Footnotes: Chinese Accounting Scandals Are Old Hat; Kentucky Gov Wants Some Action; Obama’s Indifference for Tax Reform | 02.07.13

Posted on by Caleb Newquist

Chinese Accounting Scandals. Simple Is As Simple Does. These sort of accounting cheats are not by any means peculiar to China.  They are cheats that have been employed again and again all around the world.  Yes, Virginia, even in the United States.  There is nothing new here because when it comes to fraud, there is rarely anything new under the sun.  I doubt there is an auditor with even two months of experience at any big accounting firm who has not already been trained to look out for every single one of them. [China Law Blog]

Kentucky Governor Steve Beshear tells lawmakers state needs tax reform [AP]

Liberals introduce bill to end tax deferral on foreign income [The Hill]

More Than an Obstacle to Tax Reform Up until now, I’ve given the President the benefit of the doubt about reforming our broken tax system. I just didn't think tax reform was a big issue for his administraiton. That certainly is an obstacle to tax reform. But now I’m beginning to think he doesn’t care about tax policy at all. [Christopher Bergin]

Crime novelist Patricia Cornwell takes the stand in suit against former accounting firm Best-selling crime novelist Patricia Cornwell testified Friday she was never aware her former financial management firm had invested her money in an “aggressive growth” fund against her wishes and that her signature on a financial document had been forged. Cornwell, taking the stand for the first time in her federal lawsuit against the firm and its former principal, said she had told Evan Snapper and his colleagues at Anchin, Block & Anchin that she was earning enough money and wanted to invest conservatively. But she told the jury she later discovered Anchin had invested some of her fortune in riskier ventures. [BG]

DCJ goes after the pharm companies using "legal restructurings" to move profits offshore. [TA]

You Will Spend $22,000 on Gas Over Your Car's Lifespan [MoJo]

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An Argument for Techie Accountants

My one piece of advice for the next generation of accountants right now is, enroll in some Computer Science courses. Learn to code. Learn how to manage a small server farm. Learn APIs, SQL, HTML5, JAVA, etc.

Drop that Poli-sci course right now.

Technicalntant’s best friend nowadays. It should be self-evident as to why. Data. Data. Data.

My first accounting gig was in a tax firm. We had an old mainframe crunching numbers and all the programming was in COBOL. In industry, reports would have all been generating output as text files; but who cares, there’s no ‘export to file’ function anyways.


Actually, that’s a good test. If you want to know whether your current software vendor is investing in the future of their product, look at the file output from your reports. If they come out as text files (you open Excel and each line of output is just one cell), this means the reporting architecture is really, really old.

It’s kind of like when you and your friends one-time go for an afternoon horseback ride. Inevitably, one person gets plunked on the beatest, tired old nag you ever seen. Yeah, technically she still rides but she ain’t even long in the tooth. All the teeth, they fell out.

Consider it the carbon dating of your accounting system.

You see, just because there has been consolidation in the ownership of companies in the enterprise software space does not mean the units have consolidated their products. Most units (purchased or raised) continue to operate independently. Revenues are generated from new sales obviously; but equally important, from a big, juicy installed base of maintenance contracts within the business units. You know that. And it’s fine. The amount of new investment in the product however, would be a corporate management decision from head office. Some products are the equivalent of that tired old nag.

Back to the point on technical skills though. Unlike back in the day, technology is no longer just auxiliary to what we do. It’s central and 100% pervasive. A commenter last week summed it up really well when I talked about the accounting tools:

“Three letters for you bitches, S to the Q to the mofo L.”

Getting a bit more techie will help you appreciate the humor in this quote. It’ll also help you recognize the tired old nag before you saddle up and ride.

In practice, normally we’re simply subject to whatever system happens to be installed. You deal with it, right? And that’s fine too. Recognition goes hand in hand with acceptance.

The reports kick out to Excel in text files; you find the delimiters, execute a ‘text-to-columns’ command, split up what you can and do your reporting. In the past, I’ve also had to occasionally create an Excel formula for pulling out text that’s really buried using the LEFT, RIGHT, functions. Then, I write a macro to automate as much as possible. Poor tired old nag.

Technology and data are just like riding a horse. With the correct instruction, you can get the horse to do what you want. But you’ll always be limited by what the horse is physically able to do.

If you don’t know anything about horses, this analogy might not make much sense at all. Which, I would say, just proves my initial point. Learn your technical skills now while you’re still in school. Leave all the fluffy horsebackriding and philosophy courses to the guys who’ll be serving you coffee after graduation.

In my view, technology skills are just as important for accountants as debits and credits. You may or may not like it, but it’s time to see how the dog food is made.

Enjoy.

Old farm adage: “If you’re going to have livestock,… you’re going to have deadstock.”

Geoff Devereux as been active in Vancouver’s technology start-up community for the past 5 years. Prior to getting lured into tech start-ups, Geoff worked in various fields including a 5 year stint in a tax accounting firm. You can see more of his posts for GC here.