When accounting goes unaccounted for
From the mailbag:
I have been working as a Accounts Payable for 3 years. I don’t want to waste your time of explaining my disadvantages. One of my advantages is money. I have a large savings. I would like to give $30,000 to anyone who get me a job in Big 4. I am not talking about [a] bribe. I wish to know how to use advantages [sic].
Just don’t sit there, give the man some suggestions. All options are on the table. Bonus points for creativity.
Actually it’s about half of CFOs with that attitude, according to Grant Thornton’s latest survey. They’re ballparking it around 5-7 years while nearly a quarter of the responders think we need to get on this ASAP.
Stephen Chipman, is keeping the faith even though, people aren’t as enthusiastic as he:
“While there is movement toward greater acceptance of International Financial Reporting Standards based on our previous surveys, it is clear that there is still much work to be done in educating the U.S. financial community on the benefits of IFRS,” said Grant Thornton LLP CEO Stephen Chipman.
“We have been, and continue to be, staunch supporters of the ongoing movement toward one set of high-quality, globally accepted accounting standards. As dynamic businesses continue to expand their international footprint, it is increasingly sub-optimal to be using different reporting standards, which sometimes increase costs while decreasing comparability. Just as international business has benefited over the last 30-odd years from the increased shared use of English, so too will global companies reap the benefits of one financial reporting language.”
Shocking development out of Pakistan as an accountant has died from a heart attack after allegations of corruption were brought against him. Judging by the complete omission of anything to the contrary, a predator drone does not appear to be involved in any way shape or form.
An accountant of a school in Pakistan’s Multan city suffered a heart attack and died after the teaching staff levelled corruption allegations against him and the principal.
Ehsan Ghauri, chief accountant of the Multan Public School, died Monday following a heart attack after the teaching staff, during a protest demonstration, charged him and the principal with corruption, Dawn reported Tuesday.
The presumed next Majority Leader in the House has gone on the record (with Fox News no less) that any pragmatism on the President’s part will be slapped away like a homeless vet’s outstretched hand:
The Obama administration’s hopes of reaching a tax deal with Republicans that would decouple rates on the rich from the middle class appear dead.
House GOP Whip Eric Cantor (Va.) threw cold water on the proposed plan, which would temporarily extend tax cuts for the wealthy while permanently extending tax cuts for the middle class. “Taxes shouldn’t be going up on anybody right now,” Cantor said.
So, in other words President Obama, you can take any of this “compromise” talk and stick it in your tea because that’s what was mandated by the people:
“This election … was really the American people saying they are tired of the lack of results in Washington,” he said. “They want to see more jobs for more Americans. They want to see us … cut government spending, rein in the size of government so we can get this economy growing again. That was the prescription, that was the mandate that came from the people.”
So a fair amount of ellipsises there, so maybe he’s not exactly sure what he’s saying but Cantor is a fool if he thinks that “cutting government spending” and” reining in the size of government” is not part of the GOP agenda despite what Paul Ryan writes in the Financial Times.
Security Agency spending seems to be a pretty big piece of the shopping spree; doesn’t it make sense to start there? If not, are we going to continue buying predator drones on the credit card and cut education again since raising taxes is absolutely out of the question?
Cantor, Republicans signal Obama tax proposal is dead in the water [The Briefing Room/The Hill]
It was just last week that Victor the Spartan was on the hunt for Lauren, an accountant addicted to love (presumably in the Robert Palmer sense).
The picture at right represented Victor’s preferred method of stalking tracking down Lauren.
And despite the odds and the skeptics, the Spartan has reported that the hunt was a success:
Found her! We have not had a chance to get together but I am excited for it to happen. You always have to try if you want something. I’m glad i did.
Now, we’d like to think we were partially responsible for this happening but there’s no indication that is the case. Anyway, best of luck and all that. We’re sure this just the beginning of a great love story that will become a best seller – “Accountants like double entry” – or something.
In the Old Empire, if you’re busted driving over 100 mph, you’re supposed to lose your license. Apparently there is an unwritten exception to this rule that says if you’re soon-to-be married and the bride WILL NOT STAND FOR IT, you get a pass.
Exhibit A: Christopher Bidgood, 32 an accountant from “Martham near Great Yarmouth” was stopped after going 110 and “weaving in and out of traffic.” Not the first time he had a run-in over his lead foot:
Bidgood of Martham near Great Yarmouth had faced a driving ban of up to 56 days after he admitted breaking the 70mph limit at 7.47pm on September 3.
Right, then. Bidgood’s attorney, knowing full well that his client is dumber than a sack of hammers, pulled the only card he thought he could play:
Tim Carey, defending, said Bidgood, had already faced the “displeasure” of his bride Amanda due to the risk of a ban ruining their honeymoon.
Describing his client’s behaviour behind the wheel, Mr Carey told the bench: “Sir, he has been a complete idiot – an idiot of the first order.”
But a “hardworking and honest” idiot, according to his co-workers, which may have helped his case as well.
Six years and everyone pretty much has this down. Arthur Andersen (the man, not the firm) would be so proud.
Just don’t get lazy.
In the sixth year of compliance with Sarbanes-Oxley Section 404 requirements, companies with a public float greater than $75 million reduced their rate of adverse opinions from 5 percent in the fifth year to only 2.4 percent in the most recent year. Even if companies that have missed their filing deadlines turn in adverse opinions, it would bump the rate to only 2.8 percent, said Don Whalen, director of research for Audit Analytics.
Over the six reporting years that public companies have been filing the reports, adverse opinions have steadily fallen from a high of 16.9 percent for fiscal years ending after Nov. 15, 2004, to the current low of 2.4 percent, said Whalen. “It’s getting to the point where you wonder if it can even be reduced any more,” he said.
The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.
We all have to lie from time to time as we go through life. Sometimes it’s to protect ourselves, sometimes to protect others. We even grade them – the fib, white lie, the lie of concealment, the misleading lie, and the business lie.
Does the lie have a place in life, or should we all be absolutely hones l the time, about everything? I feel sure we could spend many hours debating the pros and cons of lying including many moral issues.
There are in fact a number of good reasons why we have to lie. To tell the truth might be unnecessarily hurtful. Telling the white lie, when you decide to tell a colleague how good they look when they return to the office having spent a small fortune on clothes or a new hairstyle is probably the right thing to do. Spoiling someone’s day unnecessarily is difficult to justify. It is also worth bearing in mind that it is just your opinion. Everyone else may disagree with you.
Lying in business is another matter
In business it is a matter of day-to-day necessity to lie or conceal a wide variety of issues. In certain cases to tell the truth might even be illegal. For example, when one company is having secret talks to purchase another, the stock market price of their shares could be affected if they told other people in advance of the acquisition. If asked a direct question relating to a potential acquisition and they had answered it honestly, they may have given someone the opportunity to purchase stocks in advance and make money from the information, thus breaking the law with regard to insider trading.
In deciding to lie to someone, we try to convince them of the accuracy of the information by reinforcing the statements with body language signals.
Look me in the eye
One of the most obvious mistakes is deliberately looking someone straight in the eye when lying. The origins of this emanate from the challenging statement we heard as children “look me in the eye and tell me that you know nothing about what happened.” This might be accurate with children, teenagers, and young adults as they do tend to look down or away when concealing the truth. In order to counteract this they are advised to look people in the eye to prove the truth of their words.
As we get older we believe that looking people in the eye when lying will help us look more convincing. We compound the mistake by staring without blinking and adopting a solid posture whilst the statement is being said.
Even though they are not sure why, it tends to give the game away to the majority of people because instinct tells us that something is wrong and we become suspicious about what we are hearing. We don’t know what it is, but we just know it feels wrong.
Constricting pupils
There is also the issue of the eyes. You may be the best liar in the world, but you cannot prevent your eyes constricting when you lie. A good negotiator will always make best use of the light, so he can see your eyes but you can’t see his!
A few things to bear in mind
1. Don’t look directly into the pupils of the person you’re lying to, look at the whole face.
2. Maintain eye contact for 75% of the time (the average for most people).
3. Be aware that the voice usually goes flat when you are lying. In trying to lie convincingly we control pitch and resonance, believing it will sound more convincing. Often, each word is clipped in an attempt to be precise. Changes in the voice coupled with a look directly into the eyes will cause doubt.
4. Next is body posture, whether standing or sitting.
In an effort to conceal the truth when a lie is being told the body generally becomes more solid or rigid. This is made more difficult because only you know what your body language is like when you tell the truth and you must make sure you don’t change it when lying. If you are an animated person who looks at people 75% of the time, then don’t alter your habits, do not increase the eye stare, or reduce body movement or sound firmer with your words. People will not always be sure you are lying, but they can tell something has changed.
Another difficult area to control when lying is the hands. Some people fidget with their hands and arms (especially when caught off guard with a question they did not expect.) One second the hands are in pockets and then out and this may get repeated several times.
Blushing and nose blushing
The skin gets warmer when someone is feeling awkward. This is because blood vessels in and around the nose and face are irritated when you exaggerate or lie. The only way to make the irritation to go away is to rub or lightly touch the tingling and offending areas of the face.
We have carried out a number of body language experiments in this area and discovered that 90% of those observing hand-to-face contact thought that something was wrong and they became cautious of what was being said. To anyone who understands body language it is a giveaway. Therefore if you cannot learn to leave the offending areas alone, stick to telling the truth.
Who are the best liars?
Politicians have to be good at lying because journalists will never stop asking awkward questions that will give them tomorrow’s headline. Unlike many of us, they have learned to adapt. By giving a much longer answer and explanation than necessary, a politician telling the lie avoids being asked a follow up question and hopes the reporter has either forgotten his original question or gives up.
One of the contracts I have is to analyse public figures and I sometimes have to spend weeks or months studying before I can be sure of a politician’s gestures that tell if they are concealing the truth.
About the author:
Peter Clayton is a leading body language expert, speaker, and trainer as well as a consultant for the BBC and ITV. He writes for a wide range of national papers and magazines and is a specialist consultant to other speakers, leading businesses, celebrities and politicians. For more information, visit his Web site: www.peterclayton.com.
Share your thoughts on this topic in the General Business forum on our sister site, USBusinessForums.
This article originally appeared on our sister Web site, AccountingWEB.co.uk.
Riddle me this, oh wise Going Concern readers – Forbes’s list du jour is America’s Largest Private Companies and its Top 10 has two familiar names: PwC and Ernst & Young but Deloitte and KPMG are nowhere to be found.
Here’s a rundown of companies, their revenues in billions and # of employees:
1. Cargill – $109.84, 130k
2. Koch – 100.00, 70k
3. Bechtel – $30.8, 49k
4. HCA – 30.05, 190k
5. Mars – 28, 65k
6. Chrysler – 27.90, 41.2k
7. PwC – 26.57, 161k
8. Publix – 24.32, 142k
9. E&Y – 21.26, 141k
10. C&S – 20.4, 16.6k
Just for the sake of not opening a bigger canner of worms we’ll ignore the enormous drop in revenues from #2 to #3.
Both firms have over $20 billion in revenues – Deloitte’s the biggest of the Big 4 for crissakes – so that puts them in the top ten easily, yet they’re completely MIA.
If you look at the methodology, you’ll find that both firms should easily qualify to make the list:
In addition to our $2 billion revenue requirement, the companies on our list have either too few shareholders to be required to file financial statements with the Securities and Exchange Commission, or have shares whose ownership is restricted to some group, such as employees or family members. We exclude foreign companies, companies that don’t pay income tax (like Mohegan Tribal Gaming Authority), mutually owned companies (like State Farm Insurance), cooperatives ( like Central Grocers), companies with fewer than 100 employees, and companies that are more than 50% owned by another public, private or foreign company. We also leave out companies whose primary business is auto dealerships or real estate investment and/or management.
If you take a hard line here, “companies that don’t pay income tax” should probably disqualify all the firms but obviously Forbes made at least two exceptions. As for the rest of requirements, nothing really jumps out so it’s anyone’s guess.
Perhaps Deloitte and KPMG just got their applications in late? Maybe they were “meh” on the whole list? Maybe they don’t support the flat tax so Teve Torbes just said “To hell with them.” ? The editors for the piece don’t have emails included in their bios but we’re pretty curious as to how this whole thing came together, so please get in touch.
Theories (DWB is going with “because they both suck”) on the alleged oversight/snub are welcome.
The final Congressional race featuring an accountant is in Virginia’s 11th District where KPMG alum Keith Fimian trails incumbent Gerry Connolly by less than half a point:
Challenger Keith Fimian was able to pick up votes on incumbent Gerry Connolly as a result, but not enough to make a significant dent in Connolly’s lead. There are still approximately 250 provisional ballots to be counted.
As of 1:30 p.m., the vote in the 11th District as a whole is:
Connolly: 111,630 (49.21%)
Fimian: 110, 700 (48.80%)
Fimian has to request the recount and has until November 22nd when the election becomes official. Because the margin is less half a percentage point, the recount would be paid for by Virginia (i.e. the taxpayers). No pressure, Keith. You best sleep on it for a day or two.
Filed under: more mess to directly blame on the fall of Lehman Brothers and Uncle Ernie’s epic failure
FASB is being awfully kind to those who played a large part in that whole total financial meltdown issue by avoiding actual name-dropping in their latest exposure draft but we don’t need names to know who they are talking about. *coughLehmancough* Here’s the note from FASB yesterday:
The Financial Accounting Standards Board (FASB) issued an Exposure Draft (ED) today to solicit input from stakeholders on its proposal to improve the accounting for repurchase agreements (repos) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The FASB requests comments on this ED by January 15, 2011.
“During the global economic crisis, concerns were expressed about a narrow aspect of existing guidance for determining whether a repo should be accounted for as a sale or as a secured borrowing,” notes FASB Acting Chairman Leslie F. Seidman. “The proposals contained in this Exposure Draft seek to address these concerns by simplifying this guidance.”
You hear that? You’ve got until January 15th to draw up your fantastic comment letters (please don’t disappoint us, we haven’t seen a good comment letter since North Carolina State Employees’ Credit Union President James Blaine said of mark-to-market: “Theoretically arrogant; in practice insane; financially negligent and reckless. Other than that, I have no concerns.”) on this new repo accounting proposal.
Once again, FASB wants the input of the worker grunts to find out A) what the plan is and B) how they should go about implementing it.
Seeing as how comment letters are a hallmark of our fantastically cooperative profession maybe FASB is going about this the wrong way. After all, it would be the investors who relied on incorrect information on Lehman’s financial condition based on creative repo accounting (mind you, “creative” and “fraudulent” are not the same thing) who are most impacted by current rules and any changes, not the accountants putting together the financial statements. Surely they would know better than to rely on their own financial information.
If you are unfamiliar with the joys of repo accounting FASB has offered a quick primer:
In a typical repo transaction, an entity transfers financial assets to a counterparty in exchange for cash with an agreement for the counterparty to return the same or equivalent financial assets for a fixed price in the future. Topic 860, Transfers and Servicing, prescribes when an entity may or may not recognize a sale upon the transfer of financial assets subject to repo agreements. That determination is based, in part, on whether the entity has maintained effective control over the transferred financial assets.
The amendments in this proposed Update are intended to simplify the accounting for these transactions by removing from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets, as well as implementation guidance related to that criterion.
Clarification is always nice, I guess, but paint me skeptical, I don’t see additional guidance doing much for closing the giant gaping loophole that Lehman drove a truck through on its way right off the cliff.
~ Update includes the spartan’s response to our request for comment.
No. Seriously.
Reportedly at LaSalle and Erie in Chicago. Yes, we’ve emailed Victor. No, we haven’t heard back.
Sayeth Vic:
Thank you for your help Caleb! Its just amazing how many people are pitching in to help find one person. Everyone except for the one person who left a comment on your site (even though it was kind of funny). If you hear anything on the interwebs about this girl let me know! I’m thinking there is a 50/50 chance she has seen this and is highly unimpressed. Oh well you have to try.
Unimpressed? Hardly dude. It’s fate (or something).
[via @retheauditors]