Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    Another Call for Stumpf to Resign

    Friday Sept  23, 2016

    A A Marketwatch commentator calls for Stumpf to resign.

    We know that maximum social mood occurs in the final stages of a move. And we know that herding contributes to this.

    This is how so many manias end with a parabolic move up, as in the dot.com craze of 1998-2000. Then the NASD moved 3,500 of it 5,000 points form 1982 in the last two years of a 18 eyar bull market.

    We see the same thing in market bottoms as when oil recently fell to $28 from $110.

    The same thing is happening to Mr. Stumpf.  Just a few years back WFC was held as an example of how to survive a banking crisis. Now WFC IS the banking crisis.

    We will be examining the number of articles run calling for his resignation.I am guessing graphically speaking, it is going parabolic to the upside right about now.

  • Professor Elam

    Greenspan Would Repeal Dodd Frank

    Thursday Sept  22, 2016

    Greenspan would repeal Dodd Frank

    “What Dodd-Frank has left us with is a system in which contagious default can still occur, and if that is in fact still the case, it’s done nothing,” he said. “But if you have a high enough ratio of equity to assets, there is no way you get contagious defaults.”

    He is of course correct but without a Republican White House and even then perhaps  a pick up in the Senate I don't see this happening.

  • Professor Elam

    Stumpf Taken Aback

    Thursday Sept  22, 2016

    WFC CEO Stumpf was taken aback by the ferocity of attacks and questions at his hearing.

    Big Bucks CEOs, accustomed to never being questions about anything of course, are usually stunned at outrage. And in this instance it came from both parties, a rare time of agreement.

    Apparently the highest the firing got was to someone making $65K. As the Senators remarked, not high enough!

    The problem here is that the CEO simply cannot comprehend what the fuss is all about. This is exactly how the fraud unfolded. He wanted more credit cards so by golly the serfs issued more cards.

    This is rather like the Jack Nicholson Colonel  in A Few Good Men who is stunned that he was arrested for ordering  a Code Red attack on one of his Marines.

  • Professor Elam

    Words Don’t Lie But People Do

    Thursday Sept 22, 2016

    Three TAMUSA students officially joined the IIA and attended Wednesday Sept 21 CPE presentation of Words Don't Lie bu People Do, Interview Essentials Through Linguistic Lie Detection.

    National expert Nejolla Korris made a day long presentation on how to detect lies using analytic techniques. Did the person refer to

    my Wife Maria

    My Wife

    that woman I am married to

    see the difference of degree?

    DSCF1735 DSCF1736

     As you can see Nejolla easily engaged the SA II A group.

     

     

     

     

     

     

     

     

    Here Renita visits with an HEB internal auditor. DSCF1729

     

     

     

     

     

     

     

     

    DSCF1738Jennifer Dirks and           were likewise engaged with auditors from the NE ISD.

     

     

     

     

     

     

     

     

    It was a packed house with some 190 internal auditors in attendance. DSCF1730

  • Professor Elam

    A Financial Service Advisor Calls for Stumpf’s Exit

    Thursday Sept 22, 2016

    We have been following the Wells Fargo scandal. I wondered aloud in class where the Board or the Audit Committee was as this went on.

    This advisor suggests Stumpf will be gone in a week.

    Yes there are lots of scandals throughout Wall Street history. But now a depositor is not safe inside the bank he or she chose. As he says, that is wrong.

    It would certainly send a message if the entire Board, appointed by Stumpf, got the boot along with him The bank may be TBTF but that should nto be a lifetime employment contract for the CEO and the Board.

  • Professor Elam

    Meet Carman Blough, 1937

    Sept 20 2016

    Carman Blough was the first Chief Accountant of the SEC. Read his interesting remarks about the accounting reports of that day.

    Blough was instrumental in urging the AICPA to form the Committee on Accounting Procedure. This was  the first standard setting accounting board.

  • Professor Elam

    Internal Control

    Tuesday Sept 20 2016

    We study internal control in Spiceland's Chapter Seven on Cash and in Whittington's Audit Text.

    Adra is a company that furnishes software to support the IC function.

    Sure this is an ad to promote their product but also a good summary of what is involved.

    RGP on the 2013 COSO Framework

    WHo is hte committee of Sponsoring Organization of the Treadway Commission?

    These links provide more insight into the  2013 COSO Framework.

     

     

  • Professor Elam

    Stumpf Blames and Fires Staff for Trying to Keep Jobs, Menendez labels actions Despicable

    Tuesday Sept  20 2016

    As expected, sparks are flying at the Senate Hearing on WFC Scandal

    "I am personally appalled by the size, the scope, the duration and the impact of the scandal, and I must say that I'm shocked and incredibly disappointed by the response of Wells Fargo's corporate executives," the New Jersey Democrat told CEO John Stumpf .

    "In the last week you and your chief financial officer have taken to the press and laid the blame squarely on low-paid retail bank employees, and while I don't excuse what they did by any stretch of the imagination, I find that despicable."

    As I suggested in class, no doubt CEO Stumpf is 'lawyered up' and really, do you think he fears anything more than this photo op of righteous indignation?  Justice is supposedly looking at the case but will this just blow over in a month or two? Confident that Congress will not move to break up his bank, no doubt he will retreat to Too Big to Fail Nirvana. Will the Board claw back any of Tolstedt's $95 M in stock options?

    What does this say about the tone at the top of WFC?

     

  • Professor Elam

    Meet Carrie Tolstedt

    Tuesday Sept 20, 2016

    Carrie Tolstedt has worked at WFC for 27 years. She is known as a micro manager. So how could she not know employees at WFC were creating unrequested cards and accounts for customers?

    IN audit class yesterday we learned of one student who discovered this had happened to her account.

    Another student said she left the employ of WFC because of cross selling demands. The ethical tone of company comes from the top. Yet CEO Stumpf who will testify today, says he is acountable. But it was the minor league employees who got the pink slips.

    We continue to follow this controversy.

  • Professor Elam

    Exxon Asset Values Still in the News

    Monday Sept 19, 2016

    So really what are your reserves worth?

    In a world where the price of oil can lose over 70% of its value  in a few months, that is a good question. There is yet another article on Exxon's lack of write downs.

    And a couple of professors are quoted as saying that is a tough call if the values were conservatively estimated when originally booked.

    Exxon's CEO boldly declares this policy does not let managers off the hook by writing assets down.

    Yet Chevron, no wild eyed speculator, has booked $2.6 B in write downs, and Shell took $3.7 billion.

    The NY Attorney General gave up on his attack on Exxon's unwillingness to embrace climate change.

    So he changed tracks and is now pursuing this angle. I doubt he cares what he can prove guilty as long as he can come up with something. This is regulation run amok.