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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.
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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