Think back to the six or nine months when the stock market was in an absolute free fall, say beginning last fall and continuing through this spring.
During that time, how many of you opened up your 401(k) statements as soon as they came in, just to see how badly you [...]
I’m starting to think it is.
I’ve been spending some time the last couple of days digging deep into fair value accounting, and I’m struck by how unnecessarily absurd the whole exercise turned into. Read my comments here.
Today I came across an old article from 2007 in the CPA Journal, [...]
I’m no big fan of the Perlumtter amendment. I see it as a naked power grab by the ABA and their ilk, who I don’t trust at all.
That being said. I feel their pain.
One of the more painful lessons I learned from SOX was that AS2 wasn’t very good. All [...]
Floyd Norris reports.
This year, a subcommittee of the House Financial Services Committee held a hearing at which legislators sought no facts but instead threatened dire action if the chairman of the financial accounting board did not promptly make it easier for banks to ignore market values of the toxic [...]
Am I the only one who’s noticed?
In April they did a piece slamming the Obama administration for an increase in the cigarette tax and claiming that the President violated a campaign pledge. The editors at AccountingWeb took their talking points from Americans for Tax Reform, the group founded by [...]
Not too long ago I was at a big lunch with a fair number of politicians plus regular folks like me–probably 20 – 25 tables of 10 people each, all squeezed in pretty tight. Between the main course and the dessert, all the politicians got up from their tables and [...]
In last week’s Mad Men episode the agency is working on a new campaign for Western Union. It’s a tough task. Business is falling because making a long distance phone call is so easy now (1963) hardly anyone sends a telegram.
The two copywriters both draw blanks, and they end [...]
Much hoopla today over the release of a new Windows OS. I haven’t tried it; I’ve never owned a PC, so I don’t know anything about Windows. even a mostly positive review in the NYT doesn’t make it sound all that great. First, they talk about the three year [...]
I have a client how is creating an internal guide on fair value measures and disclosures. The authors of the guide note that the definition of fair value rely on the terms “orderly market” and “market participants,” both of which the FASB makes clear are hypothetical constructs.
So accounting has gone [...]
This cautionary tale continues.
Yesterday I saw a fundraising email sent from a Democratic candidate based on the AHIP report prepared by an “accounting firm.” It describes the report as “widely discredited,” “untrue,” “duplicitous,” and something that “can not be taken seriously.” Though not named, no “accounting firm” would want to [...]
Or maybe not.
But they’ve been portrayed as taking sides, and for now, perception trumps reality.
The backstory. Last night, the Rachel Maddow Show, a pretty far left (IMO) news/opinion poll on MSNBC, ran a story on a new study released by the health insurance lobby AHIP. The study said that under [...]
I’ve had clients ask me about Facebook and other social networking technologies. It seems to be pretty popular these days for consultants to offer advice about this, so let me join in with my views.
I think most people focus too much on the whiz bang of the technology. Or they [...]
If you’ve been reading this blog, you know I’m no IFRS cheerleader. My friends know this. The other day it came up in conversation, and the comment was quickly made [insert ironic tone] “Mike’s favorite topic.”
My big complaints about IFRS are:
It represents a significant weakening of US GAAP, leaving the [...]I’ve spent the last day or so mired in the depths of SAS 115, which is about assessing and communicating internal control deficiencies.
I hadn’t really gotten into it that much before, but as I started to get my hands dirty it began to seem terribly anachronistic to me, though [...]
I’ve been talking to quite a few firms lately who are bringing their training in-house, creating and teaching their own materials. For firms of a certain size, that makes a whole lot of sense. In fact, I’d encourage more firms to take a serious look at moving in that direction.
The [...]
When I first started learning about marketing, an old pro explained to me the “features – benefits – results” troika.
Features: you tell the client about the features of your service Benefits: you explain how the client will benefit from your services Results: you describe how the feel after realizing the benefits.The idea [...]
A while back I suggested we follow the health insurance reform debate to see what we could learn about communications strategies. We’re coming up on a big speech on Wednesday night, and in anticipation of that speech, let’s ask a few questions that might help us learn how the pros [...]
I never took to studying tax in college. Hated it, in fact, which is one of the reasons I got into auditing.
Accounting and auditing are grounded in principles from which all the details flow. Taxes…man, what a drag. Just a bunch of arbitrary rules you had to memorize. What’s the [...]
Right?
I mean, we’re shooting for financial statements that are “representationally faithful” and transparent, that provide a quantitative measure of the what the company did during the year (Results of Operations) and where it stands today (Balance Sheet). Financial statements tell a story. So why not treat them as stories?
Each year [...]
Yes. They’re synonymous.
Here’s the context. SAS 115 is effective for calendar year-end 2009 audits. The SAS supersedes No. 112, and one of the changes the new SAS made was changing the definition of material weakness.
Previously:
A significant deficiency or a combination of significant deficiencies that results in more than a remote [...]
I started watching Mad Men this season, so now I’m going back and catching up on earlier seasons. Don Draper has some great insight into advertising, and here’s a seen from season one.
He’s pitching Bethlehem Steel, and he unveils their new campaign. The client doesn’t get the messaging, and so [...]
In the last few months I’ve watched a couple of firms start a business development function and hire a new person to serve in that role. The question I’ve been asked is whether I think having a discrete bd function is a good idea.
In general, the answer is yes, [...]
I got a nice email from a reader the other day asking me for my opinion of IFRS. I’ve blogged about it quite a bit, but rather than send him back to the blog to look at all the IFRS posts, I thought I’d summarize my thoughts for him.
If he [...]
Focus on the Audit Risk Model.
Earlier this morning I had a great conversation with Kurt Oestriecher, a Cajun auditor with his own firm. Kurt does a lot of instructing, and he has a great command of the auditing standards and good insight as to the problems faced by [...]
Eli Mason passed away today.
I can’t say I always agreed with him–sometimes a bit too resistant to change for my tastes. But overall I see him as a kindred spirit. He’s always been referred to respectfully as the “conscience of the profession,” and that’s a title I wouldn’t [...]
We’ve been following the health care messaging coming out of the administration to understand how messaging and positioning works. It’s been an interesting exercise.
Have you noticed the subtle (or maybe not so subtle) shift in the administration’s positioning? It’s no longer Health Care Reform. It’s Health Insurance reform. They’re repositioning, [...]
I was at a conference a couple of weeks ago and caught the IFRS presentation, which was very good. One of the point the presenter made was one I’d heard before from IFRS proponents.
Under today’s GAAP, if you had five different companies and they each did the same transaction, [...]
I first said it here: when it comes to communications and marketing, the most valuable asset you have is your list.
Great article today on Rick Telberg’s blog about CPA firms and their use of CRM. Or rather non-use.
Unlike other professional services firms, more than 86 percent of [...]
A couple of weeks ago I talked about “positioning” and how important it is to frame your marketing arguments. I said to pay attention to how the Administration positions health care. There are a number of ways you can frame the argument:
Insuring the uninsured is a moral imperative The [...]
There were some good presentations at the naaats conference last week, but the most helpful for me was the one on IT controls by Dan Schroeder of Amper, Politziner & Mattia. I’ve been listening to speeches and reading guidance on IT controls for auditors for 25 years, and this [...]
I mean, other than me.
Yes, it’s a geeky thing to do, but as we grapple with current events and trends such as globalization and IFRS, I think it’s more important than ever that we constantly remind ourselves of where we put our stake in the ground. If we decide that [...]
No.
Okay, a cheeky response, but I couldn’t resist. Now let’s get down to business.
As it turns out, the question about walkthroughs is one of the most frequently asked questions about the risk assessment standards. Just the other day, I got this email from my friend Russ Madray, who [...]
When I was on the staff at KPMG there was a story about one of our big public clients getting ready to issue their quarterly financials that showed them missing their eps forecast by $.01. The client was very distraught over all this because they were afraid their stock would [...]
IFRS for SMEs came out this week, and I just don’t see how this is a good public policy. We’ve seen what happens when lax underwriting practices allowed banks to make loans to homeowners who never should have been granted credit. It was win-win for a while: bankers and all [...]
You’ll remember the mtm debate a few months ago. The bankers argued that mtm was forcing them to take writedowns that depleted their capital, which prevented them from making loans. The economists believed that we needed to get credit flowing again to help the economy recover. That makes sense to [...]
They say you can’t step into the same river twice, and the same is true of auditing: you can’t audit the same client twice.
Rivers flow and business is always changing. The world around us changes, gaap changes, personnel at the company change. We need to build that fact [...]
I was talking to someone the other day about “positioning” a planned service offering and asking questions about how his firm is “positioned” against others. Here’s what I mean.
A lot of firms have what I think are very generic brands and firm positioning statements. They’ll emphasize their customer service, say [...]
I’ve been working on creating a second edition to the AICPA Risk Assessment Audit Guide, and it was in that context that I read Nicholos Kristoff’s column in today’s NYT. The key point.
Evidence is accumulating that the human brain systematically misjudges certain kinds of risks.
And then this.
Still, all is [...]
The key to getting a good answer is asking the right question. It all depends on how you frame the issue. My friend Hiram Hasty recently reminded me of this fact.
One of the questions auditors frequently ask is “do I have to do a walkthrough every year?” The answer is [...]
I’m talking about an in-firm collaborative work site or social networking site or something similar. If you build one, will come?
No. At least not with a whole lot of work on your part. This isn’t Iowa, Shoeless Joe.
More and more firms are going down this road, and I think it’s [...]
Congressman Ed Perlmutter represents Colorado’s 7th district, which is not my district, but close enough. He’s a member of the House Finance Committee and was quite visible during the MTM hearings. Personally, I thought he was guilty of a little grandstanding during the mtm hearings (I wouldn’t tell him that), [...]
Okay, maybe that’s a bit of an exaggeration, but here’s what he said on Tuesday in an interview with CNBC (right before he smacked that fly)
That’s why people invest in America. They know that if they read a prospectus, someone has gone through it to make sure it’s telling the [...]
I’m sitting here writing about change, and it seems to me that the problem with SALY is not the methodology–start with a baseline and focus your work on what’s changed. Thinking back to when I was on the staff (now there’s a depressing thought. 27 years of water under the [...]
I had a conversation with the someone the other day about the risk assessment standards, and we both expressed frustration at how they’ve been implemented. I made the point that to drive auditor behavior you need to have three things all working together:
Good standards Implementation tools, which include training, interpretative guidance [...]There’s a scene early in Animal House where Larry and Kent Dorfman go to a frat party at the cool frat and are quickly shown around and steered to a corner where a bunch of other soon-to-be rejects are sitting on a couch.
Ken, Lonny, I’d like you to meet Mohammet…Jugdish, [...]
Just participated in a webcast on current A&A topics and the speaker touched on IFRS and put up a slide that said that although there a variety of opinions about IFRS, everyone agrees that
The ultimate goal must be the worldwide use of a single set of high-quality financial reporting standards [...]
My take on General Motors is that it was a once great company (54% market share) that because of structural problems and a healthy dose of hubris made poor, short-sighted decisions that lead to its eventual demise (19% market share, stock price below $1, now in bankruptcy).
I’m not sure the [...]
