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Year 2002 Quarter 1: January 1-March 31 Additions to Bob
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Bob Jensen at Trinity
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Bob
Jensen's New Bookmarks on March 31, 2002
Bob
Jensen at Trinity
University
Quotes of the Week
Had the
computer come first—and paper second—no one would raise an eyebrow at the
flight strips cluttering our air-traffic-control centers.
by Malcolm Gladwell in the March 25, 2002 edition of The New Yorker --- http://www.newyorker.com/printable/?critics/020325crbo_books
They put their
pants on the same way we do. They just pull them up two feet higher.
Rich Glas, North Dakota basketball coach just prior to his team's 91-61 loss to
Kansas.
If our food,
drinks and service aren't up to your standards, please lower your standards.
Red Dog Saloon, Juneau, Alaska
Auditing firms and their self-regulating processes seem to have adopted a
similar slogan (see below)
Nobody stands
taller than those willing to stand corrected.
William Safire
We know
accurately only when we know little; with knowledge, doubt increases.
Johann
Wolfgang von Goethe
If you hate a
person, you hate something in him that is a part of yourself.
Hermann Hesse
You're not
going forth. You're going to take that damn hat off, and you're going to
get a job.
Bill Cosby, in a commencement address at Southern Methodist University
Life is a
game. Money is how we keep score.
Ted Turner (as quoted in a recent message from Andrew Priest)
When the Time
Waner write down was reported on a local radio station, it was observed that it
was bigger than our the New Zealand GDP! Surely this should be a lesson to
those who want to carry goodwill in any capacity (e.g. as brands). The numbers
are without meaning.
Robert B Walker [walkerrb@ACTRIX.CO.NZ]
But open
archiving means you don't have to go to the journal and we believe it could very
rapidly undermine the journals without putting anything in their place.
The problem is that things happen in the loop and somebody has to pay for them.
Sally Morris, Association of Learned and Professional Society Publishers, in a
March 25 BBC News interview --- http://news.bbc.co.uk/hi/english/sci/tech/newsid_1885000/1885931.stm
In the final
analysis, there is a real learning curve involved in maximizing both the
instructional and business models for this type of program. Still, it is clear
that corporate education is heading in a new direction. Companies like Intel are
looking to this new corporate education model to provide higher quality
assurances and overall increased value. By combining a traditional graduate
degree curriculum with content tailored to the needs of a company, customized
degree programs offer unprecedented benefits to both the employee and employer
and stand to ultimately redefine the relationship between academia and the
"real world."
Tom Moore (See Babson College's experiments with "Tailor-Made
Degrees" below.)
Self Regulation Really Works in New
York --- It Kept a Few NY Drunks From Performing Bad Audits
Out of roughly 50,000 accountants licensed in New York, only 16 were disciplined
by the state last year-most of them for drunk driving. In fact, only one was
reprimanded on professional grounds.
NEW YORK, March 18, 2002 (Crain's New York Business) — http://www.smartpros.com/x33351.xml
They were an
admixture of old-fashioned and uncouth, a duo almost as unlikely as Neil Simon's
odd couple. The seventy-year-old had been married to the same woman for
forty years, in the same job for more than twenty, and in the same place--Orange
County, California--forever. The fifty-four-year-old had recently divorced
and remarried, switched jobs often and moved even more frequently, most recently
to a million-dollar home in swanky Moraga, east of Oakland, California.
Despite their obvious differences, they spoke on the phone virtually every day
for many years. They first met in 1975 and had traded billions of dollars
of securities with each other. The elder of the pair was the Orange County
treasurer, Robert Citron; the younger was a Merrill Lynch bond salesman, Mike
Stamenson. Together they created what many officials described as the
biggest financial fiasco in the United States: Orange County's $1.7 billion loss
on derivative
Frank Partnoy, Page 157 of Chapter 8 entitled "The Odd Couple"
F.I.A.S.C.O. : The Inside Story of a Wall Street Trader
by Frank Partnoy
- 283 pages (February 1999) Penguin USA (Paper); ISBN: 0140278796
A longer passage from Chapter 8 appears at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
A second passage beginning on Page 166 reads as follows:
Also on December 5, Orange County filed the largest municipal bankruptcy petition in history. Orange County's funds covered nearly two hundred schools, cities, and special districts. The losses amounted to almost $1,000 for every man, woman, and child in the county. The county's investments, including structured notes, had dropped 27 percent in value, and the county said it no longer could meet its obligations.
The bankruptcy filing made the ratings agencies look like fools. Just a few months before, in August 1994, Moody's Investors Service had given Orange County's debt a rating of Aa1, the highest rating of any California county. A cover memo to the rating letter stated, "Well done, Orange County." Now, on December 7, an embarrassed Moody's declared Orange County's bonds to be "junk"--and Moody's was regarded as the most sophisticated ratings agency. The other major agencies, including S&P, also had failed to anticipate the bankruptcy. Soon these agencies would face lawsuits related to their practice of rating derivatives.
On Tuesday, January 17, 1995, Robert Citron and Michael Stamenson delivered prepared statements in an all-day hearing before the California Senate Special Committee on Local Government Investments, which had subpoenaed them to testify. It was a pitiful display. Citron left his wild clothes at home, testifying in a dull gray suit and bifocals. He apologized and pleaded ignorance. He said, "In retrospect, I wish I had more education and training in complex government securities." Stuttering and subdued, appearing to be the victim, Citron tried to excuse his whole life: He didn't serve in the military because he had asthma; he didn't graduate from USC because of financial troubles; he was an inexperienced investor who had never even owned a share of stock. It was pathetic.
Stamenson also said he was sorry and cited the enormous personal pain the calamity had produced. He pretended naivete. He said Citron was a highly sophisticated investor and that he had "learned a lot" from him. Stamenson's story was as absurd as Citron's was sad. When Stamenson asserted that he had not acted as a financial adviser to the county, one Orange County Republican, Senator William A. Craven, couldn't take it anymore and called him a liar. Stamenson finally admitted that he had spoken to Citron often--Citron had claimed every day--but he refused to concede that he had been an adviser. At this point Craven exploded again, asking, "Well, what the hell were you talking about to this man every day? The weather?" Citron's lawyer, David W. Wiechert, was just as angry. He said, "For Merrill Lynch to distance themselves from this crisis would be akin to Exxon distancing themselves from the Valdez."
For updates on derivative financial instruments frauds, go to http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
Nice going
Lehman: To
Hell With the Widows and Orphans
Richard Gross, an analyst at Lehman Bros.,
maintains a "strong buy" rating on Enron as the stock declines from
$81 to $0.75. A Lehman spokesperson helpfully explains to the New York Times
that the firm was advising Dynegy on its purchase of Enron's pipeline, and it is
Lehman's policy not to change the firm's rating on any company involved in a
deal in which Lehman is an adviser.
Number 55 among the 101 Dumbest Moments in Business reads as follows
at http://www.business2.com/dumbest/
Nice Going
Paine Webber: To Hell With the Widows and Orphans
Accounting Has Big Problems, But It is Not as Rotten to the Core as
the Professions of Financial Analysis and Investment Banking --- http://www.trinity.edu/rjensen/fraud.htm#Cleland
"The Man Who Paid the Price for Sizing Up Enron," by Richard A. Oppel, Jr., The New York Times, March 27, 2002, Page C1 --- http://www.nytimes.com/2002/03/27/business/27ENRO.html
Enron (news/quote) executives pressed UBS PaineWebber to take action against a broker who advised some Enron employees to sell their shares in August and was fired by the brokerage firm within hours of the complaint, according to e-mail messages released today by Congressional investigators.
The broker, Chung Wu, of PaineWebber's Houston office, sent a message to clients early on Aug. 21 warning that Enron's "financial situation is deteriorating" and that they should "take some money off the table."
. . .
The episode illustrates just how easily Enron appears to have thrown its weight around at a Wall Street firm, which may have satisfied a big corporate customer at the expense of some retail customers. PaineWebber managed Enron's stock option program for employees and handled brokerage accounts for many company executives. It also did substantial investment banking work for Enron, which generated fees for the firm. PaineWebber said that Mr. Wu was fired because he had violated policies by sending unauthorized e-mail messages to more than 10 clients and by failing to disclose that PaineWebber's research analyst had rated Enron a "strong buy."
But the day that Mr. Wu was fired was the day that Enron's chairman, Kenneth L. Lay, was both shedding some of his own shares and talking up the stock. On Aug. 21, Mr. Lay sold $4 million of stock to the company. He also sent an e-mail message to employees saying that one of his highest priorities was to restore investor confidence, adding that that "should result in a significantly higher stock price."
The message complaining to PaineWebber about Mr. Wu was sent by Aaron Brown, an Enron official who PaineWebber said helped oversee the stock option program. Mr. Brown could not be reached for comment. A switchboard operator at Enron said today that Mr. Brown no longer worked at the company, and a spokesman did not respond to questions.
Mr. Wu, who declined to comment through his lawyer today, previously asserted that Enron was behind his dismissal, but today's disclosure was the first to show pressure was applied by Enron officials. Mr. Wu now works for A. G. Edwards.
A PaineWebber spokesman declined to elaborate on the matter involving Mr. Wu but pointed to a letter sent to Congress last week.
Continued at http://www.nytimes.com/2002/03/27/business/27ENRO.html
Bob Jensen's threads on how the professions of investment banking and security analysis are rotten to the core can be found at http://www.trinity.edu/rjensen/fraud.htm#Cleland
This week's, March 31, updates on the Enron scandal and accounting fraud are in a separate document at http://www.trinity.edu/rjensen/fraud033102.htm
Do you think that, in retrospect, the
following initiative would have deterred the Lay, Skilling, Fastow executives at
Enron or David Duncan at Andersen? I contend that they will still do it
because they can still get away with it, and even if they get caught stealing
millions of dollars, the payoff vastly exceeds the punishment.
Read the following March 21, 2002 Message from Phil Livingston, CEO of Financial
Executives International (FEI)
Read an HTML version of this message, plus our archive of past issues, at http://www.fei.org/newsletters/feixp/
SEC CHAIRMAN PITT OUTLINES CURRENT SEC INITIATIVES IN SENATE TESTIMONY Chairman Pitt emphasized that the Commission and Congress must act together towards reform, with the Congress only stepping in with legislation, which "would have the benefit of extending the reach of the available SEC authority where necessary".
Chairman Pitt's recommendations focused on the following three areas for reform: · Corporate governance and disclosure, including MD&A requirements for critical accounting policies, SPEs and related party transactions and trend information, and guidelines toward more timely disclosure · Accounting reform, including the public accountability board (PAB), and auditor independence requirements · Accounting standard setting to improve the FASB process by broadening FASB funding sources, advocating principles-based standards and providing more SEC input to the FASB agenda
He stressed the need to increase the "CEO's individual accountability for his or her company's disclosure" via certification to shareholders of significant information. With regard to the PAB, he emphasized "private sector" regulation with SEC oversight, comprised "predominantly of independent public members, unaffiliated with the accounting profession". Membership in the PAB would be a "prerequisite to an auditor's ability to supply audit opinions on which a registrant may rely". The SEC does not advocate a ban on "the receipt of non-audit services from their auditors and believes the SEC framework, adopted in late 2000, will over time, serve investors better." The Commission is also against the mandatory rotation of auditors and cautions on creating a "cooling off" period for which auditors cannot go to work for their clients.
Chairman Pitt also referenced, and included as an appendix to his testimony, FEI's recently released Reform Recommendations. Here's the Chairman's complete testimony, and it includes much more detail and opinion than I could provide here: http://www.sec.gov/news/testimony/032102tshlp.htm
Speaking as the final witness before the Senate Banking Committee, Harvey L. Pitt, chairman of the Securities and Exchange Commission, argued against proposed legislation that would introduce radical reforms for accounting firms, but supported reforms of companies, credit agencies, and accounting standard-setters. http://www.accountingweb.com/item/75865
The Securities and Exchange Commission has filed suit against the founder and five other former top officers of Waste Management Inc. for massive fraud. The complaint charges the defendants with inflating profits to meet earnings targets. http://www.accountingweb.com/item/76329
Note that Waste Management just announced that it was changing auditors. The auditor up to now was (guess?) Arthur Andersen.
Bob Jensen's threads on this and other frauds can be found at http://www.trinity.edu/rjensen/fraud.htm
Hi Patricia,
You raise deep questions, and I am afraid that today I only have time to give you off-the-wall answers that hardly do justice to your questions.
Firstly, I might point out that Trinity University accounting courses are very traditional in a five-year program leading to an MS in Accounting. Being a very small university with only five accounting faculty, we often teach course modules rather than entire courses in some specialties like not-for-profit accounting. Our strength lies in student quality due, in large measure, to the huge Trinity University endowment that provides financial aid to the best and brightest prospects and/or provides small classes and great learning opportunities outside the classroom. Virtually all incoming first-year students have never considered majoring in accounting. A few see the light along the way, and we graduate about twenty students per year in our MS in Accounting Program. Our students all intern in their senior year, and nearly all have their jobs in hand before even starting their fifth year program. The program is a success for our students, so we have not tinkered with radical innovations that might upset the success of the students and the program. I think we are probably quite like most accounting education programs in that regard.
If you want to listen to an influential professor who takes a quite opposite viewpoint, you should listen to the August 2001 remarks of Professor Joel Demski when he became this year's President of the American Accounting Association. In an August 15, 2001 controversial address to the American Accounting Association, current AAA President Joel Demski lamented the fall of accounting education (I think he meant business education in general) from scholarship, joy, and an academic curriculum. In particular, he blasted the current textbooks and publishers, public accounting firms, accounting educators, administrators, and the tendency for scholarship and curricula to become niched into specialty topics with failing cross-communications between those specialties such as tax accounting, capital markets studies, NFP accounting, managerial accounting, AIS, etc. In particular he laments the way accounting curricula have evolved to meet the career interests of public accounting firm employers and the virtual failing of the five-year, 150-credit, requirements to sit for the CPA examination. At the end of his address to the membership, Joel announced a curriculum-design competition. Winners will be announced in August 2002 at the annual meetings in San Antonio.
You can both read and listen to Joel Demski's August 15 address to the AAA membership at http://www.cs.trinity.edu/~rjensen/001aaa/atlanta01.htm
My own feelings about accounting education cannot be divorced from my feelings about higher education. I think that the traditional undergraduate and graduate "diplomas" should be replaced by a succession of life-long "certifications" that begin with required liberal exposure to a large variety of disciplines that reduces over time to increasingly narrower focus upon disciplines and technical details. After say, ten years, the certifications should become quite narrow and quite technical. What we have now is an undergraduate diploma that pretends to "certify" such graduates as "artists," "managers," "accountants," "psychologists," "engineers," etc. when these graduates have only superficial backgrounds and skills in their chosen fields. They become more specialized in graduate education programs, but then the formal education process ends. On-the-job learning, of course, continues, but is a haphazard and serendipitous life-long progression that needs to be improved upon in virtually all academic disciplines. In some professions there are certification examinations, but these typically do not progress down to increasingly technical successions of certification accomplishments over the life of a specialist. The certification process is also too focused upon examinations rather than mentoring and rigorous education/training courses. I am not just talking about professions like accounting, engineering, law, and medicine. I am also talking about art, art history, history, literature, etc.
I have become a very vocal advocate of distance education. My main reason is that I think that distance education using emerging technologies offers mentoring and lifelong learning opportunities that were not feasible until very recently. And these technologies are improving at breakneck speed. See http://www.trinity.edu/rjensen/000aaa/0000start.htm
I am not optimistic about rapid change in this regard. The so-called corporate universities offer more hype than hope. Traditional universities such as the University of Wisconsin offer hundreds or thousands of online courses and are making enormous strides in educational experiments. But these programs are trapped in our existing culture, traditional economy, and traditional employment practices. Change must be monumental in the economy, business tradition, profession tradition, and culture. Such change may be very disruptive and must evolve slowly rather than with a big bang. Bit by bit the world will make progress as the world becomes more global due to modern education technologies.
Rather than isolate the poor and ignorant people who suffer and make war, we need to use our new education technologies to offer them affordable opportunities and share our knowledge and to make creative contributions to our knowledge bases. We then need to offer them career tracks and lifelong opportunities to better themselves and their products and services.
In terms of accounting education and professional opportunity, I am very worried about the impact of the Enron/Andersen scandal. Some of the serious proposals such as the dropping of most consultancy services will be disastrous overreactions. But this is leading me astray, and I am running out of time today. So I will close here.
Best of luck in your endeavor to both same and improve accountancy and the education of its faithful servants.
Bob Jensen.
-----Original Message-----
From: Willipat@aol.com [mailto:Willipat@aol.com]
ent: Tuesday, March 26, 2002 1:36 PM
To: rjensen@trinity.edu
Subject: accounting educationDear Professor Jensen:
It was a pleasure to meet you at the University of Denver's panel "Accounting in Turmoil: Picking Up the Pieces." As I told you, I write CPE for CPA's and am currently writing a chapter for CPE Direct (the subscription program from the AICPA in connection with the Journal of Accountancy) on the changes needed in accounting education. The article from the JofA that is part of this chapter is entitled "The Crisis in Accounting Education" and points out the decrease in the number of accounting students, their qualifications, and the need for changes in accounting education.
When I spoke to you at DU you indicated that you prefer to answer questions by email.
One of the questions that you answered at DU had to do with how you would change accounting education. Would you be willing to elaborate on what you think needs to be done in order to improve accounting education overall? How would you go about recruiting the most qualified students to the accounting profession? What has Trinity University done in this area? I will, of course, quote you, and include any information about you, Trinity's accounting program, and the university as a whole, that you would like included. I would like permission to include your web site in the chapter. You have such a wealth of information on your site. I wish I had known about it much sooner!
Thank you so much for taking time to consider answering these questions. If you would prefer, I would be happy to call you for an interview by phone. However, I know that with your schedule, email is probably more convenient for you.
Patricia Lane Williams
303-367-4496 Willipat@aol.com
Two Letters to Senator Schumer
On March 25, 2002, Walter P. Schuetze, former Chief Accountant of the Securities and Exchange Commission, wrote Senator Schumer a letter that leaves no doubt that he opposes booking of employee stock options when they vest. That letter is now on the Web at http://www.trinity.edu/rjensen/theory/sfas123/schuetze01.htm
I wrote a draft reply in order to point out some opposing arguments. My reply is on the Web at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm
Mr. Schuetze is a friend, and my arguments in the above letter are academic. Nothing personal in any way is intended.
Educators and students may also be interested in the short case that I wrote in the Appendix to my letter.
Actually, I have not yet mailed my letter to Senator Schumer and would appreciate replies with helpful suggestions and corrections.
For added background reading, I have added some other papers/lectures by Walter Schuetze as follows:
Once again, my reply reply is on the Web at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm
Thanks,
Bob (Robert E.) Jensen
Jesse H. Jones Distinguished Professor of Business
Trinity University, San Antonio, TX 78212
Voice: (210) 999-7347 Fax: (210) 999-8134
Email: rjensen@trinity.edu
http://www.trinity.edu/rjensen
March 31, 2002 reply from Robert B Walker [walkerrb@ACTRIX.CO.NZ]
I have briefly scanned the two letters. I would say at the outset that I, too, have a strong instinct for realisable value as the benchmark for assessing financial position - at least I do until I deal with the public sector where the notion breaks down.
My first thought is that Mr Schuetze asks himself the wrong question. He asks is there an asset which is depleted? He should ask: is there an obligation with a financial value? If the answer is yes, then he has a credit and a resultant debit to deal with. Then he can consider whether the debit has any value or not. If no then it is a debit to equity (net assets) in some way.
In his first scenario, where the senators manage their Club, there is no obligation. No further issues arise.
In his second scenario, there is an obligation. It has a financial value. In the event of booking the credit, does the debit have any 'future economic' (cash?) benefit. The answer is no because it has had value in the past not the future. Then:
Dr Expense Cr Liability.
The liability will be discharged by a transfer of shares to the owner of the right. This is the same as giving the person some money and having them buy shares (doctine of substance over form or representational faithfulness applies). The problem is this. There is no outflow of economic benefits (money), except in substance (the problem with that doctrine is anything can mean everything), because:
Dr Liability Cr Equity (paid up capital)
We are left then with doing one of two things:
First, redefine Liability to be Equity - Type 2 compared to Equity - Type 1, being that held by the original shareholders. You then have, essentially, a shuffle around inside equity. You do, however, achieve the main objective. You inform the original shareholders that they have had value transferred from themselves to another, for which they received a service. This is necessary because otherwise how will they know?
Another way to see the problem is to conceive of it as having two separate reporting entities. RE1 is the merged interest of the original stockholders. RE2 is the interest of the newcomer. The first accounting then makes a sort of sense. The two reporting entities are then combined without carrying out eliminations.
Remember I can only argue the second of these because of our (NZ) definition of the reporting entity which states:
'A reporting entity exists where it is reasonable to expect users dependent on general purpose financial reports for information which will be useful to them in terms of the objectives [of general purpose financial reporting.' (para 2.1 Statement of Concepts for General Purpose Financial Reporting)
March 31, 2002 reply from nodoushan@mail.hartford.edu
Dear Robert:
The other issue that I believe is behind the effort not to book or value stock options is the tax treatment. I'm a tax accountant so this is my take.
Currently, there is no taxable income upon the receipt of a nonstatutory option that does not have a readily ascertainable fair market value, even if the FMV of the option is ascertainable before it is exercised or disposed of. The rules are under Internal Revenue Code §83 which does define "readily ascertainable" but the definition requires that four conditions exist: 1) option is freely transferable by the recipient; 2) option is immediately exercisable in full by the recipient; 3)option is not subject to any condition or resitrction that has a significant effect upon its FMV; and 4)FMV of option is readily ascertainable.
Obviously, companies write the options so that these conditions are not met because there is a time restriction and the options usually are not transferable. However, if FASB/SEC/Congress changes financial accounting rules and requires stock options to be valued and booked when issued, you will probably see the Treasury/IRS/Congress move to have the income taxed immediately. There would be a major commotion against this as it violates the "wherewithal to pay" concept, but this concept is violated frequently in the IRC. Then, you have the problem of what happens if the value later declines? Do you allow the employee a loss deduction equal to previously taxed income, and what if the tax rates have changed? Congress can deal with this but it adds complications.
I believe that changes to financial accounting for stock options will change the tax treatment. If the company reports the options as compensation expense does it go in the employees W-2? There is too much potential income out there to ignore if these options will have a "readily ascertainable value." We all know that they do have a value to both the company and the employee; the tax question has always been what's the value prior to exercise and when should the value be taxed?
More issues to consider and to complicate things. Just thought I'd add my two cents. If you're writing to Congressmen about something that could increase taxes they don't always act in the best interest of accounting theory.
Patricia Nodoushani, Ph.D., CPA
Dept. of Accounting & Taxation
University of Hartford
WHITE-COLLAR
CRIMINALS Enough Is Enough They lie they cheat they steal and they've been
getting away with it for too long.
by Clifton Leaf, Fortune magazine, March 18, 2002, pp. 60-78
--- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206659&_DARGS=%2Fhtml%2Fmag_archive%2Fmag_archive_index.html.6_A&_DAV=Home
| What
Really Happens (From Fortune, March 18, 2002, p. 72)
In the ten-year period from 1992 to 2001, SEC officials felt that 609 of its civil cases were egregious enough to merit criminal charges. These were referred to U.S. Attorneys. Of the initial 609 referrals, U.S. Attorneys have disposed of 525 Defendants prosecuted 187 Found guilty 142 Went to jail 87 |
609 525 187 142 87 |
And how many attorneys are in this office to fight the nation's book cookers, insider traders, and other Wall Street thieves? Twenty-five--including three on loan from the SEC. The unit has a fraction of the paralegal and administrative help of even a small private law firm. Assistant U.S. Attorneys do their own copying, and in one recent sting it was Sandy--one of the unit's two secretaries--who did the records analysis that broke the case wide open. (Page 72)
----------------------------
Nevertheless, the last commission chairman, Arthur Levitt, did manage to shake the ground with the power he had. For the 1997-2000 period, for instance, attorneys at the agency's enforcement division brought civil actions against 2,989 respondents. That figure includes 487 individual cases of alleged insider trading, 365 for stock manipulation, 343 for violations of laws and rules related to financial disclosure, 196 for contempt of the regulatory agency, and another 94 for fraud against customers. In other words, enough bad stuff to go around. What would make them civil crimes, vs. actual handcuff-and-fingerprint ones? Evidence, says one SEC regional director. "In a civil case you need only a preponderance of evidence that there was an intent to defraud," she says. "In a criminal case you have to prove that intent beyond a reasonable doubt." (pp. 70-71)
----------------------------
The auditor in that case, you'll recall, was Arthur Andersen, which paid $110 million to settle a civil action. According to an SEC release in May, an Andersen partner authorized unqualified audit opinions even though "he was aware of many of the company's accounting improprieties and disclosure failures." The opinions were false and misleading. But nobody is going to jail.
At Waste Management, yet another Andersen client, income reported over six years was overstated by $1.4 billion. Andersen coughed up $220 million to shareholders to wipe its hands clean. The auditor, agreeing to the SEC's first antifraud injunction against a major firm in more than 20 years, also paid a $7 million fine to close the complaint. Three partners were assessed fines, ranging from $30,000 to $50,000, as well. (You guessed it. Not even home detention.) Concedes one former regulator familiar with the case: "Senior people at Andersen got off when we felt we had the goods." Andersen did not respond to a request for comment. (Page 63)
Waste
Management Defects: There Appears to Be No Honor Among Thieves
Big Five firm Andersen is facing almost daily defections of major clients as
publicly held companies jump ship in search of another auditor. Waste
Management, Occidental Petroleum and Dynegy have announced they have
switched to other Big 5 firms. http://www.accountingweb.com/item/74745
"WHITE-COLLAR CRIMINALS Schemers
and Scams: A Brief History of Bad Business It takes some pretty spectacular
behavior to get busted in this country for a white-collar crime. But the
business world has had a lot of overachievers willing to give it a shot."
by Ellen Florian, Fortune magazine, March 18, 2002, pp. 62-68 --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206661
1920: The Ponzi Scheme
Charles Ponzi planned to arbitrage postal coupons--buying them from Spain and selling them to the U.S. Postal Service at a profit. To raise capital, he outlandishly promised investors a 50% return in 90 days. They naturally swarmed in, and he paid the first with cash collected from those coming later. He was imprisoned for defrauding 40,000 people of $15 million.1929: Albert Wiggin
In the summer of 1929, Wiggin, head of Chase National Bank, cashed in by shorting 42,000 shares of his company's stock. His trades, though legal, were counter to the interests of his shareholders and led to passage of a law prohibiting executives from shorting their own stock.1930: Ivar Krueger, the Match King
Heading companies that made two-thirds of the world's matches, Krueger ruled--until the Depression. To keep going, he employed 400 off-the-books vehicles that only he understood, scammed his bankers, and forged signatures. His empire collapsed when he had a stroke.1938: Richard Whitney
Ex-NYSE president Whitney propped up his liquor business by tapping a fund for widows and orphans of which he was trustee and stealing from the New York Yacht Club and a relative's estate. He did three years' time.1961: The Electrical Cartel
Executives of GE, Westinghouse, and other big-name companies conspired to serially win bids on federal projects. Seven served time--among the first imprisonments in the 70-year history of the Sherman Antitrust Act.1962: Billie Sol Estes
A wheeler-dealer out to corner the West Texas fertilizer market, Estes built up capital by mortgaging nonexistent farm gear. Jailed in 1965 and paroled in 1971, he did the mortgage bit again, this time with nonexistent oil equipment. He was re-jailed in 1979 for tax evasion and did five years.1970: Cornfeld and Vesco Bernie
Cornfeld's Investors Overseas Service, a fund-of-funds outfit, tanked in 1970, and Cornfeld was jailed in Switzerland. Robert Vesco "rescued" IOS with $5 million and then absconded with an estimated $250 million, fleeing the U.S. He's said to be in Cuba serving time for unrelated crimes.1983: Marc Rich
Fraudulent oil trades in 1980-81 netted Rich and his partner, Pincus Green, $105 million, which they moved to offshore subsidiaries. Expecting to be indicted by U.S. Attorney Rudy Giuliani for evading taxes, they fled to Switzerland, where tax evasion is not an extraditable crime. Clinton pardoned Rich in 2001 (and he and Hillary received over $7,000 in furniture from the wife of Marc Rich to furnish the Clinton's new home in New York.)1986: Boesky and Milken and Drexel Burnham Lambert
The Feds got Wall Streeter Ivan Boesky for insider trading, and then Boesky's testimony helped them convict Drexel's Michael Milken for market manipulation. Milken did two years in prison, Boesky 22 months. Drexel died.1989: Charles Keating and the collapse of Lincoln S&L
Keating was convicted of fraudulently marketing junk bonds and making sham deals to manufacture profits. Sentenced to 12 1/2 years, he served less than five. Cost to taxpayers: $3.4 billion, a sum making this the most expensive S&L failure.1991: BCCI
The Bank of Credit & Commerce International got tagged the "Bank for Crooks & Criminals International" after it came crashing down in a money-laundering scandal that disgraced, among others, Clark Clifford, advisor to four Presidents.1991: Salomon Brothers
Trader Paul Mozer violated rules barring one firm from bidding for more than 35% of the securities offered at a Treasury auction. He did four months' time. Salomon came close to bankruptcy. Chairman John Gutfreund resigned.1995: Nick Leeson and Barings Bank
A 28-year-old derivatives trader based in Singapore, Leeson brought down 233-year-old Barings by betting Japanese stocks would rise. He hid his losses--$1.4 billion--for a while but eventually served more than three years in jail.1995: Bankers Trust
Derivatives traders misled clients Gibson Greetings and Procter & Gamble about the risks of exotic contracts they entered into. P&G sustained about $200 million in losses but got most of it back from BT. The Federal Reserve sanctioned the bank.1997: Walter Forbes
Only months after Cendant was formed by the merger of CUC and HFS, cooked books that created more than $500 million in phony profits showed up at CUC. Walter Forbes, head of CUC, has been indicted on fraud charges and faces trial this year.1997: Columbia/HCA
This Nashville company became the target of the largest-ever federal investigation into health-care scams and agreed in 2000 to an $840 million Medicare-fraud settlement. Included was a criminal fine--rare in corporate America--of $95 million.1998: Waste Management
Fighting to keep its reputation as a fast grower, the company engaged in aggressive accounting for years and then tried straight-out books cooking. In 1998 it took a massive charge, restating years of earnings.1998: Al Dunlap
He became famous as "Chainsaw Al" by firing people. But he was then axed at Sunbeam for illicitly manufacturing earnings. He loved overstating revenues--booking sales, for example, on grills neither paid for nor shipped.1999: Martin Frankel
A financier who siphoned off at least $200 million from a series of insurance companies he controlled, Frankel was arrested in Germany four months after going on the lam. Now jailed in Rhode Island--no bail for this guy--he awaits trial on charges of fraud and conspiracy.2000: Sotheby's and Al Taubman
The world's elite were ripped off by years of price-fixing on the part of those supposed bitter competitors, auction houses Sotheby's and Christie's. Sotheby's chairman, Taubman, was found guilty of conspiracy last year. He is yet to be sentenced.
Bob Jensen's threads on fraud, including derivative financial instruments fraud, are at http://www.trinity.edu/rjensen/fraud.htm
"Hard Time? Hardly In 1999 we
wrote about some accounting bad guys who seemed to have airtight cases against
them. Guess how many went to jail?"
by Carol J. Loomis, Fortune magazine, March 18, 2002, Page 78 --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206662
Raise your hand if you think one or more Enron executives should go to jail. The yes votes on that one would surely put President Bush's approval rating to shame. We might even get past 99.99% affirmative, with only the Lay, Skilling, and Fastow families voting no.
But the fact is that putting bigtime executives in jail for perpetrating accounting frauds has proved very hard to do. Some 2 1/2 years ago (Aug. 2, 1999) FORTUNE ran an article, Lies, Damned Lies, and Managed Earnings, that spotlighted the accounting scandals of the time. Of the big ones then generating tales of absolutely egregious behavior, none has produced jail sentences.
Indeed, only one produced a sentence of any kind: Bruce J. Kingdon, who had run a division of Bankers Trust that did securities processing, pleaded guilty in September 2000 to conspiracy and falsifying bank records, and was ordered to perform 450 hours of community service, see a therapist once a week for three years, and pay fines of $180,500. (Bankers Trust itself had earlier paid a $63 million fine.) Kingdon's lawyer says his client's community service consisted of work for a medical cause--"cerebral palsy or muscular dystrophy or something like that."
Jail sentences could yet come out of several other cases, including two that have actually produced indictments. The zinger is likely to be the case against two prominent CUC International executives, CEO Walter Forbes and President Kirk Shelton, who in 1997 merged their company with HFS Inc. to form Cendant. A scant four months later CUC's accounting was exposed as rotten, and Cendant's market value dropped $14 billion in one day.
In time the U.S. Attorney for New Jersey, working with the SEC, wrung cooperating plea agreements from three former CUC financial executives, who are expected to testify against Forbes and Shelton. The two men are charged with three types of fraud--securities, mail, and wire--and with conspiracy to lie to the SEC. In their trial, scheduled to start in Newark in September, they will face a morally outraged team of prosecutors, one of whom says, "This is war." Forbes and Shelton cannot have been helped by the furor over Enron.
The second batch of indictments emerged from another merger-related mess, arising from McKesson's acquisition of software supplier HBO & Co. in January 1999. Again, within months rot was exposed, this time in HBO's accounting. (Say, whatever happened to the due diligence that supposedly precedes mergers?) After a criminal investigation headed by San Francisco Assistant U.S. Attorney Leslie Caldwell, the two co-presidents of HBO, Albert Bergonzi and Jay Gilbertson, were charged with the fraud battery--securities, mail, and wire--and with conspiracy. No date has been set for their trial, and Caldwell won't, in any case, be apt to take part in it. She's now heading the Department of Justice task force that's investigating Enron.
"Massive financial fraud" is what the SEC says occurred at both McKesson and Cendant. But that is also how it described the goings-on a few years ago at Sunbeam and Waste Management, and those cases have brought no criminal indictments. That means the executive everyone loves to hate, deposed Sunbeam CEO Al Dunlap, has escaped charges, and so has Waste Management's former CEO, Dean Buntrock. Other escapees: partners of Arthur Andersen & Co., which was the outside auditor at both Sunbeam and Waste Management (and, as all the world knows, at Enron).
The weirdest accounting case around is one in which indictments have existed for years, but nothing has made it to court. Here, in early 1999, the U.S. Attorney for the Southern District of New York, Mary Jo White, charged Garth Drabinsky and Myron Gottlieb of theatrical producer Livent with 15 counts of fraud and one of conspiracy. But Drabinsky and Gottlieb had already fled to Canada, Drabinsky's homeland--and there they remain today. No wonder, since the U.S. Attorney's office has never moved to extradite them, even though it vowed from the start to do so.
Continued at http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206662
Nice Going Paine Webber: Screw the Widows and Orphans
Accounting Has Big Problems, But It is Not as Rotten to the Core as the Professions of Financial Analysis and Investment Banking --- http://www.trinity.edu/rjensen/fraud.htm#Cleland
"The Man Who Paid the Price for Sizing Up Enron," by Richard A. Oppel, Jr., The New York Times, March 27, 2002, Page C1 --- http://www.nytimes.com/2002/03/27/business/27ENRO.html
Enron (news/quote) executives pressed UBS PaineWebber to take action against a broker who advised some Enron employees to sell their shares in August and was fired by the brokerage firm within hours of the complaint, according to e-mail messages released today by Congressional investigators.
The broker, Chung Wu, of PaineWebber's Houston office, sent a message to clients early on Aug. 21 warning that Enron's "financial situation is deteriorating" and that they should "take some money off the table."
. . .
The episode illustrates just how easily Enron appears to have thrown its weight around at a Wall Street firm, which may have satisfied a big corporate customer at the expense of some retail customers. PaineWebber managed Enron's stock option program for employees and handled brokerage accounts for many company executives. It also did substantial investment banking work for Enron, which generated fees for the firm. PaineWebber said that Mr. Wu was fired because he had violated policies by sending unauthorized e-mail messages to more than 10 clients and by failing to disclose that PaineWebber's research analyst had rated Enron a "strong buy."
But the day that Mr. Wu was fired was the day that Enron's chairman, Kenneth L. Lay, was both shedding some of his own shares and talking up the stock. On Aug. 21, Mr. Lay sold $4 million of stock to the company. He also sent an e-mail message to employees saying that one of his highest priorities was to restore investor confidence, adding that that "should result in a significantly higher stock price."
The message complaining to PaineWebber about Mr. Wu was sent by Aaron Brown, an Enron official who PaineWebber said helped oversee the stock option program. Mr. Brown could not be reached for comment. A switchboard operator at Enron said today that Mr. Brown no longer worked at the company, and a spokesman did not respond to questions.
Mr. Wu, who declined to comment through his lawyer today, previously asserted that Enron was behind his dismissal, but today's disclosure was the first to show pressure was applied by Enron officials. Mr. Wu now works for A. G. Edwards.
A PaineWebber spokesman declined to elaborate on the matter involving Mr. Wu but pointed to a letter sent to Congress last week.
Continued at http://www.nytimes.com/2002/03/27/business/27ENRO.html
Bob Jensen's threads on frauds have been updated at http://www.trinity.edu/rjensen/fraud.htm
Oxford University Press has launched what may be the world's largest reference collection on the Internet -- with a hefty fee to view it.
"Oxford Online: Will People Pay?" by Kendra Mayfield, Wired News, March 28, 2002 --- http://www.wired.com/news/business/0,1367,51300,00.html
Now, this centuries-old collection of illustrious reference works will be available to anyone with an Internet connection -- if they can afford the annual subscription fees.
"It will offer a new global standard for reference across the Internet, and in the process make accessible Oxford's massive reference assets," said Rob Scriven, managing editor of Oxford Dictionaries.
The Core Collection, the first database to be available as part of Oxford Reference Online, integrates over 100 dictionaries and reference titles across an array of subjects -- from astronomy to zoology -- into a single cross-searchable resource.
OUP decided to take its extensive collection online because "the technology is there to put books online, the content is there and the interest is large," said Rebecca Seger, sales and marketing director for OUP USA scholarly and professional reference group.
All that information comes at a price, however. Annual subscription fees will cost approximately $250 a year for schools and anywhere from $395 to just under $3,000 for multiple-user accounts such as libraries.
Institutions and organizations can also sign up for a free 30-day trial. More than 3,000 institutions around the world have signed up so far.
But will users pay for content when many general reference materials on the Web remain free?
Oxford University Press publishers think so.
Continued at http://www.wired.com/news/business/0,1367,51300,00.html
Babson College's experiments with "Tailor-Made Degrees"
"Tailor-Made Degrees: Customized Corporate Education," by Tom Moore, Syllabus, March 2002, pp. 30-33 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=6135
The popular notion of a new graduate entering "the real world" points to the fact that we commonly view academia and the corporate environment as two disparate, almost polarized communities. The perception may be that universities focus on theory while businesses concentrate on practice. And to combine the two—to influence academic curriculum on behalf of corporate needs—has traditionally been frowned upon as a corruption of pure academic purpose.
This is not to say that higher education has ignored the corporate community. Colleges and universities have long offered corporate training programs and customized courses. However, corporate offerings and traditional degree programs have fallen into two distinct categories, usually considered to be very separate: the graduate degree program, typically thought of as the more rigorous education experience designed exclusively by academics, and the executive education program, a shorter-term, not-for-credit alternative intended to serve the corporation’s needs.
Now, due in large part to the maturing nature and growing acceptance of distance learning, the wall that once stood between business and academia is beginning to crumble. Over the past few years, we’ve begun to see a blending of executive education and graduate degree programs. The result is a new model for professional education: the corporate-customized graduate degree program.
The Babson College Experience
In 2000, Babson College opened the doors of Babson Interactive, a school dedicated to applying e-learning to innovative management education programs. The goal was to create an e-learning/faceto- face hybrid that is both responsive to the needs of businesses and culminates in a degree from an established brick-andmortar university.
When I was first hired by Babson College, I held the titles of dean of the Babson School of Executive Education and dean of its Graduate School of Business. My responsibilities included overseeing Babson’s MBA programs and executive education courses at the same time. As I stepped into the position of CEO of Babson Interactive, I relinquished my role as dean of the Graduate School but retained my title and responsibilities as dean of Executive Education. It was clear from the start that e-learning offered high potential for an entirely new type of executive education, and that Babson Interactive was the place where we would explore the possibilities.
Babson had been watching the development of e-learning from the sidelines for quite some time before opening Babson Interactive. At first we were, frankly, not very interested. For the most part, the technologies appeared underdeveloped and unproven. We had great concern that the initial technology was not robust enough to provide the kind of insight and judgment building that we felt a good graduate program should offer.
In the past few years, however, we’ve seen the technology improve and have observed other institutions implement very successful e-learning programs. I now believe that a blended degree program—one that incorporates both elearning and face-to-face instruction— offers an education experience that can, in fact, be superior to the traditional classroom experience. The key is in the proper balancing of these two learning modes.
A number of corporations have come to Babson Interactive. In one example, Babson, along with Cenquest, an e-learning company with expertise in creating online courses, developed a oneof- a-kind company-customized MBA degree program for Intel Corp. By combining the foundational and theoretical knowledge included in a Babson graduate degree with the strategic intent of the company, the program provided Intel with a completely new employee education option.
The customization of the curriculum took several forms. The Intel team offered input into the class electives. They also provided real work projects to be used as examples and incorporated into the coursework. Through e-learning technology, Intel executives, partners, and even customers could be included as guest lecturers.
ROI and Student Benefits
Corporations have long viewed companyreimbursed education as a standard employee benefit alongside health care and bonus programs. U.S. businesses spend $58 billion annually on employee education. And in a market where there is always fierce competition for top employees, offering quality education programs is seen as essential to hiring and retaining the best and brightest.
Unfortunately, the return-on-investment for company-reimbursed degree programs has been less than easy to quantify. Corporations have had little influence over the schools being attended, much less the programs being offered and the curriculum being taught. Aside from reimbursement contingencies based on keeping a certain grade point average, businesses have had limited input into the nature of their employee’s for-credit education experience. The programs are typically funded more upon faith and hope then on real data showing that employees will learn skills that will increase their overall value to the company.
Perhaps a larger irony to these programs is that while they are seen as a necessary tool for hiring and retaining employees, they often have an opposite effect. It is not unusual for a company to pay for an employee’s graduate education only to have that employee leave once the degree is obtained. In such cases, the reimbursement program often becomes a company-sponsored training ground for its competition.
Since the programs at Babson Interactive are designed to increase an employee’s value to the company, chances are far better that graduates will continue their careers at the company once their degree is completed. And since employees work and study with other employees from various corporate locations, managers see the learning experience as providing a rare opportunity to build valuable employee relationships across company campuses.
Lessons Learned
In the final analysis, there is a real learning curve involved in maximizing both the instructional and business models for this type of program. Still, it is clear that corporate education is heading in a new direction. Companies like Intel are looking to this new corporate education model to provide higher quality assurances and overall increased value. By combining a traditional graduate degree curriculum with content tailored to the needs of a company, customized degree programs offer unprecedented benefits to both the employee and employer and stand to ultimately redefine the relationship between academia and the "real world."
Janet Fulk of our Annenburg School for Communication has been happy using the Internet 2 infrastructure for high quality video conferencing. It has enabled her to conduct a joint doctoral seminar with two other distant US-based schools. With Internet 2, there are no charges for the bandwidth connecting the schools. Market prices for such bandwidth would be in the tens of thousands of dollars, effectively precluding the seminar.
Kevin Kobelsky PhD CA·CISA
Assistant Professor Leventhal School of Accounting,
Marshall School of Business
University of Southern California Accounting Building 125
Los Angeles, CA 90089-0441
Voice: (213) 740-0657 Fax: (213) 747-2815
Information Week had an interesting article that says that teens are developing bad "work" habits that may cause them problems at work--e.g., plagiarism.
http://www.informationweek.com/story/IWK20020307S0005
Glen L. Gray, PhD, CPA
Department of Accounting and Information Systems
California State University, Northridge 18111 Nordhoff Street
Northridge, CA 91330-8372 818.677.3948
glen.gray@csun.edu
http://www.csun.edu/~vcact00f
Bob Jensen's threads on cheating and plagiarism are at http://www.trinity.edu/rjensen/plagiarism.htm
"Online Education Must Capitalize on Students' Unique Approaches to Learning, Scholar Says" by Michael Arnone THE CHRONICLE OF HIGHER EDUCATION, March 4, 2002 http://chronicle.com/free/2002/03/2002030401u.htm
In a recent interview, Nishikant Sonwalkar, principal educational architect at the Education Media Creation Center at the Massachusetts Institute of Technology, says "online learning provides tremendous opportunity for providing pedagogical choices to learners that cannot be provided by a single professor or teacher in a classroom situation. Online education provides a unique opportunity to use multiple representations of knowledge in terms of media. At the same time, it also provides opportunity to sequence this knowledge in a way so that it makes more pedagogical sense, by providing different learning strategies."
"High-tech teaching could be 'suicidal,' scholar says" by John Sanford STANFORD REPORT, February 11, 2002 http://www.stanford.edu/dept/news/report/news/february13/gumbrecht-213.html
Speaking at the Stanford University Center for Teaching and Learning's "Award-Winning Teachers on Teaching" series, Hans Ulrich Gumbrecht, Albert Guerard Professor of Literature, said, "I think this enthusiastic and sometimes naive and sometimes blind pushing toward the more technology the better, the more websites the better teacher and so forth, is very dangerous -- [that it] is, indeed, suicidal."
Stanford Report is published daily by the Stanford University News Service, 425 Santa Teresa Street, Stanford, CA 94305-2245 USA; tel: 650-723-2558; email: stanford.report@forsythe.stanford.edu ; Web: http://www.stanford.edu/dept/news/report/
"Philosopher's Critique of Online Learning Cites Existentialists (Mostly Dead)" by Michael Arnone THE CHRONICLE OF HIGHER EDUCATION, March 15, 2002 http://chronicle.com/free/2002/03/2002031501u.htm
Hubert L. Dreyfus, a professor of philosophy at the University of California at Berkeley, "argues that the Internet's promise of extending and improving human interaction through the digital medium isn't everything it's cracked up to be. . . . To prove his point, Mr. Dreyfus calls on existentialist philosophers from the 19th and 20th centuries, most of whom never saw a computer or heard of the Internet."
"Oversold and Underused: Why Faculty Don't Use Computers in the Classroom" by Larry Cuban AFT ON CAMPUS, March 2002 http://www.aft.org/publications/on_campus/march02/technology.html
While affirming that most academics make great use of computer technology in their writing, research, and communication, Cuban argues that "University promoters of computers for instruction need to downsize their expectations for deep changes in pedagogy or seriously examine other factors that influence how professors teach." He believes that "[t]raditional forms of teaching seem to have been relatively untouched by the enormous investment in technologies that universities have made in recent decades."
AFT On Campus is published eight times a year by the American Federation of Teachers, 555 New Jersey Avenue NW, Washington, DC 20001 USA; tel: 202-879-4400; email: online@aft.org; Web: http://www.aft.org/ Current and back issues are available at no cost at http://www.aft.org/publications/on_campus/index.html
Tom Moore, dean of Babson College's School of Executive Education, writes: "The popular notion of a new graduate entering 'the real world' points to the fact that we commonly view academia and the corporate environment as two disparate, almost polarized communities. The perception may be that universities focus on theory while businesses concentrate on practice. And to combine the two--to influence academic curriculum on behalf of corporate needs--has traditionally been frowned upon as a corruption of pure academic purpose." In "Tailor-Made Degrees: Customized Corporate Education" (SYLLABUS, vol. 15, no. 8, March 2002, pp. 30-1, 33), Moore describes how Babson created a school that can be customized to meet individual corporation's needs while students benefit from both e-learning and face-to-face instruction experiences. The article is available online at http://www.syllabus.com/syllabusmagazine/article.asp?id=6135
In his book, HIGHER ED, INC: THE RISE OF THE FOR-PROFIT UNIVERSITY (Baltimore: Johns Hopkins University Press, 2001), Richard S. Ruch writes, "I must confess that until a few years ago I thought that all proprietary institutions were the scum of the academic earth. I could not see how the profit motive could properly coexist with an educational mission. While I did not know exactly why I believed this, I was certain in my conviction that non-profit status was noble, just as the profession of education is noble, and that to be for-profit meant to be in it for the money, which was corrupting and ignoble." Based on his subsequent experiences with for-profit colleges and universities, Ruch re-examines these assumptions.
The first chapter of the book is available online at http://www.press.jhu.edu/press/books/titles/s01/s01ruhi.htm
Philosophy - Why We Should
Explore Web sites that will help you develop a strategy for online learning from developing a philosophy to determining scenarios for application. In other words, find out why we should to how we can.
Distance Learning...What is it?
This site presents an interesting critique of the nature of e-learning and how it can or cannot fit into existing philosophies of education. Differentiates the different kinds of courses using online structure.Learning To Learn: Using research to define effective distance education.
The author presents a paper of the ideas of notable writers on the subject of the philosophy of distance education.alt.education.distance FAQ [part 1 of 4]
This four-part website answers frequently asked questions about distance and online learning.Philosophy and Purposes of Distance Education
This lengthy paper describes the philosophy and purposes of distance education including credit and non-credit courses, relationship of on-campus and off campus learning, and different models of distance learning.Constructivist Theory Unites Distance Learning and Teacher Education
They said it couldn't be done, but here is an article that combines constructivist theory with both distance learning and teacher education. The authors use interviews with teachers whose teaching methods have changed after combining constructivist theory in building online courses.Application -- How We Can
GOALS: Global Online Adventure Learning Site
This is a terrific site for teachers interested in taking their students on virtual journeys. Each location allows students to view graphics and read about the area. They can then email the explorers with comments and questions. The Classroom Expedition page provides lesson plans and activities.EdWeb: Exploring Technology and School Reform
"An intelligent, detailed, informed and practical guide, both to education related issues concerning the Internet, and to educational resources on the World Wide Web." (quoted from the Harvard Educational Review)Online Learning - an Overview
Excellent site on the pitfalls and successes of online learning for university students. Interactive pages provide wealth of information for prospective students of e-learning.Planning and Designing Educational Facilities Online
This is an online course from the University of California Riverside for all school board members, administrators, district planners, etc., who are involved in the planning, designing, and executing the advancement of e-learning.The Web of Asynchronous Learning Networks
Visit this resource website, which is for anyone interested in asynchronous online delivery systems.
Bob Jensen's threads are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
Hardware
Printers
Kyocera Mita America has introduced the FS-1010 black-and-white laser printer, designed for individual users and small workgroups and featuring 600 x 600 dpi resolution, 15-page-per-minute printing speed, and support for parallel, USB, and Card Flash interfaces. The FS-1010 comes with a one-year parts and labor warranty. $429.
Kyocera Mita America, 225 Sand Rd., P.O. Box 40008, Fairfield, NJ 07004; (800) 222-6482
Oki Data's OKI C7000 Series printers can print at 12 pages per minute in full color and 20 pages per minute in black and white. Additional features include 600 x 1200 dpi resolution, the ability to print on various types of card stock, and an output of 10,000 pages before the toner needs to be changed. Rebates are available for schools that trade in old ink-jet or laser printers. $3,499.
Oki Data, 2000 Bishops Gate Blvd., Mount Laurel, NJ 08054; (856) 235-2600
Projection Devices
BOXLIGHT has unveiled the SP-9t LCD projector that comes with 1000 ANSI lumens, 800 x 600 SVGA resolution (compressed 1280 x 1024 SXGA), built-in component video input, digital keystone adjustment, and manual zoom and focus. The unit is backed by a two-year parts and labor warranty and a 120-day lamp guarantee. $1,999.
BOXLIGHT, 19332 Powder Hill Pl., Poulsbo, WA 98370; (800) 844-6464
Software
4MATION LiveText is a Web-based professional development system. Using their own lesson models or one of five built-in templates, teachers can create and update lessons from any Internet-enabled computer. Tutorials are designed to provide strategies for sparking student motivation, mastery of facts, and other instructional techniques. Lessons are then stored on LiveText's server, where teachers can search for additional lessons from other participating teachers. State standards are available for quick reference, as are collaboration tools such as forums, chat groups, and lesson reviews provided by other teachers.
About Learning, Inc., 1251 N. Old Rand Rd., Wauconda, IL 60084; (800) 822-4628
Gemteq Software, Inc., just released Version 2.0 of its eGems Collector Pro software. New features of this research tool are designed to improve speed by capturing Web pages, pictures, and hyperlinks simultaneously. New editing capabilities offer options to update collected gems or create and format original content with text, images, and links. Bibliography formats now include APA, MLA, and Chicago style. Workgroups are also available for users on shared networks. Upgrade for $29.95 at the site or purchase a CD for $79.95.
Gemteq Software, Inc., 936 7th St., Ste. R, Novato, CA 94945; (415) 899-8100
Newton's Quest for grades 4, 5, and 6, from Knowledge Adventure, focus on cross-curricular skill-building exercises. Designed to reinforce problem-solving strategies and test performance, these programs cover a full year of the math and language arts curriculum, and each title includes over 4,000 questions. Content is also correlated to state standards, as well as to the Stanford Achievement Test and the Iowa Test of Basic Skills. Teacher editions start at $59.95.
Knowledge Adventure, 101 Castleton St., P.O. Box 100, Pleasantville, NY 10570; (800) 321-7511
Macromedia's new Accessibility and E-Learning Solutions Kit provides tools and resources for Web developers who want to make content on their site accessible to people with disabilities and who are interested in building online courses. Media templates, tutorials, and accessibility resources help develop and retrofit Web sites, making them available to all users. New e-learning features include product extensions and tutorials on moving content to the Web. Both are free with purchase or upgrade to Flash 5, Dreamweaver 4, or eLearning Studio.
Macromedia, 600 Townsend St., San Francisco, CA 94103; (415) 252-2000
TB Labs has released RoadLingua, a dictionary database that fits in a handheld computer's optional memory card (MMC/SD/CF or MemoryStick). The database allows users to choose from several multilingual and specialty dictionaries for devices running Palm OS 2.0 and above or Windows CE 3.0 and above. $14.95. A free trial version can be downloaded at the Web site.
TB Labs, 30-1-66, Anokhina ul., Moscow, Russia 117602; (661) 760-8820
Books
Geared toward administrators and instructors, The Design and Management of Effective Distance Learning Programs examines challenges and solutions related to distance education. Examined issues include costs incurred for remote equipment, loss of traditional evaluation methods, potential losses of academic integrity, and more. $74.95.
Idea Group, Inc., 1331 E. Chocolate Ave., Hershey, PA 17033-1117; (800) 345-4332
The Web Design CD Bookshelf offers unabridged versions of the six most popular O'Reilly Web-building titles. Topics include HTML, ActionScript, information architecture, and more. The collection can be viewed through any Web browser; references and tutorials are fully searchable, cross-referenced, and indexed. $79.95. Also from O'Reilly, Building Wireless Community Networks provides a blueprint for a wireless LAN based on 802.11b standards. Also included are sample configuration files, network layout diagrams, and topographical maps. $24.95.
O'Reilly, 1005 Gravenstein Hwy. N, Sebastopol, CA 95472; (800) 998-9938
Zuleyma Tang-Martinez apparently sides with David Noble
"Higher Education and the Corporate Paradigm: the Students are the Losers," by Zuleyma Tang-Martinez --- http://www.louisville.edu/journal/workplace/tang-martinez.html
0.1. As institutions of higher education throughout the US and abroad have adopted the corporate model, "efficiency" and profit have been emphasized, while students have been redefined as "customers", "consumers," and "clients." In reality, what we are currently witnessing, as the result of this corporate paradigm, is the destruction of American higher education. University presidents and administrators take on the roles of Chief Executive Officers, and business managers have not supported greater diversity or inclusiveness in academia, whether in terms of faculty or students. The bottom line has become making money rather than educating students or fostering an environment conducive to free intellectual inquiry and development.
0.2. Although faculty often object to the corporate paradigm, because of what it does to our profession and to us as individuals, it is important to keep in mind that ultimately it is the students and their education who suffer the most and have the most to lose. There are three trends, dictated by the corporate approach, that profoundly affect the quality of the education our students receive.
For more on the negative side, go to http://www.trinity.edu/rjensen/000aaa/theworry.htm
For the positive side, go to http://www.trinity.edu/rjensen/000aaa/updateee.htm
For a summary of assessment issues, go to http://www.trinity.edu/rjensen/assess.htm
Cross Archive Search Engines discussed by Peter Cuber, "Noesis: Is it a library with built-in searching or a search engine with a built-in library?" Syllabus, March 2002, pp. 18-22 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=6133
Every discipline has a rapidly growing body of literature on the Web. Many hard-working volunteers in every field have built Web directories of this literature. Some have even built discipline-specific search engines. As the scholarly content on the Web grows, life gets more and more difficult for these directory and search engine editors. Think about the problems they face. They must try to cover the field, or their own topic within the field, comprehensively. They must distinguish worthy literature from unworthy. They must discover new sites within a reasonable time and add them if they are worthy. They must fix or delete dead links. The directory editors must organize their contents to help users navigate. If they can, they should offer searching, not only of the links and their annotations, but of the full-text files to which they point. Finally, they must use methods that scale up as the relevant body of literature continues to grow. Methods that worked five years ago when the Web was small no longer work today.
Noesis (noesis.evansville.edu) is an online library and search engine for the field of philosophy that solves these problems. Moreover, the software enabling it to solve them is transferable to any other discipline.
I’m one of the two co-editors of Noesis. My partner, Tony Beavers, deserves the credit for envisioning and implementing the features of this powerful software. In what follows, I can make immodest claims for Noesis because I’m praising Tony.
Noesis Today
Noesis has a board of topic editors, each with a different specialization within the field. The topic editors are responsible for monitoring their corners of the field for old, new, and worthy content. The Noesis software gives them a Web form for adding sites, which is much easier than writing HTML code or sending e-mail to another human editor who then writes HTML code. (Noesis also gathers new content by inviting user submissions, which are evaluated by the editors.) Topic editors may organize their topic area according to the sub-topics of their choice. Users can browse or search the entire Noesis collection or any sub-collection produced by an individual editor. By dividing the labor among the editors, an entire discipline can be covered comprehensively and kept up-to-date. If one editor has too large a topic to cover adequately, then we only have to divide the topic and add another editor.
Gateway Selection Filters
Noesis uses several kinds of peer review to identify and recommend worthy sites. The first is at the gateway, when editors use their professional judgment to decide what deserves to be included. In addition to the criteria invoked in the gateway decisions, Noesis currently requires (with a few exceptions) that the texts be written by Ph.D.s. As we’ll soon see, Noesis supports other, higher kinds of quality control that sort out the better from the worse among the texts that make it into the collection.
Adjustable-Scope Searching
Searching is the glory of Noesis. Because Noesis stores all its texts in a database, it can index them for searching much more quickly than a traditional search engine can crawl a series of Web sites. For the same reason, it can fine-tune the construction of the index. Traditional searchable collections only support all-or-nothing searching: if a file contains the search string, then a link to the file appears on the hit list, and otherwise not.
But Noesis is an adjustable-scope search engine. Users can search the whole collection, any sub-collection created by a topic editor, the collection of works by a given author, the collection of works from a given journal or set of journals, or the custom collection created by the user. Noesis also classifies its texts by genre (essays, reviews, course syllabi, and so on) and lets users filter any search by genre. Finally, editors only need to collect links to desirable texts; Noesis will automatically provide fulltext searching of those texts.
Adjustable-scope searching allows users to add another layer of peer review to their research. If you trust the peer review judgments made by the editors of journals A, B, and C, then you can set the scope of Noesis to search just those journals.
When updating its search index,Noesis automatically purges dead links. The next version of the software will put dead links in a special offline graveyard for post-mortem analysis. Most of the time, dead links mean that content has been moved, not deleted. With a little effort, the new location can be found and the link revived.
Noesis Tomorrow
The version of Noesis now online is 2.0. Noesis 3.0 will have two key features that we’ve already proved to work, so it’s not premature to sketch here how they could enhance research.
I said that in 2.0, users could create a custom collection to help organize and search a subset of the master collection. A custom collection could contain texts relevant to a course, a dissertation, or an essay.
In Noesis 3.0, user control over custom collections is set free to flourish. The first key feature in 3.0 is that users can create as many custom collections as they want. That might mean one for each course, each essay, each research interest. By default, all Noesis collections are public, so the collections you make for your courses can be used by your students. Each collection has a unique URL, making it easy to tell your students where to look.
At first only Noesis-approved editors will have the authority to add new items to the master collection—i.e., to make the gateway decisions about relevance and worth. Other Noesis users will only be able to make custom collections from the items in the master collection.
But eventually all users will be able to make Noesis collections from any content anywhere on the Web.We can give up the gateway control because Noesis will contain other, more effective forms of peer review and quality control.
Continued at http://www.syllabus.com/syllabusmagazine/article.asp?id=6133
Cross-Archive Search Engines
ARC --- http://citeseer.nj.nec.com/liu01arc.html
CiteBase --- http://www.eprints.org/
Torii --- http://torii.sissa.it/html/torii_service_provider.html
Free Online Scholarship
A guide to the terminology, acronyms, initiatives, standards, technologies, and players in the free online scholarship (FOS) movement —the movement to publish scholarly literature on the internet and make it available to readers free of charge --- http://www.earlham.edu/~peters/fos/guide.htm
As I mentioned in the March 25 edition of New Bookmarks, my wife and I really enjoyed the day we spent in Denver's Tattered Cover Bookstore.
"To Bookseller, Officers' Try at a
Search Warrants a Fight A Denver drug probe clashes with aims to keep the
public's reading choices private." by Joyce Meskis, Los Angeles Times,
March 27, 2002 --- http://www.latimes.com/features/lifestyle/la-000021929mar27.story
I quote the concluding paragraphs below:
Bevis, meanwhile, wondered how many other bookstores had been approached whose owners didn't have the will or the money to fight the government. "God only knows how often it's happened," he said. "And the stores that roll over, you'll never know about."
In Denver, the criminal investigation that started the Tattered Cover's ordeal has taken a back seat to the 1st Amendment case. Only one charge was ever filed in the meth lab bust, and that was later dropped. Authorities don't know where the four people who were under investigation now are.
March 28 message from Dawn Davidson
Hello Bob
This article was in yesterday's LA Times. Isn't this your favorite bookstore in Denver?
http://www.latimes.com/features/lifestyle/la-000021929mar27.story
dee davidson
Accounting Systems Specialist
Marshall School of Business Leventhal School of Accounting
University of Southern California 213.740.5018
dgd@marshall.usc.edu
I attended a workshop called "Information Fluency: Beyond the Basics" conducted by Michael Kaminski from the Trinity University Library. Based upon his informative presentation plus some of my own searches, I added the following to my Search Helpers at http://www.trinity.edu/rjensen/searchh.htm
Search for Library and Reference Databases
Evaluation of Information Sources --- http://www.vuw.ac.nz/~agsmith/evaln/evaln.htm
American Library Association (ALA) --- http://www.ala.org/
Information Literacy Competency Standards for Higher Education --- http://www.ala.org/acrl/ilcomstan.html
Association of College and Research Libraries --- http://www.ala.org/acrl/
Government
Library of Congress Online Catalog --- http://catalog.loc.gov
FedWorld --- http://www.fedworld.gov/
FirstGov (over 30 million government Web pages) --- http://www.fedworld.gov/firstgov.html
U.S. Government Information --- http://www2.lib.udel.edu/subj/godc/database/govdb.htm
Government Documents --- http://lib.trinity.edu/servcols/govdocs/
Government Information and Maps --- http://www.lib.ucdavis.edu/govdoc/
U.S. Federal Government Gray Literature --- http://www.osti.gov/graylit/
Public Records and by State --- http://www.pac-info.com/
Politics and Government --- http://www.access.gpo.gov/su_docs/multidb.html
Also see Yahoo at http://dir.yahoo.com/Government/
Census Information --- http://www.peoplefind.com/frames/freeresources/govdataindex.htm
Also see http://www.trinity.edu/mkearl/
Trinity University Library --- http://lib.trinity.edu/
Quest --- New Databases --- http://www.trinity.edu/mkaminsk/new_databases.htm
Databases for Trinity Students, Faculty, and Staff --- http://lib.trinity.edu/dbs/dbs.asp
eJournals, Electronic Journals --- http://www3.tdnet.com/trinity/
Also see http://sharewareconnection.com/play/402000index.htmlUlrich's Periodicals Directory --- http://lib.trinity.edu/dbs//dbs.asp#U
Michael Kaminski --- http://www.trinity.edu/mkaminsk/
Research Tips --- http://www.trinity.edu/mkaminsk/research_tips.htm
New Databases --- http://www.trinity.edu/mkaminsk/new_databases.htm
Information Databases
Free Database Links --- http://www.docx.com/freedb.htm
Multiple International and Historical Databases (including Encyclopedias and Photographs) --- http://www.slco.lib.ut.us/databases.htm
Global (Music, Literature, etc.)--- http://www.isop.ucla.edu/lac/bibliography-databases.htm
Academic Gateway --- http://datalib.ed.ac.uk/sources.html
University of Wisconsin Core Databases and Journals --- http://www.library.wisc.edu/guides/coreguide/corelist.htm
Also see http://www.library.wisc.edu/libraries/Instruction/jaid.htmBaker Library (Harvard Business School) Electronic Resources --- http://www.library.hbs.edu/abouta.htm
Business Information Databases --- http://www.ficci.com/ficci/Databases/databases.html
Biographical Databases --- http://www2.lib.udel.edu/subj/biography/
Biomedical --- http://www.nlm.nih.gov/databases/databases.html
Drug Information --- http://matweb.hcuge.ch/Medical_search/Drugs_pharmacology_pharmacy.html
Drug Information --- http://www.coreynahman.com/medicalinfodatabases.html
Drug Information --- http://library.pbac.edu/drug_information_databases.htm
UNC Health Sciences --- http://www.hsl.unc.edu/lm/degrant/introduction.htm
Health --- http://chid.nih.gov/
Dorland Healthcare Information --- http://www.healthcare-info.com/database.htm
Pesticides --- http://ace.orst.edu/info/npic/tech.htmBusiness Databases --- http://dir.yahoo.com/Business_and_Economy/Business_to_Business/Information/Databases/
Internet and Information Systems --- http://idrinfo.idrc.ca/
Public Records and by State --- http://www.pac-info.com/
Government Information and Maps --- http://www.lib.ucdavis.edu/govdoc/
Legal Information Databases --- http://www.wlu.ca/~wwwlib/subject/legal/databases.html
Politics and Government --- http://www.access.gpo.gov/su_docs/multidb.html
Restaurants and Diets --- http://businesstravel.about.com/cs/restaurants/
Country of Origin and Legal Information --- http://www.unhcr.ch/research/rsd.htm
Internet Public Library (from the University of Michigan) --- http://www.ipl.org/
20,000 electronic texts, and an annotated guide to web sitesBob Jensen's Guide to Economic Statistics --- http://www.trinity.edu/rjensen/bookbob1.htm#EconStatistics
Economic and Demographic Statistics --- http://www.pac-info.com/
From New Zealand (Statistical Information Databases) --- http://www2.auckland.ac.nz/lbr/stats/webpages/statsdb.htm
Baker Library (Harvard Business School) Electronic Resources --- http://www.library.hbs.edu/abouta.htmSociology Databases and Other Great Links --- http://www.trinity.edu/mkearl/
Bob Jensen's Bookmarks --- http://www.trinity.edu/rjensen/bookbob.htm
Primary Sources
Enter "Primary Sources" into Exact Phrase at http://www.google.com/advanced_search
Gray Literature (hard to find documents)
Enter "Gray Literature" into Exact Phrase at http://www.google.com/advanced_search
U.S. Federal Government Gray Literature --- http://www.osti.gov/graylit/
Shareware and eBooks --- http://sharewareconnection.com/play/402000index.html
Some Other Free Sites Noted at http://www.techlearning.com/db_area/archives/TL/2002/03/inservice.html
Encyclopedia.com --- http://www.encyclopedia.com
contains more than 50,000 articles. In addition, it links to Electric Library, mentioned above.Internet Public Library --- http://www.ipl.org
or IPL, was one of the first public libraries "of and for the Internet community." Some available collections are general reference, associations, literary criticism, newspapers, youth, and teens.Library of Congress Online Catalog --- http://catalog.loc.gov
records represent the holdings of the library, including books, computer files, manuscripts, cartographic materials, music, sound recordings, and visual materials; it also includes searching aids for users.
Yahoo --- http://www.yahoo.com/
Bob Jensen's search helpers are at at http://www.trinity.edu/rjensen/searchh.htm
Bob Jensen's bookmarks are at http://www.trinity.edu/rjensen/bookbob.htm
Electronic Database and Information System Glossary --- http://databases.about.com/library/glossary/bldef-information.htm
Bob Jensen's Technology Glossary and Links --- http://www.trinity.edu/rjensen/245gloss.htm
Bob Jensen's Other Glossary Links (including accounting, business, and finance) --- http://www.trinity.edu/rjensen/bookbus.htm
Individuals and nonprofits can no longer purchase personal computers in Cuba, according to a government decree. Dissidents claim it's another example of the restriction of information flow --- http://www.wired.com/news/politics/0,1283,51270,00.html
Disaster of the Week: Hollings' Hell
The proposed copy-protection bill from Senator Fritz Hollings would demand restrictive technology on practically all new devices. Here's a rundown on what the law would do if passed --- http://www.wired.com/news/politics/0,1283,51275,00.html
A bill introduced by Senate Commerce Chairman Fritz Hollings would prohibit the sale or distribution of nearly any technology -- unless it features copy-protection standards to be set by the federal government.
Creating:
Anyone selling -- or creating and distributing -- "digital media devices" may not do so unless they include government-approved security standards. Digital media devices are defined as any hardware or software that can reproduce or display copyrighted works. [Section 5(a)(1)]Importing:
It would be unlawful to import software or hardware without government-approved security standards. It's not clear whether this section bans an individual downloading a copy of a program from a non-U.S. website. [Section 5(a)(1)]Protecting:
Network-connected computer systems may not delete markers indicating a file is copy-protected. Such systems must preserve the markers intact. This section applies to peer-to-peer networks, FTP sites, websites, routers, Internet providers, library terminals and more. [Section 4]Removing:
Knowingly removing copy-protection markers from digital content is prohibited. [Section 6(a)(1)]Sending: I
t would be unlawful to knowingly distribute or send someone any digital content that has been purged of its this-is-copy-protected marker. [Section 6(a)(2)]Violations of any of those four sections will be punished by civil penalties ranging from $200 to $25,000 per violation, and, in some cases, federal felony charges.
Fair use:
Another section says that if anyone wants to use the copy-protection standard, to be drafted by the Federal Communications Commission, they have to use the whole thing. That's designed to preserve at least minimal "fair use" rights. [Section 6(b)]But it's a section with blunt teeth. Nearly all the other parts of the bill promise criminal penalties: This merely promises civil damages of between $200 and $2,500.
MP3 players:
One part of the bill overrides a landmark lawsuit that said the Rio MP3 player did not violate copyright law.In 1999, a federal appeals court ruled that Diamond Multimedia Systems could sell the Rio -- a decision that ushered in the MP3 craze. This bill rewrites current copyright law to require copy-protection in any device that "retrieves or accesses copyrighted works in digital form."
"By including that, they want to get around the Rio court case," says Ethan Ackerman, a senior research fellow at the University of Washington School of Law. "This is statutorily overruling that court case. This way they can sue the player manufacturers."
Also see "Howling Mad Over
Hollings' Bill," by Brad King --- http://www.wired.com/news/mp3/0,1285,51337,00.html
The two concluding paragraphs read as follows:
Along with upsetting the 2 million people who have already purchased digital television sets, the bill also wipes away many of the legal uses people have become accustomed to, Petricone said. The CEA is also averse to adding taxes onto the cost of new devices that could be used to pay entertainment companies, something the Audio Home Recording Act forced on portable MP3 makers.
"Consumers have the right to do things to make recordings of broadcast shows," said Petricone. "If you charge them extra, then it's not a right. If we're put in a position that we have to sell devices that don't allow people to do what they've always done, then nobody is going to buy any new devices."
"The Oscars get Napsterised," The Economist, May 22, 2002 --- http://www.economist.com/agenda/displayStory.cfm?Story_ID=1049624
Hollywood feels threatened as more people use Internet file-sharing services to obtain free copies of movies. But just as the music business has found in its efforts to fight the mass copying of songs through services such as Napster, the film studios will not be able to rely on technology alone to protect their copyrights
Oh Oh!
The IRS has compiled statistics indicating that Federal employees owe more than $2.5 billion in back taxes. Of the 8.7 million federal workers and retirees, 381,500 were behind on their taxes, or 2.8% of the total. Find out how this compares with a national average of the American workforce and which branches of the government are the worst offenders. http://www.accountingweb.com/item/76127
One of the wonderful adventures of my life was a sabbatical in New Zealand.
Many locals may not have known the Dictionary of New Zealand Biography ever existed, but now that it's online, librarians hope Kiwis will get to know more about their homeland. Kim Griggs reports from Wellington, New Zealand --- http://www.wired.com/news/culture/0,1284,51132,00.html
March 27 message from Fathom
Fathom's spring break offer is ending this week, but you still have time to take advantage of your special 25% discount. Just enter the coupon code SPRNG at checkout for any Fathom enrollment through March 31. Hundreds of new courses are open for enrollment, including:
ARTS & HUMANITIES
Tiananmen June 1989: The Roots of Crisis http://www.fathom.com/course/51704700/esp1
Digital Video: An Introduction with Michael Rubin http://www.fathom.com/course/4701042/esp1
HISTORY & GLOBAL AFFAIRS
Covering Terrorism: The Media and 9/11 http://www.fathom.com/course/71705500/esp1
Israeli and Palestinian Nationalism: Debates over Partition http://www.fathom.com/course/68705501/esp1
PROFESSIONAL DEVELOPMENT
Organizational Behavior: Communication and Conflict Resolution http://www.fathom.com/course/42704460/esp1
Disaster-Proof Your Finances http://www.fathom.com/course/40704013/esp1
Search for more courses: http://www.fathom.com/link.jhtml?cid=esp1&page=home
Partly driven by marketing, partly by genuine customer needs, integrated analytics will soon be the yardstick by which enterprise app business value is measured. By Sharon Ward http://www.dsi-enews.net/e-bin/enews.asp?id=8949006
Big Blue Bully?
A recent lawsuit filed by Compuware against IBM certifies that intellectual
property protection needs to be a part of business strategy. http://www.dsi-enews.net/e-bin/enews.asp?id=8949010
How to Value Interest Rate Swaps
Hi John,
Basics are explained in the early part of "Summary of Derivative Types." It can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
I would download http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
Then I would examine the attached solutions file for Example 5 in Appendix B, particularly Columns N-W in the "Effective" spreadsheet of that Excel workbook. The 133ex05a.xls file is also available online at http://www.cs.trinity.edu/~rjensen/
In practice, firms then to use the Bloomberg terminal to derive swap (yield) curves from forward rates.
Hope this helps.
Bob Jensen
-----Original Message-----
From: Walters, John [mailto:John.Walters@bdk.com]
Sent: Wednesday, March 27, 2002 7:55 AM
To: 'rjensen@trinity.edu' Subject: Yield Curve DerivationsMr. Jensen, I am trying to model a zero coupon yield curve in excel for the purpose of valuing our swap portfolio. As I'm fairly new to the Treasury area I am interested in the tutorials mentioned on your web site. Are these still available? Thanks for your assistance.
Regards, John Walters
Treasury Manager
Black & Decker Corporation
Messages from Business Week magazine on March 26, 2002
So you've decided to get a Master's of Business Administration--the coveted degree that often serves as an entr?e into the upper echelons of management. You've figured it's worth the $150,000 or more investment--in tuition, expenses, and two years of lost pay. And you've spent late nights boning up for the Graduate Management Admission Test, earning a score that should put you in the running for a spot on the "admitted" list at a highly rated school.
Now what? Before you slog through those lengthy applications, take a step back. You need to consider more than just a brand name when it comes to choosing the right program. Every applicant has different needs and goals, and not every school will meet them.
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/magazine/content/02_12/b3775113.htm?c=bwmbamar27&n=link1&t=email
Saul Keeton -- Jones School, Rice University | Class of 2002 -- There was time during my last full-time job when it was fashionable to be "comfortable with ambiguity." I was working for Andersen Consulting, and the Internet was sizzling. High-flying, cash-burning startups were spending wildly on consulting services to rush their products to market in hopes of gobbling up chunks of market share ahead of their competitors. This new operating environment required a paradigm shift for us, the consultants. We were accustomed to working to the n-th degree of detail and to perfecting our work products prior to going live. But e-commerce changed everything.
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/bschools/mbajournal/index.htm?c=bwmbamar27&n=link3&t=email
Cell-phone manufacturers are cranking out new products at an astonishing rate, even though the market is flat. They sound confident, but the analysts are worried --- http://www.wired.com/news/wireless/0,1382,51152,00.html
Where technology really helps
"Of Diesel and Dial-Up: The IT Traveler," by Paul Heltzel, Technology Review, March 22, 2002 --- http://www.techreview.com/articles/wo_heltzel032202.asp
It makes sense that truckers are the most well-connected travelers on the road. They need to stay in touch with the trucking company and with family. Also, they increasingly use Web-based services that help them find loads to drive home and avoid deadheading, or driving an empty trailer—every trucker's worst nightmare since those miles produce no revenue. In an attempt to remedy this situation, companies such as The Internet Truckstop, Insight Technology and On Time Media have set up Web-based load matching services. A trucker can log on to these sites, enter the city where he will be dropping off a load and the city to which he needs to return. The system will then tell him of any loads that need to be hauled between those cities. It gets sophisticated. For example, if a load is being dropped in Orlando and the trucker needs to go to New York, the system may find an Orlando-Memphis load, followed by a Memphis-Cleveland load and then a Cleveland-New York load.
Some IT investors follow the online movements of truckers closely because they are not traditionally thought of as early adopters of technology. Like travelers who pull over to eat where the truckers do, investors feel a sense of comfort once a technology becomes viable at truck stops. According to Jack Vonder Heide, president of Oakbrook Terrace, IL-based Technology Briefing Centers, 18-wheeler operators have led the way in road testing technologies that have filtered down to consumers. He notes a laundry list of technologies used today, including cell phones, ruggedized notebooks, touch screens, discount long-distance services, self-serve gas pumps, "and, lest we forget the past, CB radios."
"We find truckers to be very reliable predictors of an emerging technology's likelihood of success," says Vonder Heide. "Truckers don't have large amounts of expendable income. They're not conspicuous consumers. So when we see truckers adopt a technology, that gives us a higher level of comfort that we can recommend that technology to our clients as an investment."
So what's down the road, so to speak, after dial-up access in roadside restaurants? In the next 12 to 18 months, expect to see wireless public Internet access points begin to pop up at truck stops around the country. Using the same technology found in wireless home and office networks, 802.11b LANs provide Internet access within 200 to 300 feet of the truck stop. Providers are test marketing wireless access plans priced around 15 cents a minute (or $7 a day), as well as nationwide service plans for frequent travelers willing to subscribe for a monthly fee.
"I think wireless service will be widespread in our industry," says Bill Bartkus, vice president of IT at TravelCenters of America. "Wireless networks put Internet access at every seat, not just the ones with a phone jack. We'll add wireless access points to the exterior of the buildings, so drivers won't have to go inside. People who want to sit in the lot in their car or RV won't have to lug a laptop into the building."
FREE
eBook Samplers from Barnes & Noble ---
http://ebooks.barnesandnoble.com/bn_digital/free_samplers.asp?sourceid=00394094055875196094&bfdate=03-22-2002+13:04:58
Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm
National Academy Press: Scientific Inquiry in Education http://www.nap.edu/books/0309082919/html/
i-xiii
Executive Summary
1-6
1 Introduction
7-18
2 Accumulation of Scientific Knowledge
19-34
3 Guiding Principles for Scientific Inquiry
35-56
4 Features of Education and Education Research
57-68
5 Designs for the Conduct of Scientific Research in Education
69-90
6 Design Principles for Fostering Science in a Federal Education Research Agency
91-112
References
113-138
Appendix: Biographical Sketches, Committee Members and Staff
Bob Jensen's bookmarks on education are at http://www.trinity.edu/rjensen/bookbob2.htm
Learning Differences and Disabilities
From PBS: Misunderstood Minds http://www.pbs.org/wgbh/misunderstoodminds/
The Misunderstood Minds project consists of three elements: The PBS documentary, first airing March 27, 2002; the companion Web site on PBS Online, www.pbs.org/misunderstoodminds ; and the Developing Minds Multimedia Library.
Misunderstood Minds: the documentary
For one in five students, learning is an exhausting and frustrating struggle. Often mistakenly called "lazy" or "stupid" by their teachers, classmates, and even their families, these children may be suffering from debilitating learning problems. If not addressed, the problems can have a devastating impact on the students' self-esteem and future academic and social success.
The PBS documentary, Misunderstood Minds shines a spotlight on this painful subject, following the stories of five families as, together with experts, they try to solve the mysteries of their children's learning difficulties. Produced and directed by renowned Frontline filmmaker Michael Kirk, this 90-minute special shows the children's problems in a new light, and serves as a platform to open a nationwide dialogue on how best to manage young, vulnerable, and misunderstood minds.
Misunderstood Minds is a co-production of the Kirk Documentary Group, Ltd. and WGBH Boston. Executive producers are Michele Korf and Brigid Sullivan. The producer and director is Michael Kirk. Misunderstood Minds is closed captioned for deaf and hard-of-hearing viewers by The Caption Center at WGBH Boston. Narrated descriptions are provided by Descriptive Video Service® (DVS®), a national service of WGBH Boston that makes television, cable, and home video programming accessible to people who are blind or visually impaired.
Information on ordering a copy of Misunderstood Minds is available on the order videos section of this site, or by calling 1-800-949-8670.
Misunderstood Minds: the Web site
www.pbs.org/misunderstoodminds
Parents, teachers, and students looking for explanations of the science behind learning difference and strategies to aid success in school, can find both on the companion Web site for Misunderstood Minds. The site includes profiles of the students in the documentary, as well as sections on Attention, Reading, Writing, and Mathematics. Interactive activities, called Firsthands, are designed to give site visitors a sense of what it may be like for a student struggling with a basic skill.
The Web site is a production of WGBH Interactive and Educational Programming and Outreach. Executive producers are Ted Sicker, Michele Korf, and Brigid Sullivan. The producer is Arthur R. Smith.
The Web site is accessible, designed for use with screen reader devices that render text into speech for blind and low-vision Web users. To learn more about providing access to Web content for users with disabilities, please visit the CPB/WGBH National Center for Accessible Media on the Web at www.ncam.wgbh.org .
Funding for the Misunderstood Minds PBS documentary and Web site is provided by Schwab Learning, a service of the Charles and Helen Schwab Foundation; Exxon Mobil Foundation; Spencer T. and Ann W. Olin Foundation; Emily Hall Tremaine Foundation; The Roberts Foundation; Geraldine R. Dodge Foundation, and public television viewers. Thank you.
Developing Minds Multimedia Library
This multimedia library of videos and print guides is designed to help parents and teachers of elementary and middle-school children explore differences in learning through the approach and conceptual framework of developmental-behavioral pediatrician, author, and professor Dr. Mel Levine.
The 22-video library explores the relationship between learning and key brain functions, and features practical, easy-to-use strategies to help students become more successful learners. The 18 accompanying print guides reinforce the concepts and strategies presented in the videos.
The Developing Minds Multimedia Library can be ordered in its entirety. As well, multi-video sets have been arranged around particular learning difficulties and problem clusters, with many combinations to choose from. Individual videos and accompanying guides are also available.
Detailed item descriptions and full ordering information (phone, fax, or mail orders) may be obtained by downloading the brochures on the order videos page of this site. You may also call 1-800-949-8670 to request more information or to order.
About WGBH
WGBH Boston is America's preeminent public broadcasting producer. More than one-third of PBS's prime-time lineup and companion Web content is produced by WGBH, and the Boston station is the source of many public radio favorites. WGBH also is a pioneer in educational multimedia and in access technologies for people with disabilities. For more information visit www.wgbh.org.
About All Kinds of Minds
All Kinds of Minds helps families and teachers understand why a student is struggling in school and provides an action plan to help each child become a more successful learner.
Founded in 1995, All Kinds of Minds is a private, non-profit Institute, affiliated with the University of North Carolina at Chapel Hill that offers a powerful system of programs for helping kids succeed. The Institute's primary goal is to educate teachers, parents, educational specialists, psychologists, doctors, and children about differences in learning, so that students who are struggling in school because of the way their brains are "wired" are no longer misunderstood. Its programs have been developed by Dr. Mel Levine and colleagues based on scientific research and over twenty-five years of clinical experience. The programs provide a comprehensive framework for understanding how all kids learn.
All Kinds of Minds enables a student (K-12), his parents, and his teachers to understand why he is having difficulty in school and provides the language and tools for parents, educators, and clinicians to develop a concrete, practical action plan to help him succeed. For more information about All Kinds of Minds, visit www.allkindsofminds.org.
March 28 message from Vasant Raval [vraval@bluejay.creighton.edu]
Fourth Annual Meeting of AIS Educator Association is scheduled for June 28 through July 2 in the beautiful Copper Mountain Resort in Colorado, about 80 miles West of Denver. Details are posted on the Association's website, www.ais-educ.com .
You are welcome to participate in training, or conference, or both. A total of 19 training sessions, 3 keynotes, and up to 57 conference paper presentations are planned. Besides training proposals and research paper presentations, we need help in other roles, such as paper discussants, session chairs, and panel organizers. Also, please encourage your graduate students to attend as well. The deadline for proposals is extended to April 15.
The annual meeting offers a unique opportunity in accounting information systems and related areas, both in terms of learning hands-on, and by sharing with others relevant technology and tools, curriculum innovations, and research. The meeting offers a very friendly, informal environment for networking and sharing ideas and resources.
We hope to see you in Copper this summer.
Best Wishes.
Sincerely,
Vasant Raval,
Conference Chair AIS Educator Association (vraval@creighton.edu)
Message regarding the forthcoming
European Conference on Accounting Information Systems
From Andrew Lymer [A.LYMER@bham.ac.uk]
Whilst particularly for those of you who are attending ECAIS 2002 in April in Copenhagen, others may be interested in the materials which have been posted up to our website today for one of our workshops - on Researching ERP systems, to be given by Ben Wier (with assistance from Niels Dechow). The website pages can be access at http://accountingeducation.com/ecais - see Keynote and Worskshops link.
Ben and Niels have offered up four papers to be examined prior to attending this workshop to illustrate different approaches to researching this topic area as used by them, and other researchers, in the recent past.
Two of these papers are working papers (please respect this status and ask permission of the respective authors if you wish to use them subsequently) and two are papers awaiting publication where copyright should also be respected, and correct citation made where appropriate.
Further information on other other two workshops (on Case based reasoning research and ECommerce research) and keynote speech will be added to the website in the near future.
We look forward to welcoming as many of you as can attend to the conference.
Regards
Andy Lymer University of Birmingham,
UK on behalf of the ECAIS 2002 Chairs and organisers.
March 28 message from Graziella Michelante [michelante@eiasm.be]
With this message, I would like to remind you the following events :
Workshop on Accounting and Economics V
When : June 20-21, 2002
Where : Madrid, Spain
Submission deadline : March 31, 2002 !!
Web site : http://www.eiasm.be/events/WsAccountingEconomics.htmlInternational Conference on Accounting, Auditing & Management in Public Sector Reforms
When : September 5-7, 2002
Where : Dublin, Ireland
Web site : http://www.eiasm.be/events/WsDublin.htmlWorkshop on Accounting in Historical Perspective
When : December 5-6, 2002
Where : Lisbon, Portugal
Web site : http://www.eiasm.be/events/2002.12.5-6.html3rd Conference on New Directions in Management Accounting : Innovations in Practice and Research
When : December 12-14, 2002
Where : Brussels, Belgium
Web site : http://www.eiasm.be/events/3rd_Conference_ON_New_Directions.htmlInternational Workshop on Management and Anthropology
When : September 12-14, 2002
Where : Venice, Italy
Web site : http://www.eiasm.be/events/WsManagement&Anthropology.htmlSincerely,
Graziella Michelante_______________________________
Graziella Michelante
EIASM Conference Manager
Rue d'Egmont 13 - 1000 Brussels - Belgium
Tel.: 32 2 5119116 - Fax : 32 2 5121929
March 30 message from Ho S. M., Simon (ACY) [simon@baf.msmail.cuhk.edu.hk]
Dear Bob,
As you may know, I am chairing the Organizing Committee of the above Congress. I hope you have planned to attend this truly international event.
. . .
For more information of the Congress, please browse www.cuhk.edu.hk/acy/hkaaa/iaaer.html I look forward to hearing from you soon.
Sincerely,
Simon S.M. Ho
Chairman, Organizing Committee of the 9th WCAE
A new breed of customer service agents will be so attentive to your needs that you’ll never guess you’re talking to software.
"Are You Being Served?" by Joe Nickell, MIT's Technology Review, March 15, 2002 --- http://www.techreview.com/articles/nickell031502.asp
Somehow it seems the more businesses cater to customers through the use of new technologies, the harder it is to get good service. It's hard to find a company of any size today that answers its phone or e-mail without first sending customers through a maze of touch-tone menus or voice prompts—"voice hell" always a 1-800 number away. Then there are online customer support centers: soulless lists of frequently asked questions, hyperlinked conceptual puzzles and unintuitive search engines that never quite answer the question at hand. "What customers very often end up wanting is an F-U button," jokes Dr. Rosalind Picard, an associate professor at MIT whose research examines the role of emotions in human-computer interactions.
Undaunted, technology providers and their corporate clients are pushing toward a future in which an increasing percentage of customer inquiries can be handled automatically and, hopefully, with better results. They aim to build so-called "service bots"—software-hardware hybrid systems that understand spoken or written English (or any other dialect or language preferred by the customer), interpret vague or broad queries, possess a thorough understanding of both the company's products and the customer's past interactions, and speak or write answers in an intelligible, context- and emotion-sensitive fashion. The necessary skill set for the perfect service bot demands several interdependent layers of technology: voice recognition modules, natural language understanding engines, artificial intelligence for data extraction and text-to-speech synthesizers.
Customers should like these new bots because they would be faster, more accurate and more consistent than live service agents, providing personalized interactions managed across any medium, available any time of the day. Companies will line up for the new technology in order to fend off ever-rising customer service costs and catastrophic call-center employee turn-over rates.
That's the premise, anyway. It may all sound pie-in-the-sky, but numerous technology companies, as well as research centers at leading academic institutions, are hammering away at the challenges of building a better service bot. The first generation is already here. Ford Motor Company employs a chatty online bot named Ernie, built by San Francisco-based NativeMinds, who helps technicians at its network of dealerships diagnose car problems and order parts. IBM's Lotus software division employs a service bot from Support.com that can examine a user's software, diagnose problems and fix them by uploading patches to the user's computer—without any necessary intervention by human tech support personnel.
And in an odd twist, Electronic Arts has built an entire game, called Majestic, around service bot technology built by San Francisco-based developer eGain. Majestic carries players through a complex, multi-media episodic mystery. Players receive clues and information via pager, fax, e-mail, Web sites and even telephone calls. eGain's service bot keeps track of player information such as what clues they've collected and how they have reacted. The software can handle 100,000 simultaneous player interactions.
But given the lousy track record of automated customer service so far, consumers have reason to be skeptical of this new generation of talking machines. Confusing or insufficient menu choices, lack of personalization, outdated or insufficient responses and failure to carry over punched-in account information to conversations with live reps rank at the top of consumer complaints about automated customer service systems today. Almost 40 percent of Americans press zero whenever they encounter an automated answering system, rather than waiting to hear the menu options, according to a study conducted in 1998 by the Center for Client Retention.
So will service bots truly give us better service, or will they simply allow companies to reinforce the walls between themselves and customers? Can we really hope for a better-than-human service bot? And, is it realistic to expect companies to deploy tomorrow's automated systems any better than they deploy today's?
"I don't think it's possible to even imagine a generic customer service [bot] that can handle any kind of question in any industry," says Joe Bigus, leader of the Agent Building and Learning Environment (ABLE) project at IBM Research. Bigus' research group has recently produced a toolkit that allows developers to build small software agents—programs that gather information and perform duties automatically—in Java. The toolkit consists of software code that provides baked-in machine learning capabilities and a set of instructions for customizing the software agents with specific domain knowledge. This allows developers to design any number of discreet agents that possess specialized knowledge and problem-solving capabilities; the agents can even interact with one another when faced with a complex problem.
By facilitating the deployment of a number of small, specialized software agents—rather than one massively complex agent—this approach mimicks the way human resources are managed: customer service agents at Sony aren't all trained to understand every product from audio cassettes to digital video cameras. Instead, small groups of service agents are given specific products to understand thoroughly.
Continued at http://www.techreview.com/articles/nickell031502.asp
Bob Jensen's threads on speech recognition and text reading are at http://www.trinity.edu/~rjensen/245glosf.htm#Speech1
From FEI Express on March 21, 2002
IBM included "A Road Map" in their 2001 Glossy Annual Report, a two-page narrative with helpful hints to walk you through their 51 pages of MD&A and provide some perspective before reading their financials. This is a great step towards making financial statements more understandable to the average reader and not so overwhelming. Take a look for yourself on their website at http://www.ibm.com/annualreport/2001/financial_reports/fr_index.html
Caterpillar, on the other hand, took a different approach to their 2001 Glossy Annual Report. They opted for a glossy summary annual report that included consolidated financial statements, with detailed disclosures instead included as an appendix to their Proxy. You can view an electronic version of this report at http://www.caterpillar.com/about_cat/investor_information/pdf/YECX0014.pdf. I've noticed that several companies this year have opted for a glossy Summary Report, with varying levels of detail in what's provided in that summary.
TenLinks.com: Ultimate Directories for Technology Professionals http://www.tenlinks.com/
communities, events, jobs, products and companies, reference, reviews, services and consultants, translation
FEA, CFD, products and companies, resources, reviews, services and consultants
TopTen Civil Engineering Sites, bridges, codes, dams, environment, geotechnical, hydrology, indoor/outdoor, IT in construction, organizations, portals, reference, services, software, tall buildings, transportation
communities, consultants, data, education, events, jobs, products & companies, reference
communities, products and companies, reference, services and consultants, CAM, rapid prototyping, quality
Architecture
TopTen sites, builders' sites, built environment, home improvement, magazines, portals, sustainable architectureComputers
computing for the disabled, hardware, hardware reviews, magazines, softwareElectronic Design (EDA)
TopTen EDA, products and companiesEngineering
civil, design, chemical, electrical, mechanical, collaboration, humor, jobs, magazines, referencesFree Stuff
CAD, GIS, FEA, Internet access, general stuffMathematics
online solvers, math software, unitsTech Jobs
CAD, engineering, general, GIS/Mapping, qualityTechnology
computers, free tech stuff, Internet, newsletters and digestsGeneral Interest and Diversions
cycling, employment, folk medicine, reference, salary calculators, satellite images, science, software, webcams
Bob Jensen's technology bookmarks are at http://www.trinity.edu/rjensen/bookbob4.htm
Tate Online: Turner Collection -- http://www.tate.org.uk/collections/collection_search_simple.jsp?group=turner
In 1856, nearly five years after Turner's death, his estate was settled by a decree in which the works found in his studio that were considered to be by his own hand were accepted by the nation as the 'Turner Bequest'. This comprises nearly 300 oil paintings and around 30,000 sketches and watercolours (including 300 sketchbooks). A group of nine paintings from the Bequest is retained at the National Gallery. View the Turner collection highlights View the Turner sketchbooks
While the great majority of the works by Turner in the Tate are from the Turner Bequest there are also a small number of oils, watercolours and prints which have been acquired independently.
Updates on FAS 133 Derivatives Accounting
March 22, 2002 Message from Risk Waters Group [RiskWaters@lb.bcentral.com]
The Financial Accounting Standards Board (FASB) has ruled that undrawn loan commitments will not be subject to derivatives accounting rules, and do not have to be marked to market - a victory for commercial lenders. But, there may be a larger problem on the horizon for banks opposed to fair-value loan accounting. FASB, the US accounting standards-setter, also said it would add loans to its ongoing fair-value accounting project, through which it is devising mark-to-market accounting rules for all financial instruments.
The International Monetary Fund became the latest critic of credit derivatives. It believes the lack of financial disclosure and transparency in the credit derivatives market has the potential to increase market risk, as participants find it more difficult to gauge the depth of credit deterioration caused by credit events.
Turnover in equity index contracts at Asian exchanges, meanwhile, rose by 40% in the fourth quarter of last year, according to the latest quarterly report from the Bank for International Settlements (BIS). The Switzerland-based banking body pointed to the rapid development of options trading in Korea as leading the charge.
In a blow to new market development, Italy's IntesaBCI shelved its plans to trade weather derivatives this year.
Christopher Jeffery Editor,
RiskNews
http://www.risknews.net
mailto:cjeffery@riskwaters.com
Interesting Business History in the Context of the Enron Scandal
A very interesting story, much more so than 'The Untouchables'...
The key accountant if there was one, was actually one of his lawyers, Edward O'Hare, who advised Capone on business ventures. 'Fast Eddie' O'Hare became a prominent lawyer and was involved in many businesses with Capone. During Capone's imprisonment for the Valentine's Day massacre in 1929, the laws had been changed to enable taxation of illegally earned profits. Capone and his associates, including Eddie, became a focus of IRS operations in 1930.
Fast Eddie decided to turn on Capone to settle up with the IRS. This was a breakthrough for the IRS. In addition, a set of accounts seized years earlier was properly analyzed provided further evidence of Capone's illegal earnings.
A very interesting wrinkle was that Eddie planned ahead for his son Butch. Terms of the deal with the Feds included acceptance of Butch at Annapolis. Eddie cooperated, and Capone was convicted.
In November, 1939, Eddie was executed by mob associates for cheating another boss, Frank Nitti, on a deal, and perhaps as (somewhat overdue) payback for Capone. According to http://www.alleged-mafia-site.com/tuohy/ohare.html several months later, Nitti married Eddie's fiance (Eddie had divorced Butch's mother much earlier).
In the meantime, Butch graduated from Annapolis, and in 1942 became a war hero, the first US Navy Ace, by single-handedly downing 5 Japanese bombers and buying time that saved the carrier USS Lexington from destruction. According to http://www.alleged-mafia-site.com/tuohy/ohare.html President Roosevelt called his outstanding performance, "One of the most daring, if not the most daring, single action in the history of combat aviation." He was subsequently shot down at night in Nov, 1943 and lost at sea.
In 1949, Col. Robert H. McCormick, publisher of the Chicago Tribune, led the charge to rename the Chicago-area airport (formerly named Orchard Field) to O'Hare's International Airport. And so it is named today.
I wonder if anyone from Enron is making similar deals...
Other links:
http://www.alleged-mafia-site.com/tuohy/ohare.html
http://wy.essortment.com/alcaponegangst_rwdl.htm
http://www.ohare.com/ohare/about/about_butch.shtm
Kevin Kobelsky PhD CA*CISA
Assistant Professor Leventhal School of Accounting,
Marshall School of Business
University of Southern California Accounting Building
125 Los Angeles, CA 90089-0441 Voice: (213) 740-0657 Fax: (213) 747-2815
March 24 message from Emanuel Schwarz
In case you are interested in this new developed Managerial Cost accounting, will you please open my website: www.InternalAccounting.com or just click here: IAE Home Page
You will see a totally new concept of Internal Accounting. We have now separated the External-Financial Accounting from the Internal one. A very important step ahead.
Please, let me hear from you with all your observations and comments.
God bless you there.
Sincerely yours,
Emanuel Schwarz Professor Emeritus, Ph.D.
From The Wall Street Journal Accounting Educators' Review on March 21, 2001
TITLE: Berkshire Hathaway Changes
Accounting of Its Berkadia Stake
REPORTER: Reuters DATE: Mar 18, 2002
PAGE: A6
LINK: Print Only (Not online)
TOPICS: Accounting Changes and Error Corrections, Accounting For Investments,
Consolidation, Equity, Financial Accounting, Accounting, Financial Analysis,
Financial Statement Analysis, Investments
SUMMARY: An accounting change will increase assets and liabilities of Berkshire Hathaway by $5.5 billion. The change is related to investments in Berkadia.
QUESTIONS:
1.) Describe Berkshire Hathaway's investment in Berkadia. Prior to the accounting change, how did Berkshire Hathaway account for the investment? How is Berkshire Hathaway currently accounting for the investment? Why are assets and liabilities higher under the new accounting method? Why are there no changes to net income or equity under the new accounting method?
2.) What are the differences between the cost method and the equity method of accounting for investments? What factor(s) determine the appropriate method? When should investments be accounted for by consolidation of financial statements?
3.) What happened to Berkshire Hathaway's share price? What was the percentage change? Why do you think the price changed? Could the change in accounting treatment have affected share price? Support your answer.
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
From The Wall Street Journal Accounting Educators' Review on March 21, 2001
TITLE: Audit Cleanup: New Oversight
Is Proposed by Blue-Chip Firms
REPORTER: Cassell Bryan-Low and Michael Schroeder
DATE: Mar 20, 2002
PAGE: C1
LINK: http://online.wsj.com/article/0,,SB10165764708550520.djm,00.html
TOPICS: Auditing
SUMMARY: The FEI has proposed changes in regulation over the auditing profession to include a new oversight body staffed with finance and accounting professionals knowledgeable about, but independent from, the industry. As well, the group proposes a minimum two-year delay before auditors who are leaving the profession may begin working for their audit clients. They also support streamlining the Financial Accounting Standards Board's operations.
QUESTIONS:
1.) Describe the changes proposed by the FEI that are highlighted in the
article. As described in the article, how do these proposed changes differ
from some other proposals currently being discussed?
2.) What is the "outgoing Public Oversight Board"? Two members of that Board, Charles Bowsher and Aulana Peters, testified before Congress this week. With whose proposed reforms do those two individuals express concern? Comment on what you think they are concerned about and why.
3.) Who pays for oversight of the accounting and auditing profession? How does the FEI propose that the new regulation efforts be funded? Why do you think they make this proposal?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Congratulations to Baruch Lev from NYU --- http://www.stern.nyu.edu/~blev/main.html
Baruch's picture adorns the cover of Financial Executive, March/April 2002 --- http://www.fei.org/magazine/marapr-2002.cfm
The cover story entitled
"Rethinking Accounting: Intangibles at a Crossroads: What
Next?" on pp. 34-39 --- http://www.fei.org/magazine/articles/3-4-2002_CoverStory.cfm
The concluding passage is quoted below:
The Inertness and Commoditization of Intangibles
Intangibles are inert - by themselves, they neither create value nor generate growth. In fact, without efficient support and enhancement systems, the value of intangibles dissipates much quicker than that of physical assets. Some examples of inertness: uHighly qualified scientists at Merck, Pfizer, or Ely Lilly (human capital intangibles) are unlikely to generate consistently winning products without innovative processes for drug research, such as the "scientific method," based on the biochemical roots of the target diseases, according to Rebecca Henderson, a specialist on scientific drug research, in Industrial and Corporate Change. Even exceptional scientists using the traditional "random search" methods for drug development will hit on winners only randomly, writes Henderson.
uA large patent portfolio at DuPont or Dow Chemical (intellectual property) is by itself of little value without a comprehensive decision support system that periodically inventories all patents, slates them by intended use (internal or collaborative development, licensing out or abandonment) and systematically searches and analyzes the patent universe to determine whether the company's technology is state-of-the-art and competitive.
uA rich customer database (customer intangibles) at Amazon.com or Circuit City will not generate value without efficient, user-friendly distribution channels and highly trained and motivated sales forces.
Worse than just inert, intangibles are very susceptible to value dissipation (quick amortization) - much more so than other assets. Patents that are not constantly defended against infringement will quickly lose value due to "invention around" them. Highly trained employees will defect to competitors without adequate compensation systems and attractive workplace conditions. Valuable brands may quickly deteriorate to mere "names" when the firm - such as a Xerox, Yahoo! or Polaroid - loses its competitive advantage. The absence of active markets for most intangibles (with certain patents and trademark exceptions) strips them of value on a stand-alone basis.
Witness the billions of dollars of intangibles (R&D, customer capital, trained employees) lost at all the defunct dot-coms, or at Enron, or at AOL Time Warner Co., which in January 2002 announced a whopping write-off of $40-60 billion - mostly from intangibles.
Intangibles are not only inert, they are also, by and large, commodities in the current economy, meaning that most business enterprises have equal access to them. Baxter and Johnson & Johnson, along with the major biotech companies, have similar access to the best and brightest of pharmaceutical researchers (human capital); every retailer can acquire the state-of-the-art supply chains and distribution channel technologies capable of creating supplier and customer-related intangibles (such as mining customer information); most companies can license-in patents or acquire R&D capabilities via corporate acquisitions; and brands are frequently traded. The sad reality about commodities is that they fail to create considerable value. Since competitors have equal access to such assets, at best, they return the cost of capital (zero value added).
The inertness and commoditization of most intangibles have important implications for the intangibles movement. They imply that corporate value creation depends critically on the organizational infrastructure of the enterprise - on the business processes and systems that transform "lifeless things," tangible and intangible, to bundles of assets generating cash flows and conferring competitive positions. Such organizational infrastructure, when operating effectively, is the major intangible of the firm. It is, by definition, noncommoditized, since it has to fit the specific mission, culture, and environment of the enterprise. Thus, by its idiosyncratic nature, organizational infrastructure is the major intangible of the enterprise.
Focusing the Intangibles Efforts
Following Phase I of the intangibles work, which was primarily directed at documentation and awareness-creation, it's now time to focus on organizational infrastructure, the intangible that counts most and about which we know least. It's the engine for creating value from other assets. Like breaking the genetic code, an understanding of the "enterprise code" - the organizational blueprints, processes and recipes - will enable us to address fundamental questions of concern to managers and investors, such as those raised above in relation to H-P/Compaq and Enron.
Organizational Infrastructure By Example: A company's organizational infrastructure is an amalgam of systems, processes and business practices (its operating procedures, recipes) aimed at streamlining operations toward achieving the company's objectives. Following is a concrete example of a business process, part of the organizational infrastructure, which was substantially modified and thereby created considerable value. This was adopted from "Turnaround," Business 2.0, January 2002.
Nissan Motor Co. Ltd., Japan's third-largest automaker and a perennial loser and debt-ridden producer of lackluster cars, received in March 1999 a new major shareholder, Renault, and a new CEO, Carlos Ghosn, both imported from France. Ghosn moved quickly to transform Nissan into a viable competitor, and indeed, in the fiscal year ending March 2001, the company reported a profit of $2.7 billion, the largest in its 68-year history.
How was this miracle performed? Primarily by cost-cutting, achieved by a drastic change in the procurement process. Here briefly, is the old process: Nissan's buyers were locked into ordering from keiretsu partners, suppliers in which Nissan owned stock. The guaranteed stream of Nissan orders insulated those suppliers from competition. Suppliers can't specialize and can't sell excess capacity elsewhere. Each supplier was assigned a shukotan, Nissan-speak for a relationship manager. It was the shukotan who would negotiate price discounts - but favors got in the way.
Here, in brief, is the new procurement process, as drastically changed by Ghosn: Ghosn gave Itaru Koeda, the purchasing chief, authority to place orders without regard to keiretsu relationships - and, more important, insisted that he use it. Then, a Renault executive and Koeda dumped the shukotan system, instead assigning buyers responsibility by model and part. They formed a sourcing committee to review vendor price quotes on a global basis. "This is the best change in our process," Koeda says. "Suppliers are specializing in what they do best, making them more efficient."
The results? An 18 percent drop in purchasing costs, which was the major contributor to Nissan's transformation from a loss to a profit. Ghosn's next major set of tasks: To change the car design process in order to enhance the top line, sales; to rid Nissan of the myriad design committees and hierarchies that stifle and slow innovation; and to institute an efficient, effective innovative process.
Baruch's cover story is accompanied by "Fixing Financial Reporting: Financial Statement Overhaul," by Robert A Howell, pp. 40-42 --- http://www.fei.org/magazine/articles/3-4-2002_Howell_CoverStory.cfm
Financial reporting is broken and has to be fixed - and fast! If it isn't, we will continue to see more cases such as Xerox, Lucent, Cisco Systems, Yahoo! and Enron. Xerox's market value is down 90 percent, or $40 billion, in the past two years. In the same period other market losses include; Lucent, down more than $200 billion; Cisco Systems, off more than $400 billion; Yahoo!, more than $100 billion; and Enron, down more than $60 billion in the largest bankruptcy of all time.
Some argue that these are extreme examples of "irrational exubuerance." Some in the accounting profession say that such cases represent a small percentage of the aggregate number of statements audited - some 15,000 public company registrants. Perhaps. But a financial reporting framework that permits these companies to suggest that they are doing well, and, by implication, to justify market valuations which, subsequently, cost investors trillions in the aggregate, is unconscionable.
Financial reporting, especially in the U. S., with its very public capital markets, has reached the point where "accrual-based" earnings are almost meaningless. Reported earnings are driven as much by "earnings expectations" as they are by real business performance. Balance sheets fail to reflect the major drivers of future value creation - the research and product, process and software development that fuel high technology companies, and the brand value of leading consumer product companies. And, cash flow statements are such a hodge-podge of operating, investing and financing activities that they obfuscate, rather than illuminate, business cash flow performance.
The FASB, in its Concept No. 1, states, "financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit and similar decisions." This is simply not so.
The primary financial statements - income statement, balance sheet and cash flow statement - which derive their foundation from an industrial age model, need major redesign if they are to serve as the starting point for meaningful financial analysis, interpretation and decision-making in today's knowledge-based and value-driven economy. Without significant redesign, ad hoc definitions such as pro forma earnings, returns and cash flows will continue to proliferate. So will significant reporting "surprises!"
Starting Point: Market Value Creation
The objective of a business is to increase real shareholder value - what Warren E. Buffett would call the "intrinsic value" of the firm. It's a very basic idea: Investors get "returns" from dividends and realized market appreciation. Both investments and returns are measured in cash terms, so individuals and investors invest cash in securities with the objective of realizing returns that meet or exceed their criteria. If their judgments are too high, and that later becomes clear, the market value of the firm will drop. If judgments are too low and cash flows turn out to be stronger, market values increase.From a managerial viewpoint, the objective of increasing shareholder (market) value really means increasing the net present value (NPV) of the future stream of cash flows. Note, "cash flows," not "profits." Cash is real; profits are anything, within reason, that management wants them to be. If revenues are recognized early - or overstated - and expenses are deferred or, in some cases, accelerated to "clear the decks" for future periods, resulting earnings may show a nice trend, but do not really reflect economic performance.
There are only three ways management may increase the real market, or "intrinsic," value of a firm. First, increase the amount of cash flows expected at any point in time. Second, accelerate cash flows; given the time value of money, cash received earlier has a higher present value. Third, if a firm is able to lower the discount rate that it applies to its cash flows - which it frequently can - it can raise its NPV.
Given that cash flows drive market value, financial statements should put much more emphasis on cash flows. The statement of cash flows now prescribed by the accounting community and presented by management is not easily related to value creation. Derived from the income statement and balance sheet, it's effectively a reconciliation statement for the change in the balance of the cash account. A major overhaul of the cash flow statement would directly relate to market valuations.
Cash Earnings and Free Cash Flows
Managers and investors should focus on "cash earnings" and the reinvestments that are made into the business in the form of "working capital" and "fixed and other (including intangible) investments." The net amount of these cash flows represent the business's "free cash flows."With negative cash flows - frequently the case for young startups and high-growth companies - a business must raise more capital in the form of debt or equity. The sooner it gets its free cash flows positive, the sooner it'll begin to create value for shareholders. Positive free cash flows provide resources to pay interest and pay down debt, to return cash to shareholders (through stock repurchases or dividends) or to invest in new business areas.
The traditional cash flow statement purportedly distinguishes between operating, investing and financing cash flows, and has as its "bottom line" the change in cash and cash equivalents. In fact, the operating cash flows include the results of selling activities, investing in working capital and interest expense, a financing activity. Investing cash flows include capital expenditures, acquisitions, disposals of assets and the purchase and sale of financial assets. Financing cash flows consist of what's left over.
Indeed, the bottom-line change in cash is not a useful number, other than to demonstrate that it may be reconciled with the change in the cash account. If one wants a positive change in cash, simply borrow more. These free cash flows ultimately drive market value, and should be the focus of managers and investors alike.
Replacing Income With Cash Earnings
The traditional "profit and loss," or "income," statement needs modification in three ways, two of which are touched on above, along with a name-change, to "Operating Statement." That would suggest a representation of the business' current operations, without the emphasis on accrual-based profits.Interest expense (income) should be eliminated from the statement, as it represents a financing cost rather than an operating cost. A number of companies do this internally to determine "net operating profit after taxes" (NOPAT). Also, NOPAT needs to be adjusted for the various non-cash items, such as depreciation, amortization, gains and losses on the sale of assets, tax-timing differences and restructuring charges - which affect income but not cash flows. The resultant "cash earnings" better represents the current economic performance of a business than accrual income and, very importantly, is much less susceptible to manipulation.
A third adjustment is the order in which the classes of expenses are displayed. Traditional income statements report cost of goods sold or product costs first, frequently focus on product gross margins, and then deduct, as a group, other expenses such as technical, selling and administrative expenses. This order made sense in the industrial age when product costs dominated. It does not for many of today's high-tech or consumer product companies. It would be more useful for companies to report expenses in an order that reflects the flow of the business activities. One logical order that builds on the concept of a business' value chain, is to categorize costs into development costs, product (service) conversion costs, sales and customer support costs and administrative costs.
Reinvesting in the Business
For most companies - especially those with significant investments that are being depreciated or amortized - cash earnings will be significantly higher than NOPAT. Unfortunately, cash earnings are not free cash flows because most businesses have to reinvest in working capital, property, plant and equipment and intangible assets, just to sustain - let alone increase - their productive capabilities.As a business grows in sales volume, assuming that it offers credit to its customers who pay with the same frequency, accounts receivable will increase proportionately. As sales volumes increase, so, too, will product costs, inventories and accounts payable balances. Working capital - principally receivables, inventories, and payables - will tend to increase proportionately with sales growth, and will require cash to finance it. The degree to which it grows is a function of receivables terms and collection practices, inventory management and payables practices.
Companies such as Dell Computer Corp. collect payments up front, turn inventories in a few days and pay their vendors when due. The net effect is that as Dell grows it actually throws off cash, rather than requiring it to support increases in working capital. Most companies are not as efficient; the amount of cash needed to support increases in working capital can be as much as 20-25 percent of any sales increase. The degree to which working capital increases as sales increase is an important performance metric. Lower is better, which absolutely flies in the face of such traditional measures of liquidity as "working capital" and "quick" ratios, for which higher has been considered better.
Balance sheets ought to reflect investments that represent future value. What drives value for many businesses in today's knowledge-based economy - pharmaceuticals, high technology, software and brand-driven consumer product companies - is the investments in R&D, product, process and software development, brand equity and the continued training and development of the work force. Yet, based on generally accepted accounting principles (GAAP) accounting, these "investments" in the future are not reflected on balance sheets, but, rather, expensed in the period in which they are incurred.
A frequent argument for "expensing" is the unclear nature of the investments' future value. Apparently, investors believe otherwise, evidenced by the ratio of market values to book values having exploded in the past 25 years. In 1978, the average book-to-market ratio was around 80 percent; today it is around 25 percent. In the early 1970s, when accounting policies were established for R&D, product lines were narrower and life cycles longer, resulting in R&D being a much less significant element of cost. Expensing was less relevant. Now, with intangible assets having become so central and significant, expensing - rather than capitalizing and amortizing them over time - results in an absolute breakdown of the principle of "matching," which is at the heart of accrual accounting. The world of business has changed; accounting practices must also change.
Financial Statement Overhaul
Financial statements need marked overhaul to be useful for analysis and decision-making in today's knowledge-driven and shareholder value-creation environment. The proposed changes fall into three categories:First - Move to a much more explicit shareholder (market) value creation and cash orientation, and away from accrual accounting profits and return on investment calculations predicated on today's accounting policies. Start with a shareholder perspective for cash flows, then reconstruct the statement of cash flows to clearly provide the free cash flows that the business' operations are generating. Cash earnings and reinvestments in the business comprise free cash flows.
Second - Expand the definition of investments to include intangibles, which should be capitalized as assets and amortized according to some thoughtful rules. This will better reflect investments that have potential future value.
Third - Change the title to "operating statement" and other "housekeeping" of financial statements, to include categorizing costs in a more logical "value chain" sequence and aggregating all financial transactions, such as interest and the purchase and sale of securities, as financing activities.
Value creation is ultimately measured in the marketplace, so it stands to reason that if a firm's market value increases consistently, over time, and can be supported by improvements in its cash generation performance, real value is being created. For this to happen, the place to start is by fixing the financial statements.
Bob Jensen's threads on accounting theory are at http://www.trinity.edu/rjensen/theory.htm
March 24 message from Andrew Lymer [A.LYMER@bham.ac.uk]
ECAIS 2002
Copenhagen Business School, Copenhagen
23-24th April, 2002
The conference programme for the forthcoming European Conference on Accounting Information Systems has been added to the Conference series website at http://accountingeducation.com/ecais .
This includes:
- the Conference Schedule (draft) - copies of the invited papers - copies of the other accepted papers for presentation
We invite you to access our website and examine these materials.
Further details of our three workshops and our keynote speaker will be added in the near future.
As organisers of this year's conference we believe this event will be of great interest to anyone associated with accounting or information systems. We encourage you to consider attending the event if you have not already booked. Full booking details are also available on the above website. The event this year only costs 50 Euro due to the very generous sponsorship we have received in support of this conference.
This event immediately precedes the European Accounting Association Annual Congress - held at the same venue 25-27th April. See their website for further details of this event - http://www.eaa-online.org
We hope to see as many of you as can make it to Copenhagen at the end of April.
Regards
Andy Lymer
Eddy Vaassen
im Hunton
Joint Chairs - ECAIS 2002.
Dictators of the World: Past
and Present, Best to Worst (History, Government)
The Dictatorship.com --- http://www.thedictatorship.com/
A Web Training Course From the U.K.
Becoming WebWise http://www.bbc.co.uk/webwise/learn/index.shtml
Welcome to BBC Becoming WebWise!
This new online course is the easy way to get to grips with the Internet. It lets you learn at your own pace and can lead to a nationally recognised qualification. Enrol at your local college for one of the accredited qualifications.
- The eight key sections, or trips, will take you through the Internet basics in a simple and easy to follow format. Remember, you can return to any of the sections as often as you like. It will probably take you about ten hours to complete the course.
- Becoming WebWise will help you find out about getting connected, e-mailing, searching, bookmarking, making your own address book and the very basics of building your own web page. You will also learn about technological developments like Digital TV and WAP phones, your legal rights online, the history of the net, and the other ways in which you might get online.
- As you progress through the course, you will be able to see your scores by visiting your scorecard. This will tell you which trip and landmarks you have visited and also your scores in our tasks and quizzes. It is important to log out at the end of your visit so that your scores and progress will be saved.
- Remember: in order to obtain the accredited qualification you must enrol at a local college. Use our national coursefinder section to find one.
- Use the Register or Log In link to get a scorecard. If you would like to enter Becoming WebWise without registering or logging in then use this link: Enter Becoming WebWise
University of Texas at San Antonio (UTSA) Workshop Schedule
Below is a link to the web page which contains the revised schedule for our colloquia as well as copies of the papers to be presented. Again, I would like to invite your faculty to attend any workshops that are of interest to them. Please share this schedule with interested faculty. Thank you,
Rick Hatfield
African History and
Geography (Photographs)
American Museum of Natural History Congo Expedition --- http://diglib1.amnh.org/
March 25, 2002 message from Richard Newmark [richard.newmark@phduh.com]
Bob,
I thought you might be interested in this.
Rick
-------------------------
Richard Newmark
Assistant Professor of Accounting
University of Northern Colorado
Kenneth W. Monfort College of Business
Campus Box 128
Greeley, CO 80639
(970) 351-1213 Office
(801) 858-9335 Fax (free e-mail fax at efax.com)
richard.newmark@PhDuh.com
http://PhDuh.com
IRS finalizes hedging regs with liberalizations
TD 8985; Reg. § 1.1221-2, Reg. § 1.1256(e)-1
IRS has issued final regs for determining the character of gain or loss from hedging transactions.
Background. As a result of a '99 law change, capital assets don't include any hedging transaction clearly identified as such before the close of the day on which it was acquired, originated, or entered into. (Code Sec. 1221(a)(7)) Before the change, IRS had issued final regs in '94 providing ordinary character treatment for most business hedges. Last year, IRS issued proposed changes to the hedging regs to reflect the '99 statutory change (see Weekly Alert ¶ 6 2/1/2001). IRS has now finalized the regs with various changes, many of which are pro-taxpayer. The regs apply to transactions entered into after Mar 19, 2002. However, the Preamble states that IRS won't challenge any transaction entered into after Dec. 16, '99, and before Mar. 20, 2002, that satisfies the provisions of either the proposed or final regs.Hedging transactions. A hedging transaction is a transaction entered into by the taxpayer in the normal course of business primarily to manage risk of interest rate, price changes, or currency fluctuations with respect to ordinary property, ordinary obligations, or borrowings of the taxpayer. (Code Sec. 1221(b)(2)(A)(i); Code Sec. 1221(b)(2)(A)(ii)) A hedging transaction also includes a transaction to manage such other risks as IRS may prescribe in regs. (Code Sec. 1221(b)(2)(A)(iii)) IRS has the authority to provide regs to address nonidentified or improperly identified hedging transactions (Code Sec. 1221(b)(2)(B)), and hedging transactions involving related parties. (Code Sec. 1221(b)(3))
Key changes in final regs. The final regs include the following changes from the proposed regs.
... Both the final and the proposed regs provide that they do not apply to determine the character of gain or loss realized on a section 988 transaction as defined in Code Sec. 988(c)(1) or realized with respect to any qualified fund as defined in section Code Sec. 988(c)(1)(E)(iii). The proposed regs also provided that their definition of a hedging transaction would apply for purposes of certain other international provisions of the Code only to the extent provided in regs issued under those provisions. This is eliminated in the final regs because the other references were to proposed regs and to Code sections for which the relevant regs have not been issued in final form. The Preamble states that later regs will specify the extent to which the Reg. § 1.1221-2 hedging transaction rules will apply for purposes of those other regs and related Code sections.
... Several commentators noted that the proposed regs used risk reduction as the operating standard to implement the risk management definition of hedging. They found that risk reduction is too narrow a standard to encompass the intent of Congress, which defined hedges to include transactions that manage risk of interest rate, price changes or currency fluctuations. In response, IRS has restructured the final regs to implement the risk management standard. No definition of risk management is provided, but instead, the rules characterize a variety of classes of transactions as hedging transactions because they manage risk. (Reg. § 1.1221-2(c)(4); Reg. § 1.1221-2(d))
... The proposed regs provided that a taxpayer has risk of a particular type only if it is at risk when all of its operations are considered. Commentators pointed out that businesses often conduct risk management on a business unit by business unit basis. In response, the final regs permit the determination of whether a transaction manages risk to be made on a business-unit basis provided that the business unit is within a single entity or consolidated return group that adopts the single-entity approach. (Reg. § 1.1221-2(d)(1))
RIA observation: As a result of the two foregoing changes made by the final regs, more transactions will qualify as hedging transactions. This is good for taxpayers because any losses from the additional transactions qualifying as hedges will be accorded ordinary treatment.
... In response to comments, the final regs have been restructured to separately address interest rate hedges and price hedges. (Reg. § 1.1221-2(d)(1)(iv); Reg. § 1.1221-2(d)(2))
... In response to comments, the final regs provide that a transaction that converts an interest rate from a fixed rate to a floating rate or from a floating rate to a fixed rate manages risk. (Reg. § 1.1221-2(d)(2))
... The final regs provide that IRS may identify by future published guidance specified transactions that are determined not to be entered into primarily to manage risk. (Reg. § 1.1221-2(d)(5))
... The proposed regs sought comments on expanding the definition of hedging transactions to include transactions that manage risks other than interest rate or price changes, or currency fluctuations with respect to ordinary property, ordinary obligations or borrowings of the taxpayer. While comments were received, the final regs did not make any changes in this area. However, IRS continues to invite comments on the types of risks that should be covered, including specific examples of derivative transactions that may be incorporated into future guidance, as well as the appropriate timing of inclusion of gains and losses with respect to such transactions.
... With respect to the identification requirement, a rule has been added specifying additional information that must be provided for a transaction that counteracts a hedging transaction. (Reg. § 1.1221-2(f)(3)(v))
RIA Research References: For hedging transactions, see FTC 2d/FIN ¶ I-6218.01 ; United States Tax Reporter ¶ 12,214.80
Bob Jensen's threads on hedging are at http://www.trinity.edu/rjensen/caseans/000index.htm
Forwarded by Scott Bonacker, CPA [scottbonacker@MOCCPA.COM]
LOWELL, Mass.--(BUSINESS WIRE)--Jan. 30, 2002--With the March 15 IRS deadline for business tax filings approaching, accountants and business owners can access a free search tool at www.bizownerHQ.com to help determine the right IRS activity code for a business. A business tax return cannot be filed without an IRS business activity code. The IRS switched to a new industry classification system for these codes in 1998. Subsequently, many accountants complain they are often uncertain of which code to assign. bizownerHQ has frequently found activity code errors in reviewing tax returns for valuations
March 20, 2002
Aimster suits on hold after bankruptcy filing --- http://www.latimes.com/technology/la-000020204mar20.story?coll=la%2Dheadlines%2Dtechnology
A federal judge in Chicago called a temporary halt to the music and movie industries' legal assault on Madster, the online file-swapping service formerly known as Aimster. The move came shortly after two of the targets of the industries' copyright-infringement lawsuit--BuddyUSA Inc. and AbovePeer Inc., which operate Madster--filed for bankruptcy protection.
Bob Jensen's P2P threads are at http://www.trinity.edu/rjensen/napster.htm
The Efficient Auditor Newsletter is the most unique publication in the world of auditing. First, it's loaded with practical tips and ideas to improve your engagements. In addition, you'll find yourself smiling and even laughing as you read each issue. That's right-The Efficient Auditor is an auditing publication that you'll truly enjoy reading! http://www.accountingweb.com/members/auditwatch/resources.html
Bob Jensen's practice tips are at http://www.trinity.edu/rjensen/fees.htm
A free service called "FreeAnswers" can assist you in getting answers to many software packages' "help functions", such as Quicken, Excel, Pagemaker and more. http://www.accountingweb.com/item/75438
Council on Foreign Relations http://www.cfr.org/index_public.html
Businesses Won't Rush to Install XP Look for consumers to gobble up Windows XP as Microsoft's latest OS makes its debut, but businesses won't be so quick to jump on board, according to research by Gartner's Dataquest. http://www.newmedia.com/default.asp?articleID=3447
An original Macintosh computer is now considered worthless. But the box it came in? It goes for hundreds of dollars on eBay --- http://www.wired.com/news/mac/0,2125,51208,00.html
Five Quick MS Word Tips to Save You
Time
Here are some helpful tips to help you save time and money during your
day-to-day activities. http://www.accountingweb.com/item/75441
March 22, 2002 message from Eckman, Mark S, CFCTR [meckman@att.com]
Probably my last contribution while at AT&T. Mark S. Eckman, CPA Box 1923 340 Mt. Kemble Avenue Room N270-E130 Morristown NJ 07962-1923 Phone 973.326.3011 FAX 973.326.2699
Privacy Bird software is offered free from AT&T Labs. Individuals can set up their privacy guidelines, and then the Privacy Bird will tweet and change colors from green to yellow to red to inform users whether a Web site they are visiting complies with their privacy preferences. The free software is available at http://privacybird.com .
BUSINESS Email Deployment Systems: A Step-By-Step Buyer's Guide Shopping for a system or provider that can handle your email, lists, data, and reporting? Here's how to define your needs and find the right match. http://www.newmedia.com/default.asp?articleID=3461
Next Up for Financial Services: Wireless With wireless devices such as mobile phones approaching critical mass, GartnerG2 expects U.S. consumers to begin adopting such devices for wireless financial services. http://www.newmedia.com/default.asp?articleID=3455
Those awful leisure suits and other
items that were popular in the 1970s
JCPenney Catalog Fall/Winter 1980 --- http://www.excitementmachine.org/jc/
American Folklore (including hoaxes and tall tales) --- http://www.americanfolklore.net/
Welcome to American Folklore. This folklore site contains retellings of American folktales, Native American myths and legends, Tall Tales, weather folklore and ghost stories from each of the 50 states. Read about famous characters such as Paul Bunyan, Pecos Bill, Jesse James, Davy Crockett, Daniel Boone and many more. Choose a folktale from the list below, or browse one of our six categories.
Famous Characters State Folktales Historical Folklore Regional Folktales Tall
TalesEthnic Folklore
My wife
makes me eat so much roughage that I started passing wicker furniture.
Tim Conway at a performance at Trinity University on March 23.
Giving
viagra to a person my age is like putting a new flag pole on a condemned
building.
Harvey Korman at a performance at Trinity University on March 23.
But the "Pen on Viagra is
Mighter" will slip through the smut filter!
A witness in the case to overturn library filters says that among the blocked
pages was "The Pen Is Mightier" because the software read
"penis." --- http://www.wired.com/news/politics/0,1283,51339,00.html
Blasts of gamma rays targeted at
flatulence-causing foodstuffs can eliminate the age-old problem of
nose-scrunching noxious methane fumes, scientists from India say --- http://www.wired.com/news/medtech/0,1286,51354,00.html
It is the title of the article that tries to be funny: "Zap Those
Buttock Burps Away"
A study showing that female squirrels are more likely to aid a family member with a familiar smell could go a long way toward proving that the "armpit effect" has merit --- http://www.wired.com/news/culture/0,1284,51330,00.html
Forwarded by Todd Boyle [tboyle@ROSEHILL.NET]
There are two new models of shredders featured in the Enron Mall in Business 2.0 this month http://www.business2.com/images/mag/enronmall.pdf
The Shredmaster XT is a 250 HP motor that annihilates up to 1000 pages per second (the photo seems to resemble a municipal tree shredder trailer) But I can't understand how the shredmaster Ultra works.
Can somebody provide CPE Courses on these emerging issues?
On an airplane, I overheard a stewardess talking to an elderly couple in front of me. Learning that it was the couple's 50th wedding anniversary, the flight attendant congratulated them and asked how they had done it.
"It all felt like five minutes . . ." the gentleman said slowly.
The stewardess had just begun to remark on what a sweet statement tat was when he finished his sentence with a word that eanred him a sharp smack on the head:
" . . . underwater."
Forwarded by Dick Haar
From The Original Hollywood Squares TV Show. These are from the days when game show responses were spontaneous and not scripted like they are now.
Q. Imagine you are a child in your
mothers womb, can you detect light?
A. Paul Lynde: Only during ballet practice.
Q: If you're going to make a
parachute jump, you should be at least how high?
A: Charley Weaver: Three days of steady drinking should do it.
Q: True or false...a pea can last as
long as 5,000 years.
A: George Gobel: Boy it sure seems that way sometimes...
Q: You've been having trouble going
to sleep. Are you probably a man or a woman?
A: Don Knotts: That's what's been keeping me awake.
Q: According to Cosmo, if you meet a
stranger at a party and you think he's really attractive, is it okay to come
out directly and ask him if he's married?
A: Rose Marie: No, wait until morning.
Q: What are "Do It",
"I Can Help" and "Can't Get Enough"?
A: George Gobel: I don't know but it's coming from the next apartment.
Q: As you grow older, do you tend to
gesture more or less with your hands while you are talking?
A: Rose Marie: You ask me one more growing older question, Peter...and I'll
give you a gesture you'll never forget!
Q: Paul, why do Hell's Angels wear
leather?
A: Paul Lynde: Because chiffon wrinkles too easily.
Q: Charley, you've just decided to
grow strawberries. Are you going to get any during your first year?
A: Charley Weaver: Of course not, Peter. I'm too busy growing strawberries!
Q: In bowling, what's a perfect
score?
A: Rose Marie: Ralph, the pin boy.
Q: During a tornado, are you safer in
the bedroom or in the closet?
A: Rose Marie: Unfortunately, Peter, I'm always safe in the bedroom.
Q: When you pat a dog on its head he
will usually wag his tail. What will a goose do?
A: Paul Lynde: Make him bark.
Q: If you were pregnant for two
years, what would you give birth to?
A: Paul Lynde: Whatever it is, it would never be afraid of the dark.
Q: Is it possible for the puppies in
a litter to have more than one daddy?
A: Paul Lynde: Why, that bitch!
Q: While visiting China, your tour
guide starts shouting "Poo! Poo! Poo!" What does that mean?
A: George Goebel: Cattle crossing.
Q: Back in the old days, when Great
Grandpa put horseradish on his head, what was he trying to do?
A: George Gobel: Get it in his mouth.
Q: Who stays pregnant for a longer
period of time, your wife or your elephant?
A: Paul Lynde: Who told you about my elephant?
Q: When a couple have a baby, who is
responsible for it's sex?
A: Charley Weaver: I'll lend him the car. The rest is up to him.
Q: Jackie Gleason recently revealed
that he firmly believes in them and has actually seen them on at least two
occasions. What are they?
A: Charley Weaver: His feet.
Q: Do female frogs croak?
A: Paul Lynde: If you hold their little heads under water long enough.
Forwarded by Dr. Bernards
Next time you are washing your hands and complain because the water temperature isn't just how you like it, think about how things used to be. Here are some facts about how it was in the 1500s:
Most people got married in June because they took their yearly bath in May and still smelled pretty good by June. However, they were starting to smell, so brides carried a bouquet of flowers to hide the body odor.
Baths consisted of a big tub filled with hot water. The man of the house had the privilege of the nice clean water, then all the other sons and men, then the women and finally the children. Last of all the babies were bathed. By then the water was so dirty you could actually lose someone in it. Hence the saying, "Don't throw the baby out with the bath water."
Houses had thatched roofs - thick straw, piled high, with little or no wood underneath. It was the only place for animals to get warm, so all the dogs, cats and other small animals (mice rats, and bugs)lived in the roof.
When it rained it became slippery, and sometimes the animals would slip and fall off the roof. Hence the saying, "It's raining cats and dogs."
There was nothing to stop things from falling into the house. This posed a real problem in the bedroom where bugs and other droppings could really mess up your nice clean bed. Hence, a bed with big posts and a sheet hung over the top afforded some protection. That's how canopy beds came into existence.
The floors were usually dirt. Only the wealthy had something other than dirt. Hence the saying "dirt poor." The wealthy had slate floors that would get slippery in the winter when wet, so they spread thresh on the floor to help keep their footing. As the winter wore on, they kept adding more, thresh until when they opened the door it would all start slipping outside. A piece of wood was placed in the entranceway. Hence, a "thresh hold."
Folks cooked in the kitchen with a big kettle that always hung over the fire. Every day they lit the fire and added things to the pot. They ate mostly vegetables and did not get much meat. They would eat the stew for dinner, leaving leftovers in the pot to get cold overnight and then start over the next day. Sometimes the stew had food in it that had been there for quite a while. Hence the rhyme, "Peas porridge hot. Peas porridge cold. Peas porridge in the pot nine days old."
Sometimes they could obtain pork, which made them feel quite special. When visitors came over, they would hang up their bacon to show off. It was a sign of wealth that a man "could bring home the bacon." They would cut off a
>little to share with guests and would all sit around and "chew the fat."
Those with money had plates made of pewter. Food with a high acid content caused some of the lead to leak onto the food, causing lead poisoning and death. This happened most often with tomatoes, so for the next 400 years or so, tomatoes were considered poisonous.
Most people did not have pewter plates, but had "trenchers." A trencher was a piece of wood with the middle scooped out like a bowl. Often trenchers were also made from stale pays and bread which was so old and hard that they could use them for quite some time. Trenchers were never washed and a lot of times worms and mold got into the wood and old bread. Often, after eating off wormy, moldy trenchers, one would get "trench mouth."
Bread was divided according to status. Hired workers got the burnt bottom of the loaf, the family got the middle, and special guests got the top, or "the upper crust."
Lead cups were used to drink ale or whiskey. The combination would sometimes knock a hefty drinker out for a couple of days. Someone walking along the road would find these folks passed-out and take them for dead. They would then be prepared for burial. A part of this preparation was that they would be "laid out" on the kitchen table for a couple of days and the family would gather around and eat and drink and wait and see if they would "wake up." Hence, the custom of holding a "wake."
England is old and small and they started out running out of places to bury people. So they would dig up coffins and would take the bones to a "bone-house" and reuse the grave. When reopening these coffins, one out of twenty-five coffins were found to have scratch marks on the inside and they realized that in spite of holding their "wakes" they still had been burying some people alive. So they began to tie a string on the wrist of the corpse, lead it through the coffin and up through the ground. Above ground the string was tied to a bell. Someone would have to sit out in the graveyard all night to listen for the bell. Hence, the beginning of the term, "graveyard shift." If the bell rang, that person was, "saved by the bell!" If, after a week passed and the bell did not ring, the person was considered a "dead ringer."
Whoever said that "History" is boring.
And that's the way it was on March 31, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on
the Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at
http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
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Bob
Jensen's New Bookmarks on March 25, 2002
Bob
Jensen at Trinity
University
Quotes of the Week
The only time
my education was interrupted was when I was in school.
George
Bernard Shaw
The important
thing is not to have a lot of ideas, but to live one of them.
Ugo Bernasconi
Beware of
defining as intelligent only those who share your opinions .
Ugo Ojetti
Numbers 24, 55, and 98 among the 101 Dumbest Moments in Business reads as follows at http://www.business2.com/dumbest/
24. By faking the transactions that should have offset the risk in his portfolio, a trader named John Rusnak, working for a Baltimore subsidiary of Allied Irish Banks, loses $691.2 million before the bank discovers his misdeeds. After the bank and the federal government launch investigations, Rusnak is fired, denying him the chance to unseat Barings PLC's Nicholas Leeson -- who lost $1.4 billion and destroyed a 232-year-old company -- as the most inept rogue trader ever.
Nice going Lehman
55. Houston, We Have a Problem, Part 7: Richard Gross, an analyst at Lehman Bros., maintains a "strong buy" rating on Enron as the stock declines from $81 to $0.75. A Lehman spokesperson helpfully explains to the New York Times that the firm was advising Dynegy on its purchase of Enron's pipeline, and it is Lehman's policy not to change the firm's rating on any company involved in a deal in which Lehman is an adviser.98. "Do you judge Ted Williams on one bad year?" -- Morgan Stanley analyst Mary Meeker, to Fortune magazine, explaining why it's unfair to criticize the fact that stocks on which she has maintained "outperform" ratings have lost more than 90 percent of their value. (For the record, Ted Williams's worst year was 1959. He played the season with a neck injury and still finished the year hitting a respectable .254.)
The notion
that the goal of the professional accountant is public or social service is
nonsense. His function is to provide the best possible possible service to his
specific clients, the people who pay for his efforts. And in doing this his
attitude is not one of independence or aloofness; instead he should be
endeavouring to become as fully acquainted as practicable with each client's
affairs and problems and be prepared to give constructive advice on his internal
accounting methods, and all phases of financial measurement, review and
planning. Fortunately, in actual practice, most accountants follow this path
rather than accepting the posture of working in the interest of that elusive
entity, the public or society at large. If I were a business owner or executive
I certainly wouldn't engage an aloof accountant, bent on promoting the general
welfare with me footing the bill. Of course, this doesn't imply that the
accountant should condone or participate in any kind of crooked or destructive
conduct. This point would be taken care of by emphasizing competence and
integrity as qualifications rather than independence and public service.
William A. Paton stated in "Earmarks of a Profession- And the APB," Journal
of Accountancy, January 1971)
(This quotation was forwarded by George Lan from the University of Windsor.
An ISOS
consists of a thin layer of software (an ISOS agent) that runs on each
"host" computer and a central coordinating system that runs on one or
more ISOS server complexes. This veneer of software would provide only the core
functions of allocating and scheduling resources for each task, handling
communication among host computers and determining the reimbursement required
for each machine. This type of operating system, called a microkernel, relegates
higher-level functions to programs that make use of the operating system but are
not a part of it. For instance, Mary would not use the ISOS directly to save her
files as pieces distributed across the Internet. She might run a backup
application that used ISOS functions to do that for her. The ISOS would use
principles borrowed from economics to apportion computing resources to different
users efficiently and fairly and to compensate the owners of the resources.
David P. Anderson and John Kubiatowicz, Scientific American --- http://www.sciam.com/2002/0302issue/0302anderson.html
The following was forwarded last week by my wife's sister, Frannie, who lost her beautiful and talented fifteen year old daughter in a tragic traffic icy-road accident in Dousman, Wisconsin several years ago. I am including it in New Bookmarks for one of my graduate students, Desiree Pratt, who lost her best friend in an auto accident in Houston on March 17 and Mary Jane, our office secretary whose mother is near death at this time. I am also including it in New Bookmarks for Auntie Bev who writes: "I am going through a very bad time in my life . . . as I am going to Pa. Friday morning and will be gone at least two weeks. My sister was diagnosed with: metastasized cancer with effect to the cerebral hemisphere (brain). This has come as a great shock to all of us, especially since my sister has not been sick."
If I Knew
It Would Be The Last Time
by Laura HortonIf I knew it would be the last time
That I'd see you fall asleep,
I would tuck you in more tightly
and pray the Lord, your soul to keep.If I knew it would be the last time
that I see you walk out the door,
I would give you a hug and kiss
and call you back for one more.If I knew it would be the last time
I'd hear your voice lifted up in praise,
I would video tape each action and word,
so I could play them back day after day.If I knew it would be the last time,
I could spare an extra minute
to stop and say "I love you,"
instead of assuming you would KNOW I do.If I knew it would be the last time
I would be there to share your day,
Well I'm sure you'll have so many more,
so I can let just this one slip away.For surely there's always tomorrow
to make up for an oversight,
and we always get a second chance
to make everything just right.There will always be another day
to say "I love you,"
And certainly there's another chance
to say our "Anything I can do?"But just in case I might be wrong,
and today is all I get,
I'd like to say how much I love you
and I hope we never forget.Tomorrow is not promised to anyone,
young or old alike,
And today may be the last chance
you get to hold your loved one tight.So if you're waiting for tomorrow,
why not do it today?
For if tomorrow never comes,
you'll surely regret the day,That you didn't take that extra time
for a smile, a hug, or a kiss
and you were too busy to grant someone,
what turned out to be their one last wish.So hold your loved ones close today,
and whisper in their ear,
Tell them how much you love them
and that you'll always hold them dearTake time to say "I'm sorry,"
"Please forgive me," "Thank you," or "It's okay."
And if tomorrow never comes,
you'll have no regrets about today.
This week's, March 25, updates on the Enron scandal and accounting fraud are in a separate document at http://www.trinity.edu/rjensen/fraud032502.htm
Great Site of
the Week (John Dallair led me to this site) --- http://www.exploratorium.edu/
Exploratorium, The Museum of Science, Art, and Human Perception
Housed within the walls of San Francisco's Palace of Fine Arts, the Exploratorium is a collage of over 650 science, art, and human perception exhibits. The Exploratorium is a leader in the movement to promote the museum as an educational center.
This unique museum was founded in 1969 by noted physicist and educator Dr. Frank Oppenheimer, who was director until his death in 1985.
Innovation of the Week: Slide Rather Than Click!
IBM Glass Engine (Music) --- http://www.philipglass.com/glassengine/
The IBM glass engine enables deep navigation of the music of Philip Glass. Personal interests, associations, and impulses guide the listener through an expanding selection of over sixty Glass works.
The engine is currently compatible with MS Internet Explorer (4.5+) running on Windows 98, ME, 2000, or Apple OS 9, OS X platforms. Medium to high-bandwidth Internet access is highly recommended, but not absolutely required. Problems? See Frequently Asked Questions.
Forwarded by Cindy Happy
Ok, fellow "happy people". You need to take this test. Hope you are not color blind. HP: #1
http://www.colorgenics.com/
Tax Time 2002 http://lii.org/taxes
The following resources include Web sites related to income tax preparation, taxation, sales tax, tax-related finance sites, the IRS and state taxation agencies, tax forms and publications, and finally (how we need it during tax season) a bit of humor.
Bob Jensen's tax threads are at http://www.trinity.edu/rjensen/bookbob1.htm#010304Taxation
Reply from Scott Bonacker, CPA [scottbonacker@moccpa.com]
Thanks for the tax links.
This isn't specifically about you, but I came across http://www.mihov.com/eng/lc.html while researching a network problem we are having, and I thought of how hard it is to maintain valid links on an extensive website like you have.
If this is wanted and useful, then I am happy to have helped.
Scott
The University
of Michigan's Open Archives Initiative
OAlster --- http://oaister.umdl.umich.edu/
OAIster is a Mellon-funded project of the University of Michigan Digital Library Production Services. Our goal is to create a wide-ranging collection of free, useful, previously difficult-to-access digital resources (what are digital resources?) that are easily searchable by anyone.
The novelty of this service is multi-fold:
Our service will reveal digital resources previously "hidden" from users behind web scripts (how are they hidden?). The OAI harvesting protocol we're using makes this possible.
There won't be any dead ends. Users will not be retrieving merely information (metadata) about resources -- they will have access to the real things. For instance, instead of just the catalog records of a slide collection of Van Gogh's works, users will be able to view images of the actual works.
The service will provide one-stop "shopping" for users interested in useful digital resources.
Digital resources will be easily findable and viewable through our service. The middleware we use to index these resources makes this possible.
If you're interested in making your collection available for harvesting, please contact Kat Hagedorn.
If you're interested in easier access to digital resources, please check back for results on our survey about use of online resources. Further testing is in progress for the initial release of the service.
Message sent to Stanford, Yale, and Oxford alumni:
Renew your academic passion! This spring, Stanford, Yale and the University of Oxford are offering online courses to alumni and friends through the Alliance for Lifelong Learning, a joint venture among the three institutions – http://www.allLearn.org/stanford.
Courses cover a range of contemporary subjects and are produced by distinguished faculty members of the three partner universities. Designed for your busy schedule, you can participate at times that are convenient for you. Spring 2002 offerings include:
Islam and the West World War II The Stock Market Emotional Intelligence Shakespeare The American Civil War Roman History
Click here to examine the complete online course catalog and register for classes: http://www.allLearn.org/stanford .
Spring courses start on April 15. Enrollments are limited and will be filled on a first-come, first-served basis, so please act now.
All Stanford alumni, family and friends are welcome to enroll. Please feel free to share this e-mail with others you know who may be interested in taking online courses offered by the Alliance.
Sincerely yours,
Howard Wolf President,
Stanford Alumni Association
THANK YOU DU! --- http://www.dcb.du.edu/officeofdean/pressreleases/pressreleasedescription.asp?PressReleaseID=10
I want to thank Peter Firmin and the faculty of accountancy at the University of Denver, the home of my MBA degree, for being such wonderful hosts during my visit last week. In a March 15 panel, we solved all the problems, at least in theory, regarding the future of the accountancy profession. Peter is the former Dean of the colleges of business at both Tulane University and the University of Denver. He resurfaced out of retirement as a fund raiser (Director of Development) for the University of Denver's School of Accountancy. He and other top university administrators have done a fantastic job pulling DU out of its nearly-bankrupt state in the early 1980s. DU is now ranked among the top 100 universities in the U.S.
With DU's various new buildings, including the fantastic new $25 million Daniels College of Business, its amazing growth in endowment, and the economic outlook for Denver and Colorado, I predict a dynamic and highly successful future for DU. The Daniels College of Business has a very innovative, albeit expensive, team-teaching curriculum with an excellent faculty and outstanding students. See http://www.dcb.du.edu/accountancy/
I also wish Peter and his wife, Jean, well on their forthcoming canoe adventure to four jungle camps in Peru and a planned trek into the wilds of Africa. Erika and I are younger and less adventuresome. Our idea of roughing it is being forced on occasion to downgrade to a four-star hotel.
On Saturday, Erika and I spent a delightful day in one store in Denver. It is called the Tattered Cover Bookstore and is located across from the Cherry Creek Shopping Mall. It is more like a public library with comfortable furniture and quiet nooks to browse. There is also a wonderful restaurant called the Fourth Story Restaurant and Bar in the bookstore. I "read" (snore?) much better after a couple of cubalibras and a lobster lasagna lunch. The Tattered Cover website is at http://www.tatteredcover.com/
Reply from Peter Firmin
My goodness, Bob
What a nice thing for you to do. Jean and I are finalizing our Zambia trip this afternoon and will be putting a deposit down on it. Even though it's a year-and-a-half away, the camps we plan to go to hold only 6 people - so we need to act now to save our spaces. The two-day canoe trips down the river require that we do the rowing. So I'm hoping that it is row, rest, look, take pictures, row, rest, rest, rest, etc. But just in case, I'm starting now to get in shape. We also have five days of walking safaris to look forward to.
Nice seeing you again. I'll just plan to take you up on your kind invitation to visit in San Antonio.
Peter
Reply from Kevin
O'Brien [kobrien@du.edu]
Kevin made an excellent presentation on CPA
whistle blowing obligations.
Bob, thanks for the feedback; I have had several CPAs come up and tell me your presentation was very thought provoking!
My Powerpoint related to the presentation is on my website at the following URL: http://www.du.edu/~kobrien/whistleblowing.ppt
You can also access it at www.du.edu/~kobrien and follow the link to "CPA Ethics".
March 18 reply from George Lan [glan@UWINDSOR.CA]
Bob Jensen wrote:
. In a > March 15 panel, we solved all the problems, at least in theory, regarding > the future of the accountancy profession.
Hi Bob,
Any earth-shattering solutions to the future of the accountancy profession? P.S. What is a cubalibra anyway? Some drink from Cuba? And did you find out by any chance what was the first degree of the taxi driver?
George Lan
In answer to George, I might note the following:
- My earth-shattering accounting solutions are the arbitration and whistle blowing recommendations at http://www.trinity.edu/rjensen/FraudConclusion.htm#MyAnswer
- A Cubalibra is simply rum and coke with a squeezed slice of lime (the lime is vital to the flavor). Apparently it was a favorite drink of Hemingway --- http://www.vertebrate.co.uk/overground/og7/cubalibra.html
There is also a song entitled La Cubalibra
- I did not find out any details about the taxi driver's first degree. I don't think it was an online degree.
Distance Education Success: A Sample of One Taxi Driver
On March 17, 2002 while returning home from the San Antonio Airport, I learned that our taxi driver was currently taking two distance education computer engineering courses via the Internet from SMU. He said he really enjoyed this online education opportunity that was helping him walk in his father's footsteps (his father is a computer engineer). SMU's Master of Science distance education program in engineering and computer science is at http://www.seas.smu.edu/disted/
Bob Jensen's threads on distance education programs are at http://www.trinity.edu/rjensen/crossborder.htm
EDUCAUSE Review, Volume 37,
Number 2
The Table of Contents below gives you a peek at the articles in this
issue. The full issue is online at http://www.educause.edu/pub/er/erm02/erm022w.asp
.
FEATURES
Leading the IT Team: The Ultimate Oxymoron or the Ultimate Challenge? by J. GARY AUGUSTSON Changes driven by advancements in the information technology industry will define the ultimate challenge for future IT leaders as well as for senior managers of higher education institutions. http://www.educause.edu/ir/library/pdf/erm0220.pdf
WINWINI and the Next Killer App: An Interview with Carl F. Berger by CAROLE A. BARONE "WINWINI will be most important in this killer app.... We need a killer app that operates and gets What I Need When I Need It." http://www.educause.edu/ir/library/pdf/erm0221.pdf
Commonsense Ideas from an Online Survivor by HERMAN D. LUJAN By first exploring the myths that surround technology and its role in teaching and learning, higher education institutions can use commonsense ideas to survive in the online environment. http://www.educause.edu/ir/library/pdf/erm0222.pdf
Bits and Atoms: An Interview with Neil Gershenfeld by RICHARD N. KATZ "Ordinary people can learn to do exceptional things if the educational attention moves from the content of a formal curriculum to the tools that can help people find their own solutions to problems that they care about." http://www.educause.edu/ir/library/pdf/erm0223.pdf
EXCERPT
The Organizational Challenge: IT and Revolution in Higher Education by JOHN R. CURRY From Richard N. Katz and Associates, Web Portals and Higher Education: Technologies to Make IT Personal http://www.educause.edu/ir/library/pdf/erm0224.pdf
DEPARTMENTS
techwatch Information Technology in the News http://www.educause.edu/ir/library/pdf/erm02211.pdf
Leadership Commerce, Language, and Culture under One Roof by WILLIAM H. CROUCH JR. http://www.educause.edu/ir/library/pdf/erm02210.pdf
E-Content Technology's Payload by DEANNA B. MARCUM http://www.educause.edu/ir/library/pdf/erm0229.pdf
New Horizons Web Services: Stitching Together the Institutional Fabric by CARL JACOBSON http://www.educause.edu/ir/library/pdf/erm0228.pdf
policy@edu What's Policy Got to Do with IT? by RODNEY J. PETERSEN http://www.educause.edu/ir/library/pdf/erm0227.pdf
Viewpoints Vive la Difference? by GREGORY A. JACKSON http://www.educause.edu/ir/library/pdf/erm0226.pdf
Homepage The Wise and Trusted Counselor by CYNTHIA GOLDEN http://www.educause.edu/ir/library/pdf/erm0225.pdf
Increasingly popular among the PC-literate crowd, Internet-based training is helping hundreds, if not thousands, of accountants to balance their work schedules and their personal lives. http://www.accountingweb.com/item/74824
Bob Jensen's threads on online training are at http://www.trinity.edu/rjensen/crossborder.htm
Email
Forwarding
SwitchEmail: Free Email Forwarding http://www.switchemail.com/pages/index.asp
Email-To-FAX
Service
OURFAX: Free World Wide Email to Fax Service http://www.ourfax.com/
Telephone
Voice to Email Service
Copytalk is a glorified dictation service. From any phone, you dial
Copytalk's toll-free number. At the tone, you dictate, for example, an e-mail
message. Between 3 and 20 minutes later, the message you dictated is sent on its
merry way across the Internet (with or without your review, at your option),
looking exactly as if it came from your desktop PC ---
http://www.nytimes.com/2002/01/24/technology/circuits/24STAT.html
Convert Print
to Spoken Words
From Syllabus News on September 11, 2001
The recently released Scan and Read family of software scans any printed material and converts it to spoken words, delivered in a variety of voices through the computer's speaker. The software also displays the text on the screen and highlights each word as it's read, a helpful feature for readers of all ages, those with learning disabilities, and non-English speakers looking for a way to increase their vocabularies. The more advanced members of the software family include word processing capability; the ability to access Microsoft Word files and convert them to spoken words; automatic image rotation, which allows software to convert text regardless of how it's positioned on the scanner bed; and the ability to create MP3 files, which can then be downloaded to other devices.
For more information, visit http://www.premier-programming.com
Access Your PC
from Anywhere - Free Download
GoToMyPC --- https://www.gotomypc.com/
FAQs --- https://www.gotomypc.com/help.tmpl?SessionInfo=9197287/5C369812E7DB446/null
ZDnet gives it a rating of 9 out of 10 --- http://www.cnet.com/software/0-3227892-1204-8480755.html
PC World Review --- http://www.pcworld.com/downloads/file_description/0,fid,8177,00.asp
March 16 message from Richard Campbell [campbell@RIO.EDU]
I thought some might want to see the new version of Flash in action. This puzzle is one of the sample files provided by Macromedia.
http://www.virtualpublishing.net/vp_puzzle/vp_puzzle.html
Richard J. Campbell
March 16 message from Bob Blystone
I got up earlier that Bob Jensen so you get this email from me instead of the other Bob.
The Web site below is very interesting on several levels.
The site allows one to see a photo album of 800 college campuses.
From time to time I have the opportunity of going to a campus that I have not visited before. This web site allows the chance to "see" the campus before going.
It also shows what some schools are doing to "show off" their institution.
The campus tours site also lists those schools that have web cams, campus maps, videos, and VR tours. Trinity was one of the first to have a VR tour.
Give it a quick look if you like to see what the other guys are doing and look like.
Bob Blystone
Robert V. Blystone, Ph.D.
Professor of Biology
Trinity University San Antonio, Texas 78212
rblyston@trinity.edu 210-999-7243 FAX 210-999-7229
From Syllabus News on March 12, 2002
UC Davis Prof Launches Sustainable Business Web Site
A University of California at Davis professor launched a web site dedicated to "sustainable business," the idea that businesses make the social and environmental impact of their work a top priority. The Sustainable World site grew out an MBA course on responsible business and technology taught by Richard Dorf of the Graduate School of Mangement at U.C. Davis. Dorf sees the site as a way to bring together graduate students from several disciplines, including agriculture and engineering, and weave sustainable business thinking into engineering and business curricula.
For more information, visit: http://www.sustainablebiztech.org
Online University Stocks Slip From All-Time Highs
Stocks of online universities fell last week on concerns that their earnings did not justify recent surges in share prices to all-time highs. Apollo Group, which administers educational programs for working adults, closed down 4.26 percent from an all-time high of $52 posted last Tuesday. Apollo subsidiary University of Phoenix Online, which offers degrees via the Internet, was down 6 percent, at $36.17, from an all- time high posted Tuesday. And ITT Educational Services, a provider of technical education, was down 2.49 percent, at $43.78. It has gained more than 26 percent since mid-January. "The entire post-secondary education group has been on a tear" over the past several weeks, said Greg Cappelli, senior research analyst at Credit Suisse First Boston. "It gets to a certain point and valuation becomes a concern."
From Syllabus News on March 19, 2002
William & Mary, AMS, Combine on Management Series
William & Mary College last week announced a partnership with American Management Systems Inc. to start a course in human capital management. The program, to focus on how organizational factors influence business success, will be funded by a $120,000 gift from AMS. A key part of the deal will be a seminar series in human capital management for business school faculty and AMS personnel. John Boschen, associate dean at the School of Business, said, "interactive relationships between business and schools of business are the wave of the future ... we gain support for further development of the management faculty and AMS can call on our depth of talent as consultants when projects require."
For more information, visit: http://www.business.wm.edu
St. Edward's University to Enhance Online Offerings
Austin, Texas-based St. Edward's University said it would use web-based collaboration software to deliver MBA courses online and to expand its online undergraduate curriculum. The school will use software tools from Centra Inc. to deliver selected MBA programs completely online and improve the quality of online courses delivered through its New College undergraduate program for working adults. Centra applications, including interactive Web meetings, virtual classrooms, and large- scale conferences, are based on CentraOne, a thin-client Web platform that includes content creation tools and delivery systems that can either be installed on-site or accessed through its secure ASP.
For more information, visit: http://www.stedwards.edu
Partnership to Globalize Blackboard 5 System
Blackboard Inc. last week announced a partnership to allow educational institutions abroad to tailor the Blackboard e-Learning platform to their local pedagogical approaches. The company said it would work with Welocalize Inc., a Frederick, Md., firm specializing in globalization services for the e- Learning industry, to help clients extend their e- Learning software and offerings across international borders. Georg J. Anker, a professor at the University of Innsbruck, said the international version of Blackboard "will surely further the systems acceptance on our own campus as well as throughout the German market. More importantly, it will enable us to establish the e-Campus in the region outside the traditional university and to offer one platform for a number of other learning institutions."
For more information, visit: http://www.blackboard.com
U. Wisconsin's dot.edu Org Takes Sun Micro Award
Sun Microsystems, Inc. last week said it chose the University of Wisconsin's dot.edu department, at the Milwaukee campus, as a Sun Center of Excellence in e- learning. dot.edu -- Digital Online Technology.Educational Design Utility -- is an e- learning infrastructure provider for educational institutions inside and outside Wisconsin. As a Sun Center of Excellence in e-learning, dot.edu provides instructional design, software training, hosting services, and a 24x7 helpdesk for online course development. It has placed more than 10,000 courses online since the being founded in 1999. To date, there are two Sun Centers of Excellence in e-learning globally: dot.edu at the University of Wisconsin System and the University of Alberta, Canada.
For more information, visit: http://www.sun.com/edu
Wow Site of
the Week
University of Wisconsin's dot.edu: 10,000 courses online since the being
founded in 1999
http://www.uwm.edu/Dept/dotedu/
dot.edu provides hosting services for online course development using an array of courseware products including, but not limited to, Prometheus and Blackboard. Services can be selected and uniquely organized to meet the needs of each associated institution. The Utility Model is structured as a three-stage implementation plan that transfers responsibility for course development and instruction from dot.edu to the associates. The program design and timeline are also determined by the needs of each institution. A written plan, with the flexibility necessary to meet changing needs, will be designed jointly by dot.edu and the respective institution.
Services we provide include:
- Hosting
- Course Management Systems
- Instructional Design Consultation
- Software Training
- The Solution Center - 7x24 Support
- ...and more! Click here to learn about them
dot.edu provides a robust, up-to-date e-learning system infrastructure including technology, training, support, and instructional design services to effectively apply these resources to enhance education. dot.edu works with all University of Wisconsin System higher education institutions, public and private higher education institutions, and public and private schools, school districts, and educational agencies in Wisconsin and beyond.
Reply from Damian Gadal [DGADAL@CI.SANTA-BARBARA.CA.US]
This site isn't too bad either:
http://online.sbcc.net/
March 19 message from Fathom
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See more courses: http://www.fathom.com/link.jhtml?cid=esp0&page=edu
THINKING IS ENCOURAGED @ FATHOM.COM (TM) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
* Offer expires March 31, 2002, and cannot be combined with any other offer. The 25% coupon may be used only once and will apply to the entire amount in your cart before checkout. This coupon is an exclusive offer from Fathom and is not valid on the websites of Fathom's individual course providers or any other website.
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Free Assessment Summary Tool for Teachers --- http://www.getfast.ca/
Traditionally, teaching assessments are conducted at the end of a course - a practice precluding students from offering constructive feedback while they are still in the course. However, conducting instructor-designed and administered web-based course assessments opens a proactive dialogue with students about teaching, the course, and the entire learning process.The FAST project is committed to providing users with a simple online tool for assessing their students' impressions of their courses and their teaching. Using the software does not cost anything so if this is your first visit, become a user and see if FAST would be useful for you and your students. Also, you may want to read the FAQ's and the User Tips to provide you with an overview of the functionality of the software.
If you have any questions or comments about FAST, please enter them in the discussion board or send either of us a note - Bruce Ravelli, lead researcher and/or Zvjezdan Patz, lead programmer.
Whose Rules?
Young people have grown up with computers, the Internet, and instant
communication, yet are governed by the laws and values of a society still
adjusting to such technological developments. (Not surprisingly, teens don't
think adults have a clue.) InformationWeek examines the ethical issues being
raised by, and about, your soon-to-be co-workers. http://update.informationweek.com/cgi-bin4/flo?y=eGNk0BcUEY04e0BZkg0AA
FINANCE Investment Banking's Big Chill
in Europe The Continent's investment bankers had a horrible year in 2001. This
year could be worse
http://europe.businessweek.com/magazine/content/02_12/b3775150.htm?c=bweuropemar19&n=link1&t=email
Message received on March 20 from ProfNet [profnet@newprofnet.com]
ProfNet - New Question
New question for Robert Eugene Jensen:
History of company declines
" Hi, I'm a reporter at the San Jose Mercury News, the main paper in Silicon Valley, and I'm researching historic parallels to the decline in the tech sector since 2000. In other words, what other industries have seen such a sharp reversal of fortune as the hi-tech industries have had during the tech bubble and bust? And what do these historic parallels show about what will happen next? One example is the bursting of the energy and oil service stocks after 1980.
I'm also looking for examples of companies that had very large write-offs of intangibles and impaired goodwill for expensive mergers in the past and what happened to them. If JDS Uniphase had the biggest write-off in U.S. Corporate history, what were the previous biggest write-offs... and what happened to these companies?
I can be reached at dsylvester@sjmercury.com or 408 920 5019... and I'm working on this this week but as soon as possible would help. Tnx David Sylvester Financial writer San Jose Mercury News
--Contact Details-- Organization: San Jose Mercury News Email: dsylvester@sjmercury.com Phone: 408-920-5019 "
from:
Temporary Access - Wed Mar 20 18:42:24 EST 2002
Access My ProfNet now --- http://www3.profnet.com/organik/orbital/login/login.jsp?bypassSessionCheck=true
The 101 Dumbest Moments in Business --- http://www.business2.com/dumbest/
In a perfect world, a list like this
would not exist. In a perfect world, businesses would be run with the utmost
integrity and competence. But ours is, alas, an imperfect world, and if we must
live in one where Enron, Geraldo Rivera, and Cottonelle Fresh Rollwipes exist,
the least we can do is catalog the absurdities.
By Tim Carvell, Adam Horowitz, Thomas Mucha, April 2002 Issue
1. Houston, We Have a Problem, Part 1: Enron states billions of dollars in extra revenue through aggressive accounting and complicated off-the-books partnerships managed by its own executives, all the while ignoring warnings from its employees and enriching its top executives at the expense of its investors and workforce. And it assumes none of this will ever come to light.
2. A dozen Burger King marketing execs suffer first- and second-degree burns while walking over hot coals as part of a team-building retreat in October. One of the injured, a VP for product marketing aptly named Dana Frydman, tries to put a positive spin on having her feet flame-broiled like so much ground chuck. "It made you feel a sense of empowerment and that you can accomplish anything," she tells the Miami Herald.
3. Republic co-founders Mel and Patricia Ziegler start ZoZa, an "athletic formalwear" retailer, in late 2000. Mel says he expects sales to reach $1 billion within seven years. Gary Rieschel of Softbank Venture Capital invests $16.5 million, telling BusinessWeek, "If you have guts and you have capital, how can you not be optimistic about the consumer market?" Here's how: ZoZa's designers revamp its spring 2001 line, intentionally making their dresses two sizes smaller than labeled. Even the svelte are outraged, and ZoZa's merchandise return rate soars to 80 percent. The company shuts down in May 2001, proving that, if the dress doesn't fit, you must, uh, quit.
4. Sept. 11 Inc., Rampant Greed Division: Gas stations nationwide exploit post-Sept. 11 fears of a fuel shortage by charging customers $4 and $5 per gallon. Among the worst offenders: a station in Jackson, Mich., that, according to Newsweek, hikes its price to $6.75 per gallon.
5. Proving the old business-school saw that "any idiot can sell a dollar for 80 cents," online-currency company Flooz.com in July launches a special offer whereby American Express platinum cardholders can buy $1,000 of Flooz currency for just $800.
6. A month later, Flooz.com ceases processing transactions. It declares bankruptcy in November, leaving those who bought Flooz currency stuck with worthless e-dollars.
7. Last May, Citizens Against Government Waste, a group that received funding from Microsoft (MSFT), is caught simulating a "grassroots" campaign to get state attorneys general to drop their antitrust suit against the software giant. One detail that gives the scheme away: Some of the letters supporting Microsoft are from people who have long since died.
8. After issuing his landmark antitrust decision against Microsoft, Judge Thomas Penfield Jackson lets reporters print comments from previously confidential interviews, in which he compares Bill Gates to Napoleon and Microsoft executives to gangland killers. In June an appeals court overturns Jackson's decision to break up the company, citing his remarks as evidence of his "rampant disregard for the judiciary's ethical obligations."
9. At a Microsoft employee event last summer, CEO Steve Ballmer apparently suffers a grand mal seizure. Or attempts to dance. One or the other. It's hard to tell. In any case, a video clip of his calisthenics starts making the rounds of the Internet.
10. With the slogan "Sometimes wetter is better," Kimberly-Clark (KMB) introduces Cottonelle Fresh Rollwipes premoistened toilet paper -- or, to put it another way, baby wipes for adults.
24. By faking the transactions that should have offset the risk in his portfolio, a trader named John Rusnak, working for a Baltimore subsidiary of Allied Irish Banks, loses $691.2 million before the bank discovers his misdeeds. After the bank and the federal government launch investigations, Rusnak is fired, denying him the chance to unseat Barings PLC's Nicholas Leeson -- who lost $1.4 billion and destroyed a 232-year-old company -- as the most inept rogue trader ever.
Bob Jensen's threads on derivative financial instruments frauds are at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
Nice going Lehman
55. Houston, We Have a Problem, Part 7: Richard Gross, an analyst at Lehman Bros., maintains a "strong buy" rating on Enron as the stock declines from $81 to $0.75. A Lehman spokesperson helpfully explains to the New York Times that the firm was advising Dynegy on its purchase of Enron's pipeline, and it is Lehman's policy not to change the firm's rating on any company involved in a deal in which Lehman is an adviser.100. Houston, We Have a Problem, Part 14: In February 2002, as it struggles to emerge from bankruptcy, Enron pays more than $200,000 to retain its box seats and luxury suite at Enron Field. The company argues that it is making the payment solely to fulfill its contractual obligation -- although, coincidentally, it had earlier failed to fulfill a $200,000-a-year commitment to fund a local Boys and Girls Club.
63. Bottling the Stench of Death and Calling It Perfume: Philip Morris also attempts to counter antismoking measures in the Czech Republic by commissioning an economic analysis of the "indirect positive effects" of early deaths -- savings on health care, pensions, welfare, and housing for the elderly. The company later apologizes.
75. Unilever subsidiary Lipton approves an ad in which a man standing in line for communion holds a bowl of onion dip, presumably to improve the taste of the body of Christ. Under protest, Lipton withdraws the ad.
98. "Do you judge Ted Williams on one bad year?" -- Morgan Stanley analyst Mary Meeker, to Fortune magazine, explaining why it's unfair to criticize the fact that stocks on which she has maintained "outperform" ratings have lost more than 90 percent of their value. (For the record, Ted Williams's worst year was 1959. He played the season with a neck injury and still finished the year hitting a respectable .254.)
Continued at http://www.business2.com/articles/mag/0,1640,38604,00.html
In a reply message, David Albrecht noted that Number 40 is really funny.
40. The Newspaper Association of America names Kmart its "Retailer of the Year" on Jan. 21, 2002, one day before the company files for bankruptcy protection under Chapter 11.
Reply from Leo Gallant [lgallant@STFX.CA]
This could become a whole new language of laughter for accountants.
47 Ha Ha
83 Ha Ha
and so on
Reply from NANCY BAGRANOFF [BAGRANNA@MUOHIO.EDU]
I'd just like to chime in to say that Business 2.0 is one of the greatest resources for all kinds of stories. The dumbest moment story is second only to the business guru trading cards in the October 2001 issue. I subscribe to the paper journal but most everything is at the web site - www.business20.com .
Nancy A. Bagranoff
Professor of Accountancy
RT Farmer School of Business Admin.
Miami University Oxford, Ohio 45056
March 14, 2002 message from Dennis Beresford [dberesfo@terry.uga.edu]
Bob,
The Financial Accounting Foundation proposed today to reduce the size of the FASB from 7 to 5 members in order to speed up the process. The press release describing this is on the Board's web site - www.fasb.org .
Denny
The news release is at http://www.fasb.org/news/nr031402.html
After a review of recent events, the Trustees determined that there is a need for the FASB to be more flexible in responding to change and to increase the efficiency of its standard-setting process. By doing so, financial reporting standards would be enhanced.
The Trustees considered the need for accelerating the standard-setting process by improving the FASB’s efficiency without compromising the quality of its open due process. To meet that objective, the Trustees approved a proposal for public comment that includes the following:
- Reduction in the size of the FASB from seven to five members.
- A simple majority-voting requirement of 3-2 for the five-member board. The current board has a 5-2 supermajority requirement.
- A recommendation to the FASB that it expose proposed standards for shorter comment periods.
The Trustees will carefully consider responses to the proposal before deciding on a course of action. If approved, the proposed reduction in the size of the FASB would transition over time and be achieved through attrition. Comments also will be sought on the composition of a five-member board. The current board is composed of three members from public accounting, two from industry or the preparer community, another from the investor or user community and one from the academic community.
In reflecting on the action under consideration by the FAF to enhance the FASB’s process, Mr. Johnson remarked, "We have a responsibility to investors and we take it very seriously. The Trustees are committed to preserving the independence of private-sector standard setting and will continue to consider improvements to the process in as timely a manner as possible."
Independence
At its March 4 meeting, the Trustees also reviewed the importance of having an independent accounting standard setter. Much of that review centered on a position paper entitled "The FASB’s Role in Serving the Public, A Response to the Enron Collapse" that was prepared by FASB Chairman Edmund L. Jenkins. The paper, covering a broad range of issues, emphasizes the necessity of having an independent, private-sector accounting standard setter in maintaining efficient capital markets and is available on the FASB’s website at www.fasb.org .
Despite significant resistance from some of those affected, the FASB has made substantial improvements to financial reporting that have resulted in greater transparency of financial information. The following are a few examples drawn from the Jenkins paper:
Requiring that reporting entities recognize liabilities for retirement benefits when those entities promise them to employees rather than when they later pay them.
- Requiring significant disclosures about the separate operating segments of an entity’s business so that investors can evaluate the differing risks in the diverse operations.
- Requiring that derivative instruments and hedging transactions be reflected in financial statements which, previously, were not reflected.
- Requiring that the acquisition of one company by another be accounted for in the same way for all entities and that the total amount paid for the acquisition be reflected in the financial statements. In the past, that was not often the case.
In commenting on current auditor reform proposals, Mr. Johnson stated, "While the Trustees are interested, concerned and highly supportive of efforts to improve the independence and effectiveness of the auditing system, the FASB has no authority or responsibility for auditing matters. And as part of the broader financial reporting system, we believe it is critical that the FASB remain an independent, private-sector organization—free from political pressure. Independence is critical to developing credible and transparent information for investors and is essential to the vibrancy of the U.S. capital markets."
Vital to the independence of a private-sector standard setter is broad-based funding support from constituents in order to avoid undue influence from any single source. In commenting on this issue, Mr. Johnson said, "Now more than ever, all of our constituents—and especially the investor community—should view this as an important opportunity to support high-quality financial reporting standards, and we strongly encourage broad participation in the contribution process." Approximately two-thirds of the FASB’s funding comes from the sale of publications and licensing agreements. The remaining one-third is from a broad base of contributors, including the public accounting profession, and the corporate, investor and academic communities.
Comment Period
A document seeking public comments on the proposed changes will be issued on or about March 18, 2002, and will also be available on the FASB’s website at www.fasb.org . The comment period will be 30 days and all responses received in that time frame will be considered by the Trustees at their next regular meeting scheduled for April 23, 2002.
This is an age-old question of the accounting world, and there are no easy answers. In simpler times, the fear of being publicly humiliated by losing your CPA license and having to sit for the 3-day exam again was enough to keep most CPAs clean. http://www.accountingweb.com/item/74689
No longer the impossible dream, international accounting standards just took another step closer to gaining widespread acceptance. On March 12 the European Parliament voted in favor of plans to require IAS for listed companies in the European Union, starting in the year 2005. http://www.accountingweb.com/item/74948
Diversity Poll Identifies Top-Ranked
Accounting Firms
A survey by The Black Collegian magazine of more than 2,300 African, Asian,
Hispanic, and Native American undergraduate and MBA students found that
corporate diversity is a critical factor for minority students in deciding upon
employers, and several major accounting firms are among the companies that excel
in this area. http://www.accountingweb.com/item/73983
UK's Sunday Times Chronicle of
the Future (including prediction of a new set of Ten Commandments in 2042)
http://www.chronicle-future.co.uk/
From Phil Livingston, CEO of the Financial Executives International on March 20, 2002
FEI Publishes Reform Recommendations Last week the FEI Executive Committee approved a set of recommendations for consideration by Congress, the regulators and all corporate executives. The proposals cover a broad area and are intended to strengthen our financial reporting and governance systems. The 12 recommendations were developed by a member task force, and the task force also had significant input from FEI’s Committee on Corporate Reporting.
We offer recommendations in four areas: · Strengthening financial management and commitment to ethical conduct · Rebuilding confidence in financial reporting, the accounting industry and the effectiveness of the audit process · Modernizing financial reporting, and reforming the accounting standards-setting process · Improving corporate governance and the effectiveness of audit committees
Download a copy of the recommendations at: http://www.fei.org/download/taskforce.pdf (This file is in Adobe Acrobat format. To download the free Adobe Acrobat reader, click here: http://www.adobe.com/products/acrobat/readstep2.html )
FEI Publishes Revised Code of Ethics After receiving more than 200 comments from members, FEI is republishing its Code of Ethics. Thanks to the great work by the Ethics & Eligibility Committee, chaired by Rich Schrader, CFO of Parsons Brinckerhoff. The revised code now calls for all financial executives to acknowledge their affirmative duty to proactively promote ethical conduct in their organizations. View the revised code at: http://www.fei.org/info/code.cfm
March 20 Message from Ira Kawaller
Hi Bob,I just posted a recently published article on how to satisfy the FAS 133 disclosure requirements for interest rate hedges. Although it was originally published by Bank Asset/Liablility Management (March 2000), the content is applicable to all firms with interest rate exposures -- not just banks.If you are interested, it is available at http://www.kawaller.com/pdf/BALMHedges.pdfYou can also find additional information about derivatives, risk management, and FAS 133 in the various articles posted on the Kawaller & Company website: http://www.kawaller.comPlease feel free to contact me with any questions, comments, or suggestions.Ira Kawaller Kawaller & Company, LLC kawaller@kawaller.com (718) 694-6270
Bob Jensen's documents and threads on FAS 133 are linked at http://www.trinity.edu/rjensen/caseans/000index.htm
The Excel workbook solutions to examples and cases are on a different server at http://www.cs.trinity.edu/~rjensen/
News of the Week
XBRL
Statements Make Their Internet Debut
Microsoft Corporation has announced that it is the first technology company to
publish its financial statements on the Internet using Extensible Business
Reporting Language (XBRL). http://www.accountingweb.com/item/74412
Bob Jensen's XBRL threads are at http://www.trinity.edu/rjensen/xmlrdf.htm
The shortage of experienced personnel in the accounting profession has become critical. According to most estimates, this will not change in the near future. Every firm is looking for a magical way to keep staff happy, motivated and out of the job market. http://www.accountingweb.com/item/74223
The Case for Halting the Auditors'
Revolving Door
Law-makers and businesses are taking steps to halt the "revolving
door" between auditors and their clients. A majority, 58%, favor imposing a
two- to five-year waiting period during which auditors may not accept senior
positions with audit clients. http://www.accountingweb.com/item/73865
Differences of opinion between House Democrats and Republicans have resulted in the introduction of a second bill in the House Financial Services Committee. Known as the Comprehensive Investor Protection Act, this new proposal is the toughest accounting reform bill yet. It was the result of close coordination with the Securities and Exchange Commission, and it is supported by the AFL-CIO, consumer groups, and former SEC Chief Accountant Lynn Turner. http://www.accountingweb.com/item/73861
Differences of opinion between House Democrats and Republicans have resulted in the introduction of a second bill in the House Financial Services Committee. Known as the Comprehensive Investor Protection Act (CIPA), this new proposal is the toughest accounting reform bill yet. It was the result of close coordination with the Securities and Exchange Commission (SEC), and it is supported by the AFL-CIO, consumer groups, and former SEC Chief Accountant Lynn Turner.
Among other things, CIPA would:
- Create a Public Accountability Board with a 7-member majority selected from the public and the remaining 6 members drawn from groups representing institutional investors and pension funds.
- Empower the Board to conduct reviews of audits and audit firms, institute disciplinary actions and set standards for quality control of audits, auditor independence, and ethics.
- Impose tougher legal penalties on auditors by restoring joint and several liability in certain circumstances and restoring the aiding and abetting liability for accountants and outside professionals.
- Require the SEC to review more filings more systematically based on a risk-rating system that uses analytics (such as price-earnings ratios) to determine the frequency of reviews.
- Restrict auditors from providing a list of specified nonaudit services and require audit committee approval of any nonaudit services not listed in the bill, such as tax services.
- Require a 4-year rotation of auditors, with the possibility of one 4-year extension, if approved by the Public Accounting Regulatory Board.
- Require audit committees to meet quarterly with auditors and have an opportunity to do so outside the presence of management.
- Require a 2-year cooling off period for certain former auditor employees before they could work for an audit client.
- Prohibit directors from providing consulting services to the companies on whose boards they sit.
- Double the resources for SEC’s Division of Enforcement, Corporation Finance, and Office of the Chief Accountant.
- Set restrictions on security analysts to prevent conflicts of interest.
In introducing the bill, Representative John LaFalce said, the reforms are not "cosmetic" and do not "paper over the problem." Georgetown University law professor Donald Langevoort told Reuters, "If it were just the little guy who got trounced [by the Enron collapse], we would simply get cosmetic changes. But this has hurt more than the little guy."
Read the news release. Read the summary of the bill. View a side-by-side comparison with the bill introduced by the House Financial Services Committee Republicans.
The American Institute of CPAs is building a lobbying campaign against Enron-related reform proposals being discussed in Washington and demanded by the private sector. According to an AICPA spokesman, an e-mail was distributed to 3,000 federal key people - AICPA members who have contact and/or access to lawmakers - urging their assistance in convincing lawmakers to temper the response to requests for reforms. http://www.accountingweb.com/item/74169
Also see http://www.house.gov/banking_democrats/pr_020228.htm
Bob Jensen's threads on fraud are at http://www.trinity.edu/rjensen/fraud.htm
A message from Barry Rice
Today's issue of The Baltimore Sun has an article which tries to put a positive spin on being an accountant. I'm not sure they succeed! It's at http://www.sunspot.net/features/lifestyle/bal-to.accountant06mar06.story?coll=bal%2Dartslife%2Dtoday . The title is "The numbers game -There's no accounting for taste as changing times and high-profile scandals turn bean counters from no-accounts to celebrities". I find it interesting that in the paper edition, the article appears in the Today section rather than the Business section. That is the section with the TV listings, movie reviews, the comics and Ann Landers and Liz Smith's columns.
Please note that after two weeks, The Sun archives articles and after that they are only available for a fee.
Barry Rice
www.barryrice.com
www.AccountingIsCool.com
LEARNING TO PUT ETHICS LAST
During their spell in B-school, MBA students become more focused on company profitability and less on things like customer service
Does an MBA degree change a person's attitudes and values? According to a new study, the answer is yes -- and perhaps not for the better. "Where Will they Lead?: MBA Student Attitudes About Business & Society," published by the nonprofit Aspen Institute's Initiative for Social Innovation through Business (ISIB), finds that MBA students enter B-school with relatively idealistic ambitions, such as to create quality products and be of service to consumers. By the time they graduate, though, these goals have taken a back seat to such priorities as boosting their company's share price.
It might appear a benign transformation were it not for the specter of Enron, where MBAs Jeffrey Skilling (Harvard 1979) and Andrew Fastow (Northwestern 1987) apparently pursued such a strategy to the hilt, with disastrous results.
FOR THE FULL VERSION, VISIT: http://www.businessweek.com/bschools/content/mar2002/bs2002038_0311.htm?c=bwmbamar13&n=link1&t=email
Ten Ways to Reduce Chargebacks and Fraud Merchants' concern about online credit card fraud and chargebacks is rising at a significant rate. According to the 2001 Online Fraud Report conducted by Mindwave Research, 41 percent of merchants say the issue of online credit card fraud is "very serious" to their business. http://www.newmedia.com/default.asp?articleID=3443
Bob Jensen's threads on fraud are at http://www.trinity.edu/rjensen/fraud.htm
Bob Jensen's e-Commerce threads are at http://www.trinity.edu/rjensen/ecommerce.htm
GMAT PREP Looking to improve your score? To help you prepare as thoroughly as possible, BusinessWeek Online has developed an area that focuses on the ins and outs of the exam. You'll find expert advice, sample questions, and more http://www.businessweek.com/bschools/gmat/?c=bwmbamar13&n=link6&t=email
Hi Dave,
Her name is Amy Dunbar at the University of Connecticut.
I think all educators should read at least the first 15 pages of "Genesis of an Online Course," by Amy Dunbar at www.sba.uconn.edu/users/adunbar/genesis_of_an_online_course.pdf
She was the Wow Professor of the Week at http://www.trinity.edu/rjensen/book01q3.htm#Dunbar
Her husband also teaches tax online, although he also has some onsite courses at the University of Connecticut.
Hopefully, Amy will be presenting a workshop on August 13 in San Antonio. Watch for a future announcement under CPE at http://accounting.rutgers.edu/raw/aaa/2002annual/meetinginfo.htm
Bob Jensen
-----Original Message-----
From: University of St Thomas [mailto:djohn@USWEST.NET]
Sent: Thursday, March 07, 2002 12:32 PM To: AECM@LISTSERV.LOYOLA.EDU
Subject: Secrets of online teaching successI'm looking for a link from Bob Jensen's site and can't find it. It linked to an online tax accounting course that was exemplary. I recall that it was taught by a woman (and husband team?) and that she routinely received the highest marks from her course evaluations, even from students who received poor grades. Does anybody remember this link? I want to discover the secrets to her success delivering an online course.
Dave Johnson
Reply from Barb Edwards [bjedwards@SHAW.CA]
I think all educators should read at least the first 15 pages of "Genesis of an Online Course," by Amy Dunbar at www.sba.uconn.edu/users/adunbar/genesis_of_an_online_course.pdf
I found this interesting to read. First I noted that teams were used and that the students' responses were very positive. (Exhibit III, page 19) I use teams in my online accounting course and I now have a case that deals with team building to prepare the graduate students for team work. I am interested in comments from others about using teams in online courses and the need for team building. My teams complete weekly case summaries and once a term a major presentation of one case.
The other point that was interesting is that students generally did not use the "flashier" tools - flash files, sound files (Exhibit II, page 17). I was considering adding audio but now I wonder if it is worth the work. Maybe the straight content is more important than flash. Opinions?
The last point that I still struggle with is having students accept that graduate courses are different from undergrad. Just like Dunbar's course, my course is the first graduate course. How do you really prepare them for the graduate level of work? Thanks
Barb Edwards
Senior Lecturer,
Accounting Graduate Diploma in Business Administration
Simon Fraser University,
Burnaby BC Canada Email: bjedwards@sfu.ca
From Syllabus News on March 5, 2002
Distance Learning Lobby Praises Internet Bill
A distance learning lobbying group said it supported the House's passage of H.R. 1542, the Internet Freedom and Deployment Act. U.S. Distance Learning Association executive director John Flores said passage of the bill is "good news for the nation's distance learning industry whose future prosperity depends on universal access to broadband technology in our nation's homes, schools, universities and workplaces." The bill, sponsored by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mi.), requires Bell companies' central offices to have high speed data capabilities within five years.
For more information, visit: http://www.usdla.org
George Washington U. Launches Consulting Group
George Washington University launched a consulting group to provide learning strategies for business and government clients. GWSolutions will "pinpoint key challenges and craft individualized and customized learning strategies" for its customers. Solutions will range from top-to-bottom learning programs in multimedia formats, to trends analysis, strategic consulting, research, and the development of joint ventures. In launching the venture, the school said its first "Solution Center," would focus on problems related to security, including crisis, emergency and risk management; privacy, information security, and transportation safety.
For more information, visit: http://www.gwu.edu
Scottish School Offers Advanced Degree in Games Tech
The University of Abertay Dundee is offering what it claims is the world's first postgraduate degree in computer games technology. It will recruit its first group of students via the British Council's Online Learning Zone (OLZ) in New Dehli. The school expects about 20 young Indian computer scientists will subscribe and participate in the course via the WebCT online learning platform. The OLZ in Delhi is a mini-campus, equipped with library and hi-tech computers. Indian students taking the Abertay course will have the same quality learning experience as students in Dundee, with the only difference being that the lecturer is on the screen instead of the podium.
For more information, visit: http://www.abertay.ac.uk
AICPA Issues Proposed Standard On Fraud
Detection
On February 28, 2002, the American Institute of CPAs (AICPA) released a draft of
a revised audit standard on Consideration of Fraud in a Financial Statement
Audit. If adopted, this updated standard will replace the current standard with
the same name, (Statement on Auditing Standards No. 82). http://www.accountingweb.com/item/73718
From The Wall Street Journal Accounting Educators' Review on March 7, 2002
TITLE:
Auditing Standard for Detecting Fraud Is Posed
REPORTER: Dow Jones Newswires
DATE: Mar 01, 200
PAGE: A4
LINK: http://online.wsj.com/article/0,,BT_CO_20020228_009080.djm,00.html
TOPICS: Auditing
SUMMARY: The article implies that a new auditing standard on fraud actually has been issued, but the actual document issued was an exposure draft of a proposed standard.
QUESTIONS:
1.) Access the AICPA web site to read the actual document issued by the Auditing Standards Board at http://www.aicpa.org/members/div/auditstd/consideration_of_fraud.htm
The article begins with the statement that "the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants issued expanded fraud guidance for U.S. auditors..." Is this statement correct?
2.) In the second paragraph of the article, the author states, "The guidance comes at a time when questionable accounting practices have surfaced in the wake of bankruptcy-law filings by...Enron Corp. and Global Crossing Ltd." Were these recent scandals the reason behind the new auditing standard proposal? If not, what were the ASB's reasons for proposing the new standard? (Hint: again see the actual document at the AICPA's web site.)
3.) The proposed new standard would mandate specific requirements to search for fictitious entries and perform other tests to search for fraud under certain circumstances. Compare and contrast this proposal to current auditing requirements to search for fraud.
SMALL GROUP ASSIGNMENT: The proposed auditing standard requests feedback from respondents to assess each of the major areas of the new standard (e.g., classification of risk factors for fraud, identification of revenue recognition as the major area for risk of fraud, consideration of the risk of management override of fraud, inquiry of audit committees about fraud, and the attitude of professional skepticism). Divide the class into small groups and assign one section to each group to draft a response to the questions posed in the exposure draft.
Reviewed
By: Judy Beckman, University of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Bob Jensen's threads on fraud are at http://www.trinity.edu/rjensen/fraud.htm
THE E-MAIL MONSTER This indispensable tool for business has a huge dark side that can bring mail servers -- and workers' productivity -- to a halt --- http://www.businessweek.com/technology/tc_special/email.htm?c=bwtechmar08&n=link8&t=email
Museum of Hoaxes (repeated from earlier editions of New Bookmarks) --- http://www.museumofhoaxes.com
March 8, 2002 message from Craig Polhemus [craig@aaahq.org]
FEI BUSINESS COMBINATIONS VIDEO PROGRAM http://www.fei.org/confsem/bizcombo2k2/agenda.cfm
American Accounting Association (AAA) members may view a replay of a day-long webcast on accounting for business combinations and intangible valuations (SFAS 141 and 142) at half the price that will be charged to other non-FEI members ($149 versus $299). The FEI hopes to use funds generated from AAA members to help the FEI assume sponsorship of a Corporate Accounting Policy Seminar.
The webcast encompassed five presentations by experts with question-and-answer periods: (1) Overview of SFAS 141/142, by G. Michael Crooch, FASB Board Member; (2) Recognition and Measurement of Intangibles, by Tony Aarron of E&Y Valuation Services and Steve Gerard of Standard and Poors's, (3) Impact on Doing Deals: Structure, Pricing and Process, by Raymond Beier of PWC and Elmer Huh, Morgan Stanley Dean Witter, (4) Testing for Goodwill Impairment, by Mitch Danaher of GE, and (5) Transition Issues and Financial Statement Disclosures, by Julie A. Erhardt of Arthur Andersen's Professional Standards Group.
As an example (Digital Island Inc.) of the impact of FAS 142 on impairment testing for goodwill, please print the following document: http://www.edgar-online.com/brand/businessweek/glimpse/glimpse.pl?symbol=ISLD
Amortization of intangible assets. Amortization expense increased to $153.7 million for the nine months ended June 30, 2001 from $106.4 million for the nine months ended June 30, 2000. This increase was primarily due to a full period of amortization of the goodwill and intangibles related to the acquisitions of Sandpiper, Live On Line and SoftAware, which were completed in December 1999, January 2000 and September 2000, respectively. This increase was offset by a decrease in the current quarter's amortization as a direct result of a $1.0 billion impairment charge on goodwill and intangible assets in the quarter ended March 31, 2001. Amortization of intangible assets is expected to decrease in future periods due to this impairment charge.
Impairment of Goodwill and Intangible Assets. Impairment of goodwill and intangible assets was recorded in the amount of $1,039.2 million. The impairment charge was based on management performing an impairment assessment of the goodwill and identifiable intangible assets recorded upon the acquisitions of Sandpiper, Live On Line and SoftAware, which were completed during the year ended September 30, 2000. The assessment was performed primarily due to the significant decline in stock price since the date the shares issued in each acquisition were valued. As a result of this review, management recorded the impairment charge to reduce goodwill and acquisition-related intangible assets. The charge was determined as the excess of the carrying value of the assets over the related estimated discounted cash flows.
March 8, 2002 Message from the Risk Waters Group [RiskWaters@lb.bcentral.com]
ONLINE TRADING TRAINING NOW AVAILABLE (Investments, Finance, Derivatives) …
‘Introduction to Trading Room Technology’ from Waters Training. A low-cost, Web-based training solution for financial professionals. Go at your own pace, travel nowhere, and learn about the core trading processes and key technology issues from your own desktop. For more information, go to http://www.waters-training.com to find out more. Lastly, if you have any colleagues, training managers or business associates who would be interested in this new product, please forward them this message.
Thank you.
GIS and Historical Maps from the David Rumsey Collection (Geography, History, Travel) http://www.davidrumsey.com/
Terrorism: Questions & Answers --- http://www.terrorismanswers.com/
An e-publisher selling versions of several significant books survives a day in court against Random House --- http://www.wired.com/news/politics/0,1283,51022,00.html
Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm
From InformationWeek Daily on March 4, 2002
Adobe's All Aboard Web Services
Web, print, and video publishing vendor Adobe Systems Inc. is getting into the Web services game with an update to its AlterCast imaging server software.
AlterCast automatically creates multiple versions of an image based on one original version, so they can be easily modified to use across Web sites in various formats (in different sizes, colors, and so on). The new version will further simplify the process by letting AlterCast communicate with content-management systems and application servers via the Simple Object Access Protocol Web-service standard. "One of the key advantages of Web servers is being able to create Soap packets on any system that can talk to AlterCast servers, whether the server runs on Solaris or Windows," says Gregg Brown, group product manager for Adobe AlterCast servers. Customers who previously had to buy multiple versions of AlterCast, depending on the import and export formats they needed to support, now only have to buy one copy of the software.
E-business integrator Burntsand Inc. uses AlterCast to help its clients access advertising images, and channel director Christian Pease is looking forward to the upgrade. "With Web services, we can take ad content that we've already created and make it available to a broader set of players in a supply chain or business-to-business environment, without having to do extra coding," he says.
The AlterCast Web-services upgrade will be available free to existing users Monday on Adobe's Web site http://update.informationweek.com/cgi-bin4/flo?y=eGHt0BcUEY0V20BXKx0Ad . The product is priced at $7,500 per CPU for new users.
Business-Intelligence Progress In Jeopardy
E-business technologies, CRM applications, supply-chain management systems, and other enterprise applications can provide competitive advantages or bring companies closer to customers and suppliers. But many companies are having difficulty organizing the data and disseminating it to decision makers. Can business- intelligence tools really help? According to a Datamonitor report, business-intelligence tools will help many businesses, but others will find serious barriers. http://update.informationweek.com/cgi-bin4/flo?y=eGHs0BcUEY04e0BXLB0A1
A Statement of Responsibilities for AAA Members? Register Your Views
The American Accounting Association Council is considering the adoption of a Statement of Responsibilities (SOR) as guidance for Association members. The AAA Professionalism and Ethics Committee wrote a proposed Statement of Responsibilities after many years of input from AAA members. Previous versions have been exposed at both regional and national AAA meetings.
The current version of the proposed SOR, a set of Frequently Asked Questions, and two questions are online at http://www.aaahq.org/surveys/sor.cfm so that you may register your views and provide confidential feedback by March 31. The Professionalism and Ethics Committee will present the results of this member feedback to the Council at its meeting in Sarasota, Florida, on April 6. Please participate and express your views.
AAA Professionalism and Ethics Committee
Medicine and Madison Avenue (Marketing
and Advertising History)
http://scriptorium.lib.duke.edu/mma/
Bob Jensen's marketing helpers are at http://www.trinity.edu/rjensen/bookbob1.htm#022119Advertising%20and%20Marketing
Harry Benson: 50 Years in Pictures (History, Photography) --- http://digitaljournalist.org/issue0112/hb_intro.htm
The Wright Brothers in Photographs (Aviation, History) http://www.libraries.wright.edu/special/wright_brothers/dmc.html
The Whitney Museum of Art: 2002 Biennial Exhibition http://www.whitney.org/2002biennial/
In an ambitious project, the Library of Congress is digitizing its perfect rendition of the Gutenberg Bible. These high-resolution images could reveal more about Gutenberg's invention of moveable type --- http://www.wired.com/news/culture/0,1284,50589,00.html
"Handhelds of Tomorrow," Technology Review, April 2002 --- http://www.techreview.com/articles/tristram0402.asp
Encouraged by such statistics, some companies are offering next-generation devices that give consumers either new ways to do old things or new functions we didn’t know we needed. At last November’s Comdex, the world’s biggest trade show for consumer electronics, Bill Gates spent much of his keynote speech predicting the coming popularity of tablet-style wireless computers, which will supposedly replace today’s keyboards with pen-based computing. National Semiconductor was pushing for its all-in-one Geode Origami Mobile Communicator, a prototype that folds up into different shapes depending on its use, transforming itself into a digital camera, a digital video recorder, a videoconferencing terminal, an Internet access device, an Internet picture frame, an MP3 player and a few other things to boot. A company called Senseboard Technologies showed off its virtual keyboard, which lets you type in the air by measuring the movements of your fingers and converting them to readable e-mail messages. Then there was the Chat Pen from Ericsson, which records your handwriting on digital paper, transmits this digitized scrawl to your cell phone, and sends it along to any e-mail address. There are countless others, in prototype and production.
Most of these concepts, of course, will tank. Not because they don’t offer enough processing power or storage capacity. Not because they don’t offer compatibility with the latest wireless protocol. Not because they don’t do what they’re supposed to do, although that can be an issue. Unh-uh. The ultimate success or failure of any given gizmo will depend on a million or so people picking it up and deciding whether it feels good or not.
“Most good products are designed around the person, not the technology,” says Donald A. Norman, principal at Fremont, CA-based Nielsen Norman Group and author of The Invisible Computer, a manifesto for replacing “technology-centered” products with “human-centered” ones. “It’s not a case of people saying, ‘Gee, look at this neat technology.’ It’s a case of people saying, ‘Gee, look at what this thing can do for me.’”
A message from David Fordham on March 7, 2002
We have had superb results using The Accounting Library, by Excelco. It is easy to learn, astoundingly comprehensive, intuitive, and very complete in its line-up of accounting packages.
We give the students a case study (in most semesters, a contrived and well-developed hypothetical company replete with all sorts of "easter-eggs" in the internal-control area, -- but occasionally a real live consulting engagement). The students then use The Accounting Library to select a fitting package, and justify why they select their package over the others compared by TAL.
The CEO of Excelco is a close friend of Ralph Benke, one of our emeritii faculty, and they keep us updated with the latest edition. I don't know if they have an educational version or not, but it is certainly worth checking out. Their product is one of the most comprehensive that I've run across, at least for small to medium-large companies. They won't handle a Boeing or General Motors, but would easily handle a Weyerhauser or Starbucks or Starlight Plastics, all the way down to a one-chair barbershop.
David Fordham
James Madison UniversityFrom:
Jeff Romine
To: AECM@LISTSERV.LOYOLA.EDU
Sent: Thursday, March 07, 2002 5:58 PM
Subject: Re: questionCan someone provide the name of the software package that allows students to input the answers to questions about a company and then will select several accounting packages for consideration? I would also appreciate hearing if anyone has good or bad experiences to share. - Jeff Romine
Fraud Continues to Haunt Online Retail Online fraud losses for 2001 were 19 times as high, dollar for dollar, as fraud losses resulting from offline sales, GartnerG2 found. http://www.newmedia.com/default.asp?articleID=3427
March 11, 2002 message from Jagdish Gangolly
Ron,
I have been using PGP (Pretty Good Privacy) to illustrate most concepts in the area (Encryption/Decryption, Digital signatures, Digital certificates, Public Key Infrastructure, certificate authorities,key ring, ...).
It is freely available for download for MS-Windoze. Most unix installations will probably have it installed.
It is also very easy to use. Even some students in my class who have very little background are able to use it in a matter of days.
Hope this helps.
Regards,
Jagdish
Bob Jensen's network security threads are at http://www.trinity.edu/rjensen/ecommerce/assurance.htm
From The Wall Street Journal Accounting Educators' Review on March 7, 2002
TITLE:
Vivendi Posts Big Loss for 2001 After Write-Down of Goodwill
REPORTER: John Carreyrou
DATE: Mar 06, 2002
PAGE: B2
LINK: http://online.wsj.com/article/0,,SB1015349100950078120.djm,00.html
TOPICS: Accounting, Goodwill, Accounting Theory, International Accounting,
Valuations
SUMMARY: Vivendi Universal SA reported the biggest loss in French corporate history due to a 15.7-billion-euro write-down of goodwill. Additional write-downs of assets and increases in reported debt will occur when Vivendi begins reporting under U.S. GAAP. Questions focus on accounting for goodwill and differences between U.S. GAAP and French GAAP.
QUESTIONS:
1.) Describe accounting for goodwill under current U.S. GAAP. Describe what the article refers to as "old U.S. rules." Compare and contrast accounting for impaired goodwill under current U.S. GAAP and old U.S. GAAP.
2.) The article states that "[u]nder the old U.S. rules, companies could write down goodwill gradually, over many years. But, under the new rules, the goodwill has to be written down entirely as soon as it is deemed overvalued." Do you think that this statement fairly reflects the old and new rules for accounting for goodwill? Support your answer.
3.) What differences between French GAAP and U.S. GAAP are mentioned in the article? Compare and contrast French GAAP and U.S. GAAP on these issues.
4.) Why would a French corporation prepare financial statements under U.S. GAAP? Is Vivendi any less profitable when financial statements are prepared in accordance with U.S. GAAP? Support your answer.
Reviewed
By: Judy Beckman, University of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Renaissance Secrets (including how
women worked within societal and cultural constraints)
http://www.open2.net/renaissance2/doing/doing.html
New from JASC Software
After Shot picks up where your digital camera leaves off so you can complete all your photo tasks quickly and easily. Designed to work the way you do, After Shot is filled with amazing, easy-to-use tools that are literally just a click or two away. After Shot makes your digital photography experience what it should be – fun, fast, and simple! --- http://deals.jasc.com/promos/ashot/EAFSFS.asp
Patrick Charles forwarded the link http://www.icaew.co.uk/index.cfm?AUB=TB2I_30478&CFID=1346135&CFTOKEN=3
Seven of Europe’s leading accountancy Institutes* have announced a joint project to explore how to bring their professional qualifications closer together within, approximately, five years.
The Institutes hope that the project will result in the greater part of the content of the curricula for their qualifications being common to all the Institutes. The Institutes will also explore the potential for common learning materials, education, examination and other forms of assessment for the proposed common content.
Michael Groom, President of the Institute of Chartered Accountants in England and Wales, commented:
"Our members operate in a global business environment and the common content project would enhance the portability of their qualification. The Institutes involved in the project believe that there is significant and growing demand for the highest quality global accountancy qualifications. We are working together because we can see real benefits from the project to the wider business community as well as for our members, their firms and their employers."
The Institutes envisage that a prospective member would be able to satisfy the assessment criteria for the common content in any of the participating countries. A prospective member would satisfy the national content in the country in which he or she wants Institute membership or the right to practise.
Each Institute will consult the appropriate supervisory, regulatory and examination bodies about this project as well as its members, their firms and other employers of members. The participating Institutes also intend to advise other major Institutes, the International Federation of Accountants (IFAC) and the Federation of European Accountants (FEE) about the nature of the project and seek their involvement at the appropriate time.
*The seven Institutes participating in the project are:
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Ordre des Experts-Comptables (OEC) (France)
- Institut der Wirtschaftsprüfer (IDW) (Germany)
- Institute of Chartered Accountants in Ireland (ICAI)
- Consiglio Nazionale de Dottori Commercialisti (CNDC) (Italy)
- Koninklijk Nederlands Instituut van Registeraccountants (NIVRA) (The Netherlands)
- Institute of Chartered Accountants of Scotland (ICAS)
Background:
Under the common content project, the Institutes would retain their respective national professional qualifications but the greater part of the curricula for those national qualifications would become common to all the Institutes. In order to implement the project, therefore, the Institutes need to:
agree a common content for the curricula of all their qualifications; and identify a national content for the curriculum of each individual qualification. A prospective member of an Institute would become qualified by satisfying the assessment criteria for the common content in any participating country and for the national content in the particular country or countries in which he or she wants Institute membership or the right to practise. Satisfying the criteria for the national content with ICAEW, ICAS or ICAI would, as now, enable members to practise throughout the United Kingdom and Ireland.
The common content will be developed on the assumption that each Institute’s qualification is a business and finance qualification.
The common content will be designed to:
be attractive to top quality graduates and other potential entrants to the profession; be relevant to accounting firms and other businesses who train, employ or use the services of holders of the qualifications; facilitate the use of global education and training; and meet the increased competition from other qualifications and career paths (with or without qualifications).
SPECIAL REPORT: THE TECH REBOUND Tech's
Best Hope: Pockets of Prosperity Within the industry, some sectors will outrun
others. And within sectors, only some companies will benefit. But 2002 sure will
beat 2001
http://www.businessweek.com/technology/content/mar2002/tc20020315_8603.htm?c=bwtechmar19&n=link3&t=email
Mark Twain: A Film Directed by Ken Burns (Literature, History) --- http://www.pbs.org/marktwain/
Early Modern Women Resources http://35a-505.umd.edu/emw/early_modern.php3
Most K-12 textbooks are inspired more by political correctness than facts. John Hubisz is a leading scientist attempting to force publishers to get the facts right.
March 5 Message from John L. Hubisz [hubisz@mindspring.com]
The website is finally up and running. The site address is http://www.science-house.org/middleschool/ and can be accessed now.
This note is being sent to those folks, who over the past year expressed an interest in Middle School physical science. Most were following up a reference to a report on a review of several middle school physical science books mentioned in a newspaper article, a newsmagazine, a newsletter, on a radio talk show, in a TV interview, or by word of mouth. I want to be able to provide valuable assistance to anyone and everyone interested in seeing to it that the Middle School student's experience in physical science is a positive one and one that encourages further interest in the study of science.
Feel free to make suggestions and contributions to improve the site's content.
My aim is to keep the tone positive. When errors are cited, there will be suggestions for improvement. I will try to influence states and school districts to see that for the most part their methods of choosing textbooks is seriously flawed and needs to be changed.
Best wishes,
John L. Hubisz
Hubisz@unity.ncsu.eduJohn L. Hubisz, Physics Department, Box 8202, North Carolina State University, Raleigh NC 27695-8202; hubisz@unity.ncsu.edu, (919)515-2515, (919)515-7331 FAX
Reply from Jane Jackson
Colleagues:
Below are excerpts from an important new book that reviews HIGH QUALITY middle school science programs. It's a result of research by the Education Development Center, Inc., in Boston.You can easily download the several pdf documents that constitute the book (256 pages) at http://www.middleweb.com/EDC/EDCscience.html
See also http://www.middleweb.com/EDC/EDCmain.html for a new book that reviews high quality middle school MATH programs.
Cheers, Jane Jackson,
Dept. of Physics, Arizona State University
Invasion of the "Porn Nappers" Beware: Smut-site owners are waiting to grab your URL if you allow your registration for it to lapse --- http://www.businessweek.com/bwdaily/dnflash/mar2002/nf2002037_2837.htm?c=bwtechmar08&n=link3&t=email
From The AccountingWeb on March 4, 2002
Book Recommendation: Excel 2000 Answers, By Gail Perry, CPA
A whole book of Excel 2000 Answers for less than the price of one support call! Why pay $50, $100, $150, or even more for one phone call to tech support when you can have the answers you need at your fingertips for under $25? Get this valuable, reader-friendly book and you'll get hundreds of answers to all of your basic to advanced Excel 2000 questions, straight from the databases of Stream International--the world's largest third-party tech support organization. http://www.amazon.com/exec/obidos/ASIN/0072118830/accountingweb
Hi George,
I am back for a day and hundreds of email messages in a queue. But your message below caught my eye.
Utility functions are never identical between people. What is ideal for one is sub-optimal for another, and Arrow's Impossibility Theorem tells us that it is impossible to optimize everybody's utility at the same time (maybe in heaven?)
Utility functions are temporal. When I was a newly minted graduate, the ideal job, I thought, would was awaiting me Colorado where I planed to hold class 12 hours per week for a full salary while skiing and chasing women the rest of the week. Professor Herb Miller, who was a visiting professor at Stanford at the time, took me under his wing and convinced me that I would be miserable if I did not choose a research university where I could teach six hours a week and do research for 70 hours a week. Turned out he was correct. (Among other things, I'd be dead given my hot dog style of skiing.)
Some faculty love face-to-face interactions with students all day long (Alice Nichols at FSU comes to mind during the four years that I was chair of FSU's accounting department). Most research professors would run and hide if students wanted to interrupt them all day long. Some professors will give all the time in the world to graduate students but prefer to brush away the undergraduates (or vice versa).
When I was a newly minted assistant professor at Michigan State, one of my colleagues taught the first economics course to over 1,000 students every semester (some live and some on piped TV into dormitory classrooms where TAs took role and answered questions). Al M. asserted that the best job in the university was to teach over 1,000 students each term. Then you never had to see a student, read a paper, or grade a test (computers graded all tests). It was like being the preacher whose only duty was to give one sermon a week.
The answer pure and simple is that colleges are big institutions where faculty and students have different utilities and needs. I am really bothered by the publish or perish mentality that shuts down the really great face-to-face teachers outside the classroom unless they were mistakenly (in the eyes of some colleagues) given tenure with little or no research on their record. At the same time, I am bothered by research professors who collect a paycheck but can never be found on campus.
My advice is to march to your own drummer, but only after you have tenure. Hopefully, however, someone is tending to the flock on campus.
Bob Jensen
-----Original Message-----
From: glan@UWINDSOR.CA [mailto:glan@UWINDSOR.CA]
Sent: Monday, March 11, 2002 9:20 AM
To: AECM@LISTSERV.LOYOLA.EDU Subject:
Re: Acctg. Prof. - "My Dream Campus Interview"Is there a "dream" teaching job? Aside from pecuniary incentives and recognizing the diversity of situations and preferences, is there an "ideal" teaching load, research atmosphere and level of interaction with faculty and students?
Should the regular course load in the business school be three and three i.e. a total of six courses per year or a different number? Class size will also be a factor- should there be class limit to say third and fourth year classes in accounting ? Is it preferable to teach three sections of the same course in a semester (one prep) or to have two or three preps ? Do you find a large amount of difference in the number of hours you spend preparing for some accounting courses as opposed to other accounting courses? ( A senior accounting faculty, who has retired a while ago, once told me that accounting is like throwing jello on the wall -- it does not stick; hence a lot of preparation is required.) Do availability of T.As and G.As make a big difference, especially re marking of assignments? Do you mark all your midterms and final exams or do you make use of T.As and G.As to mark some exams?
Should there be a course or two off for those actively doing research ?Is it the dean's job to ensure that the faculty have the data bases (such as CRSP tapes and COMPUSTAT)or is it the responsibility of the faculty member to do whatever it takes to have access to the data? (e.g. obtaining permission and commuting to another university that have these data). Is having the time to do research the most important factor?
Do you have students waiting in line outside your office to see you during your office hours? I am amazed by my neighbour- there is always one or two students in his office during his office hours and usually I have to navigate through a throng of students waiting in the hallway to see him to get to my office. ( I only have a few students occasionally coming to see me!). Should faculty members, especially the new ones, spend more time in the office?
In the final analysis, what would you consider to be the significant rewards of a "dream" teaching job? The flexibility of the working hours, the opportunities to travel to exotic places for conferences, the success of former students, self-actualization...
George Lan
University of WindsorOn 10 Mar 2002, at 17:17, Barry Rice wrote:
From: The Chronicle of Higher Education, Wednesday, March 6, 2002. http://chronicle.com/jobs/2002/03/2002030601c.htm
"Driving home from my last campus interview, I felt like Sarah Hughes making a perfect landing on her Olympic gold figure-skating routine. As a tenured associate professor of accounting and business at a small > private college in the Midwest, I had ventured out on the job market for the first time in 18 years..."
Book Recommendation: Practice What You
Preach, By David Maister
Maister, a professional service consultant, surveyed 6,500 employees at 50
worldwide companies to evaluate the relationship between company financial
performance and employee satisfaction and loyalty. Here, he offers detailed
commentary from CEOs, managers and staffers, and analysis of the survey results.
http://www.amazon.com/exec/obidos/ASIN/0743211871/accountingweb
From Cindy
This is an interesting site that might be helpful in understanding why this war is taking so long.
http://wire.ap.org/APpackages/caves_flash/index.html
Paul Adams works up a lather over the Simple Object Access Protocol, a fast, easy, XML-based way for Web aps to talk to each other --- http://hotwired.lycos.com/webmonkey/02/08/index0a.html
Bob Jensen's XML threads are at http://www.trinity.edu/rjensen/xmlrdf.htm
The AccountingWeb's Book Recommendation: Strategic Management of Professional Service Firms, by Bente R. Lowendahl
Professional service firms play an increasingly important role in the value creation of today's business as well as public sector organizations. This book describes in detail the driving forces behind the challenges involved in management of a professional service firm. Based on in-depth studies of firms in multiple industries, the book presents a number of examples as well as a framework for the development of firm strategies. http://www.amazon.com/exec/obidos/ASIN/8716135083/accountingweb
Forwarded on March 5, 2002 by Desiree Pratt
| Here's
a look at who's likely to 'fess up as the new, more virtuous era of
bookkeeping begins. Expect earnings to take a hit. By Michael Brush Even if there are no more disasters like Enron lurking out there, one thing’s for sure: We’re moving into an era of stricter accounting standards that will clip the earnings outlook -- and stock prices -- for lots of companies. CAs
an investor, you need to get familiar with the most common accounting
ploys – like the ones outlined below -- so you can steer clear of
companies abusing them. Pressure from Congress and regulators is likely
to make executives get religion on accounting and back away from
aggressive practices over the next few quarters. |
The World's Flags Given Letter Grades (some reviews are really funny) --- http://138.251.140.21/~josh/flags/intro.html
Forwarded by Dick Haar
A Flag As A Tax Symbol? A visitor from Holland was chatting with his American friend and was jokingly explaining about the red, white and blue in the Netherlands flag. "Our flag symbolizes our taxes," he said. "We get red when we talk about them, white when we get our tax bill, and blue after we pay them." "Oh, that's the same with us," nodded the American, "Only we see stars, too!"
The owner of a small deli was being questioned by an IRS agent about his tax return. He had reported a net profit of $80,000 for the year. "Why don't you people leave me alone?" the deli owner said. " I work like a dog, everyone in my family helps out, the place is only closed three days a year, and you want to know how I made $80,000?" "It's not your income that bothers us" the agent said. "It's these deductions. You listed six trips to Bermuda for you and your wife." "Oh, that," the owner said smiling. "I forgot to tell you -- we also deliver."
A new arrival, about to enter the hospital saw two white-coated doctors searching through the flower beds. "Excuse me," he said, "have you lost something?" "No" replied one of the doctors. "We're doing a heart transplant for an IRS Agent and want to find a suitable rock."
Q: Are birth control pills deductible? A: Only if they don't work.
There is only one thing worse than the flu season -- the tax season. You can recover from the flu.
Internal Revenue Service Theme Song
Tax his cow, tax his goat,
tax his pants, tax his coat.Tax his crop, tax his work,
tax his ties, tax his shirt.Tax his chew, tax his smoke,
teach him taxing is no joke.Tax his tractor, tax his mule,
tell him taxing is the rule.Tax his oil, tax his gas,
tax his notes, tax his cash.Tax him good and let him know
that after taxes he has no dough.If he hollers, tax him more;
tax him till he's good and sore.Tax his coffin, tax his grave,
tax his sod in which he's laid.Put these words upon his tomb,
"Taxes drove him to his doom."After he's gone, we won't relax.
We'll still collect inheritance tax.
And last but not least - Death &
Taxes
A businessman on his deathbed called his friend and said "I want you to
promise me that when I die you will have my remains cremated." "And
what do you want me to do with your ashes?" the friend asked. The
businessman said, "Just put them in an envelope and mail them to the
Internal Revenue Service and write on the envelope 'Now you have
everything'."
HAPPY TAX SEASON
Forwarded by Don Ramsey
Susie Jones goes to the cemetery to visit her husband's grave, but she can't remember the exact location of the plot. The office tells her they have no plot under the name Herman Jones, but they do have one for Susie Jones. "That's him!" she says. "He put everything in my name."
Forwarded by George Lan
Some differences between an accountant and a financial analyst.
You have probably heard the joke about accountants giving you the numbers that you want. Here is a common one about financial analysts.
A potential investor came to seek investment advice from a financial analyst (F.A.). The F.A. told the investor, " I have the experience, you have the money."
Several weeks later, after the investor has lost all the money from following the advice of the F.A., the investor came to see the F.A. and the F.A. said to the investor:
"You have the experience, I have the money!"
Bob Jensen's Enron humor is at http://www.trinity.edu/rjensen/fraud.htm#Humor
Forwarded by Dick Haar
A man left from work one Friday afternoon. But instead of going home, he stayed out the entire weekend hunting with the boys & spending his entire paycheck. When he finally appeared at home, Sunday night, he was confronted by his very angry wife and was barraged for nearly 2 hours with a tirade of yelling about his actions...
Finally his wife stopped the nagging and simply said to him "How would you like it if you didn't see me for 2 or 3 days?"
To which he replied, "That would be fine with me."
Monday went by & he didn't see his wife. Tuesday & Wednesday came & went with the same results. On Thursday, the swelling went down just enough where he could see her a little out of the corner of his left eye.
Dear Grandson:
I have become a little older since I saw you last, and a few changes have come into my life since then. Frankly, I have become a frivolous old gal. I am seeing five gentlemen everyday.
As soon as I wake up, Will Power helps me get out of bed. Then I go to see John. Then Charlie Horse comes along, and when he is here he takes a lot of my time and attention.
When he leaves, Arthur Ritis shows up and stays the rest of the day. He doesn't like to stay in one place very long, so he takes me from joint to joint.
After such a busy day, I'm really tired and glad to go to bed with Ben Gay. What a life. Oh yes, I'm also flirting with Al Zymer.
Love,
Grandma
P.S. The preacher came to call the other day. He said at my age I should be thinking of the hereafter. I told him, "Oh I do it all the time. No matter where I am, in the parlor, upstairs, in the kitchen, or down in the basement, I ask myself ... "Now, what am I here after?"
A blonde was bragging about her
knowledge of state capitals. She proudly says, "Go ahead, ask me, I know
all of them." A friend says, "OK, what's the capital of
Wisconsin?"
The blonde replies, "Oh, that's easy: W."
What did the blonde ask her doctor when
he told her she was pregnant?
"Can you run a DNA test to see if it's mine?"
Forwarded by Auntie Bev
Puns:
My wife really likes to make pottery, but to me it's just kiln time.
Dijon vu - the same mustard as before.
Practice safe eating - always use condiments.
I fired my masseuse today. She just rubbed me the wrong way.
A Freudian slip is when you say one thing but mean your mother.
Shotgun wedding A case of wife or death.
I used to work in a blanket factory, but it folded.
I used to be a lumberjack, but I just couldn't hack it, so they gave me the axe.
A man needs a mistress just to break the monogamy.
Marriage is the mourning after the knot before.
A hangover is the wrath of grapes.
Corduroy pillows are making headlines.
Is a book on voyeurism a peeping tome?
Dancing cheek-to-cheek is really a form of floor play.
Banning the bra was a big flop.
Sea captains don't like crew cuts.
Does the name Pavlov ring a bell?
A successful diet is the triumph of mind over platter.
Time flies like an arrow. Fruit flies like a banana.
A gossip is someone with a great sense of rumor.
Without geometry, life is pointless.
When you dream in color, it's a pigment of your imagination.
Condoms should be used on every conceivable occasion.
Reading whilst sunbathing makes you well-red.
When two egotists meet, it's an I for an I.
If electricity comes from electrons... does that mean that
Morality comes from morons?
Forwarded by Debbie Bowling
Garbage Lawyer Department
If you damage your car by hitting a wild animal (such as a deer), you can now
sue the wildlife agency in the state where the accident happened. See http://www.washtimes.com/sports/20020310-39328075.htm
Forwarded by Bob Overn
A programmer is someone who solves a problem you didn't know you had in a way you don't understand.
An auditor is someone who arrives after the battle and bayonets then counts all the wounded.
A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain. (Mark Twain)
An economist is an expert who will know tomorrow why the things he predicted yesterday did not happen today.
A statistician is someone who is good with numbers but lacks the personality to be an accountant.
A mathematician is a blind man in a dark room looking for a black cat that is not there.
A topologist is a man who does not know the difference between a coffee cup and a doughnut.
A lawyer is a person who writes a 10,000-word document and calls it a "brief."
A psychologist is a man who watches everyone else when a beautiful girl enters the room.
A professor is one who talks in someone else's sleep.
A consultant is someone who takes the watch off your wrist and tells you the time.
A diplomat is someone who can tell you to go to Antarctica in such a way that you will look forward to the trip.
Forwarded by Dick Haar
Secrets if a Successful Marriage
1. Two times a week, we go to a
nice restaurant, have a little wine, some good food and companionship.
She goes Tuesday's, I go Friday's.
2. We also sleep in separate beds. Hers is in San Francisco and mine is in Denver.
3. I take my wife everywhere, but she keeps finding her way back.
4. I asked my wife where she wanted to go for our anniversary. "Somewhere I haven't been in a long time!" she said. So I suggested the kitchen.
5. We always hold hands. If I let go, she shops.
6. She has an electric blender, electric toaster, and electric bread maker. Then she said, "There are too many gadgets, and no place to sit down!" So I bought her an electric chair.
7. My wife told me the car wasn't running well because there was water in the carburetor. I asked where the car was. She told me, "In the lake."
8. She got a mudpack and looked great
for two days.
Then the mud fell off.
9. She ran after the garbage truck, yelling, "Am I too late for the garbage?" The driver said, "No, jump in!"
10. Remember....Marriage is the number one cause of divorce.
11. Statistically, 100% of all divorces start with marriage.
12. I married Miss Right. I just didn't know her first name was Always.
13. I haven't spoken to my wife for 18 months. I don't like to interrupt her.
14. The last fight was my fault. My wife asked, "What's on the TV?"...I said, 'Dust!"
15. In the beginning, God created earth
and rested.
Then God created man and rested. Then God created
woman............
Since then, neither God nor man has rested.
Forwarded by Dick Haar
1. If you're too open minded, your brains will fall out.
2. Age is a very high price to pay for maturity.
3. Going to church doesn't make you a Christian any more than going to a garage makes you a mechanic.
4. Artificial intelligence is no match for natural stupidity.
5. If you must choose between two evils, pick the one you've never tried before.
6. My idea of housework is to sweep the room with a glance.
7. Not one shred of evidence supports the notion that life is serious.
8. It is easier to get forgiveness than permission.
9. For every action, there is an equal and opposite government program.
10. If you look like your passport picture, you probably need the trip.
11. Bills travel through the mail at twice the speed of checks.
12. A conscience is what hurts when all your other parts feel so good.
13. Eat well, stay fit, die anyway.
14. Men are from earth. Women are from earth. Deal with it.
15. No husband has ever been shot while doing the dishes.
16. A balanced diet is a cookie in each hand.
17. Middle age is when broadness of the mind and narrowness of the waist change places.
18. Opportunities always look bigger going than coming.
19. Junk is something you've kept for years and throw away three weeks before you need it.
20. There is always one more imbecile than you counted on.
21. Experience is a wonderful thing. It enables you to recognize a mistake when you make it again.
22. By the time you can make ends meet, they move the ends.
23. Thou shall not weigh more than thy refrigerator.
24. Someone who thinks logically provides a nice contrast to the real world.
25. Blessed are they who can laugh at themselves for they shall never cease to be amused.
Also forwarded by Dick Haar
The elder priest speaking to the younger priest said, "I know you were reaching out to the young people when you had bucket seats put in to replace the first four pews. It worked. We got the front of the church filled first."
The young priest nodded and the old one continued, "And, you told me a little more beat to the music would bring young people back to church, so I supported you when you brought in that rock'n roll gospel choir that packed us to the balcony."
"So," asked the young priest, "What's the problem?"
"Well," said the elder priest, "I'm afraid you've gone too far with the drive-thru confessional."
"But Father," protested the young priest, "My confessions have nearly doubled since I began to do that!"
"I know, I know, my son, but that flashing neon sign "Toot 'n Tell or Go to Hell" really has to go."
And that's the way it was on March 25, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
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Bob
Jensen's New Bookmarks on March 4, 2002
Bob
Jensen at Trinity
University
Quotes of the Week
Quotations on the Topic of Investment Banking, Structured Financing, and Derivatives
JP Morgan – whose lawyers must be working overtime
– is refuting any wrongdoing over credit default swaps it sold on Argentine
sovereign debt to three hedge funds. But the bank failed to win immediate
payment of $965 million from the 11 insurers it is suing for outstanding surety
bonds.
Christopher Jeffery Editor, March 2, 2002, RiskNews http://www.risknews.net
Note from Bob Jensen:
The above quotation seems to be Year 2002 Déjŕ Vu in terms of all
the bad ways investment bankers cheated investors in the 1980s and 1990s.
Read passage from Partnoy's book quoted at http://www.trinity.edu/rjensen/book02q1.htm#022502
Enron was its own investment bank on many deals, especially in credit derivatives. You can read the following at http://www.trinity.edu/rjensen/fraud.htm
Selected quotations from "Why Enron Went Bust: Start with arrogance. Add greed, deceit, and financial chicanery. What do you get? A company that wasn't what it was cracked up to be." by Benthany McLean, Fortune Magazine, December 24, 2001, pp. 58-68.
Why Enron Went Bust: Start with arrogance. Add greed, deceit, and financial chicanery. What do you get? A company that wasn't what it was cracked up to be."
In fact, it's next to impossible to find someone outside Enron who agrees with Fasto's contention (that Enron was an energy provider rather than an energy trading company). "They were not an energy company that used trading as part of their strategy, but a company that traded for trading's sake," says Austin Ramzy, research director of Principal Capital Income Investors. "Enron is dominated by pure trading," says one competitor. Indeed, Enron had a reputation for taking more risk than other companies, especially in longer-term contracts, in which there is far less liquidity. "Enron swung for the fences," says another trader. And it's not secret that among non-investment banks, Enron was an active and extremely aggressive player in complex financial instruments such as credit derivatives. Because Enron didn't have as strong a balance sheet as the investment banks that dominate that world, it had to offer better prices to get business. "Funky" is a word that is used to describe its trades.
I was particularly impressed, as were all people who phoned in, by the testimony of Scott Cleland (see Tuesday, January 15) and then click on the following link to read his opening remarks to a Senate Committee on December 18. If you think the public accounting profession has an "independence problem," that problem is miniscule relative to an enormous independence problem among financial analysts and investment bankers --- two professions that are literally rotten to the core. Go to http://www.c-span.org/enron/scomm_1218.asp#open
A portion of Mr. Cleland's testimony is quoted below:
Four, it's common for analysts to have a financial stake in the companies they're covering. That's just like, essentially, allowing athletes to bet on the outcome of the game that they're playing in.
Five, most payments for investment research is routinely commingled in the process with more profitable investment banking and proprietary trading. The problem with this is it effectively means that most research analysts work for the companies and don't work for investors.
Six, credit agencies may have conflicts of interest.
Seven, analysts seeking investment banking tend to be more tolerant of pro-forma accounting and the conflict there is, essentially, the system is allowing companies to tell -- you know, to make up their own accounting. To describe their own financial performance, that no one then can compare objectively with other companies.
Eight, surprise, surprise, companies routinely beat the expectations of a consensus of research analysts that are seeking their investment banking business.
You can read about traunches and other misuses of derivatives by investment bankers in structured financings at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#CreditDerivatives
Other Quotations
Just another
day on the river
Forwarded by Phil Cooley http://koti.mbnet.fi/~soldier/towboat.htm (Try
it for the amazing photographs!)
Pupils eat
that which the teachers have digested
Karl
Krauss
The journalist
is stimulated by a deadline. He writes worse if he has time
Karl
Krauss
Suppose you were an idiot . . . and suppose you were
a member of Congress . . . But I repeat myself.
Mark Twain
Expansion
means complexity and complexity decay.
Cyril
Parkinson
However, over
the last decade, railroads have been engaged in their own version of an
information revolution. The combination of computers and wireless systems gives
railroads greater customer service capacity and better dispatching and cost
controls—as well as dispensing with armies of clerks. Charles Dettmann,
executive vice president for operations, research and technology at the
Washington, DC-based Association of American Railroads, argues that railroads’
competitiveness—perhaps even their existence—depends on their use of
information technologies.
Don Philips, Technology Review (from MIT), March 2002 --- http://www.techreview.com/articles/philips0302.asp
"Historically,
companies have been forced to evaluate ethics programs on the basis of outputs,
such as training sessions and hotline calls, rather than real outcomes,"
said the head of Andersen's ethics group, Dr. Barbara Ley Toffler. "The
result has been misdirected investment and concern among senior executives about
the real value of these programs."
"Andersen Introduces Yardstick for Employee Ethics Programs," The
Electronic Accountant, June 15, 1999 --- http://www.electronicaccountant.com/news/1999/061599_4.htm
In particular,
it has raised awareness of “hollow swaps”, where two telecoms companies
exchange identical amounts of network capacity, then book the purchase cost as
capital expense and the sale as revenue. Although C&W says it does not use
hollow swaps, it has recently admitted to using another controversial accounting
method to book the sale of “indefeasible right of use” (IRU) contracts.
C&W booked the contracts, which give access to its telecoms network, as
upfront revenue even though they were spread over periods of up to 15 years.
Such deals — which were outlawed in 1999 by regulators in America — boosted
C&W’s revenues by Ł373 million in 2001.
Chris Ayres and Clive Mathieson, London Times Online, March 1, 2002 --- http://www.thetimes.co.uk/article/0,,5-222235,00.html
Bob Jensen's threads on financial derivatives instruments frauds are at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
US GAAP is
under attack on the world stage, and the case for acceptance of international
accounting standards is gaining momentum. Will the U.S. lose its authority over
how foreign firms file financial statements for the U.S. market? What's
happening and why?
http://www.accountingweb.com/item/73130
Porn websites
are making millions. Now mainstream dot.coms are asking them for advice.
Sara Gaines in The Guardian, February 25, 2002 --- http://www.guardian.co.uk/online/story/0,3605,659159,00.html
The Online
Computer Library Centre's annual review found 74,000 adult websites last year,
accounting for 2% of sites on the net, and together they bring in profits of
more than $1billon. Though many are small scale, with half making $20,000 a
year, even that figure is the envy of many mainstream brands.
Ibid
When Ashe is
not posing naked on her site, Danni's
Hard Drive, she has a growing list of business engagements. Last year these
included speeches at the Streaming Media Asia seminar in Hong Kong and the
Internet World Conference in Sydney, and Ashe has twice testified before US
congressional committees on child protection and internet-related issues.
Ibid
(Her site does not seem to offer any child protection.)
The Catholic
church gives its blessings to the Internet, saying it's a "marvelous
technological tool." But it also says that the "ideology of radical
libertarianism is both mistaken and harmful."
Farhad Manjoo, "What Would Jesus Surf?, Wired News --- http://www.wired.com/news/culture/0,1284,50757,00.html
Enron: Updates
on March 4, 2002 ---
http://www.trinity.edu/rjensen/fraud030402.htm
My answer proposed at http://www.trinity.edu/rjensen/fraudConclusion.htm#MyAnswer
My answer, albeit naive, is that auditing firms must
begin to "warrant" or "insure" their services much like
insurance companies insure against liability with limits as to what they will
pay such as limits to liability in automobile accidents. Clients should
decide how much auditing liability insurance they are willing to purchase as a
component of the total audit fee. The insured liability limit should
be publicized on Page 1 of a corporate annual report and in stock price listings
in newspapers and on the Internet. Accordingly, the amount of insured
audit liability would then become an important input into investor and creditor
decisions. Firms paying for lower audit liability would then pay the price
by having a higher cost of capital. This does not mean that all
audits should not be held accountable to identical high auditing standards or
that audit insurance claims can be filed for stock price declines. Claims
should only be filed when there is evidence of audit negligence and/or fraud.
This is not a proposal that I have worked out in any kind of detail. Two components that I would like to include are as follows:
Also see http://www.trinity.edu/rjensen/damages.htm
Dan Whatley set out to expose what he saw as Enron-style corporate malfeasance on an Internet message board. Now he has a judgment against him for $450,000. His story is not uncommon --- http://www.wired.com/news/business/0,1367,50548,00.html
Bad Flashing versus Good Flashing (Webpage Design, Authoring) --- http://www.flash99good.com/
Bob Jensen's threads on authoring are at http://www.trinity.edu/rjensen/000aaa/thetools.htm
Innovation of the
Week: Augmented Reality
Believe it or not, this may be the prototype for the killer app in portable
computing. It's called augmented reality and it alters how we see the world. But
there's still a little work to be done.
"Augmented Reality," by Steve Ditlea, Popular Science --- http://www.popsci.com/popsci/computers/article/0,12543,190327,00.html
Walk down the street, look at the world. This is reality. Now repeat, but wearing an odd-looking, bulky pair of glasses that place into your line of vision selective, relevant bits of data about the world; the data hovers in sight like virtual Post-it Notes, annotating your view. This is augmented reality. Glasses on, you glance to the right, at a vaguely familiar restaurant, and click a small button in your hand. Up pops text reminding you that Tom's Restaurant was the model for the diner on "Seinfeld"; not only that, but -- according to the glasses, at least -- the Morningside salad is worth ordering.
When the technology for augmented reality (AR) is fully developed, the gear won't amount to much more than glasses and some sort of small unit like a PDA. Right now, though, it consists of about 26 pounds of equipment that gets strapped to the back and to the head, along with a shoulder-perching flying saucer-shaped antenna. The Mobile Augmented Reality System (MARS), developed at Columbia University (not far from Tom's Restaurant), has been assembled from off-the-shelf technology, including a 1GHz Dell laptop with a graphics accelerator chip and soap-bar-sized batteries to power the display glasses and the critical positioning and orientation technologies. Strap on this rig and you look like a robothief on the lam from CompUSA.
But if you do strap on this rig, as I have, you begin to understand the profound possibilities of an AR system, which can superimpose computer-generated text, graphics, 3-D animation, sound, or any other digitized data on the real world. Think of what digital detail can accomplish when it pops up at your beck and call, to identify faces, or buildings, or the parts of an engine being repaired, or the flight number of a plane in the air, or the schedule of a train in a station.
Already, AR is providing real-time battlefield data for soldiers and giving physicians the equivalent of X-ray vision during delicate operations. Data is power, and AR promises to be a powerful way to insert data into the seen world.
Much of this will have to wait until later in this decade: The MARS system I wore, the first to take AR outdoors, cannot be comfortably used for much more than a few minutes at a time, even if you don't mind the gawking of passersby. And the coordination between the wearer and the data-display system needs to be better synchronized. But the principles of AR are well demonstrated, and better-working technology is on the way.
Continued at http://www.popsci.com/popsci/computers/article/0,12543,190327,00.html
I don't think they realize the magnitude of the service if Bob Jensen registers at MyBookmarks --- http://www.mybookmarks.com/
MyBookmarks is a free Internet service that allows you to keep your browser bookmarks and favorites online so you can access them from anywhere.
Your Internet Explorer favorites, Netscape bookmarks, and AOL favorite places can be imported to MyBookmarks to get started quickly. Our full-featured editor makes it easy to organize and search your online bookmarks. You can even export your online bookmarks back to your browser. Add instant content to your homepage by optionally making your online bookmarks public.
A demo is provided.
Email-To-FAX Service
OURFAX: Free World Wide Email to Fax Service http://www.ourfax.com/
Telephone Voice to Email Service
Copytalk is a glorified dictation
service. From any phone, you dial Copytalk's toll-free number. At the tone, you
dictate, for example, an e-mail message. Between 3 and 20 minutes later, the
message you dictated is sent on its merry way across the Internet (with or
without your review, at your option), looking exactly as if it came from your
desktop PC ---
http://www.nytimes.com/2002/01/24/technology/circuits/24STAT.html
Distinguished Lecturer of the Week
"OF HERETICS AND INTERLOPERS: IN
SEARCH OF COMMUNITY,"
A Keynote address delivered by
Arturo Madrid Murchison Distinguished Professor of the Humanities at Trinity
University http://www.trinity.edu/rjensen/arturo.htm
Hi Roger,
What is ironic is that the largest CPA firms argued civil damages to be awarded on a pro-rata basis (instead of being the deep pockets in a lawsuit where the primary defendant is bankrupt) was due to "cookie-cutter" lawsuits in which identically worded lawsuits were being filed for multiple firms whose prices had severely declined. (In some cases, the letters even had the names of the defendants wrong).
I guess we have cookie cutters on both sides.
Thanks,
Bob Jensen
Original Message-----
From: Roger Collins [mailto:rcollins@cariboo.bc.ca]
Sent: Friday, March 01, 2002 12:14 AM
To: Jensen, Robert Subject: Politics and standard settingBob, regardless of the merits of the argument, I quite like this quote from the article.. The responses show evidence of a co-ordinated US campaign against the IASB proposals, which have been criticised by Senator Michael Oxley, the chairman of the US House of Representatives' committee on financial services.
The letters include 116 from the US business community that are identical in content and even contain the same typographical error. http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT31GJ4Q4YC&live=true&tagid=FTDCZE6JFEC&subheading=accountancy
Roger
Roger Collins Associate Professor UCC School of Business
Oh Oh!
Goof of the Week
Apple's iPod can be used to copy software from display computers at stores like
CompUSA. Will it herald a new era of virtual shoplifting? --- http://www.wired.com/news/mac/0,2125,50688,00.html
When Apple introduced the iPod, the company was aware that people might use it to rip off music from the Net or friends' machines. Each new iPod, in fact, is emblazoned with a sticker that warns, "Don't Steal Music."
But it is unlikely that Apple imagined people would walk into computer stores, plug their iPod into display computers and use it to copy software off the hard drives.
Continued at - http://www.wired.com/news/mac/0,2125,50688,00.html
Here's a potential reason to stay on the job rather than retire to the golf course.
Not only can adults generate new brain cells, new research proves that these new neurons can forge new connections and fire like the older ones. In mice, anyway --- http://www.wired.com/news/business/0,1367,50724,00.html
From InformationWeek Daily of March 1, 2002
Microsoft Targets Next Generation With .Net Academic
Microsoft on Thursday released a specially priced academic version of its Visual Studio .Net software, adding extra tools for computer science students in a bid to produce a new batch of .Net-friendly programmers.
"We are very interested in getting the next generation of developers to come out of academia to understand .Net," says Michael Bronsdon, lead product manager for Microsoft's academic developer marketing. "This shows how big our investment in .Net technologies is and that we're committed to academia to ensure that there will be technologists to build for them."
Visual Studio .Net Academic contains the same set of software tools available in the professional version of Visual Studio .Net, a development suite for writing applications to run over the Internet, which was released in mid-February. The academic version adds wizards, templates, and documentation for students as well as an assignment publishing toolset, grade manager, and code-extraction tool for creating interactive software-coding tests. The package will be sold to students for $99, and universities can obtain a $799 departmentwide yearly subscription.
"It's an interesting move, but not all that surprising as Microsoft has watched with alarm as Java has become the de facto programming [platform] at universities," Summit Strategies analyst Dwight Davis says. The education market has become a "significant battleground" for the company, which hopes to prop up support for .Net by winning over converts before they reach the professional world, he says. "Microsoft can't afford to ignore that future crop of programmers." - David M. Ewalt
More on .Net Microsoft Launches Visual Studio.Net http://update.informationweek.com/cgi-bin4/flo?y=eGDa0BcUEY0V20BW7V0AL
Gates: .Net Is 'Architecture For This Decade' http://update.informationweek.com/cgi-bin4/flo?y=eGDa0BcUEY0V20BWuy0Aw
Why You Might Want A Water-Cooled Notebook
Hitachi Ltd. has developed a notebook computer with a water- based radiator system, which could become the first of its kind used in mass-produced portable computers.
Water-based solutions have long been used to cool processors in more complex devices such as supercomputers, which must be carefully maintained by users who refill the liquid if it evaporates or degrades. But by refining the quality of the solution, Hitachi has made it essentially maintenance-free and practical for use in cooling notebooks. The company says the innovation eliminates the need for fans, making the machine quieter and more durable, without raising costs or reducing power. The notebook works by pumping the solution past the hot processor through a stainless steel tube, absorbing the heat. That hot water is then pumped behind the notebook screen, where the heat radiates out into the surrounding air.
The system exists only as a prototype, but Hitachi plans to release a commercial version in Japan in the third quarter of this year, a spokesman says. While there are no formal plans beyond that, he says, the notebooks will show up in the United States eventually, and the system could be used in other components, such as servers and plasma display panels.
Brian Eisenbrandt, owner of BE Cooling in Stevensville, Mich., sells water-cooling kits for desktop machines to hobbyists over the Internet, but he's never seen the system used in a notebook. "I'm curious to see how they get it so small," he says. But if it works, he believes water-cooling is the way to go. "It's quieter, it allows you to run cooler and to use higher clock speeds." - David M. Ewalt
Read on IBM To Debut Adaptable PC Core http://update.informationweek.com/cgi-bin4/flo?y=eGDa0BcUEY0V20BXFe0Aq
When I was at the GSB, competition was cutthroat. While this may not have been healthy, I found it to be extremely motivational and became a better student because of the competition.
I really question the quality of learning if students get bombarded with solutions every time the going gets tough. I cannot say that I am proud of the following policy at my alma mater. I wonder if this means that a graduate can never disclose his or her grades. The following is only a small excerpt from Suharita Mulpuru's MBA Journal:
**************************************
SUPPORTIVE.
One of the biggest drivers of the culture at the GSB is the policy of non-grade disclosure to anyone outside the school, namely recruiters. It's so strict that any potential employer that recruits on campus and so much as asks about grades is politely requested not to return. What this policy does is that it infuses a spirit of cooperation and camaraderie amongst classmates that is unparalleled. Where competition and a cutthroat culture may be common in other places, it is not unlikely for students to share answers to homework assignments or to e-mail around exam aids that they procured from second-years. I learned this early on when I sent out a desperate plea for help on a homework assignment and was bombarded with an inbox full of solutions, many from people I'd never met.Of course, there is the flip side to non-grade disclosure. There's been vehement seesawing back and forth as professors feel students have insufficient incentive to work hard, especially during the second year. However, that is always countered by the students' argument that Stanford's culture is unique and one of the most special elements of the school.
For all their griping that students should work harder, professors at business school are nonetheless the most involved and accessible teachers I've had. My most vivid personal example involves a professor who I e-mailed in the middle of the night regarding a class question. I received a very polite, very helpful response within minutes. Many professors run their own review sections, a task many undergraduate lecturers would leave to teaching assistants. This, of course, is all the more impressive as these professors, like any others, still face the perennial pressures to publish papers and attend to research.
Professors make themselves available in many other ways, too. Nearly all are more than willing to partake in the school's Take a Professor to Lunch program, where any student is free to invite any professor to a lunch (reimbursable up to $7.50). Then there is the recently incorporated Books on Break program, where a faculty member leads a discussion of a recently published book (fiction or non-fiction) that students decide to read over the winter break. And at Student Faculty suppers, students host dinner parties for a dozen students and a faculty guest. Mine was a delightful Thai dinner whipped up by a group of second-years in the company of none other than our venerable head, Dean Joss himself. The level of accessibility among senior administration, in this case the dean of the GSB, who graciously came to a student's house for dinner, I found most impressive.
To further encourage communication among students and faculty, there are weekly WIM group sessions in which small groups of female classmates gather for a couple of hours to air concerns, complaints, commiserations and anything else to create support structures and female companionship. There are also extensive student body committees that help shape everything from the social life and academics to the information technology and sports programs. Additionally, there are monthly lunches with the deans, and quarterly surveys to gauge students satisfaction.
Stanford is also very supportive of career decisions that are 'out of the box.' There is funding available for students who opt to take low or non-paying summer internships in the public sector, as well as programs to assign students to work with alumni living abroad. There is also an Alumni Mentor Program that matches local alums with a variety of professional backgrounds with students who share their interests. The university also supports and partially subsidizes Study Trips, two week immersion experiences where students go in groups to foreign countries (the most recent ones went to Brazil, Australia, India, Russia, and Mexico) to meet with businesses to whet their appetites for international business and potentially poise them for a career abroad.
And finally, probably one of the most indispensable and camaraderie-building parts of the business school is, oddly enough, the computer lab. Open 24 hours, 7 days a week, it is a gathering point and central learning place - the venue where countless group projects come together. It ends up being a particularly social place before any big assignment is due, as numerous students congregate to one of the many workstations to finish their papers.
I'm finding that business school is good in many ways that undergrad wasn't. While there is some rigid structure that I didn't have even in college-assigned classes, mandatory attendance, class participation, name tags - it is met with a student body that is actively involved in just about every aspect of the GSB and a sense of camaraderie that breeds a wonderful and non-competitive culture.
Suharita Mulpuru --- http://www.businessweek.com/bschools/content/mbajournal/01mulpuru/5.htm*************************************
For the opinions of other MBA students at other universities, go to B Schools MBA Journals from Business Week Magazine at http://www.businessweek.com/bschools/mbajournal/index.htm?c=bwmbafeb27&n=link3&t=email
FULL-TIME MBA PROFILES
From Business Week
In 2001, W expanded our coverage of full-time MBA programs by reviewing more schools and packing profiles with extra data. Scan these 250 profiles to determine which MBA programs fit your needs and lifestyle.
http://www.businessweek.com/bschools/01/full_time_rank.htm?c=bwmbafeb27&n=link7&t=email
****************
B-SCHOOL FORUMS
Visit BW Online's interactive forums [ http://forums.businessweek.com/bw-bschools/start?c=bwmbafeb27&n=link8&t=email ] for wide-ranging discussions about management education. Search through OVER 342,000 POSTS for topics that interest you. Join in today! Here are a few samples of recent messages:
From the University of Michigan
Women Who Ruled: Queens, Goddesses, Amazons 1500-1650 http://www.umich.edu/~umma/women/
Center for Women and Information Technology http://www.umbc.edu/cwit/
From PublicationsShare.com --- http://publicationshare.com/
Free Downloadable Reports from CourseShare:
- CourseShare.com researchers have collected online survey data from both college faculty and corporate trainers regarding their online learning needs and supports. Both surveys were co-sponsored by JonesKnowledge.com and CourseShare.com and are available below:
Bonk, C. J. (2002). Online Training in an Online World. Bloomington, IN: CourseShare.com
(Note: Distribution or Reproduction of more than 50 copies of this report require permission from CourseShare.com or JonesKnowledge.com)Online Training in an Online World (Adobe PDF format :: 649 KB)
Executive Summary Only (Adobe PDF format :: 284 KB)Bonk, C. J. (2001). Online Teaching in an Online World. Bloomington, IN: CourseShare.com
(Note: Distribution or Reproduction of more than 50 copies of this report require permission from CourseShare.com or JonesKnowledge.com)
Online Teaching in an Online World (Adobe PDF format :: 308 KB)
Executive Summary Only (Adobe PDF format :: 68 KB)- As a Senior Consortium Research Fellow with the U.S. Army Research Institute (ARI), Dr. Curt Bonk of CourseShare.com has written the following major report with Dr. Robert Wisher from ARI that is now available online as well as in a hardcopy format:
Bonk, C. J., & Wisher, R. A. (2000). Applying collaborative and e-learning tools to military distance learning: A research framework. (Technical Report #1107). Alexandria, VA: U.S. Army Research Institute for the Behavioral and Social Sciences. (Note: this report has unlimited distribution.)
Click to Download PDF of this file.- Bonk, C. J., & Cunningham, D. J. (1998). Chapter 2: Searching for learner-centered, constructivist, and sociocultural components of collaborative educational learning tools. In C. J. Bonk, & K. S. King (Eds.), Electronic collaborators: Learner-centered technologies for literacy, apprenticeship, and discourse (pp. 25-50). Mahwah, NJ: Erlbaum.
Click to Download PDF of this file.
(Note: Permission to download from this site was granted by the publisher Lawrence Erlbaum Associates; call LEA at 1-800-9books9 to order the book)- Introduction section to (including a list of contributors) Bonk, C. J., & King, K. S. (Eds.). (1998). Electronic collaborators: Learner-centered technologies for literacy, apprenticeship, and discourse. Mahwah, NJ: Erlbaum. ISBN: 0-8058-2796-X (cloth); 0-8058-2797-8 (paper).
Click to Download PDF of this file.
For more on the Electronic Collaborator's Book, see: http://php.indiana.edu/~cjbonk/book.html
Table of contents:http://php.indiana.edu/~cjbonk/nbook.html#table
Book Contributors:http://php.indiana.edu/~cjbonk/nbook.html#contributor
(Note: Permission to download from this site was granted by the publisher Lawrence Erlbaum Associates; call LEA at 1-800-9books9 to order the book)
Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm
Bob Jensen's threads on education technologies are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
CPA firms are attempting to expand their assurance services in a number of areas, most notable of which is SysTrust --- http://www.trinity.edu/rjensen/ecommerce/assurance.htm#SpecialSection
However, new competition is arising in the SysTrust market. The following appears in the February 26, 2002 issue of Syllabus News:
U. Illinois, Security Firm, Start Info Assurance Center
The University of Illinois at Urbana-Champaign and Argus Systems Group, Inc., a company specializing in security technologies, jointly launched the Center for Advanced Research in Information Security. The Center will be located in the school's computer science department, which was designated as a Center of Academic Excellence in Information Assurance by the National Security Agency. The center will focus its research on next generation infrastructure security technologies, and aims to influence public policy in the area of information assurance.
For more information, visit: http://www.engr.uiuc.edu
Hi Jim,
Alternative electronic classroom systems are summarized at http://www.ala.org/acrl/is/projects/control.html
At Trinity University, we are very happy with the Insight system, although this is not the cheapest of alternatives by any means. The Insight system allows us to project any computer in a classroom on the screen. It also allows for designation of groupings of computers for team work.
The Insight system allows for the projection of the instructor's screen on every classroom computer. This makes it easier to read fine print. More importantly, students cannot be doing email, play games, or view any other software while the instructor is teaching from his or her own machine at the front of the classroom. At any point, however, the instructor can give control back to students, who will then return to whatever they were viewing before the instructor took contol of their monitors.
Hope this helps.
Bob Jensen
-----Original Message-----
From: Jim McKinney [mailto:jim@MCKINNEYCPA.COM]
Sent: Monday, March 04, 2002 6:40 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Electronic Classroom Management SoftwareDo members of the list have suggestions regarding software solutions to the following issues regarding electronic classrooms: 1) Software that allows the instructor to broadcast his/her screen to classroom computers or to receive the image from their computers.
2) Limiting the applications the students have access to on a temporary basis. For example: I am teaching a segment on Access, I don't want the students using their e-mail. After the class is over I want to enable them to use their software again. For a test on the computer I do not want the students to access most software. 3) Limiting the sites a student may go to on a temporary basis. I give exams in the classroom using a database driven web page. I would like to prevent students during the exam from accessing other web sites or instant messaging. After the exam I would like to enable full Internet access.
Does anyone have suggestions or solutions to any of these issues?
Jim McKinney
Howard University
Bob Jensen's threads on classrooms and electronic classrooms are at http://www.trinity.edu/rjensen/bookbob2.htm#Classrooms
Free TECHKNOWLOGIA Educational Technology Readings for the Week
From Infobits on March 1, 2002
ARTICLES ON TECHNOLOGIES FOR EDUCATION AND LEARNING
The theme for the January-March 2002 issue of TECHKNOWLOGIA is "Technologies for Education and Learning." Articles include:
"Solving the Connectivity Problem," by Heather E. Hudson, Professor and Director, Telecommunications Management and Policy Program, University of San Francisco Article describes different connectivity options: terrestrial wireless, satellite technologies, wireline technologies, and other technologies.
"Getting a School On-line in a Developing Country: Common Mistakes, Technology Options and Costs," by Mike Trucano and Robert Hawkins, World Links Article provides a blueprint for school officials and planners to determine the connectivity options and costs associated with getting (and keeping) schools connected.
"ThinkCycle at MIT: Sharing Distributed Design Knowledge for Open Collaborative Design," by Nitin Sawhney, Saul Griffith, Yael Maguire, and Timothy Prestero, MIT ThinkCycle is a student-led initiative at Massachusetts Institute of Technology (MIT) that seeks to develop design pedagogy and collaborative tools to address critical design challenges by working closely with universities and organizations worldwide.
"ICTs in African Schools: A Multi-Media Approach for Enhancing Learning & Teaching," by Shafika Issacs, SchoolNet Africa SchoolNet Africa is a network of organizations that promote education through the use of ICTs (information and communication technologies) in African countries, in partnership with a range of global, regional and local organizations.
"Designed for the Dumpster, Outdated Computers Bring Hope and Progress to Disadvantaged Communities," by John Thomas, Executive Director, The CURE Network, Inc. Article explains how to start a computer recycling program.
The entire issue is available on the Web at http://www.techknowlogia.org/
TechKnowLogia is published bimonthly by Knowledge Enterprise, Inc., 9926 Courthouse Woods Court, Vienna, VA 22181-6019 USA; fax: 703-242-2279; email: techknowlogia@knowledgeenterprise.org ; Web: http://www.techknowlogia.org/ Publication is in collaboration with the United Nations Educational, Scientific and Cultural Organization (UNESCO) and the Organization for Economic Co-operation and Development (OECD).
Subscriptions are free, but readers must first register to gain access to articles. Readers will then be notified by email when new issues are published.
From Infobits on March 1, 2002
RECOMMENDED READING
"Recommended Reading" lists items that have been recommended to me or that Infobits readers have found particularly interesting and/or useful, including books, articles, and websites published by Infobits subscribers. Send your recommendations to carolyn_kotlas@unc.edu for possible inclusion in this column.
A new book, published by EDUCAUSE and NACUBO, addresses technology issues related to portals and their implications for the culture, business, organization, and policies of the institution. WEB PORTALS & HIGHER EDUCATION: TECHNOLOGY TO MAKE IT PERSONAL is written by Richard N. Katz and a group of top leaders in higher education. To learn more about this publication or to order it online, visit http://www.educause.edu/pub/pubs.html
The NACUBO homepage is at http://www.nacubo.com/
Message from James L. Morrison Editor-in-Chief The Technology Source http://ts.mivu.org Phone/Fax: 919.493.1834 Home Page: http://horizon.unc.edu
Hi Bob
Below is a brief description of the articles published in the March/April 2002 issue of The Technology Source, a free, refereed, e-journal at http://ts.mivu.org
IN THIS ISSUE:
Information Technology and the Future of Education: An Interview with Diana Oblinger, by James Morrison and Diana Oblinger
Oblinger assesses the integration of information technology in higher education: its driving forces, its specific applications, its future development trends, and its current challenges. See http://ts.mivu.org/default.asp?show=article&id=983 ----
Computerizing College Composition, by Joel Foreman
Foreman describes how to use customized software for guiding student revision; manage the flow of incoming assignments, peer review, and instructor feedback; and an archive that instructors can consult to measure student proficiency. See http://ts.mivu.org/default.asp?show=article&id=967 ----
ABCs of the Virtual High School, by Kathy Winograd
Winograd interviews virtual high school leaders on the needs their schools serve, the innovations they provide to teaching/learning models, and the future paths that virtual education at the K-12 level will take. See http://ts.mivu.org/default.asp?show=article&id=988 ----
Using a Web-Based Course Management Tool to Support Face-to-Face Instruction, by Nada Dabbagh
Dabbage addresses the challenges and opportunities involved with integrating face-to-face and Web-based instructional formats. See http://ts.mivu.org/default.asp?show=article&id=938 ----
Open Knowledge and Open Source Initiatives: An Interview with MIT's Phil Long, by Steve Gilbert and Phil Long
Gilbert and Long discuss two recent initiatives at MIT, the Open Knowledge Initiative (OKI) and the OpenCourseWare Initiative (OCW), that illustrate how open source policies can support effective online course design. See http://ts.mivu.org/default.asp?show=article&id=979 ----
Drafting a Faculty Copyright Ownership Policy, by Laura Gasaway
Gasaway discusses the crucial distinctions between faculty and institutional ownership and their role in determining copyright policy. See http://ts.mivu.org/default.asp?show=article&id=982 ----
Using a Course Management System for Large Classes: Support, Infrastructure, and Policy Issues, by Doug Johnson
Johnson evaluates the implementation of a course management system in large undergraduate courses and offers solutions to problems that may arise. See http://ts.mivu.org/default.asp?show=article&id=945 ----
Training Professional Workforce Educators Online, by Sharon Pitt, Edmund Vitale, Jr., and Diane Foucar-Szocki
Pitt, Vitale, and Foucar-Szocki describe the Workforce Development Campus and offer a valuable glimpse into the future of online professional development programs. See http://ts.mivu.org/default.asp?show=article&id=947 ----
Delivering Web-Based Multimedia Using CD/Web Hybrids, by David Diaz
Diaz argues that CD/Web hybrids represent a powerful solution to numerous problems, including bandwidth limitations, overloaded servers, and slow modem speeds. See http://ts.mivu.org/default.asp?show=article&id=963 ----
Spotlight Site: The George Lucas Educational Foundation, by Stephen Downes
Downes describes this site as representing force of advocacy and public service, offering a vision for the future of education that brings us closer to realizing its potential. See http://ts.mivu.org/default.asp?show=article&id=999 ----
Letter to the Editor: Announcing Teacher Focus, an Online Community of Educators, by Lucy Vaysman
Vaysman describes a Web site designed to foster a virtual community for teachers around the globe in which they can share experiences, concerns, and practical solutions to the challenges of teaching. See http://ts.mivu.org/default.asp?show=article&id=993 ----
The Technology Source is published by the Michigan Virtual University as a service to the educational community. Please forward this announcement to colleagues who are interested in using information technology tools more effectively in their work.
As always, we seek illuminating articles that will assist educators as they face the challenge of using information technology tools in teaching and in managing educational organizations. Please review our call for manuscripts at http://ts.mivu.org/default.asp?show=call and send me a note if you would like to contribute such an article.
Many thanks.
Jim
From Infobits on March 1, 2002
FREE ONLINE ASSESSMENT TOOL
Bruce Ravelli, an instructor of sociology at Mount Royal College, Calgary, Canada, has developed a student assessment tool known as the Free Assessment Summary Tool, or FAST. FAST "allows students to anonymously submit feedback about their course and/or instructor. The data goes directly and only to individual teachers. It allows instructors to open an active, ongoing dialogue with their students about the course, content, instruction and the learning process." Rather than relegating evaluations to the end of the semester, instructors can use the tool to get and apply student feedback throughout the course term. The tool lets instructors build their surveys on the Web; results are returned in Excel format for ease of data manipulation and tabulation. For more information about FAST and to use the tool, see http://www.getfast.ca/
Passage from http://www.getfast.ca/
Traditionally, teaching assessments are conducted at the end of a course - a practice precluding students from offering constructive feedback while they are still in the course. However, conducting instructor-designed and administered web-based course assessments opens a proactive dialogue with students about teaching, the course, and the entire learning process. Seeing Student Assessment in a Brand New Light
The FAST project is committed to providing users with a simple online tool for assessing their students' impressions of their courses and their teaching. Using the software does not cost anything so if this is your first visit, become a user and see if FAST would be useful for you and your students. Also, you may want to read the FAQ's and the User Tips to provide you with an overview of the functionality of the software.
If you have any questions or comments about FAST, please enter them in the discussion board or send either of us a note - Bruce Ravelli, lead researcher and/or Zvjezdan Patz, lead programmer.
EDUCAUSE Quarterly
Volume 25, Number 1 http://www.educause.edu/pub/eq/eqm02/eqm021w.html
Viewpoints
Feature Articles
EDUCAUSE Review
January/February 2002 --- http://www.educause.edu/pub/er/erm02/erm021w.asp
Table of Contents
Features
Departments
Distance Education: The Great Debate
From Infobits on March 1, 2002
EVALUATION STRATEGIES FOR DISTANCE EDUCATION
"The many factors involved in the success of distance offerings makes the creation of a comprehensive evaluation plan a complex and daunting task. Unfortunately, what may seem the most logical approach to determining effectiveness is often theoretically unsound. For example, comparing student achievement between distance and face-to-face courses may seem a simple solution, yet the design is flawed for a number of reasons. However, theoretically sound approaches do exist for determining the effectiveness of learning systems, along with many different methods for obtaining answers to the relevant questions." In "Measuring Success: Evaluation Strategies for Distance Education" (EDUCAUSE QUARTERLY, vol. 25, no. 1, 2002, pp. 20-26), Virginia Tech faculty Barbara Lockee, Mike Moore, and John Burton explain the factors to consider when evaluating distance education (DE) programs. Sharing the experience gained from DE evaluations at Virginia Tech, they provide guidance to readers who want to set up evaluation plans at their institutions. The article is available online (in PDF format) at http://www.educause.edu/ir/library/pdf/eqm0213.pdf
The link to the Lockee et al. paper is at http://www.educause.edu/ir/library/pdf/eqm0213.pdf
Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm
From EDUCAUSE at http://www.educause.edu/
ACE-EDUCAUSE distance learning monograph published
The American Council on Education (ACE) and EDUCAUSE have just published the second monograph in a series on distributed education. Maintaining the Delicate Balance: Distance Learning, Higher Education Accreditation, and the Politics of Self-Regulation, by Judith S. Eaton, President of the Commission for Higher Education Accreditation, can be accessed in PDF format or purchased from ACE. http://www.educause.edu/asp/doclib/abstract.asp?ID=EAF1002
Abstract
Maintaining the Delicate Balance: Distance Learning, Higher Education Accreditation, and the Politics of Self-Regulation is the second monograph in a series of papers on distributed education commissioned by the American Council on Education (ACE) and EDUCAUSE. It describes the impact of distance learning on the balance among accreditation (to assure quality in higher education), institutional self-regulation, and the availability of federal money to colleges and universities. The paper confronts the challenges of protecting students and the public from poor-quality higher education, and attending to quality in an increasingly internationalized higher education marketplace.View HEBCA proof-of-concept video
Visit the EDUCAUSE Information Resources Library to view the video that was shown at a recent demonstration of the Higher Education Bridge Certification Authority (HEBCA), the Federal Bridge, and the Public Key Interoperability project. Read the press release describing the proof-of-concept event.NSF releases latest HPNC announcement
In a recently released High Performance Network Connections for Science and Engineering Research (HPNC) announcement, the NSF encourages U.S. institutions of higher education and institutions with significant research and education missions to establish high-performance (at or above 45 megabits per second) Internet connections where necessary to facilitate cutting edge science and engineering research. View the announcement and instructions for proposal submission.
Hi Kevin,
Thank you for the message below. My concern with John Sanford's report is that critics of distance education often have never tried it. Or even if they have tried it, they have never tried it with the instant message intensity of an Amy Dunbar --- http://www.trinity.edu/rjensen/book01q3.htm#Dunbar
I just do not think the armchair critics really appreciate how the Dunbar-type instant messaging pedagogy can get inside the heads of students online.
But I think it is safe to day that the Sanford-type critics will never have the motivation and enthusiasm to carry off the Dunbar-type instant messaging pedagogy. For them and many of us (actually I'm almost certain that I could not pull off what Dr. Dunbar accomplishes), it is perhaps more "suicidal" for students.
I also think that success of distance education depends heavily upon subject matter as well as instructor enthusiasm. But I think there is only a small subset of courses that cannot be carried off well online by a professor as motivated as Dr. Dunbar.
I am truly grateful that I was able to
persuade Professor Dunbar and distance education expert from Duke
University to present an all-day workshop in the Marriott Rivercenter Hotel on
August 13, 2002. If our workshop proposal is accepted by the AAA, this is
an open invitation to attend. Details will soon be available under "CPE"
at http://accounting.rutgers.edu/raw/aaa/2002annual/meetinginfo.htm
I wish John Sanford would be there to watch the show.
Thanks for helping me stay informed! Other views on the dark side are summarized at http://www.trinity.edu/rjensen/000aaa/theworry.htm
Bob Jensen
Bob,
Since I know you track information technology WRT education, I thought you might be interested in this. The original source is the "Stanford Report" cited below: TP is a listserv that redistributed it.
KevinFolks:
The article below presents an interesting take on the limitations of technology, teaching, and learning. It is from the Stanford Report, February 11, 2002 http://www.stanford.edu/dept/news/report/ . Reprinted with permission.
Regards,
Rick Reis reis@stanford.edu UP NEXT: Book Proposal Guidelines
HIGH-TECH TEACHING COULD BE "SUICIDAL"
BY JOHN SANFORD
University educators largely extol the wonders of teaching through technology. But skeptics question whether something is lost when professors and lecturers rely too heavily on electronic media, or when interaction with students takes place remotely -- in cyberspace rather than the real space of the classroom.
Hans Ulrich Gumbrecht, the Albert Guerard Professor of Literature, is one such skeptic. "I think this enthusiastic and sometimes naďve and sometimes blind pushing toward the more technology the better, the more websites the better teacher and so forth, is very dangerous -- [that it] is, indeed, suicidal," Gumbrecht said, speaking at the Jan. 31 installment of the Center for Teaching and Learning's "Award-WinningTeachers on Teaching" series.
But Gumbrecht cautioned that there are few, if any, studies either supporting or rejecting the hypothesis that traditional pedagogy is superior to teaching via the Internet or with a host of high-tech classroom aids. "If [such studies] exist, I think we need more of them," he said.
He added that he could point only to his "intuition that real classroom presence should be maintained and is very, very important," and emphasized the need for educators to critically examine where technology serves a useful pedagogical function and where it doesn't.
However, Gumbrecht allowed that, for courses in which knowledge transmission is the sole purpose, electronic media probably can do the job well enough. Indeed, given the 20th century's knowledge explosion and the increasing costs of higher education, using technology as opposed to real-life teachers for the transmission of information is probably inevitable, he said.
In any case, knowledge transmission should not be the core function of the university, he added, noting that the Prussian statesman and university founder Wilhelm von Humboldt, sociologist Max Weber and Cardinal John Henry Newman all held that universities should be places where people confront "open questions."
"Humboldt even goes so far to say -- and I full-heartedly agree with him -- they should ideally be questions without a possible answer," Gumbrecht said. He asserted the university should be a place for "intellectual complexification" and "riskful thinking."
"We are not about finding or transmitting solutions; we are not about recipes; we are not about making intellectual life easy," he continued. "Confrontation with complexity is what expands your mind. It is something like intellectual gymnastics. And this is what makes you a viable member of the society."
Paradoxically, "virtual" teacher-student interaction that draws out this kind of thinking probably would be much costlier for the university than real-time, in-class teaching, Gumbrecht said. The reason for this, he suggested, is that responding to e-mail from students and monitoring their discussion online would require more time -- time for which the university would have to pay the teacher -- than simply meeting with the students as a group once or twice a week.
In addition, Gumbrecht asserted that discussions in the physical presence of others can lead to intellectual innovation. He recalled a Heidegger conference he attended at Stanford about a year ago, where he said he participated in some of the best academic discussions of his career. Heidegger himself "tries to de-emphasize thinking as something we, as subjects, perform," Gumbrecht said. "He says thinking is having the composure of letting thought fall into place." Gumbrecht suggested something similar happens during live, in-person discussions.
"There's a qualitative change, and you don't quite know how it happens," he said. "Discussions in the physical presence have the capacity of being the catalyst for such intellectual breakthroughs. The possibility of in-classroom teaching -- of letting something happen which cannot happen if you teach by the transmission of information -- is a strength."
Gumbrecht argued that the way in which students react to the physical presence of one another in the classroom, as well as to the physical presence of their professor, can invigorate in-class discussions. "I know this is problematic territory, but I think both the positive and negative feelings can set free additional energy," he said. "I'm not saying the physical presence makes you intellectually better, but it produces certain energy which is good for intellectual production."
Asked to comment on some of the ideas Gumbrecht discussed in his lecture, Decker Walker, a professor of education who studies technology in teaching and learning, agreed that pedagogy via electronic media may work best in cases where information transmission is the goal -- for example, in a calculus course. In areas such as the humanities and arts, it may be a less valuable tool, he said.
In any case, the physical presence of teachers can serve to motivate students, Walker said. "I think young people are inspired more often by seeing other people who are older -- or even the same age -- who do remarkable things," he said. "It would be hard to replace this with a computer."
On the other hand, Walker maintained that computer technology can be a useful educational aid. One such benefit is access to scholars who are far away. "Technology can enable a conversation, albeit an attenuated online one, with distant experts who bring unique educational benefits, such as an expert on current research on a fast-moving scientific topic," Walker said. "This may greatly enrich a live class discussion with a local professor."
Walker maintained that the university environment is not in danger of being supplanted by technology. On the contrary, he noted, large businesses have adopted aspects of the university environment for their employees' professional education. For example, General Motors started GM University, whose main campus is at the company's new global headquarters in Detroit's Renaissance Center.
Museums also function in some ways like universities, he noted. For example, the Smithsonian Institution has numerous research, museum and zoo education departments
And for all the emphasis high-tech companies put on developing devices and software for remote communication, many have had large campuses constructed where workers are centralized -- a nod, perhaps, to the importance of person-to-person interaction.
Rick Reis, executive director of Stanford's Alliance for Innovative Manufacturing and associate director of the Learning Lab's Global Learning Partnerships, noted that the subject of technology in education covers a lot of territory. Few people, for example, are likely to argue that making students trudge over to the library's reserve desk to get a piece of reading material for a course, or making hundreds of hard copies, is preferable to posting it on the web, Reis said. But he added that whether the kind of teaching generally reserved for a seminar could be as effective online is an open question.
Reply from Amy Dunbar [ADunbar@SBA.UCONN.EDU]
George,
you wondered about the following Sanford statement:
>"paradoxically "virtual" teacher-student interaction that
> draws out this kind of thinking probably would be much costlier for the
> university than > real-time, in class-teaching...responding to e-mail
>from students and monitoring their discussion online would require more
> time--time for which the university would have to pay the teacher--- than simply
> meeting with the students as a group once or twice a week."Although I probably do spend more time "teaching" now that I am online (I teach two graduate accounting courses: advanced tax topics and tax research), I think the more important issue for me is "when," not "how much." My students work full time. They are available at night and on weekends, and they prefer to do coursework on weekends. Thus, I spend a lot of time at home in front of my computer with my instant messenger program open. If a student wants to talk, I'm available during pre-determined times. For a compressed six-week summer session with two classes and around 60 students, I live online at night and on weekends. With a regular semester online class, I base my online hours on a class survey of preferences. Last fall I was online from 7 to 9 or 10 at least two nights a week, Saturday afternoons, Sunday mornings for the early birds (an hour or two), and then Sunday evenings from 6 to 10. Sunday evenings were my busiest times. On the other scheduled days, I generally could do other easily interruptible tasks while I was online. Frequently a group of students would call me into a chat room, either on AIM or WebCT. I think that my online presence takes the place of "the physical presence of teachers [which] can serve to motivate students." Students log on to AIM, and they see me online. For my part, I love logging on and seeing my students online. They are just a click away.
Most of my online students think the burden of learning has been shifted to them, and I'm just a "guide on the side." And they are right. Online learning is not for everyone, but as Patricia Doherty noted, live classroom instruction isn't an option for all students, particularly students who travel in connection with their work. And just as not all live classroom instruction encompasses the dynamic interchanges described by Sanford, not all online courses will either, but I have certainly been an observer and a participant in spirited exchanges among students.
As for the comment that the university would have to pay the teacher for additional time, I'm not sure such time is quantifiable because I do other things when I am online but no one is "talking" to me. As a tenure track prof, I'm not sure how that comment would apply in my case in any event. Perhaps where the extra cost arises is in the area of class size. Handling more than 30 students in an online class is difficult. Thus, schools may have to offer more sections of online courses. __________________________________
GO HUSKIES!!! (BEWARE OF THE DOG)
Amy Dunbar ( mailto:adunbar@sba.uconn.edu 860/486-5138 http://www.sba.uconn.edu/users/ADunbar/TAXHOME.htm
Fax 860-486-4838
University of Connecticut School of Business, Accounting Department
2100 Hillside Road, Unit 1041A Storrs, CT 06269-2041
Reply from Dan Gode, Stern School of Business [dgode@STERN.NYU.EDU]
David Noble has been one of the foremost critics of distance learning for the last four years. He is widely quoted. I too have found his articles (at http://communication.ucsd.edu/dl/ ) interesting. While discussing them with my colleague today, I could not avoid noticing the irony that he himself is one of the biggest beneficiaries of the internet and distance learning.
Many of us would not have "learned" about his views without the web. He has been able to "teach" his ideas in the distance learning mode almost free only because of the web. In fact, most of the critics of distance learning have achieved their fame precisely because of the knowledge dissemination enabled by the web.
I agree that adoption of distance learning will be much slower than the expectation of many distance learning companies and universities but it will be foolhardy to ignore the gradual technological innovation in education.
A select few in New York can afford the live entertainment of Broadway, most others are grateful for the distance entertainment that is available cheaply to them. Distance learning may not replace classroom learning, but it will surely provide much needed low cost education to many.
Dan Gode
Stern School of Business
New York UniversityNote from Bob Jensen: You can read more about David Noble at http://www.trinity.edu/rjensen/000aaa/theworry.htm
Reply from Bob Jensen
Hi Jagdish,
I agree with you to a point. However, I am always suspicious of academics who see only the negative side of a controversial issue. I'm sorry, but I find David Noble to be more of a faculty trade union spokesperson than an academic. Much of his work reads like AAUP diatribe.
Those of you who want to read some of his stuff can to to in my summary of the dark side of distance education at http://www.trinity.edu/rjensen/000aaa/theworry.htm
I would have much more respect for David Noble if he tried to achieve a little more balance in his writings.
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: J. S. Gangolly [mailto:gangolly@CSC.ALBANY.EDU]
Sent: Thursday, February 28, 2002 9:37 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: The Irony of David Noble and other critics of distance learningDan,
Let me play the devil's advocate once again; this time I do so with a bit of conviction.
Noble's tirade has been against the commoditisation of instruction and the usurping of what are traditionally regarded as academic faculty prerogatives by the administrators in their quest for revenues (or cutting costs). These are real issues, and a knee-jerk reaction does no one service.
Noble's arguments are based on the actual experiences at UCLA and York. I suppose if he were to rewrite his pieces today, the list would be much longer.
Noble's reservations are also based on the distinct possibility of higher education turning into diploma mills (Reid's observation: "no classrooms," "faculties are often untrained or nonexistent," and "the officers are unethical self-seekers whose qualifications are no better than their offerings.")
I am a great enthusiast for distance learning, but I think the debate Noble is fostering is a very legitimate one. It will at least sensitize us all to the perils of enronisation of higher education. Do we need the cohorts of the likes of Lay and Skilling running the show? What guarantee do we have that once it is commoditised, a non-academic (with or without qualifications and appreciation for higher education) will "manage" it?
I do very strongly feel that distance education has a bright future, but the Noble-like debates will strengthen it in the long run. There is a need for the development of alternative pedagogies, etc.
Back in the late 60s, I was working in a paper mill in the middle of nowhere in India, and I started taking a course in electrical engineering in the distance mode (we used to call it correspondence courses). Unfortunately, those days there was no near universal eccess to computers, and it was not easy. However, it put the burden oif learning on me much more so than in my usual higher education even at decent schools (including one of the IIMs). Unfortunately, I had to discontinue it because of pressure of work.
I look at most existing distance learning today as the model T of education. We need to figure out how we can improve on it, not take it as a matter of faith.
Jagdish
Reply from Paul Williams [williamsp@COMFS1.COM.NCSU.EDU]
Jagdish point is well spoken; the issue is the commodification of higher education (and everything else for that matter). "Efficiency" is not the only value humans cherish. There is an interesting article in the last Harper's by Nick Bromell, a professor of English at UMass Amherst, titled Summa Cum Avaritia. Higher education produces substantial revenues and a good deal of the discussion about distance education is really about coopting those revenues (privatizing education for profit).
Reply from George Lan [glan@UWINDSOR.CA]
Hi Amy,
Thanks for sharing your on-line experience with us. It shows what flexible learning could achieve. However, those who think that teaching on-line or a dist. ed course is a walk in the park and that on-line courses are cash cows will probably think twice. Administrators should ensure that the classes are not too big so that teh on-line instructor can elicit the kind of interaction and learning that you mention.
The "psychiatrist", "nurse" or sometimes the "gladiator" in me prefers personal contact courses but I do recognize the value of on-line and distance education courses, especially for those to whom live classroom is not an option, as Pat and you have mentioned.
You make a critical point when you mention that "most of my online students think that the burden of learning has been shifted to them, and I'm just a "guide on the side." " Having taught some distance education courses in the past, I've noticed that the drop-out rate seems to be higher in my dist. ed courses (I agree that I have not used the power of technology and the computer to the fullest before) but could some of the students find the burden of learning on their own unbearable? In Canada, the Certified General Accountants have a high quality on-line delivery of courses for those wishing to pursue the accounting designation. In the big city centres, the students also have the choice of attending lectures-- they pay some extra fee (however, all assignments are submitted on-line, usually on a weekly basis and they are graded and returned to the student within 7 days- there is an efficient system of markers and tutors for each course). The onus to learn is on the student and several of them have to repeat the same course several times (which probably is not dependent on whether they choose to attend lectures or not). Financially and time-wise, it can be very costly to the students. But then, as stated by the economist Spence, education is a signal.
George Lan
Reply from Ross Stevenson [ross.stevenson@AUT.AC.NZ]
Hi (from the South Pacific) aecmers
I have written heaps of computer based (first year accounting) stuff that students can:
1 Use at their own pace in a teaching computer lab (my classroom) and/or 2 Use on their home computer
When writing the stuff I had 'distance learning' in mind. However, I and most of my students, enjoy the flexible computer lab approach during which they can 1 Listen to me (all stuff projected on large wall screen) or 2 Work at their pace from their monitor
In my mind, there is no doubt that a majority of (first year) students prefer the classroom (dare I say 'non-distance learning') IT approach. Some of my colleagues teach the same course with no more technology than overhead projectors
I am planning some research along the following lines
At beginning of semester, each student completes: 1 An objective profile of themselves (age, gender, English as their first language? etc.)
2 A subjective profile of themselves as to what they perceive are their preferred learning environments (IT based ? classroom? home? etc.)
At end of semester 1 more student feed back as to how they rated my classroom -IT delivery.
PURPOSE OF RESEARCH
To see if we can survey students at *beginning* of semester and advise them as to which class (lecturer & delivery style) would probably suit themI would appreciate any references to any research similar to above you are aware of.
Regards
Ross Stevenson
Auckland Uni of Technology NZ
Reply from arul.kandasamy@indosuez.co.uk
George,
you asked: could some of the students find the >burden of learning on their own unbearable?IMO, online learning isn't for everyone. I suggest a switch to the University of Hartford's live grad program when students are dissatisfied with online learning. (UConn's MSA program is an online program.) I have noticed that if students hang in, however, their attitude frequently changes. By the time my students take me for my second online class, most respond to my survey question re: online vs live preference by choosing online. I thank Bob Jensen for his kind words in yesterday's posting, but let there be no doubt that I have students who do not like online learning. For example, one student in my first online class said, "This experience was very new to me and I learned a lot, but my expectations were different b/c I didn't know this was going to be an on-line class. I don't think I could have gotten through this class without the help and support of you and my group members. Above I checked that I would prefer a live classroom setting. Tax can be confusing and I think I would understand the material better if you were telling it to me rather than me reading it on the computer. I learn better by hearing things than by reading them. Even though this class did not completely support my style of learning, I still think it is one of the best classes I have taken, mostly because of the way it is structured - group work. (And also because it has a great teacher.)" (You didn't think I would pick a comment that didn't say something positive about me, did you? ;-)) And "I just think that as much as we interacted with you Dunbar, it's just that much harder because in the end, all of your hard work making the content modules, etc. has to be self-taught on a level that I don't think any of us are accustomed to (or fully capable of yet)."
I am very interested in learning more about Canada's experience with the Certified General Accountants online courses. I didn't realize that live classes were an option. Has anyone compared outcome results for live/online vs strictly online students?
Dunbar
Reply from Thomas C. Omer (E-mail) [tcomer@UIC.EDU]
While I haven't paid much attention to David Noble I have paid attention to administrators whose incentives rest on balancing the budget rather than thinking about the educational issues that result from developing or offering online courses. It is critical that faculty who are interested in being involved with distance learning must show some solidarity in rejecting offers of distance learning based on cost measures alone. We are in the business of education, after all, not budget balancing. The extent to which administrations take advantage of faculty members exploring new ways to educate will only reduce our educational institutions to paper mills, a problem some might suggest is already occurring in many settings. Think for a moment about whether the grade you assign to a student is really within your authority, at my home institution and here at UIUC it is not, I also do not have the ability to drop or add students to a class. While this sounds like I am whining (I probably am), it also suggests that my control of the factors affecting the educational experience and outcomes is slowly degrading and adopting distance learning without explicit contracts as to what I am allowed to do and what the administration cannot do sets the stage for making distance learning a nightmare for me and potentially an educational farce for students.
I think Amy's experience has been very positive and I certainly agree that distance learning is not for every student. Unfortunately, my first experience with developing a curriculum based on Distance learning started with a discussion of the cost effectiveness of the approach not the educational issues.
I now step off the soap box,
Congratulations Amy!!!
Thomas C. Omer
Associate Professor (Visiting) Department of Accountancy
University of Illinois at Urbana-Champaign
Article of the
Week on Ubiquitous Computing
Persuasive, Pervasive Computing Project Oxygen's New Wind Remembering
Technology's Humanist Virtual Farm Aid Step Into Your New Browser Work the
Problem, People Internet2: The Once and Future Net Writable Web The Cricket
Indoor Location System MIT A.I. Lab
"Persuasive, Pervasive Computing, by Eric Brown, Technology Review, February 25, 2002 --- http://www.techreview.com/articles/brown022502.asp
In 2000, the Massachusetts Institute of Technology launched an ambitious project to transform the way the world uses computers. The old model: a box, a monitor and keyboard. The new: computers as pervasive and invisible as the air we breathe. They called it Project Oxygen.For an overview of the Project's goals, and a Q&A with its founders, see "Project Oxygen's New Wind".
Now, nearly two years out, the first technologies are rolling out of the labs. Project leaders—Laboratory for Computer Science chief Victor Zue, associate director Anant Agarwal and Artificial Intelligence Laboratory director Rodney Brooks—insist that Project Oxygen is about an idea, not products. But corporate sponsors—among them Hewlett Packard, Nokia and Philips—eagerly await their results. Technology Review went into the labs to get a sneak peak at three facets of Oxygen that show particular promise: Cricket, a location-aware computing system; the Intelligent Room, an high-tech office that doubles as a vision-interface research lab; and the Raw microprocessor, a low-power, ultra-programmable chip designed to power the handheld devices of the 21st century. Together these technologies, their creators say, will put computers everywhere—and nowhere.
A Raw Deal
Handheld computers have come a long way since Apple unveiled its Newton in 1993. Once little more than a glorified Rolodex, handhelds today rival the performance and range of applications of desktop PCs. But higher speeds and multiple, specialized processors have made them power-hungry, and battery life continues to be a limiting factor. To address the power problem, Oxygen researchers, led by Agarwal, are building a more flexible, less power-intensive chip they call the Raw Architecture Workstation, or Raw. "Today, people build custom [chips] for video, graphics, networking and so on," says Agarwal. "We have a single processor that can do all these things."
Not only does this optimize performance—especially for tasks like video processing, which bog down in memory—but it saves power, an essential feature for any small, battery-powered device. And the programmability extends not only to integrating discrete functions. It could open up exciting breakthroughs in areas such as software radios, which can easily switch between multiple cellular protocols.
By making the data paths highly programmable, Raw avoids centralized memory and register systems. "In a typical processor you may have to bounce a piece of data around. But with Raw, it goes straight to where I want it to go," says Agarwal.
The Raw architecture resembles a network of tiles, each containing features for instruction, switch instruction, data memory, logic units, registers and a programmable switch. "We pay a lot of attention to the interconnect, to the wires," says Agarwal. "If you expose the interconnect to the software you can customize how data flows through the chip. You can orchestrate the flow of data. Now my software can match up the hardware with the application."
The first device the chip will power will be Oxygen's model handheld, what they call the Handy 21. Prototype Handys integrate voice recognition, wireless communications and video—power-hungry applications that would benefit from Raw's all-in-one design. A prototype of the Raw processor, being developed with IBM Microelectronics, is expected to arrive sometime this year.
Cricket Chirps Up
At Project Oxygen, researchers believe a mobile computer can be more helpful if it knows where it is, and what's around it. Enter the Cricket Indoor Location System, a network of wireless transmitters that provides mobile devices such as Handy 21s with information about their physical location, which they can use to find static devices such as printers or exits as well as other people.
Location-tracking is a hot topic now in light of the Federal Communications Commission's "Enhanced 911" requirements that call for 95 percent of all cell phones to include automatic location identification technology such as the Global Positioning System by the end of 2005.
The goal, says LCS associate professor Hari Balakrishnan, is to develop an indoor alternative to satellite-based GPS tracking, which rarely works inside buildings and often fails outside near tall buildings.
Inside buildings, multipath and magnetic interference disrupt traditional locational devices. "Getting something to work indoors is particularly challenging," says Balakrishnan. "The goal for us is to get linear distances of within a few centimeters so you can tell where you are within a foot or so."
Cricket's trick is to have each beacon continually transmit two signals: one radio and one ultrasound signals. Because radio zips along at the speed of light and ultrasound pulses travel at the speed of sound, the Cricket software that governs the listening device built into a piece of hardware can calculate the timing difference between the two to determine location. "So if there's a gap of ten milliseconds…then you're about ten feet away," says Balakrishnan.
The low-cost, battery-powered Cricket beacons can be "slapped" on ceilings quickly without calibration, thus making for easy scalability. They're placed so any listening device can receive signals from three or four devices at once to further localize position. Cricket beacons can also send other information beyond location coordinates, for example, transmitting the identity of key resources in its purview.
The Oxygen team is also working on a "Cricket Compass" prototype that can determine which direction the listening device is facing. By equipping each listening device with several ultrasound receivers placed very closely together, they can compare the minute differences between the reception times, thus determining orientation. This capability could help direct a computer to send information to the nearest facing display, or it could enhance informational and point-of-sale applications. For example, shoppers could point their handheld toward a store display to find out about nearby sales, or museum visitors could download information on a nearby exhibit. Cricket is not wed to a particular radio frequency, and Balakrishnan says they may switch to Bluetooth if the technology takes off. Sensitive to Cricket's big-brother undertones, researchers are also designing intricate protections for user privacy.
Cricket's greatest impact may come in embedded systems that track not people in an office, but parts through a warehouse. In fact, Balakrishnan's group is experimenting with a wired library, in which every book features a radio tag tracked by a Cricket-like system. Better tracking of goods throughout their manufacture and delivery could save billions in theft, loss and inefficiency, while avoiding the privacy worries attendant to the tracking of people.
The Intelligent Room
If, as LCS director Victor Zue suggests, Project Oxygen is a "big playground," then the Intelligent Room is the cool new jungle gym in the middle. The room hosts a variety of projects exploring new collaborative tools and audio/visual interfaces. For Oxygen, the Artificial Intelligence Laboratory is focusing on voice and vision recognition technologies that will help to shape Oxygen's Enviro 21, a room-controlling device that lets users interact naturally with the computer.
At first glance, the Intelligent Room looks like a typical meeting room, albeit with a surfeit of computer projected "live board" displays on the wall. You interact with the displays via voice, light pen, gesture, or, if all else fails, a touch panel. The ceiling is studded with an array of 32 microphones, two standard video cameras and two stereoscopic video cameras.
A basic goal is to improve communications between microphones and cameras so that the computer can determine who to pay attention to. The task of identifying speakers is important both for controlling videoconferences and for letting the computer respond to user commands without getting confused. Eventually, such communications, which are orchestrated via Oxygen's innovative networking software, Metaglue, will also help the computer customize responses for each individual.
"In traditional vision systems you have mono cameras trying to detect objects by extracting the prerecorded background, but changing the lighting fools the camera," says Krzysztof Gajos, an A.I. Lab research scientist and technical director of the Intelligent Room. "With the stereo cameras, we can not only record the background image, but the background shape. It's much more robust."
Oxygen is also interested in what people are looking at, for example to help the computer decide which displays to use for optimal viewing. Software tracks the way a user is looking by combining face-recognition software with the 3D information provided by a stereo camera. To identify orientation, the head-post algorithm keys in on how facial features change during movement. Among other applications, the researchers hope to mount the tracking system on robots to improve navigation.
Researcher Harold Fox demonstrated SAM, an animated computer display that shows different emotions to reveal its state. Instead of prefacing commands by saying "computer," which can be confusing in meetings, the user just looks at the graphic, and Fox's prototype knows to listen up. When the user looks away, SAM disengages.
Whether SAM or Cricket or Raw ever find their way into the conference rooms, hallways and handhelds in everyday business is a question that will not be answered for years. But one thing is for certain: the concepts they inspire undoubtedly will.
Bob Jensen's threads on ubiquitous computing are at http://www.trinity.edu/rjensen/ubiquit.htm
Faculty Pay and Benefits Database from the Chronicle of Higher Education (Salaries) --- http://chronicle.com/stats/990/2001/
Student Project Films free from Florida
State University
FSU Films http://www.fsufilms.com/index.cfm
If you are interested in email messages regarding financial risk news, you may be interested in contacting:
Christopher Jeffery mailto:cjeffery@riskwaters.com
Editor, RiskNews
http://www.risknews.net
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Congress Online: Assessing and Improving Capitol Hill Web sites http://www.congressonlineproject.org/webstudy2002.html
From the American Accounting Association's Accounting Education News, Winter 2002, Page 1 --- http://aaahq.org/ic/browse.htm
This is the Curriculum Challenge put forth by the current AAA President, Joel Demski. I think that Joel has a longer-term goal of providing guidance for both curriculum change and research focus in accountancy academe.
The Curriculum Challenge was designed to invite and promote some "out of the box" thinking about our approaches to academic training in accounting. What follows is one idea, with ties to the curriculum structure at the University of Florida. It is aimed at our "3/2" Program in which the 150-hour requirement is satisfied, and the successful student exits with a Bachelor and Master’s degree. So the proposal does not stray from the usual building blocks of formal courses, standard graduation requirements, etc. I should also mention two of my colleagues, Karl Hackenbrack and Hadley Schaefer, have played a major role in putting this idea together.
The centerpiece of the proposal is an explicit focus on information, on what we know about information, and on what we know about accounting as a specialized information service. The basics are developed in a sequence of four courses:
(1) Measure Theory, where we cover such things as what does it mean to measure something, what scaling alternatives are available, and so on. Examples are ordinal measurement and additive, conjoint measurement. (Parenthetically, I often associate this material with an undergraduate course in mathematical psychology.)
(2) Risk Measurement, where we continue the measurement theme and cover the basics of risk, partial measures thereof, and the fact that no general measure of riskiness exists. This is also where we encounter risk assessments, hedging effectiveness, and, of course, choice under uncertainty.
(3) Economics of Organizations, where we study economic forces that influence the design and operation of organizations, be they decentralized organizations, alliances, or market arrangements. This course provides a focus on the role of institutional arrangements in efficiently delivering some good or service.
(4) Information Services, where we continue the organization theme, but now focus on the production and delivery of information services, drawing upon institutional arrangements in, say, journalism, federal data sources, and consulting. This is where we deal with institutional details that ensure "reliability" of some information service, as well as the fact there are many such services.
(These first four courses also illustrate the potential for gains to trade. I envision the first two and fourth being offered and taught by the accounting group and the third offered and taught by the economics group. And I see all four appealing to students well beyond those majoring in accounting.)
From here, the design focuses explicitly on accounting, with the following additional courses: information service, complete with the infrastructure (e.g., the FASB, IASB, and SEC) that holds it all together.
(5) Assurance Services, where we focus on assurance and the industry structure that supports the efficient delivery of this important service.
(6) Financial Measurement, where the topics of firm-wide economic stocks and flows are entertained, but from the perspective of an explicit information service complete with the infrastructure (e.g., the FASB, IASB, and SEC) that holds it all together.
(7) Financial Measurement, where the topic of intra-organization measurement is examined, again from the perspective of an explicit information service, complete with its own infrastructure.
(8) Economy-wide Measurement, where the topics of national income measurement, productivity, etc., are studied, once again from the perspective of an explicit information service, complete with its own infrastructure. The financial, organizational, and economy-wide courses all make reference to respective infrastructures, e.g., mandated disclosures and regulatory agencies, external and internal audit functions, and so on. Here I also envision careful and thorough exploration of the commonalities and complementarities in the respective infrastructures. Finally, the development is rounded out with a capstone course.
(9) Capstone, where we take a specific firm in a specific industry and document its information practices, with special attention to its accounting choices and management of those choices. Where we go from here to fill in the remaining, and more familiar, details depends on degrees of freedom in the
TITLE: Oligopolies Are on the Rise As
the Urge to Merge Grows
REPORTER: Yochi J. Dreazen, Greg Ip and Nicholas Kulish
DATE: Feb 25, 2002 PAGE: A1,10
LINK: http://online.wsj.com/article_print/0,4287,SB1014589181477203560,00.html
TOPICS: Antitrust, Managerial Accounting, Mergers and Acquisitions
SUMMARY: Dreazen, Ip and Kulish report on the recent spate of mergers in specific industries resulting in apparent oligopolies. The article explains why firms seek these arrangements, how the firms benefit, how consumers benefit, and also what the risks are for the consumers. They relate the tales of some of the more prominent mergers of the recent past as well as those from the beginning of the last century. How they are similar, and different. Finally, they explain the role of government in the matter.
QUESTIONS:
1.) Define the term oligopoly. How does it differ from a monopoly? How can an
oligopoly have a similar impact that a monopoly might? Can you name a well-known
oligopoly that tries to function like a monopoly? How are the oligopolies
different today from those of a century ago?
2.) What motivates firms to merge with their competitors? Is it simply a matter of growth or are there tangible benefits from these unions? Can consumers benefit from such arrangements? Can they also suffer?
3.) What can happen to competition in this environment? How can two executive administrations view these mergers in such a different light? Have the laws themselves changed in the last few years? What recent economic development has fueled these mergers?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
From The Scout Report on February 22, 2002
Business 2.0 Web Guide http://www.business2.com/webguide/
According to one of its own brochures, "Business 2.0 is the essential tool for navigating today's relentlessly changing marketplace, particularly as it's driven by the Internet and other technologies." In both print and electronic versions, Business 2.0 does cover an incredible amount of ground, including day-to-day and month-to-month information and offering extensive subject lists of its material, broken down by general subjects -- from management and marketing to Enron and the Internet. Not only clearly in touch with today's business world, Business 2.0 promises to put its readers in touch with it through company links, as well as through straightforward contact lists. While Business 2.0 is open for anyone's consultation, registered readers are granted greater access privileges to archived and premium content.
Columbia Newsblaster http://www.cs.columbia.edu/nlp/newsblaster/
With a team of researchers headed by Prof. Kathy McKeown, Columbia Newsblaster is an online project at Columbia University's Department of Computer Science in the School of Engineering and Applied Science. Newsblaster currently looks at news reports from thirteen sources, including Yahoo, ABCNews, CNN, Reuters, Los Angeles Times, CBS News, Canadian Broadcasting Corporation, Virtual New York, Washington Post, Wired, and USA Today. The product uses artificial intelligence techniques to cull through news reports published online and then sorts and summarizes these reports in five different news categories -- US, world, finance, entertainment, and sports. These summaries are based on reflecting factors, such as where a fact is mentioned in the published reports and how often it is repeated across reports dealing with the same event or subject. They are also based on the news value of individual facts, such as how many were killed or injured, or how much damage to property occurred. On the whole, in an age of information overload, this newly developed tool may provide assistance to journalists, executives, and average news consumers.
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
Quality Counts 2002: Building Blocks for Success (prior to K-12 years) http://www.edweek.org/sreports/qc02/
From Syllabus News on February 26, 2002
Online Masters Degree in Health Law Enters Second Year
Nova Southeastern University said a second class of students had begun its online master's degree program in health law. The graduate program is designed to educate non-lawyer health care professionals about health- related legal issues. The masters is a two-year program taught almost entirely over the Internet. Short residential sessions each year supplement the program, which is designed for working professionals, full-time practitioners, administrators, military personnel, nurses, and leaders in the health care industry.
For more information, visit: http://www.mhl.nsulaw.nova.edu .
Women, Enterprise & Society: A Guide to Resources in the Business Manuscripts Collection at Baker Library http://www.library.hbs.edu/hc/wes/
Northern Lights (Photography) --- http://www.northern-lights.no/
PhotoGraphic Libraries: Education Resource (History, Photography, Art) http://www.photographiclibraries.com/
U.S. Steel Gary Works Photograph Collection (American History, Photography) http://www.dlib.indiana.edu/collections/steel/
Life.com: (Photographs on the Cover of Life Magazine, Photography, History) --- http://www.lifemag.com/Life/search/covers
Graphic Design from the 1920s and 1930s in Travel Ephemera (Art History, Graphics, Travel) --- http://www.travelbrochuregraphics.com/
This is a virtual online gallery I've created to display and share the best items in my collection of 1920s and 1930s travel-related ephemera. Many friends and fellow collectors have asked to see the items in my collection so I figured, why not, I'll build a website to display the best ones. Nothing on this website is for sale, it is purely an online gallery.
My basic passion is paper items such as travel brochures, airline time-tables, ocean liner time-tables, auto road maps, luggage labels, advertising, and graphic design publications from the the 1920s and 1930s, primarily in Europe but also Asia and, to a small degree, the U.S.A.
I am still collecting and still building this website and it will continue to grow. Right now there are over 950 individual images on the website. I still have much work to do and will post additions on the "What's New" page so keep checking back!
Why Is This Happening?
I "fell down the rabbit hole," or rather, I started collecting travel ephemera in 1992 while I was on my way to Prague, Czech Republic, where I lived from 1992 to 1994. We had stopped in London on our way to Prague and one day in London we visited the famous British Museum. Afterwards, we wandered down Museum Street, just south of the museum, and I stumbled on an Antiquarian book store. In this store I notice a small brochure, which I would later learn were called "ephemera."
Later, in Prague, I was walking through the streets of Prague's Old Town and I passed an Antiquarian Book Store. I went inside and there were bins of old paper items. There were travel brochures and ocean liner time-tables and luggage labels. That was it - I was hooked.
Most of the items are from Europe, which is my main area of interest, with a concentration on Germany and Italy and Central Europe. These countries had by far the best graphic design in the period influenced, no doubt, by the Bauhaus and Italian Futurism.
Surgeon General Reports on the Web (Medicine) http://www.nlm.nih.gov/news/surgeonreports.html
American Dietetic Association http://www.eatright.org/adainfo.html
Message from Bill Ayers at BillA@flosim.com
I noticed that you have links on your excellent site
http://www.trinity.edu/rjensen/bookbob3.htm
to various external calculator-related resources.
I'd really appreciate it if you would consider linking to our site at
Calculator.org has a number of calculator related resources, including an online scientific calculator, units conversion and constants database, and other information.
Visitors can also download Calc98, a free scientific, engineering, statistical and financial calculator for Windows and PocketPC. Calc98 includes a vast range of units conversions, fundamental constants and physical property data, and other features including arbitrary base numbers, Roman numerals and a stopwatch feature and built-in Periodic Table of the Elements.
Our site has won many awards, including a StudyWeb Academic Excellence Award, and the software was a winner in the 1998 Shareware Industry Awards. I am sure our site would be of interest to your visitors.
Many thanks in advance for considering linking to us.
Regards,
Bill Ayers Flow Simulation Ltd.
APPLE'S FUTURE
Steve Jobs certainly has the needed pieces. The key question: Will its hot
products and a major retail effort boost market share?
http://www.businessweek.com/technology/tc_special/apple.htm?c=bwtechmar01&n=link8&t=email
I thank Roger Collins for this link.
"Enron: how the press
failed," by Richard Lambert, London Times Online, http://www.thetimes.co.uk/article/0,,7-221632,00.html
Enron's debacle was also a failure of journalism. As business grows more
powerful we need better reporting to hold it to account
The signs were there for anyone who cared to look. The fact that Enron executives had for some time been selling their shares for all they were worth was public information. So were the company’s links with the obscure off-balance- sheet partnerships that were to trigger its downfall. The annual report for the year 2000 should have raised all kinds of questions: about the group’s cashflow, which was a lot less impressive than you might have expected; about conflicts of interests involving an unnamed senior executive who was also working for the off-balance-sheet partnerships; about the length and complexity of the footnotes to the accounts — often a warning that things are not quite what they appear.
Above all, no one for years had come up with a satisfactory answer to the question: how did Enron make its money? Even the company seemed vague about the answer to this one. According to its website: “It’s difficult to define Enron in a sentence, but the closest we come is this: we make commodity markets so that we can deliver physical commodities to our customers at a predictable price.”
You can understand why Wall Street missed, or ignored, all these signals. Enron was a cash machine, spinning out enormous investment banking fees by way of its many transactions. It set itself ambitious growth targets and always met them. No one had an incentive to ask awkward questions so long as this process continued. But why wasn’t the press on to the case sooner? After all, it is now clear that the company had encouraged a culture of rule-breaking, or worse, for years. Enron was arrogant — it described itself as the world’s leading company. It was opaque — even its supporters acknowledged difficulties in making the numbers add up. And it made no secret of its political connections in its home state of Texas, in Washington, and in the world at large.
Why didn’t someone kick the tyres? More generally, why is the media less successful in spotting trouble to come in big corporations than it is, for example, in governments? The first serious questions about Enron that I can find were raised by Fortune magazine in a perceptive article published last March. Until that point, Fortune had been one of the company’s cheerleaders. Enron was featured in a gushing article a few months earlier on the world’s most admired businesses, and in the summer of 2000 its shares were tipped by the magazine as one of the world’s outstanding investments for the next ten years. The headline was rather unfortunate: “Ten Stocks to last the Decade.”
Most publications started to take Enron’s problems seriously only in the final few months of last year, when the game was already up.
Part of the explanation for this indifference lies in the mood of the times. Enron rose to its position as one of the world’s biggest companies during a period that ranks among the greatest financial bubbles in business history — a time when the willing suspension of disbelief seemed the best route to prosperity. In the South Sea Bubble itself, nearly 300 years earlier, one ambitious promoter launched “a company for carrying on an undertaking of great advantage, but nobody to know what it is”. That slogan might have served as Enron’s mission statement.
But there is more to the story than the bubble mentality. The Enron affair reveals something about the culture of business journalism. As Editor of the Financial Times over the period, I was part of this culture. Business reporting is unlike other forms of journalism in some important respects. As Russ Lewis, the chief executive of The New York Times, wrote in January in The Washington Post, it is far easier to investigate governments than businesses:
“The press is aided by laws that provide reporters with access to government meetings and documents. But much of what happens in corporations goes on behind closed doors.”
Political reporting deals in opinions, which often turn out to be adversarial hot air, as much as it does in hard information. If you call a politician a villain in your columns, as like as not you can expect a lunch invitation. Business reporting has a harder edge: a lot of it is about facts, which are either right or wrong. Call a business leader a villain and you are more likely to receive a writ — at least if you work in Britain. If you work for a fragile publication, there is also the worry about what the cost might be in terms of cancelled advertising.
So it takes courage and conviction to say that the emperor has no clothes. This was doubly so in Enron’s case. First, the company’s management was brutal in its response to questioning. People who didn’t buy the story were told in public that they simply didn’t get it: they were beneath contempt.
Secondly, Enron had a fervent fan club among the big financial institutions. They were, of course, profiting from its excesses. But if as an inexperienced reporter you see a company being championed by a Citigroup or a JP Morgan Chase, you think twice about saying that it is built on sand.
Financial journalists in general have come to rely too heavily on the guidance of investment analysts. Analysts have done the homework and have fat research reports full of numbers to demonstrate it. But, as Enron shows, they have every incentive not to make trouble. Many of them were rating its shares a “buy” almost up to the end.
Another trend that allowed the company to avoid bad headlines for so long has been a shift towards soft, personality-based journalism in the business pages. You don’t read about Microsoft so much as about Bill Gates. Ken Lay, the Enron chairman, made a great cover story for many admiring magazines.
Fortune magazine is a good example of this development. It used to be full of worthy pieces about the long-term strategy of Caterpillar Tractor. Over recent years it has shifted towards personality stories, and prospered mightily as a result.
All of this matters because business matters even more than it used to and has a bigger political influence. The Enron story did not just have an impact on its employees, creditors, customers and shareholders. It also reached into Government in the US and, more tangentially, in Britain.
In Washington, the company lobbied successfully for legislation two years ago that exempted much of its trading activity from regulatory oversight, and spread its funds around politicians of every stripe. On a much smaller scale, Enron shows that soft money is playing an increasing part in funding British politics also. The Tory peer, Lord Wakeham, sat on Enron’s board and the company made small donations to both Labour and the Conservatives.
In a recent pamphlet for the think-tank Demos, a diplomat, Robert Cooper, argued that in years to come the corporate sector could be better placed than national governments to set international standards. “Transnational corporations may even work out international procedures for arbitration themselves,” he wrote.
And according to Russ Lewis: “If the creators of the US Constitution had foreseen this development, they would have recognised the necessity for the press also to serve as a check against the excesses of big business.”
One of the main tasks of the media is to hold power to account. With no serious alternative to free-market capitalism, governments are increasingly obliged to enter into relationships with corporations. An intelligent examination of business starts to become a crucial component of democratic choice.
How to make that possible? Lewis’s call for laws requiring greater transparency and disclosure of corporate actions, a kind of First Amendment for the business pages, is probably impractical — and anyway, laws tend to get ignored when companies run into serious trouble. What is more, plenty of clues were ignored by the business press in Enron’s case.
No, the answer has to lie in the hands of the media themselves. Developing journalists who are capable of tackling an Enron takes time and the investment of resources. Publications such as The Wall Street Journal and the Financial Times have already recognised this requirement. Among other changes, training is taken much more seriously than it used to be.
For the next year or two, every business story will have to face a lot more scrutiny. Until the Enron scars are healed, no one will take anything on trust. The real test for the media will come a little farther off, when the good times next start to roll and the new Enrons start to emerge.
I added the following message to http://www.trinity.edu/rjensen/crossborder.htm
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Italy on the Grand Tour (Travel, Art History, Photography) http://www.getty.edu/art/exhibitions/grand_tour/index.html
My friend Ed Scribner wrote the following message:
Speaking of salary data, the KTLA-TV "Cyber Guy" this morning mentioned the following CEO salary database maintained by AFL-CIO:
http://www.aflcio.org/paywatch/index.htm
Ed ---- Ed Scribner New Mexico State
Reply from Dennis Who? I couldn't quite make out the last name in this message)
MEMORANDUM We need your support.
Dear kindhearted friends ...
Now that the holiday season has passed, please look into your heart to help those in need. Enroll executives in our very own country are living at or just below the seven figure salary level ... right here in the land of plenty. And as if that weren't bad enough, they will be deprived of it as a result of the bankruptcy and current SEC investigation.
But now, you can help! For only $20,835 a month, about $694.50 a day (that's less than the cost of a large screen projection TV), you can help an Enron executive remain economically viable during his time of need. This contribution by no means solves the problem, as it barely covers their per diem, but it's a start. Almost $700 may not seem like a lot of money to you, but to an Enron executive, it could mean the difference between a vacation spent in DC, golfing in Florida, and a Mediterranean cruise. For you, seven hundred dollars is nothing more than rent, a car note, or mortgage payments. But to an Enron executive, $700 will almost replace his per diem. Your commitment of less than $700 a day will enable an Enron executive to buy that home entertainment center, trade in the yearend Lexus for a new Ferrari, or enjoy a weekend in Rio.
HOW WILL I KNOW I'M HELPING? Each month, you will receive a complete financial report on the executive you sponsor. Detailed information about his stocks, bonds, 401(k), real estate, and other investment holdings will be mailed to your home. You'll also get information on how he plans to invest his golden parachute. Imagine the joy as you watch your executive's portfolio double or triple! Plus upon signing up for this program, you will receive a photo of the executive (unsigned -- for a signed photo, please include an additional $50.00). Put the photo on your refrigerator to remind you of other peoples' suffering.
HOW WILL HE KNOW I'M HELPING? Your Enron executive will be told that he has a SPECIAL FRIEND who just wants to help in a time of need. Although the executive won't know your name, he will be able to make collect calls to your home via a special operator just in case additional funds are needed for unexpected expenses.
YES, I WANT TO HELP! I would like to sponsor an Enron executive. My preference is checked below: [ ] Mid-level Manager [ ] Director [ ] Vice President (Higher cost; please specify which department)
[ ] President (Even higher cost; please specify which department)
[ ] CEO (Contribution: Average Enron janitor monthly salary x 700) [ ] Entire Company [ ] I'll sponsor an Exec most in need. Please select one for me.
SPECIAL LIMITED TIME OFFER Already an Enron supporter? Don't worry, in this troubled economy, there are many executives who need your help. Ford today is laying off 35,000. The NASDAQ is deflated. Now you can show your patriotism and do something about it. The Invisible Hand will allow supporters to substitute executives from any downtrodden company listed on*edcompany.com. You will never own a Bentley, wear hand-tailored silk shirts, or have a gentleman's gentleman; why deprive a worthy executive from ascending, and more importantly, from maintaining the lifestyle he so richly deserves? Imagine the feeling of satisfaction, the pure joy of knowing that your sponsor ex-executive at the former spiltmilk.com will be able to have his caviar and eat it too. *It's just that easy -- do it now!* Please charge the account listed below ___________ per day and send me a picture of the Enroll executive I have sponsored, along with my very own Enroll "Keep America Strong, Sponsor an Enron Executive: Ask Me How!" T-shirt to wear proudly. Your Name: _______________________ Telephone Number:_______________________ [ ] MasterCard [ ] Visa [ ] American Express [ ] Discover Account Number: _______________________
Exp. Date:_______ Signature: _______________________Mail completed form to "The Invisible Hand" or call 1-900-2MUCH now to enroll by phone. Note: Sponsors are not permitted to contact the executive they have sponsored, either in person or by other means including, but not limited to, telephone calls, letters, e-mail, or third parties. Keep in mind that the executive you have sponsored will be much too busy enjoying his free time, thanks to your generous donations. Contributions are not tax-deductible.
Hartford Black History Project http://www.hartford-hwp.com/HBHP/index.html
The Moonlit Road http://www.themoonlitroad.com/godschillun/intro_godschillun.asp
Hall of Black Achievement (HOBA) --- http://www.bridgew.edu/HOBA/
International treaties designed to globalize standards that currently exist only the U.S. have advocates and opponents staking claims to what is copyright and copywrong --- http://www.wired.com/news/politics/0,1283,50658,00.html
Most Admired Companies According to Fortune Magazine, March 4, 2002, pp. 64-70 --- http://www.fortune.com/lists/mostadmired/index_alpha.html
Company Industry Rank Overall Score A.G. Edwards, Inc. 5 6.19 Abbott Laboratories 9 4.91 ABM Industries, Incorporated 6 5.31 Ace Hardware 5 6.55 ADC Telecommunications Inc. 8 4.47 Administaff Inc 4 6.42 Adobe Systems 6 6.04 Adolph Coors Company 6 6.29 Advanced Micro Devices, Inc. 7 6.11 Aetna 9 4.19 Affiliated Computer Services, Inc. 3 6.73 AFLAC, Inc. 6 6.47 Agilent Technologies 3 6.29 Ahold USA 4 6.66 Airborne Freight Corporation 5 3.98 Air Products & Chemicals 6 6.07 AK Steel Holding 6 5.05 Alaska Air Group, Inc. 4 5.67 Alberto-Culver Company 8 4.89 Albertson's, Inc. 6 5.60 Alcoa, Inc. 1 7.57 Allegheny Technologies Incorporated 4 5.33 ALLTEL Corporation 6 4.87 Amerco 9 3.55 American Electric Power Company, Inc. 4 6.72 American Express Company 1 7.83 American Greetings Corporation 9 5.20 American Home Products Corporation 8 5.32 American Honda Motor 3 6.48 American International Group,Inc. 3 6.74 American Standard Companies, Inc. 7 6.02 America West Holdings Corp. 9 2.84 Amgen, Inc. 6 5.68 AMR Corporation 5 5.66 Anadarko Petroleum Corp. 1 7.16 Anheuser-Busch Companies, Inc. 2 7.23 Anthem Insurance Companies,Inc. 3 6.28 AOL Time Warner Inc. 2 7.33 Apache Corporation 2 7.16 Apple Computer, Inc. 3 5.77 Continued at
http://www.fortune.com/lists/mostadmired/index_alpha.html
"The Shiniest Reputations in Tarnished Times, Fortune Magazine, March 4, 2002, Page 72
The Top Ten for Shareholders, Fortune Magazine, March 4, 2002,
Page 72 --- http://www.fortune.com/lists/mostadmired/index.htmlTop Ten Full List Industry Key Attributes
TOP TEN Total Return Rank Company 2001 1996-2001 1 General Electric -15.1% 21.2% 2 Southwest Airlines -17.3% 33.7% 3 Wal-Mart Stores 9.0% 39.1% 4 Microsoft 52.7% 26.3% 5 Berkshire Hathaway 6.5% 17.3% 6 Home Depot 12.1% 36.0% 7 Johnson & Johnson 14.0% 20.5% 8 FedEx 29.8% 18.5% 9 Citigroup 0.1% 28.9% 10 Intel 4.9% 14.1% Top ten average 9.7 % 25.5 % S&P 500 -11.89% 10.70%
From the Mar. 04, 2002 Issue
"The Shiniest Reputations in
Tarnished Times, Fortune Magazine, March 4, 2002, Page 72 ---
http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206471&page=2&_DARGS=%2Fartcol.jhtml.4_A&_DAV=artcol.jhtml
At a time when business feels beaten down, our ten winners stand tall. FORTUNE
The Global Most Admired Rank 01 Nokia from Finland
Rank 02 Toyota Motor from Japan
Rank 03 Sony from Japan
Rank 04 Nestle from Switzerland
Rank 05 Honda Motor from Japan
Rank 06 BP from Britain
Rank 07 Singapore Airlines from Singapore
Rank 08 L'Oreall from France
Rank 09 Royal Dutch/Shell
Rank 10 Canon
Rumor has it some Big Five accounting firms have delayed the start dates for 2001 graduates, and this is causing concerns on college campuses. The rumors have created quite a buzz on the Internet, inspiring Web site cartoons and stirring up controversy on job-related message boards. But are they true? This article tries to separate out the rumors from the realities. http://www.accountingweb.com/item/72836
Rumor has it some Big Five accounting firms have delayed the start dates for 2001 graduates, and this is causing concerns on college campuses. The rumors have created quite a buzz on the Internet, inspiring web site cartoons and stirring up controversy on job-related message boards. But are they true? This article tries to separate out the rumors from the realities.
Concerns on College Campuses
According to the Wall Street Journal, the concerns on college campuses are real. (Some 2001 grads are still waiting to get started at their new jobs, February 19, 2002.). It said some colleges are changing their recruiting programs in response to the growing risks of delayed start dates and rescinded job offers. Examples:
The Darden Graduate School of Business Administration at the University of Virginia has decided to amend a policy that bars students from further campus interviews as punishment for changing their minds about accepting a job offer. This policy won't apply, if the offer has an altered start date. Darden has also begun posting information on its intranet whenever an employer delays or rescinds an offer.
Harvard Business School has decided to penalize firms that impose long delays on its graduates' start dates and/or rescind job offers. It places these businesses on recruiting probation, meaning they can be banned from campus recruiting for a certain amount of time (up to two years) if they commit another recruiting infraction during the probationary period. In addition, the school places the names of all companies that have been banned or placed on probation on an internal Web site. Web-Site Cartoons and Message Boards
Job-related message boards and cartoons have picked up the theme and implicated some of the Big Five accounting firms as the culprits causing the collegiate concerns. Examples:
Cartoons. Indenture.ac was one of the first web sites to pick up the trend. It featured a cartoon of a recent grad who spends all his sign-up bonus on furnishing his new apartment, then finds out his start date has been postponed for a year. This same site mocks the use of new hires for difficult consulting assignments in a lively song entitled Accidenture.
Message boards. The message boards on Vault.com indicate at least three of the Big Five (Andersen, PricewaterhouseCoopers, and KPMG) have delayed start dates or rescinded job offers. Some excerpts: Andersen. Despite what their HR folks say, they do rescind offers at the last minute - it just happened to me. No signing bonus, no nothing! A word of advice for those considering recent offers with AA: Before starting, get in writing the length of time that they will pay severance, will that include COBRA, and will you be able to keep your signing bonus and relocation expenses. Archjohn, Feb. 1, 2002.
PricewaterhouseCoopers. To all of you 2001 hires who got deferred by PwC Consulting... Do you not feel cheated that PwC failed to assume ownership for its actions? Responsible firms... gave their deferees/pending rejects some sort of pecuniary compensation... whereas what did PwC do... nada! If enough of you report this to the career services department of your alma mater, it can very well be that PwC will be denied future spots on campus for recruiting purposes. Scarlet knight, Feb 16, 2002.
KPMG. Heads Up. I found out last week that my offer was being rescinded. I was told the economy and Enron debacle were causing major concern. Has this happened to anyone else? gerry1234, Jan 30, 2002.
Statements from Big Five Firms
Because some of messages posted on vault.com may be conflicting and/or less than 100% authoritative, the public relations offices of the Big Five were asked directly, “Are you delaying start dates or rescinding job offers?” These were their replies on February 20, 2002:
A spokesperson for PricewaterhouseCoopers Consulting acknowledged, “We have had to stagger or delay start dates. Some June 2001 grads have still not started.”
An Andersen spokesperson said, “We are absolutely honoring our commitments to people to whom we have extended job offers. We have not and will not rescind job offers. This is a longstanding policy that goes to the heart of the integrity of the firm. We stand by employment offers, despite the changing economic conditions which no one can predict. In the economy we're in, we have had to defer some start dates, but we are paying a stipend during the deferral period to assist people until we can bring them on board.”
A spokesperson for KPMG LLP clarified, “Consistent with past KPMG practices, full-time employment of our recent college hires began in early October, the beginning of our fiscal year. We have had instances where, at the student’s request, deferments have been granted until mid-November so that a student can study for the CPA exam while not encumbered by work.”
A spokesperson for Ernst & Young, said, “We stood by all our campus commitments despite the economic downturn. We have not delayed any start dates or rescinded any job offers, and we’re very happy we haven’t had to do that.”
A spokesperson for Deloitte & Touche was not available for comment
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Palaces of the King of Siam --- http://www.palaces.thai.net/
The Berkley Law & Economics Working Papers http://www.bepress.com/blewp/default/
Tricks with Derivatives to Hide Rather Than Manage Risk: What is a tranche besides being a French word for "trench"?
"DEBT TRICKS: Covering Their
Assets," Fortune Magazine, March 4, 2002, by Julie Creswell --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206542
So you think you escaped Global Crossing and Enron? Surprise! Banking's
dastardly debt trick may leave you vulnerable.
For all the talk of what banks have done wrong lately (huge write-downs! swelling bad debt!), they've also done something right: passed the buck.
Turns out it's not just lenders like J.P. Morgan Chase and Citigroup that are on the line for billions in loans to now-bankrupt entities such as Enron and Global Crossing; it's a host of hedge funds, insurance companies, and even retirement plans that bought slickly repackaged debt from them. While these complicated "credit derivatives" helped banks sidestep even bigger losses and possibly prevented systemic stress on the banking system by diffusing liabilities, unwitting investors may soon be in for a rude awakening. "One way or the other, somebody is sitting on a huge amount of risk," says Doug Noland, financial market strategist at David W. Tice & Associates. Indeed, federal banking regulators are increasing scrutiny of moves that push risky transactions off bank balance sheets, while the SEC is looking into PNC Financial for its debt-repackaging dealings. Though only the first repercussions of the credit-derivative fallout have been felt, "there's going to be a huge problem," predicts Noland. "Something's going to blow up."
Here's why: One of the more common hedges banks used is called a collateralized-debt obligation, or CDO, a bundle of around 50 corporate loans that is sliced and diced into pieces called tranches. In theory, the resulting product is akin to a mutual fund--one or two defaults don't taint the whole batch. Each tranche carries a degree of risk, from investment grade to--in trader's parlance--"toxic waste." That's why safety-conscious insurance companies and pension funds snapped up the higher-rated, lower-yielding tranches, while hedge funds and investors seeking higher returns bought the riskier tiers.
Banks love transforming loans into these derivatives because they don't have to reserve as much capital on their balance sheets, which frees up more money for new loans. CDOs are fairly new, but they're the fastest-growing fixed-income sector. In the past five years the market has swelled from a few billion dollars to more than $500 billion. When all goes as planned, investors love CDOs too--they get a steady stream of interest payments.
But this time around everything didn't go as planned. Banks started ramping up CDO sales in the late 1990s when default and bankruptcy rates were at historic lows; that persuaded less experienced investors to bite. Banks "became very good at using financial engineering to make credit risk more palatable to the end buyer," says Charles Peabody, a banking analyst at brokerage firm Ventana Capital. "But that risk just doesn't disappear." The sharp increase in defaults--from telecom startups to Kmart--caught buyers off guard, thus throwing CDOs into downgrades and losses. American Express' financial advisors group learned that lesson the hard way: It bought a batch of CDOs in 1997 to juice returns and last summer was forced to take an $860 million charge related to that ill-fated purchase. Furthermore, "there is a certain lack of transparency" in some types of CDOs, explains Mitchell Lench, senior director of European CDOs for Fitch Ratings. Investors "know the ratings, the industries, and the amount of exposure they have to the industries, but after that, it's kind of a guessing game."
As the aftermath of the credit-derivatives game unfolds, expect to see some angry players.
Bob Jensen's threads on derivatives financial instruments frauds are at http://www.trinity.edu/rjensen/fraud.htm#DerivativesFraud
I added the definition of tranches to http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
Hi Patrick,
The term "better" is a loaded term. One of the main criticisms leveled at IASC standards is that they were too broad, too permissive, and too toothless to provide comparability between different corporate annual reports. The IASC (now called IASB) standards only began ot get respect at IOSCO after they started becoming more like FASB standards in the sense of having more teeth and specificity.
I think FAS 133 is better than IAS 39 in the sense that FAS 133 gives more guidance on specific types of contracts. IAS 39 is so vague in places that most users of IAS 39 have to turn to FAS 133 to both understand a type of contract and to find a method of dealing with that contract. IAS 39 was very limited in terms of examples, but this has been recitified somewhat (i.e., by a small amount) in a recent publication by the IASB: Supplement to the Publication Accounting for Financial Instruments - Standards, Interpretations, and Implementation Guidance http://www.iasc.org.uk/docs/ias39igc/batch6/39batch6f.pdf
In theory, there are very few differences between IAS 39 and FAS 133. But this is like saying that there is very little difference between the Bible and the U.S. Commercial Code. Many deals may be against what you find in the Bible, but lawyers will find it of less help in court than the U.S. Commercial Code. I admit saying this with tongue in cheek, because the IAS 39 is much closer to FAS 133 than the Bible is to the USCC.
Paul Pacter wrote a nice paper about differences between IAS 39 and FAS 133. However, such a short paper cannot cover all differences that arise in practice. One of the differences that I have to repeatedly warn my students about is the fact that OCI is generally converted to current earnings when the derivative hedging contract is settled on a cash flow hedge (this conversion is usually called basis adjustment). For example, if I hedge a forecasted purchase of inventory, I will use OCI during the cash flow hedging period, but when I buy the inventory, IAS 39 says to covert the OCI to current earnings. (Actually, IAS standards do not admit to an "Other Comprehensive Income" (OCI) account, but they recommend what is tantamount to using OCI in the equity section of the balance sheet.)
Under FAS 133, basis adjustment is not permitted under many circumstances when derivatives are settled. In the example above, FAS 133 requires that OCI be carried forward after the inventory is purchased and the derivative is settled. OCI is subsequently converted to earnings in a piecemeal fashion. For example, if 20% of the inventory is sold, 20% of the OCI balance at the time the derivative is settled is then converted to current earnings. I call this deferred basis adjustment under FAS 133. This is also true of a cash flow hedge of AFS investment. OCI is carried forward until the investment is sold.
Although there are differences between FAS 133 and IAS 39, I would not make too big a deal out of such differences. IAS 39 was written with one eye upon FAS 133, and the differences are relatively minor. Paul Pacter's summary of these differences can be downloaded from http://www.iasc.org.uk/cmt/0001.asp?s=490603&sc={65834A68-1562-4CF2-9C09-D1D6BF887A00}&sd=860888892&n=3288
Hope this helps,
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: Patrick Charles [mailto:charlesp@CWDOM.DM]
Sent: Tuesday, February 26, 2002 11:54 AM
To: CPAS-L@LISTSERV.LOYOLA.EDU
Subject: US GAAP Vs IASBGreetings EVeryone
Mr Bolkestein said the rigid approach of US GAAP could make it easier to hide companies' true financial situation. "You tick the boxes and out come the answer," he said. "Having rules is a good thing, but having rigid rules is not the best thing.
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3AHWRLXXC&live=true&tagid=FTDCZE6JFEC&subheading=accountancy
Finally had a chance to read the US GAAP issue. Robert you mentioned IAS 39, do you have other examples where US GAAP is a better alternative to IASB, or is this an European ploy to get the US to adopt IASB?
Cheers
Mr. Patrick Charles charlesp@cwdom.dm ICQ#6354999
"Education is an admirable thing, but it is well to remember from time to time that nothing that is worth knowing can be taught."
Reply from Eckman, Mark S, CFCTR [meckman@ATT.COM]
I would suggest that what Mr. Bolkestein said was a global statement for discussion, and clearly not an independent view. I think the real litmus test for accounting standards is the securities market, and there US GAAP is the clear choice.
Take the example of Daimler Benz to see what an impact this can have. The company had financial statements that showed wonderful profits. But in order to have a listing on the NYSE, they need statements that follow US GAAP. In that conversion, the company went from profitable to money losing, mostly due to "cookie jar" reserves which were a common practice. After adjusting and obtaining the NYSE listing, they successfully offered new securities, met market expectations, grew their market share world wide and acquired Chrysler. None of that would have been possible without the use of US GAAP.
This is not the end of the story as it returns to the current issues on auditing. Another foundation of the security markets is the credibility of the financial statements and the independent audit of those statements. Without that audit, the assurance that Daimler-Benz followed US GAAP would not exist and entrance to the securities markets would not have been possible. It is the combination of GAAP and audit standards that has made it possible for companies to access capital on a global basis.
As to the comment of the rigid nature of US GAAP, that is true in some cases. Quite true regarding the 3% capital minimum on currently on center stage with the Enron SPEs found in EITF 90-15. However, I would also counter that many US GAAP elements are not as prescriptive such as accounting estimates (pension rate of return, depreciation rates, etc.) impairment of assets and materiality.
Take for example FAS 5. This has daily impact in my work, but to consider the concept as rigid defies logic. Show me where to check the box to determine 'probable' or 'reasonably estimated' and I'll change my position.
Mark Eckman
Hi George,
I strongly disagree with your statement that "the options have no value to the holders of the options" when they are out-of-the-money.
In theory, and definitely in FAS 133 and FAS 123, is the recognition that options have value even if they are out-of-the-money. The stockholders are giving up value and the employees are receiving something of great value even if the options are out of the money at the time they vest.
Option value has two components --- intrinsic value and time value.
Intrinsic value arises when spot price exceeds strike price (i.e., when options are in-the-money).
Time value is dependent upon the amount of time remaining while options have a chance to become in-the-money or have a change to become more-in-the-money.
For example, suppose I offer you a strike price of $1.80 put option (or a $2.10 call option) per bushel of corn for the next 24 months. This is not in the money (has no intrinsic value) now, but in the options market somebody will pay for such an option, because there's a possibility that the option will some day be in-the-money. THAT IS THE TIME VALUE OF THE OPTION.
If, however, I offer you a strike price of $1.80 per bushel of corn on an option that expires today, you probably won't pay me a dime, because the spot price of corn today is $1.98 (I'm guessing here because I'm too lazy to look up the actual price). In this instance, the TIME VALUE is zero, because there just is not enough time remaining for the put option to become in-the-money.
That is how time value works. The more time there is, the more derivatives have time value.
If you want to see how the calculation of time value is derived in the case of options, I have two cases that go into detail ad nauseaum. See the CapIT and FloorIT cases at http://www.trinity.edu/rjensen/caseans/ccase.htm
You can find more simple examples at documents the FASB generated for FAS 133 implementation is called "Summary of Derivative Types." This document also explains how to value certain types of derivatives. It can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
Hope this helps.
Bob Jensen
-----Original Message-----
From: glan@UWINDSOR.CA [mailto:glan@UWINDSOR.CA]
Sent: Monday, February 25, 2002 10:45 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Bob Jensen and Denny Beresford quoted in Philadelphia Inquire r!I had thought that accounting firms would be in favour of changes because that would reduce auditor's liability.
In the latter half of the article (as pointed out by Elliot Kamlet ), the article mentions that the accounting firms did not support the the FASB standard requiring companies to record compensation expense on the granting of stock options. The firms mentioned the big divide in the accounting community and also implementation difficulties. ("Battle not worth fighting"). How justified are they? Is the fair value of the options disclosed in the footnotes partly because the value is not reliable or subject to estimates?
I wonder whether the following alternative may have some merits and/or has been debated:
Even if no expense was recorded at the date of the grant (as under APB 25, when exercise price is above market price), why not record an expense at the end of the year if the market price of the shares has risen above the exercise price of the options? One could argue that so long as the options are out of the money (exercise price higher than the market price), the options have no value to the holders of the options but do have value when the market price exceeds the exercise price and hence an expense should be recorded, whether the options have been exercised or not. It should not be very hard to get the market price of the shares at the end of the year.
George Lan University of Windsor
Reply from Ruth Bender, Cranfield School of Manage [R.Bender@CRANFIELD.AC.UK]
I wouldn't dream of arguing with Prof Jensen about option valuation (many thanks for the case study reference), but exec compensation is my research subject, and there are certain reasons put forward as to why Black Scholes and the like aren't really appropriate for valuing executive options:
1. Executives aren't holding a diversified portfolio - they are heavily tied to one company. Therefore, they are bearing a high level of personal risk. One problem that results is that their perception of option value they receive is much less than the option value being given up by stockholders.
2. Because of this risk factor they generally exercise well before the option has expired, so that they can sell the stock and put their money into something 'safer' (ie more diversified)
3. They can't sell the options in a market.
4. The B-S model is (so they tell me) best at valuing options which are tradable, and which have a much shorter lifespan than exec options, which may run up to 10 years
5. If the options are subject to performance conditions (common in the UK, less so in the US) then many of them will never actually vest, anyway - so how do you estimate what the ultimate cost will be.
And, far more importantly - it results in a very large number that reduces profits and makes them more volatile ... :-)
Ruth Bender
Cranfield School of Management UK
Hi Again Ruth,
You wrote:
"Cynical view - It's possibility a bit optimistic to assume that when
they're granted the options they give up other forms of compensation!"
My Illustration:
I am reminded of the true story about one of the top computer science PhD
graduates at Stanford University a few years back. This graduate was so good
that he was receiving offers for well over $150,000 plus a huge cash signing
bonus. He eventually went to work for a company that makes computer games for a
salary of less than half of his other offers and no cash bonus. But the gaming
company gave him stock options that were valued at over $1 million in time value
(not intrinsic value).
Of course he was taking a huge risk. To change his time value into intrinsic value, he had to do everything possible to increase the price of the stock of the gaming company. I have no idea what actually happened later on, but it may not have been pretty after the dot.com crash. Who said options were not risky unless they're hedges?
I think it is always safe to assume that there is a tradeoff in the eyes of the employee and in the eyes of their employers when stock options are granted to employees. Otherwise it would be totally irrational to give the employee something of great value that the employee does not care about. That would be stupid. The company is giving something of value in lieu of something else of value to hire and motivate the employee. Companies like stock options because they can defer the hit on liquidity (vis-ŕ-vis cash outlays for salary and bonus), and they believe that employees are more motivated when their own fortunes directly hinge on the future price of their employer's stock. Employees like stock options because their talent and labors "might" be rewarded far more than having to invest cash salary and bonus checks into other types of investment.
Plus their are some tax advantages to options that add to value. This is a point that you failed to mention in your previous listing of the difference between investment options and employment compensation options. Not being able to exercise the options for a period of time may dampen the BS valuation for an employee, but the tax advantages recover much of this loss in the employee's eyes.
As you say, the $64,000 question is when the company books its liability --- which is indeed a liability that can even be hedged. Interestingly, if a company hedges this liability with a derivative, the fair value of the derivative has to be booked and ajusted to fair value at least every 90 days under FAS 133 and IAS 39 (although hedge accounting probably will not be allowed and the changes in the derivative's value go to current earnings).
The above hedge illustrates the asymmetry in present accounting rules for derivatives. FAS 123 says that employers do not have to book their option liabilities even if they are hedged items, but the hedges of those employee options have to be booked under FAS 133.
Bob Jensen
-----Original Message-----
From: Ruth Bender, Cranfield School of Manage [mailto:R.Bender@CRANFIELD.AC.UK]
Sent: Monday, February 25, 2002 11:49 AM
To: AECM@LISTSERV.LOYOLA.EDU Subject:
Re: Intrinsic Versus Time ValueHi Bob
That's the $64,000 question - if I knew the answer, I could become very rich ... In answer to your questions:
Q1. "My bottom line question to you is whether you think there is no liability from the standpoint of the corporation (or at least not a liability that should be booked)?"
This one's bugged me for years, long before I looked at the exec comp area. My own feeling is that there's a liability for the Shareholders, but not for the Company. So i always used to argue that there was no need for it to go near the accounts - I used to ask 'okay, I see the debit, but where does the credit go?'. But these days, accounting has moved on, and the distinction between Shareholders and Company is being blurred, so that argument is a bit tenuous - I think that shareholders need to be made aware of it, at the very least. But I personally - totally out of tune with the accounting standards people (and pretty much everyone else) - like the idea of notes rather than expenses. (The current UK treatment - which is likely to change - is to give huge detail about each tranche of unexpired options, including dates and exercise prices, and let the shareholdes work it out for themselves.)
Q2. "At what point do you think options should be booked? For example, should it be when they vest? Should it be when the employee can exercise the options (if it differs from the vesting point)? Should it be only when they are exercised?"
Again, I'd put it in notes to the accounts when they are granted, giving details of the exercise prices, so that, as George Lan said, at least shareholders could see if they were in the money. As a practical point, if you keep 'marking to market' each year it's going to produce a lot of volatility in the accounts, for an item that isn't at that time a liability, and may not become one. Once they vest, then I can see a better argument for a on-off charge based on the then-current value of the options.
Q3 "Clearly, employee options have value or they would not be so eager to sacrifice higher salaries for more options. The real issue is when to book that liability to the company."
Cynical view - It's possibly a bit optimistic to assume that when they're granted the options they give up other forms of compensation!
Ruth Bender
Cranfield School of Management UK
ASSOCIATION OF INTERNATIONAL ACCOUNTANTS NEWS: 22 FEBRUARY 2002
AIA 2002 EXAMINATIONS - CHANGE OF DATE**
The Association wishes to advise students and affiliates that the 2002 examination diets will be held on the following dates:
MAY: Wednesday 29 May 2002 Thursday 30 May 2002
NOVEMBER: Wednesday 27 November 2002 Thursday 28 November 2002
Entry forms for the May 2002 examinations will be sent out on Thursday 21 February 2002. Forms must be completed and returned, with the appropriate examination fee, to the Association by Monday 1 April 2002.
If you do not receive an examination entry form please contact Brett Young, Examinations Executive, T: +44 (0)191 482 4409, F:+44 (0)191 482 5578, E: brett_young@aia.org.uk
IAN BALL NAMED CHIEF EXECUTIVE OFFICER OF THE INTERNATIONAL FEDERATION OF ACCOUNTANTS
The Board of the International Federation of Accountants (IFAC) has appointed Ian Ball as the organization's new Chief Executive. Dr. Ball will be responsible for providing strategic and management direction of IFAC and comes at a time when IFAC is strengthening its public interest initiatives.
http://www.aia.org.uk/news/fullstory_index.cfm?fuseaction=detail&storyid=810
MILESTONE REACHED IN BATTLE TO CRACK DOWN ON TAX EVASION
The world's leading economies have reached a long-awaited and much delayed milestone in their attempts to eradicate tax evasion in offshore centres.
http://www.aia.org.uk/news/fullstory_index.cfm?fuseaction=detail&storyid=809
MULTI-DISCIPLINARY PARTNERSHIPS BLOCKED BY EUROPEAN COURT OF JUSTICE
The efforts of the " Big Five" accountancy firms to create multi-disciplinary practices incorporating legal firms have suffered a setback following a ruling of by the European Court of Justice.
http://www.aia.org.uk/news/fullstory_index.cfm?fuseaction=detail&storyid=808
Please Help the Financial Accounting Standards Board
This is a great opportunity for practioners to show that they are interested in responding to FASB calls for comments. For example, do you think the new EDs go far enough? How can we get airlines to book billions of dollars in leased airplanes on the balance sheet? These EDs do not seem to do the job.
As influential House Energy Committee Chairman Billy Tauzin called for a review of accounting rules "across the country and across corporate boards," the Financial Accounting Standards Board continued its relentless drive to strengthen the standards. On February 15, FASB announced the release of a revised limited version of an exposure draft entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections-Amendment of FASB Statement No. 13. The new ED proposes an important change in lease accounting. http://www.accountingweb.com/item/72443
As influential House Energy Committee Chairman Billy Tauzin called http://quote.bloomberg.com/fgcgi.cgi?ptitle=Securities%20Firms%20News&b1=ad_bottom1&br=blk&tp=ad_topright&T=wealthstory.ht&s=APHASPRYVVGF1emlu for a review of accounting rules “across the country and across corporate boards,” the Financial Accounting Standards Board (FASB) continued its relentless drive to strengthen the standards. On February 15, 2002, FASB announced http://accounting.rutgers.edu/raw/fasb/news/index.html the release of a revised limited version of an exposure draft (ED) entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections-Amendment of FASB Statement No. 13. The new ED supplements a previous ED dated November 15, 2001 and proposes an important change in lease accounting.
Together, the two EDs propose to amend four Statements of Financial Accounting Standards (FAS):
FAS No. 4 - Reporting Gains and Losses from Extinguishment of Debt FAS No. 13 - Accounting for Leases FAS No. 44 - Accounting for Intangible Assets of Motor Carriers FAS No. 64 - Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements
Specific proposed changes include the following:
As described in the first ED, companies will no longer be required to classify gains and losses from the extinguishment of debt as extraordinary items, but they will still be allowed to use this accounting treatment in certain circumstances.
As described in the new ED, the accounting for certain types of leases will change, (i.e., sale-leaseback transactions and lease modifications with economic effects similar to sale-leaseback transactions).
The reason for two EDs instead of one is because the second has its roots in the comment letters for the first. Commentators suggested changes they felt would improve financial reporting by eliminating inconsistencies in the various standards. FASB agrees in theory. But it also recognizes that some companies might have structured their leases differently, if the proposed accounting changes had been in effect at the time of the transaction. To ensure these substantive changes get a fair hearing, FASB decided to expose them for public comment as part of its “due process.”
Comments on the revised ED http://accounting.rutgers.edu/raw/fasb/draft/rev_ed_rescission.pdf are due by March 18, 2002.
The item below may help you when you send your letter to the FASB. Perhaps you should complain that the EDs do not go far enough to correct abuses of accounting for synthetic leases.
On February 15, 2002, FASB announced http://accounting.rutgers.edu/raw/fasb/news/index.html the release of a revised limited version of an exposure draft (ED) entitled Rescission of FASB Statements No. 4, 44, and 64 and Technical Corrections-Amendment of FASB Statement No. 13. The new ED supplements a previous ED dated November 15, 2001 and proposes an important change in lease accounting. The FASB would like educators and practitioners to respond to these new EDs.
From The Wall Street Journal's Accounting Educators' Reviews on February February 22, 2002
TITLE: Firms Use Synthetic Leases
Despite Criticism
REPORTER: Sheila Muto DATE: Feb 20, 2002
PAGE: B6 LINK: http://online.wsj.com/article/0,,SB101415738191993240.djm,00.html
Trinity University students may go to J:\courses\acct5341\readings\WSJsyntheticLeases.htm
TOPICS: Accounting, Creative Accounting, Disclosure, Financial Accounting, Financial Statement Analysis, Lease Accounting
SUMMARY: The article includes a discussion of the features of synthetic leases and the reasons that they are attractive alternatives to purchases and normal lease agreements.
QUESTIONS:
1.) List the properties of synthetic leases. How are synthetic leases different
from "normal" lease agreements? How are synthetic leases different
from purchasing assets?
2.) Are synthetic leases accounted for as capital leases or operating leases? Support your answer. In what situations is a lease transaction accounted for as a capital lease? How are the financial statements different if a transaction is accounted for as a capital lease versus an operating lease? In substance, does it appear that a synthetic lease is more similar to a purchase or an operating lease? Support your answer.
3.) What is meant by DuGan when he said, "but synthetic leases have a hidden balloon payment."? Should a balloon payment be recorded on the financial statements? Support your answer.
4.) Should companies be prohibited or discouraged from engaging in synthetic leases? Support your answer. Is better disclosure of synthetic lease transactions needed in financial reporting? What changes in financial reporting are needed to provide better disclosure of synthetic lease transactions?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Synthetic leasing is intertwined with special purpose entity ploys to keep debt off the balance sheet. You can read about SPEs at http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm
"Firms Use Synthetic Leases Despite Widespread Criticism," by Sheila Muto, The Wall Street Journal, February 22, 2002 --- http://online.wsj.com/article/0,,SB101415738191993240.djm,00.html
The widespread use of so-called synthetic leases by companies to purchase and build everything from new campuses to retail stores is coming under increased scrutiny. But that's not stopping a handful of firms from plowing ahead with the controversial financing method.
A synthetic-lease arrangement allows a company to get the tax benefits associated with owning real estate, while keeping the debt associated with it off its balance sheet. Critics say that such leases are an accounting maneuver that hides potential liabilities and can be used to boost earnings per share.
AOL Time Warner Inc., for one, remains committed to financing the construction of its new Manhattan headquarters at the site of the old New York Coliseum and a new production facility in Atlanta with a $1 billion synthetic lease with Bank of America Corp., according to Michael Colacino of real-estate services firm Julien J. Studley Inc., who worked on the deal for the media giant.
Enron Corp.'s use of off-balance sheet subsidiaries were allegedly used "to conceal lots and lots of debt" and "misdirect people away from understanding" its core business, says Mr. Colacino. In contrast, synthetic leases are "used to finance real estate and equipment that aren't part of the core business of a company." For AOL Time Warner, the synthetic lease is "not a material issue."
A spokeswoman for AOL says a synthetic lease "continues to provide a diversified source of tax advantaged, cost-efficient financing ... our synthetic leases are disclosed in our financial statements, and we believe they are in the best interest of our shareholders."
Cheaper Alternative
In a synthetic-lease deal, a financial institution typically sets up a special-purpose entity that essentially borrows money from the institution to build a facility or purchase an existing one for a company. The special-purpose entity holds the title to the property and leases the property to the respective company. In many cases, the company gets a lower interest rate, which is a floating rate based on the firm's creditworthiness rather than on the value of the real estate, although there are up-front legal and accounting costs. Companies have used synthetic leases to finance equipment purchases as well.
They see them as a cheaper alternative to leasing, purchasing or developing property with traditional loans. For accounting purposes, a company is considered a tenant leasing the property under a synthetic-lease structure. As such, the transaction is treated like a simple operating lease, and the company doesn't have to carry the asset on its balance sheet -- though many companies mention their use in a footnote. That means the company avoids taking depreciation charges against earnings. For tax purposes, the company is considered the owner of the asset. As such, it is entitled to deduct the interest payments and the depreciation of the value of the property.
What's more, typically these lease deals run from three to seven years with options to renew. And that's where potential problems can arise.
Because the leases are short-term, if a company can't renew a synthetic lease because its credit rating has fallen, it may all of a sudden be faced with getting new financing and putting it on its books -- a rude surprise for investors. This might be particularly problematic for companies that are short on cash or have properties whose values have fallen.
"There's nothing wrong with them as a concept," says Gordon DuGan, president of W. P. Carey & Co., a New York-based real-estate investment firm that helps companies get out of synthetic deals, "but synthetic leases have a hidden balloon payment." Given these economic times and the drop in real-estate values in some markets, "you don't want to have to make a payment like that," he says.
Often, these deals lack transparency because the liability a company may have isn't fully divulged. Concern about disclosure prompted an about-face last week by Krispy Kreme Doughnuts Inc., whose previous plan to finance the construction of $35 million manufacturing and distribution plant with a synthetic lease came under fire, touched off by a Forbes magazine story.
The Winston-Salem, N.C., company now says it will finance the facility with a traditional mortgage that will be reflected in its financial statements.
Not Dettered
Other companies, meanwhile, plan to proceed with their plans. In a filing with the Securities and Exchange Commission, Idec Pharmaceuticals Inc. says it plans to develop a new $100 million headquarters campus in the San Diego area and a $300 million to $400 million manufacturing facility in nearby Oceanside, Calif., using "off-balance-sheet lease" arrangements.
Idec Pharmaceuticals Chief Financial Officer Phillip Schneider says that while accountants and lawyers at the San Diego-based biotech company have become "less comfortable" with synthetic leases, "we're still looking at that as an option."
What's more, Mr. Schneider says, "synthetic leases are much lower in cost to the company than a normal lease by about 4%."
Chiron Corp., another biotech company, is proceeding with financing a more than $200 million expansion of its Emeryville, Calif., headquarters, although the deal isn't yet completed, says John Gallagher, a company spokesman.
Mr. Gallagher wouldn't comment on Chiron's reasons for continuing with the synthetic lease deal, but he says the company is "monitoring" reaction to synthetic leases "in light of recent events" involving Enron's off-balance-sheet activity.
Hi George,
That depends upon what you mean by "support." If you mean failing to adhere to any FASB standard in the U.S. on a set of audited financial statements, then auditors are sending an open invitation to all creditors and shareholders to contact their tort lawyers --- lawyers always salivate when you mention the magic words "class action lawsuit".
If you mean sending mean-spirited letters to the FASB, then that's all right, because the FASB is open to all communications in what it defines as "due process."
I am a strong advocate of FAS 133 --- corporations got away with hiding enormous risks prior to FAS 133. Could FAS 133/138 and IAS 39 be simplified? Well that's a matter of opinion. The standards will be greatly simplified if your Canadian friends and my U.S. friends support the proposal to book all financial instruments at fair value (as advocated by the JWG and IASB Board Member Mary Barth). But whether this is a simplification is a matter of conjecture since estimation of fair value is a very complex and tedious process for instruments not traded in active and deep markets. In the realm of financial instruments there are many complex financial instruments and derivatives created as custom and unique contracts that are nightmares to value and re-value on a continuing basis. One needs only study how inaccurate the estimated bond yield curves are deriving forward rates. In some cases, we might as well consult astrologers who charge less than Bloomberg and with almost the same degree of error.
My bottom line conclusion: We could simplify the wording of the financial instruments and derivative financial instruments standards by about 95% if we go all the way in adopting fair value accounting for all financial instruments and derivative financial instruments.
But simplifying the wording of the standard does not necessarily simplify the accounting itself and will add a great deal of noise to the measurement of risk. In the U.S., the banking industry is so opposed to fair value accounting that the Amazon river will probably freeze over before the FASB passes what the JWG proposes. See http://www.aba.com/aba/pdf/GR_tax_va6.PDF
Readers interested in downloading the
Joint Working Group IASC Exposure Draft entitled Financial Instruments: Issues
Relating to Banks should follow the downloading instructions at http://www.aba.com/aba/pdf/GR_TAX_FairValueAccounting.pdf
(Trinity University students may find this on J:\courses\acct5341\iasc\jwgfinal.pdf
).
On December 14, 1999 the FASB issued
Exposure Draft 204-B entitled Reporting Financial Instruments and Certain
Related Assets and Liabilities at Fair Value. I'm not sure where you can find
this buried document at the moment.
(Trinity University students can find the document at J:\courses\acct5341\fasb\fvhtm.htm
).
Bob Jensen
-----Original Message-----
From: glan@UWINDSOR.CA [mailto:glan@UWINDSOR.CA]
Sent: Monday, February 25, 2002 5:33 PM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Intrinsic Versus Time ValueI have seen the credit to be Paid-in Capital- Stock Options or to Stock Options Outstanding rather than to a liability. It would be interesting to learn more about what the accounting firms stand to gain by not supporting FAS133.
George Lan
Population Profile of the United States: 2000 http://www.census.gov/population/www/pop-profile/profile2000.html
"CAREERS: Or Not to
B," Fortune Magazine, March 4, 2002, by Ann Aharrington --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=206461
You thought you'd sit out the recession by going to business school? Oops. With
applications way up, top candidates are getting wait-listed--or worse, dinged.
Contrary to what most B-school applicants think, being wait-listed--or denied--doesn't mean you don't have options.
If you're on a wait list View it as an opportunity, not an insult. At most schools it means they see you as qualified and want to admit you, but someone similar got there first or made a more persuasive case. Since you can't control such outside factors, focus on what you can do:
• Address any concerns. At the University of Chicago, the wait list is a means of getting more information, says associate dean Don Martin, because "usually there's something missing"--a gap in employment, an uneven academic record, a letter of recommendation that doesn't have much meat. The way you respond to questions may be as important as what you say. "It does put the applicant in a test situation," says Martin.
• Update, don't inundate. Got a promotion or new responsibilities? By all means, let the school know. But keep your communications relevant, brief, and businesslike. "We appreciate the enthusiasm," says Liz Riley of Duke's Fuqua School of Business. "But we appreciate it in writing."
• Follow instructions. This sounds obvious, but B-schools have surprisingly different approaches to wait lists, says Richard Montauk, author of How to Get Into the Top MBA Programs: "Some want a lot of contact; some want none."
Despite your best efforts, the harsh truth is that top schools end up admitting a fraction of their wait lists in a typical year, and this year could be worse.
If you strike out Take comfort in the example of Dave Magstadt, who was turned down by Harvard, Columbia, and Stanford two years ago, despite a 3.95 GPA and a 750 (out of 800) GMAT score. Today the 25-year-old former Accenture consultant is a Columbia first-year who just accepted a summer job offer from Goldman Sachs.
What changed? Dave did. "I didn't get in for a reason," he says in his Oklahoma twang. "I wasn't ready." Magstadt was young and inexperienced and had little international exposure (important at Columbia). It probably didn't help that he was a white male consultant--a very common profile--who applied in the final round. But his biggest problem was one only he could address: he hadn't articulated what he had to offer, what he wanted from an MBA, and what he wanted to do with it.
Admissions experts say this is one of the most common reasons that people get turned down. That doesn't mean everyone needs a five-year plan (although that can work too). They want to know you, though they may ask in different ways. Julia Min of NYU's Stern School says applicants are asked to describe themselves creatively. People have sent games, haiku, even a jar of salsa--whatever might pique the admission committee's interest.
They also want to know why you want to be at their school. Every admissions director has received essays misaddressed to Stanford or Wharton (watch the cut-and-paste), but the problem goes deeper. It's like writing a generic love letter: It rarely persuades. That's one reason that Stanford's Derrick Bolton recommends applicants visit the schools they're serious about. When you think about it, he points out, the cost of business school (about $100K) plus the lost-opportunity cost in not working can compare to that of a house. "Would you buy a house without looking at it?"
The second time around, Dave Magstadt applied to five schools--earlier this time--and visited them all. He pushed for an overseas assignment from Accenture (which he got), sought out opportunities to manage teams, and began to see the direction he wanted his career to take. And as you know, that made the difference.
Found my birthday there, thought this group might be interested.
Jim McKinney
Howard University-----Original Message-----
Subject: IRS Advisory - Website Used for Identity Theft Importance: High At the felony judges meeting information was given out concerning an IRS advisory. Apparently a website has recently been extensively used by criminals interested in stealing identities. The website is www.anybirthday.com . This website lists millions of birthdays. It also contains addresses and other identifying information. I ran a quick check and found that my wife and I were listed but not our daughter. The memo sent out in the DA's office reflects that their staff information also appeared when checked. There are two aspects to this database. You should remove yourself from this data base for obvious reasons since apparently it has become a very popular tool among scam artists - instructions to follow. The other is you can use this service to rapidly search for people all over the country. To remove your name, go to the website and see if you are listed. If you are, click on the FAQ button, then the "privacy statement" button and finally on the "opt out option" button. You will need to enter your information exactly as it appears on the record you pulled up, and then click the "remove my record" button. This should remove you from the data base. Hints: do not list a middle initial, and dob is day-month-year ie 01JAN99.
Reply from David R. Fordham [fordhadr@JMU.EDU]
I kept trying and sometimes it comes up and other times it doesn't. And when it comes up, it is slow as molasses in the Tunguska.
After waiting the 10 minutes, it finally brought me up, but (along with a couple dozen other people who share my name), it listed me at five different zip codes, four of which I haven't lived in for between 11 and 17 years. -- I'd say this site is of limited usefulness.
Another search yielded my grandfather, who has a very unique name, but has been dead for 22 years! There was no mention of the fact that he's dead. Again, such quality problems degrade the site's usefulness in my mind. Also, the search feature appears to limit your limits, so to speak. My wife has a common name, and thus the search yielded what might be hundreds or thousands of entries.
Being something of an amateur genealogist, I laugh out loud at privacy freaks who complain about sites like this. It would shock and scare the heck out of them if they were to visit their local library and spend an hour or two with the reference librarian learning of the ease with which I, they, or anyone else can find out practically all the information that is offered by any of these sites, including the really good ones.
Ready to be surprised? Visit your local Vital Statistics office in your county courthouse. You (or anyone) can get a copy of birth certificates, marriage licenses, real estate deeds, liens, tax histories, and all kinds of stuff, most of which is indexed, and most of which is available in most counties on microfiche to anyone who walks up to the reader. In the past five years, I've probably been in thirty counties, in Georgia, Virginia, Florida, Maryland, and North Carolina, getting public records, and they have been readily, easily available in every single one. No problem, no hassle, no qualifications, just a few that charge a dollar or two for a hardcopy.
(The only limitation I've run into is that Florida recently starting "covering up" the "cause of death" on death certificates when they make a hardcopy from the microfiche, unless you check a block on the copy request form that says you are a relative. But then, the clerk never asked me to *prove* that I was a relative...)
Some, like Manassas and Fairfax VA, Jacksonville FL, even Statesboro GA, have indexes of public records in the public library, giving the exact book number, fiche number, and/or page number of the record you want as long as you know the name.
Or, go to your public library and ask the reference desk for the "City Directory". Names, places of employment, occupations and positions, former employers, whether you own your home or are renting, etc. etc., all indexed and easy to read. Sitting right there on the shelf, too. Some of the older ones even had salary information.
(There are other sources of salary data, but I'm not going to divulge the details. My wife was amazed to learn that our local libraries have my salary (and those of my colleagues and other public employees) ready and waiting for anyone who walks in. But even private company salary data is available in some cases.)
Most libraries and practically all historical society collections have indexes of birth and marriage announcements from local newspapers. Some even have newspaper indexes (indices?) by person's name appearing in news stories. Many smaller towns and counties publish the real estate transfers and sales prices in the newspaper. A lot of these are indexed by name after a year or two.
Court records are by law open to the public in all but a few cases, and are well indexed. In our county, you can walk into the courthouse, walk right up to a computer terminal, and pull up a driver's driving record, including tickets, insurance "points", etc. back at least 15 years. It is widely used by our local trucking companies to check records of job applicants, but you and I can use it, too, and there is no one around to ask us why we would need it! The terminal is sitting on a counter at the end of an open hallway, with instructions for use.
Privacy pundits are trying to close the barn door, and the horse has gone out, around the track, won the race, and is relaxing in the pasture. The piggies, geese, and laying hens are out, too.
Removing your name from these websites may make it a little more difficult for the "merely curious", but you can bet your bottom dollar it won't stop anyone who desires to create mischief for you. There are too many other avenues and easy (really, really easy) ways to get the information. The web simply makes it accessible to those who don't want to have to find a parking place at the library, city hall, county courthouse, or local historical society. A real identity thief won't be deterred by removing your name from a site like this...
Another couple of pennies from David Fordham
U.S. Businesses Join International XML
Debate
U.S. businesses join international standards body to determine the fate and
shape of XML. http://www.newmedia.com/default.asp?articleID=3412
Bob Jensen's threads on XML are at http://www.trinity.edu/rjensen/xmlrdf.htm
Miserable Melodies --- http://www.miserablemelodies.com/
For example, Leonard Nimoy sings "If I Had a Hammer" and Burt Reynolds belts out "The First One That I Lay With."
Some One Liners
"My Mom said she learned how to
swim when someone took her out in the lake and threw her off the boat. I said,
"Mom, they weren't trying to teach you how to swim."
Paula Poundstone
"Sometimes I think war is God's
way of teaching us geography."
Paul Rodriguez
"Relationships are hard. It's like
a full time job, and we should treat it like one. If your boyfriend or
girlfriend wants to leave you, they should give you two weeks' notice. There
should be severance pay, and before they leave you, they should have to find you
a temp."
Bob Ettinger
"My parents didn't want to move to
Florida, but they turned sixty, and that's the law."
Jerry Seinfeld
"Bigamy is having one wife/husband
too many. Monogamy is the same."
Oscar Wilde
Advice for the day: If you have a lot
of tension and you get a headache, do what it says on the aspirin bottle:
"Take two aspirin" and "Keep away from children"
Author Unknown
A November 2001 message from Ken Lay, CEO of Enron
Happy Thanksgiving!
This past weekend, I was rushing around in Houston, Texas trying to do some holiday season shopping done. I was stressed out and not thinking very fondly of the weather right then. It was dark, cold, and wet in the parking lot as I was loading my car up. I noticed that I was missing a receipt that I might need later. So mumbling under my breath, I retraced my steps to the mall entrance. As I was searching the wet pavement for the lost receipt, I heard a quiet sobbing. The crying was coming from a poorly dressed boy of about 12 years old. He was short and thin. He had no coat. He was just wearing a ragged flannel shirt to protect him from the cold night's chill. Oddly enough, he was holding a hundred dollar bill in his hand. Thinking that he had gotten lost from his parents, I asked him what was wrong. He told me his sad story. He said that he came from a large family. He had three brothers and four sisters. His father had died when he was nine years old. His Mother was poorly educated and worked two full time jobs. She made very little to support her large family. Nevertheless, she had managed to skimp and save two hundred dollars to buy her children some holiday presents (since she didn't manage to get them anything during the previous holiday season).
The young boy had been dropped off, by his mother, on the way to her second job. He was to use the money to buy presents for all his siblings and save just enough to take the bus home. He had not even entered the mall, when an older boy grabbed one of the hundred dollar bills and disappeared into the night. "Why didn't you scream for help?" I asked. The boy said, "I did." "And nobody came to help you?" I queried. The boy stared at the sidewalk and sadly shook his head. "How loud did you scream?" I inquired.
The soft-spoken boy looked up and meekly whispered, "Help me!"
I realized! that absolutely no one could have heard that poor boy cry for help. So I grabbed his other hundred and ran to my car.
Happy Thanksgiving everyone!
Signed,
Kenneth Lay Enron CEO
Bob Jensen's threads on Enron humor are at http://www.trinity.edu/rjensen/fraud.htm#Humor
Steven Filling send me the following link to a video history of Enron. It is in many ways a good summary, although I was turned off by the political overtones aimed at President Bush. The video seems to be politically motivated rather than education regarding the facts.
Energy deregulation took place in 1993, seven years prior to when the Bush/Cheney team took office in Year 2000. Energy deregulation was forced mainly under the influence of Phil and Wendy Gramm. It is not at all clear that Bush or Cheney played a major role after taking office. You can read a timeline at http://www.trinity.edu/rjensen/fraud.htm#bribes
Keep in mind that energy deregulation is not necessarily a bad thing in and of itself. It was a bad thing in the way Enron abused the deregulation with political influence and bribes. By way of analogy, commercial airplanes are good things that were turned into weapons by terrorists. Energy deregulation can be a good thing unless turned into a weapon by greedy investment bankers and traders.
Steve's message is as follows:
Bob -
Wasn't sure if this was included in your enron links.
http://minibytes.mondominishows.com/enron/main.asp
cheers s.
Note from Bob Jensen:
I have to fly from San Antonio to Mason City, Iowa on March 5. Since I will be driving back to San Antonio during our Spring Break, I only needed a one way airline ticket. The price for a one-way ticket was quoted as $685. But the airline's agent recommended that I get the round trip ticket for $335 and throw away the return ticket. Is there anybody named Robert E. Jensen who wants to fly from Mason City to San Antonio in the next six months?
Forwarded by Dick Haar
First, buying paint from an ordinary hardware store:
Customer: Hi. How much is your paint?
Clerk: We have regular quality paint for $18 a gallon and premium paint for $25. How many gallons would you like?
Customer: Five gallons of regular paint please.
Clerk: Great. That will be $90 plus tax.
Now, imagine you are buying paint from an airline.
First you spend days trying to reach them by phone to ask if they have paint.
Nobody answers.
So you drive to an Airline store:
Customer: Hi. How much is your paint?
Clerk: Well, sir, that all depends on quite a lot of things.
Customer: Can you give me a guess? Is there an average price?
Clerk: Our lowest price is $12 a gallon, and we have 60 different prices up to $200 a gallon.
Customer: What's the difference in the paint?
Clerk: Oh, there isn't any difference; it's all the same paint.
Customer: Well, then I'd like some of that $12 paint.
Clerk: When do you intend to use the paint?
Customer: I want to paint tomorrow. It's my day off.
Clerk: Sir, the paint for tomorrow is the $200 paint.
Customer: When would I have to paint to get the $12 paint?
Clerk: You would have to start very late at night in about 3 weeks. But you will have to agree to start painting before Friday of that week and continue painting until at least Sunday.
Customer: You've got to be kidding!
Clerk: I'll check and see if we have any paint available.
Customer: You have shelves FULL of paint! I can see it!
Clerk: But it doesn't mean that we have paint available. We sell only a certain number of gallons on any given weekend. Oh, and by the way, the price per gallon just went to $16. We don't have any more $12 paint.
Customer: The price went up as we were talking?
Clerk: Yes, sir. We change the prices and rules hundreds of times a day, and since you haven't actually walked out of the store with your paint yet, we just decided to change. I suggest you purchase your paint as soon as possible. How many gallons do you want?
Customer: Well, maybe five gallons. Make that six, so I'll have enough.
Clerk: Oh no, sir, you can't do that. If you buy paint and don't use it, there are penalties and possible confiscation of the paint you already have.
Customer: WHAT?
Clerk: We can sell enough paint to do your kitchen, bathroom, hall and north bedroom, but if you stop painting before you do the bedroom, you will lose your remaining gallons of paint.
Customer: What does it matter whether I use all the paint? I already paid you for it!
Clerk: We make plans based upon the idea that all our paint is used, every drop. If you don't, it causes us all sorts of problems.
Customer: This is crazy!! I suppose something terrible happens if I don't keep painting until after Saturday night!
Clerk: Oh yes! Every gallon you bought automatically becomes the $200 paint.
Customer: But what are all these "Paint on sale from $10 a gallon" signs?
Clerk: Well, that's for our budget paint. It only comes in half-gallons. One $5 half-gallon will do half a room. The second half-gallon to complete the room is $20. None of the cans have labels, some are empty and there are no refunds, even on the empty cans.
Customer: To hell with this! I'll buy what I need somewhere else!
Clerk: I don't think so, sir. You may be able to buy paint for your bathroom and bedrooms, and your kitchen and dining room from someone else, but you won't be able to paint your connecting hall and stairway from anyone but us. And I should point out sir, that if you paint in only one direction, it will be $300 a gallon.
Customer: I thought your most expensive paint was $200!
Clerk: That's if you paint around the room to the point at which you started. A hallway is different.
Customer: And if I buy $200 paint for the hall, but only paint in one direction, you'll confiscate the remaining paint.
Clerk: No, we'll charge you an extra use fee plus the difference on your next gallon of paint. But, I believe you're getting it now, sir.
Customer: You're insane!
Clerk: But we're now Canada's only paint supplier! And don't go looking for bargains! Thanks for painting with our Airline.
Next!
I liked the one below about Teaching Accounting in the 1970s. It is so true!
Also forwarded by Dick Haar
Teaching Accounting in 1950:
A logger sells a truckload of lumber for $100.
His cost of production is 4/5 of the price.
What is his profit?
Teaching Accounting in 1960:
A logger sells a truckload of lumber for $100.
His cost of production is 4/5 of the price, or $80.
What is his profit?
Teaching Accounting in 1970:
A logger exchanges a set "L" of lumber for a set "M" of money.
The cardinality of set "M" is 100. Each element is worth one dollar.
Make 100 dots representing the elements of the set "M."
The set "C", the cost of production contains 20 fewer points than set "M."
Represent the set "C" as a subset of set "M" and answer the following
question: What is the cardinality of the set "P" of profits?
Teaching Accounting in 1980:
A logger sells a truckload of lumber for $100.
His cost of production is $80 and his profit is $20.
Your assignment: Underline the number 20.
Teaching Accounting in 1990:
By cutting down beautiful forest trees, the logger makes $20.
What do you think of this way of making a living?
Topic for class participation after answering the question:
How did the forest birds and squirrels feel as the logger cut down the trees?
There are no wrong answers.
Teaching Match in 2000:
A logger sells a truckload of lumber for $100.
His cost of production is $120.
How does Arthur Andersen determine that his profit margin is $60?
Forwarded by Auntie Bev
COMMENTS MADE IN THE YEAR 1957
I'll tell you one thing, if things keep going the
way they are, it's going to be impossible to buy a
week's groceries for $20.
Have you seen the new cars coming out next year? It
won't be long before $5,000 will only buy a used
one.
If cigarettes keep going up in price, I'm going to
quit. A quarter a pack is ridiculous.
If they raise the minimum wage to $1. nobody will be
able to hire outside help at the store.
When I first started driving, who would have thought
gas would someday cost 29 cents a gallon. Guess
we'd be better off leaving the car in the garage.
Kids today are impossible. Those duck-tail hair cuts
make it impossible to stay groomed. Next thing you
know, boys will be wearing their hair as long as the
girls.
I'm afraid to send my kids to the movies any more.
Ever since they let Clark Gable get by with saying
"damn" in Gone with The Wind, it seems every movie
has either hell or damn in it.
I read the other day where some scientist thinks
it's possible to put man on the moon by the end of
the century. They even have some fellows they call
astronauts preparing for it down in Texas.
Did you see where some baseball player just signed a
contract for $75,000. a year just to play ball? It
wouldn't surprise me if someday they'll be making
more than the President.
I never thought I'd see the day all our kitchen
appliances would be electric. They are even making
electric typewriters now.
It's too bad things are so tough nowadays. I see
where a few married women are having to work to make
ends meet.
It won't be long before young couples are going to
have to hire someone to watch their kids so they can
both work.
Marriage doesn't mean a thing anymore - those
Hollywood stars seem to be getting divorced at the
drop of the hat.
I'm just afraid the Volkswagen car is going to open
the door to a whole lot of foreign business.
Thank goodness I won't live to see the day when the
Government takes half of our income in taxes. I
sometimes wonder if we are electing the best people
to congress.
The drive-in restaurant is convenient in nice
weather, but I seriously doubt they will ever catch
on.
There is no sense going to Lincoln or Omaha anymore
for a weekend. It costs nearly $15. a night to stay
in a hotel.
No one can afford to be sick anymore - $35. a day in
the hospital is too rich for my blood.
If they think I'll pay 50 cents for a hair cut, forget it.
>>
>> Before you you know it, mailing a letter will cost a nickel.
>>
Diary Entries of a Young Woman on a Cruise Ship:
Dear Diary,
MONDAY: What a wonderful cruise this is going to be! I felt singularly honored this evening. The Captain asked me to dine at his table.
TUESDAY: I spent the entire afternoon on the bridge with the Captain.
WEDNESDAY: The Captain made proposals to me unbecoming an officer and a gentleman.
THURSDAY: Tonight the Captain threatened to sink the ship if I do not give in to his indecent proposals!
FRIDAY: This afternoon I saved 1600 lives.
Just another day on the river
http://koti.mbnet.fi/~soldier/towboat.htm
A husband is advised, by a psychiatrist to assert himself. "You don't have to let your wife henpeck you! Go home and show her you are the boss!"
The husband takes the doctor's advice. He rushes home, slams the door, shakes his fist in his wife's face and growls, "From now on, you're taking orders from me! I want my supper right now, and when you get it on the table, go upstairs and lay out my best clothes. Tonight I'm going out with the boys, and you are going to stay home where you belong! And, another thing, guess who's going to comb my hair, give me a shave and tie my necktie.....?"
His wife calmly says, "The undertaker........"
Forwarded by Auntie Bev
The 92-year-old, petite, well-poised and proud lady, who is fully dressed each morning by eight o'clock, with her hair fashionably coifed and makeup perfectly applied, even though she is legally blind, moved to a nursing home today. Her husband of 70 years recently passed away, making the move necessary.
After many hours of waiting patiently in the lobby of the nursing home, she smiled sweetly when told her room was ready. As she maneuvered her walker to the elevator, I provided a visual description of her tiny room, including the eyelet sheets that had been hung on her window. "I love it," she stated with the enthusiasm of an eight-year-old having just been presented with a new puppy.
"Mrs. Jones, you haven't seen the room .... Just wait."
"That doesn't have anything to do with it," she replied.
"Happiness is something you decide on ahead of time. Whether I like my room or not doesn't depend on how the furniture is arranged ... it's how I arrange my mind. I already decided to love it ...
"It's a decision I make every morning when I wake up. I have a choice; I can spend the day in bed recounting the difficulty I have with the parts of my body that no longer work, or get out of bed and be thankful for the ones that do. Each day is a gift, and as long as my eyes open I'll focus on the new day and all the happy memories I've stored away ... just for this time in my life. Old age is like a bank account ... you withdraw from what you've put in ... So, my advice to you would be to deposit a lot of happiness in the bank account of memories.
Forwarded by Debbie Bowling
Here's a joke I found that would be good for your bookmarks:
Church Anecdote: A preacher was completing a temperance sermon: with great expression he said, "If I had all the beer in the world, I'd take it and throw it into the river."
With even greater emphasis, he said, "And if I had all the wine in the world, I'd take it and throw it into the river."
And then, finally, he said, "And if I had all the whiskey in the world, I'd take it and throw it into the river."
He sat down. The song leader then stood very cautiously and announced with a pleasant smile, "For our closing song, let us sing Hymn #365: 'Shall We Gather At the River.'"
(the above was from the following: http://www.rinkworks.com/said/bulletins.shtml
Forwarded by Cindy Happy,
Muldoon lived alone in the Irish countryside with only a pet dog for company.
One day the dog died, and Muldoon went to the parish priest and asked, "Father, me dog is dead. Could ya' be sayin' a mass for the poor creature?"
Father Patrick replied, "I'm afraid not; we cannot have services for an animal in the church. But there are some Baptists down the lane, and there's no tellin' what they believe. Maybe they'll do something for the creature."
Muldoon said, "I'll go right away Father. Do ya' think $5,000 is enough to donate for the service?"
Father Patrick exclaimed, "Sweet Mary, Mother of Jesus! Why didn't ya' tell me the dog was Catholic?"
And that's the way it was on March 4, 2002 with a little help from my friends.
In
March 2000, Forbes named AccountantsWorld.com as the Best Website on the
Web --- http://accountantsworld.com/.
Some top accountancy links --- http://accountantsworld.com/category.asp?id=Accounting
For accounting news, I prefer AccountingWeb at http://www.accountingweb.com/
Another leading accounting site is AccountingEducation.com at http://www.accountingeducation.com/
Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/
How stuff works --- http://www.howstuffworks.com/
Bob
Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm
and http://www.trinity.edu/rjensen/HelpersVideos.htm
Professor
Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134 Email: rjensen@trinity.edu
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Since this February 25 edition of New Bookmarks came out to be nearly 100 pages, I cut out the Enron scandal updates and pasted them to a new document at http://www.trinity.edu/rjensen/fraud022502.htm
Quotes of the Week
Internet usage
both in school and at home has increased dramatically. The Web has become an
important tool for instruction and administration, as well as a rich source for
information and resource sharing. According to the U.S. Census Report issued in
September 2001, 51 percent of schools had one or more computers in August 2000,
compared to 4.2 percent in December 1998. Nine out of 10 children have access to
a computer - four out of five at school and about two out of three at home.
Two-thirds of homes with a school-aged child have a computer; 53 percent have
Web access. Though computers are more available, they are not equally
distributed.
Educating the Web Community, T.H.E. Journal, February 2002, Page 8
This
unparalleled growth of enrollment for courses delivered via distance education
also prompted a restructuring of the services available to faculty. This growth
expanded the number of faculty teaching students at a distance, a vast increase
in courses offered, and new degree, degree completion, and specialized programs.
The distance education growth experienced by the university prompted the senior
instructional systems designer to evaluate practices and operations. During the
evaluation process, it became apparent that a unique faculty development model
would have to allow faculty to focus on instruction by providing a full range of
services to faculty, including expanding student support services
Mark Fink (See below)
He is having a
field day with the apparent anarchy which he perceives is reigning the field of
accountancy vis-ŕ-vis the *bickering* over the 150 hour rule, the *bickering*
over the XYZ, and now the *bickering* over computerizing what is perceived by
outsiders as a 1940's-era style examination requirement. Maybe we should just
give up and all go join the Information Systems professional organizations. At
least they already have a reputation for being free-spirits, loose cannons,
fruits-nuts-and-flakes. And they don't have to wear coats and ties to their
clients, anymore, either.
David Fordham's Brother-in-Law (See below)
The teen brain
is a work in progress.
Frontline: Inside the Teenage Brain (See below)
One shows
respect for books by using them.
Umberto Eco
DO NOT STAND
AT MY GRAVE AND WEEP
This link was sent to me by Paula Ward --- http://www.cantusquercus.com/9611text.htm
Do not stand at my grave and weep, I am not there, I do not sleep.
(1) I am a thousand winds that blow. I am the diamond glint on snow. I am the sunlight on ripened grain. I am the gentle autumn rain.
(2) When you wake in the morning hush, I am the swift, uplifting rush Of quiet birds in circling flight. I am the soft starlight at night.
Do not stand at my grave and weep. I am not there, I do not sleep. (Do not stand at my grave and cry. I am not there, I did not die!
Text by Mary Frye (1942)Do not stand at my grave and weep. I am not there, I do not sleep.
(3) I am the song that will never end. I am the love of family and friend. I am the child who has come to rest In the arms of the Father who knows him best.
(4) When you see the sunset fair, I am the scented evening air. I am the joy of a task well done. I am the glow of the setting sun.
Do not stand at my grave and weep. I am not there, I do not sleep. (Do not stand at my grave and cry. I am not there, I did not die!
Text by Wilbur Skeels (1996)
We are such
stuff / as dreams are made on
William
Shakespeare
This is such stuff/ as nightmares are
made on:
This passage demonstrates the miserable ethics of investment banking and the
crying need for FAS 133 that went into effect in 1998. The passage is
written by Frank Partnoy, FIASCO: The Inside Story of a Wall Street
Trader (New York: Penguin Books, 1999, ISBN 0 14 02.7879 6, pp. 65-67)
Note especially the customers that were targeted for these high risk derivative
financial instruments.
From a salesman's perspective, he may as well have been selling exploding Ford Pintos. A salesman cared only about making the sale, not about the damage it might cause later. All derivatives salesmen knew that eventually some of their trades would blow up, and some of their clients would then go up in flames. If the losses really got ugly, you always could quit the firm. If you had a reputation for selling dangerous high-margin derivatives, it would be easy to get another job.
From the firm's perspective it was important to make as much money up front as possible on these trades. Take out a big fee, plant the time bomb, walk away, and wait. Of course, after the explosion the derivatives losers would sue, but as long as the firm had made enough money up front and could defend the lawsuit adequately, it would be fine. The important message I took from the disclaimers was this: The way you made money selling derivatives was by trying to blow up your clients.
I examined the two-page term sheet. It said this trade was a one-year bond with a guaranteed annual coupon payment of 11.25 percent. That was a huge coupon, especially given that the bond was issued by a U.S. agency. U.S. agencies are virtually risk-free, and a normal bond issued by one would pay a coupon of maybe half that much. What was the catch?
The formula for principal redemption said the return of the amount you originally invested was linked to the difference in one year between the value of the Thai baht and a "basket" of currencies. This basket was composed of approximately 84 percent U.S. dollars, 10 percent Japanese yen, and 6 percent Swiss francs. If in one year the baht and the basket had changed by the same amount, you would get all of your principal back. So if you bought $100 million of this derivative, and the baht matched the basket, you would receive a whopping $11.25 million coupon plus $100 million in principal, an enormous total return. However, if the changes in the baht and the basket did not match exactly, you might get less than your entire principal amount back; you might even get zero.
Was there any reason to expect the baht to match the basket? First Boston said yes. Thailand had a "managed currency," which meant its central bank, the Bank of Thailand, adjusted the daily value of the baht based on certain variables, including the value of Thai foreign trade.
First Boston had designed this basket to duplicate the formulas they believed the Bank of Thailand was using to manage the baht. Although the Bank of Thailand kept those formulas top secret, First Boston claimed it had discovered them.
If First Boston was right, you would earn the cool, calm 11.25 percent and never realize you had been in the eye of a storm. However, if the Bank of Thailand zigged when you thought it would zag, you would be swept into a monsoon and wiped out. This trade was a perfect example of the tactic cited by the infamous BT salesman: "Lure people into that calm and then just totally fuck 'em." (After a few years in that calm, investors were stunned in July 1997, when the Bank of Thailand announced it was abandoning the formulas, and the baht--together with its associated derivatives--immediately collapsed.)
You might have some questions about this derivative. Who was buying it and why? Were they just speculating, or did they believe First Boston had discovered a secret formula? And if this trade was such a good bet, why was First Boston offering to sell the trade, rather than taking the risks itself? Was First Boston taking the other side of this bet, or were they hedging somehow? Why were U.S. government agencies involved in this trade, issuing bonds linked to a complex formula based on how the Bank of Thailand managed its currency? And most importantly, how much money was First Boston making on the sales of these derivatives?
I asked one of the salesmen a few of these questions, starting with, "Who buys these things, anyway?"
No answer. The salesman refused to tell me. I thought the buyers might include hedge funds, the swashbuckling traders who placed big, sophisticated bets in nearly every market. I mentally ticked off a list of the most sophisticated private hedge funds. They had names like Quantum or Tiger or Gordian Knot. I decided to pester the salesman until I got an answer.
"Is it Quantum?" Quantum, originally started by financier George Soros, was now the largest hedge fund in the world. Quantum and Soros had made (and lost) billions speculating on foreign exchange rates.
"No way. Are you kidding me?" It was a stupid question. The top hedge funds were much too sophisticated to buy this trade from First Boston. They could place such bets on their own, without paying First Boston's hefty fees. Whom did that leave?
"Other investment banks?"
"No again." A second stupid question. Another bank, such as Morgan Stanley or Goldman Sachs, was more likely to be selling the trade than buying it.
"How about mutual funds?" I knew the big funds played in emerging markets derivatives. Could Fidelity or Templeton be a buyer?
"Nope."
"Commercial banks?"
"No."
I was running out of choices. I pressured the salesman to admit who was buying the Thai baht trade.
"Look, I'm not gong to tell you any names, but if I tell you who the main categories of buyers are, will you leave me alone?"
"OK." I cold badger him for names later.
He said, "State pension funds and insurance companies."
"What?" I was shocked.
He just smiled.
"Really?" I asked him. I couldn't believe it. "State pension funds and insurance companies?"
The salesman simply nodded. He said state pension funds were among the biggest buyers of structured notes, of which this Thai trade was but one example. Generally the list of structured note buyers included the State of Wisconsin and several counties in California, including Orange County, although the salesman noted that this Thai trade was small and unusual and that state pension funds and insurance companies typically bought other types of structured notes.
Sate of Wisconsin? Orange County? That seemed ridiculous. Why were they buying these risky derivatives trades? The next thing you know, someone would try to claim Procter & Gamble was a big derivative buyer.
I asked, "What about insurance companies?" They're conservative investors. Why would they buy these structured notes?"
He looked at me as if I were a moron. "Come on. These notes are issued by U.S. government agencies. They're rated AAA or AA, and they're the only way for an insurance company to play the foreign exchange markets. Isn't it obvious?"
The following is quoted from Page 96:
Michael Lipper of the fund-tracking company Lipper Analytical Services said that the warnings applied to mutual funds, too; 475 of 1,728 stock, bond, and balanced funds had invested billions in derivatives, yet such holdings "magically seem to disappear" the day funds have to file statements with shareholders. Although mutual funds are forbidden by government regulation from using leverage to buy securities with borrowed money, the Investment Company Institute, a Washington-based mutual fund trade group, announced that mutual funds not only held derivatives worth $7.5 billion (2.13 percent of total assets), they owned $1.5 billion of the special derivatives called structured notes, of which PERLS was one type. For example, Fidelity Investment's $10 billion Asset Manger fund had $800 million invested in structured notes in the last quarter of 1993, including leveraged bets on Finnish, Swedish, and British interest rates. One note, based on Canadian rates and leveraged thirteen times, had gained 33 percent the previous year; in the first four months of 1994, that same note plunged 25 percent. What was worse, the mutual fund trade groups didn't even seem to know about the purchases of PLUS Notes.
Bob Jensen's other illustrations of how the professions of financial analysis and investment banking are rotten to the core are given at http://www.trinity.edu/rjensen/fraud.htm#Cleland
The following February 21 message was forwarded by George Lan [glan@UWINDSOR.CA]
In addition to trying to catch a tiger by the tail, today's auditors of derivatives may also have to contend with : .
LYONS (liquid yield option notes) .
CATs (certificates of accrual on Treasury certificates) .
COUGRs (certificates of accrual on treasury certificates) .
TIGRs (Treasury investment growth certificates) .
ZEBRAs (zero coupon eurosterling bearer or registered accruing certificates) .
OPOSSMS (option to purchase or sell specified mortgage-backed securities)Journal of Accountancy (November 1990), from which the above definitions come from, has a fascinating glossary of selected financial instruments. The list must be extended by now as it is stated in the glossary that, "Wall Street innovators devise new financial instruments faster than Campbell's make alphabet soup." Some other esoteric names mentioned in the glossary include : flip-flop notes, COPS, DARTS, PIK, STRIPS, Butterfly spread and CIRCUS.
George
Please Try Your Best to Answer Questions Coming In From the World
It is impossible to generalize with respect to professors helping others in the world. Each case has unique circumstances. The privileges that go with being admitted to the academy entail heavy obligations to be a Good Samaritan on the Information Highway. Selfishness breeds dysfunctional selfishness. Generosity breeds functional generosity. People do return favors at times when you least expect it. And even if they don't return a favor, their notes of gratitude just plain make your day!
Always remember that you generally receive as much or more than you give when you help someone else, including complete strangers. Most questions that I research free for others make me a better scholar. Most answers that I dig up can usually improve one or more of my 10,000+ Web documents such that I can now be more proud of that document, especially when I discover that what I'd previously written was totally idiotic.
Most importantly, when you start growing old and senile like me, your discoveries while helping others, discoveries that you also put into Web documents, become part of your extended brain. Anything you can do to improve your Web documents will someday return to help you out of a bind when memory fails.
By setting an example, you inspire others to be more sharing among members of the academy. How many of you are inspired to help when examples are set by a Denny Beresford, a Richard Campbell, a Jagdish Gangolly, a George Lan, an Ed Scribner, a Roger Collins, a Scott Bonacker, an Andrew Priest, a David Albrecht, an Eliot Kamlet, a Roger Debreceny, a Glen Gray, and far-away folks like New Zealand's Robert.Walker, and many others, all of whom share their knowledge freely and frequently? How many of you are really grateful when a professor such as Baruch Lev is willing to provide working research papers at his or her Website? These are Good Samaritans who have special respect in the academy.
How many of you are turned off by the few egotists in the academy who feel that someone should pay for every piece of knowledge they impart other than the words in their published research papers (which indirectly lead to payment due to the merit raise systems of their employers)? A pay-as-you-go system just does not work efficiently or effectively in the knowledge academy.
I am most inclined to help when the request comes from persons not likely to have access to helpers, libraries, T1 lines, and other knowledge resources. For example, requests from students or professors in developing nations are very difficult for me to turn down.
I am inclined to help anybody (even high salaried employees of accounting or business firms) if I think that my answer to their question might help a broader audience such as subscribers to the AECM. Generally if I answer those requests, the person asking the question must agree to my disclosure of his or her email address since I feel that much can be gained from subsequent dialog on the issue from my AECM friends (and you all really are friends out there).
Unreasonable requests such as a request to summarize the history of auditing (the request recently received by Jagdish) can be answered rather quickly by short answers that give very broad guidance such as references to a few books on the history of auditing or a suggestion of how to obtain a helpful Web search using helpers noted at http://www.trinity.edu/rjensen/searchh.htm
Sometimes a complex answer can be reduced to a few suggested search terms to use in the Advanced search site of Google. You, as an "expert," should be familiar with key words or phrases that others may not think of when embarking on a search. For example, when an executive from Rice recently asked me how to find data on hiring of women by accounting firms, I suggested some key words that she claims helped her greatly when she then searched on Google.
It also helps when you maintain over 10,000 documents at your Website. Many questions you then receive are from people who are almost certain that you can find the answer at your own Website after they become hopelessly lost in the swamp that you created. And they are correct in most cases, although sometimes I get mired down in my own Website muck. Getting lost myself is the best lesson that I need to improve the navigation aids to some module among the documents.
And the bottom line is that those of us who are teachers will help our own future students by taking the time to write down (at a Website) answers to questions from strangers, because when your own students one day have the same questions, you can find the answer in your extended (Web) brain.
Obviously, you must draw the line if a person repeatedly wants to turn you into an unpaid research assistant. I've never encountered this uncomfortable situation. You also must draw the line if you are like Jagdish in a situation where you are truly inundated with requests such that it is impossible to find the time for everybody. This is no excuse, however, for not helping as many as you can find some time to help.
Sorry to preach on this one, but if I've inspired just one lurking Good Samaritan out there, it was worth it.
Bob Jensen
-----Original Message-----
From: George Lan [mailto:glan@UWINDSOR.CA]
Sent: Tuesday, February 19, 2002 9:19 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: Help requests.Hi Jagdish,
Sounds to me that these are hitch-hikers of the information highway. Generally, one does not have the time, nor is it safe, to give free rides to unknown parties.
I rarely receive any such requests but if I do, I'll ask them to search the library first-- it's part of the learning process.
George Lan
University of Windsor----- Original Message -----
From: J. S. Gangolly <gangolly@CSC.ALBANY.EDU>
To: <AECM@listserv.loyola.edu>
Sent: Monday, February 18, 2002 2:13 PM
Subject: Help requests.For the past few months I have been inundated with requests for all sorts of things from students from all parts of the world. I am appending below some that I got just last week (I have deleted the identity of the senders, though I am tempted to reveal them in public interest). I was wondering if this is a pervasive > phenomena, or I just happen to be a lone unfortunate person.
Jagdish
Message from Scott Bonacker, CPA [scottbonacker@MOCCPA.COM]
In another situation, the way that they handle those kinds of questions is to refer the asker to this URL: http://www.ultratech-llc.com/KB/?File=~Help.TXT where it begins "Every few months or so, the issue of answering newbie questions and whether people are doing sufficient research prior to requesting assistance rages on the various lists. On the one side, we have the 'Everyone was once a newbie' crowd, with the opposing forces made up of the 'Kindly Do Your Homework' contingent."
When it was used on me I thought it was a constructive way to suggest better preparation, and maybe it would be something you could use as well.
Scott Bonacker,
CPA McCullough, Officer & Company,
LLC Springfield, Missouri moccpa.com
February 19 reply from Amelia Baldwin [abaldwin@CBA.UA.EDU]
I admit I have sometimes responded (can you point me to articles on such and such topic? how can i get a copy of this article you wrote?) and sometimes not (please tell me how expert systems have impacted auditing so i can complete this class assignment)...
I agree with the spirit of Bob's email. Unfortunately, few of us are as well organized and prolific as he is at posting our thoughts and work for others to view. I do post a huge amount of info on my websites (last i checked, about 250mb of stuff), but I admit it is neither so thoughtful as Bob's nor so interesting.
In my experience, some requests come from folks who have stumbled on some part of my website (usually created for students, but i don't see any reason to password it either) and have not found enough info for whatever their purposes are and want me to find more for them... heck, I've already found lots for them! Others are just genuinely curious or journalists, and a few are PhD students desperately searching for reference material.
I think it's interesting how the web and other technologies give us this great opportunity to spread knowledge on the one hand, but then adds to our burden to DO IT, on the other.
In my experience, efforts to use technology to deliver information (to students, colleagues, whomever) are still seen by the powers that be as "hobbies" and not worth consideration in P&T decisions. I don't agree, for sure, but clearly many decision-makers' activities lend support to that view. When a tenure committee says it will only consider your website if you print it out and include it in your binder, that's clearly a bad sign.
If you haven't seen this article (dated Friday?) in the Chronicle: "Ever So Slowly, Colleges Start to Count Work With Technology in Tenure Decisions" http://chronicle.com/free/v48/i24/24a02501.htm
:o)
Amelia
February 19 reply from Andy Lymer
I read this thread with interest - as one of the editors (with Andrew Priest) of the AccountingEducation.com community (and the one who gets most the emails to @accountingeducation.com more importantly) I get about 5-10 of these types of requests a day! I have policy that means I answer questions where, like Andrew, the person appears to have done a bulk of the work themselves and are genuinely seeking guidance to help them take the next step. However, I have a standard email that goes to anyone whom I suspect is just emailing me their class assignment and hoping I'll do it for them! The email says its in their interests to do research for class assignments themselves and their tutor would not thank me for doing it for them - if they want to ask a specific question I'll do my best to offer help or point them to someone who can help - but it must be a specific question not a general one.
My twopence (I'm from the UK!) worth on this issue. I am obviously not as generous as Bob - but then I manage to get to sleep every night - which is something I suspect he can't always fit in!
Cheers
Andy Lymer University of Birmingham and AccountingEducation.com
Hi XXXXX,
I receive over 50 email messages a day regarding FAS 133. I generally try to get people started along the right track.
I do have a full-time teaching and research professorship and cannot become a private tutor providing free consulting on a daily basis. Your email inquiries are now running one or two per day.
I am afraid that I will have to limit you to one question per month. I realize how difficult it is to get into FAS 133, but you must realize that I cannot provide consulting to 50 people a day and still do my own work. I answered your first six technical messages, but I cannot be answering two of your questions per day into the future.
You will have to find some other tutor to help with your questions.
I do apologize, and I hope you understand.
Bob Jensen
New Search Engine
A colleague of mine recently showed me a great new search engine called Vivisimo ( http://www.vivisimo.com ). I use Google most of the time . . ., but I now use Vivisimo when the first few Google hits are not fruitful. I find that the classification structure (similar to file explorer) really helps me to "zero-in" on relevant links.
Rick -------------------------
Richard Newmark Assistant Professor of Accounting University of Northern Colorado Kenneth W. Monfort College of Business Campus Box 128 Greeley, CO 80639 (970) 351-1213 Office (801) 858-9335 Fax (free e-mail fax at efax.com) richard.newmark@PhDuh.com http://PhDuh.com
Reply from Aaron Konstam
I identified the problem. That site does not work with netscape of mozilla from linux. On W2k and IE it works fine.
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
My dad in 1914, when he was about two years old, bit the Blakjer Church's organist on the leg while she was playing one of those old fashioned pump organs in front of the congregation. Now pumpers are coming back!
"Coming soon: foot-powered laptops," by John Leyden, The Register, February 15, 2002 --- http://www.theregister.co.uk/content/54/24090.html
A US developer is coming to market with a device which lets users recharge batteries using a foot-operated pump.
The StepCharger, from AladdinPower, gives approximately 20 minutes of laptop power after five minutes of brisk pumping.
This is not a great deal of time but, as AladdinPower customer services rep Max Smith told us, it could come in extremely handy if you're stuck without access to an external power source or a spare battery.
The StepCharger weighs 10.5 ounces and is roughly the size of a paperback book; it can be used to charge anything from satellite phones to digital cameras and video cameras, as well as laptops. In fact it works with most electrical devices with a rechargeable battery. It provides up to six watts charge at 18 Volts DC, according to Smith (who incidentally helped George Best run his businesses in Manchester in the 70s).
The StepCharger is not yet publicly available (contrary to what it says on the AladdinPower Web site). The US Department of Defense has bought an earlier version of the product for landmine testing and detonation (it's suitable as it can be used to generate and release a well-controlled quantity of electrical power).
Unsurprisingly, the DoD is not keen for civilians to use the StepCharger for this application, so AladdinPower is bringing a consumer version to market. This is expected to cost around $150.
The StepCharger provides approx. four times more power than AladdinPower's hand-powered battery charger, which is designed with mobile phones in mind and is already available for $60. AladdinPower is looking for distributors in Europe and Asia.
External links: StepCharger which we reckon is a lot more promising than something else AladdinPower is currently marketing
Related stories Clockwork computer power planned for next year Earth, Wind, Fire and Water hurled into laptop designs
From Syllabus News on February 19, 2002
SAP Funds E-Business Curriculum Development
SAP America, Inc. last week awarded 10 schools curriculum development grants to encourage undergraduate and graduate study of e-business technology. The awards were based on benefits of a project to students and faculty, and the potential for use of integrated business processes and SAP solutions. The top award of $100,000 went to Rutgers University. Other winners were: Widener University, the University of South Dakota, and California State University, Chico, Northern Arizona University, University of Wisconsin, Milwaukee, the University of Missouri, Columbia, the Kelly School of Business of Indiana University, the Haub School of Business of St. Joseph's University, and Drexel University.
Company Sets Up E-Business Marketplace Testbed
SAP also said it would fund a simulated e-business marketplace at four universities. The initiative, to be called the SAP Simulated Marketplace for Advance Research and Teaching (SMART), is designed to give students first-hand experience with demand across the supply chain, system development and maintenance, and decision-making across a company's value chain. It will be developed by the University of South Dakota; California State University, Chico; University of Missouri; Queensland University of Technology, Australia; and the University of Sao Paulo, Brazil. Schools participating will function as component suppliers, original equipment manufacturers, customers and subcontractors. Transactions will be conducted using the mySAP.com suite of e-business applications.
eCollege Expects to Hover at Breakeven This Year
eCollege, a provider of technology and services for online higher education programs, said it expects to see a pre-tax profit of $500,000 to $2 million in 2002, as well as student fee growth of between 30 to 45 percent. Oakleigh Thorne, the company's chairman, said he expects the company to be "fluctuating around breakeven in the first two quarters." eCollege develops online degree programs for universities. Its clients include National University; Seton Hall University; University of Colorado; DeVry University, Inc.; Kentucky Virtual High School; and Microsoft Faculty Center.
For more information visit: http://www.eCollege.com
"Mangomind" enables you to access and share files such as Microsoft Office for Windows, accounting software files such as QuickBooks, Peachtree and more with your staff and clients. Instantly access up-to- date documents from your home, remote offices, or that vacation hideaway from a secure, central Internet workspace and share them with multiple people in real time. Only authorized users can access files. This easy-to-use and affordable solution starts at just $29.95 per month for up to five unique users. AccountingWEB Members can try it Free for 30 days! Just go to http://www.mangosoft.com/accountingweb/ and click on the Free 30-Day Trial button or call toll free 888-886- 2646 and mention Code AWEB for your Free 30-Day Trial.
Bob Jensen's threads on P2P file sharing are at http://www.trinity.edu/rjensen/napster.htm
Bob Jensen's threads on webledgers are at http://www.trinity.edu/rjensen/webledger.htm
Hi Aaron,
For every downer (e.g., Jane Buck's memo below), there are two or more uppers in distance education.
What I can never quite understand is why the AAUP officials and their hero, David Noble, repeatedly cheer for every downer and hiss at or remain silent about successful programs that are proving to be win/win/win situations for students, faculty, and their universities --- http://www.trinity.edu/rjensen/000aaa/theworry.htm
I find automatic negativism of the AAUP to be non-academic among members of the academy who are supposed to look at both sides of every issue fairly. Why can't the AAUP for once consider how distance education is often benefiting the learning public instead of constantly fighting to rid the world of distance education degree programs? Distance education is a wave of the future that faculty should try to improve and make better for the benefit of learning constituencies?
I do not applaud distance education's failure at SUNY-Buffalo! I am not saying that in this instance that Jane Buck is applauding its failure. What I don't find, however, is any AAUP official sending out a single news message for a successful program. They seem to never miss sending out messages on detected failures. And never once have I seen David Noble giving credit where credit is due for a distance education success. Do I smell academic biases here?
Distance education using modern technologies goes far beyond the realm of "hapless" correspondence courses of the 19th and 20th Centuries --- http://www.trinity.edu/rjensen/000aaa/updateee.htm
My threads on distance education are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
Thanks for forwarding Jane Buck's downer about SUNY-Buffalo.
Bob Jensen
An Upper for Distance Education
"Online MBA programs grow in popularity," by Jerry LaMartina, Kansas City Star Online, July 15, 2001 --- http://www.kcstar.com/item/pages/moneywise.pat,business/37749b46.714,.html
In or out of the Kansas City area, you can earn an MBA in your pajamas if you want.
Online coursework, also known as "distance learning," is growing more common at many colleges and universities. Some offer a few courses online, but others offer entire degree programs with the computer as the classroom.
Richard St. Clair, regional academic director for Webster University in Kansas City, said the school was in its first year of offering online MBA coursework.
Webster offers its entire degree program online, St. Clair said. The curriculum reflects a typical MBA program with some additional electives.
About 14 students in the Kansas City area are getting their degree online. Between 250 and 300 students worldwide do online coursework at Webster, with 80 percent to 90 percent of those doing the entire degree online, he said.
"I'm teaching an organizational development course online, and I know the students better than I would in a traditional classroom," St. Clair said. "I have students from all over the world working on team-based activities for the class. Now that's a rich experience for the students."
Students in online programs tend to communicate more with each other and with the instructor, St. Clair said. Some people might think online coursework is sterile and isolating, but the human touch -- albeit virtual -- can be highly developed.
Webster administers exams online, too. If anomalies surface in students' work, he will call them to talk about it. Otherwise, the school relies on students' integrity to ensure that they are actually the ones taking the tests, St. Clair said.
Tuition for Webster's online coursework costs 10 percent to 15 percent more than for standard courses, while the online student's computer must have Windows 95 or 98 and at least a 120 mHz processor, a 28.8k modem and 32mb of RAM, he said.
Another area school, Keller Graduate School of Management, has been offering its entire MBA online for two years and partial coursework even longer, said Mike Haverty, regional manager.
Tuition at the Kansas City school costs about 35 percent more for online courses than for traditional ones, Haverty said. Students must go to a school center or an other location that is proctored to take exams.
David Overbye, director of curriculum for Keller, agreed that the social and intellectual interaction among students and instructors was greater with online courses. Students communicate in online forums or "threaded discussions." Online students have more time to think and prepare researched, substantiated opinions than do students in traditional classrooms, Overbye said.
Randy Womack of Prairie Village finished his MBA with Keller in April. Womack owns a home-based business called Firehouse Window Cleaning and has a bachelor's degree in electronics from the DeVry Institute of Technology.
He completed about a quarter of his coursework online and said it provided a good change of pace from traditional class settings.
"Online you ended up with a lot more reference materials," he said. "In class I'm not too shy about speaking up," but for the shy student online classes help ease anxiety, he said. He also communicated more with his online instructors than with those for traditional classes.
"I think it lends itself to flexibility," Womack said. "The deeper you want to dig, you can."
Erik Gordon, director of MBA programs at the University of Florida's Warrington College of Business, said the school had offered an entire MBA online for two years. About 40 students have participated each year, Gordon said.
Students must go to campus once at the end of each term for exams. They also meet fellow students, their professors and the next term's professors, who give introductory lectures on their classes. Regardless of where they live, the school requires this on-campus meeting. Prospective students should weigh the cost before they decide to start the program, Gordon said.
Tuition for Warrington's online MBA costs three times as much as its standard MBA program, as does the school's weekend executive MBA program. Gordon acknowledged the greater cost but said students tended to view an MBA as an investment in their futures.
"We've done it for two years now. We've found that students figure out how to jell as a team, and their feedback to us is that they think they've had a great team experience," even better than the experience of students in traditional settings, he said.
The downside of the online approach is the hard work, time and money needed to develop strong courses, Gordon said. The school has its own team of technology developers that creates courses with customized features to make communication among students and instructors as effective as possible, and it is expensive.
"Students don't want classes in which instructors simply post lectures on the Web," he said. Students must have the ability to collaborate while doing their coursework, because MBA curricula -- and the work world -- are so dependent on teamwork, he said.
Not all area MBA programs have an online component.
Wendy Acker, MBA director at Avila College, said Avila offered online courses in some undergraduate programs but not for its MBA students.
"We have certainly discussed the possibility," Acker said. "But I couldn't visualize us offering our entire degree program online. We're a fairly small, liberal arts college." Avila does not have the resources to serve that niche, she said.
John Suter, administrator of Park University's MBA program, said Park also did not offer online courses for its MBA students -- for now.
"I imagine to stay competitive we're going to have to," he said.
Nicolas Koudou, director of Park's MBA program, agreed. The university intends to create online courses in the program, although the cost of doing it could be prohibitive. In the meantime, he recognizes the value of the traditional classroom setting.
"In the classroom, my students tell me that businesses need interaction of the traditional sort," he said.
A Second Upper for Distance Education
"Faculty on the Move: Rethinking Faculty Support Services," by Mark L. Fink, Syllabus, February 2002, pp. 27-29 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=6076
The growth of faculty teaching courses via distance education also increased significantly (at The University of Toledo). In the past year alone, more than 20 faculty members have ventured into the distance education arena. Making any reorganization even more imperative is the impact of faculty teaching more courses. Typically, faculty taught one or two courses per term. Today, faculty are teaching upwards of 21 courses per academic year. The exponential nature of doubling enrollments, new faculty, and faculty teaching more courses, moved the Instructional Design team evaluate its faculty development operations.
This unparalleled growth of enrollment for courses delivered via distance education also prompted a restructuring of the services available to faculty. This growth expanded the number of faculty teaching students at a distance, a vast increase in courses offered, and new degree, degree completion, and specialized programs. The distance education growth experienced by the university prompted the senior instructional systems designer to evaluate practices and operations. During the evaluation process, it became apparent that a unique faculty development model would have to allow faculty to focus on instruction by providing a full range of services to faculty, including expanding student support services.
Back in the early stages of the division, it was achievable for faculty to develop courses by being trained in all aspects of course development. Technology skills were shared with faculty that would enable them to "do it all." Using mid-level software applications, course management skills (e.g., loading students into a course), and increasing faculty knowledge in instructional systems design (ISD), faculty were compelled to manage a diverse range of tasks, and were therefore limited in the time available for instructing other courses.
Needs Assessment
The evaluative process made it clear that faculty could not continue to "do it all." While a handful of faculty enjoyed continuously learning new technological skills and Web devices, the majority did not have the time or motivation to be all things to all courses. Therefore, it was determined by the needs assessment that a reorganization of the process was necessary for continued success. The needs assessment found that faculty desired to spend their already compressed time focusing on interacting with students, rather than spending hours designing hypermedia for distance education delivery.
Additionally, the assessment found that faculty with more time to focus on content could provide greater creativity in reaching students through superior interaction, improved sequencing of content, enhanced assessment instruments, and innovative group projects that stimulate the students' cognitive gain.
In searching for an operational model that would work in the context of the division of distance learning, it became evident that no such model existed: The division is self-supporting, the courses are taught by faculty approved by their respective college and department, and the technologies utilized vary by course.
The growth and the analysis proved two things. First, the self-supporting nature of the division required an implementation that merged corporate instructional design operations with those of high education. Not only did instructional design services necessitate following a corporate model (using ROI, CBA, etc.); it had to maintain the rigorous standards of instructional design practices for the academy. The instructional design work completed at the university had to increase in efficiency and effectiveness. The task of transitioning a team of instructional designers, visual artists, network specialists, and instructors required that faculty were no longer perceived only as colleagues, but as clients.
The assessment proved that any re-engineering should follow standards of the corporate community. The standards as defined by the American Society of Training and Development (ASTD) were incorporated with the standards set by education through the International Society for Technology in Education (ISTE) and the best practices recommended by the American Federation of Teachers.
Client Services Approach
After evaluating the needs assessment and standards, it was determined that the division could serve faculty and students best by providing a complete range of client services. This includes a laundry list of services to enable faculty—and students—to have the greatest opportunity to engage in the process of learning within the virtual walls of the academy. In assisting faculty in course development, the ISD team can create a complete course for the faculty member, including an ISD design, Web-based content pages, photography, graphical imaging, original artwork, animation, video, audio, and other related services for the course.
Given such a dramatic shift in distance learning operations, it was necessary that the structure reflect the philosophical shift to faculty-as-client. The Client Services Model (CSM) provides a unique perspective at developing courses to be taught at a distance by consulting with clients to ensure that the needs of the students, the faculty, and the university are met.
Several considerations were made in developing this model. As the division is responsible for providing distance education opportunities for all the colleges, dividing Instructional Design work by college appeared logical at first glance. After investigating this possibility, it was determined that there would not be a transfer of knowledge across disciplines. For example, if an instructional designer working for a client in the physical sciences designed a problem-based learning (PBL) instrument, the instrument—or a component of that instrument—might prove beneficial in a social science. Although this works well in higher education, cross-disciplinary design still had to be managed like a corporate ISD Department. Because of faculty constraints on time, it was necessary that faculty know whom to contact to resolve a certain issue. Although that instructional designer may have the answer for the client, the client is responsible for seeing that the person responsible for the issue within the division is informed.
Faculty Process
Although it appears that the CSM requires a larger staff, the staffing is comparatively less than many institutions with fewer courses. When a faculty member is confirmed as teaching a distance learning course, the director of distance learning notifies the IT specialist. The senior instructional designer assigns an instructional systems design team for the client. The team consists of an instructional systems designer with formal knowledge in learning theories partnered with a visual/digital artist. Next, the instructional design team schedules an orientation meeting with the new client explaining the services available from the Division of Distance Learning.
The client is the content expert, the mentor, the instructor, and the director of the course. The orientation includes training on the course portal used and "homework." The client considers the new possibilities that the delivery media will provide for course interaction and presentation, or discovers what will not transfer well from the traditional classroom. Although printed materials are given to all clients at this orientation, each meeting varies based on the characteristics of the client, the course, and the objectives of the instructional materials. Meetings with the client continue on a regular basis to provide continuous quality improvements.
Continued at http://www.syllabus.com/syllabusmagazine/article.asp?id=6076
A Downer for Distance Education
Forwarded by Aaron Konstam [akonstam@trinity.edu]
THE STATE UNIVERSITY OF NEW YORK at Buffalo's School of
Management pulled the plug on its 18-month-old Web-based M.B.A. program last week. The business school joins a growing list of institutions that have concluded that online programs aren't worth the expense and hassle.
See http://chronicle.com/free/2002/02/2002022001u.htm
Jane Buck, Ph.D.
National President American Association of University Professors
"SUNY-Buffalo Drops Online M.B.A. Program," by Katherine S. Mangan, Chronicle of Higher Education, February 20, 2002 --- http://chronicle.com/free/2002/02/2002022001u.htm
The State University of New York at Buffalo's School of Management pulled the plug on its 18-month-old Web-based M.B.A. program last week. The business school joins a growing list of institutions that have concluded that online programs aren't worth the expense and hassle.
Only 35 students signed up for the two pilot courses offered in the fall of 2001. Buffalo had hoped to expand its course offerings and enroll 1,000 students by January of this year. However, administrators decided not to market the program aggressively when it became clear that they didn't have the money to sustain it.
"Each course has to have an instructor, a graduate assistant, technical people to be there in case the connection breaks down, as well as someone to design the course," said Howard G. Foster, associate dean for academic programs at the business school. "We've found these courses to be very labor-intensive."
In order to recoup its costs, the business school would have had to charge around $23,000 for the two-year program. While that's far less than many private schools charge, it is more than double the in-state tuition for Buffalo's traditional M.B.A. program.
Many faculty members resisted teaching in the program, either doubting that online courses were as effective as classroom-based instruction, or worrying that teaching the courses would take too much time. Professors who teach online often report that getting up to speed on the technology can be frustrating and time-consuming, and that students expect them to be available around the clock.
Like several other business schools whose efforts to expand online have been derailed, Buffalo was burned by an outside partner that failed to live up to its promises. (See an article from The Chronicle, October 5, 2001.)
The Albany-based Institute for Entrepreneurship, which ran into financial and management problems, gave the school only about $65,000 of the $200,000 it had promised, Mr. Foster said. No one at the institute was immediately available for comment.
Mr. Foster said he hasn't given up on the idea that the program might be resurrected, but he said it wouldn't be easy.
"I'm convinced there's a market out there," he said. "The challenge is covering the costs, deploying the faculty, and getting these courses developed."
"Online dating booming in Europe," CNN News, February 15, 2002 --- http://www.cnn.com/2002/TECH/internet/02/13/internet.dating/index.html
LONDON, England (CNN) -- More Europeans than ever before were going online on Valentine's Day, in an attempt to find romance on the Internet.
Dating sites were reporting great increases in registered members as people become more confident using the Internet.
Analysts say people seeking partners online are willing to pay a subscription fee for quality services -- and ones that charge fees are more likely to survive in the future than free sites.
Daniel Stevens, an analyst at Jupiter Media Metrix, told CNN there had been a healthy growth in online dating due to a booming Internet population.
Online dating might attract more people because users can be anonymous, and members are instantly matched as they sign in, he said.
The global dating site Match.com, which says its services have led to more than 1,400 marriages, 75 children and hundreds of thousands of relationships worldwide, is reporting an increase in registered users all over Europe.
During the last two months of 2001, the number of new registered Match.com members grew by 45 percent in Germany, 39 percent in the Netherlands, 27 percent in Spain, 48 percent in France, 39 percent in Italy, and 26 percent in Denmark, vice-president Joe Cohen said.
In the first month of this year alone there had been an increase of 50 percent new UK members registering their profile with Match.com, bringing the total number of UK members to 100,000, he said.
Match.com and uDate.com, which is another global site also reporting a rise, charge a subscription fee of $24.95 a month for users to receive and answer mail from other members. It is free to place a profile on the site.
Continued at http://www.cnn.com/2002/TECH/internet/02/13/internet.dating/index.html
News From the International Forum on Accountancy Development (IFAD) --- http://www.ifad.net
Background At the World Congress of the International Federation of Accountants held in Paris in 1997, James Wolfensohn, President of the World Bank, issued a number of challenges to the accounting profession. One was that the profession was not doing enough to enhance accounting capacity and capabilities in developing and emerging nations. This assessment was accepted by the Council of IFAC and the then President of IFAC, Frank Harding, held discussions with the then Vice President and Controller of the World Bank, Jules Muis, regarding the need to work jointly in this area. Frank Harding suggested that the expertise of the accounting profession and the financial resources of the World Bank and other international financial institutions, when combined and using both their contacts, could be harnessed in the interests of meeting some or all of the needs set out in Wolfensohn's challenge. Following that discussion, there were a number of meetings between potentially interested parties and it was agreed to create the International Forum on Accountancy Development (IFAD). The first meeting of IFAD took place in New York in June 1999. Subsequent meetings have been held in October 1999 in Paris, in March 2000 in Washington, D.C. and in November 2000 in London.
Objectives of IFAD Given the background to its formation, IFAD's draft objectives focused on the development of accounting capacity and capabilities in the developing and emerging nations. However, as a result of the discussion on the IFAD Vision, the first two meetings produced a significantly wider statement of objectives focusing on common world-wide issues in addition to the originally envisaged focus on the developing and emerging economies.
The objectives of IFAD are to:- a. promote understanding by national governments of the value of transparent financial reporting, in accordance with sound corporate governance; b. assist in defining expectations as to how the accountancy profession (in both the public and private sectors) should carry out its responsibilities to support the public interest; c. encourage governments to focus more directly on the needs of developing countries and economies in transition (hereinafter referred to jointly as 'developing countries'); d. help harness funds and expertise to build accounting and auditing capacity in developing countries; e. contribute to a common strategy and framework of reference for accountancy development; and f. promote co-operation between governments, the accountancy and other professions, the international financial institutions, regulators, standard setters, capital providers and issuers.
IFAD has provided a mechanism through which those with an interest in raising reporting and auditing practices can communicate and can develop the partnerships necessary to promote change in an effective and efficient manner.
At the same time as Wolfensohn was issuing his challenge to the accounting profession, world markets were experiencing the impact of the East Asian financial crisis. Amongst the matters highlighted in the analysis of causes of the crisis was the quality of financial information and its variability from country to country. Although the lack of agreed high quality and common practices for financial reporting cannot be realistically considered as a cause of the crisis, the poor quality of the reporting almost certainly made it more difficult to assess the scale of the crisis and to put in place the measures to stabilise the economies and reverse the damage.
When I went to the IFAD site, I found a link to the following:
TWENTY-THREE INTERNATIONAL ACCOUNTANCY FIRMS LAUNCH EFFORT TO CREATE A GLOBAL QUALITY STANDARD FOR AUDITING
(London 19 January 2001) -- Twenty-three international accountancy firms met in London Thursday to develop a Global Quality Standard for firms conducting transnational audits. The intention is to ensure consistent, high-quality auditing practices worldwide as a means of protecting the interests of cross-border investors and other economic decision-makers and of promoting financial market stability. The International Federation of Accountants (IFAC) sponsored the meeting, and the firms will operate as a new section of IFAC known as the Forum of Firms."The launch of the Forum of Firms is another significant step in implementing the plan IFAC adopted last year to strengthen its role as the global standard-setting, self-regulatory and representational body for the profession's audit and assurance-related services," said Tsuguoki (Aki) Fujinuma, President of IFAC. "Commitment to the obligations of membership in the Forum will raise the standards of the international practice of auditing and will strongly serve the interests of the users of the profession's services," he continued.
Globalisation of business and commerce has highlighted the inadequacy of financial reporting and auditing in accordance with purely national standards. Decision-makers need assurance that the financial information on which they base their decisions is transparent, consistent, comprehensive and comparable across national boundaries. Through their commitment to a Global Quality Standard, audit firms that are members of the new Forum of Firms will be able to provide this assurance.
Membership in the Forum of Firms is open to any firm that has or is interested in accepting transnational audit appointments, provided the firm:
- agrees to conform to the Forum's Global Quality Standard, and
- agrees to subject its assurance work to periodic external quality assurance reviews.
- The Forum's Global Quality Standard is likely to include:
- having audit policies and a methodology for conducting transnational audits in accordance with International Standards of Auditing,
- complying with the IFAC Code of Ethics,
- maintaining training programmes to keep partners and staff up to date on international developments in financial reporting, and
- maintaining quality control standards and conducting regular quality assurance reviews to monitor compliance with the firm's policies and methodology.
The Forum of Firms will operate on a provisional basis until IFAC and the participating firms agree on a formal constitution and operating procedures. Considerable work has already been done and the intent is to move from provisional to permanent standing in the next few months."Our meeting yesterday made very good progress on constitutional and operating issues, and there is a high degree of enthusiasm for moving forward as quickly as possible," said Dr. Karl Ernst Knorr, member of the Executive Board of BDO in Germany, who was elected Chairman of the provisional Forum of Firms.
The creation of the Forum of Firms is just one prong of a four-pronged program to restructure and strengthen IFAC. Other aspects of the program include:
- the introduction of a programme for monitoring the compliance of IFAC member bodies (153 professional institutes in 113 countries) with IFAC standards,
- the strengthening of the processes and broadening of the membership of the International Auditing Practices Committee, which sets International Standards on Auditing, and
- the establishment of a Public Oversight Board to oversee the activities of IFAC and the Forum of Firms that affect the public interest.
The IFAC strengthening programme, in turn, fits into the broader initiative to improve the quality of financial reporting and auditing around the world that is being implemented under the auspices of the International Forum on Accountancy Development (IFAD). IFAD brings together more than 30 international public and private organizations, including those representing the accounting profession, regulators, standard-setters, development banks and agencies, governments, and users and preparers of financial information. IFAD was first presented with a "vision" for improving financial reporting and auditing on a worldwide basis in June 1999. IFAD participants endorsed the initiative at their meeting in October 1999."After 18 months of consensus-building and planning, the IFAD 'vision' is now taking concrete form. The agreement to move ahead on the IFAC Forum of Firms is a significant milestone. The coming year will see more, equally important implementation steps. Success will depend upon the commitment of all the interested parties represented in IFAD," said Richard Findlater, a senior partner in Ernst & Young, who participated in the Forum of Firms meeting and represents his firm in IFAD.
IFAC is the worldwide organization for the accountancy profession. Its mission is to develop and enhance the profession to enable it to provide services of consistently high quality in the public interest. Its current membership consists of 153 professional accountancy bodies in 113 countries, representing more than two million accountants in public practice, education, government service, industry and commerce.
I also found the following:
IFAC COMMENTS ON ACCOUNTING FIRMS' GAAP 2000 REPORT (New York 18 January 2001) -- The International Federation of Accountants (IFAC) welcomes the major accounting firms' new report, GAAP 2000: A Survey of National Accounting Rules in 53 Countries IFAC President, Tsuguoki (Aki) Fujinuma said: "The Report is a critical first step in understanding the current international accounting environment. It will assist the profession to play its part in improving worldwide accounting practices." The report contains summary comparisons of national accounting rules against International Accounting Standards (IASs). The great merit of this study is that it allows for easy comparison against one single benchmark. Diverse groups can benefit from the study. Investors will certainly want to know that standards differ from one country to the next, making caution necessary in the cross-border use of financial reports. Governments, regulators, standard setters, international organizations and NGOs (non-governmental organizations) also will find the report informative. It provides them a "snapshot" of the situation as of the end of 2000.
The GAAP 2000 report is one part of a worldwide undertaking to address World Bank President James Wolfensohn's challenge to the accounting profession to "Push the agenda for international harmonization of accounting standards to meet the needs of the global marketplace." He presented this challenge at the World Congress of Accountants, sounding a warning and call to action to preparers and users of financial statements regarding the impact of weak reporting in an economy that is increasingly global and increasingly reliant on information.
This call to action led to the creation by IFAC and the World Bank of the International Forum on Accountancy Development (IFAD). It has created the partnership necessary to encourage improvement in global accounting and auditing practices. IFAD brings together the key international players in the field of accounting including the regulators, the major accounting firms, investors and such organizations as the International Accounting Standards Committee (IASC), the Bank for International Settlements (BIS), the World Bank, regional development banks, the IMF, OECD, UNCTAD and others. Each has a critical role to play in improving the quality of financial reporting around nthe globe. The first step in achieving IFAD's program was to assess the state of accounting internationally. The major firms' report was prepared in response to this need.
Some Technology Resources Available to Educators
"Accountability: Meeting The Challenge With Technology," Technology & Learning, January 2002, Page 32 --- http://www.techlearning.com/db_area/archives/TL/2002/01/accountb.html
Bob Jensen's threads on tools are at http://www.trinity.edu/rjensen/000aaa/thetoolsa.htm
Bob Jensen's threads on resources are at http://www.trinity.edu/rjensen/000aaa/newfaculty.htm
Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm
Bob Jensen's educational technology documents are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
A Clever Way to Stop Some Types of Cheating
Hossein Nouri [hnouri@TCNJ.EDU]
I am assigning a comprehensive take-home problem to my managerial accounting course. In order to force students to do the problem at least by themselves, I am giving different versions of the problem. I prefer students to do the problem using spread sheet. However, I am concerned that one student creates the formula for all parts of the problem on the spread sheet and other students just plug-in the numbers and hand it to me. Do you have any suggestion how this can be avoided? Most of our students use the college's labs to do their assignments, with few using their own computers.
Hossein Nouri, PhD, CPA, CFE
Accountancy Program School of Business
The College of New Jersey
P.O.Box 7718 Ewing, NJ 08628-0718 Tel. (609)771-2176
Fax (609)637-5129 Email: hnouri@tcnj.edu
Reply from Elliot Kamlet [ekamlet@BINGHAMTON.EDU]
Write a macro (or get MIS people to help) to require that the students enter their name as soon as they open the spreadsheet. That name should then be placed in some cell someplace and the column hidden, and in addition the name should appear in some prominent place (say cell A1), then the macro should disable itself. You will know where the name is and can find it when they submit the project. Then just match names.
They can still get around it but some who cheat will probably get caught.
Elliot Kamlet
Reply from Gadal, Damian [DGADAL@CI.SANTA-BARBARA.CA.US]
Here is some Visual Basic to accomplish your spreadsheet task (NOTE: you have two options you can try):
: Put this into the "ThisWorkbook" : folder.
Dim strGenName As String Private Sub Workbook_Open()
done = False While Not done strGetName = InputBox( _
prompt:="Please enter your name.", _
Title:="UserName")
done = True
Wend
Sheets("Sheet1").Range("A1").Value = strGetName 'Option 1: Put name into a hidden sheet
Sheets("Sheet2").Range("A1").Value = strGetName
Worksheets("Sheet2").Visible = xlVeryHidden 'Option 2: Put name into a hidden cell
Sheets("Sheet1").Range("A2").Value = strGetName
Rows("2:2").Hidden = True End Sub
Bob Jensen's threads on cheating are at http://www.trinity.edu/rjensen/plagiarism.htm
From InformationWeek Daily on February 20, 2002
The Computer As Laboratory
Biotechnology companies are driving drug development from the laboratory to the data center. When it takes years of research and millions of dollars to bring a single drug to market, it makes sense for companies to put the burden of success or failure on IT environments that provide high-throughput computing and integrated access to research. Finding ways to effectively manage data that's critical to the development of lifesaving drugs was the focus Tuesday at the BioSilico 2002 conference in New York.
The four greatest challenges to the biotechnology and pharmaceuticals industries are data integration, data volume and computational throughput, security, and process control and knowledge management, says Vijay Pillai, director of Oracle Life Sciences' software development group. Oracle and hardware vendors such as IBM, Compaq, and Hewlett-Packard say they're working together to deliver database and database integration software to help meet these challenges.
With "in silico" research, the computer becomes the laboratory, says Bill Blake, Compaq's VP of high-performance technical computing. The automotive and aerospace industries have been using mathematical models for years to study vehicle performance. "Life sciences industries like biotechnology and pharmaceuticals are now turning their attention to the hardware, software, and networking capacity necessary to reduce the latency of data availability," he says. The biotechnology industry in particular places strenuous demands on its IT systems as these companies turn their focus from the study of genes and proteins to more complex subject matter such as cells and tissue samples.
"This increasingly complex research is fueled by the pharmaceutical industry's demand to discover new drugs," Blake says. "The pharmaceutical industry turns technology into product and profit." Biotechnology is an industry of high risk and high reward, says Srini Chari, IBM Life Sciences' senior manager of solution architecture and strategy: "Many decisions regarding which drugs to develop and how to develop them are made with incomplete data." - Larry Greenemeier
For more, see Lilly Cures Inefficiency With IT http://update.informationweek.com/cgi-bin4/flo?y=eF8z0BcUEY0V20BWqd0Aj
Genetic Research Drives High-End Computing http://update.informationweek.com/cgi-bin4/flo?y=eF8z0BcUEY0V20BWqe0Ak
Count To 10, Then Read This
Keep a close eye on the guy in the next cubicle. If his download times out because of network congestion, you could be in for some serious trouble.
So says a new study measuring "Web rage," or violence caused by Internet-related frustration, performed by U.K.-based polling firm Market & Opinion Research International. The poll found that more than half of all Internet users experience Net frustration on a weekly basis, and one out of 10 users deal with it daily.
When people get mad at the Internet, they take out their anger in the real world. Seven percent of respondents say they hit their equipment. Four percent pound on their desks. And 2% say they've become so upset they've hit the person who sits next to them. Surfers say that slow-loading Web sites are the biggest cause of irritation, followed by unhelpful help buttons and sites that require users to enter personal details before gaining access.
But there may be more to Web rage than just aggravating downloads, says Mark Gorkin, an expert on workplace stress and operator of StressDoc.com. "I think this is a sign more of the transitory and vulnerable nature of the workplace today and the sense that people are feeling like they're just pawns," he says. "This is how the anger gets worked out, through attacking computers or even other workers." Gorkin says management needs to work harder to repair frazzled nerves and rebuild worker confidence. In the meantime, raging Web surfers should take some time away from the keyboard. "Don't shortchange yourself when it comes to physical exercise," he says. "If you're feeling that stressed, get away, walk around for a while." - David M. Ewalt
Has your computer ever inspired you (or a co-worker) to violence? Tell us how you cope with the stress in the Listening Post: http://update.informationweek.com/cgi-bin4/flo?y=eF8z0BcUEY0V20Nmm0AZ
Frontline: Inside the Teenage Brain ---
http://www.pbs.org/frontline/shows/teenbrain/
The teen brain is a work in progress.
Innovation of
the Week
The Secret Lives of Numbers --- http://www.turbulence.org/Works/nums/index.html
The authors conducted an exhaustive empirical study, with the aid of custom software, public search engines and powerful statistical techniques, in order to determine the relative popularity of every integer between 0 and one million. The resulting information exhibits an extraordinary variety of patterns which reflect and refract our culture, our minds, and our bodies.
For example, certain numbers, such as 212, 486, 911, 1040, 1492, 1776, 68040, or 90210, occur more frequently than their neighbors because they are used to denominate the phone numbers, tax forms, computer chips, famous dates, or television programs that figure prominently in our culture. Regular periodicities in the data, located at multiples and powers of ten, mirror our cognitive preference for round numbers in our biologically-driven base-10 numbering system. Certain numbers, such as 12345 or 8888, appear to be more popular simply because they are easier to remember.
Humanity’s fascination with numbers is ancient and complex. Our present relationship with numbers reveals both a highly developed tool and a highly developed user, working together to measure, create, and predict both ourselves and the world around us. But like every symbiotic couple, the tool we would like to believe is separate from us (and thus objective) is actually an intricate reflection of our thoughts, interests, and capabilities. One intriguing result of this symbiosis is that the numeric system we use to describe patterns, is actually used in a patterned fashion to describe.
We surmise that our dataset is a numeric snaphot of the collective consciousness. Herein we return our analyses to the public in the form of an interactive visualization, whose aim is to provoke awareness of one's own numeric manifestations.
The Secret Life of Numbers by Golan Levin, et. al. (February 2002) is a commission of New Radio and Performing Arts, Inc., for its Turbulence web site. It was made possible with funding from The Greenwall Foundation. Further information here.
Reply from David R. Fordham [fordhadr@JMU.EDU]
I'm very surprised, Bob, that you didn't point out that the book's premises are somewhat compromised by the oversight of not differentiating between the secret lives of "numbers", and the secret lives of mere "symbols".
For example, the popularity of "486" and "1040" -- just to pick two of the more notable samples -- do not stem from the *numbers" 486 and 1,040. Rather, it stems from the fact that society uses the *symbols* of "486" and "1040" to represent something relatively unrelated to the actual *numbers* 486 and 1040. And telephone numbers, however easy to remember, are not true "numbers" anymore, either. My phone, for instance, is not the 5405683024th phone in my area of Virginia. My office is not the 329th in the building, or even the 29th room of the third floor, and the 3rd floor is not really the *third* floor of the building, either. Thus, the "numbers" aren't really numbers as much as they are mere symbols which allow ordinal ranking or serial sequencing, much as ordering something alphabetically.
There is a fascinating field addressing the symbolism vis-ŕ-vis ordinality and sequentiality used in modern society. The battery nomenclature (C, D, AA, AAA, etc.), the model railroad classifications (G, O, HO, N, etc.), the microwave radio band designations (C, L, K, X, etc.), not to mention tennis scoring (love 15 30 40 game), and a host of other entertaining whims and fancies are sure to give hours of pondering and thought to those philosophically inclined.
Incidentally, don't overlook the historical event coming up Wednesday! At 2 minutes after eight in the evening, it will be 2002 2002 2002. Get it? Write it with punctuation and you get 20:02 20/02, 2002. This hasn't occurred for over a thousand years: 10:01 in the morning on January 10, 1001)! And it will never, ever happen again because the clock only goes up to 2400. So enjoy 20:02 20/02 2002 on Wednesday!
Now, aren't you glad you work in a profession which values numbers! --- ;-)
David Fordham
James Madison University
Reply from George Lan [glan@UWINDSOR.CA]
A Trivia Question:
Although I do not play much tennis anymore, I could never quite understand the game's scoring (love 15 30 40 game). Is love, the euphemism for zero, used in other instances and why is the difference between love and 15 not the same as the gap between 30 and 40? Is it easier to keep track of the scoring than 0,1, 2, 3 and game? Also imagine writing "love" on a student's assignment in the place of zero!!! :-0,
G.L.
Reply from Tev Estrin [testrin@HOME.COM]
Hi George
Just a bit of trivia I happen to know about. The game of tennis started as a French game and was imported by the British. They kept and anglisized some of the scoring terminology however so that a score of zero which the French had dubbed L'Ouef or goose egg was transliterated as love which it has remained.tev
At Trinity University we subscribe to this accountancy knowledge base.
Accounting regulations and concepts that were once simple and objective have become increasingly complex and voluminous. In today's environment it is essential to find the right information - quickly. PricewaterhouseCoopers Comperio is your one-stop source for financial reporting and assurance literature from authoritative bodies around the world. For your FREE 30-day trial of Comperio, visit us at http://www.accountingweb.com/go/www.pwcglobal.com/comperio
The U.S. Securities and Exchange
Commission says it wants companies to put all their financial filings on their
own websites, including records of insider stock sales --- http://www.wired.com/news/business/0,1367,50414,00.html
"SEC to Firms: Use Your Websites," by Joanna Glasner, Wired
News, February 14, 2002:
The SEC also said it wants companies to make records of insider trades -- which currently can be submitted on paper -- available in electronic format and online.
Although public companies already have to submit most filings to Edgar, the government's public securities database, SEC officials said the proposed new rules would make vital information "more readily available to investors in a variety of locations."
Louis Thompson, president of the National Investor Relations Institute, called the proposal a welcome development, in that it indicates the SEC has recognized the role of company websites in disseminating information.
"The assumption that individuals are cruising Edgar for information is a bit of a folly," Thompson said. "They're much more apt to go to a company website."
The SEC's proposal comes as securities regulators are facing pressure to tighten disclosure rules following the collapse of Enron, which has been criticized for not revealing its extensive debt obligations in prior securities filings.
Besides adding requirements for Web posting, the SEC said it wants companies to submit certain filings more quickly, announce new developments such as debt ratings changes and include more detail about accounting methods in public documents.
"It'll be very helpful in terms of the overall transparency of the market," said Paul Maco, a partner at Vinson & Elkins and former director of the SEC's office of municipal securities.
Although most companies already post investor information on their websites, the SEC proposal would take the practice a step farther. It would require that companies immediately post every filing submitted electronically to the SEC, and not only select documents like annual and quarterly reports.
One reason for making companies post data on their websites is that investors will get information more quickly than they would on Edgar, the government's database for filings.
Currently, filings are only made publicly available on Edgar 24 hours after they are filed, and investors who want real-time information have to rely on privately run sites like FreeEdgar.
Another reason for putting data on company websites is that it could make it easier for investors to check for new filings or receive e-mail alerts when new documents come in, John Nester, an SEC spokesman, said.
Nester said it will take several months for the SEC's proposal to take effect, if it ever does. The agency must first publish a formal draft and collect comments on it from the public.
Last week, the SEC proposed more than a dozen disclosure rules to give investors a better picture of publicly traded companies sooner. But many IT departments don't have the tools in place to deliver the numbers. http://update.informationweek.com/cgi-bin4/flo?y=eF830BcUEY04e0BWl10At
Bosch Universe (Art and Art History) --- http://www.boschuniverse.org/
The Girl Scouts (in a research survey) discovered that about 30 percent of teenaged girls have been harassed online, and they hold a media conference to talk about it. Noah Shachtman reports from New York --- http://www.wired.com/news/culture/0,1284,50413,00.html
The February 2002 issue of Issues in Accounting Education will be in the mail soon.
If you purchased electronic access you can now view this issue through the American Accounting Association's new electronic publications system at http://aaahq.org/ic/browse.htm
Beginning with this issue, Issues in Accounting Education will no longer include Teaching Notes associated with the cases it publishes. Those Teaching Notes will now be available only online, limited to full members of the American Accounting Association.
For the February 2002 issue of Issues in Accounting Education, full members may use the following URL, Username, and Password to access the Teaching Notes:
Craig
[Craig Polhemus, American Accounting Association]
You can probably rent them for laughs
at Blockbuster
The 100 Worst Films of the 20th Century --- http://www.thestinkers.com/100stinkers.html
For nearly three years, this site has solicited visitor's suggestions for the worst films ever made. That list ("100 Years, 100 Stinkers"), was finalized on December 31, 2000. A final ballot was posted on January 1, 2001 and for ten weeks, visitors could vote. Below are the top twenty vote getters.
20. Ishtar
19. Barb Wire
18 Godzilla (1998)
17. Anaconda
16. Stop or My Mom Will Shoot
15. Ace Ventura 2: When Nature Calls
14. The Avengers
13. Grease 2
12. The "Look Who's Talking" Sequels
11. Jaws 4: The Revenge
10. Waterworld
9. The Blair Witch Project
8. Showgirls
7. It's Pat
6. Speed 2: Cruise Control
5. Spice World
4. Howard The Duck
3. Batman & Robin
2. Wild Wild West
1. Battlefield Earth
From Information Week Daily on February 15, 2002
**Major Companies Ready New Online Job Site
A new employer-backed online job board could be to Monster.com and HotJobs.com what airline-backed travel site Orbitz is to Travelocity and Expedia. DirectEmployers.com, to be unveiled Tuesday, is backed by more than 15 international companies, including IBM, Intel, Lockheed Martin, Nestle, Raytheon, Sprint, and Unisys. Participants span industries from advertising to aerospace.
The site, run by the E-Recruiting Association, a nonprofit established by senior human-resources execs from the participating companies, will offer a gateway to companies' own recruiting Web sites, cutting out the commercial online recruiting sites in the online job-seeker strategy.
Monster, Yahoo Inc.'s HotJobs, and thousands of other online recruiting sites receive the majority of their revenue from companies using their service to post job advertisements. But Monster won't lose its pre-eminent position just yet, thanks in part to massive brand strength, says Chris Boone, International Data Corp.'s E-recruiting analyst. "There would have to be a huge, critical mass of companies to make a dent in Monster.com's market share," he says, noting the job board's Super Bowl commercial as only one aspect of its million-dollar marketing campaign.
Online recruiting is one of the most profitable ventures for the Internet. Earlier this week, Yahoo completed its acquisition of Monster competitor HotJobs. The Internet portal won HotJobs in a successful hostile bid against Monster to diversify its revenue channels. - Elisabeth Goodridge
For more, see: Yahoo To Scoop Up HotJobs http://update.informationweek.com/cgi-bin4/flo?y=eF3w0BcUEY0V20BVcJ0Au
Best Practices For E-Recruiting http://update.informationweek.com/cgi-bin4/flo?y=eF3w0BcUEY0V20BWh20Ac
Bob Jensen's career helpers are at
http://www.trinity.edu/rjensen/bookbob1.htm#010304Careers%20in%20Accountancy
February 15, 2002 Message from David Mazzotta [dmazzotta@provide.net]
Hi Bob.
I love reading your bookmarks and I just noticed you linked up the Fortune magazine list of 100 Best Companies to Work For.I had a little fun deconstructing that article on my personal weblog: http://www.damsite.blogspot.com/2002_02_01_damsite_archive.html#9583320 Thought you might enjoy it.
Best, David Mazzotta www.damsite.blogspot.com
My module on this Fortune ranking of firms is at http://www.trinity.edu/rjensen/book02q1.htm#021502
A nice summary of the Consumer Price Index --- http://minneapolisfed.org/economy/calc/hist1913.html
Bob Jensen's links to economic indicators are at http://www.trinity.edu/rjensen/bookbob1.htm#econstatistics
Debbie Bowling forwarded the information below.
"Court to Decide on Web Copyrights," by Gina Holland, iWon News, February 19, 2001
WASHINGTON (AP) - The Supreme Court agreed Tuesday to intervene in a fight over copyrights, deciding whether Congress has sided too heavily with writers and other inventors.
The outcome will determine when hundreds of thousands of books, songs and movies will be freely available on the Internet or in digital libraries.
Groups challenging copyright law argued that justices should protect the public's right to material.
The Bush administration urged the court to reject the groups' appeal. Because copyrighted material can be used under some circumstances, "the concerns and values reflected in the First Amendment are therefore fully satisfied," Solicitor General Theodore Olson wrote the court.
The Constitution authorizes Congress to give authors and inventors the exclusive right to their works for a "limited" time. In 1790, copyrights lasted 14 years. Now it's 70 years after the death of the inventor, if the person is known.
Lawrence Lessig, attorney for the challengers, said the latest 20-year extension approved by Congress in 1998 is ill-timed and unconstitutional.
"Just as the time that the Internet is enabling a much broader range of individuals to draw upon and develop this creative work without restraint, extensions of copyright law are closing off this medium to a broad swath of common culture," he wrote.
The challengers include organizations and businesses that specialize in former copyrighted material, like books, movies and songs. The U.S. Circuit Court of Appeals for the District of Columbia ruled that they "lack any cognizable First Amendment right to exploit the copyrighted works of others."
The Bush administration said Congress promotes progress by giving people rights to their material. The administration also defended lawmakers' decision to apply the 20-year extension to all current copyrighted material, not just future.
"Congress was entitled to establish a system of copyright that treats authors in a more evenhanded fashion," Olson wrote in the government filing.
The 1998 copyright changes, known as the Sonny Bono Copyright Term Extension Act, bring U.S. rules in line with those in the European Union.
Congress extended the term of copyright 11 times in the past century, said law professor Mark Lemley, representing the non-profit Internet Archive.
Lemley told the Supreme Court that copies of old books, movies and sound recordings are being lost before they can be archived. He said in 1930, 10,027 books were published but as of last year, all but 174 were out of print.
If it wasn't for the law, "digital archives could inexpensively make the other 9,853 books published in 1930 available to the reading public starting in 2005," he wrote. If the law "still stands, we must continue to wait, perhaps eternally, while works disappear and opportunities vanish."
Settling another copyright battle, the court ruled last year that free-lance writers have online rights to their work. That decision affected tens of thousands of articles that were in regular newspapers and magazines that had been reproduced in electronic form. In another case in 1991, justices said that telephone directory listings generally are not protected by copyright law.
The case is Eldred v. Ashcroft, 01-618.
---
Appeals Court decision: http://cyber.law.harvard.edu/eldredvreno/legaldocs.html
CARNEGIE FOUNDATION NEWS
NEW BOOK -- Disciplinary Styles in the Scholarship of Teaching and Learning: Exploring Common Ground
The Carnegie Foundation for the Advancement of Teaching recently collaborated with the American Association for Higher Education to publish Disciplinary Styles in the Scholarship of Teaching and Learning: Exploring Common Ground.
The book features 10 sets of disciplinary scholars responding to an orienting essay that raises questions about the history of discourse about teaching and learning in the disciplines, the ways in which disciplinary "styles" of discourse influence inquiry into teaching and learning, and the nature and roles of interdisciplinary exchange.
Carnegie Senior Scholar Mary Taylor Huber and Sherwyn Morreale with the National Communication Association edited the volume.
Carnegie President Lee S Shulman wrote the foreword. Disciplines represented in the book are chemistry, communication studies, engineering, English studies, history, interdisciplinary studies, management sciences, mathematics, psychology, and sociology.
In presenting their own field's "sounds and silences" on the topic of teaching and learning, the authors hope to contribute to a common language for trading ideas, enlarging the pedagogical imagination, and strengthening scholarly work.
The book looks at how the attention to teaching and learning has intensified over the past 10 to 20 years in quantity, quality and participation. The authors suggest that more teaching faculty are bringing innovations into the classroom, and many are beginning to inquire systematically into its effect on their students' learning.
There is evidence of this increased awareness and activity in the number of journals and scholarly society conference sessions about examined teaching, and a shift from the sharing of teaching tips and anecdotes to scholarly research on teaching and learning.
The book is available through the American Association for Higher Education, One Dupont Circle, Suite 360, Washington, DC 20036. Phone: 202/293-6440, Fax: 202/293-0073, or website: http://www.aahe.org/pubs/
The Introduction, written by Huber and Morreale, and Table of Contents are available online at: http://www.carnegiefoundation.org/eLibrary/situating.htm
Hi Duke,
There are no simple tutorials for FAS 133. The problem with FAS 133 is that accountants typically do not have the finance background to understand derivatives. Experts in derivatives generally do not have the accounting background to understand FAS 133 (which assumes an understanding of FAS 115, FAS 52, and various other standards).
There are expensive workshops given by the larger accounting firms, but these are generally too short to do much good.
The FASB has a tutorial CD, but this is somewhat dated and has not been an overwhelming success.
For an introduction to derivatives, I suggest that you begin with the FASB document that can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
The above document, however, will not help you with the accounting. For the accounting, I suggest that you begin with http://www.trinity.edu/rjensen/caseans/000index.htm
The above links will lead you to various examples and tutorials, but none that I know of really help beginners with FAS 133 unless you really understand derivatives.
I am afraid that the only real answer is to first learn about derivatives and then dig into FAS 133 itself with great care looking at all the illustrations and keeping my glossary ever at your side. My glossary is at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
If you get serious about wanting to attend workshops, Ira Kawaller may be able to help at http://www.kawaller.com/
I used to deliver traveling workshops in the major cities, but this became too much of a drain on my time. Plus I think that FAS 133 is just too tough to present well in short workshops. It is better to dig in and then ask questions. Remember that there are no stupid questions when it comes to FAS 133.
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: Duke Bushong [mailto:dukb@pacbell.net]
Sent: Tuesday, February 19, 2002 1:53 AM
To: rjensen@trinity.edu
Subject: hedgingProfessor Jensen, I have an accounting background. I wish to learn about accounting for hedges(credit swaps, derivative's, etc). Is there an online resource that is available.. this is very important to me.
Thank you,
Duke Bushong Ph 760.630.8642
Hi Daniel,
The answers to my FAS 133/138 cases and examples are no longer secret. You can find my solutions files (badly organized I'm afraid) at http://www.cs.trinity.edu/~rjensen/
I suggest that you begin by going to
the file at
http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
Especially note the discussion of the shortcut method at the end of the above
document.
One of the best documents the FASB generated for FAS 133 implementation is called "summary of Derivative Types." This document also explains how to value certain types. It can be downloaded free from at http://www.rutgers.edu/Accounting/raw/fasb/derivsum.exe
And my glossary with other examples is at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
Hope this helps!
Bob Jensen
-----Original Message-----
From: Daniel [mailto:dtoole@eircom.net]
Sent: Monday, February 18, 2002 5:35 AM
To: rjensen@trinity.edu
Subject: Derivatives TutorialsHi Bob,
My name is Daniel Toole and I am a fourth year BSc (Mgmt) undergraduate at the Dublin Institute of Technology, Ireland. I am in the process of researching a dissertation on the availability of substitute securities for pricing and hedging private debt instruments in the absence of a reliable government yield curve. In this regard I am interested in looking at your tutorials on the derivation of yield curves, specifically swap curves. I came across your site through a key word search on google and find it very informative. If possible, can you please forward me the location of your "secret URL's? If you require confirmation of my status, I can have my supervisor e-mail you. Thank you in advance.
Daniel
Hi Donna,
If your client uses variable rate debt as the hedged item, there is cash flow risk and you can hedge this with an interest rate swap. If the hedge and the hedged item are both based on LIBOR, you have eliminated interest rate risk of the combined cash flows and should qualify for the shortcut method as explained in Paragraph 132 of FAS 133. In fact, your example is a lot like Example 5 of Appendix B that begins in Paragraph 131. You can read my discussion of Example 5 at http://www.cs.trinity.edu/~rjensen/133ex05.htm
The Example 5 Excel workbook solution is at http://www.cs.trinity.edu/~rjensen/133ex05.xls
Note in my Excel workbook above how complicated the derivation of fair values of interest rate swaps can become. You have to go to Bloomberg terminals and derive swap (yield) curves. One advantage of the shortcut method is that it allows you to assume that the value of the hedge exactly offsets the value of the hedged item. If the hedged item is easier to value (e.g., if there is a daily market price on the bonds), then you have saved yourself a lot of time and expense of valuing the swap and testing for hedge ineffectiveness.
Whenever possible, interest rate hedges are designed to qualify for the shortcut method.
You can read more about this under my definition of "Yield Curve" at http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
For a better understanding about how FAS 138 impacts upon FAS 133 in this regard, go to the definitions of "benchmarking" at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#B-Terms
Hope this helps!
Bob (Robert E.) Jensen Jesse H. Jones Distinguished Professor of Business Trinity University, San Antonio, TX 78212 Voice: (210) 999-7347 Fax: (210) 999-8134 Email: rjensen@trinity.edu http://www.trinity.edu/rjensen
-----Original Message-----
From: Donna Jones [mailto:djones@tssllp.com]
Sent: Friday, February 15, 2002 12:46 PM
To: rjensen@trinity.edu Subject: FAS133I am wrestling with the requirements of FAS133 as it relates to a client of mine. It is probably a simple case, if there is such a thing, and deals with an interest rate swap. The client has debt through industrial development bonds with a variable rate based on LIBOR. They entered into a swap agreement to fix the interest rate though final maturity of the bonds. This would qualify as a cash flow hedge, I think. The counter party to the agreement has valued the agreement (a market to market value) at year end. I assume I will set this up as a liability (who knew 2 1/2 years ago rates would fall this low) through accumulated other comprehensive income.
My confusion is related to assessing the hedge effectiveness. It appears that this is imperative to qualify for hedge accounting and determine the ineffective portion of the hedge. I am not sure how to document this assessment. If the hedge meets the requirements for the shortcut method of accounting, does this ease the assessment documentation requirements? Would this mean that there would never be an ineffective portion and all changes in the FMV of the hedge would be posted through accumulated other comprehensive income? Basically, they have posted interest paid on the swap agreement through interest expense.
I would appreciate your advice on this case. The information I found on your website was extensive but the requirements are extremely confusing to me. Unfortunately, I am the first partner in my firm to tackle this issue. Please let me know if you need more details of the agreement.
Thank you,
Donna Jones
Thomas, Stout & Stuart LLP
PO Box 2220 Burlington, NC 27216
Phone: (336)226-7343 Fax: (336)229-4204 http://tssllp.com/
Hi Again Donna,
In this added message to you, I am going to feature a quote from a fascinating book by Frank Partnoy. I also want to point you to an important paper by Ira Kawaller. But before doing so, I am going to give you more background that you ever hoped for or perhaps even want.
My purpose is to give your more background on the Shortcut Method and to demonstrate why it is so important for your clients to qualify for the Shortcut Method whenever possible. You can read the following definition in my glossary at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#S-Terms
Shortcut Method = steps to computing interest accruals and amortization adjustments for interest rate swaps that have no ineffectiveness. The main attractiveness of the shortcut it that for interest rate swaps, quarterly testing for hedge ineffectiveness is not required. Whenever possible, firms seek to use the shortcut method. For interest rate swap cash flow hedges the short-cut method steps are listed in Paragraph 132 on Pages 72-73 of FAS 133. For fair value hedges, see Paragraph 114 on Page 62 of FAS 133. See FAS 133 Paragraph 68 for the exact conditions that have to be met if an entity is to assume no ineffectiveness in a hedging relationship of interest rate risk involving an interest-bearing asset/liability and an interest rate swap.
I will digress now and explain the background of FAS 133. FAS 133 arose because of the spectacular increase in the popularity of certain types of derivative instruments, particularly interest rate swaps (that hedge fair values or cash flows) and cross-currency swaps for interest rates and foreign exchange (FX) risk. In the case of both interest rate swaps and cross-currency swaps of interest rate risk, the FASB goofed in the original FAS 133. In the case of interest rates, the goof was to assume that firms hedge sector spreads rather than benchmarked rates. In the case of cross-currency swaps, the goof was to not allow for simultaneous hedging of both interest rate risk and FX risk in the same swap derivative contract. This was rectified in FAS 138 that you can read about at http://www.cs.trinity.edu/~rjensen/000overview/mp3/138intro.htm
Except for futures contracts (that settle for cash daily), there was no fair value accounting for financial instruments derivatives prior to FAS 133 in the U.S. and IAS 39 internationally. Most derivatives like forward contracts and swaps were not booked at all until maturity when cash settlements took place. FAS 133/138 requires booking of most derivatives and subsequent adjustment of the carrying values of the derivatives to fair value at least every 90 days.
Originally, the FASB wanted to book changes in derivative value to current earnings even though such changes are not realized until cash settlements take place. If that became the required accounting treatment, FAS 133 would have been about 20 simple paragraphs, and there would have been no need for the FAS 138 amendments of FAS 133. However, corporate America complained loudly that this simplistic treatment of changes in derivative instrument fair value would lead to reporting asymmetries for hedging contracts that are highly misleading. Their point was well taken in theory. If the hedged item (such as bonds payable) remained at historical cost and the hedging contract (such as an interest rate swap) was carried at current fair value, the changes in the hedge's fair value would create extreme volatility in earnings. Furthermore, such changes in earnings are unrealized and might be perfectly offset by unbooked changes in value of the hedged item. Accounting reality would, thereby, be far removed from economic reality in the case of effective hedges.
The FASB listened to its constituencies and decided to lessen the impact of unrealized changes in hedging contract values on current earnings per share. Doing so added over 500 paragraphs to FAS 133 plus the added paragraphs in the FAS 138 amendments to FAS 133. It left us with the most complex and convoluted standard in the history of accountancy.
Now I will outline at the key issues of hedging ineffectiveness in FAS 133:
1.
Hedge accounting is primarily of interest to your clients because it allows changes in the fair value of a derivative hedge to be offset by something other than current earnings. In the case of cash flow hedges and FX hedges, the offset is usually to Other Comprehensive Income (OCI). In the case of fair value hedges, the offset is either to an account called "Firm Commitment" for unbooked purchase commitments or the hedged item itself for booked assets or liabilities. In the latter case, the historical cost rule of accounting for the hedged item is suspended in favor of fair value accounting for the booked hedged item during the hedging period, after which the accounting reverts back to historical cost. You can read more about this by looking up such terms as "cash flow hedge," "fair value hedge," and "foreign currency hedge" in my glossary at http://www.cs.trinity.edu/~rjensen/000overview/mp3/138intro.htm
2.
Not all economic hedges qualify for hedge accounting, in which case the changes in value of the hedge contract impact directly upon current earnings. Your clients will nearly always want to have their hedges qualify for hedge accounting under FAS 133/138. They will, thereby, avoid the volatility of current earnings caused by fair value adjustments of derivative contracts (other than futures contracts).
3.
FAS 133 requires, except in the case of the Shortcut Method, testing of hedge effectiveness at the time the derivative instruments are adjusted for changes in fair value. To the extent that a hedge is deemed ineffective, the ineffective portion must be charged to current earnings rather than to the permitted offsets such as OCI, Firm Commitment, or the fair value offset debit or credit to the hedged item itself. Testing for effectiveness can be a very complicated process and is highly inaccurate (as you will see in Partnoy's passage quoted below). The importance of qualifying for the Shortcut Method is stressed in a paper by Ira Kawaller cited below.
4.
Testing for hedge effectiveness of interest rate swaps is perhaps the most complicated aspect of any hedge accounting under FAS 133. Appendix A of FAS 133 is devoted to issues of effectiveness testing (although that appendix does not delve into the more complex issues of hedge effectiveness testing of interest rate swaps). Testing for interest rate swap hedge effectiveness requires an understanding of yield curves known as swap curves and an understanding of how to derive forward prices from spot prices on such curves. You can read (and possibly weep) more about how this process works at http://www.trinity.edu/rjensen/acct5341/speakers/133swapvalue.htm
5.
Testing for hedge effectiveness of interest rate swaps is a highly inaccurate process that may give rise to hedge ineffectiveness simply due to the inaccuracy of valuing the interest rate swap (at least every 90 days) relative to the valuing of the hedged item itself (say a bond) that may be valued with great accuracy because it is traded on the open market. In other words, the hedged item (e.g., a bond) can be valued with great accuracy whereas its hedge (the interest rate swap) is a customized derivative contract that is not traded in the open market and can only be valued with great inaccuracy.
6.
The importance of the Shortcut Method (which only applies to qualified interest rate swap hedges) is that hedge effectiveness does not have to be tested when the swap is adjusted to fair value. This avoids the tedium of having to go to Bloomberg terminals and derive the swaps curves. More importantly, it avoids the inaccuracy of these swaps curves in valuing the swap. This, in turn, avoids having to book hedge ineffectiveness to current earnings when, in fact, the ineffectiveness is fiction arising only from inaccuracies in estimation of swap (yield curves).
Now let me quote from a truly fascinating book that I am reading at the moment (perhaps one of the most valued books that I have ever read in my life).
| In a clever but
somewhat dubious marketing pitch for PERLS, DPG salemen often bragged
that the investor's "downside risk was limited to the initial
investment." These words appeared as boilerplate throughout
Morgan Stnley's marketing documents and almost always generated snickers
from the salesmen. One of the ironic selling points of PERLS ---
and many other derivatives my group later sold --- was that the most a
buyer could lose was everything
(Note from Jensen: The buyer would not lose everything in the case of a hedge rather than a speculation). . . . Some PERLS buyers had no idea that the bet they were making by buying PERLS typically was a bet against a set of "forward yield curves." (Note from Jensen: In the case of an interest rate swap, these are called swap curves.) Forward yield curves are a basic, but crucial, concept in selling derivatives. The most simple "yield curve" is the curve that describes government bond yields for various maturities. Usually the curve slopes upward because as the maturity of a government bond increases, its yield also increases. You can think about this curve in terms of a bank Certificate of Deposit. Your are likely to get a higher rate with a five-year CD than with a one-year CD. A yield curve is simply a graph of interest rates of different maturities. There are many different kinds of yield curves. The "coupon curve" plots the yields of government coupon bonds of varying maturities. The "zero curve" plots the yields of zero coupon government bonds of varying maturities (more about zero coupon bonds, also known as Strips later in the book). The coupon and zero curves are elementary, and you can find the quotes that make up these curves every day in the business section of most newspapers. The Wall Street Journal also includes a summary of daily trading activity in such bonds in its Credit Markets column. Note from Bob Jensen: The most important part of this passage begins now: But the most important yield curve to derivatives salesmen is one you won't find in the financial pages --- the forward yield curve, or "forward curve," Actually, there are many forward curves, but all are based on the same idea. A forward curve is like a time machine: it tells you what the market is "predicting" the current yield curve will look like at the same forward in time. Embedded in the current yield curve are forward curves for various forward times. For example, the "one-year forward curve" tells you what the current yield curve is predicting the same curve will look like in one year. The "two-year forward curve" tells you what the current yield curve is predicting the same curve will look like in two years. The yield curve isn't really predicting changes in the way an astrologer or palm reader might, and as a time machine, a forward curve is not very accurate. If it were, derivatives traders would be even richer than they already are. Instead, the yield curve's predictions arise almost like magic but not quite, out of arbitrage --- so called riskless trades to capture price differences between bonds --- in an active, liquid bond market. Continued on Page 58 of the book.
|
The important point is that the value of the interest rate swap derivative contract (the hedge) is usually an "inaccurate" estimate, whereas the value of the hedged item (e.g., a bond) may be highly accurate. If the hedge qualifies for the Shortcut Method under FAS 133, then the need to use such inaccurate value estimates in hedge effectiveness testing is avoided. The value change in the hedge can be assumed to be perfectly correlated (that is negatively correlated) with the value change in the hedged item. Changes in value of the hedge thereby are assumed to perfectly offset changes in the value of the hedged item in the case of a fair value hedge.
For students seeking to learn more
about derivatives and hedges, there are some important free papers by Ira
Kawaller at http://www.kawaller.com/articles.htm
. Several of the more important papers related to the topic at hand are
noted below:
- "Yield Curve Implications of Interest Rate Hedges," A Chicago Mercantile Exchange Strategy Paper. Originally published as "Hedge Interest Rates Now. . . Before It's Too Late," Journal of Derivatives, Spring 1998
- "The New World Under FAS 133 – (Strategies Involving Cross-Currency Interest Rate Swap Contracts)," GARP Review, December 2001/January 2002
- "FAS 133: System Worries," Bank Asset/Liability Management, May 2001.
- "The Impact of FAS 133 on the Risk Management Practices of End Users of Derivatives," Association for Financial Professionals, May 2001
- "The New World Under FAS 133 – (Strategies Involving Cross-Currency Interest Rate Swap Contracts)," GARP Review, December 2001/January 2002
Differences between tax and FAS 133 accounting are discussed in the following paper by Ira Kawaller and John Ensminger:
"The Fallout from FAS 133," (With John Ensminger), Regulation (The CATO Review of Business and Government), Vol. 23, No. 4, 2000.
With respect to the Shortcut Method, I want to call your attention to the following December 2000 message from Ira:
Hi Bob,
I wanted to alert you to the fact that I've added a new article to my site, " The Impact of FAS 133 Accounting Rules on the Market for Swaps, " which just came out in the latest issue of AFP Express. It deals with the consequences of not qualifying for the shortcut treatment when interest rate swaps are used in fair value hedges. (It's not pretty.)
,
I'd be happy to hear from you.
Ira
Kawaller & Company, LLC
(718) 694-6270
kawaller@idt.net
www.kawaller.com
| HEDGING WITH
INTEREST RATE SWAPS
Applying these rules to interest rate risks requires an understanding that both fair value hedge accounting and cash flow hedging will be used, depending on the nature of the interest rate exposure. Specifically, if the intention is to manage the risk of uncertain interest expenses or revenues associated with a variable-rate debt security, then cash flow treatment is appropriate. If the intention is to manage the risk associated with a fixed-rate security, on the other hand, fair value hedge treatment is required. Consider two examples. In a case where an investor holds the fixed-rate security as an asset, the fair value hedge treatment may be reasonable and intuitive. After all, the hedger’s objective is to safeguard its value. Locking in some value for this security is perfectly consistent with the fair value hedge approach. In contrast, however, the hedger who issues fixed-rate debt and decides to swap from fixed to floating reflects a different kind of thinking. The objective of this hedge is not to offset present value effects, but to generate prospective cash flows that, when consolidated with the debt’s coupon payments, will result in a total interest expense that replicates the outcome of a variable-rate loan. It is well known that interest rate swaps generate precisely this set of cash flows, which suggests that cash flow hedging rules should be followed. But this is not the case. When the hedged item is a fixed-rate security, the FASB has mandated that fair value accounting is the only applicable accounting treatment. Unfortunately, in many cases, this requirement will foster an accounting result that is at odds with the economics of the transactions. This seeming ineffectiveness is a consequence of the requirement to use fair value hedge accounting. It does not result from the hedge being inappropriate or badly designed. The shortcut method will circumvent this problem. Qualifying to use shortcut treatment, however, requires that the features of the swap (i.e., the notional amount, payment and reset dates, and rate conventions) match precisely to those of the debt being hedged. If they do, the change in the carrying amount of the hedged item is set equal to the gains or losses on the swap, net of swap accruals, rather than to the change in the value of the bond due to the risk being hedged. Thus, the resulting accounting under the shortcut method replicates the current "synthetic instrument" accounting. Without the shortcut, you get something else. MEASURING HEDGE INEFFECTIVENESS To get a better idea of how serious failing to qualify for the shortcut treatment can be, consider the FASB’s own example,* in which a hedger issues five-year, fixed-rate debt. The debt has a par value of $100,000 and a coupon rate of 10%. The hedging instrument is a five-year swap, receiving 7% fixed and paying LIBOR. The risk being hedged is the benchmark LIBOR-based swap rate. The example assumes a flat yield curve, which simplifies the calculations. According to the FASB’s calculations, a 50-basis point change in the LIBOR-based swap rate will foster a change in the fair value of the swap of $1,675. If the hedger elects, and qualifies for, the shortcut method, the $1,675 would be used for both the swap and the adjustment to the carrying amount of the debt. These two contributions to earnings would be exactly offsetting, so that the ultimate effect on earnings would distill to interest accruals of the debt and the swap, respectively. The synthetic instrument outcome would be realized, where the effective interest rate would be LIBOR plus 3%. (The 3% spread over LIBOR comes from the difference between the 10% fixed rate on the debt versus the 7% fixed rate on the swap.) Without the election of the shortcut method, the swap would generate the same income consequences as above, but the adjustment to earnings from the hedged item’s response to the change in the LIBOR-based swap rate would be different—$1,568 instead of $1,675. This seemingly small difference of $107 is misleading, however. On a yield basis, this discrepancy translates to an interest rate effect of 43 basis points, i.e.
So the question is: If a company is considering swapping from fixed- to floating-rate debt, and the result could end up being 43 basis points—or more—away from the intended outcome, will that company still go ahead with the hedge? For the many (possibly the vast majority of ) potential swappers, this magnitude of uncertainty will be unacceptable and the answer will be no. The recourse will be to take whatever steps are necessary to ensure that the prospective hedge will qualify for the shortcut method. GOOD NEWS The good news is that if entities do qualify for the shortcut treatment, the requirement to document that the hedge will be highly effective becomes moot. The act of qualifying ensures effectiveness. The bad news is that the criteria for qualifying are restrictive. The underlying debt securities have to be "typical," presumably lacking bells and whistles that may have served to reduce costs for issuers in the past. Thus, for those firms with "atypical" debt on their balance sheet, either as assets or liabilities, for which the shortcut method is prohibited, the perfectly functioning interest rate swap will no longer work. And for those cases where the debt security qualifies but the terms of the associated swap do not match up properly, firms will likely want to trade out of their existing swap positions and enter into swaps that do qualify for shortcut treatment. In the longer run, the appetite for anything but plain vanilla swaps may all but disappear if concerns about potential income volatility come to dominate in the decision about which hedging strategy or tool to employ. Continued at http://www.kawaller.com/pdf/Impact.pdf
|
One Man's Eye (Photography History and Appreciation) --- http://www.onemanseye.com/
Richard Campbell called my attention to the following series:
"Con man: A lesson for our
times," by Christopher Byron MSNBC CONTRIBUTOR --- http://www.msnbc.com/news/706567.asp
First in a 5-part series: Enron’s fiasco recalls the 1980’s tale of teenager
Barry Minkow and the ZZZZ Best investor swindle
FESSING UP AND FORGIVENESS
What follows is Barry’s story, much of which has never been revealed until now. He told it to me after he got out of federal prison in 1995, having done 7 1/2 years in stir for his role in the affair. I’ve decided to tell it now, if for no other reason than to remind us of two things that are germane to the Enron scandal: No one ever sets out in life with the goal of winding up in prison, and secondly, that the necessary first step to redemption is fessing up… only after which can come forgiveness and ultimately, peace.
History has a funny way of bringing events into sharper relief the further way we get from them, and the ZZZZ Best Affair was no exception. The scandal unfolded in Los Angeles nearly two decades ago, but the actors and their stage props could have been lifted straight out of the headlines from the final blowout phase of the dot-com era almost twenty years later. The man at the center of the action - Barry Minkow - was barely 16 when economic hardship and the loneliness of late adolescence converged to put him on a track that would end in Terminal Island federal penitentiary. As a member of a working class family in the working class town of Reseda, Calif. outside Los Angeles, Barry hadn’t had an easy life under the best of times. What’s more, like any teenager, he wanted to be accepted, to fit in. But Barry didn’t make friends easily, he was under-sized and underweight, and bigger kids enjoyed pushing him around. Advertisement
To compensate, he started going to a gym in his neighborhood and weightlifting — the Valley Gym and Health Club. He wanted to make himself so huge no one would mess around with him. Also, it was a way to blow off steam at his family, in particular his dad, who somehow seemed to be letting the family down when his real estate business fell apart at the start of the 1980s and he had trouble reestablishing himself in anything else. At times the money got so tight at the Minkow household that the gas company would come over and shut off the heat and hot water, and Barry and the rest of the family would have to take showers at friends’ houses. There was an older guy at the gym named Danny, who always carried around a wad of money. He drove a new truck, and seemed to have everything in control. He was big: 6’ 3”, and he had plenty of muscles. He took a liking to Barry and turned him on to steroids. Barry looked up to him. He seemed to fill a void created by his dad.
A BUSINESS IS BORN When Barry got to high school, he landed a job after school cleaning carpets. One day he went to clean Danny’s carpet and right out of the blue Danny offered to set Barry up in business by buying him his own cleaning equipment. He lent Barry $1,600, and asked for repayment at an interest-only rate of $200 per week.
Barry agreed, though he was only 16 years old. When he told his parents, he left out the “interest only” part because Danny had told him to. There seemed to be something fishy about the deal, but it was exciting and he wanted to go forward with it anyway, so he did what Danny said. In the least, the idea of having his own carpet cleaning business seemed a way to mock and humiliate his dad, who’d gone bankrupt in real estate and now couldn’t find another job. So it would be Barry to the rescue, saving the entire Minkow family from the ruination that his own father had been powerless to fend off.
But Barry also had a secret motive: He wanted to impress a girl in his class named Lisa Petrov.
She lived almost around the corner from his house, in a bigger and better place on Keswick Street. The place had a palm tree in front. It looked grand. In fact, everything about Lisa Petrov seemed grand.
Every 10th grade boy has a Lisa Petrov in his life, and Barry was no exception. She was the embodiment of every secret desire he’d ever known. She was blonde, brown-eyed, and had a voice like Melanie Griffith’s — all raspy and seductive. She was the head of the cheerleading squad. He died for her every night.
Lisa was the ultimate trophy date, and every boy in Cleveland High wanted her, but Barry couldn’t even get her to look his way. He tried everything he knew, and mostly his schemes just blew up in his face. For example, he had a part-time job working behind the takeout counter at an after school hangout in the Valley known as Foster Freeze. He told Lisa to come over one afternoon and he’d give her free food. She did. He gave her a shake, burgers, and fries and she left.
Barry thought, “I’ve got it made in the shade with that move…” Lisa would be his! Unfortunately, the manager had spotted him and he got fired, and after that Lisa just didn’t want to know him. Besides, she didn’t need to. Lisa could have anyone she wanted, so what did she want with Barry Minkow? He was funny looking, he was Jewish — and he couldn’t even steal a burger and fries for her from the Foster Freeze.
Lisa had bigger fish to fry. She had a coterie of homely, suck-up girls who hung around her wherever she went and constantly reinforced her belief in herself. They’d eat by themselves at a table in the lunchroom, and all the guys would simply stare. Lisa didn’t need to date the jerks from Cleveland High at all; she could have any guy she wanted, from anywhere — even from out of town. She actually dated guys from college! This was a woman of the world! Basically, Cleveland High was just some temporary dirt under her shoes.
It really tore Barry up inside. He was from a struggling, cash-strapped family, he wasn’t good looking, and he desperately wanted Lisa to pay attention to him.
That’s when Danny popped up with his offer, and Barry figured, well, this ought to do it for sure! If he had his own business, then Lisa Petrov would absolutely have to notice him. Besides, wasn’t that what Jewish kids did ... become businessmen?
In the end, this scheme also failed, for it turned out that his timing was off. Lisa was a year ahead of him in class, and when he turned senior and really had ZZZZ Best cookin’, Lisa had already graduated, and had gone off and married a baseball pitcher for the Kansas City Royals. But the events set in motion by Barry’s crush on her would, in short order, reach far beyond Reseda, Calif., as the angling young 10th grader from Grover Cleveland High got swept up in the twisted morality of ’80s era capitalism at its worst.
Reply from Dee Davidson on February 20, 2002
All the segments of the Barry Minkow story are now posted. This is an incredible story and a lesson for all. It reminds me of the story of the young man in a European rural community who stole his neighbors sheep until he was caught. As punishment, his forehead was branded with the letters ST, for sheep thief. In atonement for his crime, he chose to do good works among the village for many years. In old age he died. All of villagers went to his funeral and several asked the priest why the man had worn the letters ST on his forehead. The priest replied with the story of the crime. One of the village leaders responded with, "Oh, I always thought it stood for Saint."
dee davidson
Accounting Systems Specialist
Marshall School of Business Leventhal School of Accounting
University of Southern California 213.740.5018 dgd@marshall.usc.edu
Message from Graziella Michelante [michelante@eiasm.be]
With this message, we would like to remind you the following events :
Workshop on Accounting and Economics V
When : June 20-21, 2002
Where : Madrid, Spain
Web site : http://www.eiasm.be/events/WsAccountingEconomics.html
International Conference on Accounting, Auditing & Management in Public Sector Reforms
When : September 5-7, 2002
Where : Dublin, Ireland
Web site : http://www.eiasm.be/events/WsDublin.html
On February 13, 2002 there was a feature on ABC Evening News on television that claimed that airlines were keeping debt on their leased airplanes off the balance sheet. I asked some people to comment on how this is possible.
Reply from John Brozovsky [jbrozovs@mail.vt.edu]
Hi Bob:
Actually the airline case is very long standing. They have been designing their leases to take advantage of capital lease rules since they were promulgated. If you define the life of an airplane to be 21 years than a 15 year lease (which seems to be the most common lease term) does not constitute 75% of the useful life.
Personally I like a suggestion that the Aussie's bought up a few years ago--capitalize any lease that is over one year in length. However, I am not sure this went any further than the talk stage.
John
Reply from Tom Oxner [TOxner@MAIL.UCA.EDU]
According to an article from Business Week (January 28, 2002, pg 36-37) both UAL and AMR have a great deal of off-balance sheet debt in SPE's. Each of these companies has a little less than $8 billion in debt in SPE's which is not shown on their balance sheets. Most of these SPE's are in partnerships with various banks. I would assume that the banks may own the other 3% of the SPE, but that was not stated in the article.
Tom Oxner
Reply from William.Mister@colostate.edu
I have been doing some work on UAL for my financial statement analysis class. Some quick and dirty figures from the 2000 10K show debt/equity without including operating lease obligations is 1.37. With operating leases included the ratio is 3.67. Reported LT Debt and capital leases is 7,119 million. My calculation of the PV of the operating lease obligations is 11,926 million using 10%. Be careful and redo this figures before using them. I once before made an error. :-)
William G. (Bill) Mister
Reply from Murat Tanju [MTanju@WWW.BUSINESS.UAB.EDU]
They actually apply GAAP by not meeting the four conditions of capitalization within the SPE. The profession should not allow off B/S financing! There are also noncancellable operating leases for 30 years or longer where asset and liabilty are off B/S under GAAP that should be brought on B/S but we don't have normative accounting. (Sorry I got carried away!).
Murat N. Tanju
Professor of Accounting
Phone # 205.934.8822 Fax # 205.975.4429
From The Wall Street Journal's Accounting Educators' Reviews on February 14, 2002
TITLE: SEC Still Investigates Whether
Microsoft Understated Earnings
REPORTER: Rebecca Buckman
DATE: Feb 13, 2002
PAGE: A3
LINK: http://online.wsj.com/article/0,,SB1013558932799654480.djm,00.html
T
OPICS: Financial Accounting
SUMMARY: Microsoft is undergoing a continuing SEC investigation into whether the company has understated its revenues. Questions relate to issues in unearned revenue.
QUESTIONS:
1.) What is conservatism in accounting? Is it an accepted practice?
2.) In general, what is unearned revenue? How is it presented in the financial statements? When is this balance recognized as earned? What accounting adjustment is made at that time?
3.) Why must Microsoft record some unearned revenues from software sales? Could that practice be supported through reserves of some cash accounts?
4.) Given Microsoft's recent experiences in testifying against allegations of violating federal antitrust laws, why might the company want to understate its income?
5.) Why does the former Microsoft employee, Mr. Pancerzewski, say that "he disagrees that there is no harm in a company understating its income"? Do you think there could be problems in understating income even for companies that are not facing charges of earning excess profits through anti-competitive practices?
Reviewed By: Judy Beckman, University
of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
Debbie Bowling forwarded the link below:
"Reports: Computer Associates probed over ‘pro forma’ accounting: Software firm says it hasn’t been contacted by investigators," MSNBC News, February 20, 2001 --- http://www.msnbc.com/news/711818.asp
NEW YORK, Feb. 20 — Federal prosecutors have opened a preliminary inquiry into whether Computer Associates International Inc. deliberately overstated its profits to inflate its stock price and enrich its senior executives, the New York Times reported on Wednesday
SINCE OCTOBER 2000, the Islandia, N.Y.-based software company has reported its financial results using a nonstandard ”pro forma” accounting practice that makes its profits and sales seem much larger than under standard accounting rules, the Times said. Former employees have said that Computer Associates began using pro forma accounting because it had run out of ways to inflate its results under standard accounting rules and had to find a new method, the Times said. Early on Wednesday, Computer Associates issued a statement in response to a similar report by the Long Island newspaper Newsday, in which the company said it had not been contacted by the authorities regarding any investigation, and did not know what, if anything, was being investigated. The report said investigators are looking into whether the company has properly distinguished between revenues it receives from the sale of software and the fees it charges to service, upgrade and maintain those software products. Advertisement
“The reporting of our financial results has always been in accordance with all applicable accounting principles,” the company statement said. “If there are questions, we look forward to being contacted and to having the opportunity to defend against hearsay and what we believe will prove to be unwarranted concerns,” the company added. The assistant U.S. attorney for the Eastern District of New York, which oversees Long Island, appeared interested in setting up interviews with former Computer Associates employees but did not indicate whether he planned to issue subpoenas, the Times said.
The collapse of Enron Corp. has resulted in new scrutiny of unusual corporate accounting methods. More technology business news
Bob Jensen's threads on pro forma reporting are at the following two sites:
http://www.trinity.edu/rjensen//theory/00overview/theory01.htm
From the Stanford Law School Securities Fraud Database --- http://securities.stanford.edu/1022/TTWO01-01/
Take-Two Interactive CASE INFORMATION
Summary: According to a Press Release dated December 21, 2001, the complaint alleges that during the Class Period defendants materially misrepresented Take-Two's financial results and performance for each of the quarters of and full year of fiscal 2000, ended October 31, 2000, and each of the first three quarters of fiscal 2001, ended January 31, 2001, April 30, 2001 and July 31, 2001, respectively, by improperly recognizing revenue on sales to distributors. On August 24, 2001, the truth about the Company's financial condition began to emerge when the effects of defendants' scheme began to negatively impact the Company's financial results. It was not until December 14, 2001 and December 17, 2001, however, that the market began to learn that defendants had caused the Company to improperly recognize revenue for products shipped to distributors, where the distributors did not have a binding commitment to pay for the products, in direct contravention of GAAP. Significantly, defendants' unlawful accounting practices enabled defendants to portray Take-Two as a financially strong company that was experiencing dramatic revenue growth, and which was poised for future success when, in fact, the Company's purported success was the result of improper accounting practices. On December 14, 2001, following rumors of a possible restatement of Take-Two's financial results, Take-Two's common stock fell 31% --$4.72 a share to $10.33 per share. During the Class Period, Take-Two shares traded as high as $24.50 per share. Defendants were motivated to misrepresent the Company's financial results, by among other things, their desire to sell approximately 900,000 shares of Take-Two common stock during the Class Period at artificially inflated prices for proceeds of over $15 million.
INDUSTRY CLASSIFICATION: SIC Code: 7372 Sector: Technology Industry: Software & Programming
NAME OF COMPANY SUED: Take-Two Interactive Software Inc.
COMPANY TICKER: TTWO COMPANY WEBSITE: http://www.take2games.com
FIRST IDENTIFIED COMPLAINT IN THE DATABASE Fischbein, et al. v. Take-Two Interactive Software Inc., et al. COURT: S.D. New York DOCKET NUMBER: JUDGE NAME: DATE FILED: 12/18/2001 SOURCE: Business Wires CLASS PERIOD START: 02/24/2000 CLASS PERIOD END: 12/17/2001 TYPE OF COMPLAINT: Unamended/Unconsolidated PLAINTIFF FIRMS IN THIS OR SIMILAR CASE: Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY) One Pennsylvania Plaza, New York, NY, 10119-1065 (voice) 212.594.5300, (fax) , Rabin & Peckel LLP 275 Madison Avenue, New York, NY, 10016 (voice) 212.682.1818, (fax) , email@rabinlaw.com Schiffrin & Barroway, LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com
TOTAL NUMBER OF PLAINTIFF FIRMS: 3
Enron Updates for February 25, 2002
In Congressional hearings on the Enron collapse, Professor Baruch Lev of New York University's Stern School of Business gave the House Committee on Energy and Commerce a short but insightful lesson on the "axis of evil" confronting the accounting profession today. When introducing Professor Lev, Committee Chairman W. J. "Billy" Tauzin said, "If there were a Nobel Prize for Accounting, it would surely have been awarded to Baruch Lev." If his testimony helps lawmakers navigate through this crisis, he may still get that prize. http://www.accountingweb.com/item/71516
IT Braces Against New Enron Aftershock First, companies with accounting woes saw wary investors dump shares. Now, these same firms face a related, and potentially more serious, threat -- class action lawsuits. http://www.newmedia.com/default.asp?articleID=3396
As Questions Mount, Telecoms Get Spinning Global Crossing was one of the first telecommunications firms to become the recipient of regulatory scrutiny following Enron's implosion, but it is not likely to be the last. Trying to head criticism off at the pass, two telecoms are busy spinning their explanations. http://www.newmedia.com/default.asp?articleID=3393
How about improvement of Andersen's verifications of management reports? This is not something new that is needed in the way of auditing standards. It has been a standard ever since the Mckesson & Robbins scandal in 1938. A crisis in public accounting was provided by the celebrated McKesson & Robbins case. McKesson & Robbins, Inc., whose financial statements had been audited by Price Waterhouse & Co., had inflated inventory and receivables by $19 million dollars through falsification of supporting documents. The auditors merely accepted inventory and receivables balances reported by management without bothering to even verify their existence in McKesson & Robbins.
Auditors should verify all major transactions and not confine verifications to inventories and receivables. Does it take an Enron scandal for accounting firms to go beyond inventory and receivables verification?
Why would Andersen sit for over four years without independently verifying what outside equity holders invested in SPEs, especially since the amounts were so vital to financial statements. The fact that Enron put up half of one outsider's equity investment is what triggered the restatement of financial statements and was a key event in the collapse of the company. Why didn't Andersen independently verify what management reported for so many years and then get into a panic when Enron finally disclosed that it lied? Aren't auditors hired to protect investors from management lies?
To me, an auditor's legal defense built upon a contention that management lied to the auditors just does not hold water. Auditors are supposed to independently verify what management provides them, especially on really big-deal items.
All that aside, the actions and possible misdeeds of a few auditors should not cast a shadow over the other (84,000?) professionals in Andersen. Andersen has some of the best professionals in the world and some of the most ethical professionals in the world.
But that does not mean that questions should not be raised about the following:
1. Internal quality controls system-wide that protect the international firm from a bad local audit. For example, why weren't the lead partners on the Enron audit rotated frequently? It would seem that David Duncan was verifying the golf handicaps of Enron top brass more than he was verifying outside investment in SPEs year after year.
2. Why complain about accounting standards so vocally after the horse is out of the barn when Andersen and virtually all other large accounting firms have so actively pressured the FASB and the SEC to not have tougher accounting and auditing standards? See http://www.trinity.edu/rjensen/fraud.htm#Blame
Bob Jensen
-----Original Message-----
From: E. Scribner [mailto:escribne@NMSU.EDU]
Sent: Monday, February 18, 2002 1:30 PM T
o: AECM@LISTSERV.LOYOLA.EDU Subject:
Re: Arthur Andersen Conference CallIt was refreshing in a way to hear directly from the auditors instead of through the lens of the newspapers and without the pressure of Congressional questioning. Maybe I'm still in denial, but I sense a tone of integrity among the auditors that I don't sense among the prominent Enron officials. I certainly want to believe Andersen, but the call didn't provide enough information to enable a judgment on most points. They still seem to be caught between allegations of duplicity at the worst or negligence at best.
The call didn't alleviate my concern that the magnitude of the Enron fees influenced the Houston office's professional skepticism. There also seemed to be confusion between statements to the effect that auditors don't cause companies to collapse but we've got to make some changes. (The conclusion seemed to be, however, that the only changes needed are to improve the accounting standards for SPE consolidation and to take certain steps, albeit reluctantaly, to satisfy public misperceptions--e.g., that consulting conflicts with independence.) The call stressed that the audit was fine except for one blown judgment call and one side-letter that was concealed by the client; the harsh move of firing the lead auditor stemmed from the shredding activity.
But if one missing side-letter can produce such disastrous results, how can an auditor stay with an engagement that is so vulnerable?
As far as influencing my counseling of students, the call had no effect, as best I can read myself. I've always tried hard to give the students the facts as I know them and let them make their own employment decisions.
Hope this vague answer at least stimulates further comments.
Ed Scribner
New Mexico State University
Las Cruces,