Now that he's not going to be the HHS Secretary, does he get his $140,000 back? How must Daschle feel? He paid those back taxes for nothing!

The Ethics Class agreed that he would not have paid and perhaps not discovered if he had not been up for nomination, just wondering…..where is Joe Biden to lecture Tom on how patriotic it is to pay taxes, again, just wondering…

Every few days I catch up on Jerry Flint's thinking about the auto industry.

http://www.forbes.com/flint

will take you to his archive

Jerry Flint has covered the industry since the 1950s and I always enjoy his historic perspective. For my money the auto industry is extremely important because of the marginal contribution to the economy.  Click on the hyperlink to read his suggestions about what Washington needs to learn about autos.

A car requires steel, plastic,electrics and all sorts of new products from suppliers.  It must be designed and assembled and shipped and sold. This spawns railroad traffic and dealerships in every town of any size in America.  This lead to sales and then service which spawns independent garages and used car dealers. Magazines and newspapers write about cars and run advertisements for them.  Recycling leads to salvage yards and after market parts suppliers.  Finally the scrap metal dealers enter the picture and we start all over again. The same can hardly be said for computer makers whose products are worthless in six months.

Another dose of common sense from John Stossel!

Pat Buchanan does not hesitate to rail against both parties. Tom Sowell in his column today takes a dim view of the bailout package.  It is impossible to post an article about this that does not express political opinion. But even the Congressional Budget Office is pointing out that the spending will take years to happen. Ponder just how much money we could simply dole out to people if in fact that is what this bill did. 

The Deloitte Management Report can be accessed by clicking on this hyperlink. I believe all accounting majors should read this report. We are discussing this in ethics class but it is applicable to all classes including audit and intermed II.

External audits result in a management report designed to improve internal procedure. Notably this report is over thirty pages long and contains numerous instances of examples of internal control failures. I am assigning this as an example of a $1.5 Billion organization sadly lacking in controls. 

Now Tom Daschle joins Tim Geithner in not paying taxes, even more so. Daschle had to pay over $100 K in back taxes to get even, Tim was on the hook for $43,00. As someone who has represented several clients before the IRS, do not try this on your own thinking you will get the same treatment. No one likes to pay taxes, even Secretaries of the Treasury and Health and Human Services.

US Airways has offered a First Class upgrade when available to fly free for the next year to those passengers on the now famous Hudson River Landing. Gee, already some are running for attorneys saying they fear getting on a plane, others say it is just not enough.  Gee what exactly did the Cunard Line did for those folks on the Titanic?  The ones who did not get lifeboat seats that is…

It is a mere one hundred years since the Wright Brothers at Kitty Hawk.  Regular passenger service began in the 1920s. But it was the DC 3 in the 1930s that really made commercial flying a reality. Seventy years later everyone thinks planes apparently should not land in the river. 

And to think, not that long ago, a good landing was 

One you could walk away from.

Perhaps we should take this up in Ethics class! 

The UAW created jobs for life whether there was any work or not.  This was the Job Bank in which workers got paid for well not working.  This led to GM manufacturing Buicks sold to car rental companies as the CEO figured he might as well have the workers doing something.  This has cheapened the former upscale brand to the point that it is well received in China but not here.

Congress demanded an end to this, and even the UAW had to go along. I suspect that Congress will keep GM ie the UAW alive with incentives to build green cars, which sell in such small numbers it will make no real difference. Still GM will wink and use the money to stay in business.  After all every UAW member is a potential Democrat voter and the Democrats are now in charge.  No doubt the Democrats will make a big issue that the Republicans like Saxby of Georgia would have let GM go bankrupt. Saxby of course has no GM plants in Georgia, but does have foreign headquartered auto makers. There are 22 states with right to work laws and they have attrracted all the new auto plants, such as Toyota in San Antonio.

A H Belo, parent of the Dallas Morning News, is laying off another 500 people.It is borrowing money to stay in business and fund the layoffs. This has resulted in a restriction on dividends it can pay otherwise known as a loan covenant.

Gannet has written down its goodwill account, why, what do you know about accounting that would answe5r this question?  Look up impairment in the Intermediate text for the answer.

We study accounting to be able to read and interpret such articles.

Belo stock is down to $2. The Christian Science  Monitor has gone weekly, how long before others joint their lead?

Yesterday I suggested that you should be scanning business, cpa, and cfo.com websites to discern developing trends. Here is a good example.  This is a CFO article highlighting a report by the PCAOB. In the report the PCAOB explains how an alert CFO can reduce audit fees for by maintaining for example efficient bank reconciliation. If the external auditor is satisfied that this internal control is in place, the external auditor can reduce substantive procedures of further examination. This would be the result of analytical procedures that survey compliance.