Accounting & Investing Info for San Antonio A & M
Thursday Sept 1 2016
An alert TAMUSA accounting student brought this to my attention. You can sign up for continuing information on the CPA exam at
You will learn more about the exam and what the possibilities are when one becomes a CPA.
And it's free!
Sept 1 2016 Thursday
Thank goodness for Lululemon.
Female students need not worry about he stigma of wearing reasonably priced togs to yoga class. Yep the hey day of $100 yoga pants and $50 tops has arrived. 
But is Lulu stock a bit pricey at 30 times earnings?
this is an example of how reading for context can make students more aware of accounting terms and their use.
Consider this excerpt
The athleisure market, which Lululemon pioneered, is more crowded than ever. Hundreds of brands have jumped on the bandwagon, with most selling apparel at far cheaper prices. That has hurt Lululemon's gross margins in recent years, pushing them below 50% in four of the past five quarters.
Fetching more than 30 times projected earnings over the next 12 months, Lululemon's multiple has swell-ed from under 20 times in November, its lowest since 2009. The stock is richer than Nike or Adidas AG.
Underdog is a difficult pose to maintain.
Thursday Sept 1 2016
The PCAOB found evidence deficiencies in 24% of the sample audits inspected.
This sample included DeLoitte and PwC. To be fair 24% for DeLoitte and 223% for PwC.
The audits were deemed deficient due to not having sufficient evidence to support the conclusions.
In ACCT 4311 Audit there is an entire chapter in the Whittington text devoted to evidence, no wonder!
Both firms of course responded that high quality audits were their objective.
The findings did not result in any penalties.
Thursday Sept 1 2016
I read the application but it is not clear if this is one 10 K scholarship or divisions of that or multiple 10Ks. And the time window is short, Sept 7 deadline.
Deloitte and HACU offer up to $10,000 award for accounting students
Deloitte LLP and the Hispanic Association of Colleges and Universities (HACU) have partnered to offer the Jorge Caballero Student Leadership Award of $10,000 for accounting majors demonstrating leadership qualities through academics and community involvement.
Applicants that demonstrate a strong interest in future employment with Deloitte are highly encouraged to apply. As part of the leadership award, applicants will also be considered for a paid internship with Deloitte.
The eligibility requirements for the award are:
The extended application deadline is Sept. 7, 2016, 5 p.m., Central time. More information and online application is available here.
http://www.hacu.net/hacu/Leadership_Award.asp
Wed August 30 2016
The European Union has told Ireland to collect a $14.5 Billion tax from Apple. Apple located a unit in Cork, Ireland to manage international sales. And of course to escape the highest corporate tax in the world the US rate of 35%. Read the front page story here.
Here is a comment on why Britain voted to leave the dictatorial EU.
And here is the WSJ editorial take on the matter.
There is entirely too much of this progressive, you have more money than you need, we the government know better how to spend it even though we did not and could not earn it ourselves.
If Apple pays no doubt every dubious government will find a reason to impose additional taxes until Apple's cash hoard disappears. The better idea would be for the US to allow a one time 10% tax on money brought back to the US. No stock buy backs should be allowed, the money needs to go for R & D. But don't expect this Administration to be that practical.
Wednesday August 31 2016
Firms have been routinely reporting prettied up non GAAP earnings reports. This of course is contrary to what the SEC via the FASB would prefer. In intermediate accounting we study Generally Accepted Accounting Principles.
Firms have been generally ignoring them in favor of their own customized version of what happened. Read this article to learn that more firms are now coming back to the basics, which is GAAP accounting rules.
Weekend August 28, 2016
Half of all accounting students attempting any serious certified examination fails to pass any one section taken. Yet there are more review materials available than ever before. And generally there are more requirements to sit for exams, particularly the CPA exam. Reflecting on this I recall the popular movie series of the 1980s, the Karate Kid. Daniel wants to learn Karate from an older Master, Mr. Myagi. But expecting to be quickly into leaping through the air with accomplished Bruce Lee kicks and chops, he is put to work waxing cars and painting Mr. M's house.
In this clip, Mr. M. explains the task ahead, wax on,wax off.
After a few days of wax on wax off, and painting the house, Daniel explodes with some non Master type language and is about to walk out when Mr. M recalls him. 
Here the lessons come together.
No matter what one is studying, Olympic fencing as Dean Hurley's daughters do, they finished fifth in Rio Olympics, or swimming as Mike Phelps does, or accounting , there are no short cuts.
As Phelps coach puts it, if you want to learn to do this
get in the water.
I suggest you find time to watch The Karate Kid whether you have seen it or not, and it a great family film for the kids that delivers a powerful message.There were three of the movies with Daniel and a fourth, the New Karate Kid with Hillary Swank.
Weekend August 28, 2016
ACL releases new apps to analyze ERP sytems.
The big problem with forensic accounting and fraud detection is the lack of forward looking analysis. ACL now offers digital apps which scan ERP systems for gaps incontrol.
Here is another example of accountants using 'big data' to improve detection.
Weekend August 27, 2016
Last Tuesday we reported that PwC was being sued for $5.5 B over the failure of Taylor Bean and Whitaker Mortage. PwC performed the audit and the firm
later failed. PwC has now settled the lawsuit.
As always in such deals the terms are not revealed but it was 'to the mutual satisfaction of the parties.' Interestingly PwC did ot audit Taylor but audited Colonial Bank which purchased mortgages from Taylor. The bankruptcy trustee for Taylor claimed PwC should have uncovered the fraud. Both Taylor and Colonial went bankrupt in 2009.
This certainly expands the concept of external auditor liability.
Curious I googled further and found a complete story of how the fraud occurred.
This is certainly a textbook case of how an overdraft grows to a much larger problem as the fraudsters desperately try to cover the original fraud. This is how forensic accounting works to unravel a fraud.
But then again, large firms are in near continual lawsuits over similar events. It appears the Big Four CPA firms are Too Big to Fail TBTF. What would it take for someone to say, you do not deserve the trust of the public after so many failed audits? Or conversely, just what level of assurance should an audit provide to the public?
Friday August 26, 2016
One of my Twelve Steps to Conquer Accounting includes a subscription to the Wall Street Journal In this post I offer a link to
Covering up the Pension Crisis.
One need look no further than our own San Antonio police and fire fighter negotiations to see the dangers. Accounting rules have not been stringent enough to force
actuaries and fund mangers to admit their assumptions of high returns on investments are unrealistic. In short we have huge pension shortfalls in many government sectors.
And don't forget bankrupt Puerto Rico.
There is a chapter on pensions in Spiceland but I have not covered itl. The reason is that it covers defined benefit plans. I doubt there will ever be another defined benefit plan started in the USA.
At any rate, read, learn, grow as accounting students by reading outside the textbook for greater content.
Professor Elam 