March 2012

Word picture (with video) on coping with radical change

Leave a Comment / Other stuff /

I have a post at my other blog, Outrun Change, that describes how a Chicago museum got an 880 ton submarine into an exhibit by putting the sub in a hole in the ground and then building the museum around it. This is a word picture of changing ourselves to adapt to the change around us.

Building a museum after the exhibit is in place as illustration of adapting to change.

Bill Sheridan of the Maryland Association of CPAs makes this a good illustration for us CPAs on how to adapt to radical change.  See post above for more explanation.

Word picture (with video) on coping with radical change Read More »

Panel clears E&Y over Olympus auditing – far less to the report than meets the eye

Leave a Comment / Accounting, Audits, Fraud /

The Wall Street Journal headline says Panel Clears Ernst & Young in Olympus Probe.

Cool update on the investigation, huh? An official panel looks at E&Y’s role and concludes their auditing was okay.  They have no legal liability.

I was quite interested in the article.  Then found out the details.

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Panel clears E&Y over Olympus auditing – far less to the report than meets the eyeRead More »

Panel clears E&Y over Olympus auditing – far less to the report than meets the eye Read More »

Sample compilation and review reports under SSARS 19 for NPOs

Leave a Comment / Compilations & reviews /

(cross-post from my other blog, Nonprofit Update.)

Update – SSARS 19 had been replaced by SSARS 21. All the reports have been revised. See:

Here is a list of the sample reports under SSARS available on my blogs.

Sample compilation and review reports under SSARS 19 for NPOs Read More »

New format for blog

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I’ve changed the template for this blog. Went from ‘Fusion’ to ‘The journalist v1.9’.

This is in the ‘minimalist’ category. Doesn’t have a lot of pizzazz, but then I’m a CPA. We don’t usually do pizzazz. For a small touch of that, check out my other blogs.

If you aren’t familiar with blogging, WordPress provides free blogs and lets you use their software on another hosted site.

I have all my blogs hosted at WordPress.

The WordPress software is astoundingly easy to use. If you have working familiarity with Word or Excel, you can drive a blog easily.

If you’ve ever even though about blogging, give it a try!

New format for blog Read More »

To what purpose did Arthur Andersen die? Part 3

2 Comments / Audits /

First post in this series discussed an editorial in the Chicago Tribune concluding that Big 5 accounting firm Andersen died in vain.

Second post provides background on the large number of audit failures that surrounded Andersen.  The editorial provides background on the poor ethical environment of the firm.

David Albrecht, in his post 10 Years Later – Did Andersen Die in Vain?, has a very different answer to the question.

There was a purpose in the demise of Andersen.  Punishment

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To what purpose did Arthur Andersen die? Part 3Read More »

To what purpose did Arthur Andersen die? Part 3 Read More »

To what purpose did Arthur Andersen die? Part 2

3 Comments / Audits, Books you might enjoy /

Previous post discussed a March 14, 2012 editorial in the Chicago Tribune which ponders what greater cause may have existed behind the 2002 collapse of Big 5 accounting firm Arthur Andersen. The editorial concluded that Andersen died in vain.

Methinks the editorial’s content argues against the editorial’s conclusion.

Let’s look at the pattern of behavior

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To what purpose did Arthur Andersen die? Part 2Read More »

To what purpose did Arthur Andersen die? Part 2 Read More »

To what purpose did Arthur Andersen die? Part 1

4 Comments / Audits /

In a March 14, 2012 editorial, the Chicago Tribune ponders what greater cause may have existed behind the 2002 collapse of Big 5 accounting firm Arthur Andersen.

Their conclusion? Andersen died in vain.

David Albrecht, in his post 10 Years Later – Did Andersen Die in Vain?, reaches a very different conclusion. More on that in part 3 of this series. If this post has already caught your interest, you’ll enjoy reading his post now.

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To what purpose did Arthur Andersen die? Part 1Read More »

To what purpose did Arthur Andersen die? Part 1 Read More »

Self-deception – a major obstacle to thinking clearly

Leave a Comment / Audits, Pondering /

I am reading through a book that outlines ways our thinking processes will sometimes lead us to decisions that are actually wrong.

While pondering those ideas, I realized there is another severe flaw in the way we humans think that is described in the Bible.

The book is Thinking, Fast and Slow by Daniel Kahneman.  My posts on the book applying it to the audit context start here.

The problem is worse than just incorrectly thinking fast

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Self-deception – a major obstacle to thinking clearlyRead More »

Self-deception – a major obstacle to thinking clearly Read More »

Find out what licenses you need to start a business

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(cross-post from my other blog, Nonprofit Update.)

The regulatory load to start a new business is huge.  You can not miss any of the requirements at risk of serious penalties.

I found a site that CPAs could refer clients so they can do some research on their own.  Or you can get the report to help your client.

License123 is a web service that might save you time researching the licensing and permits you need to start something new.

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Find out what licenses you need to start a businessRead More »

Find out what licenses you need to start a business Read More »

Struggling with changing circumstances in your community

Leave a Comment / Pondering /

Have a post up at my other blog, Outrun Change, describing a conversation started in the humanitarian aid community about how to deal with military forces moving into the aid environment – Grappling with change – another sector talks about their environment.

That conversation is an example of one community trying to deal with the change that is taking place in their environment.

Struggling with changing circumstances in your community Read More »

If auditors won’t audit, mandatory rotation won’t help. Part 5

Leave a Comment / Audits /

This post wraps up a long discussion of the impact on audit judgment from the halo effect. You can read parts 1, 2, 3, and 4. 

In case you haven’t read the previous posts, I think mandatory auditor rotation is a lousy idea that won’t have any impact on audit quality.

The halo effect, though, is something real and we auditors need to know about it.

This series of posts is reacting to Thinking, Fast and Slow by Daniel Kahneman.  My pondering was prompted by a post from Tom Selling that I discussed here.

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If auditors won’t audit, mandatory rotation won’t help. Part 5Read More »

If auditors won’t audit, mandatory rotation won’t help. Part 5 Read More »

If auditors won’t audit, mandatory rotation won’t help. Part 4

2 Comments / Audits /

I started a discussion here about whether the halo effect on auditors is so strong that mandatory auditor rotation is needed to get good audits. Continued in part 2 and part 3.

Counter pressures

There are a lot of counter pressures to encourage auditors to be diligent and do a good job.  Here’s a short list: …

If auditors won’t audit, mandatory rotation won’t help. Part 4Read More »

If auditors won’t audit, mandatory rotation won’t help. Part 4 Read More »

Prosecutors file official charges in Olympus fiasco

1 Comment / Accounting, Fraud /

On Wednesday, prosecutors in Japan filed official charges against six individuals for their role in the accounting scandal at Olympus.  They also filed charges against Olympus.

The six charged include the ex-chairman, former executive vice president, former corporate auditor and three outside bankers.

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Prosecutors file official charges in Olympus fiasco Read More »

If auditors won’t audit, mandatory rotation won’t help. Part 3

3 Comments / Audits /

I have a discussion here and here about whether the halo effect on auditors is so strong that mandatory auditor rotation is needed to get good audits.

How the design of audit helps counter the halo effect

After reading much of Mr. Kahneman’s book, I would suggest that an audit is designed to counter the System 1 / System 2 biases.

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If auditors won’t audit, mandatory rotation won’t help. Part 3Read More »

If auditors won’t audit, mandatory rotation won’t help. Part 3 Read More »