New
Bookmarks
Year 2002 Quarter 2: April 1-June 30 Additions to Bob
Jensen's Bookmarks
Bob Jensen at Trinity
University
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For date and time, try The Aggie Digital Clock --- http://yugop.com/ver3/stuff/03/fla.html
You can read about our August 13 all-day workshop (accounting education technologies and online learning) from Dennis Beresford, Amy Dunbar, Nancy Keeshan, Susan Spencer, and Bob Jensen at http://www.trinity.edu/rjensen/000aaa/cepSanAntonio.htm . To this list of speakers, Susan Spencer has been added. She will talk about her experiences designing learning alternatives for hearing and sight impaired students in her online economics courses.
You can read about our August 14 half-day workshop (Accounting for Intangibles and Internet Reporting: Teaching Modules That Can Be Plugged Into Accounting Courses, Auditing Courses, and Electronic Commerce Courses) from Gerald Trites and Bob Jensen at http://www.trinity.edu/rjensen/000aaa/cepSanAntonio.htm
Bob Jensen's Dance Card
Some of My Planned Workshops and
Presentations --- http://www.trinity.edu/rjensen/resume.htm#Presentations
The August 13 and 14 CPE courses of the American Accounting Association have been posted at http://accounting.rutgers.edu/raw/aaa/2002annual/cpe2002.htm
If you are coming to San Antonio, you may be interested in my welcome links at http://www.trinity.edu/rjensen/sanantonio.htm
Choose a Date Below for Additions to the Bookmarks File
April 30, 2002 April 22, 2002 April 10, 2002
Bob
Jensen's New Bookmarks on June 30, 2002
Bob
Jensen at Trinity
University
If you are coming to San Antonio, you may be interested in my welcome links at http://www.trinity.edu/rjensen/sanantonio.htm
Quotes of the Week
Is there an analogy between atomic
bomb scientist Werner Heisenberg (Germany in 1940) and CPA Joe Berardino (Arthur
Andersen CEO in 2001)?
(See the John Lienhard quoted passage below.)
One nation, under greed, with stock options and tax
shelters for all.
Proposed revision of the U.S. Pledge of Allegiance
An IRS study
released this week shows a growing gap between figures reported to investors and
figures reported for tax income. With all the scrutiny on accounting practices
these days, the question is being asked - are corporations telling the truth to
the IRS? To investors? To anyone?
http://www.accountingweb.com/item/83690
There are
corporate executives so poor that they only have money.
Anonymous
The accounting profession's self-regulatory system was caught in the cross-hairs of a GAO report issued this week at the request of Representative John Dingell. Limitations were highlighted in the report of "a system that is fragmented, is not well-coordinated, and has a disciplinary function that is widely perceived to be ineffective." http://www.accountingweb.com/item/83936
It's not always
egg-heads that do well on IQ tests. Allegedly Marilyn Monroe had a higher IQ
than Einstein! But what is it that makes us intelligent? Are we 'dumbing down'
or getting 'brainier'? Find out in ‘the science of intelligence’.
The Science of Intelligence from the BBC (See Below)
CAMPUS E-MAIL
EXPOSED TO PUBLIC SCRUTINY
Many states identify administrators and professors at public colleges as state
employees, potentially exposing their letters, documents, and e-mail to public
scrutiny under freedom-of-information laws. Some institutions have begun to
update policies to safeguard personal e-mail or warn professors to be careful
what they write. Open-records laws don't specify clearly whether professors'
research notes, lecture notes, or regular mail would qualify as public records,
but most states assume that state employees' e-mail messages are public records,
even when the law is ambiguous. Employees at private colleges can be exposed as
well, although not through open-records laws; a person would need to obtain a
court order or a subpoena, requiring involvement in litigation against the
college.
Chronicle of Higher Education, 17 June 2002 (sub. req'd) http://chronicle.com/free/v48/i41/41a03101.htm
(The quotation was forwarded by Jagdish Gangolly)
There is no
road to freedom, freedom is the road.
Mahatma
Gandhi
A Quote from FAS 123 History (1993)
Dennis R. Beresford and
James J. Leisenring came to the Red Lion Inn on a hot August morning with a
simple goal: to explain a change in an accounting rule. Before it was over they
were lucky to have escaped the first lynching in San Jose in a half-century.
Measuring out the rope were 300 seriously pissed off Silicon Valley CEOs and
other senior execs who could see the ruin of their lives' work because some
glorified bean counters in Washington had decided to count sacrifice flies as
home runs.
Michael S. Malone, Upside Today, November 1, 1993 --- http://www.upside.com/texis/mvm/story?id=34712c0a45
You can attend a live performance by Dennis Beresford in San Antonio on
August 13, 2002 --- http://www.trinity.edu/rjensen/000aaa/cepSanAntonio.htm
A conference is a
gathering of important people who singly can do nothing, but together can decide
that nothing can be done.
Fred
Allen
A synonym is a
word you use when you can't spell the word you first thought of.
Burt
Bacharach
Bidding!
Bargains! Feedback! Why 50 million people are hooked on the
Internet's Hottest Marketplace (EBAY)
Newsweek Cover Story, June 17, 2002. The EBAY homepage is at http://www.ebay.com/
Making Enron's
$600 million restated financial statements look like a mistake in a child's
allowance, the U.S. Treasury has admitted an accounting error and a resulting
loss of $17.3 billion.
http://www.accountingweb.com/item/82161
A billion here, a billion there! Yawn!
IN THE
AFTERMATH of Enron, the tarnished auditing profession has mounted what might be
called the "complexity defense." This involves frowning seriously,
intoning a few befuddling sentences, then sighing that audits involve close-call
judgments that reasonable experts could debate. According to this defense, it
isn't fair to beat up on auditors as they wrestle with the finer points of
derivatives or lease receivables -- if they make calls that are questionable,
that's because the material is so difficult. Heck, it's not as though auditors
stand by dumbly while something obviously bad happens, such as money being
siphoned off for the boss's condo or golf course.
Washington Post Editorial, June 1, 2002 --- http://www.washingtonpost.com/wp-dyn/articles/A49512-2002Jun2.html
The big
[firms] in the audit world and the Wall Street firms have obviously been
lobbying intensively for months to prevent effective action in these areas. We
know that some of those people have met with Chairman Pitt. I believe that he
has strongly held views about a number of these issues that predate his arrival
as chairman at the SEC.
Damon Silvers (See below)
What are the three main problems facing the accountancy profession at the present time? See my WorldCom, Enron, and Andersen scandal updates at http://www.trinity.edu/rjensen/fraud063002.htm
One of the best sites that I have encountered regarding news and issues in
corporate governance is maintained by Robert Monks at http://www.ragm.com/index.asp
The site should also be of great interest to those interested in ethics,
environmental, and social responsibility. Robert Monks is a veteran
director of over a dozen large corporations. At best he is only cautiously
optimistic about reforms that might emerge from the current scandals like Enron,
WorldCom, and Andersen. He most certainly thinks that members of the audit
committees and boards of directors are ineffective in controlling corporate
graft, because they do not have access to company resources needed for such a
task Robert Monks is featured on Page 35 of the June 2002
issue of Financial Executive --- http://www.fei.org/magazine/May2002.cfm
I organized an all-day distance education and learning technologies workshop for August 13, 2002 in the Marriott Rivercenter Hotel in San Antonio. The original slate of speakers included the following:
To this list, I have added the following speaker:
The workshop is explained in greater detail at http://www.trinity.edu/rjensen/000aaa/cepSanAntonio.htm
TIPS FOR COLLEGE-BOUND COMPUTER BUYERS
Here's a quick tour of features you'll want your campus machine to have and some
you can overlook http://www.businessweek.com/technology/content/jun2002/tc20020611_5912.htm?c=bwtechjun14&n=link9&t=email
Some of you may have missed the following entry in the June 21 edition of Double Entries
William R. Kinney, Jr. was recently named by the American Institute of Certified Public Accountants (AICPA) as the 2002 recipient of its Distinguished Achievement in Accounting Education Award. The annual award recognizes full-time college accounting educators for excellence in teaching and national prominence in the accounting profession. Kinney received his award at the spring meeting of the Institute's Governing Council held in Savannah, Georgia. See our full article at http://accountingeducation.com/news/news3004.html for more details.
For me this is good news and bad news.
Good News
Bill was one of my doctoral students years ago. Everything he learned he learned
from me!
Bad News
Bill was one of my doctoral students years ago. I must have only been 10 years
old at the time. Either that or he was 50 years old when he earned his Ph.D.
In any case, Bill has been a dedicated researcher --- as dedicated to our craft as any student and professor that I have ever met.
Congratulations Bill!
Measuring the Business Value of Stakeholder Relationships – all about social capital and how high-trust relationships affect the bottom line. Plus a new measurement tool for benchmarking the quality of stakeholder relationships --- www.cim.sfu.ca/newsletter
Trust, shared values and strong relationships aren't typical financial indicators but perhaps they should be. A joint study by CIM and the Schulich School of Business is examining the link between high trust stakeholder relationships and business value creation. The study is sponsored by the Canadian Institute of Chartered Accountants (CICA).
The research team is looking at how social capital can be applied to business. The aim of this project is to better understand corporate social capital, measure the quality of relationships, and provide the business community with ways to improve those relationships and in turn improve their bottom line.
Because stakeholder relationships all have common features, direct comparisons of the quality of relationships can be made across diverse stakeholder groups, companies and industries.
Social capital is “the stock of active connections among people; the trust, mutual understanding, and shared values and behaviors that bind the members of human networks and communities and make cooperative action possible” (Cohen and Prusak, 2000).
So far the research suggests that trust, a cooperative spirit and shared understanding between a company and its stakeholders creates greater coherence of action, better knowledge sharing, lower transaction costs, lower turnover rates and organizational stability. In the bigger picture, social capital appears to minimize shareholder risk, promote innovation, enhance reputation and deepen brand loyalty.
Preliminary results show that high levels of social capital in a relationship can build upon themselves. For example, as a company builds reputation among its peers for fair dealing and reliability in keeping promises, that reputation itself becomes a prized asset useful for sustaining its current alliances and forming future ones.
The first phase of the research is now complete and the study moves into its second phase involving detailed case studies with six companies that have earned a competitive business advantage through their stakeholder relationships. Click here for a full report
Bob Jensen's discussion of valuation
and aggregation issues can be found at http://www.trinity.edu/rjensen/FraudConclusion.htm
Also see http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue
Teaching Ethics -- Bill Christie once helped bust Nasdaq price fixers. Now, he's Vanderbilt's B-school dean -- and bringing those lessons to MBAs http://www.businessweek.com/mediacenter/list/bs01.htm
Read it and Weep
From Business Week Online as Reproduced by SmartPros (May 30, 2002) ---- http://www.smartpros.com/x34230.xml
Still Hoping for More From Harvey Pitt
May 30, 2002 (Business Week Online) — Earlier this month, Securities and Exchange Commission Chairman Harvey Pitt convened the first "Investor Summit" to listen and respond to investor complaints. (You can hear a replay of the May 10 discussion on the SEC Web site.) It was, at times, spirited.
--------------------------------------------------------------------------------
Pitt and fellow Commissioners Isaac Hunt and Cynthia Glassman got earfuls -- both from investors at large and from a group of six panelists. Some of the sharpest criticism of the SEC's performance in the current crisis of confidence in Wall Street came from panelist Damon Silvers. He's an associate general counsel with the AFL-CIO, which is the umbrella organization for some 13 million members of different unions, who are beneficiaries of an estimated $5 trillion in pension assets.
After Silvers spoke at the conference, I reached him by phone at his Washington (D.C.) office and asked him to elaborate on the remarks he made and the questions he asked. Edited excerpts of our discussion follow:
Q: At the Investor Summit, you said that the ball is being dropped on reforming "issue after issue." What are those issues?
A: Well, I'll just do a short list for you.
Q: Shoot.
A: The first is the issues surrounding auditors, and in particular the issue of auditor independence and the creation of a public oversight board. The AFL-CIO put a rule-making petition into the [SEC] in December on auditor independence. As far as we can tell, the commission hasn't really done anything in that area. Everyone knows about the mess that auditor-oversight process turned into at the commission, and clearly it hasn't taken any steps to do the minimum in this area that was outlined by [former SEC Chairman] Arthur Levitt in his testimony in the Senate.
Q: Which was?
A: Creating a body that has a majority of nonaccounting industry people, with full enforcement powers and independent financing.
Q: What else?
A: The commission has missed an opportunity to deal with the problem of analysts' conflicts on Wall Street by failing to really do anything meaningful to regulate the power that investment bankers have developed over the analysts in the major Wall Street firms. The SEC also hasn't acted on the problems related to the independence of boards of directors at public companies.
Q: Such as?
A: Both in requiring meaningful independence of audit committee and compensation committee members and in disclosure. Those are the key issues where the commission has failed to act or has acted in a manner that is inadequate.
Q: Pitt wouldn't agree with that, and it's only fair to note that the reforms are a work in progress. In your view, why has the commission dropped the ball?
A: I wish I knew. The big [firms] in the audit world and the Wall Street firms have obviously been lobbying intensively for months to prevent effective action in these areas. We know that some of those people have met with Chairman Pitt. I believe that he has strongly held views about a number of these issues that predate his arrival as chairman at the SEC.
Q: How much of this is a result of there not being a full commission -- two of the five seats remain vacant.
A: I think that is underappreciated in the coverage of these issues. The Commission is, after all, designed to be a deliberative body. And there are currently only three commissioners, one of whom is clearly planning to depart.
Q: Commissioner Isaac Hunt?
A: Right.... There's a need for more diverse perspectives on the commission. I continue to believe that Chairman Pitt has the potential to do the right thing here. And the addition of commissioners with a more diverse set of views would help steer the SEC in that direction.
Q: So you're not in the group of people who think that Pitt no longer has the credibility to remain at the SEC?
A: There are people who have called for him to resign. Common Cause did so on the day of the Investor Summit.... We are critical of Chairman Pitt's performance here, on many levels, severely critical in fact. However, we're not ready to say that there's no hope here and that he's incapable of doing the right thing. If I believed that, I'm not sure that I would have participated in the summit.
Q: Some suspected the summit was 100% public relations -- nothing substantive. What's your view?
A: It might have been designed to be that way. I don't think that's what it was. I think we had substantial exchanges about a number of important issues -- ones in which, prior to the summit, no one really knew what Chairman Pitt's views were.
Q: Such as?
A: Mutual-fund disclosure and "aiding and abetting" liability. That being said, I think the question now is, "What's the follow-up?"
Q: You mentioned the "aiding and abetting" issue, which is a fairly technical set of legal precedents, but a very interesting one and one that's potentially important to investors. Also, I think that you got from Pitt a commitment to work with you on that.
A: Yes, that's right.
Q: Can you explain please what this "aiding and abetting" issue is?
A: This is really an outrageous situation in our securities law. The Supreme Court said in the early '90s, in a case called Central Bank of Denver, that despite the fact that everybody for decades had proceeded on the basis that the securities laws gave investors the right to sue and recover damages from people and institutions that aided and abetted securities fraud.... The Supreme Court found that there was actually no basis for that kind of claim in the statute.
Therefore, investors -- the people who were actually wronged by securities fraud -- could not sue those who aided and abetted.
Q: So?
A: This is important because the typical securities fraud is a product not just of a company that is the actual institution doing the disclosure but of the people who work with that company.
Q: Such as?
A: Investment banks, lawyers, and accountants. In most situations, the investment banks, the lawyers, and the accountants don't interact directly with the shareholder. They do so through the company. Making aiding and abetting no longer recognizable in the courts as something an investor can recover on, they basically made it impossible for investors to go after those folks.
Q: I see.
A: By the way, if you look at the defenses that have been raised by Arthur Andersen and others in the Enron cases, they all rest on this. They all say, basically, even if we did all of these things, even if we did everything you accuse us of doing, it's just aiding and abetting, and you have no right to sue for it.
Q: So what's the upshot for the individual wronged in the Enron case?
A: You're out of luck. If the aiding and abetting case defense holds in the context of Enron, where Enron is bankrupt, unsecured creditors like the investors who got defrauded are unlikely to get hardly anything.
Q: Given that, do the investors need to look to Congress for a fix?
A: Yes, you have to have a congressional fix here. The SEC can't fix it by itself. But what the SEC can do, which is what I was challenging Chairman Pitt to work with us on, the SEC can send a clear message to Congress that this needs to be fixed, and that would be very important.
-- Robert Barker, Business Week Online
And the bottom line is that reform efforts are stalled in Congress and will most likely die in hands of committees that held all of these “spectator” hearings! There will, however, be some really neat new TV commercials for re-election, commercials paid for by the lobbyists.
"Bad Boys Club" by Allan
Sloan, Newsweek, July 1, 2002, pp. 44-46 --- http://www.msnbc.com/news/771098.asp?0bl=-0
After a wave of scandals, corporate America is under pressure to clean up its
act. But will anything really change?
July 1 issue — The stock market is tanking and the business world is soured by scandal, but there is some good news. We’ve got a new growth industry: reforming corporate America. More than a dozen proposals from big-name sponsors—ranging from Goldman Sachs and the New York Stock Exchange to President Bush and the Senate Finance Committee—have appeared since Enron became widely recognized as a poster child for dysfunctional capitalism. A Reform of the Month Club, as it were. With so much attention from such influential quarters, something significant is bound to change, right?
THE ANSWER, I’M afraid, is no. At least not yet. And I’m not being some cynical newsie. It’s just that you usually don’t get reform until the people who need to be reformed recognize that there’s a problem. Despite all the pronouncements and blue-ribbon commissions—many of which have worthy suggestions—they don’t remotely represent the views of the people who are truly in a position to make change: America’s chief executive officers.
Our M.B.A. president doesn’t seem to think much is wrong. Bush said Friday that “95 percent or some... huge percentage of the business community are honest and reveal all their assets, got compensation programs that are balanced, but there are some bad apples.” He even opposes a key reform that resident sages like Warren Buffett and Alan Greenspan consider vital to producing honest corporate numbers: treating stock options as an expense on earnings statements. The fact that options value isn’t subtracted from profits has led corporations to give loads of them to CEOs, who make huge profits when the stock rises, but lose nothing when it falls. Standard & Poor’s, not exactly a hotbed of radical activity, is now counting options as an expense when computing profit figures for the influential S&P 500 Index. Vice President Cheney, a former CEO himself, has been noticeably silent on issues of reforming the way corporate America keeps its books. One possible reason is that the company he once ran, Halliburton, is now being investigated for accounting changes adopted during his tenure.
For all the talk from business organizations, we haven’t heard much from working CEOs themselves. But there are exceptions, like Henry Paulson Jr. of Goldman Sachs and Dick Grasso of the New York Stock Exchange. Paulson was especially outspoken. “American business has never been under such scrutiny. To be blunt, much of it is deserved,” he said at the National Press Club in Washington recently. These guys deserve big credit for guts, because they’re risking the wrath of their peers, alienating customers and inviting scrutiny of their institutions, which, they readily admit, are far from perfect. In separate NEWSWEEK interviews, Grasso and Paulson said they have plenty of support among corporate chieftains. But when pressed for specifics, Paulson provided none, and Grasso produced just one: a laudatory letter from John Dillon, CEO of International Paper. But Dillon is head of the Business Roundtable, which already has proposed reforms. Here’s why the CEO silence matters. When the market was going great guns during the ’90s, corporate America proclaimed that the market’s performance was proof that companies were doing the right thing, and that critics of huge executive pay packages and boards cozying up to CEOs were just cranks. Now that the market’s down, CEOs are hiding under their boardroom tables. What will it take to get business to change? Even more bad stock-market news. And we’ve already got plenty. At Friday’s close the S&P 500, a proxy for the broad stock market, was down 35 percent from its high in March of 2000. If you make the very generous assumption that the market will rise 10 percent a year compounded, it would take until the end of 2006 for the S&P to regain the ground it’s lost. So the market would have gone nowhere for almost seven years. If the market’s a report card, that’s a pretty lousy grade. A failing one, in fact.
"System Failure: Corporate America: We Have a Crisis," Fortune Magazine Cover Story, June 24, 2002 --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=208314
Goldman Sachs CEO Hank Paulson is not a touchy-feely guy. Even by Wall Street standards, he's fairly buttoned down. But the daily drumbeat of news about horrifying corporate behavior would get to anyone--and it's clearly getting to Paulson. "In my lifetime, American business has never been under such scrutiny, and to be blunt, much of it deserved,'' he said in a recent speech. To FORTUNE he added, "You pick up the paper, and you want to cry.''
You sure do. Every day, it seems, a new scandal bursts into public view. Bankrupt Kmart is under SEC investigation for allegedly cooking the books. Adelphia's founding family is forced to resign in disgrace after it's revealed that members used the company as their own personal piggy bank, dipping into corporate funds to subsidize the Buffalo Sabres hockey team, among other things. Former telecom behemoths WorldCom, Qwest, and Global Crossing are all being investigated. Edison Schools gets spanked by the SEC for booking revenues that the company never actually saw. Dynegy CEO Chuck Watson denies that his company used special-purpose entities to disguise debt a la Enron--until the Wall Street Journal reports that, lo and behold, the company does have one, called Project Alpha. (Watson has just stepped down.) Most recently, of course, Tyco CEO Dennis Kozlowski resigns after informing his board that he is under investigation for evading sales tax on expensive artwork he purchased. Kozlowski has since been indicted--but even before the most recent disclosures, Tyco's stock was pummeled by the widespread suspicion that it used accounting tricks to boost revenues (a claim the company has consistently denied).
Phony earnings, inflated revenues, conflicted Wall Street analysts, directors asleep at the switch--this isn't just a few bad apples we're talking about here. This, my friends, is a systemic breakdown. Nearly every known check on corporate behavior--moral, regulatory, you name it--fell by the wayside, replaced by the stupendous greed that marked the end of the bubble. And that has created a crisis of investor confidence the likes of which hasn't been seen since--well, since the Great Depression.
Even Harvey Pitt and Bill Lerach, who are poles apart on most issues, agree on this point. "I'm really afraid that investor psychology in this country has suffered a very serious blow," says the controversial Lerach, the plaintiffs attorney best known as the lead counsel representing Enron's beleaguered shareholders. SEC Chairman Pitt, who made his name defending big corporations, concurs: "It would be hard to overstate the need to remedy the loss of confidence,'' he said at a recent conference at Stanford Law School. "Restoring public confidence is the No. 1 goal on our agenda."
Declining investor confidence is not the only reason the stock market is hurting, of course. (The S&P 500 is down 10% so far this year, while the Nasdaq has fallen 20%.) For one thing, the world is an unsettling place right now, with Pakistan and India busy saber rattling, the Mideast in turmoil--and the threat of more terrorist attacks on U.S. soil very much in the air. For another, stocks remain high by historical standards: Even with a 20% drop since its peak in March 2000, the price/earnings ratio for the S&P 500 is still 29, compared with the norm of 16.
Despite the constant reports of misconduct, investors can't cast all the blame for the market's troubles on the actions of CEOs and Wall Street analysts--much as they might like to. There was a time not too long ago when everyone, it seemed, was day trading during lunch breaks. As Gail Dudack, chief strategist for SunGard Institutional Brokerage, puts it, "A stock market bubble requires the cooperation of everyone."
Still, the unending revelations--and the high likelihood that there are more to come--have underscored the extent to which the system has gone awry. That has taken a toll on investors' psyches. According to a Pew Forum survey conducted in late March, Americans now think more highly of Washington politicians than they do of business executives. (Yes, it's that bad.) A monthly survey of "investor optimism" conducted by UBS and Gallup shows that the mood among investors today is almost as grim as it was after Sept. 11--and has sunk by nearly half since the giddy days of late 1999 and early 2000. Similarly, the average daily trading volume at Charles Schwab & Co.--another good barometer of investor confidence--is down 54% from the height of the bull market. "People deeply believed, as an article of faith, in the integrity of the system and the markets," Morgan Stanley strategist Barton Biggs wrote recently. "Sure, it may at times have seemed like a casino, but at least it was an honest casino. Now many people are questioning that basic assumption. Are they players in a loser's game?" Investing, notes Vanguard founder John C. Bogle, "is an act of faith." Without that faith--that reported numbers reflect reality, that companies are being run honestly, that Wall Street is playing it straight, and that investors aren't being hoodwinked--our capital markets simply can't function.
Throughout history, bubbles have been followed by crashes--which in turn have been followed by new laws and new rules designed to curb the excesses of the era just ended. After the South Sea bubble in 1720, points out Columbia University law professor John Coffee, the formation of new corporations was banned for more than 100 years. In the wake of the 1929 Crash--and the subsequent discovery that insiders had used their positions to skim millions from the market--dramatic reforms were enacted, including the creation of the SEC, the passage of the Glass-Steagall Act separating banks from investment houses, and the outlawing of short-selling by corporate officers.
Is the situation today as dire as it was in 1929? Of course not. But it is serious--serious enough that real reform is once again needed to restore confidence in the system. Already there has been a flood of proposals, which range from the good to the not-so-good. For instance, the New York Stock Exchange's recently announced plan to strengthen boards of directors has been widely lauded--praise, we believe, that is quite deserved (see item 5). If enacted, the NYSE reforms will help prod boards to finally act in the interest of shareholders--which, after all, is supposed to be their job. Similarly, the SEC's decision to crack down on Edison Schools sends an enormously important signal. Money that was going to pay, say, teachers' salaries was being booked by the company as revenue--even though the money never actually flowed through Edison. Believe it or not, Edison's accounting abided by Generally Accepted Accounting Principles, or GAAP. In going after Edison, the SEC was saying that simply staying within GAAP is no longer good enough--not if the spirit of the rules is being violated, as was clearly the case with Edison.
Continued at http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=208314
The above article discusses accounting tricks played by corporations. I have commenced a summary document on accounting tricks at http://www.trinity.edu/rjensen//theory/00overview/AccountingTricks.htm
The past six months have featured a parade of corporate leaders who were irresponsible stewards of other people's money and trust. They were apparently so consumed by greed that they never dreamed of getting caught, ruining companies, and shaming themselves. In so doing, they have created what Al Vicere, a professor of strategic leadership at Pennsylvania State University's Smeal College of Business, calls a CEO "credibility crisis." All of which raises the question: Why? What is it about the character of today's corporate chieftains that has led them into CEO-gate -- which at times prompts them to indulge in behavior more reminiscent of fallen TV ministers than of upstanding community leaders?
FULL VERSION http://www.businessweek.com/bwdaily/dnflash/jun2002/nf20020613_9296.htm?c=bwcareersjun26&n=link1&t=email
Microsoft Gets Slapped for Having Bill Gate's Hands in the Cookie Jar
From iwon.com on June 3, 2002
Microsoft Corp. (MSFT) agreed to stop using an accounting practice that allegedly understated revenues and misled investors, the Securities and Exchange Commission said on Monday.
However, the world's largest software maker will not have to change any previous earnings reports.
Microsoft consented to a cease-and-desist order but did not admit or deny charges that from 1995 through 1998 it maintained seven reserve accounts containing a total of $200 million to$900 million in unsupported and undisclosed reserves.
A significant amount of the reserves did not comply with generally accepted accounting principles, which resulted in inaccuracies in filings that Microsoft made with the commission, it was alleged.
Microsoft shares were down 79 cents to $50.12 in pre-afternoon trading on Nasdaq. The company was not fined. In addition, Microsoft said the settlement will not require restatement of any reported financial results.
"The company is pleased to resolve these matters with the SEC and looks forward to an open and constructive relationship with the SEC on important accounting issues affecting the software industry," a company spokesman said.
The SEC has been aggressive in probing accounting irregularities involving overstatement of revenues. The Microsoft probe was unusual because it involved allegations of deliberately understating revenues.
For more than two years, the SEC had been looking at Microsoft's alleged practice of taking reserves that can be used to pad revenues during lean times, commonly known as "cookie jar accounting."
"Companies must properly document the bases for their reserves and other accounting entries so that they and their auditors can verify that the accounting is proper," enforcement chief Stephen Cutler in a statement announcing the settlement.
"This case emphasizes that the commission will act against a public company that issues financial statements with material inaccuracies, even in the absence of fraud charges," he added.
The Controversy Over Revenue Reporting
From The Wall Street Journal Accounting Educators' Review on May 23, 2002
TITLE: SEC Broadens Investigation
Into Revenue-Boosting Tricks; Fearing Bogus Numbers Are Widespread, Agency
Probes Lucent and Others
REPORTER: Susan Pulliam and Rebecca Blumenstein
DATE: May 16, 2002
PAGE: A1
LINK: http://online.wsj.com/article/0,,SB1021510491566948760.djm,00.html
TOPICS: Financial Accounting, Financial Statement Analysis
SUMMARY: "Securities and Exchange Commission officials, concerned about an explosion of transactions that falsely created the impression of booming business across many industries, are conducting a sweeping investigation into a host of practices that pump up revenue."
QUESTIONS:
1.) "Probing revenue promises to be a much broader inquiry than the earlier
investigations of Enron and other companies accused of using accounting tricks
to boost their profits." What is the difference between inflating profits
vs. revenues?
2.) What are the ways in which accounting information is used (both in general and in ways specifically cited in this article)? What are the concerns about using accounting information that has been manipulated to increase revenues? To increase profits?
3.) Describe the specific techniques that may be used to inflate revenues that are enumerated in this article and the related one. Why would a practice of inflating revenues be of particular concern during the ".com boom"?
4.) "[L90 Inc.] L90 lopped $8.3 million, or just over 10%, off revenue previously reported for 2000 and 2001, while booking the $250,000 [net difference in the amount of wire transfers that had been used in one of these transactions] as 'other income' rather than revenue." What is the difference between revenues and other income? Where might these items be found in a multi-step income statement? In a single-step income statement?
5.) What are "vendor allowances"? How might these allowances be used to inflate revenues? Consider the case of Lucent Technologies described in the article. Might their techniques also have been used to boost profits?
Reviewed By: Judy Beckman,
University of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University
--- RELATED ARTICLES ---
TITLE: CMS Energy Admits Questionable Trades Inflated Its Volume
REPORTER: Chip Cummins and Jonathan Friedland
PAGE: A1
ISSUE: May 16, 2002
LINK: http://online.wsj.com/article/0,,SB1021494984503313400.djm,00.html
Bob Jensen's threads on revenue reporting are at http://www.trinity.edu/rjensen/ecommerce/eitf01.htm
June 19 message from Roselyn E. Morris [rm13@business.swt.edu]
The AAA Teaching and Curriculum Section is pleased to announce that the Spring 2002 edition of The Accounting Educator, the Section Newsletter, is available on the T&C web site at:
http://accounting.rutgers.edu/raw/aaa/tccomm/newsletters/index.htm
Please share this information with your colleagues.
Wow Free Site
of the Week --- Public Library of Science (includes common-language commentaries
so that non-scientists can follow the articles) ---
http://www.publiclibraryofscience.org/
Featured in Newsweek, July 1, 2002, Page 9)
Wouldn't this be great if accounting standard setters worldwide could see their
way clear to do the same for accountancy and auditing standards? What do you say
to the idea that we work toward a Public Library of Accountancy?
The Public Library of Science is a non-profit organization of scientists committed to making the world's scientific and medical literature freely accessible to scientists and to the public around the world, for the benefit of scientific progress, education and the public good.
We are working for the establishment of international online public libraries of science that will archive and distribute the complete contents of published scientific articles, and foster the development of new ways to search, interlink and integrate the information that is currently partitioned into millions of separate reports and segregated into thousands of different journals, each with its own restrictions on access.
As a step toward these goals, scientists around the world have been circulating an open letter urging publishers to allow the research reports that have appeared in their journals to be distributed freely by independent, online public libraries of science. The response from the international scientific community to this initiative has been remarkable, and overwhelmingly positive. The open letter has now been signed by 30203 of your colleagues from 177 countries.
Our initiative has prompted some significant and welcome steps by many scientific publishers towards freer access to published research, but in general these steps have fallen short of the reasonable policies we have advocated. We must make every effort to publish our work in, and give our full support to, those journals that have adopted the policy proposed in the open letter (see our journal policies page for a list of journals that have answered your call).
It is now clear, however, that if we really want to change the publication of scientific research, we must do the publishing ourselves. It is time for us to work together to create the journals we have called for. We have established a non-profit scientific publisher under the banner of Public Library of Science, operated by scientists, for the benefit of science and the public, and will begin publishing journals in early 2003 that fully realize the principles of this movement. With your participation, vision and energy we can establish a new model for scientific publishing. Please join us in this effort.
The following is a list of journals that satisfy, in whole or in part, the criteria outlined in the PLoS Open Letter. The earlier on the list, the more compliant the journal. The information provided below is correct, to the best of our knowledge, as of June 1, 2002.
--------------------------------------------------------------------------------
The following journals have adopted the policy that all the original research reports that they publish can be freely distributed online by PubMed Central or any other public distributor, and have provided all current and archival content for distribution by PubMed Central:
Journal of Biology Genome Biology A diverse collection of over 70 online journals published by BioMed Central
These are the only biomedical journals that currently provide immediate free and open access to all of the primary research articles they publish, and we urge you to publish in these journals whenever possible and to support them with your readership.
--------------------------------------------------------------------------------
The following journals have committed to allowing all the material that they publish to be distributed freely by any legitimate non-commercial institutions, including PubMed Central, within 6 months after publication:
Proceedings of the National Academy of Sciences (6 month delay)
--------------------------------------------------------------------------------
The following journals have committed to allowing the research reports that they publish to be distributed freely by PubMed Central within the indicated interval after publication:
Arthritis Research (no delay) Breast Cancer Research (no delay) British Medical Journal (no delay) Bulletin of the Medical Library Association (no delay) Canadian Medical Association Journal (6 month delay) Cell Stress and Chaperones (6 month delay) Critical Care (no delay) Current Controlled Trials in Cardiovascular Medicine (no delay) Journal of the Americal Medical Informatics Association (6 month delay) Journal of Biomedicine and Biotechnology (1 year delay) Journal of the Medical Library Association (no delay) Journal of Medical Entomology (1 year delay) Plant Cell (1 year delay) Plant Physiology (1 year delay) Molecular Biology of the Cell (2 month delay) Respiratory Research (no delay)
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The following journals have agreed to provide their contents to PubMed Central while restricting the display of the full text of its articles to the journal's own site. The full text of the articles provided in this manner will be archived and searchable at the PubMed Central site, and freely viewable at (and only at) the publisher's own website. More details are available at PubMed Central.
American Journal of Human Genetics (delay interval unknown) Antimicrobial Agents and Chemotherapy (6 months delay) Applied and Environmental Microbiology (6 months delay) Biochemical Journal (delay interval unknown) Clinical and Diagnostic Laboratory Immunology (6 months delay) Clinical Microbiology Reviews (1 year delay) Cold Spring Harbor Press Journals (delay interval unknown) EMBO Journal (1 year delay) Genetics (delay interval unknown) Infection and Immunity (6 months delay) Journal of Bacteriology (6 months delay) Journal of Clinical Microbiology (6 months delay) Journal of Virology (6 months delay) Microbiology and Molecular Biology Reviews (1 year delay) Molecular and Cellular Biology (6 months delay) Nucleic Acids Research (6 month delay)
--------------------------------------------------------------------------------
Many journals currently provide recent contents for free following a delay after publication, but only through their own Web sites. (Please read our statement as to why we think this is not sufficient).
List of free full-text articles available through HighWire Press.
--------------------------------------------------------------------------------
Additional sources of information:
PubMed Central maintains an up-to-date list of journals that are, or will be, providing full-text copies of published research reports for online distribution by PMC.
--------------------------------------------------------------------------------
The publishers of scientific journals are part of our scientific community and we welcome and encourage constructive dialog with them. If you wish to contact the editors or publishers of any of these journals to inquire about their policies, or to encourage them to adopt the policy advocated in the open letter, we encourage you to do so.
If you are a publisher or can update us on the editorial policy of any journal, or correct any erroneous information in this listing, please contact us at feedback@publiclibraryofscience.org
Do depressed people cry more than those who are not depressed? Not necessarily, according to a new study led by Jonathan Rottenberg, a fifth-year graduate student in psychology. In showing how the emotions of depressed people become blunted, the findings could lead to more effective ways to treat an illness that afflicts one in five people during the course of a lifetime. http://news-service.stanford.edu/news/may22/crystudy-a.html
A fee-based window to 75,000 providers of over 700,000 scholarships --- http://www.scholarshipexperts.com/
Revised Student Loan Site from the U.S. Department of Education Gets a Lot of Hits (50% increase in the first month of operation) --- http://www.fafsa.ed.gov/
Bob Jensen's threads on other funding alternatives and college locators can be found at http://www.trinity.edu/rjensen/crossborder.htm
Bob Jensen's education bookmarks are at http://www.trinity.edu/rjensen/bookbob2.htm
Army University Access Online --- http://www.adec.edu/earmyu/index.html
This five-year $453 million initiative was completed by the consulting division
of PriceWaterhouseCoopers (PwC). Twenty-four colleges are delivering
training and education courses online through the U.S. Army's e-learning portal.
There are programs for varying levels of accomplishment, including specialty
certificates, associates degrees, bachelor's degrees, and masters degrees.
All courses are free to soldiers. By 2003, there is planned capacity is
for 80,000 online students. The PwC Program Director is Jill Kidwell --- http://www.adec.edu/earmyu/kidwell.html
Army Online University attracted 12,000 students during its first year of operation. It plans to double its capacity and add 10,000 more students in 2002. It is funded by the U.S. Army for all full time soldiers to take non-credit and credit courses from selected major universities. The consulting arm of the accounting firm Pricewaterhouse Coopers manages the entire system.
See earmyU at http://www.adec.edu
Bob Jensen's threads on this and other governmental training and education alternatives are at http://www.trinity.edu/rjensen/crossborder.htm#GovernmentandMilitary
From Syllabus News on June 7, 2002
Army Signs Up for Online Skills-Testing Program
The U.S. Army has enlisted the Princeton Review, which provides test preparation and admissions services, to develop an online testing skills prep program for Army personnel pursuing post-secondary educational plans. The contract, worth over $1.5 million in the first year, calls for delivery of a customized online training program to be provided via a partnership with Resource Consultants Inc., Vienna, Va., a professional services company. The Army program will contain over 30 hours of interactive online lessons, practice tests and drills to help students refine their skills. It uses the same technology and instructional design as Princeton Review's SAT, GRE, GMAT, and LSAT Online courses, which are accessed by over 100,000 students a year either through stand-alone online courses or as a integrated supplements to classroom instruction.
In light of new online learning technologies, Harvard University is evaluating its residency requirement with the intent of adapting to lifestyle changes of "mid-career professionals" according to Harvard University President Laurence H. Summers, EDUCAUSE Review, May/June 2002, Page 4.
National Technological University fell on hard times with poor timing to create a for-profit company for engineering training courses. It has phased out its own for-profit company and has been acquired by Sylvan Learning Systems. It will continue to offer engineering courses for SLS --- http://www.kmutt.ac.th/organization/Research/national.htm
Sylvan is one of the leading providers of training programs and also offers over 300 testing sites that can be utilized for its own and other training and education programs. Its homepage is at http://syl.hrdpt.com/
Bob Jensen's threads on global training and education alternatives are at http://www.trinity.edu/rjensen/crossborder.htm
WHY INNOVATIONS SCORE -- OR STUMBLE
For every triumph, other wonders of tomorrow never take off, and Harvard's
Clayton Christensen say it's not just luck that separates them http://www.businessweek.com/technology/content/jun2002/tc20020618_1175.htm?c=bwtechjun21&n=link1&t=email
Ah, the miracle of high-definition television. Starting nearly a decade ago, TV makers, broadcast networks, even the U.S. Congress vowed that HDTV would provide crystal-clear, 3-D-like pictures that would change the way Americans view the tube. The new technology was expected to spark billions of dollars in sales of new TVs and a raft of enhanced services, including interactive shopping.
Today, it seems as though it'll be a stretch to get a standard digital TV in every U.S. household before 2010, much less one that's high definition. Meantime, HDTV sets still cost more than $3,000 -- and one bought today could be obsolete as early as next year.
The failed promise of HDTV has as much to do with bureaucratic bungling as with the technology itself. But it's far from an isolated example of a can't-miss innovation that has yet to emerge. Remember cold fusion? It was supposed to deliver a limitless supply of energy from water -- and no, not hydropower. And what about the myriad promises of the e-biz revolution? Have you used any e-cash lately?
LEARNING THE RULES. The lesson is obvious: Hot emerging technologies often feature more hype than heft. Which raises the questions: What determines whether a technology will come to market eventually? And will the technologies now on many experts' list of future winners really make the grade?
Traditionally, technologists and entrepreneurs have contended that realizing the promise of an emerging technology -- one that may be in products within a couple of years -- is more art than science. But Harvard Business School professor and author Clayton Christensen argues that commercially successful innovation isn't the crap shoot that it's sometimes made out to be. Innovation has rules, he argues, just as guidelines exist for producing quality products or for being a good manager.
"Innovation isn't random," Christensen told a packed conference of young innovators at the Massachusetts Institute of Technology on May 23. "We're at the same place the quality movement was 20 years ago. We need to learn to understand and manage innovation so that we can maximize the chances that a new technology will succeed."
FINDING FERTILE GROUND. One of the most important rules of successful innovation is to develop technologies for new markets where industry stalwarts have no status quo to protect -- and no need to steal someone else's customer to succeed. In management-speak, this is called "taking root in disruption."
One example Christensen points to is the rise of the personal computer. The original Apple II computer was targeted at kids -- the only customers willing to play around with such a dorky machine. But as PCs improved, parents started paying attention. By listening to these new customers, Apple and rival PC makers were able ultimately to unseat the computing incumbents, who were still focused on mainframes and other large, professional computers.
According to Christensen, a company with a new technology has only a 6% chance of success if it tries to make a similar but better product than an incumbent and sell it to the same customers. By contrast, he says, the chances of success for a "disruptive strategy" are 33%.
MAJOR MISTAKES. Equally important is the principle that new technologies should disrupt competitors, not customers. Too often, new technologies try to make customers change the way they do things. Instead, Christensen says, innovation should help customers do things they already do more easily, conveniently, and for less money.
Take the music business. Before the Internet, when customers bought a Bob Dylan CD, they could do pretty much what they wanted with it. They could listen to it in the car or at home, or make a copy (a tape, back then) for a friend. The rise of Web-based peer-to-peer file-sharing technology à la Napster has made it easier, faster, and cheaper for customers to do what they always did -- and ultimately, that probably will disrupt CD retailers and distributors.
The problem is, it has also threatened the status quo that music labels and artists have an interest in protecting -- and have sued to preserve. So in this case, innovation has disrupted the wrong people -- the mortal enemies of trying something new.
However, the incumbents are making a similar mistake as they try to make the latest innovations work for them. The Web subscription services created by the music industry -- called PressPlay and MusicNet -- try to dictate more stringently than ever before just where and how the industry's paying customers can listen to music. But their rules are so restrictive as to annoy customers. And the music-buying public in turn largely shuns the Establishment sites in favor of whatever file-sharing service has found a chink in the industry's armor.
Continued at http://www.businessweek.com/technology/content/jun2002/tc20020618_1175.htm?c=bwtechjun21&n=link1&t=email
Related Items
Why
Innovations Score -- or Stumble
Giving
Pilots a New Eye in the Sky
Fuel
Cells Crank Up the Power
Implanted
Chips That Deliver Your Drugs
Tomorrow's
Paper-Thin Screen Gems
Nanotech:
Big Dreams, Small Steps
MYSTERIES OF MARKUPS AND MARGINS
To consumers, cost is the figure printed on the price tag. For manufacturers and
retailers, it is a rather different calculation http://www.businessweek.com/smallbiz/content/jun2002/sb2002066_0123.htm?c=bwfrontierjun11&n=link2&t=email
Wiley Interscience: Scientific and Technical Acronyms, Symbols, and Abbreviations --- http://www3.interscience.wiley.com/stasa/
Bob Jensen's threads on glossaries are at http://www.trinity.edu/rjensen/bookbob3.htm#08051Glossaries
Colleges are usually struggling for new ideas about how to better serve alumni. The Web offers some great opportunities for innovation.
Some Ideas from Online Newsletter of the Graduate School of Business at Stanford University
NEW LIFELONG LEARNING ALUMNI OPPORTUNITIES
NEW!
In the Classroom This new section of the Lifelong Learning Web site allows you to sit in the "Virtual Skydeck" and see and hear classroom speakers, catch a Brown Bag Lunch, or listen to student panels discuss the GSB and other topics of importance to them. Watch a video of former 49er quarterback, Steve Young, discussing player agents in Professor Foster's Sports and Business Management class. http://www.gsb.stanford.edu/alumni/lifelonglearning/inside/Access Online GSB Library Databases Wish you had more research tools available? Sign up for year-long access to 4 research databases. http://www.gsb.stanford.edu/alumni/libraryaccess/
Sign-Up to Be a Frequent Learner: Did you know you could receive early notification of Lifelong Learning events & new services? Sign up to be a Frequent Learner. http://www.gsb.stanford.edu/alumni/lifelonglearning/frequent_learner.html
And in the news, I offer my highest congratulations to my good friend Bill Beaver (Accounting Professor at Stanford University)
WILLIAM H. BEAVER RECEIVES HONORARY DOCTORATE FROM ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS
William Beaver, the Joan E. Horngren Professor of Accounting, was awarded an honorary doctorate from Athens University of Economics and Business at a May 14 ceremony in Athens. May 2002 http://www.gsb.stanford.edu/news/beaver_honorary_doctorate.html
From the June 6, 2002 Online Newsletter of the Graduate School of Business at Stanford University
COLUMBIA AGAIN TOPS BUSINESS SCHOOL RANKINGS
Stanford Executive Education ranks 5 overall, up from 6 last year, in the 2002 Financial Times annual ranking of executive education programs. Stanford ranked 4 in custom programs and 5 in open enrollment programs. Financial Times, May 28, 2002 (subscription required to view article). https://registration.ft.com/registration/sub/barrier.jsp?location=http%3A//news.ft.com/servlet/ContentServer%3fpagename=FT.com/StoryFT/FullStory%26c=StoryFT%26cid=1021991039573%26p=1012571727162%26ft_acl=&resource=ftarcEVEN WITHOUT FRAUD, FINANCIAL STATEMENTS CAN BE MISLEADING
The Enron scandal may be viewed as "the neutron bomb of accounting," but even without fraud, financial statements can be misleading, says Professor James Van Horne. Pro forma earnings, abuses of revenue recognition, and even playing games with the calendar can make it difficult to get a true picture. May 2002 http://www.gsb.stanford.edu/news/vanhorne.html
A FREE VIDEO --- VIEW FROM
THE TOP (From the CEO of PHIZER)
Actually this is a great video on much, much more than Viagra!
Would you believe that Phizer spends $100 million per week on research?
Listen for the modules about a school bus driver, glassware washers, and
leadership.
THE UNRECOGNIZED SIDE EFFECTS OF VIAGRA
Drug marketing has an unexpected positive side effect says Pfizer CEO Hank McKinnell. McKinnell recently visited the school as a guest speaker in the View from the Top series. May 2002 Video File, 28:27 minutes (RealPlayer® format) May 2002 http://wesley.stanford.edu/multimedia/vftt/mckinnell.ram
But what went unsaid in the alumni newsletter is a quotation from Harvey Korman that says "taking Viagra is like putting a new flagpole on a condemned building."
From Syllabus News on June 7, 2002
Online Master's Seeks Business Pros for the Aged
The University of Southern California said it would offer physicians and health care executives needing to broaden their business skills a specialized master's degree that will be delivered completely online and accessible via the Internet anywhere in the world. The USC School of Gerontology, School of Policy Planning and Development, and Marshall School of Business have jointly developed the Master of Arts in Long-Term Care Administration in response to increasing demands on managed care providers as the U.S. population continues to age. The two- to three-year degree program consists of seven 16-week courses in human resources management, finance, accounting, counseling older adults and families, normal changes with aging, and other gerontological issues. Enrollees complete 28 credit hours at $891 per unit.
For more information, visit: http://marshall.usc.edu
Online Apps Soared During Last Academic Season
Almost three times as many students applied online to undergraduate programs during the 2001-2002 admissions season compared to the previous year, according to a survey by ApplyYourself, an Internet-based college recruitment and enrollment company. The number of professional school and graduate applications processed also increased 345 percent and 233 percent respectively. The increases support findings from the third annual 'Internet as an Admission Tool - 2001' study by ApplyYourself that found that students are turning to the Web as their primary resource for researching and applying to college. Other highlights from 2001-2002 admissions season include:
-- Over three-quarters (77%) of students chose to pay their application fees with a credit card when electronic payment was presented as an option. -- Online applications are an effective communications, branding and workflow tool for institutions during the entire recruiting process. -- Students access their online applications an average of 6.5 times before submitting it and institutions are using these opportunities to communicate and build relationships. -- Forty-three percent (43%) of undergraduate applications started online were eventually submitted compared to the typical percentage of paper applications.
For more information, visit: http://www.applyyourself.com
Texas Christian University picked the eCollege platform to support its online degree programs for distance students, and online course supplements for all of its on-campus students. eCollege currently supports two online master's programs for TCU. TCU's online Master's of Liberal Arts and Master's of Science in Nursing/Clinical Nurse Specialist degree programs secure about 250 student enrollments per year. The school plans to offer additional online degree and professional development programs through the eCollege platform, and will also make online course supplements available to all of its 400 faculty who serve 8,000 full-time on-campus students
"HarperCollins Private Reserve Houses E-Books," T.H.E. Journal, April 2002, Page 26 --- http://www.thejournal.com/magazine/vault/A3964.cfm
Book publisher HarperCollins and OverDrive have created HarperCollins Private Reserve, a digital warehouse for HarperCollins e-books worldwide. Using OverDrive servers and technology, HarperCollins Private Reserve allows the publishing company's divisions in the United States, Canada, the United Kingdom, Australia and New Zealand to manage and distribute e-book titles and marketing information directly.
The warehouse supplies online retailers with e-book catalog information, and fulfills e-book purchases to their customers in Microsoft Reader and Adobe Acrobat eBook Reader formats. In addition, OverDrive's technology allows HarperCollins to use its growing e-book library to promote the sale of both print and electronic titles. For example, HarperCollins can now offer electronic review copies or e-books bundled with print titles. The initiative includes HarperCollins' e-book imprint, PerfectBound, and e-books from its Christian publishing group, Zondervan. HarperCollins Publishers, New York, NY, www.harpercollins.com .
Bob Jensen's threads on eBooks can be found at http://www.trinity.edu/rjensen/ebooks.htm
Bob Jensen's links to eLibraries can be found at http://www.trinity.edu/rjensen/searchh.htm
I don't know how many of you saw the June 19 message from Joel Demski.
Craig Polhemus did a magnificent job bringing the American Accounting Association into the 21st Century, especially in the area of technology services. In spite of very limited budgets, Craig did a wonderful job in hiring a great staff and in serving our academic community.
If you are reading this message Craig, I want to commend you on an A+ level of service.
Others who want to read and/or listen to Craig's last address to the American Accounting Association on August 15, 2001, go to http://www.cs.trinity.edu/~rjensen/001aaa/atlanta01.htm
We're really going to miss Craig Polhemus!
Bob Jensen
-----Original Message-----
From: Joel S. Demski [mailto:demski@notes.cba.ufl.edu]
Sent: Wednesday, June 19, 2002 9:33 AM To: American Accounting Association Members
Subject: American Accounting Association AnnouncementEffective June 19, Executive Director Craig Polhemus has left the American Accounting Association. We thank Craig for his 7 years of service at the AAA, and wish him well in future endeavors. We hope to announce an interim Executive Director in the near future.
Joel S. Demski President, American Accounting Association
From InternetWeek Newsbreak on June 19, 2002
TODAY'S INTERNET INSIGHT:
Who doesn't love Google? Most people I know use it incessantly. The Google toolbar has been a godsend. The company's recent geek experiment with a public SOAP interface was the talk of the Web for a few (slow) days. In today's Leading Off, we talk with several enterprise users who have been using the new rack-mounted Google Search Appliance. They have interesting stories to tell. They like its relative low cost and ease of use. More intriguing is the fact that they are finding -- or contemplating -- ways to go under the covers of their Google boxes and work all sorts of magic on its XML data feeds. The earlier excitement about the public SOAP interface into Google was tempered by the fact that no instant killer app emerged (outside of so-called Google boxes that popped up on now-ubiquitous Weblogs). Look for enterprises to find even better ways to interact with their Google search results internally, blending Web services and knowledge management in intriguing new ways.Google Takes Aim At The Enterprise By focusing on what it does best -- search -- Google is winning IT converts with its new search appliance. The flexibility of open standards and XML data feeds is just icing on the cake. -- Richard Karpinski http://update.internetweek.com/cgi-bin4/flo?y=eHkA0Bdl6n0V30BeQZ0Ai
Plus: Google Rolls Out Updated Search Appliance http://update.internetweek.com/cgi-bin4/flo?y=eHkA0Bdl6n0V30BeN30A1
Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm
"Improving Student Performance in Distance Learning Courses," by Judy A. Serwatka, T.H.E. Journal, April 2002, pp. 46-51 --- http://www.thejournal.com/magazine/vault/A4002.cfm
The tests were particularly problematic. Quizzes were not given for the on-campus course since it was an introductory course, and the students seemed to keep up well with the material. But I discovered the online students were not studying the appropriate material for the tests. To address this, online quizzes were introduced to the course Web site for the students to take as many times as they wanted. The scores are not recorded and the questions are in the same format as on the actual tests, although they are not exactly the same. Ten questions are chosen randomly from a bank of 20 for each quiz. In addition, each chapter has its own quiz. Students say they have found these quizzes to be invaluable.
The tests have been developed in a manner similar to the quizzes. Each 100-point test is created from a 200-question test bank. As each student logs in their test is created randomly from the test bank. This makes cheating extremely difficult because each test contains different questions. Even if the questions are the same, they are randomized so they do not appear in the same order. And although the test is open book, the students are admonished to study, because the questions are in random order and they do not have time to look up the answers to each question. The tests are timed and automatically submitted at the end of the time limit. The addition of these practice quizzes has dramatically improved performance on the tests.
A point about testing that should be made is that many educators are concerned about students finding someone else to take tests for them. I agree with the statement made by Palloff and Pratt (1999): "Cheating is irrelevant in this process because the participant would be cheating only him- or herself." Although attempts are made to minimize the threat, educators should not let this prevent them from teaching online. Tech-nology will allow educators to verify the identity of students taking online tests in the future, so educators must trust students for now.
Bob Jensen's threads on assessment can be found at http://www.trinity.edu/rjensen/assess.htm
June 17 message from Jim Morrison
"The University is Dead! Long Live the University!" is the title of a presentation that I am giving at the forthcoming World Future Society (http://wfs.org) meeting July 19-23, 2002 in Philadelphia. It is a takeoff on the words used by town criers in historic England upon the death of the king and the forthcoming crowning of a new king, representing the change of reigns. My theses for the presentation is that the forces of demographics, globalization, economic restructuring, and information technology are rapidly changing the landscape of higher education and are leading us into new conceptions of institutional markets, how we teach, and what we teach. There will be a question and answer session after the presentation.
This session will be Webcast courtesy of ULiveandLearn ( www.uliveandlearn.com ) on Sunday, July 21, 2002, at 11:00 AM EST. If you cannot attend the WFS meeting in person, you are invited to attend this presentation via the Webcast. Please go to http://www.quickslides.com/quickreg/sq.cfm?ObjectID=470 to signup for the Webcast and receive instructions as to how you can participate. “Seats” are limited and will be distributed on a first come, first served basis.
BTW, if you are attending the conference, please consider joining me in a pre-conference seminar titled, “’Futurizing’ Your Organization.” The seminar objectives, readings, and program are described on our conference page at http://horizon.unc.edu/conferences
Many thanks.
Jim ----
James L. Morrison
Editor-in-Chief The Technology Source http://ts/mivu.org
Home Page: http://horizon.unc.edu
The 2002 CWRL Colloquium (Computers, Writing, Research, and Learning) --- http://www.cwrl.utexas.edu/currents/
In this issue
The CWRL Colloquium: A Window into the World of Computer-enhanced Teaching and Learning
by M. A. Syverson, CWRL Director
Teaching with technology
Collaborative Teaching in the Computer Classroom
by Alexandra Barron
Comparing Traditional and Computer-assisted Composition Classrooms
by Sarah R. Wakefield
Converting to the Computer Classroom: Technology, Anxiety, and Web-based Autobiography Assignments
by Miriam Schacht
Multimedia development, multi-user domains, and role-playing
Hell Wasn't Built in a Day: Taking the Long View on Multimedia Development
by Olin R. Bjork
Virtual Spaces, Actual Practices: MOO Pedagogy in the CWRL
by Aimee Kendall and Doug Norman
Playing Doctors, Playing Patients: Multi-user Domains and the "Teaching" of Illness
by Lee Rumbarger
Role-playing Situations Improve Writing
by M. A. Syverson
Interpreting languages; imagining disability
Towards a Hermeneutic Understanding of Programming Languages
by Clay Spinuzzi
The Imagination Gap: Making Web-based Instructional Resources Accessible to Students and Colleagues with Disabilities
by John Slatin
There are also links to archived issues!
Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm
"Interactive Media in Education: An Interview with Chris Dede," Syllabus Magazine, June 2002 --- http://www.syllabus.com/syllabusmagazine/article.asp?id=6388
S: You've said that new interactive media are not necessarily being used in the best ways possible. There's a lot of amazing new technology out there, but what do you see as the areas we should be concerned about, in terms of how it is used?
CD: A lot of people—including myself—are disturbed by what we see happening in the current educational "reform" movement. There's a tremendous amount of testing for accountability at the pre-college level, and there's also an increasing emphasis on this type of evaluation for learning in college. Mandating superficial coverage of large amounts of low-level information and procedures creates pressure to use technology merely to deliver content—a sort of "teaching by telling" and "learning by listening." But if learning via technology is all presentation, or even all simulation, then it's not very powerful because this is passive assimilation rather than active construction of knowledge. And while many people are claiming that streaming lectures via Web casts and downloading presentational materials from archives somehow makes learning much better, we have many reasons to believe that's just not true.S: Okay, so there's just presenting information and then testing on it—that's like rote and drill. Is the need for accountability driving this?
CD: While I think accountability is a very good idea, often it's expressed in a way that brings out the worst in teaching rather than the best. Students can do okay on a test as long as we give the test right away rather than a year later. Presentation as a primary method of teaching has a number of problems associated with it, in terms of motivation, what students can comprehend, how long they remember the material, and whether or not they can transfer and generalize it. And yet, when we look at the uses of technology in education today, a tremendous number of them are presentational—coating data with multimedia so that it slips into people's minds more easily, then using automated testing systems to quickly pull it back out again so that we can document that "learning" has taken place.S: I think most people would agree that there are more interesting applications than that.
CD: What's frustrating about all this is that the technology is really capable of quite a bit more. And we are facing a time in which the limits of presentational instruction are highlighted by the challenges that we have in preparing students for the 21st century. You know, as a member of the Leave It to Beaver generation, I was brought up in a very different time. I was prepared for what people thought would be a mature industrial economy. As a result of that missed forecast, I learned a bunch of things in school that are obsolete now.S: For example?
CD: For example, I learned a kind of decision-making that I never use. I learned that, to solve problems, you study the situation until you understand it thoroughly, go to your repertoire of standard problem-solving techniques, pull out the right mixture, and then apply some kind of a synthesis of those solutions and your problem is solved. Of course, today you and I face a very different kind of work life. We're constantly faced with novel situations that nobody has ever seen before. If we wait until we understand them thoroughly, it's much too late to act, because the challenge has already "morphed," changed into something else. The pace of the world is so fast that we don't have the luxury of completely understanding what we're facing, and we have to act on the basis of incomplete information.
S: That's true!
CD: It's going to be true for this whole next generation of students who are facing a 21st century world driven by information technologies, and increasingly biotechnologies, moving things forward very rapidly. Another thing I learned in my education was individual competition. That's certainly still very valuable, but I didn't learn teamwork and collaboration. And yet group efforts are at the heart of a lot of the modern workplace, as you know.S: And what about skills for the information age?
CD: Well, yes, I learned how to find information when I went to school. Of course, today in 15 seconds on the Web either of us can find 200 things we could probably use. But we've only got the time and energy to deal with five or six. So now we've got to filter instead of find—a very different and more complex set of skills. And, in contrast to the kind of education reform that we're living through, the point that I want to make is: It isn't just achieving traditional educational outcomes better, it's giving students a whole different set of knowledge and skills. We can't say to ourselves, well, if we can just raise everybody's test scores 100 points, we'll be fine. Because the fact of the matter is, there is an entire set of higher-order cognitive and affective and social skills that has never been as important before in human history as now, and this is central in preparing learners for the 21st century.S: So I hope you are going to tell me now that new interactive media do indeed apply here?
CD: We're facing the biggest gap between yesterday's workplace and tomorrow's that any group of educators have faced since the dawn of the Industrial Revolution a couple of centuries ago. And yet the very technologies that are creating this challenge are also providing an opportunity to meet it. In contrast to simply automating presentation, there's a lot that interactive learning technologies can do to address more powerful forms of pedagogy—based on learning by doing, collaborative learning, and mentoring via apprenticeships. All these instructional approaches let students act rather than listen, do things inside the technology world that are impossible in the real world, and link to outside resources and communities of practice. So yes, new interactive media give us a kind of opportunity that educational technologies have not had until now—a chance to change our pedagogy in ways that really open up powerful content to students.S: What is it about new interactive media that will give us this chance—what is the characteristic of these media that is most important?
CD: What is a medium? Partly, it's a channel, and that's what everyone is excited about. That's what all the hype is about. People are tremendously excited about the fact that we can reach almost anybody, anyplace, anytime. But what we miss about media is that they are also representational containers—that is, they shape not only whom we can reach, but what we can say. A simple example is that we say a picture is worth a thousand words. What that means is that some kinds of representations are better at conveying a particular type of meaning than other kinds of representations. I can try to describe my office to you and spend 15 or 20 minutes painting a verbal picture. Or I can show you an image and, in about three seconds, you'll have a sense of what my office looks like—much better than the verbal pictures could convey.S: Will we be communicating new types of information that can only be expressed with the new media—so in a sense our conversation would be limited or nonexistent in certain areas if we didn't have these media?
CD: Representations shape what we can think and what we can do. In his novel 1984, George Orwell wrote about a ruling class that was simplifying the language by removing words like freedom. Because, if you don't have a way to articulate a concept to yourself or express it to others, it becomes much harder to find a way to act on it. What the new media are doing is the opposite of what happened in 1984. By adding new kinds of representations, they are unobtrusively widening the range of messages and meanings that we communicate with our students.S: And what about the role of the Internet and the new types of interactions going on there?
CD: Well, even the metaphor of the channel is falling apart because the channels are so big now that we ourselves are inside them. There's a place called cyberspace where many of us spend a little time, and some of our students spend a great deal of their time, in contrast to real-world settings. Understanding what those virtual settings are like and what they're good for is extremely important. Isaac Asimov once said that the important thing to forecast is not the television, but the soap opera. In the same way, the important thing to forecast is not the channels, it's not the boxes and wires and switches, but instead it's the way that we can now sense and act and learn almost magically across distance and time, and what that means for our human capabilities in terms of teaching and learning.Continued at http://www.syllabus.com/syllabusmagazine/article.asp?id=6388
Bob Jensen's threads on education technologies are at http://www.trinity.edu/rjensen/000aaa/0000start.htm
"Needed: Creative Teaching and Commitment," Phillip D. Long, EDUCAUSE Review, May/June 2002 --- http://www.educause.edu/ir/library/pdf/erm0234.pdf
The next several years will mark a transition in the format of teaching, a transition marked less by revolutionary changes in technology and more by an exploitation of the potential that current technology developments afford to support learning in more heterogeneous settings. Computing power will continue to grow enormously. In fact, it appears that Moore’s law was conservative. Even without the radical chip-fabrication breakthroughs that loom on the horizon, processor speeds of 10 GHz are already being produced in test quantities.1 Yet the sheer power of computation does not link closely with changes in teaching. Today’s laptops can present extraordinary visualizations of electromagnetic force fields, for example, but this graphic power does not necessarily improve students’ conceptual understanding of physics. It takes someone—some faculty member—to integrate this capability appropriately into an instructionally meaningful classroom experience.
Phillip D. Long is Senior Strategist for the Academic Computing Enterprise at MIT.
"Why Companies Fail," Fortune Magazine, May 27, 2002Cover Story, pp. 50-64 --- http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=207919
http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=207908
Company
Slave to Wall Street
See no evil
Overdosing on risk
Dysfunctional board
Softened by success
Enron*
X
X
X
X
X
Arthur Andersen
X
X
Global Crossing*
X
X
X
X
Lucent
X
X
X
X
Warnaco*
X
X
X
Kmart*