both.”

“So, you’re double-counting,” Shimkus replied.

“The same dollar can’t be used twice,” observed Health Subcommittee chairman Rep. Joe Pitts (R., Pa.). “This is the largest of the many budget gimmicks Democrats used to claim Obamacare would reduce the deficit.”

As any college business major knows, such double counting would earn a big, fat F on an accounting final. Far worse, this is illegal.

Obviously Joe Pitts is not at all familiar with how accounting works. The funny part, as Murdock points out, is that the SEC does not consider non-GAAP financial statements to be anything but misleading and inaccurate. It’s a good thing the federal government won’t be trying to file an IPO any time soon.

Peep Title 17, Part 210 of the Code of Federal Regulations:

Financial statements filed with the Commission which are not prepared in accordance with generally accepted accounting principles will be presumed to be misleading or inaccurate.

Question: is there a particular reason “generally accepted accounting principles” is not capitalized? Because GAAP and gaap are two different things, one of which is a set of rules (not principles, no matter what James Kroeker may believe) while the other is basically a bunch of bullshit that we call “accounting” and agree is OK. Sort of like Don’t Ask Don’t Tell for financial statements.