Attestation Update – A&A for CPAs. – Page 27 – Technical stuff for CPAs providing attestation services.

Today is last day to vote no on the proposed merger to create another AICPA that will dilute the CPA brand

Leave a Comment / Other stuff / Jim Ulvog

Today, the 16th, is the last day for voting on the proposal of the American Institute of Certified Public Accountant (AICPA with CPA) to merge with the Chartered Institute of Management Accountants (CIMA) to create a new Association of International Certified Professional Accountants (AICPA with professional instead of pubic) that will promote the interests of CPAs and management accountants.

Yes, this would produce two AICPAs, with operations of the AICPA, the AICPA, and the CIMA all being conducted out of the AICPA office in North Carolina.

My worry is this will dilute the effort of the current AICPA to pay attention to the world of CPAs.

My previous posts:

There is still time to vote no, in order to prevent dilution of the CPA brand. Find that old email and cast your vote today.

Today is last day to vote no on the proposed merger to create another AICPA that will dilute the CPA brand Read More »

Stock market capitalization as reference point for ancient finances

Leave a Comment / Economics, Other stuff / Jim Ulvog

Street sign for Wall Street and Broad Street, the heart of the Financial District of New York City. Image courtesy of Adobe Stock.

I am building some reference points for my ongoing learning about ancient finances. (If you couldn’t tell, I’m have a lot of fun. This learnin’ thing is cool.)

Here is the value of all the stock listed on the market in the G-20 economies. This is the total capitalization of the companies in those countries.

Data is from this site. A lot of other sources could be used and other years might give different results. The accuracy of the valuation of Alexander’s loot is only accurate to one or two significant digits. The needed estimates and assumptions will leave any comparisons accurate to only one significant digit. Actually, by the time my calculations are finished, the amounts will probably be accurate to maybe overestimating 20% or perhaps underestimating by 100% or 200%.

Thus, more precision in the market capitalizations is irrelevant.

Amounts are in US dollars and are for 2012: …

Stock market capitalization as reference point for ancient financesRead More »

Stock market capitalization as reference point for ancient finances Read More »

Cheating on your Fitbit? After you stop laughing, think about this from the fraud perspective.

Leave a Comment / Accounting, Audits, Fraud, Pondering / Jim Ulvog

One option to get superb results on your exercise tracker. Photo courtesy of Adobe Stock. — One option to create superb results on your exercise tracker. Photo courtesy of Adobe Stock.

Sometimes you just have to laugh.

On June 9, The Wall Street Journal asked Want to Cheat Your Fitbit? Try a Puppy or a Power Drill.

Those informal office challenges to get people to exercise often involve using a Fitbit device to track how far participants walk or run.

Apparently a few folks have decided to take some shortcuts.

One fellow attached his tracker to the blade of an electric saw. After leaving it run overnight he had recorded 57,000 steps the next morning.

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Cheating on your Fitbit? After you stop laughing, think about this from the fraud perspective.Read More »

Cheating on your Fitbit? After you stop laughing, think about this from the fraud perspective. Read More »

News on regulatory oversight; insider trading, livings wills, manipulating interest rates.

Leave a Comment / Other stuff / Jim Ulvog

Interesting news from the financial world:

How NASDAQ watches for insider trading
Why bank regulators not disclosing the criteria for evaluating “living wills” causes more systemic financial risk
Enforcement efforts on two interest-rate manipulation fiascos

Here is how you get caught for trading on inside information

6/10 – Francine McKenna at MarketWatch – How NASDAQ watches for insider trading – Deep background on how NASDAQ monitors all the trading in the market for suspicious activity. They have a variety of tools and techniques to identify anomalies and drill down to eventually reach the individual trades.

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News on regulatory oversight; insider trading, livings wills, manipulating interest rates.Read More »

News on regulatory oversight; insider trading, livings wills, manipulating interest rates. Read More »

Compensation for skilled construction worker

Societe Generale and their trading fiasco is back in the news. Oh, firing someone who lost $5 billion in unauthorized trades is a wrongful termination.

1 Comment / Accounting, Fraud, Pondering / Jim Ulvog

I can now add the French judicial system to the reeeeeally long list of things I just do not understand:

6/7 – Wall Street Journal – Court Finds Kerviel, Whose Bets Lost Bank Billions, Was Fired Unfairly – A French court awarded a fired banker US$511,000 for what we would call wrongful termination in the US.

Why was he fired? He merely cost the bank €4.9B back in 2008 after they unwound his unauthorized trades. That is only $5,530,000,000 at today’s exchange rate.

First, some background. You can check out the WSJ article on 10/6/10 for more details: Rogue French Trader Sentenced to 3 Years.

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Societe Generale and their trading fiasco is back in the news. Oh, firing someone who lost $5 billion in unauthorized trades is a wrongful termination.Read More »

Societe Generale and their trading fiasco is back in the news. Oh, firing someone who lost $5 billion in unauthorized trades is a wrongful termination. Read More »

Are you richer today than John D. Rockefeller was in 1916? The answer is, um, yes.

Leave a Comment / Economics, Pondering / Jim Ulvog

Would you trade your place in life today for life occupying the Gould-Guggenheim mansion when it was completed in 1912? Even if a billion dollars was tossed into the trade? Photo by Adobe Stock. — Would you trade your place in life today for life occupying the Gould-Guggenheim mansion when it was completed in 1912? Even if a billion dollars was tossed in to sweeten the swap? I would not make the trade. Photo by Adobe Stock.

I suggest you are in fact richer today than John Rockefeller was 100 years ago. If it were possible for Prof. Don Boudreaux to switch places with John Rockefeller’s life and even if he could have a billion dollars after he arrived back in 1916, he would not make the switch. He would rather live as a comfortable professor today than be a billionaire 100 years ago.

I agree.

Here are three posts to explain this strange idea: first, what life was like 100 years ago, why Prof Boudreaux would not make the switch, and then why Coyote Blog wouldn’t either.

(This post may seem to be out-of-place on my blog discussing accounting and auditing topics. This discussion is part of my enjoyable research on ancient finances and a related thread of how much life has improved over the last 200 years. Since I discuss finance at this blog, it actually fits.)

An article in The Atlantic on 2/11/16 describes America in 1915: Long Hours, Crowded Houses, Death by Trolley. The article is drawn from a report by the Bureau of Labor Statistics: The life of American workers in 1915. If you enjoy this brief discussion, I heartily recommend you read the full BLS report. It is a fun read, but then, I am an accountant.

I will update a few of the stats in the Atlantic article where the author took a shortcut. When I browsed through the BLS report, I noticed some sentences which were repeated nearly verbatim in the article, which is okay since the report is a public document.

A few highlights:

Workers in factories averaged 55 hours a week. The fatality rate across the economy was 61 deaths per 100,000 compared to about 3.3 per 100,000 today.

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Are you richer today than John D. Rockefeller was in 1916? The answer is, um, yes.Read More »

Are you richer today than John D. Rockefeller was in 1916? The answer is, um, yes. Read More »

More reactions to Panama Papers leak

Leave a Comment / Fraud, Other stuff / Jim Ulvog

Here are a few more recent articles on the offshore banking industry that were of interest to me:

Proposed U.S. rules that won’t do much
Law firm at center of the leaks is closing some remote offices

5/10 – Salon – The Obama administration’s Panama Papers misfire: Why new rules to curtail global tax avoidance could actually make things worse – This article follows up on my previous comments that the proposals from the feds to counter offshore banking will do very little to stop the practices.

Article says the details of the proposals accomplish very little and could actually make things worse.

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More reactions to Panama Papers leakRead More »

More reactions to Panama Papers leak Read More »

So, how can we compare today’s wages with 100 years or 2,300 years ago?

Leave a Comment / Economics, Pondering / Jim Ulvog

What does that tetradrachm from Alexander the Great representing pay for two days of a skilled construction worker represent today? Image courtesy Adobe Stock. — What does that tetradrachm, from the era of Alexander the Great, representing pay for two days of a skilled construction worker, represent today? Image courtesy Adobe Stock.

The following numbers are based on purchasing power parity, which is a tool economists use to compare countries across currencies and across time.

Average income across the planet is now $33 a day, which is also about equal to average income in Brazil today or in the US back in 1941.

Income in places like the US and Sweden are 3 or 4 times the planet average.

Average income per person was about $3 a day from about 1800 all the way back until humans first appeared on the planet. Dr. McCloskey says daily income sometimes in some places rose to $6 or $8 for a while but slipped back to the $3 range.

For illustration of what $3 per day looks like, consider Haiti or Afghanistan. In those two places, the current PPP income is $3.

So where does that leave us for a comparison? Consider this purchasing power parity analysis.

$3 – For all of history until about 1800 average daily income was about $3.
$33 – Today average income is about $33 in Brazil or a worldwide average.
$132 – Today average income in the US and Sweden is 3 or 4 times higher than the world average. The specific days point is $132 a day in the US in 2011.

Going from $3 to $132 is an increase by a factor of 44.

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So, how can we compare today’s wages with 100 years or 2,300 years ago?Read More »

So, how can we compare today’s wages with 100 years or 2,300 years ago? Read More »

Update on Panama Papers – 6/1

Leave a Comment / Fraud, Other stuff / Jim Ulvog

Seems there was a lull in the interesting articles on Panama Papers. Here are few articles catching my eye to get caught up.

How to prepare for a media firestorm
Searchable database released
A mere 35 Americans are visible in the Panama Papers database

5/9 – Nelson Granados at Forbes – Are You Law-Abiding and in the Panama Papers Database? How to Handle a Public Relations Crisis – Article is written on how a company who is legally and ethically using offshore accounts can prepare for the negative media attention when their name is revealed.

As a general concept these ideas apply to every business and charity. Getting ready in advance of a media firestorm will improve your chances of surviving the onslaught.

Short version: …

Update on Panama Papers – 6/1Read More »

Update on Panama Papers – 6/1 Read More »

How much has our economic wellbeing improved from that our of distant ancestors?

Leave a Comment / Economics, Pondering / Jim Ulvog

A view of economic progress. Ponder the productivity improvement and resulting increase in wealth to go from this:

To this:

The overall standard of living has increased by a factor of somewhere between 30 and 100 in the last 200 years.

The little side trip in this post and the next will lead me back to my discussion of ancient finances in general and Alexander’s haul from his military campaigns in particular.

Writing in Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, Professor Deirdre McCloskey says it this way:

..in the two centuries after 1800 the trade-tested goods and services available to the average person in Sweden or Taiwan rose by a factor of 30 or 100. Not 100 percent, understand— a mere doubling— but in its highest estimate a factor of 100, nearly 10,000 percent, and at least a factor of 30, or 2,900 percent. The Great Enrichment of the past two centuries has dwarfed any of the previous and temporary enrichments.

Let me phrase that another way. The value of what is enjoyed today by an average person is roughly equal to what 30 or 100 people had two centuries ago. That means the constant dollar value of what is consumed and enjoyed has grown by a factor of somewhere between 30 and 100.

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How much has our economic wellbeing improved from that our of distant ancestors?Read More »

How much has our economic wellbeing improved from that our of distant ancestors? Read More »

To all those serving in the American military or who have served

Leave a Comment / Other stuff / Jim Ulvog

I was on active duty in the U.S. Air Force a mere four years. I never got within 3,000 miles of hostile action against American forces. To top it off, my small contribution was decades ago.

As a result, I am squeamishly uncomfortable accepting the appreciation when someone tells me “Thanks for your service.”

It took me a few years to get to a place where I could accept those comments.

I now graciously and proudly accept those expressions of appreciation from my fellow Americans, not because of what I did so long ago, but on behalf of all those soldiers, sailors, marines, and airmen who do not have someone looking them in the eye, shaking their hand, and saying “thanks.”

So for all those troops pulling alerts, standing watch, scheduling logistics, or taking fire, please know that vast numbers of Americans are grateful for your service.

I pass on to you their thanks.

You are there, not here, so many people have thanked me instead. It is you they are really thanking.

While today we remember with gratitude those who did not return, I hope those who are serving today hear the appreciation.

To all those serving in the American military or who have served Read More »

Overview of new lease accounting rules

Leave a Comment / Accounting / Jim Ulvog

Image courtesy of DollarPhotoClub.com before they merged into Adobe Stock.

In about three years there will be a complete overhaul of the accounting rules for leases.

For a quick introduction to the changes, here are a few of the comments in a recent AICPA webinar. I will keep this nontechnical.

(Discussion cross-posted from my other blog, Nonprofit Update, because this discussion will be a good intro for CPAs.)

“Right of use” asset

The basic concept is that a lease contract gives you the right to control the use of property, equipment, office space, or some other identified asset for a specific period of time. The economic substance is that the asset is yours to use for the term of the lease.

By creating a “right of use”, the lease contract gives you an asset that needs to be reflected on the balance sheet. In addition the liability for future payments needs to be recognized.

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Overview of new lease accounting rulesRead More »

Overview of new lease accounting rules Read More »

That pesky problem of actually having to prove in court that banks committed fraud and actually having the case survive on appeal

Leave a Comment / Other stuff / Jim Ulvog

A hurdle that keeps popping up when the U.S. or other governments take a banker to trial is being able to prove the case in court. Now the pesky issue is surfacing of having a case survive on appeal.

5/23 – Wall Street Journal – Bank of America Penalty Thrown Out in Crisis-Era “Hustle” Case / Appeals court says government didn’t prove case, bank doesn’t have to pay $1.27 billion – The ongoing challenge of all the allegations of bad behavior in the banking world before the Great Recession continues to face the little bitty problem of actually proving cases in court.

Take a look at the latest collapse of a government case.

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That pesky problem of actually having to prove in court that banks committed fraud and actually having the case survive on appealRead More »

That pesky problem of actually having to prove in court that banks committed fraud and actually having the case survive on appeal Read More »

Updates on banking fiascos

Leave a Comment / Other stuff / Jim Ulvog

A few articles that have caught my eye on varied aspects of the overall range of banking fiascos in play:

4/14 – New York Times – How Regulators Mess With Bankers’ Minds, and Why That’s Good – News the previous week was that many of the huge banks failed their ‘living will’ test. Each bank that is labeled as having ‘systemic risk’ must submit for approval a plan on how they would wind down in the event of failure. The purpose is to show they would not take down the entire financial system.

This article points out the banks were not told what their living will should contain or what it should look like.

As an expected result, likely intentional, the banks’ plans failed the test. When you don’t know how the test will be scored, or even what will be on the test, you are unlikely to pass. Sort of like having to turn in a term paper without know what topic the professor will select.

Again, this article thinks it is wonderful that the banks are evaluated on criteria that are not disclosed to them.

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Updates on banking fiascosRead More »

Updates on banking fiascos Read More »