Accounting & Investing Info for San Antonio A & M
Tuesday Sept 23 2014
British retailer Tesco suspended four executives and called in outside auditors to investigate a $400 million overstatement of first half profit.
It's still the same old story,k according to the WSJ, early booking of income and dealyed booking of costs.
Yep that pesky accrual accounting is tough to nail down. This is the usual method of cooking the books.
Tuesday Sept 23 2014
Some of the WSJ articles will come up but others will not unless you subscribe. Here is an excellent article on How We Should Be Teaching Math. the author is an engineering teacher. She observes that concerptual understanding, watching the prof work a problem, only gets you so far. As I say in class, the only way you now the answer it to be able to work in out on a blank sheet of paper.
Here is her conclusion
Understanding is key. But not superficial, light-bulb moment of understanding. In STEM, true and deep understanding comes with the mastery gained through practice.
This leads me to another observation. We will on line exam.s There is nothing to prevent you from having your textbook open and attempting to find the answers on the quiz during an exam taken in the comfort of your home or apartment. But that is not learning, that is not content mastery. And eventually if you desire to take a certified exam, that is what will be required, content mastery.
A multiple choice test is fine as a test of accomplishment. A certification exam may require you to answer 100 questions in less than three hours. Each question may require two or three calculations. Individuals who can perform under such pressure pass the exam.
That kind of exam however is near useless in terms of a learning experience. An incorrect answer on an exam simply tells me you got the answer wrong. It does not tell me WHY you got the answer wrong. The only way for me to learn that is by written answers so I can observe how you solve the problem.
Do not kid yourself, taking exams with the textbook open proves nothing about your achieving content mastery.
Tuesday Sept 23 2014
The Administration shoould be working to make the US a destination of choice for sompanies world wide. But here is the Chamber of Commer take on the latest move.
The top economist at the U.S. Chamber of Commerce released a blistering statement late Monday, saying Treasury's new guidelines would incentivize companies to create more jobs overseas. Martin Regalia, the organization's chief economist, also said "the administration just assured that deferred income in the once foreign subsidiary will never come back to the U.S. to help create income, jobs, and economic growth here."
If yo usubscribe the WSJ article is here. The econist is simply observing that none of the trillion plus dollars of American companies overseas will now come back here to be invested or spent in the US.
Tuesday Sept 23 2014
Iron ore futures continue to fall in price. It appears to me that this is par of a world wide deflationary trend. Check out
http://www.themarketperspective 
for more on the falling CRB indes, oil, gold, and silver prices. As I keep saying in class, accounting is much more than debits and credits today. A professional accountant must have a global outlook. While we hear that a lot, what it means is understanding prices and trends around the world in various markets.
Recall that the FED lowered interest rates in an attempt to get people to borrow and buy. But now prices are falling again. How do you force someone to buy?
Commodities Resesarch Bureau Index – Investors Beware of Falling Prices
Why is this a problem? If money is borrowed against a commodity and the commodityprice falls, there is less collateral to secure the loan. But the loan balance is still on the books. Notice that the stock market is also starting to wobble up here. Small cap sock performance is trailing big caps.
I suspect all of this is the beginning of the end of the stock market rally.
Tuesday Sept 23 2014
RSH is seeking an extension of payment terms with a large supplier. A bankruptcy lawyer comments this is the same thing that happened at Circuit City and Borders,and as he says, we know how that turned out.
I commented in Acct 3310 yesterday that the cash flow statement was the most important of all. Here is that lesson, up close and personal as Jim McKay would say.
The latest CFO resigned after seven months on the job.
As the article suggests, an extension of time to pay is hardly an increase in sales. With continued losses, an increase in business is needed. But with all this bad publicity who is shopping at RSH?
Tuesday Sept 23 2014
The SEC awarrded an undisclosed Whistleblower $30,000,000. Dodd Frank allows the SEC to award the Whistleblower 10-30% of the money it collects. Clearly this large award is an attempt to bring others forward who might know something.
I am wondering how many false leads and stories such rewards will generate.
Monday Sept 22 2014
An alert TAMUSA student notified me of the Certified Sales Tax designation. I was not familiar with this one and no doubt we need to start a new list. But again this just shows how much is out there, and what a large field of endeavor accounting has become.
Is anyone interested in compliling a revised list of certifications? I am thinking we wold do this by discipline for CIS, Accounting, Finance, surely there would be a journal in which we could publish such an article, if fact I have one in mind.
Again anyone interested?
Monday Sept 22 2014
PCAOB Set to Rule on Auditor Disclosure
Audit Firms lobby for alternatives
REuglators Accounting Firms Bicker over Audit Rule - this maynow work unless you subscribe
The PCAOB has proposed that the audit partner in charge reveal his or her name in the statement submitted with the annual report. Not surprisingly the audit firms have responded there is no evidence that improves information the audit provides. The audit firms have suggested the partner's name would be better revealed in what is termed Form Two. This is the Audit Firm's report filed with the PCAOB and is on the PCAOB website.
The audit firms also argue that partners move, retire, change positions, etc which just sounds like a smoke screen to me.
Clearly the audit firms want it more difficult to identify this person. i suspect this is generated by fear of lawsuits and harassment by disgruntled investors, which is understandable.
All of which says a lot about out legalistic society today.
Perhaps the most famous signature event in American history was the signing of the Declaration of Independence. John Hancock's signature is prominent as the first signer and is clear to anyone examining the original document. This resulted int the aphorism ' put your John Hancock on it' meaning that if you are the author or creator you should be proud to say so. The techs that created the first Mac computer has their names on the inside of the computer case. Individuals that assemble the engines of exotic sports cars have their name on a tag inside the engine compartment.
And remember that the CEO and CFO of the company have to personally sign off and guarantee the statements. If that requirement is good enough to them why is the auditor unwilling to do the same?
And while we are at it, how about posting the fee for the audit as well?
What do you think?
Weekend Sept 20 2014
f You udon't like my ideas here are some others
Those are good lists of things to remember. I don't agree about using business cards sparingly, that is what they are for, and you never know where a card exchange might lead you.
I am going to address the more general notion of how to interact with people.
Here are what three experts have had to say on the topic.
Dr. Edward Deming is the father of Total Quality Management Concept. He was brought to Japan by General Douglas MacArthur in his rebuilding of that country after WW II. At a time when manufacturers only thought of increased sales and pumped out product as fast as possible, Deming told the Japanese to make the customer the center of their focus. If they were customer driven, success would be theirs. Two decades later the Japanese dominated world production in quality cameras, stereos, and motorcycles. Their success with small four cylinder motorcycle engines would be duplicated in the car business.
Dale Carnegie wrote the original self help book How to Win Friends and Influence People.
He honed the pitch n a series of lectures beginning when he was actually living at 
the YMCA. A publisher rep attended a seminar and suggested he write a book.Since its first publication it has sold millions of copies. It spawned the Dale Carnegie business which still teaches its principles. The principle is simple and here it is. Put is on your 'frigerator door' as George Strait would sing.
You will make more friends in two months showing an interest in other people than you
will in two years trying to interest them in yourself.
I have had classes read the book. Many observe that it should be re written for a more modern audience. Of course he refers to the movie stars and events of his own day, but
times change, people don't.
He of course gives numerous examples and variations of this theme but that is the theme.
Show an interest in the other person, not in yourself.
Now let's use a more modern version of the very same idea. Why is Facebook such a smashing success? Millions of people all over the world use it.
If you have read this far the answer should be obvious.
Facebook allows everyone to have their own version of O, the Oprah Magazine all about
Me Me Me, what I am doing, where I am going , where I am out to lunch, who I am with
Yep you too can be Brad and Jolene.
In short Zuckerberg realized the internet would allow everyone to pontificate on their favorite subject
themselves.
Now how can you use these obvious but valuable observations to further your career opportunities. You can begin visiting professoinal accouinting societies in San Antonio. I have taken numerous students to such events. And they usually make the same mistakes.
I recall one student at an annual CPE event, the large meeting of the hotel must have held 150-200 people all seated at round tables. But she had taken a seat alone in the far corner of the room, how would that help.
Here a a few simple reminders for attending such an event.
All these are open ended questions. None of them require a yes or no answer. This is what you want. Ask openended questions which give them the cance to pontificate on their favorite topic – themselves.
Still hesitant, join the TAMUSA Toastmaster Group which meets everyother Thursday at 7 PM at Brooks.
Friday Sept 19 2014
Once the lie begins, it is necessary to continue the deception. HEre are stories about five high profile individuals who lied about having a college degree.
This sort of lie is so prevalent that now most employers, certainly universities, require the transcript be sent un openned from the originating school to them.
You are working on your degree. Imagine the disgust you would feel on losing a position to someone who lied to get there.
Professor Elam 