New Bookmarks
Year 2006 Quarter 4:  October 1 - December 31 Additions to Bob Jensen's Bookmarks
Bob Jensen at Trinity University

For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm 

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Choose a Date Below for Additions to the Bookmarks File

December 31, 2006

November 30, 2006

October 31, 2006

 

 

December 31, 2006

 

 

 

Bob Jensen's New Bookmarks on December 31, 2006
Bob Jensen at Trinity University 

For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm
For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Bob Jensen's Blogs --- http://www.trinity.edu/rjensen/JensenBlogs.htm
Current and past editions of my newsletter called New Bookmarks --- http://www.trinity.edu/rjensen/bookurl.htm
Current and past editions of my newsletter called Tidbits --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm
Current and past editions of my newsletter called Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
 

Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   
 

Bob Jensen's various threads --- http://www.trinity.edu/rjensen/threads.htm
       (Also scroll down to the table at http://www.trinity.edu/rjensen/ )

Click here to search this Website if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/




Click Here for Tidbits and Quotations Between December 1 and December 31, 2006 --- http://www.trinity.edu/rjensen/book06q4.htm#Tidbits123106

Click Here for Humor Between December 1 and December 31, 2006 --- http://www.trinity.edu/rjensen/book06q4.htm#Humor113006

Links to Documents on Fraud --- http://www.trinity.edu/rjensen/Fraud.htm

Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm

Bob Jensen's Bookmarks --- http://www.trinity.edu/rjensen/bookbob.htm

Bob Jensen's links to free electronic literature, including free online textbooks --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Bob Jensen's links to free online video, music, and other audio --- http://www.trinity.edu/rjensen/Music.htm

Bob Jensen's documents on accounting theory are at http://www.trinity.edu/rjensen/theory.htm 

Bob Jensen's links to free course materials from major universities --- http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

Bob Jensen's links to online education and training alternatives around the world --- http://www.trinity.edu/rjensen/Crossborder.htm

Bob Jensen's links to electronic business, including computing and networking security, are at http://www.trinity.edu/rjensen/ecommerce.htm

Bob Jensen's links to education technology and controversies --- http://www.trinity.edu/rjensen/000aaa/0000start.htm

Bob Jensen's home page --- http://www.trinity.edu/rjensen/




Bob Jensen's complete set of Enron Updates are at http://www.trinity.edu/rjensen/FraudEnron.htm#EnronUpdates

Bob Jensen's threads on the Enron scandal are at http://www.trinity.edu/rjensen/FraudEnron.htm




How do scholars search for academic references?

Scholarpedia Launches at the end of 2006

From the University of Illinois Issues in Scholarly Communication blog on December 28, 2006 --- http://www.library.uiuc.edu/blog/scholcomm/

Scholarpedia feels and looks like Wikipedia - the free encyclopedia that anyone can edit. Indeed, both are powered by the same program - MediaWiki. Both allow visitors to review and modify articles simply by clicking on the edit this article link.
However, Scholarpedia differs from Wikipedia in some very important ways:
• Each article is written by an expert (invited or elected by the public).
• Each article is anonymously peer reviewed to ensure accurate and reliable information.
• Each article has a curator - typically its author -- who is responsible for its content.
• Any modification of the article needs to be approved by the curator before it appears in the final, approved version.

…Currently, Scholarpedia hosts Encyclopedia of Computational Neuroscience, Encyclopedia of Dynamical Systems and Encyclopedia of Computational Intelligence. Although all three will eventually be published in a printed form, they will also remain freely available and modifiable online. (Producing a hard copy of each encyclopedia is important for archiving; besides, many academicians have a preconception that the prestige of an online article is not as high as that of a printed one.)

If there is enough interest and support from the public, Scholarpedia will grow in the following directions:
• The neuroscience chapter of Encyclopedia of Computational Neuroscience will be a seed to start Encyclopedia of Cognitive Neuroscience, and then Encyclopedia of Neuroscience
• Encyclopedia of Dynamical Systems will be a seed to start Encyclopedia of Applied Mathematics, and then Encyclopedia of Mathematics.
• Encyclopedia of Computational Intelligence will be a seed to start Encyclopedia of Computer Science.

Read more at Scholarpedia --- http://www.scholarpedia.org/article/Main_Page

Second Nature: PLoS One Picks Up Where Nature Left Off

From the University of Illinois Issues in Scholarly Communication blog on December 27, 2006 --- http://www.library.uiuc.edu/blog/scholcomm/

The launch of the new PLoS ONE scholarly research portal looks like a big win for open access research content from a number of angles. PLoS ONE is posting research and will allow interactive review before and after publication for scientific articles via a very sophisticated publishing environment. The PLoS ONE platform applies many of the best practices of social media, providing ready access to comments posting and awareness of active discussions to draw in more active discussions. PLoS ONE will publish all papers that are judged to be rigorous and technically sound, and had already posted more an 100 papers by its launch - a remarkable number for a just-launched scholarly journal of any kind. By contrast Nature's recently shuttered open-review portal trial, which ran for around four months, attracted only 71 authors willing to post their work online and attracted 92 technical comments.

As we noted in our latest news analysis article one of the keys to successful social media products is a dedicated core of trusted contributors who will be able to ensure editorial success. PLoS ONE starts with a global editorial board of more than 200 scholars, ensuring a broad array of inputs for reviewing content. Some of the fears about having content rejected after having had it exposed to comments prior to publication may be relieved by the PLoS ONE policy that allows papers that have been already rejected by PLoS Biology and Medicine journals to be re-submitted via PLoS ONE. This is a potentially valuable feature, allowing research that may not have yet reached the highest levels of acceptance to mature through its exposure to comments from a broader audience.

PLoS ONE is finally opening the doors to the potential for fundamental changes in how scholarly research proves its worth. With an open exchange of ideas and commentary facilitated by technologies long available to the general public and a solid body of research and reviewers PLoS ONE holds out the potential to liberate the highest levels of scholarly innovation from the regimen of the printing press. Changing the way that research is paid for was a good first step for open access, but with the ability to eliminate artificial distribution bottlenecks that choke off natural conversations PLoS ONE may do for scholarly research what Wikipedia has done for reference materials - with much more integrity in the underlying editorial processes.

John Blossom, Content Blogger 12/22/06

Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm

How do scholars search for academic references?

Scholarpedia --- http://www.scholarpedia.org/article/Main_Page

PLoS One --- http://www.plosone.org/home.action

Google Scholar --- http://scholar.google.com/
Not to be confused with Google Advanced Search which does not cover many scholarly articles --- http://www.google.com/advanced_search?hl=en

Microsoft's Windows "Live Search" or  "Academic Search" ---
http://search.live.com/results.aspx?scope=academic&q=

Amazon's A9 --- http://a9.com/-/search/advSearch 

Beginning October 23, 2003, Amazon.com offers a text search of entire contents of over 120,000 books (over 10 million pages) ---
http://www.amazon.com/exec/obidos/tg/browse/-/10197021/ref%3Dsib%5Fmerch%5Fgw/104-3984945-7813514 

How It Works --- http://snurl.com/BookSearch 
A significant extension of our groundbreaking Look Inside the Book feature, Search Inside the Book allows you to search millions of pages to find exactly the book you want to buy. Now instead of just displaying books whose title, author, or publisher-provided keywords that match your search terms, your search results will surface titles based on every word inside the book. Using Search Inside the Book is as simple as running an Amazon.com search. 

Answers.com --- http://www.answers.com/

Wikipedia (heavily used by scholars in spite of authenticity risks)--- http://en.wikipedia.org/wiki/%s

Other Scholarly Search Engines (CrossRef and Scirus.) --- http://privateschool.about.com/b/a/116956.htm
Also see http://www.library.uq.edu.au/internet/scholsearch.html

Scholarly search tools

  • CiteBase
    Citebase is a trial service that allows researchers to search across free, full-text research literature ePrint archives, with results ranked according to criteria such as citation impact.

     

  • Gateway to ePrints
    A listing of ePrint servers and open access repository search tools.

     

  • Google Scholar
    A search tool for scholarly citations and abstracts, many of which link to full text articles, book chapters, working papers and other forms of scholarly publishing. It includes content from many open access journals and repositories.

     

  • OAIster
    A search tool for cross-archive searching of more than 540 separate digital collections and archives, including arXiv, CiteBase, ANU ePrints, ePrintsUQ, and others.

     

  • Scirus
    A search tool for online journals and Web sites in the sciences.
 

UCLA Library Scholarly Search Helpers --- http://www2.library.ucla.edu/googlescholar/searchengines.cfm

University of Kansas Scholarly Search Helpers --- http://www.lib.ku.edu/technology/searchengines/scholar.shtml

Social scientists and business scholars often use SSRN (not free) --- http://www.ssrn.com/

If you have access to a college library, most colleges generally have paid subscriptions to enormous scholarly literature databases that are not available freely online. Serious scholars obtain access to these vast literature databases.

Librarian's Index to the Internet --- http://www.trinity.edu/rjensen/searchh.htm#Librarian'sIndex

Searching the Deep Web --- http://www.trinity.edu/rjensen/searchh.htm#DeepWeb

Open Access Shared Scholarship --- http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

University Channel (video and audio) ---  http://uc.princeton.edu/main/

Bob Jensen's links to electronic literature, including free online textbooks and other learning materials --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm


I think this is a good deal for accounting students everywhere!

November 9, 2006 message from Tracey E. Sutherland [membership@aaahq.org]

I am proud to announce that student membership in the American Accounting Association is now available to full-time students residing anywhere in the world. Student members pay discounted membership dues and receive their selected Association journals online. Student membership also allows students to attend national, section, and regional meetings of the Association without vote but at reduced rates. Student members are also eligible to purchase Association publications at member prices.

Student membership dues in the AAA are as follows:

One electronic journal option - $25

Two electronic journal option - $35

Three electronic journal option - $45

Also included in student membership are electronic and hard copy versions of the AAA newsletter and updates/emails about upcoming events and conferences. Student members are also welcome to join any of our 15 interest sections at the discounted rate of only $6 per section.

Please encourage your students to take advantage of this new option to participate in the accounting education community, and share the news of this new opportunity with your colleagues.

Information about student membership in the AAA and an online student membership application can be found online at http://aaahq.org/membership/student_member.htm. If you have any questions about student membership, please feel free to contact Deirdre Harris at membership@aaahq.org or 941-921-7747, ext. 319.

Best regards,
Tracey Sutherland
Executive Director
American Accounting Association
Phone: 941/921-7747 ext. 311
Fax: 941/923-4093
AAA website:
http://aaahq.org
Email: tracey@aaahq.org

Although current issues of AAA publications are not free, I remind readers that back issues of The Accounting Review (up to I think year 2000) can be downloaded free as images (not PDF text) from http://maaw.info/TheAccountingReview.htm
You have to click on the "(Non USF user link)".

I've never found sources for free back issues of other AAA publications, although most college libraries subscribe to databases that provide free downloads of page images (not PDF text for older editions).


Congratulations Bill (Well Deserved)
The Management Accounting Section of the American Accounting Association is pleased to announce that it has awarded the Lifetime Contribution to Management Accounting Award to Professor William L. Ferrara. The AICPA sponsored award recognizes individuals who have made significant contributions to management accounting education, research, and practice over a sustained period of time through scholarly endeavors, teaching excellence, educational innovation, and service to the Management Accounting Section. The award extends profession-wide recognition to the recipient and promotes role models in management accounting.

"LIFETIME ACHIEVEMENT AWARD GIVEN TO WILLIAM FERRARA FOR CONTRIBUTIONS TO MANAGEMENT ACCOUNTING," AccountingEducation.com, December 7, 2006 --- http://accountingeducation.com/index.cfm?page=newsdetails&id=144010


Study: Most Audit Committees Do Not Have Even One Accountant
Then why call them audit committees?
A new report says that in 2005 the number of accountants sitting on audit committees doubled compared to four years prior, but that six out of 10 companies still did not have at least one accountant on their committee. The research from Huron Consulting is based on a sample of more than 700 audit committee members at 178 public companies from the NASDAQ 100 and Fortune 100 listings. The report analyzed patterns of audit committee composition between 2002 and 2005 using information contained in the companies' annual proxy statements and 10-K disclosures filed with the U.S. Securities and Exchange Commission.
"Study: Most Audit Committees Lack Accountant ," SmartPros, November 30, 2006 --- http://accounting.smartpros.com/x55639.xml

Bob Jensen's threads on proposed reforms are at http://www.trinity.edu/rjensen/FraudProposedReforms.htm


Issue 16 of the Ernst & Young Faculty Connection --- http://www.ey.com/global/content.nsf/US/EY_Faculty_Connection_(Issue_16)


IFAC Code of Ethics for Professional Accountants
From the IAS Plus blog on December 31, 2006 --- http://www.iasplus.com/ifac/0612ethicsed.pdf

The International Ethics Standards Board for Accountants (IESBA) has issued an exposure draft proposing to update and strengthen the auditor independence requirements contained in the IFAC Code of Ethics for Professional Accountants. Significant proposed modifications to the Code include:

Bob Jensen's threads on auditor professionalism and independence are at http://www.trinity.edu/rjensen/fraud001.htm#Professionalism


XBRL: You Can't Ignore It Anymore
The SEC has poured $54 million into a new interactive reporting tool to replace the retiring Edgar. Now the Big Four say it is time to scrap quarterly reports in favor of real-time (read: daily) financial reporting. If the phrase "XBRL" put you to sleep in the past, it's time to wake up. And as momentum for improving the format of data reporting builds, the push for enriched information content is moving along, too. Indeed, the big audit firms are calling on corporations to report scads of non-financial data to buttress the financials.
"XBRL: You Can't Ignore It Anymore," CFO Magazine Special Report, Various Dates in 2006 --- http://www.cfo.com/guides/guide.cfm/8310234?f=members_121406&x=1

THE INTERACTIVE DATA MOVEMENT

Q&A: Microsoft's Laux on Finance Reports The software giant's director of technical accounting and reporting thinks that once CFOs clear the Sarbox 404 hurdle, they'll show more enthusiasm for XBRL and the reporting of non-financial data.

Will the AICPA Take Over XBRL Standards? Companies could be filing XBRL-ready financial statements as soon as 2008. But some observers worry that the definitions corporations will have to follow will be written almost entirely by accountants.

The Good and Bad About XBRL's Future The setup costs for XBRL is relatively low, but without the proper user tools, regulatory filings can turn into "gibberish."

XBRL Will Keep Investors Wanting More The programming language will pique, not satiate, investors' appetite for more information.

SEC Hires a Company It's Investigating Hired on Monday to work on the commission's new filing system, BearingPoint earlier reported that it would file its financials late—and that it was under investigation by the SEC.

10-Ks, 8-Ks a Thing of the Past? In announcing that the SEC's XBRL project will be done within a year, Chairman Christopher Cox said investors will be able to assemble their own financial data, rather than rely on current regulatory documents.

XBR-What? Even as SEC chairman Cox champions "interactive data," few CFOs seem impressed. Is that because too few of the benefits accrue to them?

Another XBRL Nudge from the SEC The SEC issues a formal request to add an XBRL analysis tool to its online Edgar system. The move increases pressure on companies to voluntarily adopt the technology.

Will XBRL Improve Analyst Coverage? If more companies filed financial documents using XBRL, analysts would be able to spend less time on data collection and would be likely to ''expand buy- and sell-side coverage,'' according to one panelist at an SEC roundtable.

GE, Pepsi Join SEC Data Pilot More companies agree to provide the SEC with financial data in XBRL format, a program strongly backed by Chairman Christopher Cox.

Ready or Not, XBRL Is Coming The SEC and FASB are gearing up for XBRL, suggesting it's only a matter of time before its use becomes mandatory.

Tagged, But Not It Yet A small group of companies has signed up with the SEC to test Internet-tagging of financial data. Will this latest effort finally launch the long-predicted XBRL revolution?

XBRL: From Tags to Riches? The SEC is offering limited liability relief, the ability to file using Form 8-K, the freedom to tag just a portion of data, and other incentives to encourage companies to file financial data using XBRL.

What XBRL Means For You XBRL promises to bring a little context to numbers. And yes, that's a good thing.

THE SKINNY ON XBRL

For a more laid-back approach to our coverage of interactive data, check out the blog posts below, or click to go to the main blog page.

XBRL? No Thanks, Chaps

The Real-Time Reporting Conundrum

IDA? EVA? XENA?

Cue EDGAR's Fat Lady

Tiny XBRL

XBRL: Is it a TWR of BABL?

A Question of Terms

Bob Jensen's threads on XBRL --- http://www.trinity.edu/rjensen/XBRLandOLAP.htm

A while back I created a video tutorial for XBRL. You can download the xbrldemos.wmv files from the following path http://www.cs.trinity.edu/~rjensen/video/windowsmedia/


IFRSs, Applying International Financial Reporting Standards
Paul Pacter, a director in Deloitte's IFRS Global Office and webmaster of IASPlus, is co-author of the Second (Enhanced) Edition of the leading university textbook on IFRSs, Applying International Financial Reporting Standards, published this month by John Wiley and Sons (Australia). The focus of this 1,236-page text is on the analysis, illustration, and application of IFRSs. The textbook has been written for intermediate and advanced financial reporting courses, at both undergraduate and postgraduate level, and aligns with the knowledge expectations of the accounting profession. Paul's co-authors are Keith Alfredson, former chairman of the Australian Accounting Standards Board (AASB); Ruth Picker, AASB deputy chairman and a technical partner of Ernst & Young; Ken Leo and Jeannie Radford, both of Curtin University of Technology; and Victoria Wise of Victoria University. Here is the Book's Home Page, for more information and on-line purchasing. Or, for international orders, email custservice@johnwiley.com.au  (cite ISBN: 9780470808238).
IAS Plus, December 21, 2006 --- http://www.iasplus.com/index.htm


December 4, 2006 --- Dennis Beresford [dberesfo@TERRY.UGA.EDU]

The first of the PCAOB's inspection reports on Big 4 firm audits for the 2004 year end has been posted to the PCAOB's web site. It can be accessed at:

http://www.pcaobus.org/Inspections/Public_Reports/2006/Deloitte.pdf

Denny

December 9, 2006 reply from Bob Jensen

I'm getting increased messaging from companies who complain that the PCAOB inspections of Audits are making auditors highly conservative, especially regional auditing firms.

In particular auditors are becoming very tough about testing for hedge ineffectiveness under FAS 133. No auditing firm wants to get caught up anything like KPMG got caught up in before being fired from the Fannie Mae audit.

You can read more about ineffectiveness testing under the term "Ineffectiveness" at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#I-Terms

Because Denny is the new head of Fannie Mae's Audit Committee, I suspect he's heard a lot about ineffectiveness testing as of late.

Bob Jensen

December 9, 2006  reply from Denny Beresford [DBeresfo@TERRY.UGA.EDU]

Bob,

Without commenting on specific situations, it appears that the regulators would like companies and their auditors to actually follow the accounting literature. Seems pretty reasonable to me.

Denny


"PCAOB Finds Problems At PricewaterhouseCoopers (PwC)," by David Reilly, The Wall Street Journal, December 16, 2006; Page A4 --- http://online.wsj.com/article/SB116622194790551886.html?mod=todays_us_page_one

The Public Company Accounting Oversight Board, in an inspection report released Friday, cited PricewaterhouseCoopers LLP for deficiencies in some of its audits of public companies.

The PCAOB noted the firm had failed in some cases to catch or address errors in the way companies applied accounting rules or lacked sufficient evidence to back up some of its decisions. The PCAOB singled out for criticism nine audits done by PricewaterhouseCoopers, saying in a number of the cases the firm failed to adequately check the value of revenue, inventory and accounts receivable at companies whose books it was approving. The board's inspections entail reviews of a sampling of audits, not every audit done by a firm.

In keeping with the board's policies, the report doesn't identify the companies that had their audits cited. In addition, only a portion of the report is made public. A section that includes criticisms related to an accounting firm's quality-control systems is kept secret and never made public if a firm is able to show that it has corrected the problems cited within 12 months of the report's issuance.

In a comment letter included in the PCAOB report, PricewaterhouseCoopers said, "We have addressed each of the specific findings raised in the report and, where necessary, performed additional procedures or enhanced the related audit documentation." A spokesman for PricewaterhouseCoopers issued a statement saying that the firm believes it is "performing quality audits" and that it "will incorporate the board's findings" into the firm's practices.

The board's inspection reports are the only public assessment of audit firms' work available to investors and the corporate audit committees, which hire, fire and negotiate how much to pay the accounting firms.

The report is the second this year that the PCAOB has issued for a Big Four accounting firm covering inspections conducted last year of the firms' audits of companies' 2004 financial results. Earlier this month the agency issued its 2005 report for Deloitte & Touche LLP.

The PCAOB, which has been criticized for the length of time it is taking to issue annual reports, has yet to issue 2005 inspection reports for Ernst & Young LLP or KPMG LLP, the other two members of the Big Four. The board has until the end of the year to do so.

The PCAOB must issue an annual inspection report for any accounting firm that audits 100 or more public companies. Firms that audit fewer than 100 public companies are inspected every three years, although the PCAOB on Friday said it would look to amend this rule.

PricewaterhouseCoopers' response to its PCAOB report was in contrast to that of Deloitte, which included strong rebuttals of many of the board's findings.

Bob Jensen's threads on audit incompetence are at
http://www.trinity.edu/rjensen/FraudConclusion.htm#IncompetentAudits

Bob Jensen's threads on PwC troubles are at
http://www.trinity.edu/rjensen/Fraud001.htm#PwC


"FASB Proposes Improved Derivatives, Hedging Disclosures," SmartPros, December 11, 2006 --- http://accounting.smartpros.com/x55778.xml

The Financial Accounting Standards Board issued a proposal that would provide investors and others with better information about the effects of derivative and hedging activities on a company's financial statements.

The proposed statement specifically addresses constituents' concerns that existing disclosure requirements associated with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, do not provide adequate information to financial statement users.

"The proposed disclosure requirements are intended to enhance understanding of how and why entities use derivatives, how they are accounted for in an entity's financial statements, and how they affect an entity's financial position, results of operations, and cash flows," said Kevin Stoklosa, FASB Project Manager.

The exposure draft would enhance the current disclosure framework by requiring that objectives and strategies for using derivative instruments be discussed in terms of underlying risk and accounting designation. The exposure draft would require tabular disclosure of notional and fair value amounts of derivatives instruments and the gains and losses on derivatives instruments and related hedged items. Additionally, the proposed statement would require disclosure of information about counterparty credit risk and the existence and nature of contingent features in derivative instruments.

The requirements of the proposed Statement would be effective for financial statements issued for fiscal years and interim periods ending after Dec. 15, 2007, with early application encouraged. The proposed statement would encourage but would not require disclosures for earlier periods at initial adoption. In years after initial adoption, the proposed statement would require disclosures for earlier periods.

The board is seeking written comments on the proposal by March 2, 2007.

For a short time you can download the proposed FAS 133 amendment from http://www.fasb.org/draft/ed_derivatives_disclosure.pdf

Bob Jensen's tutorials on FAS 133 and IAS 39 are at
http://www.trinity.edu/rjensen/caseans/000index.htm

A slide show on FAS 133 and IAS 39 disclosure rules is available at http://www.cs.trinity.edu/~rjensen/Calgary/CD/JensenPowerPoint/


Accounting Snags Push Dresser to Restate Problems with derivative transactions, inventory controls
Dresser Inc. said it will restate its financial statements for 2001 through 2003 based on a host of accounting errors. In May, the industrial engineering company had warned that it would restate its 2004 annual filing, its 2004 and 2005 quarterly financial statements, and would be evaluating the potential need to restate prior periods. The accounting errors relate to inventory valuation and derivative transactions under the Financial Accounting Standards Board's FAS 133. Other accounting errors relate to the company's businesses which were sold in November 2005.
Stephen Taub, "Accounting Snags Push Dresser to Restate Problems with derivative transactions, inventory controls, keep IPO on hold," CFO Magazine, November 26, 2006 ---
http://www.cfo.com/article.cfm/8346406/c_8347143?f=FinanceProfessor.com

Dresser Inc. changed its independent auditor to Pricewaterhouse Coopers (PwC) in 2002 and with plans to restate its 2001 financial statements after it changed auditors. The previous auditor was KPMG.

Bob Jensen's threads on KPMG are at --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG


Monster says it made monster accounting errors
Monster Worldwide Inc. said on Wednesday it overstated profit from 1997 to 2005 by a total of $271.9 million, a result of its investigation into historical stock option grants and accounting. In a filing with the U.S. Securities and Exchange Commission, the parent of job search Web site Monster.com recorded a net charge of $9.2 million for 2005, $14.4 million for 2004, $27 million for 2003, $44.9 million for 2002, $65.6 million for 2001, and $110.8 million for the cumulative period of 1997 through 2000.
"Monster says overstated '97-'05 profit by $271.9 m," Rueters, December 13, 2006 --- Click Here

The Independent Auditor for Monster Worldwide is KPMG --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG


It just gets deeper and deeper for KPMG

Fannie Mae Sues KPMG
The mortgage lending company Fannie Mae filed suit on Tuesday against its former auditor KPMG, accusing the firm of negligence and breach of contract for its part in the flawed accounting that led to a $6.3 billion restatement of earnings. Fannie Mae states in its complaint that KPMG applied more than 30 flawed principles and cost it more than $2 billion in damages. Fannie Mae fired the accounting firm in mid-December 2004, just a week after the Securities and Exchange Commission ordered the company to restate more than two years of flawed earnings. A KPMG spokesman, Tom Fitzgerald, said the company planned to “pursue our own claims against Fannie Mae.”
"Fannie Mae Sues KPMG," The New York Times, December 13, 2006 --- http://www.nytimes.com/2006/12/13/business/13kpmg.html?_r=1&oref=slogin

KPMG fired back at former audit client Fannie Mae this week, saying it would counter the mortgage giant’s $2 billion negligence and breach of contract lawsuit. KPMG “will pursue our own claims against Fannie Mae” in the U.S. District Court in Washington, D.C., spokesman Tom Fitzgerald told reporters Tuesday. Fannie Mae filed its lawsuit Tuesday in the Superior Court of the District of Columbia. Fitzgerald said the issues raised in Fannie Mae's lawsuit “are already pending" in shareholder lawsuits before the federal district court. He did not elaborate on what claims KPMG would make against Fannie Mae, Reuters reported.
"KPMG Plans Counter Suit of Fannie Mae," AccountingWeb, February 14, 2006 ---
http://www.accountingweb.com/cgi-bin/item.cgi?id=102902 

Bob Jensen's threads on KPMG are at --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG


Guilty Plea Made in Trial Over Shelters From KPMG
A businessman pleaded guilty yesterday to charges of conspiracy and fraud and agreed to help federal prosecutors pursue indicted former employees of the accounting firm KPMG in a widening investigation into questionable tax shelters. The businessman, Chandler Stuart Moisen, who appeared in Federal District Court in Manhattan, is the third person to enter a guilty plea in the tax shelter investigation, which has ensnared accountants, bankers, lawyers and investment advisers. . . . . . . Although Mr. Moisen is a relatively minor figure in the tax shelter inquiry, his offer to cooperate with the prosecution could have major consequences for the KPMG defendants, in particular for Robert Pfaff, a former KPMG partner with whom Mr. Moisen worked closely to sell questionable tax shelters.
Lynnley Browning, "Guilty Plea Made in Trial Over Shelters From KPMG," The New York Times, December 22, 2006 --- http://www.nytimes.com/2006/12/22/business/22shelter.html?ref=business

Bob Jensen's threads on KPMG are at --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG


Prison for Chip Executive
An executive with Samsung Electronics will plead guilty, serve 10 months in prison and pay a $250,000 fine for conspiring to fix prices of computer memory chips, the Justice Department said on Thursday. Young-hwan Park participated in the conspiracy while he was a vice president for sales at Samsung, which is based in South Korea and is the world’s top maker of memory chips, the department said.
"Prison for Chip Executive," The New York Times, December 22, 2006 --- http://www.nytimes.com/2006/12/22/technology/22samsung.html


"Fannie Mae Faces Work After Restatement," by Marcy Gordon, SmartPros, December 8, 2006 --- http://accounting.smartpros.com/x55766.xml

Mortgage giant Fannie Mae has taken a significant stride in its march out of an accounting scandal by completing a restatement of past earnings but still faces tough work to make its financial reporting current.

The restatement for 2001 through June 30, 2004, made public on Wednesday, wiped out $6.3 billion in profit for the government-sponsored company, which finances one of every five home loans in the United States. But it was well below Fannie Mae's earlier estimate of $10.8 billion. Ordered by the government two years ago, the massive reworking of its accounting has cost the company some $1 billion this year to carry out.

Shares of Fannie Mae rose $1.64, or almost 3 percent, to $60.14 in early trading Thursday on the New York Stock Exchange. It has traded in a range of $46.17 to $62.37 over the last 52 weeks, compared with its peak of around $80 in early 2004.

It was the first earnings statement filed by Fannie Mae since late 2004. The scandal erupted in the fall of that year when federal regulators accused Washington-based Fannie Mae - with its long-standing prestige, vaunted political clout and reputation for financial excellence - of serious accounting problems and earnings manipulation to meet Wall Street targets.

Fannie Mae also announced Wednesday an increase in its quarterly dividend to 40 cents from 26 cents, where it had been since being slashed in half in January 2005.

"We believe that returning higher levels of capital back to shareholders is a top priority at Fannie Mae, and this marks an important first step," Moshe Orenbuch, an analyst at Credit Suisse, said in a research note issued Thursday.

The company hasn't said when it will get caught up and report its results for 2005 and 2006; it could take a year or two.

The restatement "is a key step forward for the company and represents two years of hard work," James B. Lockhart, director of the Office of Federal Housing Enterprise Oversight, said in a statement Wednesday. "Much remains to be done. ... Fannie Mae faces enormous challenges in fixing its operational and risk management systems, in (financial controls) compliance, and in producing audited financial statements for 2005 and 2006."

Jim Vogel, an analyst with FTN Financial Capital Markets, said in a research note that for Wall Street, the concern is "if there's a pattern of sustained quarterly losses that appear to reflect more difficulties in risk management than the market had thought."

OFHEO is the federal agency that regulates Fannie Mae and Freddie Mac, its smaller sibling in the $8 trillion home-mortgage market. Last May, it issued a blistering report alleging a six-year accounting fraud at Fannie Mae, the second-largest U.S. financial institution after Citigroup Inc. Regulators said the scheme included manipulations to reach quarterly earnings targets so that company executives could pocket hundreds of millions in bonuses from 1998 to 2004.

Lockhart also said Wednesday the agency plans to file a lawsuit before year's end to recover tainted bonus money from former Fannie Mae officials, including ex-chief executive Franklin Raines and chief financial officer Timothy Howard. Raines, a prominent Washington figure who was White House budget director in the Clinton administration, was swept out of office in December 2004 along with Howard. A number of senior executives and board directors have left the company.

Fannie Mae paid a record $400 million civil fine in a settlement with OFHEO and the Securities and Exchange Commission. It also agreed to limit the growth of its multibillion-dollar mortgage holdings, capping them at $727 billion, and to make top-to-bottom changes in its corporate culture, accounting procedures and ways of managing risk.

The company also disclosed Wednesday that its chief executive, Daniel Mudd, received a pay package of $13.1 million, including a $2.6 million bonus, for 2005. Mudd, who was the top operations official at the time of the accounting misdeeds, was elevated to the CEO in a management shakeup in December 2004.

In detailing its restatement, Fannie Mae cited a $7 billion net decrease from previously reported earnings for periods prior to 2002, a $705 million reduction for 2002, a $176 million increase for 2003 and a $1.2 billion increase for the first six months of 2004.

Over the last two years, Fannie Mae has disclosed a passel of new accounting problems that had been uncovered in several areas, including its core business of issuing securities backed by the billions of dollars of home mortgages annually that it buys from lenders and bundles together for resale to investors worldwide. Other problems were revealed in loans, houses acquired through foreclosures, interest on delinquent home loans and reverse mortgages.

They all were in addition to the accounting-rule violations that came to light in September 2004 involving derivatives, the financial instruments that Fannie Mae and Freddie Mac use to hedge against swings in interest rates.

Fannie Mae escaped criminal prosecution over the accounting failure. The Justice Department had pursued a criminal investigation, but federal prosecutors said in August that they had shut down their probe without bringing any action. The SEC still could bring civil actions against individual executives, including people no longer at Fannie Mae, with the burden of proof less stringent than in criminal prosecutions. Several shareholder lawsuits have been filed against the company and current and former executives.

Fannie Mae and Freddie Mac were created by Congress to pump money into the home-mortgage market to keep interest rates low and make home ownership affordable for low- and moderate-income people.

Freddie Mac, which also is government-sponsored and has its stock publicly traded, had its own accounting scandal that came to light in June 2003. The company misstated earnings by some $5 billion - mostly underreported - for 2000-2002 to smooth out volatility in profit and uphold its image on Wall Street as a steady performer.

Bob Jensen's threads on Fannie Mae are
http://www.trinity.edu/rjensen/caseans/000index.htm


"Regulators sue ex-Fannie Mae executives," Marcy Gordon, The Columbus Dispatch, December 19, 2006 ---
Click Here

The government yesterday filed civil charges against former Fannie Mae chief Franklin Raines and two other top executives, accusing them of misconduct costing shareholders billions of dollars.

The Office of Federal Housing Enterprise Oversight announced that it is seeking fines and the return of millions in bonus money. It filed 101 charges against Raines, former Chief Financial Officer Timothy Howard and former controller Leanne Spencer.

Raines and Howard were swept out of office two years ago in the multibillion-dollar accounting debacle at the government-sponsored company, which finances one of every five home loans in the United States. Fannie Mae earlier this month announced a longawaited restatement for 2001 through June 30, 2004, that erased $6.3 billion in profit.

OFHEO said it is seeking civil fines of $100 million or more against the three former executives and restitution of more than $115 million in bonus money tied to an improper accounting scheme.

Continued in article


Will Fannie eventually become an even bigger taxpayer loss than the infamous Savings and Loan frauds?
Fannie Mae's stock price has been on an upswing since late summer, reflecting investor confidence that a Democratic Congress would make strict scrutiny of the mortgage giant less likely (see the nearby chart). And there's no doubt that with Barney Frank wielding the gavel in the House Financial Services Committee, Fannie Mae and Freddie Mac will have a pal on Capitol Hill. Mr. Frank is already talking about expanding the companies' operations (and thus taxpayer exposure to any financial accident) . . . The well-documented allegation is that Fannie's managers manipulated earnings to ensure that their bonuses and incentive compensation were maximized. If Fannie didn't in fact reach those earnings targets -- and it has since restated its earnings by $6.3 billion -- then that money does not belong to the managers who "earned" it.
"Ill-Gotten Raines," The Wall Street Journal, December 20, 2006; Page A18 --- http://online.wsj.com/article/SB116658240822955337.html?mod=djemITP



Yet Again the SEC Amends Executive Compensation Disclosure (particularly regarding stock options)
The US Securities and Exchange Commission has amended its executive and director compensation disclosure rules to more closely conform the reporting of stock and option awards to FASB Statement No. 123 (revised 2004) Share-Based Payment. FAS 123R is similar to IFRS 2 Share-based Payment. The amendment modifies rules that were adopted in July 2006.
SEC Press Release 2006 219 --- http://www.iasplus.com/usa/0612seccomp.pdf


Bob Jensen's threads on outrageous executive compensation are at http://www.trinity.edu/rjensen/FraudConclusion.htm#OutrageousCompensation
 



Where were the auditors?
Firms cook the books to set executive pay
And these same executives are protesting Sarbanes-Oxley

 

 

"Firms cook the books to set executive pay," Editorial, The New York Times, December 19, 23006 --- http://www.sptimes.com/2006/12/19/Opinion/Firms_cook_the_books_.shtml

Among the corporate deceits that buttress America's obscene executive pay is the one about comparability. But a new federal rule may help expose the reality of so-called "peer groups." Far too often, the list of comparable CEOs is cooked.

As the New York Times reported in its latest installment on executive pay, former New York Stock Exchange chairman Richard Grasso was a poster child for the abuse. His $140-million compensation package was rationalized, in part, by comparing his job to those at companies with median revenues 25 times the size of the exchange, assets 125 times and employee bases 30 times the size.

Grasso was hardly alone. Executives have learned that the path to personal riches is paved by "peer groups" that include big and profitable companies. Eli Lilly compared itself to eight companies that had much higher profit margins. Campbell Soup used one set of companies for executive pay and a separate one as a benchmark for stock performance. Ford Motor Co. compared itself to other industries, its proxy statement said, because "the job market for executives goes beyond the auto industry."

The "job market" argument is particularly disingenuous. As the New York Times noted, ousted Hewlett-Packard chief executive Carly Fiorina was replaced by a data processing executive who was earning less than half her pay. His company, NCR, never appeared on the Hewlett-Packard "peer group."

The growth in executive pay has been so meteoric in the past quarter-century that it is demeaning the contributions of average workers and undermining public faith in corporate America. Last year, according to the Corporate Library, the average pay for an S&P 500 chief executive was $13.5-million. The average CEO now earns 411 times the average worker, up from 42 times in 1980.

The new Securities and Exchange Commission disclosure rules went into effect on Friday, and compensation consultants are scrambling to cover their tracks. But stockholders who have been kept mostly in the dark will now at least have a chance to see the playbook. That's the first step toward ending these games of executive greed.

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm

 

Bob Jensen's threads on outrageous executive compensation are at http://www.trinity.edu/rjensen/FraudConclusion.htm#OutrageousCompensation

 

Bob Jensen's threads on fraudulent and incompetent auditing are at http://www.trinity.edu/rjensen/FraudConclusion.htm#IncompetentAudits
 


Where can you learn more about FAS 133?

February 15, 2006 message from XXXXX

Bob,

. . . .The purpose of my email is to solicit your opinion on the best resources I can leverage to answer various issues that arise and generally broaden my understanding of FAS 133. work in risk management but have difficulties with the accounting side of FAS 133.  [Other portions of message deleted]

Thanks for your time!

XXXXX

February 15, 2006 reply from Bob Jensen

Hi XXXXX,

I receive inquiries like this almost daily. Usually these questions come from accountants who do not have sufficient background in derivative instruments contracting and economic hedging and, as a result, have not been able to tackle FAS 133 and IAS 39. Sometimes the inquiries come from people like your self who have good background in finance and risk management but cannot comprehend the quirks of accounting that led to this monstrous set of incomprehensible rules for booking and/or disclosing derivative financial instruments.

When accountants do not understand derivatives and risk management, I tell them to work through one of the best textbooks I've ever seen (which has no accounting whatsoever inside):
Derivatives:  An Introduction by Robert A Strong, Edition 2
(Thomson South-Western, 2005, ISBN 0-324-27302-9)

When people like yourself who understand derivatives and risk management but cannot understand the quirks of accounting, I begin with an illustration of a basic quirk in accounting--- a quirk discussion that also introduces the concepts of "forecasted transaction" and "firm commitment" hedging under FAS 133 rules.

Unbooked Financial Risks
One of the first things we learned in Accounting 101 is that accountants traditionally do not book (and usually do not even disclose) purchase/sales contracts until legal title to the goods and services actually changes hands. Reasons are complicated, but the most fundamental reason is that defaulted purchase/sales contracts are usually settled in court or out of court for a small fraction of contracted amounts, i.e., settlements are usually based upon damages rather than contracted amounts in full. For example, when Dow Jones contracts with St. Regis Paper Company for paper purchases over the next 50 years of publishing The Wall Street Journal it would be absurd to try to book a soft estimate of the billions of the actual contracted dollars of this contract. Damage estimates are virtually impossible to estimate and change from month to month as more trees for paper harvesting are planted.

Hence the biggest problem finance and economics professors have with accounting professors is that purchase/sales contracts entail financial risks that accounting professors refuse to book. Furthermore these purchase/sales contract risks are commonly hedged. When the notional (quantity) and underlying (price or rate) are contracted, the purchase/sales contract is called a "firm commitment" under FAS 133. There is no cash flow risk in firm commitments, but they can be hedged for fair value (when future spot prices differ from contracted prices). When the notional (quantity) is contracted or otherwise reasonably certain and the underlying is not specified there is cash flow risk that can be hedged with a cash flow hedge defined in FAS 133. Also firm commitments and forecasted transactions can be hedged for foreign currency (FX) risk apart from U.S. dollar risks. Most accountants do not even understand that it is impossible to simultaneously hedge for fair value and cash flow.

FAS 133 as Source Material for Comedy Central TV
My purpose here is not to launch into a tutorial about purchase/sales contract hedge accounting rules under FAS 133. Rather my purpose is to illustrate the dilemma caused by traditional quirks in accounting. Where finance and accounting professors differ is on the basic concept of financial risk. Finance professors are confused when there are financial risks that can be hedged even though those risks are virtually ignored by accountants because legal title has not changed hands. Then along comes FAS 133 that declares the hedge contracts for unbooked hedged items must be booked and maintained at fair value even though the hedged items themselves are not booked until title passes. This begins to sound like great source material for Comedy Central TV --- perhaps the Cobert Report!

Where To Begin
Adding pain to misery is the fact that FAS 133 rules for fair value hedges differ greatly from rules for cash flow and FX hedges. Finance professors find the stated reasons in FAS 133 incomprehensible. Accounting professors don't bother to open FAS 133 and never get out of the starting gate in understanding derivatives, hedging, risk management, and FAS 133.

So where do you begin to understand the accounting quirks in FAS 133? My first piece of advice is to totally ignore accounting textbooks, including those that may claim to be derivatives accounting textbooks. These are worthless. Second ignore the finance and economics textbooks since authors of these books do not understand accounting quirks.

You mentioned Ira Kawaller. Ira is an economist who admits to having difficulties understanding accounting quirks. This is why he sometimes brings me into partner with him on teaching FAS 133 --- my role is to teach accounting quirks of FAS 133. I also give my own workshops on this topic --- http://www.trinity.edu/rjensen/resume.htm#Presentations

I also provide free online FAS 133 and IAS 39 tutorials and videos --- http://www.trinity.edu/rjensen/caseans/000index.htm

But the bottom line is that my audiences and my readers conclude that my biggest success in life is confusing them about accounting for derivatives. My defense is that it is very difficult to explain the huge gap between financial risk versus what accountants book. I get a lot of compliments for what I provide online, but the most common complaint is that my online materials are a nightmare to navigate

Where should you dig into to learn about the accounting quirks of FAS 133? The bottom line is that I don't know! You can pay thousands of dollars to attend one of our seminars, but these are so broad brushed that our audiences feel like they've just had a meal on hors'deovers.

The bottom line is that it is probably best to dig into the FASB's "Green Book" line for line as painful as that becomes for 873 pages of jargon ---
http://fasbpubs.stores.yahoo.net/dc133-3.html
 

Also request the FASB's supplemental documentation (119 pages to date) of error corrections in the Green Book.

Secondly, memorize the FAS 133 and IAS 39 rules rather than try to find a rationale. For example, it is utterly frustrating trying to reason why hedge accounting for cash flow/FX hedges use OCI offsets that are verboten  fair value hedges (never OCI for FV hedges). You should just to do or die, not reason why.

I do suggest that you especially look at my Excel workbooks at http://www.cs.trinity.edu/~rjensen/Calgary/CD/FAS133AppendixB/

I also suggest that you look at my PowerPoint files at http://www.cs.trinity.edu/~rjensen/Calgary/CD/ 

There is much pressure outside and within the FASB and the IASB to simplify rules for accounting for derivative financial instruments. This is a bit like appeals to reduce felony statutes to a mere Ten Commandments on stone tablets. Simplification sounds great as a principle, but in my viewpoint oversimplification will be disastrous. The reason is that there are thousands of different kinds of risk management contracts, and it's impossible to derive ten commandments covering all the variations arising in the practice of risk management.

Some argue that fair value accounting (in place of historical cost accounting) is the answer, but I have my doubts about this oversimplification ---
http://www.trinity.edu/rjensen/FairValueDraft.htm
Also see
http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue

For example, fair value accounting is no panacea to accounting for purchase/sales contracts.

Bob Jensen

 


Federal Regulators Fine Grant Thornton $300,000 Over Audit of Failed Bank
Federal bank regulators have fined the accounting firm Grant Thornton LLP $300,000 for what they called "reckless conduct" in its audit of First National Bank of Keystone, a West Virginia institution whose collapse in 1999 was one of the costliest U.S. bank failures in the past decade.
Marcy Gordon, "Federal Regulators Fine Grant Thornton $300,000 Over Audit of Failed Bank, SmartPros, December 11, 2006 --- http://accounting.smartpros.com/x55776.xml

Grant Thornton LLP said it will challenge recent Treasury Department (DoT) findings and penalties stemming from the firm’s audit of a bank that collapsed in 1999. The Office of the Comptroller of the Currency, the Treasury agency that regulates nationally chartered banks, on Friday announced the telling $300,000 fine against the Chicago-based CPA firm that audited First National Bank of Keystone in 1998.
"Grant Thornton to Fight Claim of “Reckless” Audit," AccountingWeb, December 12, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102894

Bob Jensen's threads on Grant Thornton (especially the Refco audit failure) are at http://www.trinity.edu/rjensen/Fraud001.htm#GrantThornton


"Accounting Firms Seek Overhaul," by Tad Kopinski, Institutional Shareholder Services ISS, November 20, 2006 ---
http://blog.issproxy.com/2006/11/accounting_firms_seek_overhaul.html

The six biggest international audit firms have called for a complete overhaul of corporate financial reporting as the U.S. and Europe move toward convergence of international audit standards.

In a Nov. 8 report, the accounting firms propose to replace static quarterly financial statements with real-time, Internet-based reporting that encompasses a wider range of performance measures, including non-financial ones. The report was signed by the chiefs of PricewaterhouseCoopers International, Grant Thornton International, Deloitte, KPMG International, BDO International, and Ernst & Young. The report can be downloaded here.

"We all believe the current model is broken," Mike D. Rake, KPMG's chairman, told the Financial Times. "There are significant shortcomings to U.S. GAAP [Generally Accepted Accounting Principles] and issues of concern with International Financial Reporting Standards. We're not in a very happy situation."

Rake noted that quarterly reporting and the short-term focus on companies' ability to meet Wall Street earnings expectations helped foster accounting scandals. The firms have been working on their proposals for more than a year.

The large discrepancy between the "book" and "market" values of many listed companies is clear evidence that the content of traditional financial statements is of limited use, the report said. The audit firms recommend using non-financial measures that would provide more valuable indications of a company's future prospects, such as customer satisfaction, product or service defects, employee turnover, and patent awards.

The report said the following developments need to occur to ensure capital market stability, efficiency, and growth:

--Investor needs for information are well defined and met;
--The roles of the various stakeholders in these markets--financial statement preparers, regulators, investors, standards setters, and auditors--are aligned and supported by effective forums for continuous dialogue;
--The auditing profession is vibrant, sustainable, and provides sufficient choice for all stakeholders in these markets;
--A new business-reporting model is developed to deliver relevant and reliable information in a timely way;
--Large, collusive frauds are more and more rare; and
--Information is reported and audited pursuant to globally consistent standards.
 

ICGN Expresses Concerns Over Convergence

Meanwhile, the International Corporate Governance Network (ICGN) has expressed concerns about a draft proposal on harmonizing international and U.S. accounting standards. The ICGN argues that the draft doesn't pay sufficient attention to shareholder rights and the stewardship role of boards and investors.

"Convergence must be there to raise standards," ICGN Executive Director Anne Simpson told the Financial Times. "Convergence for its own sake is not of value."

The ICGN letter was in response to a request for comment by the International Accounting Standards Board (IASB) and its U.S. counterpart, the Financial Accounting Standards Board (FASB) on a discussion paper on harmonization objectives. The IASB and the FASB have been working on harmonizing the two accounting systems since October 2002 and have set 2008 as the goal for finalizing the process.

Unlike the current IASB auditing framework, the discussion paper endorses a model more similar to U.S. standards, dropping a key shareowner safeguard embedded in U.K.-style standards, the ICGN noted. Rather than focusing audits on past transactions, the discussion paper calls for audits to focus on "decision-usefulness" that can affect company cash flows, the letter said.

"We are concerned that this emphasis on the ability to forecast the future does not fully capture the requirements of stewardship, which is concerned with monitoring past transactions and events," Mark Anson, the CEO of Hermes Pensions Management who chairs the ICGN, wrote in the Nov. 2 letter. (A Hermes affiliate is a part owner of ISS.)

"In many jurisdictions, financial statements provide significant input into the decisions we make as shareholders, by providing an account of past transactions and events and the current financial position of the business," the ICGN letter noted. "In de-emphasizing things that are particularly [relevant to shareholders' risks and rights], the standards setters could achieve the perverse effect of actually increasing the cost of capital."

The ICGN includes more than 400 institutional and private investors, corporations, and advisers from 38 countries with capital under management in excess of $10 trillion, according to its Web site. The ICGN letter also was signed by Claude Lamoureux, CEO of the Ontario Teachers' Pension Plan.

A copy of the IASB discussion paper, which was published in July, can be downloaded here.

 

Bob Jensen's threads on standard setting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#MethodsForSetting

Bob Jensen's threads on fair value accounting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue

Bob Jensen's threads on troubles in the big international accounting firms are at http://www.trinity.edu/rjensen/Fraud001.htm

Bob Jensen's threads on proposed reforms are at
http://www.trinity.edu/rjensen/FraudProposedReforms.htm


Bob Jensen's threads on audit firm litigation instances are at http://www.trinity.edu/rjensen/Fraud001.htm

From The Wall Street Journal Accounting Weekly Review on November 3, 2006

TITLE: Booming Audit Firms Seek Shield From Suits
REPORTER: David Reilly
DATE: Nov 01, 2006
PAGE: C1
LINK: http://online.wsj.com/article/SB116235111161209823.html?mod=djem_jiewr_ac 
TOPICS: Auditing, Auditing Services

SUMMARY: The Big Four U.S. audit firms--PricewaterhouseCoopers, Deloitte & Touche, Ernst &Young, and KPMG--want legal limits on court damages granted to investors and others after failure of publicly traded companies they audit. "Their argument is being championed by an influential group recently formed to study the competitiveness of U.S. financial markets with the encouragement of Treasury Secretary Henry Paulson." Others, including the U.S. Chamber of Commerce and the European Commission, are considering similar measures.

QUESTIONS:
1.) The argument against limiting legal liability of public accounting firms argues that auditors should "be held to a high standard of performance." Explain this argument and describe who in business and investing activities likely holds this view.

2.) The argument for limiting legal liability includes the point made by the chief executive of Deloitte Touche Tohmatsu in the article that "the cost of ...audits was never built for insuring capital markets." Summarize the argument in support of limiting legal liability for audit firms, including and explanation of this statement.

3.) How did the Arthur Andersen firm failure result from the Enron scandal? How was the possibility of a similar fate for KPMG avoided? How do these events contribute to the debate on this issue?

4.) How did the Committee on Capital Markets Regulation become involved in the debate on limiting audit firms' legal liability?

5.) How does the discussion in the article indicate the international focus on this issue? Cite all points you can find in the article.

Reviewed By: Judy Beckman, University of Rhode Island

--- RELATED ARTICLES ---
TITLE: Panel's Mission: Easing Capital-Market Rules
REPORTER: Alan Murray
PAGE: A2
ISSUE: Sep 12, 2006
LINK: http://online.wsj.com/article/SB115802003723560082.html?mod=djem_jiewr_ac

"Booming Audit Firms Seek Shield From Suits," by David Reilly, The Wall Street Journal, by November 1, 2006; Page C1 ---
http://online.wsj.com/article/SB116235111161209823.html?mod=todays_us_money_and_investing

Business is booming at the world's biggest accounting firms, so their top lobbying priority may seem ironic: They want government protection from a big financial hit.

Revenues at the Big Four -- PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young and KPMG -- have grown at a double-digit pace in recent years as audit fees soared. Regulatory overhauls enacted in the wake of accounting scandals earlier this decade have led to new work for firms. One of the biggest problems facing the Big Four these days is a lack of staff to meet the huge demand for services.

Yet the Big Four want to limit court damages that investors and others can seek from them for flawed audits of public companies. Without such a shield, the firms say, it's only a matter of time before one of them is felled by a massive court award.

Their argument is being championed by an influential group recently formed to study the competitiveness of U.S. financial markets with the encouragement of Treasury Secretary Henry Paulson. The group is expected to recommend in coming weeks that the government enact new protections for auditors. A panel set up within the powerful U.S. Chamber of Commerce is sounding a similar theme. In Europe, the European Commission is studying the issue and is likely to recommend limitations on the damages accounting firms can face.

How much risk the big firms actually face has been largely absent from the debate over auditor liability. Despite a slew of big-ticket lawsuits that emanated from corporate scandals earlier this decade, none of the firms suffered a fatal blow from those legal actions. The one big firm that folded, Arthur Andersen LLP in 2002, fell victim not to a lawsuit but to a criminal obstruction-of-justice conviction, later overturned on appeal.

"I don't see that auditors have a real need for any kind of special protections," said Bill Kelley, general counsel at the Retirement Systems of Alabama, which has sued accounting firms following corporate blowups. "Auditors need to be held to a high standard. Those are the outsiders we rely on. It's tough to have that responsibility, but that's what they're getting paid for."

Mr. Kelley and likeminded critics say it's also difficult to quantify the risk the firms face from a big court award. That's because the accounting firms are private partnerships that don't, in most cases, disclose their financial condition or results. So outsiders don't know how much capital the firms have, their level of profitability or even how much insurance they carry.

If anything, the risk from class-action lawsuits appears to be dwindling. The number of class actions that cite auditors as defendants declined to five last year from 14 in 2002, according to the Stanford Law School Securities Class Action Clearinghouse.

The bigger threat to firms has stemmed not from civil litigation, but from alleged criminal actions related to their conduct. In addition to the Arthur Andersen case, KPMG LLP suffered a near-death experience last year due to its sale of improper tax shelters; federal prosecutors ultimately decided not to indict the firm, a move that likely would have put it out of business.

The Andersen and KPMG cases have led some lawyers to claim that the Big Four are already seen by government as too big to fail. "The fact is that the government couldn't indict KPMG for policy reasons," said Sean Coffey, a partner at New York law firm Bernstein Litowitz Berger & Grossmann LLP, who has sued several accounting firms. "These folks are effectively immune to being put out of business and now they're trying to find ways to further inoculate themselves from accountability."

The firms also have shown they can weather pretty big hits. Over the past two years, KPMG has agreed to pay out nearly $700 million in fines and settlements related to criminal and civil actions. In 2000, Ernst & Young LLP settled for $335 million a shareholder suit related to its work for Cendant Corp.

Accounting firms argue the danger they face from civil litigation is real and that there are still many scandal-era actions that have yet to work their way through the courts. What is needed, the firms say, are litigation caps similar to those many states have enacted to protect doctors from malpractice suits.

The firms say special protection is warranted because they can be sued not just by the companies whose books they audit, but also by others, such as investors. These investors, the firms add, try to use auditors to recoup stock-market losses.

"The cost of our audits was never built for insuring the capital markets," said William G. Parrett, chief executive of Deloitte Touche Tohmatsu, the international arm of Deloitte & Touche. "I don't think we're saying we shouldn't have any liability, but it has to be in proportion to our participation in any problem."

The firms also say they can't get sufficient insurance because their liability is almost unlimited, encompassing in a worst-case scenario the total stock-market value of the companies they audit. So they are forced to settle lawsuits rather than risk a trial.

A study for the European Commission, released in September, said the total costs of judgments, settlements, legal fees and related expenses for the U.S. audit practices of the Big Four firms had risen to $1.3 billion in 2004, or 14.2% of revenue, up from 7.7% in 1999. In addition, according to a study by insurer Aon, there were 20 claims outstanding against U.S. auditors as of September 2005 where damages sought or estimated losses topped $1 billion. Accounting firms say they couldn't survive an award of that size.

Advocates of liability caps frame the issue around the broader debate over U.S. market competitiveness.

"I think the whole issue of liability is one of the major reasons why foreign companies aren't coming here" to list their stocks on U.S. exchanges, said Hal S. Scott, a Harvard Law School professor and a founding member of the Committee on Capital Markets Regulation, the group formed with Mr. Paulson's blessing to study market competitiveness. Mr. Scott added that while court awards can serve as a deterrent to shoddy audit work, "if we left this to the legal process, we might come up with the right amount of damages to deter bad behavior but have just two or three accounting firms" because one will have gone out of business.

Recognizing, though, that auditor liability overhaul might be a tough sell on Capitol Hill, the committee may suggest that the U.S. Securities and Exchange Commission come up with a solution, Mr. Scott said. "The SEC could modify their own rules regarding liability," he added. One idea under study: Allowing accounting firms to negotiate liability caps with clients, a practice now barred to preserve auditors' independence.

November 2, 2006 reply from Mark Eckman, Rockwell Collins [mseckman@ROCKWELLCOLLINS.COM]

With tongue firmly planted in cheek, why don't we let the audit firms become insurance companies and let them charge premiums based on the risk of material misstatement and deny coverage when the risk is too high? Turn auditors into underwriters and I believe you would see a vast difference in how audits are conducted.

Mark S. Eckman

November 2, 2006 reply from Deborah Johnson [vicjohn@SPRINTMAIL.COM]

I have to agree. Even though you regard it as tongue in cheek, it actually sounds more rational than the current situation. Let each company comply with Sarbanes, and purchase two Bonds from an Insurer. The first Bond for the materiality of the Financial Statements. The Second Bond for Fraud Insurance.

November 5, 2006 reply from Bob Jensen

For years some professors like Josh Ronen (NYU) have made arguments for auditing firms to insure financial reports (not necessarily internal fraud that does not materially affect annual reports).

There are some very good reasons why it makes sense to do this, especially from the perspective of reducing litigation costs for misleading financial reports. However, there are some huge differences between auditing and insurance risks. Insurance risks are measured by actuarial studies of relatively stable systems such as mortality, home fires, wind damage, etc. Insurance companies tend to write in coverage exceptions for things that are less predictable like nuclear war and earthquakes that arise in non-stationary systems. Financial fraud and auditor errors that hugely impact financial statements are more like nuclear war and earthquakes.

Audits are conducted in much less stationary systems that defy actuarial prediction of losses. One problem is that the systems themselves are reactionary. The current rash of executive option backdating is a good example. Who could've predicted that thousands of executives would commence to backdate options? Events transpired to inspire these frauds, including changes in FAS 123, changes in tax constraints, and a window of opportunity before SOX went into effect. My point is that each new accounting standard, EITF, interpretation, law change (especially tax law), and political outcomes (with power shifting between conservatives and liberals) changes the entire system being audited such that actuarial calculations are impossible.

Bob Jensen

Bob Jensen's threads on proposed reforms are at http://www.trinity.edu/rjensen/FraudProposedReforms.htm

November 5, 2006 reply from Mark Eckman, Rockwell Collins [mseckman@ROCKWELLCOLLINS.COM]

Very good analysis. Still, I would raise the point that there are specialty underwriting segments available; viz., one can insure for exceptional things such as war, inconvertibility of currency, expropriation, kidnap & ransom, etc. that have no actuarial basis. However, where a need exists and the pvt insurance sector cannot or will not take on the entire risk, govt insurance entities as primary insurers, reinsurers, or insurers of last resort are frequently seen. My former employer, the Overseas Private Investment Corporation, is an example. Whether these coverages can provide indemnity in the same way as auto insurance is doubtful. Even so, as one looks for solutions to the increasingly complex problem of the modern role of financial auditing, these alternatives should be carefully examined.

Paul Bjorklund, CPA
Bjorklund Consulting, Ltd.
Flagstaff, Arizona

November 9, 2006 reply from Tom Hardy [thardy@IVESINC.COM]

In response to several inquiries that we have received regarding the Nov 1, 2006 Wall Street Journal article on Big 4 Litigation cases entitled “Booming Audit Firms Seek Shield on Suits,” I am making the attached analysis available to AECM.

Big 4 Securities Class Action Litigation- Citing Auditor as Defendant” highlights the number of security class action cases involving Big 4 Accounting Firms between 2002 and 2005. It also lists each case by year.

This research was compiled using the Audit Analytics Litigation Module. If you would like additional information or a demonstration of this new AuditAnalytics.com database please give me a call or send me an e-mail.

Tom Hardy
AuditAnalytics.com
IVES Group, Inc.
9 Main St. Suite 2F
Sutton, MA 01590
508-476-7007 Ext. 28

thardy@ivesinc.com 


Taxation of Dividends Creates European Union Stir
The Institute of Chartered Accountants in Ireland (ICAI) said that the European Court of Justice (ECJ) ruling this week on the UK dividends case creates issues for other European countries, including Ireland, which have a similar system of taxation of dividends to that in the UK. The ECJ ruled on the principles of freedom of establishment and freedom of movement of capital in relation to the UK dividends system. See further details in our full news item.
Andy Lymer, "ECJ DIVIDENDS CASE CREATES ISSUES FOR IRELAND," AccountingEducation.com, December 14, 2006 --- http://accountingeducation.com/index.cfm?page=newsdetails&id=144069


"2007 Excellence in Project Accounting Philosophy Essay Scholarship Contest Begins," AccountingWeb, December 8, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102883

The 2007 Excellence in Project Accounting Philosophy essay scholarship contest launches on January 1, 2007. The winning essayist will receive $500 toward college tuition and fees from Journyx, the first company to provide Web-based time-tracking and project accounting solutions that guide customers to per-person, per-project profitability.

“Journyx is committed to eradicating cost ignorance from our knowledge worker society and leading organizations to the highest levels of profitability through innovation,” Curt Finch, chief executive officer (CEO) of Journyx said in a prepared statement. “We developed this essay scholarship so that we could educate and share our philosophy with some of the bright minds about to enter the workforce, as well as learn new ideas from them. We will choose the submission that is the most creative and has the most real-world business applicability.”

The scholarship is open to full-time student enrolled in a graduate level masters or doctoral level degree program at a university in the United States. Interested students should contribute an essay of 1,000 words or less on one of the following two topics:

Complete rules and details, including how the essays will be scored, where to send the entries, etc., can be found at www.journyx.com/company/scholarship.html All entries must be received by 5:00 p.m. CST on June 1, 2007.

 


January 1, 2007 message from Doug Roberts [robertsfd@APPSTATE.EDU]

I am teaching for the first time a fraud examination course. As this is not my area of experience, I'm looking for ideas on what to cover and how best to cover it. In addition, the timing of the class and the non- standard "audience" will impact what I do.

The course will meet 3 and 1/2 hours a day for 12 days (consecutive except for weekends) at the end of the semester. Students will be those just returning from tax internships who need another 3 credit hours to maintain full-time status (rather than taking the course because they have an interest in fraud examination); they will have just finished 15 weeks of busy season and I suspect will be less than motivated to do much work without thoughtful "pressure" on my part. Therefore, my objective is to have activities that will force them to remain involved and hopefully learn something and have fun at the same time.

The textbook is rather interesting reading covering various forms of fraud. Beyond their reading outside of class and some quizzes over the reading, I need ideas on what to do - I'd like to keep lecture time to a minimum but need to fill up at least 3 hours. I have some videos the Association of Certified Fraud Examiners put out and will try to get some guest speakers who work in the area. But that still leaves me much time.

Does anyone have any ideas? One thought I had was working with data using Excel and Access to look for fraud flags. However, I have not been able to find datasets. Does anyone know of any good datasets or cases where data analysis is used? I saw where IDEA offers an educational demo - does anyone have experience using that? And how long does that take to complete? Any other ideas using hands-on computer exercises?

Any ideas would be appreciated.

Happy New Year,

Doug Roberts

January 1, 2007 reply from Len Stokes

I have used some of the cases from the Knapp Audit Case book published by Thomson. Many of the cases relate to audit failure and I don't focus exclusively on the GAAS perspective but the Internal Control, fraud etc. I break the class into groups and have a specific grup lead the disucssion of the issues in the case and what they think went wrong, why and what could have been done to prevent it. I don't allow them to focus on the questions that are provided My concept is to get them to begin to think outside the box not just think that Fraud involves specific lists of thing to do. The Fraud videos usually are about an hour. The students usally have interesting comments related to what they saw. Use the class time like a seminar with disucssions and the time will fly with a great deal of interest on their behalf.

Len

January 2, 2007 reply from Bob Jensen

Here are a few references of possible interest on this topic:

Turn Excel into a financial sleuth: an easy-to-use digital analysis tool can red-flag irregularities
Journal of Accountancy, August, 2003 by Anna M. Rose, Jacob M. Rose --- http://www.aicpa.org/pubs/jofa/aug2003/rose.htm 

Three books are reviewed in the December 2002 issue of the Journal of Accountancy, pp. 88-90 ---
http://www.aicpa.org/pubs/jofa/dec2002/person.htm 

"Auditors’ New Procedures for Detecting Fraud," by D.D. Montgomery, M.S. Beasley, S. Menelaides, and Z. Palmrose, Journal of Accountancy, May 2002 ---
http://www.aicpa.org/pubs/jofa/may2002/mont.htm 

"Let Them Know Someone’s Watching, by Joseph T. Wells, Journal of Accountancy, May 2002 ---
http://www.aicpa.org/pubs/jofa/may2002/wells.htm 

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


Question
What happens when you don't qualify for the "Shortcut Method" for interest rate swaps under FAS 133?

How to avoid ineffectiveness testing for interest rate swaps using the Short-Cut Method --- http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#Shortcut

Also see --- http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm#ShortCut

December 2006 article by Ira Kawaller on Long Haul Hedge Accounting --- http://www.kawaller.com/pdf/BALM_Long_Haul.pdf


Pension Fund Accounting Fraud in San Diego

"San Diego Charges," by Nicole Gelinas, The Wall Street Journal, November 27, 2006; Page A12 --- http://online.wsj.com/article/SB116459315111633209.html?mod=todays_us_opinion

The SEC has announced that it has resolved its pension-fund fraud case against San Diego, with the city agreeing not to commit illegal shenanigans in the future and to hire an "independent monitor" to help it avoid doing so. Although the SEC went easy on the residents and taxpayers of San Diego in its settlement, it still has an opportunity to make an example of the former officials who the SEC determined committed the fraud. The feds should seize that chance to show they're serious about policing a sector of the investment world that remains vulnerable to similar fraud.

San Diego ran into legal trouble with its pension fund because elected officials wanted to keep its municipal workers happy by awarding them more generous pension and health-care benefits, but also wanted to keep taxpayers happy by sticking to a lean budget. The two goals were mathematically irreconcilable. So San Diego officials, with the cooperation of the board members of the city employees' retirement system (the majority of whom were also city officials), intentionally underfunded the pension plan for years. They used the "savings" to award workers and retirees more benefits, some retroactive. Because taxpayers couldn't see how much retirement benefits for public employees eventually would cost them, they couldn't protest against those high future costs. The fund also violated sound investment principles by using "surplus" earnings in boom years to pay extra benefits to retirees, including a "13th check" in some years. Trustees should have put such "surpluses" aside for years in which the market was down.

But the alleged escalated in 2002 and 2003, when city officials brushed aside warnings from outside groups, as well as from an analyst it had itself commissioned, about the fund's parlous financial straits. Although figures clearly showed that the pension fund would face a seven-fold increase in its deficit, to more than $2 billion, over less than a decade, San Diego didn't disclose what, according to the SEC, it "knew or was reckless in not knowing" was an inevitability, instead maintaining its charade. City officials disclosed not a word of the fund's financial troubles to potential investors or bond analysts as it raised nearly $300 million in new municipal securities during those two years.

The SEC elected to go easy on the city. The feds won't levy a fine against it, reasoning that it would end up being the taxpayers who would pay. This argument has merit, since these taxpayers are already on the hook for the $1.5 billion deficit -- roughly equal to the city's operating budget -- the pension-fund fraud had concealed. Taxpayers could face fallout if wronged investors sue the city. But while SEC won't punish taxpayers, it can't afford to go so easy on the officials it's still investigating. (The SEC doesn't name the current and former officials under its scrutiny, but former Mayor Dick Murphy, former city manager Michael Uberuaga and former auditor Ed Ryan, as well as members of the City Council, all had degrees of responsibility for and knowledge of the pension fund's operations.) The SEC must demonstrate that it considers the fraud officials committed against the city's bondholders to be just as grave as similar frauds in the private sector.

People who invest in municipal bonds do so because they feel that such investments are safer than investing in the common stocks of corporations. That's why cities and states enjoy access to capital at affordable interest rates. And, for tax reasons, municipal-bond investors often invest in the bonds of the city in which they reside, so they face double jeopardy. In the first place, if city officials are committing fraud, their bonds will turn out not to be as sound (and thus not as valuable) as they thought they were. The second risk is that they will have to pay higher taxes, or suffer lower government services, to cover pension-funding shortfalls in their city's budget if that is the case.

Continued in article

Bob Jensen's threads on pension fund and post-retirement accounting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#Pensions


"Assessing and Responding to Risks in a Financial Statement Audit: Part II," Journal of Accountancy, January 2007 --- http://www.aicpa.org/pubs/jofa/jan2007/fogarty.htm

Bob Jensen's threads on professionalism in auditing are at http://www.trinity.edu/rjensen/fraud001.htm#Professionalism

Bob Jensen's threads on the future of auditing are at http://www.trinity.edu/rjensen/FraudConclusion.htm#FutureOfAuditing


The Cost Approach for Financial Reporting

From IASPlus on November 21, 2006 --- http://www.iasplus.com/index.htm

The International Valuation Standards Committee has published Proposed Revisions to International Valuation Guidance Note 8 – The Cost Approach for Financial Reporting {PDF 193k). The proposed revisions are the result of requests for clarification and suggestions of minor improvements to the 2005 version of GN8. Comment deadline is 31 December 2006. The IVSC has also released an update of its work programme:

Bob Jensen's threads on underlying bases for balance sheet valuation --- http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#UnderlyingBases


The CEO Who Jousted With Regulators
Options Backdating Takes Its Toll at Cyberonics

The tumultuous tenure of Robert P. Cummins as chairman, president and chief executive of the medical device maker Cyberonics has ended, the company disclosed yesterday. Mr. Cummins, 52, who is known as Skip, is a former venture capitalist who joined the board of Cyberonics in 1988 and became chief executive in 1995. He gained a reputation as one of nation’s most passionate and intimidating business leaders in dealing with critics, regulators and investors.
Barnaby J. Feder, "Head of Cyberonics Resigns as Options Inquiry Expands," The New York Times, November 21, 2006 --- http://www.nytimes.com/2006/11/21/business/21device.html?_r=1&oref=slogin

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


The CEO Who Argued Against Backdating of Options Because Such Practices Were Wrong

January 2, 2007 message from Denny Beresford [DBeresfo@TERRY.UGA.EDU]

I found the following article quite interesting. As noted, not backdating option grants (or other business correspondence) ought to be obvious rather than something that needs to be taught in ethics classes or otherwise. Yet it never hurts to mention these good examples to students.

Denny Beresford

"McNealy is one reason Sun never backdated," by Elise Ackerman and Nicole C. Wong, Mercury News

Stanford University's Faculty Club dining room buzzed at 8 a.m. one day recently with alumni, business leaders and community members wondering what former *Sun Microsystems *Chief Executive Scott McNealy would say about ``leadership transitions.''

McNealy -- a Silicon Valley icon known for pushing people's buttons while pushing technology forward -- relinquished the top job after 22 years to his hand-picked successor, Jonathan Schwartz, in April. However, McNealy remains chairman of the board.

His quick tips raced from the importance of ``asking prima donnas to leave'' the company (``Everyone will love you for it,'' he said) to hiring people who are smarter than you (``marrying up, as they say'').

``The other piece of identifying and grooming leaders is you have to watch for one very important breach -- that is a breach of integrity,'' McNealy said.

``You have to look for people who never break character, even Saturday night at a cocktail party.''

Toward the end of his one-hour talk, McNealy fielded a question from the audience about dealing with ethics.

Business school ethics courses are ``trying to teach something that the parents are supposed to be teaching,'' said McNealy, the father of four sons ages 4 to 11. ``Either you're born with it or you learn it from your parents.''

He alluded to the dozens of Silicon Valley companies that have been swept up this year in an ethics controversy surrounding backdated stock options, which can be done to pad the potential profits for the option recipients.

Sun hasn't been caught with a backdating problem. Schwartz recently credited Sun's clean record to McNealy's unwavering ethics, which carried over to not parking in spaces reserved for the handicapped or customers, even when there weren't any other spaces available for the circling CEO in Sun's parking lot.

**``
They never taught me in school that you are supposed to put the date that you signed it,'' McNealy said. ``It was kind of intuitively obvious to me that you didn't backdate.''

* *

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


"Toll of the stock options scandal heavy in 2006:  More prosecutions are expected to be brought next year," by Marcy Gordon, SeattlePi, December 27, 2006 --- http://seattlepi.nwsource.com/business/297346_stockoptions27.htm

Eighteen chief executives swept out. More than 100 public companies under federal investigation and more than $5 billion in profits erased by restatements. Indictments so far: five former top executives at two companies, Brocade Communications Systems Inc. and Comverse Technology Inc. The toll of the stock options timing affair -- corporate America's scandal of the year -- has been heavy. Federal officials say more prosecutions will be brought in 2007 over manipulation of the timing of stock option grants to enrich top company executives.

The toll of the stock options timing affair -- corporate America's scandal of the year -- has been heavy. Federal officials say more prosecutions will be brought in 2007 over manipulation of the timing of stock option grants to enrich top company executives.

Nearly every business day, more companies report federal or internal investigations. New lawsuits by shareholders are filed. More businesses disclose that because past option grants may have distorted their financial results, they may have to restate earnings.

Next year could well bring more restatements, and companies' stock could be stripped from public trading because reviews of options grants made them late in filing their quarterly financial reports.

The Justice Department will "continue to be engaged for perhaps years to come, as we work these cases out," U.S. Attorney Kevin Ryan, who heads a task force in Northern California pursuing options timing cases, said recently at a gathering of attorneys. "The final chapter hasn't been written yet."

Many of the companies ensnared in the scandal are in Silicon Valley's high-tech industry, where stock options for employees created legions of millionaires in the dot-com era.

The prized perks allow executives and employees to buy shares of their company's stock in the future at a set price. If the stock rises before the options are exercised, the employee can buy the stock at the predetermined, lower price, then sell it at the higher, current price -- and pocket the difference.

Among the wide swath of companies caught up in internal or government investigations: Apple Computer Inc., Barnes & Noble Inc., Caremark Rx Inc., Issaquah-based Costco Wholesale Corp., Seattle-based F5 Networks, Gap Inc., The Home Depot Inc., McAfee Inc., Monster Worldwide Inc., Restoration Hardware Inc., Staples Inc. and UnitedHealth Group Inc.

Some prominent executives at blue-chip companies have lost their jobs in the affair, including former UnitedHealth CEO William McGuire, who engineered the company's ascent from a regional health insurer into the nation's second-largest.

Continued in article


A Short History of Employee Stock Options
"Bosses' Pay: How Stock Options Became Part of the Problem Once Seen as a Reform, They Grew Into Font of Riches And System to Be Gamed Reload, Reprice, Backdate," by Mark Maremont and Charles Forelle, The Wall Street Journal, December 27, 2006; Page A1 --- http://online.wsj.com/article/SB116718927302760228.html

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


Maybe Apple Corporation will backdate its 2006 annual report
Apple Computer Delays Filing Annual Report With SEC Due to Ongoing Stock Option Investigation NEW YORK (AP) -- Apple Computer Inc. said Friday it has delayed filing its annual report with the Securities and Exchange Commission due to its ongoing investigation into stock option grants. In a filing with the SEC, the company said it needs to restate historical financial statements to record charges for compensation related to past grants. As a result, Apple was unable to file its 10-K Form for the fiscal year ended Sept. 30 by the required filing date of Dec. 14.
"Apple Delays Filing Its Annual Report," Yahoo News, December 15, 2006 --- http://biz.yahoo.com/ap/061215/apple_options.html?.v=3

Executive Compensation Fraud at Apple Corporation:
Apple's mea culpa on backdating last week was eloquently incomplete
Apple's mea culpa on backdating last week was eloquently incomplete, and all the more intriguing because the gaps seemed almost Socratically mapped to invite the media to fill the holes by asking obvious questions. The big joke here is that the logic of the witch hunt will stop the media from asking the obvious questions, not least because CEO Steve Jobs is a hero to much of the press and there's little appetite for bringing him down. Don't misunderstand. We believe it would be a gross injustice if he were defenestrated over backdating, just as we have serious doubts about the prosecutions launched against other backdating CEOS. And Apple's likely purpose in issuing its statement, naturally, was not lexical comprehensiveness but saving Mr. Jobs's job.
Holman W. Jenkins, Jr., "A Typical Backdating Miscreant, The Wall Street Journal, October 11, 2006; Page A15 --- http://online.wsj.com/article/SB116052823194588801.html?mod=opinion&ojcontent=otep

"Apple C.E.O. Apologizes for Stock Practices," The New York Times, October 5, 2006 --- Click Here

Now that an internal investigation over Apple Computer Inc.'s stock-option practices has helped abate investor worries over Steve Jobs' role as CEO, a key lingering concern will be the impact of pending earnings restatements.

Apple said Wednesday its three-month investigation did not uncover any misconduct of any current employees but did raise ''serious concerns'' over the accounting actions of two unnamed former officers.

The iPod and Macintosh maker also said its former chief financial officer, Fred Anderson, had resigned from the company's board of directors.

Jobs -- his position intact -- apologized.

The probe found that Jobs knew that some option grants had been given favorable dates in ''a few instances,'' but he did not benefit from them and was not aware of the accounting implications, the company said.

''I apologize to Apple's shareholders and employees for these problems, which happened on my watch,'' Jobs said in a statement. ''We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again.''

Apple said it will likely have to restate some earnings due to revised tax and stock option-related charges. Auditors are still reviewing the situation, and Apple said it has not yet determined the extent of the financial impact.

The looming restatements could dramatically reduce some of the windfall generated during the company's recent run of record profit, analysts said.

Shares of Apple shed 10 cents to $75.28 in midday trading Thursday on the Nasdaq Stock Market. The stock has traded between $47.87 and $86.40 over the past year.

Apple has reported profit totaling $3.1 billion during the past four years. If the restatements are severe, it could dent Apple's stock, said IDC analyst Richard Shim.

''The restatements have the potential to bite them again depending on how large they end up being,'' Shim said. ''That said, the company is certainly firing on all cylinders so investors may be willing to forgive them, but it's something that will linger in the backs of their minds.''

Piper Jaffray analyst Gene Munster said he and other investors are breathing a sigh of relief that Jobs kept his job throughout the scandal.

''The risk was that if something bizarre happened and Steve Jobs got fired over it,'' Munster said from his office in Minneapolis. ''That could have significantly impacted the company in a negative way. Steve Jobs is Apple. Ultimately, the scope of the backdating was bigger than we thought, but the impact turned out to be less severe.''

Apple is one of the most prominent among more than 100 companies caught in the nationwide stock options mishandling scandal. Cupertino-based Apple initiated its own stock-options investigation in June after problems at other companies began to unravel.

In many instances, the problem has centered on the ''backdating'' of stock options -- a practice in which insiders could make the rewards more lucrative by retroactively pinning the option's exercise price to a low point in the stock's value.

Apple said its probe found irregularities in the recording of stock option grants made on 15 dates between 1997 and 2002, with the last one involving a January 2002 grant, the company said. The grants had dates that preceded the approval of those grants.

Apple spokesman Steve Dowling said the 15 grants represented 6 percent of the total issued during that period. He said he did not have further details regarding the specific grants or whether they were awarded to officers or employees.

The company did not identify the two former officers whose accounting, recording and reporting of option grants raised ''serious concerns'' during the probe.

Apple said Anderson, who served as the company's chief financial officer from 1996 until 2004, resigned from the board, citing he did so in ''Apple's best interest.''

Dowling said the company will provide more details about the probe to the Securities and Exchange Commission.

The company's special committee conducting the investigation examined more than 650,000 e-mails and documents, and interviewed more than 40 current and former employees, directors and advisers.

"Apple Says Jobs Knew of Options," by Laurie J. Flynn, The New York Times, October 5, 2006 --- Click Here

The external auditor for Apple Corporation is KPMG --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


They not only teach about options backdating at the University of Phoenix
The Apollo Group, which as owner of the University of Phoenix is the largest player in for-profit higher education in the United States, on Thursday announced that some former officials may have concealed information about the handling of stock-option grants, a key issue in light of ongoing investigations by various authorities into stock-option violations at many top American corporations. As a result of Apollo’s continuing investigation, the company announced that it would need to delay the release of quarterly and annual financial reports that would normally be due on December 31. Bloomberg reported on some of the details of the problems at Apollo.
Inside Higher Ed, December 15, 2006 --- http://www.insidehighered.com/news/2006/12/15/qt

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


Home Depot may see fallout over options backdating
Home Depot Inc.'s admission this week that some stock option grants were backdated could spur lawsuits, result in fines and have tax implications, analysts and other experts said. The disclosure of 19 years of backdating tops off a difficult year for the world's No. 1 home improvement retailer as it continues to be dogged by criticism about executive pay, a disappointing stock performance and the fallout from the slower U.S. housing market.
"Home Depot may see fallout over options backdating," Reuters, December 8, 2006 --- Click Here
Jensen Comment
Those that blame back dating on changes in tax laws and/or newer options expense requirements under FAS 123(R) should note the 19 years of backdating by Home Depot.

"Options backdating might never have happened if reasonable options accounting had been required years ago," by Floyd Norris, The New York Times, October 13, 2006 --- http://norris.blogs.nytimes.com/?ref=business

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


"How Backdating Helped Executives Cut Their Taxes:  Evidence Suggests Recipients Of Some Stock-Option Grants Manipulated Exercise Dates," by Mark Maremont and Charles Forelle, The Wall Street Journal, December 12, 2006; Page A1 --- http://online.wsj.com/article/SB116589240479347248.html?mod=todays_us_page_one

New evidence suggests that corporate executives may have found another way to manipulate their stock options, this time to cheat on their income taxes.

In a paper that began circulating in recent days, a Securities and Exchange Commission economist concludes there is strong statistical evidence that executives manipulated the exercise dates of their options as part of a tax dodge. And a review of corporate filings turns up some companies with startling options-exercise patterns.

The new information could open another front in the options-backdating scandal. Backdating already has sparked the broadest corporate-fraud probe in decades, with more than 130 companies under investigation by federal authorities. So far, attention has focused on the practice of retroactively selecting favorable dates to grant options. The new wrinkle involves rigging the dates on which options are exercised, sometimes years after they're granted.

The tax dodge related to options, however, almost certainly involves fewer executives than are caught up in the furor over the backdating of grants. (See related article.)

The reason it can be tempting to backdate the exercise of options lies in the way the Internal Revenue Service treats different types of income for tax purposes. Options, a common part of executive pay packages, give the recipient the right to buy a company's stock at a fixed price in the future. That price, known as the strike price, is usually the stock's market price on the day the options were granted.

About three-quarters of the time, executives immediately sell the shares they buy when they exercise options. Under IRS rules that typically apply, those executives must pay ordinary income tax, as well as payroll taxes, on the difference between the stock's value on the date the option was exercised and the option's strike price. The highest federal marginal income tax rate is 35%.

But for a variety of reasons, including corporate rules that require top managers to own a certain amount of stock, some executives don't sell immediately. Those who hold the shares for at least a year pay a much lower capital-gains tax -- currently 15% -- on any profit between the time they exercise and when they eventually dispose of the shares. That lower rate gives the executive an incentive to exercise the options at a relative low point for the stock: The move reduces the amount of money that would be owed at the ordinary income tax rate, and shifts the difference so it is potentially taxed at the much-lower capital gains rate.

Consider an executive who holds options on 100,000 shares with a strike price of $10. If he exercises and sells when the price is $20, he realizes $1 million in income and must pay $350,000 in income taxes.

If he instead can claim an exercise price of $16, he lowers his income tax to $210,000. If he then sells a year later and the stock is at the same price of $20, he pays $60,000 in capital-gains levies, for a total tax bite of $270,000. In other words, he has the same $1 million gain but saves $80,000 in taxes. The problem arises if the executive misrepresents when the exercise occurred to claim a lower exercise price.

Determining which executives or companies might be involved is difficult, and it's impossible to know what information they may have included in their tax returns. But some executives have exhibited unusual timing in their options exercises.

At Maxim Integrated Products Inc., a Sunnyvale, Calif., chip maker, chief executive John F. Gifford exercised options and held shares seven times between 1997 and 2002, according to regulatory filings and insider-trading data from Thomson Financial. In all but one case, Mr. Gifford's reported exercise date was the very day the stock reached its lowest closing price of the month. After the Sarbanes-Oxley corporate-reform law took effect in 2002, drastically reducing the opportunity to backdate by tightening reporting requirements, his fortunate timing vanished.

Maxim is facing investigations by the SEC and federal prosecutors in California over its option-granting practices. A special committee of directors is also probing the matter.

Chuck Rigg, a Maxim vice president, said the company is "looking into" questions about Mr. Gifford's options exercises, but said initial data don't indicate any problems. Mr. Rigg added that the company used an outside broker to handle options exercises. "There's not a way you can backdate that," he said. Mr. Gifford didn't respond to requests for comment.

Continued in article

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


Evidence that options backdating scandals are not uniquely caused by U.S. tax law

"Options backdating:  The latest U.S. corporate scandal involves executives falsifying the dates on stock options. A series of reviews in Canada is starting to reveal worrisome patterns," by Janet McFarland and Paul Waldie, The Globe and Mail, January 12, 2006 --- Click Here 

In the spring of 2001, the two founders and co-chief executive officers of Research In Motion Ltd. were each granted 100,000 stock options. Back then, the company relied heavily on stock options for its compensation, and often granted its executives 100,000 options at a time.

The timing was fortuitous for the executives. RIM's share price was $33.60 on April 2 when the options were granted -- its lowest point so far that year and its lowest level since the previous May, almost a year earlier.

By the time investors learned of the grant when it was disclosed publicly on June 8, the share price had climbed to $50, an increase of $16.40. That means within five weeks of the grant date, each CEO already had seen a gain of $1.64-million in the value of his options.

It wasn't the first time RIM had granted its CEOs options before a healthy climb in the company's share price. In 1998 and 1999, RIM granted options at a particularly low point, just prior to an increase in the share price.

How did this good luck come about?

This is the question being pondered by investors and regulators. The company itself has launched an internal review of its past stock option grants. RIM is not saying anything about what it is specifically examining, but co-CEO Jim Balsillie has said that RIM is "in the same position as a lot of other companies" these days.

Canadian companies haven't been drawn into the stock option backdating scandal that has swept through the United States, where regulators have launched more than 180 investigations of backdating cases, and many top executives have been forced to resign in disgrace.

But legal and accounting experts believe Canada will not remain immune to the scandal. They say many Canadian companies have quietly launched internal reviews of their options practices to determine whether they have scandals lurking in their corporate closets. And while Canada had tougher rules for options than the U.S., these same experts believe they do not prevent options backdating.

Backdating involves manipulating the date that stock options are granted to executives. Normally options are granted at the price of the company's stock that day. That means the options only have value if the share price climbs in the future. Many companies, including RIM, don't allow executives to cash out options right away, often making them wait several years.

Companies involved in backdating use the benefit of hindsight to look back and choose a date when their share price was low, then falsely claim that the options were granted on that date. It's as if a participant in a hockey pool could retroactively pick winners of games after they were played.

A Report on Business review of option grants to CEOs at more than 30 large Canadian companies between 1997 (when company filings were first available electronically) and 2005 found numerous examples of especially well-timed option grants just before an increase in the company's share price. But it is hard to draw conclusions from individual examples because an outsider cannot easily determine which cases were lucky timing and which, if any, were manipulation.

Some studies have suggested there is a problem in Canada based on a broader market review. Independent analysis firm Veritas Investment Research, for example, looked at all companies comprising the S&P/TSX 60 index and examined their option grants between 2003 and 2006. It concluded option timing "is alive and well in Canada," with stock prices over all tending to drop toward the date of option grants and climb afterward.

University of Manitoba economists have done a more detailed review of the same period, examining 5,644 options granted to senior executives by companies listed in the S&P/TSX 60 between June, 2003, and October, 2006.

According to a preliminary review of the data, "the evidence is suggestive of the occurrence of backdating in Canada," the researchers found.

"We expected to find nothing with that kind of data, and the fact that we found something is sort of like, wow," said Lindsay Tedds, an assistant professor who led the study. Prof. Tedds said the results don't confirm that backdating is necessarily occurring, but she added: "There's something going on. We didn't expect to find much of a pattern in this aggregate data."

Continued in article


Hundreds of old-economy companies also committed backdating fraud
Abuses of stock option grants are perceived to have spread like a virus among high-technology companies. But a new study suggests that hundreds of old-economy companies may also have caught the backdating bug. In a paper to be released today, researchers estimate that 590 nontechnology companies appear to have manipulated options so their chief executives received them at the lowest price of the month. That compares with 130 technology companies that appear to have backdated their chief executives’ options to a monthly low.
Eric Dash, "Study Charts Broad Manipulation of Options," The New York Times, November 17, 2006 --- http://www.nytimes.com/2006/11/17/business/17options.html?_r=1&oref=slogin


From The Wall Street Journal Accounting Weekly Review on November 10, 2006

TITLE: UnitedHealth Expects Probe to Result in 'Greater' Charges
REPORTER: Steve Stecklow and Vanessa Fuhrmans
DATE: Nov 09, 2006
PAGE: B1
LINK: http://online.wsj.com/article/SB116299996219517252.html?mod=djem_jiewr_ac 
TOPICS: Accounting, Accounting Changes and Error Corrections, Sarbanes-Oxley Act, Securities and Exchange Commission, Stock Options

SUMMARY: "UnitedHealth Group Inc. said it would have to take charges related to its backdated stock options that will be 'significantly greater' than its previous estimates and expects the charges to impact more than 10 years of previously reported earnings."

QUESTIONS:
1.) Describe the options backdating scandal that has developed since March, 2006. If you are unfamiliar with the issue, you may click on the link for "Perfect Payday: Complete coverage" on the left hand side of the on-line article.

2.) For how long has options backdating been going on at UnitedHealth? Have the accounting requirements remained the same throughout that period of time? Summarize the required accounting and other financial reporting practices for executive and employee stock options over the last 10 years.

3.) Suppose that, once UnitedHealth finishes its review, the restatement of earnings nearly doubles to $500 million and that the restatement applies equally to each of the preceding 10 years. What accounting entry must be made to correct this $500 million error? What will be the ultimate impact on each year's earnings and on stockholders' equity at the end of each year? How will this correction be disclosed? In your answer, cite the accounting standards which require the treatment you present.

4.) Click on "Read the full text" of UnitedHealth's Nov. 8 filing with the SEC on the right-hand side of the on-line article. What Form number did UnitedHealth file? Summarize the implications of the depth of the options backdating problem found at this company.

5.) Refer to the related article. What role does the Public Accounting Oversight Board fill in assisting accountants to audit companies' accounting for stock options?

Reviewed By: Judy Beckman, University of Rhode Island

--- RELATED ARTICLES ---
TITLE: Guidelines Set for How to Audit Stock Options
REPORTER: Siobhan Hughes
PAGE: A10 ISSUE: Oct 18, 2006
LINK: http://online.wsj.com/article/SB116114078518696161.html?mod=djem_jiewr_ac

"HealthSouth Agrees to $445 Million Settlement," AccountingWeb, October 2, 2006 ---
http://www.accountingweb.com/cgi-bin/item.cgi?id=102629

HealthSouth Corp. announced on Wednesday that it will pay $445 million to settle several lawsuits that were filed against the company and some of its former directors after an accounting scandal.

HealthSouth will pay $215 million in common stock and warrants, and its insurance carriers will pay $230 million in cash, the company said. Also, federal securities class-action plaintiffs will get 25 percent of any future judgments obtained by or on behalf of HealthSouth regarding certain claims against fired CEO Richard Scrushy, former auditors Ernst & Young, and the company’s former investment bank, UBS. Each party remains a defendant in the derivative actions and the federal securities class actions.

A judge must approve the settlement, which is nearly the same as a preliminary settlement that was reached in February.

"This settlement represents another significant milestone in HealthSouth's recovery and is a powerful symbol of the progress we have made as a company," said HealthSouth President and CEO Jay Grinney. HealthSouth, the Birmingham, Ala.-based rehabilitation and medical services chain, does not admit any wrongdoing in the settlement, nor does any other settling defendant, the company said.

The settlement does not include Ernst & Young, UBS, Scrushy or any former HealthSouth officer who entered a guilty plea or was convicted of a crime in connection with the company's financial reporting activities ending in March 2003.

Scrushy and more than a dozen top executives were accused of recording as much as $2.7 billion in bogus revenues on the company's books over six years. UBS and Ernst & Young have denied knowing about the fraud. Last year, Scrushy was acquitted of all criminal charges in the fraud. He was convicted of conspiracy, bribery and mail fraud charges in a separate government corruption trial.

Note that the above settlement does not include a settlement with Ernst & Young auditors.
Bob Jensen's threads on the HealthSouth Corp. fraud are at http://www.trinity.edu/rjensen/Fraud001.htm#Ernst

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm

Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


Scrushy to Pay HealthSouth $31 Million
Richard M. Scrushy, founder of the HealthSouth Corporation, has agreed to pay the company $31 million as part of a settlement of litigation over his bonuses and legal fees. Mr. Scrushy dropped a lawsuit seeking $21 million for legal fees after HealthSouth agreed to credit that amount against the $52 million he owed for inflated bonuses, said Teresa Tomlinson, one of his lawyers. HealthSouth ousted Mr. Scrushy in 2003 after auditors uncovered a $2.7 billion accounting fraud at the chain of rehabilitation centers.
"Scrushy to Pay HealthSouth $31 Million," The New York Times, November 30, 2006 --- http://www.nytimes.com/2006/11/30/business/30health.html


Link forwarded by Roger Collins

How dominant shareholders screw the small investors
What matters, though, is that the non-family shareholders have not fully benefited from deals over the years. Moreover, because of these transactions, investors have lost influence over their company to a dominant shareholder. In essence, the Bouygues' financial cunning enabled the family to acquire stakes in companies that arguably should have been entirely in the hands of Bouygues SA. But the dealing was extremely subtle; any ordinary investor living through the drawn-out creation of the Bouygues family's stake would have found it almost impossible to follow. This raises a broader lesson. Investors battered by scandals over stock-options and golden parachutes sometimes look to family-run companies for salvation. Although professional managers, with the advantages of time and inside knowledge, can run a business to suit their own interests, family owner-managers are often thought to be less prone to such “agency risk”. Yet the story of Bouygues SA suggests that family capitalism, so common in continental Europe, can sometimes backfire as much as any share-option scheme.
"Creative construction," The Economist, November 30, 2006 ---
http://www.economist.com/business/displaystory.cfm?story_id=8348645&fsrc=nwlbtwfree


Complicated Accounting Rules and Employee Pressures

November 7, 2006 message from Amy Dunbar [Amy.Dunbar@BUSINESS.UCONN.EDU]

I am teaching a class, Research for Accounting Professionals, and I have been thinking about how to prepare my students for the "real world." I am looking for some insight re: the apparent increased pressure on accountants. For example, some say that the financial reporting environment is rivaling the tax world for the number of new rules that come out every year. I counted the number of statements issued since per year and found that the 1980s was the busiest period, with 1982 being the highest year with 18 statements. Does anyone know why that was? If the number of statements isn't increasing, is it the guidance from SEC that has increased, or is the pressure coming from the SOX environment with its emphasis on internal controls? Has the internal control guidance stepped up? Or is the pressure simply the same pressure that all business people are facing from increased global competition?

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Amy Dunbar
University of Connecticut
School of Business
Department of Accounting
2100 Hillside Road, Unit 1041 Storrs, CT 06269

November 8, 2006 reply from Bob Jensen

Hi Amy,

I don’t think you can compare numbers of FASB/SEC statements with any sort of confidence. How do you compare FAS 133 (incredibly complex) with FAS 157 (relatively simple)? The problem is not the number of new standards but the way new standards merely add to a growing mountain of previous standards that does not go away --- the mountain just grows higher and higher.

Our students must face an exceedingly complex world of technology. They must have skills in pivot tables, client databases, knowledge databases, ERP, and things that were just not crashing down on our graduates in the 1980s.

I personally think that a negative externality of technology has been increased risk of fraud that increases pressures on auditors. For example, technology has made it lucrative to steal IDs. Now we have huge conspiracies to steal those IDs, as witnessed by the recent reporting of a gang, including hotel owners, managers, and employees, that were stealing IDs at multiple hotels. Internal controls have just not kept pace with the level of theft risks and temptations, and our graduates are under pressures to invent newer  internal controls in complicated IT systems. Hacker/Cracker criminals themselves are extremely sophisticated and skilled. Our networked enemies can be anywhere on the globe.

Pressures are coming from a wide variety of interacting causes, not the least of which is SOX which is basically aimed at improving audit quality. What you had back in the 1980s was auditing sham! Firms like Andersen were removing much of the detail testing and trench work out of the audits, thereby taking much of the pressure off of auditors in the field --- http://www.trinity.edu/rjensen/fraud001.htm#RiskBasedAuditing
The world’s worst audit in history, WorldCom, brought this sham into the light.

The audit scandals (spread rather evenly among firms), litigation losses, the nose dive of reputation of the CPA profession, and SOX turned much of this around and now the audit firms are trying to restore the professionalism of their work with a dramatic increase in funding to do the job. But the pressures are bound to increase as well if auditors really try to do professional work.

You have audit firms being fired (the way KPMG was fired from Fannie Mae and E&Y was fired from TIAA/CREF). You have clients paying millions upon millions to restate financial statements because of bad auditing (e.g., Fannie is spending over $100 million to produce restatements). This is bound to pressure auditors assigned to do the job right. One of my former students brought in by PwC to help generate Fannie’s restatements said that he had to become an expert on valuing derivatives using a Bloomberg terminal (as part of the restatement effort). How many of our accounting education programs teach students how to value interest rate swaps on a Bloomberg terminal?

But mostly I think the pressure is on our graduates to deal with incredibly tough contracts that their professors and their supervisors themselves do not understand. Pressure is put on our green-as-grass new graduates to understand and explain contract complexity all the way up the food chain in their firms.

Below is a message that I received yesterday from a recent graduate who went to work immediately for AT&T rather than one of the big auditing firms. It helps explain how our young graduates encounter contracts that do not appear in our textbooks and how they must have skills and knowledge well beyond what we taught in the past Century.

 

Hey again Dr. Jensen,

I have another derivatives situation! Do you know anything about zero coupon bonds that are puttable? I guess they are a relatively new transaction type that banks are trying to push. I guess the theory is that you sacrifice some additional risk (by allowing the bondholder to put to you) in return for a lower interest rate than a typical zero coupon bond. It is my interpretation that written options don't count for hedge accounting status unless they offset another derivative instrument (FAS 133, P 396-401). It is also my interpretation that this is a situation which would create a difference in the bond value which would be reflected as an income statement (other income/expense) effect.

However, I think the financial components of the situation are over my head, and my boss is trying to tell me that he thinks that all of this transaction would either run through interest expense or there would be a huge increase in income in the first period represented (with no MTM throughout). I don't understand these arguments. Do you have any idea what he is getting at?

I am really grateful for any help you can provide, but I am starting to feel bad about emailing you. I have always assumed that you enjoyed these kind of discussions, but if you don't please don't feel obligated to answer. Just let me know - I don't want to disturb your retirement!

As always, hope things are well.

Thanks again so much.

Andrew

 My response to him is too long to repeat here, but you can read a bit more about puttable bond accounting at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm

Each new message from a frustrated former student makes me happier that I’m retired in the high hills.  I would not want to be one of these young men and women today.

Bob Jensen

November 8, 2006 reply from J. S. Gangolly [gangolly@CSC.ALBANY.EDU]

Years ago, I suggested one of my doctoral students (now a colleague) to prepare a graph that shows how the various standards are related. The result was the graph attached.

Here, we represent each standard as a point, equidistant from each other, on the circumference of a circle. Then we draw an arrow from standard A to standard B if standard A amended Standard B. The result is the attached graph. It looks more like an oval because I had to compress the image to fit powerpoint slide.

The graph helps us understand the dynamics of standards, forces us to ask questions as to why standards may be frequently revised, why interpretation of "the GAAP" as opposed to standards becomes difficult, and behooves us to ask what needs to be done.

This sort of a graph is used in information retrieval as well as exploratory data analysis. I teach using this figure in my statistics course for accountants (and not Accounting "Theory" course).

Those interested in my first class of the semester, please go to the following link:

http://www.albany.edu/acc/courses/acc522.fall2006/classnotes/acc522sept142006.ppt 

Hope I am not too far off the mark.

Regards,

Jagdish

November 8, 2006 reply from Jim Formosa [Jim.Formosa@NSCC.EDU]

I believe that SOX and the PCOAB shocked the FASB for a while and I am not sure that the shock has worn off. I remember reading in several journals that, with the advent of the PCOAB, the FASB became tentative. Then I believe you have to consider the FASB process which requires drafting and approvals with the constant threat of legislative interference at the federal level. Many have questioned the long-term efficacy of the FASB process itself. I believe in full disclosure and feedback in the rule making process but it should not take years - expensing options as only one of several examples.

I have also read that many believe the FASB is fast becoming a dinosaur that has outlived its usefulness- it will certainly be interesting.

Jim Formosa, M.S., CPA
Certified Senior WebCT Trainer
Associate Professor of Accounting
Nashville Community College 615-353-3420 FAX 615-356-1213

November 8, 2006 reply from J. S. Gangolly [gangolly@CSC.ALBANY.EDU]

1. Codification is a neanderthal concept and a vestige of the disastrous Napoleonic rule in Europe. It is expensive, does nothing to resolve whatever ambiguities that might be present (in fact it might exacerbate them), has high maintenance, and totally ignores all the developments in information technologies over the past century. In fact, in my humble opinion, codification is the accounting equivalent of Iraq (I am, of course, exaggerating here). What is needed is NOT radical reconstitutive surgery of the body of accounting standards (as in Iraq) by first disemboweling them, but a philosophical reflection of the way we draft standards (and how we use them) that is informed by the developments in information technology.

In my humble opinion, the emerging technologies surrounding the semantic web initiative of W3C is the way to go, but that involves considerable research investments.

Years ago I tried a dialogue with some firms (and also with FASB through some friends) about supporting research in the area, but my plea fell on deaf ears (except for Arthur Andersen - their Litigation Support people, who showed considerable interest before they tragically disbanded).

2. Your second question as to why people still refer to SASes rather than their codification, I think I can safely rest my case in 1. above. Codification adds little value at great cost. Codification is for the lazy people who want their thinking done for them.

If the standards are drafted well, codification is a trivial task. One can have an algorithm for codification in less than a semester of a competent doctoral student's time. Drafting the standards well is another matter, and is a profoundly intellectual activity. We can not do that without adequate theories of language competence, language use, reasoning, and theories of textual interpretation (similar to legal hermeneutics). And having examined the standards as well as EDGAR filings over the past few years, I can safely say that we in accounting are quite lacking in each of these.

Regards,

Jagdish

November 8, 2006 reply from J. S. Gangolly [gangolly@CSC.ALBANY.EDU]

Bob,

1. That accounting standards standards have become complex over the years is true. It is also perhaps true that they are nowadays better drafted compared with the philosophical ramblings in very early "standards". However, I personally don't think they are anywhere close to the tax code in complexity (and of course length. For example, section 10 of SFAS 133, a relatively long paragraph for SFASes, is dwarfed by, for example section 351 of the Tax code, a relatively average paragraph).

I will not resort to midieval torture of the reader by reproducing the two sections side-by-side. But the elegance of the tax code and the lack thereof is there plainly to be seen.

One of the problems with drafting in accounting standards is in the way definitions are stated. In accounting, the definitions are often given by examples rather than definitions with exceptions to the definitions. That is not the only problem. There are a slew of problems that I wrote about in an article titled "Some thoughts on the Engineering of Financial Accounting Standards" that I wrote a long time ago (in the second volume on AI in Accounting edited by Miklos Vasarhelyi.

It would be an interesting exercise comparing the complexities between the two texts after developing appropriate metrics. I am not sure accounting standards would measure up to the tax code, but I am no expert in either field. Perhaps some one like Amy who is one in both can enlighten us.

Jagdish

November 9, 2006 reply from Bob Jensen

Jagdish,

Codification with enforcement suppresses some types of atrocious behavior. For example, thousands of CEOs commenced to steal from investors by backdating stock options until disclosure rules were put in place.

Without codification and enforcement there's anarchy. With excess codification freedom and creativity is suppressed. It's just very, very difficult to set the bar optimally because Arrow's Impossibility Theorem proved it to be impossible --- http://en.wikipedia.org/wiki/Impossibility_theorem 

We are thus doomed to forever debate codes of behavior ad infinitum.

As usual you make good points. However, financial contracting is so complex that I'm like Amy is with tax accounting. I cannot imagine trying to account on a subjective judgment basis without codification. Without codification comparability is virtually impossible with exotic financial structurings.

It's possible to reduce the problem with simplified rules/laws such as eliminating 90% of the personal tax code with a new flat tax, eliminating accrual accounting in favor of cash flow financial reporting, or reporting on a "fair value" basis for all assets and liabilities. But the social impacts of a flat tax are contentious. Cash flow reporting is a license for CEOs to mislead and manipulate investors with cash flow timing manipulations. Fair value reporting creates more fiction than fact (such as wild earnings fluctuations of perfect hedges that eliminate cash flow or FX risk).

Codification sets parameters on major types of behavior. What is "right" versus "wrong" becomes anarchy if those parameters become subjective variables. The never-ending debate becomes one of deciding what are the "major types of behavior" to be codified since it is impractical and undesirable to set a parameter for every element of behavior. In the case of financial structuring we keep inventing new "major types." For example, the interest rate swap was invented in 1984 and quickly became a major way to raise capital before it even had to be disclosed (FAS 119) and eventually booked (FAS 133) in Year 2000.

We are thus doomed to forever debate codes of behavior and accounting standards ad infinitum.

My threads containing earlier arguments on this issue (e.g., Beresford versus Ketz) are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#MethodsForSetting 

Bob Jensen


S.E.C. to Ease Auditing Standards for Small Publicly Held Companies
The Securities and Exchange Commission will begin the process of easing auditing standards for thousands of smaller public companies this Wednesday when it proposes rules under the most contentious provision of the Sarbanes-Oxley Act. The relaxed standards represent a compromise, giving a qualified victory for businesses, which had considered any regulation burdensome, and for the auditing firms, which had benefited from the imposition of stringent requirements on their clients.
Stephen Labaton, "S.E.C. to Ease Auditing Standards for Small Publicly Held Companies," The New York Times, December 11, 2006 --- Click Here

Bob Jensen's threads on proposed reforms are at http://www.trinity.edu/rjensen/FraudProposedReforms.htm


Standards of Value: Theory and Applications
Standards of Value covers the underlying assumption in many of the prominent standards of value, including Fair Market Value, investment value, and fair value. It discusses the specific purposes of the valuation, including divorce, shareholders' oppression, financial reporting, and how these standards are applied.

Standards of Value: Theory and Applications, by Jay E. Fishman, Shannon P. Pratt, William J. Morrison Wiley:  ISBN: 0-471-69483-5 Hardcover 368 pages November 2006 US $95.00) --- http://www.wiley.com/WileyCDA/WileyTitle/productCd-0471694835.html

Bob Jensen's threads on fair value controversies in accountancy are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue


Why are CEOs making such a fuss over the accounting for stock options? It has nothing to do with their concern about accounting theory, argues J. Edward Ketz. "If they cared about accounting theory, CEOs would be more supportive of the FASB, the SEC, and the IASB in developing and improving accounting practice. They don't want improvements in accounting, else somebody might actually know what they are up to.
J. Edward Ketz, "The Accounting Cycle Accounting for Stock Options (Part Three): Why CEOs Fight Stock Option Accounting," SmartPros, November 2006 --- http://accounting.smartpros.com/x55207.xml

Kip Hagopian wrote a recent article in California Management Review in which he claimed that "Expensing Employee Stock Options is Improper Accounting." I explained in my first column that his appeal to authority was misplaced, an error in logic. My second column clarified why expensing employee stock options is indeed proper and that Hagopian's assertions are invalid. In this essay, I shall endeavor to discuss why CEOs are making such a fuss over the accounting for stock options.

Let's state the obvious fact: that CEOs are creating this hubbub over how to account for stock options has nothing to do with their concern about accounting theory. They don't care a wooden nickel about such matters. If they cared about accounting theory, CEOs would be more supportive of the Financial Accounting Standards Board (FASB), the Securities and Exchange Commission (SEC), and the International Accounting Standards Board (IASB) in developing and improving accounting practice. They don't want improvements in accounting, else somebody might actually know what they are up to.

If CEOs cared about investors, they would quit employing aggressive accounting techniques and they would quit biasing their estimates (whether of interest rates, asset lives, or fair values) to obtain their desired results. As they continue to utilize aggressive, almost fraudulent accounting, we can infer that they are looking out after themselves rather than anybody in the investment community.

If CEOs were worried about the state of accounting in the U.S., then we would expect them to learn the vocabulary, the concepts, and the principles of accounting to engage in meaningful debate. Mr. Hagopian and the set of signatories have not bothered themselves with the trifles of accounting, as seen in their invention of "gain-sharing instruments," their lack of appreciation for accrual accounting, and the misapplication of the entity concept.

If CEOs were really apprehensive about today's accounting, then we would expect them to get involved in the many less-than-stellar accounting rules and argue for a tightening and an improvement in them. Pension accounting and lease accounting and the accounting for business combinations, to name a few, are deficient FASB standards and in need of great work. Instead, CEOs get involved primarily to prevent FASB from doing too much damage to them.

So why does Kip Hagopian and so many CEOs still carp about the accounting for stock options? I posit it is because, first, they do not want the general public to understand the ever increasing gap between the wages of the average American worker and the average corporate CEO and, second, they do not want investors and creditors to realize the nexus between treasury stock repurchases and their personal bank accounts.

The average CEO in 2004 earned $11.8 million, while the average worker made only $27,460. The ratio of CEO-to-worker pay was 42 in 1980, 107 in 1990, and hit an all-time high of 525 in 2001. Even now the ratio is 431. The explosive growth in CEO compensation comes about primarily with stock and stock options.

Maybe as CNN's Lou Dobbs continues his criticism of exporting American jobs overseas to cheaper venues, he could advocate that we start outsourcing CEOs for cheaper ones. Or maybe he should just insist on receiving some value for the compensation. Broadcom's managers have received $5 billion from stock options while the business entity has lost $6 billion in operating profits. What have these executives done to deserve $5 billion in stock options?

I shall leave it to others to debate the issue of when CEO pay becomes excessive. At this time, I merely think people ought to have the facts so the debate will be meaningful. And saying that stock options are costless is, well, witless.

The second point is that we need to understand better the nexus between stock repurchases and CEO's personal bank accounts. Stock options line their bank accounts of managers with tons of money, but needing some emphasis is the fact that stock options are quite similar to the government's printing more money. When the government prints more money, the effect is inflation; for instance, it takes more money to buy the same goods. In like manner, when corporations print more stock certificates, the effect is also dilutive; for instance, an investor's shares in the company provides over time a claim to fewer and fewer of the net assets of the entity.

Corporate managers comprehend this inflationary aspect of stock options quite well, so they nearly always couple an aggressive stock option plan with a strategy to buy back shares with some hogwash like they want to put some cash in the hands of stockholders. If CEOs really wanted to do that, they could declare a dividend instead of playing this song-and-dance.

Cisco Systems has enriched its executives with $24 billion of stock options; it has counterbalanced the dilutive effect by repurchasing $19 billion of its own stock. Broadcom, Dell, and many other hi-tech companies have acted likewise.

Indeed, it is the nexus of the stock options and the stock repurchases that explains why stock options ought to be expensed. Managers find it critical to repurchase enough shares of stock to offset the inflationary ripples that stock options create. Simultaneously, the cash that the business enterprise disburses to replenish the lost shares represents the assets conveyed to compensate the management team.

While Kip Hagopian is entitled to his opinion, the standard setters at FASB, SEC, and IASB should not give it much weight. It is tainted with the greed of Lay and Kozlowski. It is mere rhetoric to justify incredibly exorbitant salaries.

J. EDWARD KETZ is accounting professor at The Pennsylvania State University. Dr. Ketz's teaching and research interests focus on financial accounting, accounting information systems, and accounting ethics. He is the author of Hidden Financial Risk, which explores the causes of recent accounting scandals. He also has edited Accounting Ethics, a four-volume set that explores ethical thought in accounting since the Great Depression and across several countries.

When Top Scholars Write Outside Their Realm of Expertise to Favor Executives at the Expense of Investors
 
To close, the appeal to authority is enticing because it gives the aura that those with brilliant minds adopt a particular point of view. While powerful rhetorically, this approach constitutes a logical error because authorities sometimes make mistakes, such appeals to authority do not address the subject under debate, and the opposing side can solicit its own bevy of experts. Worse, this strategy backfires when the list of experts do not really possess the requisite knowledge base in the field of battle. With such ignorant experts, the glamour of Hagopian's paper disappears. I could stop my critique at this point, but opponents of the expensing of employee stock options would continue their nonsense. Therefore, I shall resume the critique in the next column by reviewing the arguments by FASB and by Bodie, Kaplan, and Merton.
J. Edward Ketz,  "Accounting for Stock Options: Reasoning by Authority:  Part 1,"  SmartPros, November 2006 --- http://accounting.smartpros.com/x55203.xml 
 Jensen Comment
 Bravo Ed!

Bob Jensen's threads on employee stock options accounting are at
http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


From The Wall Street Journal Accounting Weekly Review on November 17, 2006

TITLE: Business Wins Its Battle to Ease a Costly Sarbanes-Oxley Rule
REPORTERS: Kara Scannel and Deborah Solomon
DATE: Nov 10, 2006
PAGE: A1
LINK: http://online.wsj.com/article/SB116312925640019517.html?mod=djem_jiewr_ac 
TOPICS: Accounting, Auditing, Public Accounting, Regulation, Sarbanes-Oxley Act, Securities and Exchange Commission

SUMMARY: "...Securities and accounting regulators are yielding to pressure for a...flexible reading of...Section 404 [of the Sarbanes-Oxley Act]. Regulators have said they will propose guidance next month to help companies and auditors interpret Section 404 in a way likely to save them time and money."

QUESTIONS:
1.) Which regulators are considering changes to make the effects of Sarbanes-Oxley less onerous?

2.) Are regulators proposing changes to the Sarbanes-Oxley law itself or to some other documents? Explain.

3.) What has been the impact of Sarbanes-Oxley on fees charged by auditing firms? Describe both the impact in the first year of implementing the rule and in subsequent years.

4.) How has the impact of Sarbanes-Oxley in recent years been out of line with expectations?

5.) How might relaxation of interpretation of Sarbanes-Oxley Section 404 impact smaller companies to ease their burden of implementation? In your answer, specifically refer to auditing standards described in the article.

6.) Describe the impact of the issues discussed in answer to questions 3, 4, and 5 on listings of stock with U.S. exchanges.

Reviewed By: Judy Beckman, University of Rhode Island


From The Wall Street Journal Accounting Weekly Review on November 17, 2006

TITLE: Accounting Watchdog Falls Behind`
REPORTER: David Reilly
DATE: Nov 10, 2006
PAGE: C3
LINK: http://online.wsj.com/article/SB116312914256419514.html?mod=djem_jiewr_ac 
TOPICS: Auditing, Fraudulent Financial Reporting, Public Accounting, Sarbanes-Oxley Act

SUMMARY: "With the end of the year fast approaching, the Public Company Accounting Oversight Board has yet to issue an annual inspection report for any of the Big Four [public accounting firms]...'

QUESTIONS:
1.) Who is the "watchdog" who has yet to issue an inspection report this year? What is the purpose of this "watchdog"?

2.) What is the time line for issuing reports on "auditing the auditors." Where do the ones closest to completion stand against that time line?

3.) How are others expected to use the reports regarding auditors of publicly traded firms?

4.) How is the process of "auditing the auditors" intended to make market participants feel greater confidence in the integrity of markets?

5.) How does the benefit described in answer to question 4 translate into benefits to society at large, rather than just benefits related to personal investing?

Reviewed By: Judy Beckman, University of Rhode Island


Proposal for Real Time Reporting by Corporations

November 8, 2006 message from Glen L Gray [glen.gray@CSUN.EDU]

Big Four Eyes End to Quarterlies: Report The leading accounting firms want to change to "real-time, internet-based reporting encompassing a wider range of performance measures" than current "static" forms supply. Stephen Taub and David M. Katz, CFO.com November 08, 2006

The Big Four accounting firms will call on Wednesday for sweeping changes in the way companies report their results to investors, including an end to quarterlies, according to the Financial Times.

In the place of "static" quarterly statements, PwC, Deloitte, KPMG, Ernst & Young, plan to recommend "real-time, internet-based reporting encompassing a wider range of performance measures," the FT reported on late Tuesday afternoon.

Along with the heads of Grant Thornton and BDO, senior managements of the Big Four reportedly plan to say in a joint paper to be revealed at gathering in Paris that the financial reporting model of the 20th century "is broken," said Mike Rake, chairman of KPMG International, according to the FT.

"There are significant shortcomings to [U.S. generally accepted accounting principles] and issues of concern with international financial reporting standards," he also reportedly said. "We're not in a very happy situation."

"Current systems of reporting and auditing company information will need to change toward the public release of more non-financial information customized to the user, and accessed far more frequently than is currently done," the paper reportedly says.

The accounting firms reportedly have been working on their proposals for over a year, according to the FT.

Glen L. Gray, PhD, CPA
Accounting & Information Systems,
COBAE California State University,
Northridge Northridge, CA 91330

http://www.csun.edu/~vcact00f

          The CFO.com link is http://www.cfo.com/article.cfm/8132475/c_813251

November 10, 2006 reply from Saeed Roohani [sroohani@COX.NET]

This is a good demo to show application of continuous auditing

http://www.emporia.edu/business/newsdetail.php?newsID=26

The demo was the prize winner of 6th Global XBRL Academic Competition

2005-06 (www.XBRLeducation.com)

 

Other XBRL teaching cases/projects:

South America Unified Markets

http://www32.brinkster.com/xbrl2003/

user: SAUM

password : xbrl2003

InvestWise: Where investment forecasts are just a click away!

http://personal.bgsu.edu/~ilyak/xbrl

password is xbrl

Credit Analyzer

http://kelley.iu.edu/Norne/ (ID: admin, PASSWORD: xbrlpass)

Some related links:

http://www.kelley.iu.edu/sagp/news_items.cfm?newsid=15

http://www.iasb.org/xbrl/xbrl_team/profiles_where_are_they_now.html

http://www.lerner.udel.edu/accounting/FacultyPages/Geerts.HTML

http://www.rafware.it/ias/index.php?id=2489

=====================

Saeed Roohani
Bryant University


December 10, 2006 message from Saeed Roohani [sroohani@COX.NET]

In his speech at the 14th XBRL International Conference, Chairman Cox talked about Global XBRL Academic Competition:

See below and the link for your information.

And I should point out that not only can XBRL help reduce errors in the first place, but it can also help detect them after they occur. Here's an interesting example of how that might work. Just this year, a group of students at Emporia State University in Kansas won the Sixth Global XBRL Academic Competition at Bryant University by creating a software application that continuously identifies tagged transactions which should come to the attention of internal or external auditors. It's not hard to imagine that in the very near future, companies of all kinds will be able to rely on interactive data to flag anomalous data and fix accounting errors in real time

Speech by SEC Chairman: The Promise of Interactive Data by Chairman Christopher Cox U.S. Securities and Exchange Commission 14th International XBRL Conference Philadelphia, Pennsylvania December 5, 2006

http://www.sec.gov/news/speech/2006/spch120506cc.htm 

Saeed Roohani
Bryant University

Bob Jensen's threads on XBRL are at http://www.trinity.edu/rjensen/XBRLandOLAP.htm


"A Report by the World’s Largest Auditors Urges Relaxed Standards for Liability," by Floyd Norris, The New York Times, November 8, 2006 --- http://www.nytimes.com/2006/11/08/business/worldbusiness/08account.html?_r=1&oref=slogin

The heads of the six largest auditing firms in the world issued a call for relaxed liability standards for their companies yesterday, in what appears to be the start of a campaign to protect their franchises while reducing the risk that bad audits could bankrupt one or more of them.

In a report, the executives said that they supported efforts to standardize accounting and auditing standards around the world and that eventually, “a new business reporting model” should be developed that would provide better financial information more rapidly.

But while the report, entitled “Serving Global Capital Markets and the Global Economy,” offered little detail in that area, it was most detailed in its warnings that auditor liability needed to be restricted and in mounting the arguments for that outcome.

It did not offer specific proposals on how liability could be restricted while continuing to protect investors if auditors failed to do a conscientious job. Instead, it pointed to a restriction on auditor liability as being essential to solve many problems of the industry, and suggested that if investors were worried about fraud, they should be willing to pay for more detailed and more expensive audits than those prepared now.

“Our firms are not and can never be the insurers of last resort for the capital markets,” the report said. It cited an “expectations gap” between what investors wanted from an audit in detecting fraud “and what audit networks are actually capable of doing, at the prices that companies or investors are willing to pay for audits.”

One idea the report raised, which could bring in more revenue with less risk for auditing firms, was to create a separate category of forensic audits, which would cost more than ordinary ones and be more likely to uncover fraud. It said companies might be required to have such an audit every five years, or to face such audits on a random basis. Or, it said, investors could choose whether they wanted their companies to face that additional cost.

Since the collapse of Arthur Andersen in the wake of the Enron scandal, there has been worry over excessive concentration of business in the Big Four firms — PricewaterhouseCoopers, KPMG, Deloitte & Touche and Ernst & Young. The report, signed by the heads of those four firms as well as of the next two, much smaller firms — Grant Thornton and BDO International — suggested that more competition would appear if liability concerns were eased.

It argued that fear of lawsuits had led to detailed accounting rules in the United States that encouraged a “check the box” style of auditing and accounting that in some cases made fraud more likely and information less useful. It endorsed the idea of accounting rules that are more “standards based,” with fewer details and more responsibility for auditors to interpret them.

The report acknowledged that the big firms had often sought detailed rules in the hope that would protect them from lawsuits, but said that had not worked.

While the largest firms in major countries bear the same or similar names, they are organized as partnerships in each country, reflecting differing regulations on what accountants and auditors can do. The firms asked for more consistent global rules and for ways to allow the heads of the international firms to enforce standards on all those in a network without making all the firms in the network liable for a firm’s errors.

From The Wall Street Journal Accounting Weekly Review on November 10, 2006

TITLE: Caveat Auditor?
AUTHORS: Samuel DiPiazza, Jr., David McDonnell, Willaim Parrett, Mike Rake, Frans Samyn, James Turley
DATE: Nov 08, 2006
PAGE: A22
LINK: http://online.wsj.com/article/SB116293744280516046.html?mod=djem_jiewr_ac 
TOPICS: Accounting, Auditing, Financial Accounting, Financial Accounting Standards Board, International Accounting, International Accounting Standards Board, International Auditing

SUMMARY: The leaders of the world's largest public accounting firms are presenting a paper at the Global Public Policy Symposium in Paris and jointly published this editorial encouraging global reporting and auditing standards,

QUESTIONS:
1.) Who are the worldwide leaders who have written this article? What symposium are they attending on which the article is based?

2.) Why are these leaders supporting global accounting and auditing standards? How can implementation of such standards assist them in operating their audit firms?

3.) The authors argue that implementing world-wide accounting and auditing standards will help restore investor confidence in capital markets. What is the logic behind that argument? According to these individuals, what steps must be taken beyond merely converging international standards to achieve a goal of increased investor confidence?

4.) Focus particularly on the authors' argument in favor of "allowing auditors greater room to exercise judgment." Greater than what? What is the logic of this argument?

5.) How might investors and other users of financial statements argue against this "need for greater judgment" by auditors? In your answer, also comment on the "expectations gap" that persists with respect to auditing publicly traded companies.

Reviewed By: Judy Beckman, University of Rhode Island

"Caveat Auditor?" By SAMUEL A. DIPIAZZA JR., DAVID MCDONNELL, WILLIAM G. PARRETT, MIKE D. RAKE, FRANS SAMYN and JAMES S. TURLEY, The Wall Street Journal,  November 8, 2006; Page A22 ---

Investor confidence is easily shaken and, once lost, hard to restore. After Enron and other corporate scandals, much has been done by regulators, publicly traded companies, investors and auditors to help win back that trust. As leaders of the six largest global audit networks, we have rededicated ourselves to the highest standards of quality and ethical service.

But it's clear that fully restoring investor confidence requires much more. Fresh thinking and action are now required to provide stability and sustainable growth to the global capital markets in the future.

The way in which companies report financial information matters greatly to almost everyone: from the individual saving for a child's university tuition to money managers responsible for billions of dollars. Public-company auditing matters because, in the end, it is one of the foundations of investor confidence in capital markets and, in turn, the global economy.

But when the basics of accounting procedures were written, the world's investors were more a private club than a global network. Auditors used fountain pens, capital stayed pooled in a few financial centers, and information moved by runner.

Business is now much more complex, with more sophisticated financial tools for raising capital and hedging risks than were available in previous decades. Globalization has created ever greater movement of goods, services and capital across borders. Yet the concepts governing financial reporting and auditing standards have not sufficiently changed with the times.

There has been some progress, such as the introduction of EU legislation that clarifies the duties of statutory auditors. But we can act further now to improve the information that firms report to the public. • First, we should harmonize reporting and auditing standards around the world. Stakeholders and investors need to know that the information they are getting is compiled, classified, reported and audited on a consistent basis across countries. The International Accounting Standards Board and the U.S.-based Financial Accounting Standards Board are already working on this task but should complete their efforts promptly. The adoption of International Financial Reporting Standards in nearly 100 countries is a major step in this direction.

• There also remain national differences in the oversight of auditors and enforcement of relevant audit standards. The new Independent Forum of International Audit Regulators is the ideal body to bring these regulatory regimes into harmony.

• Some financial statements have become so complex that few people properly understand them. We must develop a new business reporting model to make the information less complex and more useful. This new model should include the reporting of more nonfinancial information. While corporate value was once largely about tangible assets -- land, plants, equipment and so on -- attributes such as customer loyalty, employee knowledge, brand value and reputation are now just as important to many investors. But the rules for financial reporting provide limited guidance as to how a company should report these aspects of its business. The adoption of more user-friendly technologies would also be helpful.

• All of these steps should include an emphasis on allowing auditors greater room to exercise judgment. Accountants and auditors are trained professionals who have the ability to apply the spirit of broad principles in deciding how to account for and report financial and other information. Rules that allow this judgment to be exercised will produce better, more reliable and more useful information. Rigid rules are ill-suited to a rapidly changing business environment.

• Such measures should also include an honest assessment of the "expectations gap," relating to material fraud and the ability of auditors to uncover it at a reasonable cost. Unless companies or investors are willing to pay auditors to police all of a company's transactions, auditors can use only indirect means to ascertain whether a fraud has occurred.

We believe that these steps could give investors, businesses and regulators what they want and deserve: reliable and relevant information that is the lifeblood of thriving capital markets. We will offer further details on these steps in a paper that we will present at the Global Public Policy Symposium in Paris today. (For more information, see www.globalpublicpolicysymposium.com.)

We hope that this symposium provides a starting point for addressing these issues. The world is changing quickly and public companies are changing along with it. It is time for financial reporting and auditing standards to change as well.

Mr. DiPiazza is CEO of PricewaterhouseCoopers International Limited. Mr. McDonnell is CEO of Grant Thornton International. Mr. Parrett is CEO of Deloitte. Mr. Rake is chairman of KPMG International. Mr. Samyn is CEO of BDO International. Mr. Turley is chairman and CEO of Ernst and Young.

November 8, 2006 reply from Paul Bjorklund [PaulBjorklund@AOL.COM]

Bob-

Thank you for this. It is interesting in several respects. I was particularly fascinated about the forensic audit idea set forth. I think both the big firms and the profession as a whole need to put on their "public interest" hats, rather than their trade-industry/lobbying ones, and develop solutions that benefit everyone.

Paul Bjorklund, CPA
Bjorklund Consulting, Ltd.
Flagstaff, Arizona

November 8, 2006 reply from Roger Debreceny [Roger@DEBRECENY.COM]

Intresting snippets in the report's Executive Summary:
 
Reporting model, p2:
  • The value of many companies resides in various “intangible” assets (such as employee creativity and loyalty, and relationships with suppliers and customers). However, information to assess the value of these intangibles is not consistently reported. 
  • Billions of people around the world now have the ability to access information instantaneously. Yet when it comes to financial reports, investors must wait for companies to publish data only once a quarter, every six months or annually.
  • The information technology revolution has made data customization easy to use and broadly expected. However, today’s financial reports remain largely one-size-fits-all, and are not sufficiently accessible to many investors.
Again on p3:

Longer-Run Measures: Over the longer run, experts agree that the current systems of reporting and auditing company information will need to change — toward the public release of more non-financial information (some or much of which may be industry-specific) customized to the user, and accessed far more frequently than is currently done. It is time, therefore, for all global capital markets stakeholders involved to launch a process that will lead to the development of a new business reporting model, with a clear identification of the role of the independent audit and requirements dictated by that model.  

Skills, p2:
The auditing profession needs to develop the talent and expertise to deliver consistent, high-quality audit services in the coming environment, both through the hiring of outstanding individuals and the training of auditors in new auditing techniques (especially evolving information technology, fair value models and expanded business information).

And again on p4:
To provide these services, our profession must be able, through market-based incentives and our workplace environments, to attract and retain individuals with broad training in multiple disciplines — in accounting, information technology, finance, tax and other business skills — to deal with a more complex and global business environment. Among other things, this will require improvements in accountancy degree curricula and investments in continuous training on our part. Meanwhile, legal restrictions on the scope of services that can be provided by audit networks should be evaluated in light of the capital markets’ clear interest in assuring the continued attractiveness of the profession and its ability to bring in and retain individuals with the requisite talent and skills as well as the need to assure auditor independence. 

Interesting comments on national and global audit standards, role or forensic auditing etc.

Roger

..................................................................

Roger Debreceny

School of Accountancy

Shidler College of Business

University of Hawai`i at Mānoa

2404 Maile Way, Honolulu, HI 96822, USA

roger@debreceny.com rogersd@hawaii.edu

Office: +1 808 956 8545 Cell: +1 808 393 1352

www.debreceny.com

Bob Jensen's threads on intangibles and accounting theory are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm


It struck me as yet another example of how small the role of academe is in shaping the future of the profession of accountancy.

I examined the Vision being promoted, since November 8, 2006, by CEOs of the largest accounting firms --- http://www.globalpublicpolicysymposium.com/CEO_Vision.pdf
It struck me as yet another example of how small the role of academe is in shaping the future of the profession of accountancy. I wonder if the professions of medicine and law would chart the future of their own professions with so little regard for schools of medicine and law. Large firms in accounting actively seek to hire our students and have great public relations with professors. However, when it comes to something as substantive as this it's very difficult to find where leaders of the profession charted this change in course by building upon academic accounting research. There are probably indirect links, but it would be surprising if the writers of this proposed huge change in policy were influenced heavily by published academic research. An exception might be the thrust toward XBRL, but the so-called leading academic accounting journals have paid scant attention to XBRL,

On one hand we could blame the leaders of the profession for avoiding academe in the generation of new vision for the future. On the other hand we could blame the accounting researchers and their top journals for addressing what they can study with scientific models rather than what the profession wants to be studied. My threads on this issue are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#AcademicsVersusProfession

"Largest Accounting Firms See Coming Revolution in Business Reporting," AccountingWeb, November 27, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102827

As part of the Global Public Policy Symposium in Paris, held on November 8 and attended by key players concerned with ensuring the quality and reliability of financial reporting worldwide, the Chief Executive Officers (CEOs) of PricewaterhouseCoopers (PwC) International, Grant Thornton International, Deloitte, KPMG International and Ernst & Young, published a joint statement of their vision of what the future might hold for financial reporting and the accounting profession.

Entitled “Global Capital Markets and the Global Economy: A Vision from the CEOs of the International Audit Networks,” the document envisions investors having access to real time company financial information through XBRL, financial statements that go beyond reporting past performance to projecting future performance based on information about business intangibles that are not currently measured, and a recommendation that companies choose to supplement regular audits with periodic forensic audits. The report may be viewed at www.globalpublicpolicysymposium.com/

“This essay is about one type of information and its importance to all actors in the global economy; information about the performance of management and companies that make and deliver goods and services, and compete for capital,” the symposium paper says.

In a letter to the Wall Street Journal published on November 8, the day their paper was released, the CEOs wrote that when the basics of current accounting procedures were written, the world’s investors were more a “private club than a global network. Auditors used fountain pens, capital stayed pooled in a few financial centers, and information moved by runner.” The world has changed since then.

In the short term, the letter says, it will be necessary to proceed as rapidly as possible with convergence in international accounting standards, and with overcoming national differences in oversight of auditors and in enforcement.

In the longer term, auditors themselves must evaluate the usefulness to investors of information provided in the current financial statement and footnote format and consider the inclusion of more nonfinancial information.

But, the CEOs say in the Journal letter, “All of these steps should include an emphasis on allowing auditors greater room to exercise judgment. Accountants and auditors are trained professionals who have the ability to apply the spirit of broad principles in deciding how to account for and report financial and other information. . . . Such [future] measures should also include an honest assessment of the “expectations gap,” relating to material fraud and the ability of auditors to uncover it at a reasonable cost.”

The paper looks forward to a world “where users increasingly will want to customize the information they receive” in which “the process for recording and classifying business information will be as important, if not more important, than the static formats in which today’s financial information is reported. Our jobs as auditors, must therefore change to increasing focus on those business processes.”

An “important enabler” of future reporting will be the Global XBRL Initiative, the paper says. XBRL users will be able to view company data in any language, any currency and under different accounting systems and get immediate answers to queries. “In fact the new world is already here for the approximately 40,000 companies that already use XBRL to input their data. . . . China, Spain, the Netherlands and the United Kingdom have required companies to use XBRL.”

The paper acknowledges that investors, analysts and others will still want standardized reports to be issued by public companies on a regular basis. But the CEOs say that investors have told them they want more relevant information to be included. “The large discrepancies between the “book” and “market” values of many, if not most, public companies similarly provide strong evidence of the limited usefulness of statements of assets and liabilities that are based on historical costs. A range of intangibles, such as employee creativity and loyalty and relationships with suppliers and customers, can drive a company’s performance, yet the value of these intangibles is not consistently reported."

In short, the CEO’s vision states “the same forces that are reshaping economies at all levels are driving the need to transform what kind of information various stakeholders want from companies, in what form, and at what frequency. In a world of “mass customization,” standard financial statements have less and less meaning and relevance. The future of auditing in such an environment lies in the need to verify that the process by which company-specific information is collected, sorted and reported is reliable and the information presented is relevant for decision making.”

Investors and regulatory bodies may expect auditors to go further than is reasonable to detect fraud and the paper recommends that all companies be subjected to a regular forensic audit, or be subjected to forensic audits on a random basis.

Another option would be introducing more choice regarding the intensity of audits for fraud. For example, since forensic audits are conducted primarily for the benefit of investors, one possibility would be to let shareholders decide on the intensity of the fraud detection effort
they want auditors to perform. Shareholders could be assisted in making this decision by disclosure in the proxy materials of the costs of the different levels of audits, as well as the historical experience of the company with fraud.

The CEO paper calls for both liability reform and scope of service reform.

Considering the “Brave New World” of auditing envisioned in the document and the scope of the questions it raises, “Global Capital Markets and the Global Economy” has received little attention in the financial press, Motley Fool reports. But, while approving the idea of more timely information flows for the investor, Fool says, “enough companies have trouble meeting their reporting obligations as it is. I would prefer to both maintain those reports and supplement them with additional data.”

That financial reporting will evolve and change is inevitable, the International Herald Tribune says, but whether large accounting firms will lead the dialogue is another matter that may be influenced by their “life-threatening litigation risks.”

December 1, 2006 reply from Paul Bjorklund [PaulBjorklund@AOL.COM]

Good points. My viewpoint is more as a reader/user of financial reporting, rather than as a CPA who practices in the area of financial accounting and auditing.

From my perspective though, it seems that some of the innovations that are being proposed of late by the big firms should be welcomed, no doubt. However, some questions arise as to who should participate in this process and what roles they should play.

For example, if the current financial reporting system, for both large and small enterprises, is allegedly "broken," how did this come about? Is this supposedly inanimate "system" just had time pass it by, and now as a result this state of broken-ness has just sort of accidentally evolved? I question that characterization, as it would appear that those with the greatest influence over the practice of auditing and financial accounting have been the same big firms who now complain that it is broken.

Accordingly, would it not be better for other stakeholders to participate as well? I hope that, as suggested in the previous posting by Dr. Jensen, the academic thinkers will indeed disengage a little from their computer modeling and exert their influence in the "coming revolution" too.

Paul Bjorklund, CPA Bjorklund Consulting, Ltd. Flagstaff, Arizona

"Accounting Firms Seek Overhaul," by Tad Kopinski, Institutional Shareholder Services ISS, November 20, 2006 ---
http://blog.issproxy.com/2006/11/accounting_firms_seek_overhaul.html

Bob Jensen's threads on accounting theory are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm

Bob Jensen's threads on proposed reforms --- http://www.trinity.edu/rjensen/FraudProposedReforms.htm


SEC's Fair Disclosure (Regulation FD)

From The Wall Street Journal Accounting Weekly Review on December 1, 2006

TITLE: Seeking an Edge, Big Investors Turn to Network of Informants
REPORTER: Laurie P. Cohen
DATE: Nov 27, 2006
PAGE: A1
LINK: http://online.wsj.com/article/SB116459881353833275.html?mod=djem_jiewr_ac 
TOPICS: Accounting, Disclosure, Disclosure Requirements, Materiality, Securities and Exchange Commission

SUMMARY: Capital management firms are turning to industry experts for information about potential investments' business prospects in the wake of Regulation FD. Experts' ability to avoid crossing the line into disclosing material non-public information is questioned; so is their ability to provide the services they offer given many employers' policies prohibiting "moonlighting." Examples in the article seem to give credence to the argument that these experts don't know when they've crossed these lines and behaved improperly.

QUESTIONS:
1.) What is Regulation Fair Disclosure (Regulation FD)? When was it placed in effect? Hint: to answer this question, you may read about Regulation FD at the following SEC web site: http://www.sec.gov/rules/final/33-7881.htm 

2.) How has Regulation FD given rise to efforts to find unique information sources about potential investments?

3.) Was the service provided by Gerson Lehrman specifically designed in response to the impact of Regulation FD? If so, explain how. If not, explain how the idea for this service developed.

4.) What evidence in the article indicates that "material, nonpublic information" may be released through the service provided by Gerson Lehrman? In your answer, define the phrase "material, nonpublic information."

5.) What are the potential ramifications of disclosure of material, nonpublic information? Who would be responsible for costs and fees associated with violating the SEC's Regulation FD?

6.) What evidence in the article indicates that Gerson Lehrman consultants may not know if they have disclosed material nonpublic information?

7.) What evidence given in the article supports the claim that information provided by these consulting services is 'either too good to trade on or too pedestrian to care about"?

8.) What evidence supports Mr. Gerson's claim that his service is valuable and can thrive, and even gain the approval of companies about whom the services' consultants may speak?

Reviewed By: Judy Beckman, University of Rhode Island


Question
What is the new requirement to file an IRS Schedule M-3?
I vote for investor access!

From The Wall Street Journal Accounting Weekly Review on December 1, 2006

TITLE: Minding the Gap: IRS Looks Closer at Profit Disparity
REPORTER: Jesse Drucker
DATE: Nov 27, 2006
PAGE: C1
LINK: http://online.wsj.com/article/SB116459525535533182.html?mod=djem_jiewr_ac 
TOPICS: Accounting, Financial Accounting, Financial Accounting Standards Board, Generally accepted accounting principles, Tax Avoidance, Tax Evasion, Tax Laws, Tax Regulations, Tax Shelters, Taxation

SUMMARY: The article reports on a new IRS requirement to file Schedule M-3 detailing the differences between income reported to shareholders and taxable income. The article describes how the required disclosures help the IRS to decide which transactions and companies to scrutinize for potential abusive tax shelters. The authors also refer to accounting research demonstrating greater likelihood of IRS audits resulting in back-tax payments from companies with the largest disparities between book and taxable income.

QUESTIONS:
1.) Why is there a difference between income reported in annual reports to shareholders and others (book income) and taxable income reported to the Internal Revenue Service (IRS)?

2.) Depreciation differences and tax deductibility of stock options are cited as some of the biggest differences between the two reporting systems. Describe the accounting and tax treatment for each of these items. How can depreciation differences result in perpetual differences that show taxable income lower than book income?

3.) Describe the research cited in this article. In particular, explain how the biggest book/tax differences may serve as "markers" for potential volatility in future earnings. How could an investor use this information?

4.) Do you think investors should have access to the information in the now-confidential Schedule M-3 disclosures to the IRS? Support your answer.

5.) Describe the arguments for and against requiring the same set of standards for financial reporting and for taxation. In your answer, you may comment on systems in countries in which the two are the same or substantially so.

Reviewed By: Judy Beckman, University of Rhode Island

December 4, 2006 reply from Richard C. Sansing [Richard.C.Sansing@DARTMOUTH.EDU]

The research referred to in the WSJ article does not support the conclusion that Jesse Drucker draws.

Mills (1998) showed that book-tax differences are positively correlated with PROPOSED IRS audit adjustments, but Mills and Sansing (2000) showed that book-tax differences are uncorrelated with RETAINED IRS adjustments, which is the amount agreed to by the taxpayer after the Exam, Appeals, and Counsel processes are completed.

Both results are consistent with the strategic auditing model developed in the Mill and Sansing paper.

Mills, L. 1998. Book-tax differences and Internal Revenue Service adjustments. Journal of Accounting Research

36 (Autumn): 343-56.

Mills, L. and R. Sansing. 2000. Strategic tax and financial reporting decsions: Theory and evidence. Contemporary Accounting Research 17 (Spring): 85-106.

Richard C. Sansing
Professor of Accounting
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH 03755
Office: Tuck 307
Phone: (603) 646-0392
Fax: (603) 646-0995

email: Richard.C.Sansing@dartmouth.edu
URL: http://mba.tuck.dartmouth.edu/pages/faculty/richard.sansing/

You can access my papers on the Social Science Research Network (SSRN) through the following URL: http://papers.ssrn.com/author=016942

 




Forwarded by Maria

After 21 years of marriage, my wife wanted me to take another woman out to dinner and a movie. She said, "I love you, but I know this other woman loves you and would love to spend some time with you."

The other woman that my wife wanted me to visit was my mother, who had been a widow for 19 years, but the demands of my work and my 3 children had made it possible to visit her only occasionally. That night I called to invite her to go out for dinner and a movie.

"What's wrong, are you well?" She asked. My mother is the type of woman who suspects that a late night call or surprise invitation is a sign of bad news.

"I thought that it would be pleasant to spend some time with you," I responded. Just the two of us."

She thought about it for a moment, and then said, "I would like that very much."

That Friday after work, as I drove over to pick her up I was a bit nervous. When I arrived at her house, I noticed that she, too, seemed to be nervous about our date. She waited in the door with her coat on. She had curled her hair and was wearing the dress that she had worn to celebrate her last wedding anniversary.

She smiled from a face that was as radiant as an Angel's! "I told my friends that I was going to go out with my son, and they were impressed," she said, as she got into the car. "They can't wait to hear about our meeting."

We went to a restaurant that, although not elegant, was very nice and cozy. My mother took my arm as if she were the First Lady. After we sat down, I had to read the menu. Her eyes could only read large print. Halfway through the entrees, I lifted my eyes and saw Mom sitting there staring at me.

 A nostalgic smile was on her lips. "It was I who used to have to read the menu when you were small," she said. "Then it's time that you relax and let me return the favor,"I responded.

During the dinner, we had an agreeable conversation -- nothing extraordinary but catching up on recent events of each other's life. We talked so much that we missed the movie. As we arrived at her house later, she said, "I'll go out with you again, but only if you let me invite you." I agreed.

"How was your dinner date?" Asked my wife when I got home.

 "Very nice. Much more so than I could have imagined," I answered.

A few days later, my mother died of a massive heart attack. It happened so suddenly that I didn't have a chance to do anything for her. Some time later, I received an envelope with a copy of a restaurant receipt from the same place where mother and I had dined.

An attached note said: "I paid this bill in advance. I wasn't sure that I could be there; but nevertheless I paid for two plates-- one for you and the other for your wife. You will never know what that night meant for me.

 "I love you, son." At that moment, I understood the importance of saying in time: "I love you," and to give our loved ones the time that they deserve.

Nothing in life is more important than your family. Give them the time they deserve, because these things cannot be put off 'til "some other time."

Somebody said it takes about 6 weeks to get back to normal after you've had a baby . . .
Somebody doesn't know that once you're a mother, "normal" is history.

Somebody said you learn how to be a mother by instinct. . .
Somebody never took a 3-year-old shopping.

Somebody said being a mother is boring . . .
Somebody never rode in a car driven by a teenager with a driver's permit.

Somebody said good mothers never raise their voices ...
Somebody never came out the back door just in time to see her child hit a golf ball through the neighbor's kitchen window.

Somebody said you don't need an education to be a mother . . .
Somebody never helped a 4th grader with his math.

Somebody said you can't love the 5th child as much as you love the first . . .
Somebody doesn't have 5 children.

Somebody said a mother can find all the answers to her child-rearing questions in the books . .. .
Somebody never had a child stuff beans up his nose or in his ears.

Somebody said the hardest part of being a mother is labor and delivery. . .
Somebody never watched her"baby" get on the bus for the 1st day of kindergarten, or on a plane headed for military boot camp.

Somebody said a mother can do her job with her eyes closed and one hand tied behind her back . . .
Somebody never organized 7 giggling Brownies to sell cookies.

Somebody said a mother can stop worrying after her child gets married. . .
Somebody doesn't know that marriage adds a new son- or daughter-in-law to a mother's heartstrings.

Somebody said a mother's job is done when her last child leaves home. . . Somebody never had grandchildren.

Somebody said your mother knows you love her, so you don't need to tell her. . .
Somebody isn't a mother.

 Pass this along to all the "mothers" in your life.


Progress in School Behavior:  1976 Versus 2006

Forwarded by Dick Haar

Scenario: Jack pulls into school parking lot with rifle in gun rack.

1973 - Vice Principal comes over, takes a look at Jack's rifle, goes to his car and gets his to show Jack.

2006 - School goes into lockdown, FBI called, Jack hauled off to jail and never sees his truck or gun again. Counselors called in for traumatized students and teachers.

++++++++++++++++++++++

Scenario: Johnny and Mark get into a fist fight after school.

1973 - Crowd gathers. Mark wins. Johnny and Mark shake hands and end up best friends. Nobody goes to jail, nobody arrested, nobody expelled.

2006 - Police called, SWAT team arrives, arrests Johnny and Mark. Charge them with assault, both expelled even though Johnny started it.

+++++++++++++++++++++++++++++++

Scenario: Jeffrey won't be still in class, disrupts other students.

1973 - Jeffrey sent to office and given a good paddling by Principal. Sits still in class.

2006 - Jeffrey given huge doses of Ritalin. Becomes a zombie. School gets extra money from state because Jeffrey has a disability.

++++++++++++++++++++++++++

Scenario: Billy breaks a window in his father's car and his Dad gives him a whipping.

1973 - Billy is more careful next time, grows up normal, goes to college, and becomes a successful businessman.

2006 - Billy's Dad is arrested for child abuse. Billy removed to foster care and joins a gang. Billy's sister is told by state psychologist that she remembers being abused herself and their Dad goes to prison. Billy's mom has affair with psychologist.

+++++++++++++++++++++++++++++

Scenario: Mark gets a headache and takes some headache medicine to school.

1973 - Mark shares headache medicine with Principal out on the smoking dock.

2006 - Police called, Mark expelled from school for drug violations. Car searched for drugs and weapons.

+++++++++++++++++++++++++

Scenario: Mary turns up pregnant.

1973 - 5 High School Boys leave town. Mary does her senior year at a special school for expectant mothers.

2006 - Middle School Counselor calls Planned Parenthood, who notifies the ACLU. Mary is driven to the next state over and gets an abortion without her parent's consent or knowledge. Mary given condoms and told to be more careful next time.

+++++++++++++++++++++++++++

Scenario: Pedro fails high school English.

1973: Pedro goes to summer school, passes English, goes to college.

2006: Pedro's cause is taken up by state democratic party. Newspaper articles appear nationally explaining that teaching English as a requirement for graduation is racist. ACLU files class action lawsuit against state school system and Pedro's English teacher. English banned from core curriculum. Pedro given diploma anyway but ends up mowing lawns for a living because he can't speak English.

+++++++++++++++++++++

Scenario: Johnny takes apart leftover firecrackers from the 4th of July, puts them in a model airplane paint bottle, blows up a red ant bed.

1973 - Ants die.

2006 - BATF, Homeland Security, FBI called. Johnny charged with domestic terrorism, FBI investigates parents, siblings removed from home, computers confiscated, Johnny's Dad goes on a terror watch list and is never allowed to fly again.

+++++++++++++++++++++

Scenario: Johnny falls while running during recess and scrapes his knee. He is found crying by his teacher, Mary. Mary, hugs him to comfort him.

1973 - In a short time Johnny feels better and goes on playing.

2006 - Mary is accused of being a sexual predator and loses her job. She faces 3 years in State Prison.

All in the name of progress!




 




  • Click Here for Tidbits and Quotations Between December 1 and December 31, 2006 --- http://www.trinity.edu/rjensen/book06q4.htm#Tidbits123106

    Click Here for Humor Between December 1 and December 31, 2006 --- http://www.trinity.edu/rjensen/book06q4.htm#Humor113006

     




    And that's the way it was on December 31, 2006 with a little help from my friends.

     

    Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm

     

    Facts about the earth in real time --- http://www.worldometers.info/ 

    Jesse's Wonderful Music for Romantics (You have to scroll down to the titles) --- http://www.jessiesweb.com/

    International Accounting News (including the U.S.)

    AccountingEducation.com and Double Entries --- http://www.accountingeducation.com/
            Upcoming international accounting conferences --- http://www.accountingeducation.com/events/index.cfm
            Thousands of journal abstracts --- http://www.accountingeducation.com/journals/index.cfm
    Deloitte's International Accounting News --- http://www.iasplus.com/index.htm
    Association of International Accountants --- http://www.aia.org.uk/ 

    Free Harvard Classics --- http://www.bartleby.com/hc/
    Free Education and Research Videos from Harvard University --- http://athome.harvard.edu/archive/archive.asp

     

    I highly recommend TheFinanceProfessor (an absolutely fabulous and totally free newsletter from a very smart finance professor, Jim Mahar from St. Bonaventure University) --- http://www.financeprofessor.com/ 

     

    Bob Jensen's bookmarks for accounting newsletters are at http://www.trinity.edu/rjensen/bookbob1.htm#News 

    News Headlines for Accounting from TheCycles.com --- http://www.thecycles.com/business/accounting 
    An unbelievable number of other news headlines categories in TheCycles.com are at http://www.thecycles.com/ 

     

    Jack Anderson's Accounting Information Finder --- http://www.umsl.edu/~anderson/accsites.htm

     

    Gerald Trite's great set of links --- http://www.zorba.ca/bookmark.htm 

     

    The Finance Professor --- http://www.financeprofessor.com/about/aboutFP.html 

     

    Walt Mossberg's many answers to questions in technology --- http://ptech.wsj.com/

     

    How stuff works --- http://www.howstuffworks.com/ 

     

    Household and Other Heloise-Style Hints --- http://www.trinity.edu/rjensen/bookbob3.htm#Hints 

     

    Bob Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/ 
    Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm and http://www.trinity.edu/rjensen/HelpersVideos.htm 

     

    Click on www.syllabus.com/radio/index.asp for a complete list of interviews with established leaders, creative thinkers and education technology experts in higher education from around the country.

     

    Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
    190 Sunset Hill Road
    Sugar Hill, NH 03586
    Phone:  603-823-8482 
    Email:  rjensen@trinity.edu  

     

     

     

     

     




     

    Tidbits and Quotations Between December 1 and December 31, 2006

     

     

     

    My close friends Lon and Nancy Hendersen own the Sunset Hill House down the road from our cottage. There are assorted cross country ski trails up here. The above picture is in their slide show at http://www.sunsethillhouse.com/

    Congratulations to Kate Lopez and Trinity University

     

    I want to congratulate Kate Lopez on her recent acceptance of an offer to join the accounting faculty at Trinity University. Kate is finishing her PhD at the University of Texas in San Antonio. Kate was one of my star students in Trinity's undergraduate and masters accounting programs. She joined Arthur Andersen and worked as a CPA auditor and an arbitrage consulting expert right up to the day Andersen closed its doors in San Antonio. She consulted me about her options for the future. With a new baby and her husband and father in business together in San Antonio there were difficulties for her to travel out of town to earn a doctoral degree.

     

    I recommended that she look into applying for the new accounting doctoral program starting up at UTSA. The rest is history. She's done very well and is quite happy with UTSA's program. I anticipate that you will learn much more about this very talented young woman who's joining the Academy. Years ago as an undergraduate she paid close attention when I explained why I was blessed to have fallen into (more accurately skied into) the career of being an accounting educator.

     

    Kate's been teaching accounting part time at Trinity for the past two years. Now she's stepped onto the tenure track.

     

    And Congratulations to Some Old Folks at the Other End of Trinity's Tenure Track
    November 30, 2006 message from Dan Walz

    Please join me in congratulating Dick Burr (Business Statistics) for being ranked as the top professor for teaching at Trinity University and Petrea Sandlin (Accounting) for being ranked number 3 in Scene in SA Monthly. This is quite an honor! Open the pdf file below to see more.

    Dan


    Tidbits on December 1, 2006
    Bob Jensen

    For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm
    For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 

    Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
    For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.


    Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   



    Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/


    Bob Jensen's blogs and various threads on many topics --- http://www.trinity.edu/rjensen/threads.htm
           (Also scroll down to the table at http://www.trinity.edu/rjensen/ )




    Online Video, Slide Shows, and Audio
    In the past I've provided links to various types of music and video available free on the Web. 
    I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

    George Clooney and Oprah plead for an end to genocide in Darfur ---  http://www.theirc.org/resources/george-clooney-visit-chad-sudan.html

    The incoming House Ways and Means Chairman plays loose with the facts by greatly exaggerating African American/ Hispanic disproportions in what turns out to be our mostly white volunteer army ---
    http://online.wsj.com/public/page/8_0004.html?bcpid=86195573&bclid=212338097&bctid=336010655

    Hillary vs. Condi Ho Down (turn up your speakers) --- Click Here
    She's Ready (Hillary Dances) --- Click Here

    Hundreds of Clips from Canadian Broadcasting Corporation --- http://archives.cbc.ca/index.asp?IDLan=1

    Video Nation (from the United Kingdom) --- http://www.bbc.co.uk/videonation/

    Voices on Genocide Prevention (audio) --- http://www.ushmm.org/conscience/podcasts/

    PC World's Digital Duo Videos --- http://www.pcworld.com/digitalduo/video/224-0/video.html

    Who Wants to Be a Millionaire Game --- http://abc.go.com/games/millionairetv/game/

    Audio interview with two articulate Israeli women --- www.israelthisweek.org.

    Great Skinny Dip --- http://www.metacafe.com/watch/303513/check_before/

    Frank Sings Strangers on My Flight --- http://www.beecy.net/frank/

    David Letterman's selection of great presidential moments --- http://www.youtube.com/watch?v=uA0CMb8EoNk


    Free music downloads --- http://www.trinity.edu/rjensen/music.htm

    Sammy Davis Song and Dance Man --- http://www.npr.org/templates/story/story.php?storyId=6522104

    From Jessie
    If the sound does not commence after 30 seconds, scroll to the bottom of the page.
    You Had Me from Hello --- http://www.jessiesweb.com/fromhello.htm
    If I Should Ever Fall Behind ---
    http://www.jessiesweb.com/fallbehind.htm
    Paint the Sky With Stars ---
    http://www.jessiesweb.com/paint.htm
    Have a Little Faith in Me ---
    http://www.jessiesweb.com/faith.htm
    Good Morning Beautiful --- http://www.jessiesweb.com/beauty.htm
    Thank You for Loving Me --- http://www.jessiesweb.com/thankyou.htm
    Morning Has Broken --- http://www.jessiesweb.com/morningbroken.htm
    Holding All My Love for You --- http://www.jessiesweb.com/madworld.htm 
    Nothing Can Keep Me From You --- http://www.jessiesweb.com/dreams.htm
    Love Me --- http://www.jessiesweb.com/beforeido.htm
    The River --- http://www.jessiesweb.com/river.htm
    Whiskey Bar --- http://www.jessiesweb.com/whiskeybar.htm

    From Janie
    Elvis singing Memories --- http://mjbreck.com/elvismagicofmemoriesbyjbw.html

    From Janie (more Elvis) --- http://mjbreck.com/JanieandElvisFromTheresa.html

    Ravi Shankar, Master of the Sitar --- http://www.npr.org/templates/story/story.php?storyId=4578267

    Sanjay Mishra: A Cross-Cultural Exploration in Music --- http://www.npr.org/templates/story/story.php?storyId=6502991

    The Psychedelic Debut of Jimi Hendrix --- http://www.npr.org/templates/story/story.php?storyId=6491823

    OK Go, French Kicks in Concert from D.C. --- http://www.npr.org/templates/story/story.php?storyId=6486100

    Tom Waits: The Whiskey Voice Returns --- http://www.npr.org/templates/story/story.php?storyId=6519647

    Taylor Fights, Then Follows, Parents' Musical Path --- http://www.npr.org/templates/story/story.php?storyId=6513773


    Photographs and Art

    The politically correct Iwo Jima --- http://www.goodolddogs3.com/If-IwoJima-Happened2day.html

    Waiting for the Season:  Celebrating Wildflowers http://www.fs.fed.us/wildflowers/ 

    Kenneth Parker Photographs --- http://www.kennethparker.com/

    Wild Things Photography --- http://www.wildthingsphotography.com/detected.php?page=&pass=

    Off The Map [Art] --- http://www.pbs.org/independentlens/offthemap/

    Time Magazine's historic photos of the most popular 100 musicians of all time ---
    http://www.time.com/time/photoessays/2006/all_time_100/


    Online Books, Poems, References, and Other Literature
    In the past I've provided links to various types electronic literature available free on the Web. 
    I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

    Yale Book of Quotations (great but not an online freebie) --- http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300107986
    This is favorably reviewed by Scott McLemee in "Quote Unquote," Inside Higher Ed, November 29, 2006 --- http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300107986
    Bob Jensen's links to free quotations are at http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Quotations

    Ocean Flowers: Anna Atkins’s 19th Century Cyanotypes of British Algae --- Click Here

    Phantasmagoria and Other Poems by Lewis Carroll (1832-1898) --- Click Here

    The Adventure of the Blue Carbuncle by  Arthur Conan Doyle (1859-1930) --- Click Here 




  • You've got to be taught to hate and fear
    You've got to be taught from year to year
    It's got to be drummed in your dear little ear
    You've got to be carefully taught
    You've got to be taught to be afraid
    Of people whose eyes are oddly made
    And people whose skin is a different shade
    You've got to be carefully taught
    You've got to be taught before it's too late
    Before you are six or seven or eight
    To hate all the people your relatives hate
    You've got to be carefully taught You've got to be carefully taught

    Rogers and Rodgers and Hammerstein in South Pacific

    Parents have forced a school trip to a mosque to be abandoned because they objected to their children learning about Islam. Atwood Primary in Croydon was forced to call off a Year 5 class visit to a mosque after nearly a third of parents refused to give consent.
    "Class trip to mosque blocked by parents," Canada's Daily Mail, November 22, 2006 --- Click Here

    Episcopalians tend to be better-educated and tend to reproduce at lower rates than some other denominations
    (e.g.,  Roman Catholic and Mormon churches that tend to encourage large families)
    Bishop Katharine Jefferts Schori, the first woman to head the US Episcopal Church (ECUSA) --- http://www.lifesite.net/ldn/2006/nov/06112106.html
    Jensen Comment
    I can't believe Bishop Schori made such a statement!  She does confirm why Episcopalians, being more educated, are more unfit for military service than prolific and uneducated Roman Catholics who support Senator Kerry and Representative Rangel..

    MUSLIM terrorists are no more likely to come from places with large Islamic populations than anywhere else, according to Manchester academics. Dr Ludi Simpson and Dr Nissa Finney studied media reports to map the location of suspects charged under anti-terror laws. The Manchester university researchers found that the proportion of people who have been charged is no greater in areas with large Muslim populations.
    Seb Ramsay, "Large Muslim areas 'not breeding grounds for terror'," The U.K Manchester Evening News, November 22, 2006 --- Click Here

    With Baghdad shaken by daily outbreaks of sectarian violence, in Iraq's western al-Anbar province, groups of former Iraqi Baathists are battling armed Islamist groups for control of this largely desert region near the Syrian border . . . The former Baathist fighters are believed to be relatively secular while their opponents share al-Qaeda's dream of establishing an Islamic caliphate in Iraq which will then be a launchpad for carrying out attacks around the Middle East.
    Maher al-Jasem, "Sunni face new conflict in Iraq war," Al Jazeera, November 24, 2006 --- Click Here

    Libyan leader Moammar Gadhafi Sunday accused the West of trying to grab Sudan's oil wealth with its plan to send U.N. troops to Darfur and urged Khartoum to reject them. "Western countries and America are not busying themselves out of sympathy for the Sudanese people or for Africa but for oil and for the return of colonialism to the African continent," he said.
    "Gadhafi: U.N. Darfur force is ruse to grab Sudan's oil," CNN News, November 19, 2006 --- Click Here
    Jensen Comment
    Yeah Right! George Clooney and Oprah secretly conspired with Bush and Cheney to grab the oil wells. See the video for yourself at http://www.theirc.org/resources/george-clooney-visit-chad-sudan.html

    The news is that two years after we've said "genocide" that it's still going on and it's increasing — and that somewhere in there we can all talk about this and make speeches and say this is horrible and we have to do something. But every day we don't do something, and every day this goes on, thousands of people are dying and dying horrific deaths . . . Here's the thing: We always see this now. We have tragedy fatigue on television. Every day, 20 kids [are] killed in Iraq or, you know, there's always disaster. Pakistan, Afghanistan, there's always horrible disaster in Nepal now. But this is genocide, and if everybody just got up right now out of their chair and picked up a phone and called their congressman, or called the number that registered with the president, it makes a difference. It always has.
    Oscar Winning George Clooney, ABC News, April 30, 2006 --- Click Here
    Clooney On Darfur | September 15, 2006 (Video)

    We all condemn terrorism, because its victims are the innocent. But, can terrorism be contained and eradicated through war, destruction and the killing of hundreds of thousands of innocents? If that were possible, then why has the problem not been resolved?
    Mahmoud Ahmadinejad, "Letter to the American People," President of the Islamic Republic of Iran, November 29, 2006 --- http://www.blogsofwar.com/2006/11/29/mahmoud-ahmadinejads-letter-the-american-people/

    “Americans are going to be very puzzled by it (Mahmoud Ahmadinejad's, "Letter to the American People,") ,” said William Beeman, a linguistic anthropologist at Brown University who specializes in Persian. “People are simply not used to being talked to this way.” He added, “It is almost a sermon, which is very much in keeping with his religious background. But I should also point out it is also a lecture.” The letter reminded Americans that “many victims of Katrina continue to suffer, and countless Americans continue to live in poverty and homelessness.” It also lamented: “Civil liberties are increasingly being curtailed. Even the privacy of the individuals is fast losing its meaning.” The president made no reference to the level of poverty, political freedom or judicial independence in his own country.
    Michael Slackman, "Iran’s President Criticizes Bush in Letter to American People," The New York Times, November 30, 2006 --- http://www.nytimes.com/2006/11/30/world/middleeast/30iran.html?_r=1&oref=slogin

    Anybody who recognizes Israel will burn in the fire of the Islamic nation's fury.
    Mahmoud Ahmadinejad --- http://en.thinkexist.com/quotes/mahmoud_ahmadinejad/

    Powerful Iran is the best friend of the neighboring states and the best guarantor of regional security
    Mahmoud Ahmadinejad

    Our religion prohibits us from having nuclear arms and our religious leader has prohibited it from the point of view of religious law. It's a closed road.
    Mahmoud Ahmadinejad

    We believe that atomic energy is a blessing given by God.
    Mahmoud Ahmadinejad

    Iran is ready to transfer nuclear know-how to the Islamic countries due to their need.
    Mahmoud Ahmadinejad

    As the Imam (Ayatollah Khomeini) said, Israel must be wiped off the map.
    Mahmoud Ahmadinejad
    Jensen Comment
    There are academic disputes over the translation of this threat --- http://en.wikipedia.org/wiki/Mahmoud_Ahmadinejad_and_Israel
    A synopsis of Mr Ahmadinejad's speech on the Iranian Presidential website states:

    He further expressed his firm belief that the new wave of confrontations generated in Palestine and the growing turmoil in the Islamic world would in no time wipe Israel away (however interpreted) --- http://en.wikipedia.org/wiki/Mahmoud_Ahmadinejad_and_Israel

    They say it is not possible to have a world without the United States and Zionism. But you know that this is a possible goal and slogan.
    Mahmoud Ahmadinejad

    CNN host Glenn Beck criticizes the rest of the Western media, including by implication his own station CNN, for drastically failing to properly report on Islamic extremism. This documentary, screened on the American (but not so far on the international) version of CNN ---  http://www.youtube.com/watch?v=3PWIK8YTZS8

    Researchers have been scouring rivers in Europe and the US for traces of cocaine consumption. The result: Cocaine use is probably much greater than previously assumed -- and New Yorkers are the biggest coke-heads of all.
    Markus Becker, "New York Blows Away the Competition," Spiegel (Germany), November 23, 2006 --- http://www.spiegel.de/international/0,1518,450078,00.html

    The radioactive poison used to kill the former Russian spy Alexander Litvinenko is being offered for sale over the internet for less than £40. A company in the US claims to supply polonium-210 to anyone for just $69 plus postage and packing. A three-pack set of “alpha, beta, gamma” radioactive isotopes also includes polonium-210. United Nuclear, based in Albuquerque, New Mexico, tells purchasers: “If you’re looking for clean, accurate, certified radiation sources, here they are. . . All isotopes are produced fresh in a nuclear reactor and shipped directly to you.”
    Tony Halpin in Moscow, "Polonium-210? it's yours for $69, no questions asked," London Times, November 30, 2006 --- http://www.timesonline.co.uk/article/0,,2-2478908.html
    Jensen Comment
    This makes little sense since coming near this radiation is dangerous to postal workers and other innocent people who get near the package.

    Be unselfish: respect the selfishness of others.
    Stanislaw Jerzy Lec (1909-1966) --- Click Here

    A patriot must always be ready to defend his country against his government.
    Edward Abbey

    This world is a comedy for those who think but a tragedy for those who feel.
    Horace Walpole

    Be nice to people on your way up because you'll meet them on your way down.
    Wilson Mizner (1876-1933) --- Click Here

    Never mind those promised reforms
    The reception thrown by Nancy Pelosi at the Capitol a week after the Democrats prevailed in congressional elections was a party some power players had been waiting more than a decade to attend. The fête was for newly elected freshmen lawmakers, but Pelosi's invited guests included big-name Democratic lobbyists like Jack Quinn, Tony Podesta and Steve Elmendorf. Said a partygoer: "I thought to myself, they're all back, all the same old faces. It was just like old times." . . . Who will win the coming battle between reformers and revanchists? The market is betting against reform. Demand for anyone with access to powerful Democrats on the Hill is soaring. Lobbyists who couldn't get a meeting (before the election) are suddenly a hot commodity. "I've gotten a lot of calls from headhunters in the last two months," says Florence Prioleau, a lobbyist who has maintained close ties with her former boss, New York's Charles Rangel, incoming chairman of the Ways and Means Committee. Pelosi's former chief of staff, George Crawford, has just been hired by Amgen, a biotech company, to represent its interests with the new Congress.
    Massimo Calabresi, "When the Democrats Take Back K Street:  Democratic lobbyists are enjoying a comeback after 12 years of exile. Never mind those promised reforms," Time Magazine, November 26, 2006 --- Click Here

    The City Council here voted late Tuesday to ban certain giant retail stores, dealing a blow to Wal-Mart Stores Inc.'s potential to expand in the nation's eighth-largest city. The measure, approved on a 5-3 vote, prohibits stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax.
    Elliot Spagat, "San Diego to Ban Wal-Mart Supercenters," Yahoo News, November 29, 2006 --- http://biz.yahoo.com/ap/061129/wal_mart_supercenter_ban.html?.v=4
    Jensen Comment
    Think of how much better off residents of San Diego will be as a result of this decision supposedly in their best interests. I wonder what would happen if the choice was put to a test in a referendum? The entire state of Vermont banned new Wal-Mart stores of any kind, and now I can't get into my closest New Hampshire Wal-Mart (ten miles away in Littleton) because most of the cars in the overflowing parking lot have green license plates. Claiming that sales tax revenue in San Diego and Vermont will increase without Wal-Mart stores is phony to the point of being fraudulent. The real reason is that local business interests can't compete with Wal-Mart --- which is a much more legitimate argument but it won't sell with voters. I might add that the lowest paying workers are those clerks in small retail stores. These exploited workers would have much better salaries and benefits working for Wal-Mart. But from a selfish standpoint, I hope that my little village never allows any store to have more than 50 square feet. We have only one Sugar Hill store to date (an old fashioned cheese and venison store). One little store's enough for our village as far as I'm concerned. I'd vote against Wal-Mart if it ever came to a vote in Sugar Hill. But then I'd also vote against any new store in Sugar Hill. But I was all in favor of more and more Wal-Mart Supercenters when I lived in San Antonio, because more Wal-Marts beside the many Super K-Marts and other giant stores are not going to affect the ambiance of San Antonio (or San Diego).

    The essay — in his collection There’s No Such Thing as Free Speech — ought to be more notorious still. According to Fish, academics will do anything to distinguish themselves from “the realities of the marketplace.” One of whose realities, I am suggesting here, is that bosses do exist in both realms. Perhaps we can’t abide a vocabulary of bosses because the need to distinguish ourselves from the world of business is so crucial. Or, more interestingly, perhaps we already have enough oppression. “In the psychic economy of the academy,” Fish explains, “oppression is the sign of virtue. The more victimized you are, the more subject to various forms of humiliation, the more you can tell yourself that you are in proper relation to the corrupted judgment of merely worldly eyes.”
    Terry Caesar, "Who’s the Boss?" Inside Higher Ed, November 21, 2006 ---
    http://www.insidehighered.com/views/2006/11/21/caesar

    It’s a funny old world. Chinese manufacturers are copying the circuit boards and designs of products from Japan and Korea, and they’re doing it so fast that by the time the originals arrive in the marketplace, they’re seen as the fakes! China is a land of endless factories, with many pumping out the world’s most desirable gadgets, from iPods to portable computers to digital cameras and much more.
    Alex Zaharov-Reutt, "Fake chinese electronics selling better than the originals!" ITWire, November 27, 2006 --- http://www.itwire.com.au/content/view/7483/52/

    A state office that oversaw a series of controversial charities tied to African-American legislators is being scrutinized by the FBI, Gov. Kathleen Blanco’s office confirmed Tuesday in announcing that it had complied with a subpoena for records from the department. “The governor’s office staff has complied with the FBI’s request for information dating back to 1996 regarding certain programs funded by the former Office of Urban Affairs,”
    Gordon Russell, Jan Moller and James Varney, New Orleans Times Picayune, November 22, 2006 --- Click Here
    Jensen Comment
    Government programs are always ripe for the plucking by ex-generals and criminal politicians, most especially Louisiana politicians who've been notoriously corrupt since the Louisiana Purchase in 1803. Crime just grows and grows hand-in-hand with government programs and Louisiana seems to steal more than its fair share from Federal programs. For Louisiana criminals, of all races, Katrina was indeed a perfect storm.

    Each place has its own advantages - Heaven for the climate and Hell for society.
    Mark Twain

    A church that wanted to do something special for Hurricane Katrina victims gave a $75,000 house, free and clear, to a couple who said they were left homeless by the storm. But the couple turned around and sold the place without ever moving in, and went back to New Orleans. "Take it up with God," an unrepentant Joshua Thompson told a TV reporter after it was learned that he and the woman he identified as his wife had flipped the home for $88,000. Church members said they feel their generosity was abused by scam artists . . . The church was also shocked by an ungrateful interview the couple gave with WHBQ-TV in Memphis. "I really don`t like this area," said Delores Thompson. "I really didn`t, and I didn`t know anybody, so that`s why I didn`t move in and I sold it."
    "2 unrepentant about selling Katrina gift," The Angola Press, November 22, 2006 ---
    http://www.angolapress-angop.ao/noticia-e.asp?ID=489462
    Also see http://community.myfoxmemphis.com/blogs/category/NEWS

    "They came in humble like they really needed a new start, and our hearts went out to them," said Jean Phillips, a real estate agent and member of the Temple of Deliverance Church of God in Christ. "They actually begged for the home." . . . "Do I have any legal problems? What do you mean? The house was given to me," Delores Thompson said. "I have the paperwork and everything." She refused further comment and hung up.
    WTOP --- http://www.wtop.com/?nid=104&sid=982862
    Jensen Comment
    We can only hope that God takes it up with scammers like Joshua and Delores Thompson. If we could get a glimpse of them ten years from now my guess is that they will not be so proud and happy that they scammed the Good Samaritans. It would be fantastic if they prospered and became reformed Good Samaritans themselves --- but in the meantime don't hold your breath!

    British criminal psychologists are putting together a list of the 100 most dangerous murderers and rapists before they have committed any such crimes, The Times said.
    "British police targeting would-be criminals before they offend," PhysOrg, November 27, 2006 ---http://physorg.com/news83838079.html
    Jensen Comment
    In the U.S., our ACLU would never tolerate such a crime prevention move even against our even our most threatening criminals.

    And contrary to the United Nations resolutions, contrary to the official policy of the United States government, contrary to the Quartet so-called road map, all of those things – and contrary to the majority of Israeli people's opinion – this occupation and confiscation and colonization of land in the West Bank is the prime cause of a continuation of violence in the Middle East," he said.
    "Carter blames Israel for Mideast conflict:  'Domination' over Palestinians 'atrocious,' ex-prez tells 'Good Morning America'," WorldNetDaily, November 27, 2006 --- http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53120

    Carter's book "Palestine: Peace Not Apartheid" is so biased that it inevitably raises the question of what would motivate a decent man like Jimmy Carter to write such an indecent book. Whatever Mr. Carter's motives may be, his authorship of this ahistorical, one-sided, and simplistic brief against Israel forever disqualifies him from playing any positive role in fairly resolving the conflict between Israel and the Palestinians. That is a tragedy because the Carter Center, which has done much good in the world, could have been a force for peace if Jimmy Carter were as generous in spirit to the Israelis as he is to the Palestinians.
    Alan M. Dershowitz
    , (Harvard Law School). New York Sun, November 22, 2006 --- http://www.nysun.com/article/43958
    A knowledgeable Lebanese-American casts even more doubt on Carter's scholarship
    see http://www.wnd.com/news/article.asp?ARTICLE_ID=53154

    Also see http://www.jewishvirtuallibrary.org/jsource/reviews/carter.html

    One of the most nefarious elements in the book is Carter’s effort to paint Israel as hostile to Christians. He repeatedly refers to “Christians and Muslims” rather than simply the Palestinians in a transparent effort to suggest that Israeli actions were harming Christians and not just Muslims or Arabs. He claims, for example, that “many priests and pastors” were disturbed by the control of Israeli religious parties over “all forms of worship.” On a visit to Jerusalem in 1990, he said he met with a variety of Christian leaders who he said complained of various abuses. He doesn’t offer a single specific example, but tars Israel with bigotry. He then says that Prime Minister Shamir told him that religious parties had authority over all religious matters because of the needs of the coalition government. Carter says that this conversation made him understand why “there was such a surprising exodus of Christians from the Holy Land.”

    These charges are so vile they require a more substantial response. First, while Christians are unwelcome in Islamic states such as Saudi Arabia, and most have been driven out of their longtime homes in Lebanon, Christians continue to be welcome in Israel. Christians have always been a minority in Israel, but it is the only Middle East nation where the Christian population has grown in the last half century (from 34,000 in 1948 to 145,000 today), in large measure because of the freedom to practice their religion.

    The "progressive" media grows angry with Democrats who do not endorse Jimmy Carter's rage toward Israel
    Instead, Democrats are shoring up their pro-Israel bona fides. They are strikingly anxious because of a courageous new book by President Jimmy Carter that hit American bookstores in mid-November, Palestine: Peace Not Apartheid.
    Michael F. Brown, "Dems Rebut Carter on Israeli 'Apartheid'," The Nation, November 20, 2006 --- http://www.thenation.com/doc/20061204/brown
    Jensen Comment
    I don't find solutions in Carter's book that have not already been advocated and tried even by Israel. Carter insists on Israel's right to exist. He's a man a peace who does not advocate wiping out Israel. Liberals who like to be called "progressives" advocate cessation of military and economic backing of Israel. Do progressives really want Israel so wounded and dying that Israel seriously considers resorting to its huge nuclear arsenal.  As usual, the "progressives" are long on criticism but short on alternatives. So is Jimmy Carter. Finding solutions is not nearly as much fun as finding fault.

    Most chilling of all, could the festering differences precipitate a military confrontation involving the use of nuclear weapons? It is known that Israel has a major nuclear arsenal and the capability to launch weapons quickly, and some neighboring states are believed to be attempting to acquire their own atomic bombs. Without progress toward peace, desperation or adventurism on either side could precipitate such a confrontation.
    Jimmy Carter, Palestine: Peace Not Apartheid

    A joint paratrooper and Shin Bet force uncovered an explosive lab in Nablus Friday night. In the lab, the forces found teddy bears with wires hanging from them, apparently slated to be used as explosive devices . . . Captain Assaf Cabra, a company commander at the Haruv battalion, addressed the operation at the time: "We launched a regimental operation in Nablus, which included searches, seizing weapons and arrests. We uncovered the explosive lab in the casba, which contained between 40 to 50 kilograms (88 to 110 pounds) of explosives for preparing explosive devices."
    "Nablus: Explosive teddy bears found in lab," YNet News, November 25, 2006 --- http://www.ynetnews.com/articles/0,7340,L-3332360,00.html
    Jensen Comment
    When the teddy bears blow up in the faces of children, Jimmy Carter reminds them that their parents really caused the pain and suffering. In fairness, Israel's recklessness has killed and maimed children in Palestine. But it is a particularly vile deed to deliberately plant explosives in toys for children.

    Denmark, once the symbol of a welcoming welfare state, is becoming part of an anti-immigrant backlash sweeping across Europe. Sentiments once associated with ultra right-wing parties are becoming mainstream.
    Sylvia Poggioli, "Danes' Anti-Immigrant Backlash Marks Radical Shift," NPR, November 20, 2006 --- http://www.npr.org/templates/story/story.php?storyId=6505809

    French presidential candidate Jean-Marie Le Pen is drawing support again this year for his anti-immigrant stance. The extreme-right politician is pushing for a welfare system that favors indigenous French . . . Immigration -- code for Muslim immigration -- was the convention's hot-button issue.
    Sylvia Poggioli, "Anti-Immigrant Policy Boosts France's Le Pen Again," NPR, November 22, 2006 --- http://www.npr.org/templates/story/story.php?storyId=6522463

    The second element is definitiveness. Our political figures say they have to concentrate on an overall, long-term, comprehensive answer to the immigration problem. So they huff and puff about the long-term implications of this move or that, and in the end they do nothing. They are like people in a burning house who sit around discussing the long-term efficacy of various kinds of water hoses while the house burns down around them.
    Peggy Noonan, "What Grandma Would Say:  We don't need to solve the immigration problem forever. We need to solve it now," The Wall Street Journal, November 24, 2006 --- http://www.opinionjournal.com/columnists/pnoonan/?id=110009288

    With political junkies looking ahead to the 2008 presidential race, two of the names often mentioned as leading contenders for the GOP nomination – John McCain and Rudy Giuliani – are being called "disastrous" for the Republican Party by Rep. Tom Tancredo, R-Colo. Both of those individuals, of course, would be disastrous for us for a variety of reasons, not the least of which is their position on immigration, which is to open the border," Tancredo told WND in an exclusive interview.
    Joe Kovacs, "Tancredo: McCain, Giuliani would be disastrous for GOP," WorldNetDaily, November 22, 2006 ---
    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53039
    Jensen Comment
    Senator McCain's "open border stance," like a lot of his stances, is no more solid than flubber. He voted both times to build the border fence despised by Mexico and favored heavily by his Arizona constituency. To see how the U.S. Senate (Republicans and Democrats alike) voted overwhelmingly to build a useless wall between the U.S. and Mexico, go to http://www.trinity.edu/rjensen/book06q4.htm#BorderFence
    Since being for an open border will be political suicide for the 2008 elections, it's entertaining to watch Congress dance the proverbial sidestep. The great majority of our legislators will proudly point to their votes in favor of building a border wall and then find all sorts of excuses not to fund the actual construction.  Even more of a hot potato will be amnesty for millions of  illegal immigrants already residing in the U.S. I favor a  one-time amnesty coupled with elimination of citizenship of babies born to on U.S. soil to mothers who are not citizens. Bush strongly supports amnesty and citizenship to all babies born in the U.S. in the face of overwhelming opposition among voters. Counterfeiters are now cranking out thousands of phony birth certificates daily in anticipation of bringing in more more parents from Mexico. This will be a booming business until babies are not granted automatic citizenship regardless of citizenship status of the parents.

    Half of the 91,516 illegal aliens from terror-sponsoring countries and those of "special interest" apprehended at the border between 2001 and 2005 were released into the U.S. population, according to a report by the inspector general's office of the Department of Homeland Security. The report, "Detention and Removal of Illegal Aliens," released earlier this year with little fanfare or attention, suggests about 85 percent of those aliens – potentially the most dangerous – would abscond and likely never be seen by authorities again. Acknowledging the danger such aliens pose to the national security, the report cites a DHS official testifying that terrorist organizations "believe illegal entry into the U.S. is more advantageous than legal entry for operations reasons."
    "45,000 terror-threat illegals released into U.S. population:  Half from countries of 'special interest' let go between 2001, 2005, says report," WorldNetDaily, November 29, 2006 ---
    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53151

    A South African man has been fined $140 for taking a week off work, telling his employers he was pregnant. Charles Sibindana, 27, stole a certificate from a clinic during his pregnant girlfriend's checkup, a court near Johannesburg heard. He then added his own details to the note and submitted it and took seven days off work, seemingly unaware that only women consult gynaecologists (sic) . His employers became suspicious and investigated the matter.
    "'Pregnant' man fined in SA court," BBC News, November 28, 2006 --- http://news.bbc.co.uk/2/hi/6190772.stm?lspan
    Jensen Comment
    This sort of dashes his hopes for maternity leave, but he might still conjure up a miracle by moving to New Orleans.

     




     

    A Primer on Electronic Communication
    Often enough we are faced with a question that can best be answered by someone else, possibly a complete stranger. The upside of the Internet is that we can quickly contact folks without much effort. The downside of the Internet is that people can contact us without much effort. This reality is very present in academe today — where senior professors constantly gripe about being overwhelmed by inappropriate e-mail, to the point where some hide their e-mail addresses. Graduate students and researchers of all kinds, meanwhile, agonize over how to approach an eminent scholar with a query, and trade strategies for actually getting an answer.
    Eszter Hargittai, "A Primer on Electronic Communication," Inside Higher Ed, November28, 2006 --- http://www.insidehighered.com/workplace/2006/11/28/hargittai

     

     

    November 29, 2006 reply from Scott Bonacker [aecm@BONACKER.US]

    That is good - thanks for posting the link.

    Here's another one - http://catb.org/%7Eesr/faqs/smart-questions.html 

    The subject of this one is different, but the procedures are intended to reach the same result.

    Scott Bonacker, CPA
    Springfield, Missouri

    "How To Ask Questions The Smart Way" by  Eric Steven Raymond http://catb.org/%7Eesr/faqs/smart-questions.html


    Question
    What radio broadcast had the largest audience in history?

     

    You can listen to it here --- http://www.npr.org/templates/story/story.php?storyId=6515548

     

     

    The 1938 boxing rematch between American Joe Louis and German Max Schmeling is believed to have had the largest audience in history for a single radio broadcast. In 2005, the Library of Congress selected it for the National Recording Registry.
    "The Fight of the Century: Louis vs. Schleming," NPR, November 25, 2006 ---
    http://www.npr.org/templates/story/story.php?storyId=6515548

     

     


    2006 Update on WorldCom Fraud
    U.S. Judge Denise Cote of the U.S. Court for the Southern District of New York said the distribution should be made "as soon as practicable." More than one dozen investment banks, including Citigroup Inc. and JPMorgan Chase & Co., agreed to pay about $6.15 billion to resolve allegations that they helped WorldCom sell bonds when they should have known the phone company was concealing its true financial condition. The remaining balance from available settlement funds will continue to accrue interest until other claims are processed and disputed claims are resolved, Cote said in her four-page order.

    "Judge OKs $4.52 bln payout to WorldCom investors," Reuters, November 29, 2006 --- Click Here

    2005 Update on WorldCom Fraud
    Former WorldCom Investors can now claim back some of the billions of dollars they lost in a massive accounting fraud, after a federal judge approved legal settlements of "historic proportions." The deal approved Wednesday by U.S. District Judge Denise Cote, will divide payments of $6.1 billion among approximately 830,000 people and institutions that held stocks or bonds in the telecommunications company around the time of its collapse in 2002.
    Larry Neumeister, "Judge OKs $6.1B in WorldCom Settlements," The Washington Post, September 22, 2005 --- http://snipurl.com/WorldcomSettlement   

    University of California gets a settlement from Citigroup as part of its losses in the WorldCom accounting scandal
    Citigroup has agreed to pay the University of California more than $13 million to settle a lawsuit over liability for the university’s investments in WorldCom, a company that collapsed in 2002. The university sued over inaccurate analyses of WorldCom, which led UC to pay more than it would have otherwise to buy stock in the company.
    Inside Higher Ed, April 7, 2006 --- http://www.insidehighered.com/news/2006/04/07/qt

    The WorldCom audit by Andersen is arguably the worst audit in history. Bob Jensen's threads on the WorldCom scandal are at http://www.trinity.edu/rjensen/FraudEnron.htm#WorldCom

     


    Question
    What do professors think are the top accounting education programs in the U.S.?

     

    The Public Accounting Report on October 30, 2006 published its rankings of the universities having the top undergraduate, masters, and doctoral programs in accounting. The University of Texas hung on to the top rankings in all three categories --- http://www.mccombs.utexas.edu/news/pressreleases/PAR_06.pdf

     

    Of course these rankings are subject to all the criticisms of college rankings in general --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#BusinessSchoolRankings
    Be that as it may, these rankings are very important for both fund raising and student recruiting activities.

     


    AHP = Analytic Hierarchy Process

     

    November 15, 2006 message from Al-Mashari Gmail

    I hope that you are doing well. Could you, please, send me your papers and any related references that use AHP especially in the computer filed. As I'm interested in this filed.

    Thanks in advance for your expected cooperation.

    Yours B. Al-Mashari

    November 20, reply from Bob Jensen

    I’m sorry that most of those old, like me,  Analytic Hierarchy Process papers were discarded when I moved across the U.S. to my retirement cottage.

    I am able to attach my unpublished Working Paper 127 entitled “COMPARISONS OF EIGENVECTOR, LEAST SQUARES, CHI SQUARE, AND LOGARITHMIC LEAST SQUARES METHODS OF SCALING A RECIPROCAL MATRIX” --- http://www.trinity.edu/rjensen/127WP/127WP.HTM 

    I did find one of our old published papers online.

    "Analytic Hierarchy Process Multivariate Analysis of Expert Judgment Regarding Alternative Analytical Review Procedures: An Empirical study," with C.E. Arrington and W.A. Hillison, Journal of Accounting Research, Vol. 22, No. 1, Spring 1984, 298-312 --- http://www.jstor.org/view/00218456/di008028/00p0193i/0

     

    One of my doctoral students, Ed Arrington, used AHP in a clever doctoral dissertation at Florida State University --- http://wwwlib.umi.com/dissertations/

     

     

    My published papers on AHP are available in some libraries --- http://www.trinity.edu/rjensen/resume.htm#Published

     

    49.
    "A Dynamic Analytic Hierarchy Process Analysis of Capital Budgeting Under Stochastic Inflation Rates and Risk Premiums," Advances in Financial Planning and Forecasting, Vol. 2, 1987, 269-302.

    48.
    "Extension of Consensus Methods For Priority Ranking Problems: Eigenvector Analysis of 'Pic-the-Winner' Paired Comparison Matrices," Decision Sciences, Vol. 17, Spring 1986, 195-211.

    45.
    "Matrix Scaling of Subjective Probabilities of Economic Forecasts: An Empirical Study," Economics Letters, Vol. 20, 1986, 221-225. With Roger W. Spencer of Trinity University Economics Department.

    42.
    "An Alternative Scaling Method for Priorities in Hierarchical Structures," Journal of Mathematical Psychology, Vol. 28, No. 3, September 1984, 317-332.

    41.
    "Analytic Hierarchy Process Multivariate Analysis of Expert Judgment Regarding Alternative Analytical Review Procedures: An Empirical study," with C.E. Arrington and W.A. Hillison, Journal of Accounting Research, Vol. 22, No. 1, Spring 1984, 298-312 --- http://www.jstor.org/view/00218456/di008028/00p0193i/0

    39.
    "Aggregation (Composition) Schema for Eigenvector Scaling of Priorities in Hierarchial Structures," Multivariate Behavioral Research, Vol. 18, January 1983, 63-84.

    38.
    Review of Forecasts: Scaling and Analysis of Expert Judgments Regarding Cross-Impacts of Assumptions of Business Forecasts and Accounting Measures
    , (Sarasota, FL: American Accounting Association, 1983).

    36.
    "Scaling Multivariate performance Criteria: Subjective Composition Versus the Analytic Hierarchy Process," with C.E. Arrington and Masao Takutani (of Seiker University in Japan), Journal of Accounting and Public Policy, Vol. 1 Winter 1982, 95-125.

    34.
    "Competition in Auditing: An Assessment" in Symposium on Auditing Research IV (Urbana, IL: The Board of Trustees of the University of Illinois, 1982, 451-468).

    33.
    "Accounting Futures Analysis: An Eigenvector Model for Subjective Elicitations of Variations in Cross-Impacts Over Time," Decision Sciences, January 1982, Vol. 13, 15-37.

    32.
    "Scenario Probability Scaling: An Eigenvector Analysis of Elicited Scenario Odds Ratios," Futures, December 1981, Vol. 13, 489-98.

    31.
    "The Evaluation of Generic Cross-Impact Models: A Revised Balancing Law for the R-Space Model," Futures, June 1981, 217-220.

    28.
    "A Dynamic Programming Algorithm for Cluster Analysis," Mathematical Programming in Statistics, Edited by Arthanari and Dodge, New York, John Wiley & Sons.

    Hope this Helps,

     

    Bob Jensen


     

    Return to the Oxford Model in U.S. Universities

     

    "Hogwarts U.," by Robert J. O’Hara, Inside Higher Ed, November 28, 2006 --- http://www.insidehighered.com/views/2006/11/28/ohara

    What does private and wealthy Princeton University have in common with the public and less-wealthy University of Central Arkansas? What links Acadia University in the Canadian Maritimes and Vanderbilt University in the American South? What does the new International University in Bremen, Germany, share with the Universidad de las Américas, in Puebla, Mexico?

    Each of these institutions has established, is planning, or is expanding an internal system of residential colleges: permanent, cross-sectional, faculty-led societies that bring the educational advantages of a small college into the environment of a large university. This wave of college founding, taking place in public and private institutions from Kentucky to Louisiana, from Missouri to Florida, from Pennsylvania to Arkansas, and elsewhere around the world, is one of the most substantive structural reform movements in higher education today, and it promises to repair a half-century of destructive bureaucratic centralization.

    Dividing a large university into cross-sectional residential colleges is not a new idea: it is the organizational structure of Oxford, Cambridge, and Durham Universities in Great Britain, and as such is one of the oldest ideas in higher education. The collegiate organizational model is common in universities in Canada, Australia, and New Zealand, and it was adopted by the undergraduate divisions of Harvard and Yale Universities in the 1930s and by Rice University in the 1950s. But residential college systems have remained rare in American higher education until quite recently. Paradoxically, they are better understood by many American undergraduates today than by American senior faculty and administrators, since, as students often remind me, the collegiate model is “just like Harry Potter.” The fictional School of Witchcraft and Wizardry in J.K. Rowling’s popular young adult novels is divided into a system of four “houses” that parallel, in their structure, the structure of a collegiate university.

    Although many universities that are in the process of establishing residential college systems are also embarking on construction projects at the same time, the two do not have to be connected. Creating residential colleges within a larger institution is more a matter of arranging resources that already exist than it is a matter of acquiring new resources. It need not be expensive, and it doesn’t require any changes to the curriculum.

    The residential college movement today is guided not by financial concerns or questions of curricular reform, but rather by four organizational principles: decentralization, faculty leadership, social stability and genuine diversity. Each of these principles attempts to repair a portion of the damage that was wrought during the “industrialization” of higher education in the post-World War II era, and especially in the post-1960s era, two periods of widespread bureaucratic massification when student numbers exploded, central administrative offices proliferated, faculty retreated, high-rise dormitories sprouted, and alienation spread.

    Decentralization is a fundamental principle of both new and old residential college systems because all education is local. Real education — the substantive development of intellect and character — depends on sustained personal contact between students and teachers over the long term. But universities forgot this basic principle when they ballooned in size from the 1960s onward. No matter how many slogans campus public relations people may invent about being “student-centered” and “caring,” a university with high-rise dormitory towers, vast impersonal dining halls, and central advising offices that students report to for 15 minutes each term to have their schedules checked cannot possibly offer the sustained, local, personal contact that is fundamental to real education. The slogans are phony, and the students know it.

    Small, decentralized residential colleges counteract the effects of educational massification by bringing students and faculty from all academic disciplines together into rich and cohesive social communities. Because of their small size — 400 members is ideal — residential colleges ensure that all students are known one by one, and that no student is anonymous. And while these collegiate societies are usually called “residential” colleges, they need not be entirely residential, and can be established within any university regardless of the number of students who actually live on campus. The emphasis is on the word college as a small, intimate society of members, rather than on the word residential.

    Faculty leadership of residential college systems is fundamental because as universities became more centralized and bureaucratic over the past half-century, the oversight of campus life within them was largely handed off to a class of full-time residence life managers. However well-meaning these officials have been, because they are detached from the academic structure of the university, they have not been able to create meaningful educational environments for students. Even more noxiously, some universities have come to see campus dormitories as income-generating tools analogous to parking lots and vending machines. For more than a generation these deep structural flaws have cheated students out of the most important thing a university can offer them: sustained personal contact with their teachers in a rich and diverse educational environment for years at a time.

    Residential college systems return the management of campus life to the faculty, and distribute most of the functions now performed by departments of student affairs and residence life into the faculty-led residential colleges. And they treat student life and housing as academic functions of a university, not as business functions. Residential colleges, as faculty-led academic societies, are consciously crafted to provide a wide range of informal educational opportunities for their members day and night, week after week, year after year. Their object is to ensure that students’ formal learning in the classroom is integrated in every way with their external life in the world.

    Continued in article

     

     


    From Dartmouth College
    Chance News --- http://chance.dartmouth.edu/chancewiki/index.php/Main_Page
    Tutorial on Statistics (focus is on learning exercises and how to view media reports critically)

     

    A list of some useful links related to Statistics Education from Juha Puranen, Department of Statistics, University of Helsinki --- http://noppa5.pc.helsinki.fi/links.html 

     

     

    Online Tutorials for Learning About Statistics and Research
    Against All Odds: Inside Statistics ---  http://www.learner.org/resources/series65.html

     

     

    Bob Jensen's links to free online mathematics and statistics tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#050421Mathematics 

     

     


     

    Can I Have A Word? [Helpers for Writers and Poets] --- http://www.barbican.org.uk/canihaveaword/

     

    Bob Jensen's writing helpers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Dictionaries

     

     


     

    Open Sharing Tutorial on Environmental Water Science

    Water on the Web --- http://waterontheweb.org/index.html

     

    Water on the Web (WOW) helps college and high school students understand and solve real-world environmental problems using advanced technology.

    WOW is a complete package containing two sets of curricula, data from many lakes and rivers nationwide, extensive online primers, data interpretation and Geographic Information System Tools, and additional supporting materials.

    Basic Science consists of individual lessons for infusion into a wide range of exisiting science cources. Water Resource Science is a two-semester water resource management curriculum for second year technical students and undergraduates in water or environmental management disciplines.

    Bob Jensen's threads on free online science tutorials are at http://www.trinity.edu/rjensen/bookbob2.htm#Science

     


     

    Truck Driver Test Questions & Answers

    CDL Online Practice Questions --- http://www.testprepreview.com/cdl_practice.htm

     


     

    "Choosing Who Can See What on Your Blog:  Web Service Offers Features For Privacy, Adding Media; Registration Is a Turn-Off ," by Walter S. Mossberg and Katherine Boehret, The Wall Street Journal, November 22, 2006; Page D7 --- http://online.wsj.com/article/the_mossberg_solution.html

    A big problem with blogs is privacy. While some people -- especially MySpace fans -- don't mind posting personal news, photos and videos for anyone to read, many of us hesitate to leave details about our personal lives online.

    This week, we tested a new, free blogging service called Vox, www.vox.com, from Six Apart Ltd., a blogging software company. One of Vox's best attributes is its ability to label each individual post, or entry, with a different privacy filter, so that instead of setting your blog to be entirely private or entirely public, you can pick and choose what you want to share.

    Vox also excels at making it easy to add photos, audio, videos and book links to your blog without any prior expertise. It lets you incorporate content from Web sites like YouTube, Amazon and photo-sharing site Flickr in only a couple of steps. Viewing of each multimedia element can also be restricted to people you choose. Vox is supported by ads that aren't intrusive or distracting.

    We each made a blog in Vox, and updated them several times. We found the process to be quick and simple, and the results to be attractive. We liked the privacy features. But while its intentions are good, Vox has a few downsides. Its idea of making each blog post visible to different groups is useful. But everyone who views your privacy-protected entries must also be registered with Vox, a quick process, but one that will discourage many potential users.

    Also puzzling are Vox's categories for labeling those who view your blog. Everyone must be labeled as friends, family or neighbors, but the filters that determine who can view your posts don't include neighbors at all.

    Vox also doesn't do a great job of implementing many features that are standard in blog services. These features include interactive elements on a page such as drag-and-drop organizing.

    We got started by signing up for Vox -- a process that involved entering our email address, creating a password and URL, and entering personal information. A Design section walked us through choosing a layout and theme from numerous choices. Katie chose the Cityscape Washington, D.C., theme, which includes the Capitol and Washington Monument. Walt chose Firefly Night, which includes the moon and stars and a silhouette of a tree.

    To prompt you to blog, the Vox homepage always offers a Question of the Day, or QOTD. With one click, you can optionally answer the QOTD in your own blog. When you post your answer, or enter any post, a drop-down menu lets you choose who can view it: The World (Public), Your Friends and Family, Your Friends, Your Family or Just You. If, for example, you choose to allow only your friends to see a post, other groups won't know that they're not seeing the friends-only post.

    If you see another person's Vox blog and would like to bookmark it so that his or her latest entries are constantly updated on a special page just for you, you can add that blogger to your neighborhood. Friends and family are automatically part of your neighborhood, but when choosing who can see your content, neighborhood isn't an option. Vox plans to make the neighborhood concept more understandable in an updated version due out by December.

    Continued in article

     

    Bob Jensen's threads on Weblogs and blogs are at http://www.trinity.edu/~rjensen/245glosf.htm#Weblog

     

     


    "Thinking Machines:  Danny Hillis talks about the real-world challenges of creating artificially intelligent machines," by  Jason Pontin, MIT's Technology Review, November 14, 2006 --- http://www.technologyreview.com/InfoTech/17709/

     

    In 1982, when he was still a student at MIT, Danny Hillis cofounded Thinking Machines, one of the most famous failures in the history of computing. A hive of wayward and brilliant researchers, Thinking Machines tried to build the world's first artificial intelligence. But if the company did not succeed in "building a machine that will be proud of us" (its corporate motto), its Connection Machine demonstrated the practicality of parallel processing, the foundation of modern supercomputing. Today, Danny Hillis is cochair of Applied Minds, a design and invention company, and he is building the Clock of the Long Now, a mechanical timepiece meant to last 10,000 years.

    TR: Why is creating an artificial intelligence so difficult?

    Hillis: We look to our own minds and watch our patterns of conscious thought, reasoning, planning, and making analogies, and we think, "That's thinking." Actually, it's just the tip of a very deep iceberg. When early AI researchers began, they assumed that hard problems were things like playing chess and passing calculus exams. That stuff turned out to be easy. But the types of thinking that seemed effortless, like recognizing a face or noticing what is important in a story, turned out to be very, very hard.

    TR: Why did Thinking Machines fail to create a thinking machine?

    Hillis: Well, the glib answer is that we just didn't have enough time. But enough time would have been decades, maybe lifetimes. It is a hard problem, probably many hard problems, and we don't really know how to solve them. We still have no real scientific answer to "What is a mind?"

    TR: The Connection Machine was an effective platform for supercomputing. Why didn't Thinking Machines prosper as a supercomputing company?

    Hillis: Supercomputing turned out to be a technology, not a business. My friend Nathan Myhrvold, who was running Microsoft Research at the time, once told me, "It is at least as hard to make software for a supercomputer as for a PC, but you only have a few thousand customers, and we have billions. Not only that, but each of those customers actually expects you to give them exactly what they need."

    TR: What were the successful commercial applications of the research at Thinking Machines?

    Hillis: The commercial applications were mostly chip design, data mining, text search, cryptology, computational chemistry, computer graphics, financial optimization, seismic processing, and fluid flow modeling. Scientific applications like astronomy, climate modeling, or quantum chromodynamics were exciting when they helped get a result on the cover of Nature, but we never made money on them.

    TR: What happened to the patents from Thinking Machines? More than anyone else, you are responsible for massive parallel processing. You get credit, but no payment. Who gets it, and why?

    Hillis: Well, first of all, I should be clear that I am just one of many people who contributed to developing massively parallel computing. As for the patents, one of the consequences of Thinking Machines' failure is that I lost any rights to the technologies. In retrospect, that turned out to be a blessing, because it saved me from spending the next decade of my life in court.

    Continued in article


     

    ProQuest Digital Dissertations ---  http://wwwlib.umi.com/dissertations/ 

     

    Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm

     


     

    Bad FEI Audio With Good Intentions

     

    FEI had good intentions when putting out audio clips of a series of interviews with some of the leaders of the financial reporting community. I thank Denny Beresford for sending me the link and a warning that the audio was bad ---
    http://www.phillivingston.com/FEI CFRI/testing.html

     

    I found the audio to be so broken up that I could hear these interviews. Perhaps the fact that the file is named "testing" means that better recordings will be posted later.

     

    I was glad to see Phil is still with the FEI. I once had lunch with him and was impressed that a 6-foot-ten Super Bowl lineman (Oakland) could be so articulate and knowledgeable.

     

     


    From the University of Illinois Issues in Scholarly Communications Blog on November 21, 2006 --- http://www.library.uiuc.edu/blog/scholcomm/

     

    Top 100 Global Universities

    An August 2006 article in the international edition of Newsweek evaluated universities from around the world on their "globalness", providing a ranked list of the top 100. We're pleased to see that one of their criteria was the size of the library.

    We evaluated schools on some of the measures used in well-known rankings published by Shanghai Jiaotong University and the Times of London Higher Education Survey. Fifty percent of the score came from equal parts of three measures used by Shanghai Jiatong: the number of highly-cited researchers in various academic fields, the number of articles published in Nature and Science, and the number of articles listed in the ISI Social Sciences and Arts & Humanities indices. Another 40 percent of the score came from equal parts of four measures used by the Times: the percentage of international faculty, the percentage of international students, citations per faculty member (using ISI data), and the ratio of faculty to students. The final 10 percent came from library holdings (number of volumes).

    The top 10 were:
     

    1. Harvard University
    2. Stanford University
    3. Yale University
    4. California Institute of Technology
    5. University of California at Berkeley
    6. University of Cambridge
    7. Massachusetts Institute Technology
    8. Oxford University
    9. University of California at San Francisco
    10. Columbia University

    The University of Illinois at Urbana-Champaign came in 48th, behind other big ten universities such as Michigan (11), U Chicago (20), Wisconsin (28), Minnesota (30), Northwestern (35), and Penn State (40). Others from the Big 10 that made the list of 100 included Michigan State (62), and Purdue (86).

    Read the entire list of the 100 top global universities at MSNBC as well as a related story.

    Note: You may also be interested in reading the Times of London's analysis of the "Top 100 Universities", worldwide. By their accounting, the University of Illinois ranked 58 in 2005 and 78 in 2006. According to this listing, the top universities are:

    1. Harvard
    2. Cambridge
    3. Oxford
    4. MIT
    4. Yale
    6. Stanford
    7. California Institute of Technology
    8. UC Berkeley
    9. Imperial College, London
    10. Princeton
    11. University of Chicago

    Controversial issues in rankings of universities are discussed at http://www.trinity.edu/rjensen/HigherEdControversies.htm#BusinessSchoolRankings

     


    Question
    Are there any respected online doctoral programs in accountancy?

     

    November 16, 2006 message from David Raggay [draggay@TSTT.NET.TT]

     

    Please forgive me bringing up this topic again. I know that things are rapidly changing and I also ask the question from a broader perspective than the initial query..

    Are any of the current online doctorate programs in business/accounting and/or finance highly recommended? If so which ones?

    Alternatively, are there any highly recommended part-time programs in the areas mentioned above? If so which ones?

    Regards,

    David

    November 16, 2006 reply from Richard Campbell [campbell@RIO.EDU]

    David:
    Let me relate my experience in investigating an online Ph.D. program in accounting - www.sarasota.edu  (Florida) - part of Argosy University. They have revised their web site, and the information that I talk about may not now be currently referenced on their web site. The web site referred to the lead accounting professor as being a Ph.D. graduate of the University of Buffalo. I checked the U of Buffalo web site and his name was not included on the list of Ph.D graduates on a list that went back to 1970. There was no link to a vita of that professor. There WAS a mention, however, that the professor was an excellent woodworker. Incidentally, I feel strongly that all students have the ability to see the vita of their professors. I have mine on my own web page. I urge my local colleagues to do the same.

    I called the North Central accrediting agency and asked if U of Sarasota was accredited - and I was told they were - as part of the Illinois Argosy connection. I then called the Admissions counselor at Sarasota U and asked a few questions. I got the "hard sell" and was told that my studies would be a pleasant journey, although a costly ($30K) one. I would be able to arrange the quarterly Florida visits around trips to Disney World, Cape Canaveral and other hot spots. I then asked the counselor some questions that she could not readily answer. 1. Could you verify that Accounting Professor X is a Ph.D. graduate of the University of Buffalo, and could you provide me a vita for him? 2. Could I have a list of ALL your FULL TIME faculty with their degrees and vitae? 3. Could you provide me with a list of graduates and their current professional affiliations? 4. Can you give me more information about the accreditation process of your Ph.D program?

    My questions must have been unanswerable - I never received a response in return.

    Some additional observations - some accrediting agencies are simply NOT doing their jobs in discriminating diploma mills from legitimate institutions. And some legitimate institutions are cheapening their reputations by lending their good names to dubious ventures who just build a graphically pleasing web site.

    So in summary, I don't know if there are legitimate online business doctoral programs out there.

    Richard J. Campbell
    School of Business
    218 N. College Ave.
    University of Rio Grande Rio Grande, OH 45674

    http://faculty.rio.edu/campbell

     

    November 17, 2006 reply from Bob Jensen

    Hi David,

    I spend a lot of time tracking distance education and training programs. I know of NO (NONE, NILL) respected alternatives for an online doctoral degree in accounting. There are a few respected doctoral programs in selected disciplines like education, pharmacy, and law (a JD is a doctoral degree) --- http://www.trinity.edu/rjensen/Crossborder.htm 

    Since I've made presentations for you in Trinidad, I'm well aware that you reside outside the U.S. But for U.S. residents, the best alternative is probably to earn a distance education masters degree in accounting or tax and then a JD degree in a respected online law school program or an EED from a respected College of Education. Remember that above all else the recognizable name of the university on the diploma means more than anything else on the diploma (including the discipline of study).

    There are many online masters programs in accountancy since so many highly respected state universities have added online programs to their onsite masters degree programs --- http://www.trinity.edu/rjensen/crossborder.htm#MastersOfAccounting 

    There are some gray zone doctoral programs like Nova's programs, but I don't yet have high regards for Nova. The Nova formula is to hire doctoral faculty who moonlight for Nova, but nobody has ever convinced me that a Nova doctoral degree is respected for a tenure track position in a respected university even though there may be some respected baccalaureate Nova alternatives --- http://www.nova-university.org/

    It may be possible to negotiate with some respected doctoral programs for an increased balance of online courses combined with onsite requirements. But I doubt that the there is a very serious proportion of accounting doctoral courses that can be taken online.

    Remember that doctoral programs generally have negligible requirements for accounting and tax courses and don't require many, or any, of those courses from their masters degree programs. Doctoral studies courses are in mathematics, statistics, econometrics, psychometrics, and economic theory. Doctoral program advisors are very particular about content in those courses and very few online courses suffice for these accountics, yes I spelled that accountics, foundation courses --- http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm 

    I must admit that I've not investigated all foreign alternatives for distance education doctoral degrees. For example, there might be one or two popping up among the vast number of distance education alternatives in the United Kingdom --- http://www.trinity.edu/rjensen/crossborder.htm#England 
    But I've not yet encountered a respected doctoral degree program.

    The classic U.K. doctorate entails little course work and heavy private tutoring such that U.K. doctorates are more conducive to modern online technology. But respected U.K. universities probably still turn up their noses at online doctoral degrees. They're still pretty stuffy in the U.K. and in former nations of the British Empire.

    Beware of any program for any degree that grants credit for life experience. All God's children have life experience --- http://www.trinity.edu/rjensen/crossborder.htm#CLEP 

    Bob Jensen

    November 17, 2006 reply from J. S. Gangolly [gangolly@CSC.ALBANY.EDU]

     

  • I too agree with most caveats expressed.

    However, I beg to differ with respect to requiring a PhD in accounting.

    In my opinion, the ideal candidate would have a liberal education background followed by a CPA (with audit experience) followed by a PhD in any related field (Economics, Criminal Justice, CSI, ...), and finally motivation to do research in accounting related areas.

    There are very few that fit the bill, but that I think is the ideal background for an academic.

    Having gone through the doctoral hamster mills in both Operations Research and Accounting (didn't complete PhD in OR due to the demise of my intended supervisor), accounting doctoral education, in my opinion leaves much to be desired, relative to that in other fields. This is as it should be, for accounting is a profession; it is debatable if it is an academic discipline (though, of course it can be).

    As usual, I am being provocative.

    Respectfully submitted,

    Jagdish
     

    November 17, 2006 reply from Tom Lechner [acttal@BUSINESS.UTAH.EDU]

     

    While I agree with almost everything that was said, I would add two precautions. First, I am not at all sure that a Ph.D. in another field would be an acceptable substitute for a Ph.D. in accounting. When I chaired a search committee at a teaching oriented school, we would not consider a Ph.D. in another field. As far as I can recall, the applicant was an MBA/CPA. The applicant lived several thousand miles from the nearest AACSB school that offered a Ph.D., so that applicant had gotten a Ph.D. in education. While we understood the applicant's situation, we did not consider him.

    Second, I believe that the LLM in law is more equivalent to a Ph.D. than a JD. While an MBA + JD would be acceptable for teaching tax at many schools, it might not provide terminal qualification for a position in another area of accounting.

    I suggest that you contact some schools that have current openings that you would be interested in. Ask them how they would view various combinations of credentials.

    Tom

    Dr. Thomas A. Lechner, CPA
    Assistant Professor (Lecturer)
    David Eccles School of Business School of Accounting and Information Systems
    University of Utah

    November 18, 2006 reply from Bob Jensen

     

    Hi Tom,

    I agree with what you say. I should have pointed out that in the College of Education there are often two doctoral programs, the EED vs. the PhD. in Education. The EED is more for school administrators and the PhD is more of a traditional teaching and research degree.

    Although many business programs do not consider either College of Education degree as a terminal qualification, it will enhance other qualifications if it was granted from a highly respected university. Particularly the PhD in Education should enhance both teaching and research skills. It is not very common to encounter such College of Education doctoral degrees in AACSB schools, although JD and LLM degrees are quite common, especially among tax faculty. However, attorneys who also have CPA licenses commonly teach in areas other than tax.

    Bob Jensen

    November 17, 2006 reply from Bernadine Raiskums [berna@GCI.NET]

     

    Hi David,

    I am CPA, CIA, MEd. and currently currently pursuing online PhD in Education from Capella and really would recommend the school for quality of program as well as administration. Capella does have a couple of PhD in business, and an MBA in accounting, but might be worth checking it out. www.capella.edu

    Bernadine Raiskums in Anchorage

     

    November 19, 2009 reply from Bob Jensen

     

    Hi Bernadine,

    We've both written previously and favorably about Capella's distance education programs. I think Capella sets one of the best examples of a for-profit corporation that's a good role model for similar online corporations.

    I would like to point out that Capella does not yet have online doctoral programs in traditional business education disciplines of accounting, finance, and marketing. It's online organization management doctoral programs to date are linked at http://www.capella.edu/schools_programs/degrees/phd.aspx 

    Specializations:

    Capella has even wider arrays of doctoral programs in education and psychology ---
    http://www.capella.edu/schools_programs/degrees/phd.aspx 

    We are always grateful to hear from students enrolled in distance education graduate programs.

    Thank you,

    Bob Jensen

    Capella Education’s initial public offering on Friday sent its stock up by about 25 percent, The Pioneer Press reported.
    Inside Higher Ed, November 13, 2006


     

    New Thoughts About Herman Melville's Sexual Orientation and Multiculturalism
    Herman Melville: great American novelist or great American hipster? Well, it isn’t an either/or kind of situation. Rereading Moby Dick for the first time in ages (now minus the English major’s mental tic of obsessing over how each little part fit into a vast symbolic architecture), I recently underwent the astonishing revelation that Melville (1) definitely has a sense of humor, (2) pretty much invented the postmodern “maximalist” novel of the sort we now associate with Thomas Pynchon, and (3) is so overtly gay and so stridently multiculturalist that Fox News should probably look into how he ever got into the canon.
    Scott McLemee, "Where’s Herman?" Inside Higher Ed, November 22, 2006 --- http://www.insidehighered.com/views/2006/11/22/mclemee

     

     


    November 21, 2006 message from Dennis Beresford [dberesfo@TERRY.UGA.EDU]

    Here is a link to an interesting speech by Secretary of the Treasury Paulson on competitiveness of capital markets, with particular emphasis on accounting and auditing related matters.

    Denny Beresford

    http://www.treasury.gov/press/releases/hp174.htm


     

    From AccountingEducation.com on November 25, 2006 --- http://accountingeducation.com/

     

    Most football clubs in England and Scotland will make a loss over the next 12 months, according to their finance directors, despite frantic efforts to rein in spending ahead of the start of the season next month
    "How football (Soccer Football that is) got its finances wrong," AccountancyAge, November 2006 --- http://www.accountancyage.com/accountancyage/specials/2162919/football-got-finances-wrong

     

     


    From CPANet on November 20, 2006

    AICPA Financial Literacy Initiative
    ------------------------------
    360 Degrees of Financial Literacy -
    http://www.cpanet.com/up/s0611.asp?ID=1270
    Financial Literacy Resource Center -
    http://www.cpanet.com/up/s0611.asp?ID=1271
    Feed the Pig -
    http://www.cpanet.com/up/s0611.asp?ID=1272
    MySpace: Benjamin Bankes -
    http://www.cpanet.com/up/s0611.asp?ID=1273
    CPAs Asked to Mobilize the Pig -
    http://www.cpanet.com/up/s0611.asp?ID=1274
    State-Level Involvement -
    http://www.cpanet.com/up/s0611.asp?ID=1275
    Financial Literacy Topics -
    http://www.cpanet.com/up/s0611.asp?ID=1276
    Ask the Money Doctor -
    http://www.cpanet.com/up/s0611.asp?ID=1277

    Blog Your Business
    ------------------------------
    The Unseen Blogosphere: Internal Blogs -
    http://www.cpanet.com/up/s0611.asp?ID=1278
    BlogWrite for CEOs -
    http://www.cpanet.com/up/s0611.asp?ID=1279
    Getting the Word Out -
    http://www.cpanet.com/up/s0611.asp?ID=1280
    A Crash Course in Corp Blogging -
    http://www.cpanet.com/up/s0611.asp?ID=1281
    16 Ways to Drive Traffic to Your Business Blog -
    http://www.cpanet.com/up/s0611.asp?ID=1282
    Blogs for Marketing Purposes? -
    http://www.cpanet.com/up/s0611.asp?ID=1283
    Romancing the Bloggers -
    http://www.cpanet.com/up/s0611.asp?ID=1284
     

     


     

    Ethanol Use Has No Effect On Carbon Dioxide Levels
    Oil releases carbon that has been deep within the earth for millions of years. Ethanol comes from corn, which procured its carbon from the atmosphere. In other words, ethanol is not introducing any carbon into the atmospheric system that was not there to begin with. Therefore ethanol, unlike oil, can have no net effect on atmospheric carbon dioxide levels. I am no ardent supporter of Big Ethanol. There are plenty of environmental problems associated with cultivating millions of more acres of corn. To say nothing of the massive systems required for fermentation and purification of billions of gallons of fuel. However, it is a step in the right direction and further scientific breakthroughs that could rectify some of these problems might be just over the horizon. Aside from this, doesn't it seem only prudent to diversify our national energy portfolio when facing such loose cannons as Iran and Saudi Arabia?
    James Wagandt, "Ethanol Use Has No Effect On Carbon Dioxide Levels," The Wall Street Journal,  November 25, 2006; Page A9 ---
    http://online.wsj.com/article/SB116441989972532456.html?mod=todays_us_opinion

     

     


     

    Doomsday Hurricane Forecasters Blown Away
    It was not the hurricane season we expected, thank you. With cataclysmic predictions that hurricanes would swarm from the tropics like termites, no one thought 2006 would be the most tranquil season in a decade. Barring a last-second surprise from the tropics, the season will end Thursday with nine named storms, and only five of those hurricanes. This year is the first season since 1997 that only one storm nudged its way into the Gulf of Mexico.

    Neil Johnson, "Hurricane Predictions Off Track As Tranquil Season Wafts Away," The Tampa Tribune, November 27, 2006 --- http://www.tbo.com/news/metro/MGBHKNBE0VE.html

     



    Updates from WebMD --- http://www.webmd.com/

    Latest Headlines on November 24, 2006

  • Latest Headlines on November 28, 2006

    Latest Headlines on November 29, 2006


     


    The Glimmering Promise of Gene Therapy
    Its history is marred by failures, false hopes, and even death, but for a number of the most horrendous human diseases, gene therapy still holds the promise of a cure. Now, for the first time, there is reason to believe that it is actually working.
    Horace Freeland, "Part 1:  The Glimmering Promise of Gene Therapy," MIT's Technology Review, November 14, 2006 ---
    http://www.technologyreview.com/BioTech/17725/



    Doctors put bite on snake venom for stroke treatment

    Ancrod, an anti-clotting drug derived from the venom of Malaysian pit vipers, is only effective in treating stroke victims if given within three hours, according to a study that appears in Saturday's Lancet. European doctors assessed ancrod, when administered within six hours of a stroke, against a harmless lookalike compound, called a placebo, among 1,220 patients in Europe, Australia and Israel. No significant benefit was found when the drug was administered beyond three hours, according to the paper.
    "Doctors put bite on snake venom for stroke treatment," PhysOrg, November 24, 2006 --- http://physorg.com/news83591511.html

     



    Playing Catch-Up After Lost Time In Alzheimer's Labs
    Orthodoxy also stifles research on other culprits. "Where the field made its mistake was in trying to make everything fit one common [amyloid] pathway," says Robert Mahley, president of the J. David Gladstone Institutes, San Francisco. "We've got to realize there are multiple ways you can wind up with [Alzheimer's]."
    Sharon Begley, "Playing Catch-Up After Lost Time In Alzheimer's Labs," The Wall Street Journal, November 24, 2006; Page B1 --- http://online.wsj.com/article/science_journal.html

     

     


     

    Scientists to freeze women's ovaries
    U.S. researchers are launching an experimental program for young female cancer patients in which an ovary is removed and frozen for possible future use. The Center for Reproductive Research at Northwestern University said the program is designed for young women who might be at risk of losing their ovarian function and fertility following treatment for cancer. Teresa Woodruff, associate director of the university's Lurie Comprehensive Cancer Center in Chicago says the long-term goal is to be able to extract and mature eggs from cryopreserved ovarian tissues to initiate pregnancies once cancer treatment has been completed.
    "Scientists to freeze women's ovaries," PhysOrg, November 28, 2006 --- http://physorg.com/news83960481.html
     


     

    One-off treatment to stop back pain -- Using patients' own stem cells
    A University of Manchester researcher has developed a treatment for lower back pain using the patient’s own stem cells, which could replace the use of strong painkillers or surgery that can cause debilitation, neither of which addresses the underlying cause.Dr Stephen Richardson, of the University’s Division of Regenerative Medicine in the School of Medicine (FMHS), has developed the treatment; and in collaboration with German biotechnology company Arthrokinetics and internationally-renowned spinal surgeons Spinal Foundation are hoping to enter pre-clinical trials next year. It is expected to rapidly yield a marketable product which will revolutionise treatment of long-term low back pain.
    "One-off treatment to stop back pain -- Using patients' own stem cells," PhysOrg, November 30, 2006 --- http://physorg.com/news84113927.html

     

     



    Consumers Not Warned of Mercury in Fish

    Not a single West Virginia grocery store is warning consumers of the possible dangers of mercury in fish, an environmental group says, even though the state and federal governments have been issuing advisories to anglers for at least two years. Oceana, a Washington, D.C.-based activist group, issued a report this week that concludes fewer than 20 percent of the nation's grocery stores are posting in-store warnings about mercury. West Virginia is one of four states with zero in-store warnings, the report says. The others are Mississippi, Alabama and North Dakota.
    "Consumers Not Warned of Mercury in Fish," PhysOrg, November 23, 2006 --- http://physorg.com/news83476474.html

     


     

    When it comes to child porn, it pays to have friends in high places

     

    "Court shocker: 10 months for kiddie porn producer:  Democrat activist faced 81 years in jail on charges involving kids as young as 6," WorldNetDaily, November 25, 2006 --- http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53070 

     

    Authorities say Andrew Douglas Reed, 53, who reported for an abbreviated jail term just a few weeks ago, had pleaded guilty to a page-long list of counts of 2nd-degree sexual exploitation of a minor.

    Court records in the Asheville, N.C., case said he admitted that he would "record, develop and duplicate material containing a visual representation of a minor engaging in sexual activity." That activity is defined by state law as including masturbation, intercourse and "touching – in apparent sexual stimulation or sexual abuse – of the genitals, pubic area or buttocks."

    However, instead of the 967 months in jail – nearly 81 years – for which he was liable, Judge Robert Lewis, another Democrat, gave him, in a plea bargain with the office of District Attorney Ron Moore, who was elected as a Democrat, a 10-12 month sentence.

     

    Continued in article

     

     


    November 21, 2006 message from Naomi Ragen [nragen@netvision.net.il]

    If you want to cheer yourself up in a profound way, go to the following website: http://www.arabsforisrael.com/

    This is not a hoax, but an actual website, filled with many letters from Arabs and Muslims who reject anti-Semitism and who truly love Israel. It is such an amazing thing to read these letters. For the first time in a long time I realized that real peace could be possible if only our enemy were not brainwashed with lies and causeless hatred, had an elementary education, and had ever met real Jews/Israelis.

    Below, a remarkable letter posted on the website.

    Naomi





     

    "Friedman's Sampler," by Emily Parker and Joseph Rago, The Wall Street Journal, November 18, 2006 --- http://www.opinionjournal.com/extra/?id=110009267

    On Freedom

    It is important to emphasize that economic arrangements play a dual role in the promotion of a free society. On the one hand, "freedom" in economic arrangements itself a component of freedom broadly understood, so "economic freedom" is an end in itself to a believer in freedom.

    In the second place, economic freedom is also an indispensable means toward the achievement of political freedom. . . .

    A citizen of the United States who under the laws of various states is not free to follow the occupation of his own choosing, unless he can get a license for it, is likewise being deprived of an essential part of his freedom. So economic freedom, in and of itself, is an extremely important part of total freedom.

    The reason it is important to emphasize this point is because intellectuals in particular have a strong bias against regarding this aspect of freedom as important. They tend to express contempt for what they regard as material aspects of life and to regard their own pursuit of allegedly higher values as on a different plane of significance and as deserving special attention. But for the ordinary citizen of the country, for the great masses of the people, the direct importance of economic freedom is in many cases of at least comparable importance to the indirect importance of economic freedom as a means of political freedom.

    Viewed as a means to the end of political freedom, economic arrangements are essential because of the effect which they have on the concentration of power. A major thesis of the new liberal is that the kind of economic organization that provides economic freedom directly, namely, organization of economic activities through a largely free market and private enterprises, in short, through competitive capitalism, is also a necessary though not a sufficient condition for political freedom.

    The central reason why this is true is because such a form of economic organization separates economic power from political power and in this way enables the one to be an offset to the other. I cannot think of a single example at any time or any place where there was a large measure of political freedom without there also being something comparable to a private enterprise market form of economic organization for the bulk of economic activity.

    --from "Capitalism and Freedom: Why and How the Two Ideas Are Mutually Dependent," May 17, 1961

     

     

    On the Free Market

    What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really lack of belief in freedom itself.

    The essence of political freedom is the absence of coercion of one man by his fellow men. The fundamental danger to political freedom is the concentration of power. The existence of a large measure of power in the hands of a relatively few individuals enables them to use it to coerce their fellow men. Preservation of freedom requires either the elimination of power where that is possible, or its dispersal where it cannot be eliminated.

    It essentially requires a system of checks and balances, like that explicitly incorporated in our Constitution. . . .

    The person who buys bread doesn't know whether the wheat from which it was made was grown by a pleader of the Fifth Amendment or a McCarthyite, by person whose skin is black or whose skin is white. The market is an impersonal mechanism that separates economic activities of individual from their personal characteristics. It enables people to cooperate in the economic realm regardless of any differences of opinion or views or attitudes they may have in other areas.

    --from "The New Liberal's Creed: Individual Freedom, Preserving Dissent Are Ultimate Goals," May 18, 1961

     

     

    On Free Trade

    What we ought to do is practice what we preach. We have been going around preaching the virtues of free enterprise, of free competition in a free market. What have we been doing? We've been practicing the opposite, not only through our foreign aid program, but also at home. We tell other countries, use the market: we tell our farmers, look to Washington. We tell other countries, don't try to be self-sustained; try to develop valuable industries that can compete on the international market, and then what do we do? We impose import quotas on oil, we impose tariffs on goods that come in, we dump agricultural products abroad, and impose quota on their import at home. The rest of the world listens to what we say and they think, "now there is a fine bunch of hypocrites," and they are right.

    --from "An Alternative to Aid: An Economist Urges U.S. to Free Trade, End Grants of Money," April 30, 1962

     

     

    On Inflation

    If the Fed does not explain to the public the nature of our problem and the costs involved in ending inflation, if it does not take the lead in imposing the temporarily unpopular measure required, who will?

    --From "Why Curbing Inflation Is the Fed's Job, March 6, 1974

     

     

    On Taxes

    To summarize, deficits are bad--but not because they necessarily raise interest rates. They are bad because they encourage political irresponsibility. They enable our representatives in Washington to buy votes at our expense without having to vote explicitly for taxes to finance the largesse. The result is a bigger government and a poorer nation. That is why I favor a constitutional amendment requiring Congress to balance the budget and limit taxation.

    --from "The Taxes Called Deficits," April 24, 1984

     

     

    On the Economy

    The Wall Street Journal has been a firm and dedicated supporter of free markets at home and free trade abroad. It has repeatedly stressed its view that the invisible hand of Adam Smith is a far more effective and equitable means of organizing economic activity than the visible hand of government. Yet when it comes to foreign economic policy, a recent editorial, "Beyond Venice" (June 8), relies upon a wholly different and thoroughly incompatible set of ideas.

    According to that editorial, "The economic summits of leading free-market nations are a sound recognition that the world economy defies sovereign borders, and can be run only through international cooperation."

    Would the Journal describe the American economy as being "run," whether through international cooperation or by the powers that be in Washington or through cooperation among the individual states? Or would it rather, in accordance with its general philosophy, describe it as a system that is coordinated by the voluntary activities of millions of individuals, a system that runs but is not run?

    --from "Please Reread Your Adam Smith," June 24, 1987

     

     

    On Social Security

    I have long been a critic of Social Security, basically because I believe that it is not the business of government to tell people what fraction of their incomes they should devote to providing for their own or someone else's old age. On a more pragmatic level, Social Security is another example of the generalization that government programs typically have effects that are the opposite of those intended by their well-meaning sponsors (what Rep. Richard Armey calls the "invisible foot of government").

    The well-meaning sponsors intended Social Security to ensure a minimum income to the poor in their old age. It has largely done that, but at the cost of what they would have regarded as a perverse redistribution of income from the young to the old, from black to white, from the relatively poor to the relatively well-to-do.

    From its inception, Social Security has been an unholy combination of two items: a flat-rate tax on earnings up to a maximum with no exemption and a benefit program that awards subsidies that have essentially no relation to need but are based on such criteria as marital status, longevity and recent earnings. As I wrote many years ago, "hardly anyone approves of either part separately. Yet the two combined have become a sacred cow. What a triumph of imaginative packaging and Madison Avenue advertising!"

    --from "Social Security: The General And the Personal," March 15, 1988

     

     

    On the Future

    Let us put aside the scarecrows of the twin deficits and face up to the real problems that threaten U.S. growth and prosperity: excessive and wasteful government spending and taxing, including in particular the real time bomb in Social Security, Medicare and Medicaid programs; concealed taxes in the form of mandated expenditures on private business; excessive and misguided regulation of individuals as well as businesses; the changes in tort legislation that are discouraging innovation; and not least, the recent increase in protectionism and the threat of a further major increase. We should and can do something about these problems, not allow ourselves to be diverted by politically convenient scarecrows.

    --from "Why the Twin Deficits are a Blessing," Dec. 14, 1988

     

     

    On Health Care Prices

    Toward the end of World War II, I served as an instructor in a quality-control course for Navy procurement officers. It was held in Hershey, Pa. As I recall, we stayed at the Hershey Hotel, on the corner of Cocoa Avenue and Chocolate Boulevard, across the street from the Hershey Junior College, where the actual instruction took place, a block or so from the Hershey Department Store, and so on. You get the idea. The stench--or perfume--of paternalism was heavy in the air.

    Early in the century such company towns, most far less benevolently paternalistic than Hershey, were common. Workers who were employed at mines or factories located far from large cities, in towns that typically had only a single major employer, were often required, or induced, to live in company housing and buy their food and other supplies at company stores. In effect, they were paid in kind rather than in cash--the so-called truck system. . . .

    The company town has been revived in one major area: medical care. It is taken for granted that workers should receive their pay partly in kind, in the form of medical care provided by the employer. How come? Why single out medical care? Surely food is no less essential to life than medical care. Why is it not at least as logical for workers to be required to buy their food at the company store as to be required to buy their medical care at the company store?

    --from "Pricing Health Care: The Folly of Buying Health Care at the Company Store," Feb. 13, 1993

     

     

    On Jobs

    Proposed economic policies tend to be judged in terms of jobs "created." That is the wrong criterion. The economic problem is not creating jobs. That is easy: Hire people at minimum wages (or lower) to dig holes and fill them. True, raising taxes to finance that project would destroy jobs, but the jobs destroyed would be high-wage jobs, the jobs created low-wage jobs, so for each job destroyed more than one job would be created--a net gain of jobs.

    The real problem is to establish an economic environment in which there is a demand for workers at wages that those workers not only regard as satisfactory, but are qualified to earn: Better qualified workers and better wages--not simply more jobs--is the real problem.

    --from "Better Workers, Better Wages: The Real Issue," June 1, 1993

     

     

    On the Federal Reserve

    My favorite "moderate" proposal for the Fed (my "extreme" proposal is to abolish it) is that (1) at the beginning of each quarter, have it estimate how much it will have to add net to its holdings during that quarter to achieve its target monetary growth; (2) divide that number by 12; and (3) announce that every Monday morning at 11 a.m. it will buy that amount of securities from the lowest bidder, and then close up shop until the next Monday, except for replacing maturing securities.

    What harm would that do? It would mean day-to-day and week-to-week fluctuation in the federal-funds rate. However, the sophisticated financial markets have surely demonstrated their capacity to handle wide daily fluctuations in all kinds of securities prices. Dealing with the fluctuations in the federal-funds rate would be child's play.

    --from "End the Fed's Fine-Tuning," Sept. 15, 1993

     

     

    On the Flat Tax

    The only way we are ever likely to get it is if there is a drive for a constitutional convention to repeal the 16th Amendment (which gives Congress the power to tax income) and replace it with one mandating a flat-rate tax.

    However, I regret that that is not an immediate prospect.

    --from "Why a Flat Tax Is Not Politically Feasible," March 30, 1995

     

     

    On Government Spending

    The typical rhetoric, Republican as well as Democratic, about the current battle to balance the budget is that cutting government spending imposes short-term pain more than compensated by long-term gain. That is utter nonsense. Cutting government spending and government intrusion in the economy will almost surely involve immediate gain for the many, short-term pain for the few, and long-term gain for all.

    --from "Budget Cutting: A Lot of Gain, Little Pain," June 15, 1995

     

     

    On Hong Kong

    By some accident of officialdom, the colonial office assigned John Cowperthwaite, a Scotsman and a disciple of Adam Smith, to serve as financial secretary of Hong Kong. Cowperthwaite's free market policies are widely credited with producing the subsequent economic miracle that led to a phenomenal rise in the average level of living despite a nearly 10-fold rise in population.

    It is hard to conceive of a more severe test of free market policies. Hong Kong is an island devoid of any significant natural resources other than a great harbor. When the Communists took over China, refugees came streaming over the borders with only the possessions they could carry. They and their successors produced a rapid rise in population. Hong Kong received negligible if any foreign aid to assist the assimilation of the refugees.

    Under these adverse circumstances, the salvation of Hong Kong has been its complete free trade and free market policy. No tariffs on imports, no subsidies or other privileges to exports. (The only restrictions are those that Hong Kong has been forced to impose by pressure from other countries, including the U.S., as under the multifiber agreement.) There is no fixing of prices or wages; few if any restrictions on entry into business or trade; and government spending and taxes have been kept low. The top tax rate on personal income is 25%, with a maximum average rate of 15%. . . .

    What a contrast to the experience of most of the colonies to which Britain gave their freedom after the war. And what a striking demonstration of how much better free trade and free markets are for the ordinary citizen than the protectionism of Mr. Buchanan and the "fair trade" of President Clinton. "Fair" is in the eye of the beholder; free is the verdict of the market. (The word "free" is used three times in the Declaration of Independence and once in the First Amendment to the Constitution, along with "freedom." The word "fair" is not used in either of our founding documents.)

    --From "Hong Kong vs. Buchanan," March 7, 1996

     

     

    On Health Care

    The best way to restore freedom of choice to both patient and physician and to control costs would be to eliminate the tax exemption of employer-provided medical care. However, that is clearly not feasible politically. The best alternative available is to extend the tax exemption to all expenditures on medical care, whether made by the patient directly or by employers, to establish a level playing field, in terms of the currently popular cliche.

    Many individuals would then find it attractive to negotiate with their employer for a higher cash wage in place of employer-financed medical care. With part or all of the higher cash wage, they could purchase an insurance policy with a very high deductible, i.e., a policy for medical catastrophes, which would be decidedly cheaper than the low-deductible policy their employer had been providing to them, and deposit all or part of the difference in a special "medical savings account" that could be drawn on only for medical purposes. Any amounts unused in a particular year could be allowed to accumulate without being subject to tax, or could be withdrawn with a tax penalty or for special purposes, as with current Individual Retirement Accounts--in effect, a medical IRA. Many employers would find it attractive to offer such an arrangement to their employees as an option.

    --from "A Way Out of Soviet-Style Health Care," April 17, 1996

     

     

    On 'Reform'

    The present crisis is not the result of market failure. Rather, it is the result of governments intervening in or seeking to supersede the market, both internally via loans, subsidies, or taxes and other handicaps, and externally via the IMF, the World Bank and other international agencies. We do not need more powerful government agencies spending still more of the taxpayers' money, with limited or nonexistent accountability. That would simply be throwing good money after bad. We need government, both within the nations and internationally, to get out of the way and let the market work. The more that people spend or lend their own money, and the less they spend or lend taxpayer money, the better.

    --from "Markets to the Rescue," Oct. 13, 1998

     

     

    On Ronald Reagan

    To Mr. Reagan, of course, holding down government spending was a means to an end, not an end in itself. That end was freedom, human freedom, the right of every individual to pursue his own objectives and values so long as he does not interfere with the corresponding right of others. That was his end in every phase of his remarkable career.

    We still have a long way to go to achieve the optimum degree of freedom. But few people in human history have contributed more to the achievement of human freedom than Ronald Wilson Reagan.

    --from "Freedom's Friend," June 11, 2004

     

     

    On Communism

    In the almost six decades since the end of World War II, intellectual opinion in the United States about the desirable role of government has undergone a major shift. At the end of the war, opinion was predominantly collectivist. Socialism--defined as government ownership and operation of the means of production--was seen as both feasible and desirable. Those few of us who favored free markets and limited government were a beleaguered minority.

    In subsequent decades opinion moved away from collectivism and toward a belief in free markets and limited government. By 1980 opinion had moved enough to enable Ronald Reagan to win the presidency on a quasi-libertarian agenda.

    The collapse of the Soviet Union in 1989 delivered the final blow to the belief in socialism. Hardly anyone today, from the far left to the far right, regards socialism in the traditional sense of government ownership and operation of the means of production as either feasible or desirable. Those who profess socialism today mean by it a welfare state.

    --from "The Battle's Half Won," Dec. 9, 2004

     

     

    On School Choice

    One result has been experimentation with such alternatives as vouchers, tax credits, and charter schools. Government voucher programs are in effect in a few places (Wisconsin, Ohio, Florida, the District of Columbia); private voucher programs are widespread; tax credits for educational expenses have been adopted in at least three states and tax credit vouchers (tax credits for gifts to scholarship-granting organizations) in three states. In addition, a major legal obstacle to the adoption of vouchers was removed when the Supreme Court affirmed the legality of the Cleveland voucher in 2002. However, all of these programs are limited; taken together they cover only a small fraction of all children in the country.

    Throughout this long period, we have been repeatedly frustrated by the gulf between the clear and present need, the burning desire of parents to have more control over the schooling of their children, on the one hand, and the adamant and effective opposition of trade union leaders and educational administrators to any change that would in any way reduce their control of the educational system.

    --from "Free to Choose," June 9, 2005

     




    Forwarded by Erika's sister Nancy

    The embers glowed softly, and in their dim light,
    I gazed round the room and I cherished the sight.
    My wife was asleep, her head on my chest,
    My daughter beside me, angelic in rest.

    Outside the snow fell, a blanket of white,
    Transforming the yard to a winter delight.
    The sparkling lights in the tree I believe,
    Completed the magic that was Christmas Eve.

    My eyelids were heavy, my breathing was deep,
    Secure and surrounded by love I would sleep.
    In perfect contentment, or so it would seem,
    So I slumbered, perhaps I started to dream.

    The sound wasn't loud, and it wasn't too near,
    But I opened my eyes when it tickled my ear.
    Perhaps just a cough, I didn't quite know,
    Then the sure sound of footsteps outside in the snow.

    My soul gave a tremble, I struggled to hear,
    And I crept to the door just to see who was near.
    Standing out in the cold and the dark of the night,
    A lone figure stood, his face weary and tight.

    A soldier, I puzzled, some twenty years old,
    Perhaps a Marine, huddled here in the cold.
    Alone in the dark, he looked up and smiled,
    Standing watch over me, and my wife and my child.

    "What are you doing? " I asked without fear,
    "Come in this moment, it's freezing out here!
    Put down your pack, brush the snow from your sleeve,
    You should be at home on a cold Christmas Eve!"

     For barely a moment I saw his eyes shift,
    Away from the cold and the snow blown drift.
    Then he sighed and he said "Its really all right,
    I'm out here by choice. I'm here every night."

    "It's my duty to stand at the front of the line,
    That separates you from the darkest of time.
    No one had to ask or beg or implore me,
    I'm proud to stand here like my fathers before me.

    My Gramps died at 'Pearl on a day in December,"
    Then he sighed, "That's a Christmas 'Gram will always remember."
    My dad stood his watch in the jungles of 'Nam',
    And now it is my turn and so, here I am.

    I've not seen my own son in more than a while,
    But my wife sends me pictures, he's sure got her smile.
    Then he bent and he carefully pulled from his bag,
    The red, white, and blue... an American flag.

    I can live through the cold and the being alone,
    Away from my family, my house and my home.
    I can stand at my post through the rain and the sleet,
    I can sleep in a foxhole with little to eat.

    I can carry the weight of killing another,
    Or lay down my life with my sister and brother..
    Who stand at the front against any and all,
    To ensure for all time that this flag will not fall."

    "So go back inside," he said, "harbor no fright,
    Your family is waiting and I'll be all right."
    "But isn't there something I can do, at the least,
    "Give you money," I asked, "or prepare you a feast?

     It seems all too little for all that you've done,
    For being away from your wife and your son."
    Then his eye welled a tear that held no regret,
    "Just tell us you love us, and never forget.

    To fight for our rights back at home while we're gone,
    To stand your own watch, no matter how long.
    For when we come home, either standing or dead,
    To know you remember we fought and we bled.

    Is payment enough, and with that we will trust,
    That we mattered to you as you mattered to us."


    Forwarded by Michael Moore

    Cut and Run, the Only Brave Thing to Do --- http://www.michaelmoore.com/words/message/index.php?id=202 

    Jensen Comment
    We have to be very brave to retreat from the Middle East. Chances for nuclear winter become very high indeed as nations going nuclear surround Israel with full intentions to wipe Israel off the map. It takes a great deal of courage to encourage our enemies to obtain more and more WMDs and wait at home with our heads in the sand while Israel stands alone on the front lines. Michel Moore is good for one liners but he never addresses serious policy issues like how to end terrorist attacks in Israel or whether Iran should have its fair share WMDs.

    Most chilling of all, could the festering differences precipitate a military confrontation involving the use of nuclear weapons? It is known that Israel has a major nuclear arsenal and the capability to launch weapons quickly, and some neighboring states are believed to be attempting to acquire their own atomic bombs. Without progress toward peace, desperation or adventurism on either side could precipitate such a confrontation.
    Jimmy Carter, Palestine: Peace Not Apartheid

    There is no terrorist threat in this country. This is a lie. This is the biggest lie we've been told.
    Michael Moore

    If someone did 9/11 to get back at Bush, then they did so by killing thousands of people who DID NOT VOTE for him! Boston, New York, DC, and the planes' destination of California - these were places that voted AGAINST Bush!
    Michael Moore

    I'm a millionaire, I'm a multi-millionaire. I'm filthy rich. You know why I'm a multi-millionaire? 'Cause multi-millions like what I do.
    Michael Moore

    The Iraqis who have risen up against the occupation are not 'insurgents' or 'terrorists' or 'The Enemy.' They are the revolution, the Minutemen, and their numbers will grow - and they will win.
    Michael Moore
    Jensen Comment
    As far as I know British soldiers were not standing between warring "tribes" of Minutemen killing and torturing each other in unimaginable horror. Once again Michael proves he's never read a history book --- he probably does not have the time because he's too busy adding more millions to his millions.
     

     




    Forwarded by Aaron Konstam

    WHY ARE WE BADLY PAID... MATHEMATICALLY PROVEN.

    Here is a simple explanation that is also mathematical proof:

    Knowledge is Power.

    Time is Money.

    And, as every engineer knows:

    Power = Work / Time

    If Knowledge = Power, and Time = Money, then

    Knowledge = Work / Money

    Solving for Money, we get:

    Money = Work / Knowledge

    Thus, Money approaches infinity as Knowledge approaches zero, regardless of the Work done. What this means is:

    The Less you Know, the More you Make --- QED


    From the Readers Digest, December 2006, Page 153

  • Flying to Toronto at Crhistmastime, I arrived at the airport check-in. As the security guard cleared my bags, I noticed a sprig of mistletoe dangling from him.

    "What's the mistletoe for?" I asked.

    "That?" He smiled. "That's so you can kiss your luggage goodbye."

     

    Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
    190 Sunset Hill Road
    Sugar Hill, NH 03586
    Phone:  603-823-8482 
    Email:  rjensen@trinity.edu  

     




  • 
    
    My close friends Lon and Nancy Hendersen own the Sunset Hill House down the road from our cottage. There are assorted cross country ski trails up here. The above picture is in their slide show at http://www.sunsethillhouse.com/ 
    Congratulations to Kate Lopez and Trinity University
     
    I want to congratulate Kate Lopez on her recent acceptance of an offer to join the accounting faculty at Trinity University. Kate is finishing her PhD at the University of Texas in San Antonio. Kate was one of my star students in Trinity's undergraduate and masters accounting programs. She joined Arthur Andersen and worked as a CPA auditor and an arbitrage consulting expert right up to the day Andersen closed its doors in San Antonio. She consulted me about her options for the future. With a new baby and her husband and father in business together in San Antonio there were difficulties for her to travel out of town to earn a doctoral degree. 
     
    I recommended that she look into applying for the new accounting doctoral program starting up at UTSA. The rest is history. She's done very well and is quite happy with UTSA's program. I anticipate that you will learn much more about this very talented young woman who's joining the Academy. Years ago as an undergraduate she paid close attention when I explained why I was blessed to have fallen into (more accurately skied into) the career of being an accounting educator.
     
    Kate's been teaching accounting part time at Trinity for the past two years. Now she's stepped onto the tenure track.
     
    And Congratulations to Some Old Folks at the Other End of Trinity's Tenure Track
    November 30, 2006 message from Dan Walz
    Please join me in congratulating Dick Burr (Business Statistics) for being ranked as the top professor for teaching at Trinity University and Petrea Sandlin (Accounting) for being ranked number 3 in Scene in SA Monthly. This is quite an honor! Open the pdf file below to see more. 
    Dan
    
    --------------------------------------------------------------------------------
    Tidbits on December 1, 2006
    Bob Jensen 
    For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm 
    For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
    Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
    For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.
    
    Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations    
    
    Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/ 
    
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    Bob Jensen's blogs and various threads on many topics --- http://www.trinity.edu/rjensen/threads.htm 
           (Also scroll down to the table at http://www.trinity.edu/rjensen/ )
    
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    Online Video, Slide Shows, and Audio
    In the past I've provided links to various types of music and video available free on the Web.  
    I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm 
    George Clooney and Oprah plead for an end to genocide in Darfur ---  http://www.theirc.org/resources/george-clooney-visit-chad-sudan.html 
    The incoming House Ways and Means Chairman plays loose with the facts by greatly exaggerating African American/ Hispanic disproportions in what turns out to be our mostly white volunteer army --- 
    http://online.wsj.com/public/page/8_0004.html?bcpid=86195573&bclid=212338097&bctid=336010655 
    Hillary vs. Condi Ho Down (turn up your speakers) --- Click Here
    She's Ready (Hillary Dances) --- Click Here 
    Hundreds of Clips from Canadian Broadcasting Corporation --- http://archives.cbc.ca/index.asp?IDLan=1 
    Video Nation (from the United Kingdom) --- http://www.bbc.co.uk/videonation/ 
    Voices on Genocide Prevention (audio) --- http://www.ushmm.org/conscience/podcasts/ 
    PC World's Digital Duo Videos --- http://www.pcworld.com/digitalduo/video/224-0/video.html 
    Who Wants to Be a Millionaire Game --- http://abc.go.com/games/millionairetv/game/ 
    Audio interview with two articulate Israeli women --- www.israelthisweek.org.
    Great Skinny Dip --- http://www.metacafe.com/watch/303513/check_before/ 
    Frank Sings Strangers on My Flight --- http://www.beecy.net/frank/ 
    David Letterman's selection of great presidential moments --- http://www.youtube.com/watch?v=uA0CMb8EoNk 
    
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    Free music downloads --- http://www.trinity.edu/rjensen/music.htm 
    Sammy Davis Song and Dance Man --- http://www.npr.org/templates/story/story.php?storyId=6522104 
    From Jessie
    If the sound does not commence after 30 seconds, scroll to the bottom of the page. 
    You Had Me from Hello --- http://www.jessiesweb.com/fromhello.htm 
    If I Should Ever Fall Behind --- http://www.jessiesweb.com/fallbehind.htm 
    Paint the Sky With Stars --- http://www.jessiesweb.com/paint.htm 
    Have a Little Faith in Me --- http://www.jessiesweb.com/faith.htm
    Good Morning Beautiful --- http://www.jessiesweb.com/beauty.htm 
    Thank You for Loving Me --- http://www.jessiesweb.com/thankyou.htm 
    Morning Has Broken --- http://www.jessiesweb.com/morningbroken.htm
    Holding All My Love for You --- http://www.jessiesweb.com/madworld.htm  
    Nothing Can Keep Me From You --- http://www.jessiesweb.com/dreams.htm 
    Love Me --- http://www.jessiesweb.com/beforeido.htm 
    The River --- http://www.jessiesweb.com/river.htm 
    Whiskey Bar --- http://www.jessiesweb.com/whiskeybar.htm 
    From Janie
    Elvis singing Memories --- http://mjbreck.com/elvismagicofmemoriesbyjbw.html 
    From Janie (more Elvis) --- http://mjbreck.com/JanieandElvisFromTheresa.html 
    Ravi Shankar, Master of the Sitar --- http://www.npr.org/templates/story/story.php?storyId=4578267 
    Sanjay Mishra: A Cross-Cultural Exploration in Music --- http://www.npr.org/templates/story/story.php?storyId=6502991 
    The Psychedelic Debut of Jimi Hendrix --- http://www.npr.org/templates/story/story.php?storyId=6491823 
    OK Go, French Kicks in Concert from D.C. --- http://www.npr.org/templates/story/story.php?storyId=6486100 
    Tom Waits: The Whiskey Voice Returns --- http://www.npr.org/templates/story/story.php?storyId=6519647 
    Taylor Fights, Then Follows, Parents' Musical Path --- http://www.npr.org/templates/story/story.php?storyId=6513773 
    
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    Photographs and Art
    The politically correct Iwo Jima --- http://www.goodolddogs3.com/If-IwoJima-Happened2day.html 
    Waiting for the Season:  Celebrating Wildflowers http://www.fs.fed.us/wildflowers/  
    Kenneth Parker Photographs --- http://www.kennethparker.com/ 
    Wild Things Photography --- http://www.wildthingsphotography.com/detected.php?page=&pass= 
    Off The Map [Art] --- http://www.pbs.org/independentlens/offthemap/ 
    Time Magazine's historic photos of the most popular 100 musicians of all time --- 
    http://www.time.com/time/photoessays/2006/all_time_100/ 
    
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    Online Books, Poems, References, and Other Literature
    In the past I've provided links to various types electronic literature available free on the Web.  
    I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm 
    Yale Book of Quotations (great but not an online freebie) --- http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300107986 
    This is favorably reviewed by Scott McLemee in "Quote Unquote," Inside Higher Ed, November 29, 2006 --- http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300107986 
    Bob Jensen's links to free quotations are at http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Quotations 
    Ocean Flowers: Anna Atkins’s 19th Century Cyanotypes of British Algae --- Click Here 
    Phantasmagoria and Other Poems by Lewis Carroll (1832-1898) --- Click Here 
    The Adventure of the Blue Carbuncle by  Arthur Conan Doyle (1859-1930) --- Click Here  
    
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    You've got to be taught to hate and fear 
    You've got to be taught from year to year 
    It's got to be drummed in your dear little ear 
    You've got to be carefully taught
    You've got to be taught to be afraid 
    Of people whose eyes are oddly made 
    And people whose skin is a different shade 
    You've got to be carefully taught 
    You've got to be taught before it's too late 
    Before you are six or seven or eight 
    To hate all the people your relatives hate 
    You've got to be carefully taught You've got to be carefully taught
    Rogers and Rodgers and Hammerstein in South Pacific
    Parents have forced a school trip to a mosque to be abandoned because they objected to their children learning about Islam. Atwood Primary in Croydon was forced to call off a Year 5 class visit to a mosque after nearly a third of parents refused to give consent.
    "Class trip to mosque blocked by parents," Canada's Daily Mail, November 22, 2006 --- Click Here 
    Episcopalians tend to be better-educated and tend to reproduce at lower rates than some other denominations 
    (e.g.,  Roman Catholic and Mormon churches that tend to encourage large families)
    Bishop Katharine Jefferts Schori, the first woman to head the US Episcopal Church (ECUSA) --- http://www.lifesite.net/ldn/2006/nov/06112106.html 
    Jensen Comment
    I can't believe Bishop Schori made such a statement!  She does confirm why Episcopalians, being more educated, are more unfit for military service than prolific and uneducated Roman Catholics who support Senator Kerry and Representative Rangel..
    MUSLIM terrorists are no more likely to come from places with large Islamic populations than anywhere else, according to Manchester academics. Dr Ludi Simpson and Dr Nissa Finney studied media reports to map the location of suspects charged under anti-terror laws. The Manchester university researchers found that the proportion of people who have been charged is no greater in areas with large Muslim populations.
    Seb Ramsay, "Large Muslim areas 'not breeding grounds for terror'," The U.K Manchester Evening News, November 22, 2006 --- Click Here 
    With Baghdad shaken by daily outbreaks of sectarian violence, in Iraq's western al-Anbar province, groups of former Iraqi Baathists are battling armed Islamist groups for control of this largely desert region near the Syrian border . . . The former Baathist fighters are believed to be relatively secular while their opponents share al-Qaeda's dream of establishing an Islamic caliphate in Iraq which will then be a launchpad for carrying out attacks around the Middle East.
    Maher al-Jasem, "Sunni face new conflict in Iraq war," Al Jazeera, November 24, 2006 --- Click Here 
    Libyan leader Moammar Gadhafi Sunday accused the West of trying to grab Sudan's oil wealth with its plan to send U.N. troops to Darfur and urged Khartoum to reject them. "Western countries and America are not busying themselves out of sympathy for the Sudanese people or for Africa but for oil and for the return of colonialism to the African continent," he said.
    "Gadhafi: U.N. Darfur force is ruse to grab Sudan's oil," CNN News, November 19, 2006 --- Click Here
    Jensen Comment
    Yeah Right! George Clooney and Oprah secretly conspired with Bush and Cheney to grab the oil wells. See the video for yourself at http://www.theirc.org/resources/george-clooney-visit-chad-sudan.html 
    The news is that two years after we've said "genocide" that it's still going on and it's increasing — and that somewhere in there we can all talk about this and make speeches and say this is horrible and we have to do something. But every day we don't do something, and every day this goes on, thousands of people are dying and dying horrific deaths . . . Here's the thing: We always see this now. We have tragedy fatigue on television. Every day, 20 kids [are] killed in Iraq or, you know, there's always disaster. Pakistan, Afghanistan, there's always horrible disaster in Nepal now. But this is genocide, and if everybody just got up right now out of their chair and picked up a phone and called their congressman, or called the number that registered with the president, it makes a difference. It always has. 
    Oscar Winning George Clooney, ABC News, April 30, 2006 --- Click Here
    Clooney On Darfur | September 15, 2006 (Video)
    We all condemn terrorism, because its victims are the innocent. But, can terrorism be contained and eradicated through war, destruction and the killing of hundreds of thousands of innocents? If that were possible, then why has the problem not been resolved?
    Mahmoud Ahmadinejad, "Letter to the American People," President of the Islamic Republic of Iran, November 29, 2006 --- http://www.blogsofwar.com/2006/11/29/mahmoud-ahmadinejads-letter-the-american-people/ 
    “Americans are going to be very puzzled by it (Mahmoud Ahmadinejad's, "Letter to the American People,") ,” said William Beeman, a linguistic anthropologist at Brown University who specializes in Persian. “People are simply not used to being talked to this way.” He added, “It is almost a sermon, which is very much in keeping with his religious background. But I should also point out it is also a lecture.” The letter reminded Americans that “many victims of Katrina continue to suffer, and countless Americans continue to live in poverty and homelessness.” It also lamented: “Civil liberties are increasingly being curtailed. Even the privacy of the individuals is fast losing its meaning.” The president made no reference to the level of poverty, political freedom or judicial independence in his own country. 
    Michael Slackman, "Iran’s President Criticizes Bush in Letter to American People," The New York Times, November 30, 2006 --- http://www.nytimes.com/2006/11/30/world/middleeast/30iran.html?_r=1&oref=slogin 
    Anybody who recognizes Israel will burn in the fire of the Islamic nation's fury.
    Mahmoud Ahmadinejad --- http://en.thinkexist.com/quotes/mahmoud_ahmadinejad/ 
    Powerful Iran is the best friend of the neighboring states and the best guarantor of regional security
    Mahmoud Ahmadinejad
    Our religion prohibits us from having nuclear arms and our religious leader has prohibited it from the point of view of religious law. It's a closed road.
    Mahmoud Ahmadinejad
    We believe that atomic energy is a blessing given by God.
    Mahmoud Ahmadinejad
    Iran is ready to transfer nuclear know-how to the Islamic countries due to their need.
    Mahmoud Ahmadinejad
    As the Imam (Ayatollah Khomeini) said, Israel must be wiped off the map.
    Mahmoud Ahmadinejad
    Jensen Comment
    There are academic disputes over the translation of this threat --- http://en.wikipedia.org/wiki/Mahmoud_Ahmadinejad_and_Israel 
    A synopsis of Mr Ahmadinejad's speech on the Iranian Presidential website states:
    He further expressed his firm belief that the new wave of confrontations generated in Palestine and the growing turmoil in the Islamic world would in no time wipe Israel away (however interpreted) --- http://en.wikipedia.org/wiki/Mahmoud_Ahmadinejad_and_Israel 
    They say it is not possible to have a world without the United States and Zionism. But you know that this is a possible goal and slogan.
    Mahmoud Ahmadinejad
    CNN host Glenn Beck criticizes the rest of the Western media, including by implication his own station CNN, for drastically failing to properly report on Islamic extremism. This documentary, screened on the American (but not so far on the international) version of CNN ---  http://www.youtube.com/watch?v=3PWIK8YTZS8 
    Researchers have been scouring rivers in Europe and the US for traces of cocaine consumption. The result: Cocaine use is probably much greater than previously assumed -- and New Yorkers are the biggest coke-heads of all. 
    Markus Becker, "New York Blows Away the Competition," Spiegel (Germany), November 23, 2006 --- http://www.spiegel.de/international/0,1518,450078,00.html 
    The radioactive poison used to kill the former Russian spy Alexander Litvinenko is being offered for sale over the internet for less than £40. A company in the US claims to supply polonium-210 to anyone for just $69 plus postage and packing. A three-pack set of “alpha, beta, gamma” radioactive isotopes also includes polonium-210. United Nuclear, based in Albuquerque, New Mexico, tells purchasers: “If you’re looking for clean, accurate, certified radiation sources, here they are. . . All isotopes are produced fresh in a nuclear reactor and shipped directly to you.” 
    Tony Halpin in Moscow, "Polonium-210? it's yours for $69, no questions asked," London Times, November 30, 2006 --- http://www.timesonline.co.uk/article/0,,2-2478908.html 
    Jensen Comment
    This makes little sense since coming near this radiation is dangerous to postal workers and other innocent people who get near the package.
    Be unselfish: respect the selfishness of others.
    Stanislaw Jerzy Lec (1909-1966) --- Click Here 
    A patriot must always be ready to defend his country against his government.
    Edward Abbey
    This world is a comedy for those who think but a tragedy for those who feel.
    Horace Walpole
    Be nice to people on your way up because you'll meet them on your way down.
    Wilson Mizner (1876-1933) --- Click Here 
    Never mind those promised reforms
    The reception thrown by Nancy Pelosi at the Capitol a week after the Democrats prevailed in congressional elections was a party some power players had been waiting more than a decade to attend. The fête was for newly elected freshmen lawmakers, but Pelosi's invited guests included big-name Democratic lobbyists like Jack Quinn, Tony Podesta and Steve Elmendorf. Said a partygoer: "I thought to myself, they're all back, all the same old faces. It was just like old times." . . . Who will win the coming battle between reformers and revanchists? The market is betting against reform. Demand for anyone with access to powerful Democrats on the Hill is soaring. Lobbyists who couldn't get a meeting (before the election) are suddenly a hot commodity. "I've gotten a lot of calls from headhunters in the last two months," says Florence Prioleau, a lobbyist who has maintained close ties with her former boss, New York's Charles Rangel, incoming chairman of the Ways and Means Committee. Pelosi's former chief of staff, George Crawford, has just been hired by Amgen, a biotech company, to represent its interests with the new Congress.
    Massimo Calabresi, "When the Democrats Take Back K Street:  Democratic lobbyists are enjoying a comeback after 12 years of exile. Never mind those promised reforms," Time Magazine, November 26, 2006 --- Click Here 
    The City Council here voted late Tuesday to ban certain giant retail stores, dealing a blow to Wal-Mart Stores Inc.'s potential to expand in the nation's eighth-largest city. The measure, approved on a 5-3 vote, prohibits stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax.
    Elliot Spagat, "San Diego to Ban Wal-Mart Supercenters," Yahoo News, November 29, 2006 --- http://biz.yahoo.com/ap/061129/wal_mart_supercenter_ban.html?.v=4 
    Jensen Comment
    Think of how much better off residents of San Diego will be as a result of this decision supposedly in their best interests. I wonder what would happen if the choice was put to a test in a referendum? The entire state of Vermont banned new Wal-Mart stores of any kind, and now I can't get into my closest New Hampshire Wal-Mart (ten miles away in Littleton) because most of the cars in the overflowing parking lot have green license plates. Claiming that sales tax revenue in San Diego and Vermont will increase without Wal-Mart stores is phony to the point of being fraudulent. The real reason is that local business interests can't compete with Wal-Mart --- which is a much more legitimate argument but it won't sell with voters. I might add that the lowest paying workers are those clerks in small retail stores. These exploited workers would have much better salaries and benefits working for Wal-Mart. But from a selfish standpoint, I hope that my little village never allows any store to have more than 50 square feet. We have only one Sugar Hill store to date (an old fashioned cheese and venison store). One little store's enough for our village as far as I'm concerned. I'd vote against Wal-Mart if it ever came to a vote in Sugar Hill. But then I'd also vote against any new store in Sugar Hill. But I was all in favor of more and more Wal-Mart Supercenters when I lived in San Antonio, because more Wal-Marts beside the many Super K-Marts and other giant stores are not going to affect the ambiance of San Antonio (or San Diego).
    The essay — in his collection There’s No Such Thing as Free Speech — ought to be more notorious still. According to Fish, academics will do anything to distinguish themselves from “the realities of the marketplace.” One of whose realities, I am suggesting here, is that bosses do exist in both realms. Perhaps we can’t abide a vocabulary of bosses because the need to distinguish ourselves from the world of business is so crucial. Or, more interestingly, perhaps we already have enough oppression. “In the psychic economy of the academy,” Fish explains, “oppression is the sign of virtue. The more victimized you are, the more subject to various forms of humiliation, the more you can tell yourself that you are in proper relation to the corrupted judgment of merely worldly eyes.”
    Terry Caesar, "Who’s the Boss?" Inside Higher Ed, November 21, 2006 ---
    http://www.insidehighered.com/views/2006/11/21/caesar 
    It’s a funny old world. Chinese manufacturers are copying the circuit boards and designs of products from Japan and Korea, and they’re doing it so fast that by the time the originals arrive in the marketplace, they’re seen as the fakes! China is a land of endless factories, with many pumping out the world’s most desirable gadgets, from iPods to portable computers to digital cameras and much more.
    Alex Zaharov-Reutt, "Fake chinese electronics selling better than the originals!" ITWire, November 27, 2006 --- http://www.itwire.com.au/content/view/7483/52/ 
    A state office that oversaw a series of controversial charities tied to African-American legislators is being scrutinized by the FBI, Gov. Kathleen Blanco’s office confirmed Tuesday in announcing that it had complied with a subpoena for records from the department. “The governor’s office staff has complied with the FBI’s request for information dating back to 1996 regarding certain programs funded by the former Office of Urban Affairs,” 
    Gordon Russell, Jan Moller and James Varney, New Orleans Times Picayune, November 22, 2006 --- Click Here
    Jensen Comment
    Government programs are always ripe for the plucking by ex-generals and criminal politicians, most especially Louisiana politicians who've been notoriously corrupt since the Louisiana Purchase in 1803. Crime just grows and grows hand-in-hand with government programs and Louisiana seems to steal more than its fair share from Federal programs. For Louisiana criminals, of all races, Katrina was indeed a perfect storm.
    Each place has its own advantages - Heaven for the climate and Hell for society.
    Mark Twain
    A church that wanted to do something special for Hurricane Katrina victims gave a $75,000 house, free and clear, to a couple who said they were left homeless by the storm. But the couple turned around and sold the place without ever moving in, and went back to New Orleans. "Take it up with God," an unrepentant Joshua Thompson told a TV reporter after it was learned that he and the woman he identified as his wife had flipped the home for $88,000. Church members said they feel their generosity was abused by scam artists . . . The church was also shocked by an ungrateful interview the couple gave with WHBQ-TV in Memphis. "I really don`t like this area," said Delores Thompson. "I really didn`t, and I didn`t know anybody, so that`s why I didn`t move in and I sold it."
    "2 unrepentant about selling Katrina gift," The Angola Press, November 22, 2006 --- 
    http://www.angolapress-angop.ao/noticia-e.asp?ID=489462 
    Also see http://community.myfoxmemphis.com/blogs/category/NEWS 
    "They came in humble like they really needed a new start, and our hearts went out to them," said Jean Phillips, a real estate agent and member of the Temple of Deliverance Church of God in Christ. "They actually begged for the home." . . . "Do I have any legal problems? What do you mean? The house was given to me," Delores Thompson said. "I have the paperwork and everything." She refused further comment and hung up.
    WTOP --- http://www.wtop.com/?nid=104&sid=982862 
    Jensen Comment
    We can only hope that God takes it up with scammers like Joshua and Delores Thompson. If we could get a glimpse of them ten years from now my guess is that they will not be so proud and happy that they scammed the Good Samaritans. It would be fantastic if they prospered and became reformed Good Samaritans themselves --- but in the meantime don't hold your breath!
    British criminal psychologists are putting together a list of the 100 most dangerous murderers and rapists before they have committed any such crimes, The Times said.
    "British police targeting would-be criminals before they offend," PhysOrg, November 27, 2006 ---http://physorg.com/news83838079.html 
    Jensen Comment
    In the U.S., our ACLU would never tolerate such a crime prevention move even against our even our most threatening criminals.
    And contrary to the United Nations resolutions, contrary to the official policy of the United States government, contrary to the Quartet so-called road map, all of those things – and contrary to the majority of Israeli people's opinion – this occupation and confiscation and colonization of land in the West Bank is the prime cause of a continuation of violence in the Middle East," he said.
    "Carter blames Israel for Mideast conflict:  'Domination' over Palestinians 'atrocious,' ex-prez tells 'Good Morning America'," WorldNetDaily, November 27, 2006 --- http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53120 
    Carter's book "Palestine: Peace Not Apartheid" is so biased that it inevitably raises the question of what would motivate a decent man like Jimmy Carter to write such an indecent book. Whatever Mr. Carter's motives may be, his authorship of this ahistorical, one-sided, and simplistic brief against Israel forever disqualifies him from playing any positive role in fairly resolving the conflict between Israel and the Palestinians. That is a tragedy because the Carter Center, which has done much good in the world, could have been a force for peace if Jimmy Carter were as generous in spirit to the Israelis as he is to the Palestinians. 
    Alan M. Dershowitz, (Harvard Law School). New York Sun, November 22, 2006 --- http://www.nysun.com/article/43958 
    A knowledgeable Lebanese-American casts even more doubt on Carter's scholarship 
    see http://www.wnd.com/news/article.asp?ARTICLE_ID=53154
    Also see http://www.jewishvirtuallibrary.org/jsource/reviews/carter.html 
    One of the most nefarious elements in the book is Carter’s effort to paint Israel as hostile to Christians. He repeatedly refers to “Christians and Muslims” rather than simply the Palestinians in a transparent effort to suggest that Israeli actions were harming Christians and not just Muslims or Arabs. He claims, for example, that “many priests and pastors” were disturbed by the control of Israeli religious parties over “all forms of worship.” On a visit to Jerusalem in 1990, he said he met with a variety of Christian leaders who he said complained of various abuses. He doesn’t offer a single specific example, but tars Israel with bigotry. He then says that Prime Minister Shamir told him that religious parties had authority over all religious matters because of the needs of the coalition government. Carter says that this conversation made him understand why “there was such a surprising exodus of Christians from the Holy Land.” 
    These charges are so vile they require a more substantial response. First, while Christians are unwelcome in Islamic states such as Saudi Arabia, and most have been driven out of their longtime homes in Lebanon, Christians continue to be welcome in Israel. Christians have always been a minority in Israel, but it is the only Middle East nation where the Christian population has grown in the last half century (from 34,000 in 1948 to 145,000 today), in large measure because of the freedom to practice their religion.
    The "progressive" media grows angry with Democrats who do not endorse Jimmy Carter's rage toward Israel
    Instead, Democrats are shoring up their pro-Israel bona fides. They are strikingly anxious because of a courageous new book by President Jimmy Carter that hit American bookstores in mid-November, Palestine: Peace Not Apartheid. 
    Michael F. Brown, "Dems Rebut Carter on Israeli 'Apartheid'," The Nation, November 20, 2006 --- http://www.thenation.com/doc/20061204/brown 
    Jensen Comment
    I don't find solutions in Carter's book that have not already been advocated and tried even by Israel. Carter insists on Israel's right to exist. He's a man a peace who does not advocate wiping out Israel. Liberals who like to be called "progressives" advocate cessation of military and economic backing of Israel. Do progressives really want Israel so wounded and dying that Israel seriously considers resorting to its huge nuclear arsenal.  As usual, the "progressives" are long on criticism but short on alternatives. So is Jimmy Carter. Finding solutions is not nearly as much fun as finding fault.
    Most chilling of all, could the festering differences precipitate a military confrontation involving the use of nuclear weapons? It is known that Israel has a major nuclear arsenal and the capability to launch weapons quickly, and some neighboring states are believed to be attempting to acquire their own atomic bombs. Without progress toward peace, desperation or adventurism on either side could precipitate such a confrontation.
    Jimmy Carter, Palestine: Peace Not Apartheid
    A joint paratrooper and Shin Bet force uncovered an explosive lab in Nablus Friday night. In the lab, the forces found teddy bears with wires hanging from them, apparently slated to be used as explosive devices . . . Captain Assaf Cabra, a company commander at the Haruv battalion, addressed the operation at the time: "We launched a regimental operation in Nablus, which included searches, seizing weapons and arrests. We uncovered the explosive lab in the casba, which contained between 40 to 50 kilograms (88 to 110 pounds) of explosives for preparing explosive devices." 
    "Nablus: Explosive teddy bears found in lab," YNet News, November 25, 2006 --- http://www.ynetnews.com/articles/0,7340,L-3332360,00.html 
    Jensen Comment
    When the teddy bears blow up in the faces of children, Jimmy Carter reminds them that their parents really caused the pain and suffering. In fairness, Israel's recklessness has killed and maimed children in Palestine. But it is a particularly vile deed to deliberately plant explosives in toys for children.
    Denmark, once the symbol of a welcoming welfare state, is becoming part of an anti-immigrant backlash sweeping across Europe. Sentiments once associated with ultra right-wing parties are becoming mainstream.
    Sylvia Poggioli, "Danes' Anti-Immigrant Backlash Marks Radical Shift," NPR, November 20, 2006 --- http://www.npr.org/templates/story/story.php?storyId=6505809 
    French presidential candidate Jean-Marie Le Pen is drawing support again this year for his anti-immigrant stance. The extreme-right politician is pushing for a welfare system that favors indigenous French . . . Immigration -- code for Muslim immigration -- was the convention's hot-button issue.
    Sylvia Poggioli, "Anti-Immigrant Policy Boosts France's Le Pen Again," NPR, November 22, 2006 --- http://www.npr.org/templates/story/story.php?storyId=6522463 
    The second element is definitiveness. Our political figures say they have to concentrate on an overall, long-term, comprehensive answer to the immigration problem. So they huff and puff about the long-term implications of this move or that, and in the end they do nothing. They are like people in a burning house who sit around discussing the long-term efficacy of various kinds of water hoses while the house burns down around them.
    Peggy Noonan, "What Grandma Would Say:  We don't need to solve the immigration problem forever. We need to solve it now," The Wall Street Journal, November 24, 2006 --- http://www.opinionjournal.com/columnists/pnoonan/?id=110009288 
    With political junkies looking ahead to the 2008 presidential race, two of the names often mentioned as leading contenders for the GOP nomination – John McCain and Rudy Giuliani – are being called "disastrous" for the Republican Party by Rep. Tom Tancredo, R-Colo. Both of those individuals, of course, would be disastrous for us for a variety of reasons, not the least of which is their position on immigration, which is to open the border," Tancredo told WND in an exclusive interview.
    Joe Kovacs, "Tancredo: McCain, Giuliani would be disastrous for GOP," WorldNetDaily, November 22, 2006 --- 
    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53039 
    Jensen Comment
    Senator McCain's "open border stance," like a lot of his stances, is no more solid than flubber. He voted both times to build the border fence despised by Mexico and favored heavily by his Arizona constituency. To see how the U.S. Senate (Republicans and Democrats alike) voted overwhelmingly to build a useless wall between the U.S. and Mexico, go to http://www.trinity.edu/rjensen/book06q4.htm#BorderFence 
    Since being for an open border will be political suicide for the 2008 elections, it's entertaining to watch Congress dance the proverbial sidestep. The great majority of our legislators will proudly point to their votes in favor of building a border wall and then find all sorts of excuses not to fund the actual construction.  Even more of a hot potato will be amnesty for millions of  illegal immigrants already residing in the U.S. I favor a  one-time amnesty coupled with elimination of citizenship of babies born to on U.S. soil to mothers who are not citizens. Bush strongly supports amnesty and citizenship to all babies born in the U.S. in the face of overwhelming opposition among voters. Counterfeiters are now cranking out thousands of phony birth certificates daily in anticipation of bringing in more more parents from Mexico. This will be a booming business until babies are not granted automatic citizenship regardless of citizenship status of the parents.
    Half of the 91,516 illegal aliens from terror-sponsoring countries and those of "special interest" apprehended at the border between 2001 and 2005 were released into the U.S. population, according to a report by the inspector general's office of the Department of Homeland Security. The report, "Detention and Removal of Illegal Aliens," released earlier this year with little fanfare or attention, suggests about 85 percent of those aliens – potentially the most dangerous – would abscond and likely never be seen by authorities again. Acknowledging the danger such aliens pose to the national security, the report cites a DHS official testifying that terrorist organizations "believe illegal entry into the U.S. is more advantageous than legal entry for operations reasons."
    "45,000 terror-threat illegals released into U.S. population:  Half from countries of 'special interest' let go between 2001, 2005, says report," WorldNetDaily, November 29, 2006 --- 
    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53151 
    A South African man has been fined $140 for taking a week off work, telling his employers he was pregnant. Charles Sibindana, 27, stole a certificate from a clinic during his pregnant girlfriend's checkup, a court near Johannesburg heard. He then added his own details to the note and submitted it and took seven days off work, seemingly unaware that only women consult gynaecologists (sic) . His employers became suspicious and investigated the matter. 
    "'Pregnant' man fined in SA court," BBC News, November 28, 2006 --- http://news.bbc.co.uk/2/hi/6190772.stm?lspan 
    Jensen Comment
    This sort of dashes his hopes for maternity leave, but he might still conjure up a miracle by moving to New Orleans.
     
    
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    A Primer on Electronic Communication
    Often enough we are faced with a question that can best be answered by someone else, possibly a complete stranger. The upside of the Internet is that we can quickly contact folks without much effort. The downside of the Internet is that people can contact us without much effort. This reality is very present in academe today — where senior professors constantly gripe about being overwhelmed by inappropriate e-mail, to the point where some hide their e-mail addresses. Graduate students and researchers of all kinds, meanwhile, agonize over how to approach an eminent scholar with a query, and trade strategies for actually getting an answer.
    Eszter Hargittai, "A Primer on Electronic Communication," Inside Higher Ed, November28, 2006 --- http://www.insidehighered.com/workplace/2006/11/28/hargittai 
     
     
    November 29, 2006 reply from Scott Bonacker [aecm@BONACKER.US] 
    That is good - thanks for posting the link. 
    Here's another one - http://catb.org/%7Eesr/faqs/smart-questions.html  
    The subject of this one is different, but the procedures are intended to reach the same result. 
    Scott Bonacker, CPA 
    Springfield, Missouri
    "How To Ask Questions The Smart Way" by  Eric Steven Raymond http://catb.org/%7Eesr/faqs/smart-questions.html 
    
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    Question 
    What radio broadcast had the largest audience in history?
     
    You can listen to it here --- http://www.npr.org/templates/story/story.php?storyId=6515548 
     
     
    The 1938 boxing rematch between American Joe Louis and German Max Schmeling is believed to have had the largest audience in history for a single radio broadcast. In 2005, the Library of Congress selected it for the National Recording Registry.
    "The Fight of the Century: Louis vs. Schleming," NPR, November 25, 2006 --- 
    http://www.npr.org/templates/story/story.php?storyId=6515548 
     
     
    
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    2006 Update on WorldCom Fraud
    U.S. Judge Denise Cote of the U.S. Court for the Southern District of New York said the distribution should be made "as soon as practicable." More than one dozen investment banks, including Citigroup Inc. and JPMorgan Chase & Co., agreed to pay about $6.15 billion to resolve allegations that they helped WorldCom sell bonds when they should have known the phone company was concealing its true financial condition. The remaining balance from available settlement funds will continue to accrue interest until other claims are processed and disputed claims are resolved, Cote said in her four-page order.
    "Judge OKs $4.52 bln payout to WorldCom investors," Reuters, November 29, 2006 --- Click Here 
    2005 Update on WorldCom Fraud
    Former WorldCom Investors can now claim back some of the billions of dollars they lost in a massive accounting fraud, after a federal judge approved legal settlements of "historic proportions." The deal approved Wednesday by U.S. District Judge Denise Cote, will divide payments of $6.1 billion among approximately 830,000 people and institutions that held stocks or bonds in the telecommunications company around the time of its collapse in 2002.
    Larry Neumeister, "Judge OKs $6.1B in WorldCom Settlements," The Washington Post, September 22, 2005 --- http://snipurl.com/WorldcomSettlement   
    University of California gets a settlement from Citigroup as part of its losses in the WorldCom accounting scandal
    Citigroup has agreed to pay the University of California more than $13 million to settle a lawsuit over liability for the university’s investments in WorldCom, a company that collapsed in 2002. The university sued over inaccurate analyses of WorldCom, which led UC to pay more than it would have otherwise to buy stock in the company.
    Inside Higher Ed, April 7, 2006 --- http://www.insidehighered.com/news/2006/04/07/qt 
    The WorldCom audit by Andersen is arguably the worst audit in history. Bob Jensen's threads on the WorldCom scandal are at http://www.trinity.edu/rjensen/FraudEnron.htm#WorldCom 
     
    
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    Question
    What do professors think are the top accounting education programs in the U.S.?
     
    The Public Accounting Report on October 30, 2006 published its rankings of the universities having the top undergraduate, masters, and doctoral programs in accounting. The University of Texas hung on to the top rankings in all three categories --- http://www.mccombs.utexas.edu/news/pressreleases/PAR_06.pdf 
     
    Of course these rankings are subject to all the criticisms of college rankings in general --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#BusinessSchoolRankings 
    Be that as it may, these rankings are very important for both fund raising and student recruiting activities.
     
    
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    AHP = Analytic Hierarchy Process
     
    November 15, 2006 message from Al-Mashari Gmail 
    I hope that you are doing well. Could you, please, send me your papers and any related references that use AHP especially in the computer filed. As I'm interested in this filed. 
    Thanks in advance for your expected cooperation. 
    Yours B. Al-Mashari
    November 20, reply from Bob Jensen
    I’m sorry that most of those old, like me,  Analytic Hierarchy Process papers were discarded when I moved across the U.S. to my retirement cottage. 
    I am able to attach my unpublished Working Paper 127 entitled “COMPARISONS OF EIGENVECTOR, LEAST SQUARES, CHI SQUARE, AND LOGARITHMIC LEAST SQUARES METHODS OF SCALING A RECIPROCAL MATRIX” --- http://www.trinity.edu/rjensen/127WP/127WP.HTM  
    I did find one of our old published papers online.
    "Analytic Hierarchy Process Multivariate Analysis of Expert Judgment Regarding Alternative Analytical Review Procedures: An Empirical study," with C.E. Arrington and W.A. Hillison, Journal of Accounting Research, Vol. 22, No. 1, Spring 1984, 298-312 --- http://www.jstor.org/view/00218456/di008028/00p0193i/0 
     
    One of my doctoral students, Ed Arrington, used AHP in a clever doctoral dissertation at Florida State University --- http://wwwlib.umi.com/dissertations/ 
     
     
    My published papers on AHP are available in some libraries --- http://www.trinity.edu/rjensen/resume.htm#Published 
     
    49.
    "A Dynamic Analytic Hierarchy Process Analysis of Capital Budgeting Under Stochastic Inflation Rates and Risk Premiums," Advances in Financial Planning and Forecasting, Vol. 2, 1987, 269-302.
    48.
    "Extension of Consensus Methods For Priority Ranking Problems: Eigenvector Analysis of 'Pic-the-Winner' Paired Comparison Matrices," Decision Sciences, Vol. 17, Spring 1986, 195-211.
    45.
    "Matrix Scaling of Subjective Probabilities of Economic Forecasts: An Empirical Study," Economics Letters, Vol. 20, 1986, 221-225. With Roger W. Spencer of Trinity University Economics Department.
    42.
    "An Alternative Scaling Method for Priorities in Hierarchical Structures," Journal of Mathematical Psychology, Vol. 28, No. 3, September 1984, 317-332.
    41.
    "Analytic Hierarchy Process Multivariate Analysis of Expert Judgment Regarding Alternative Analytical Review Procedures: An Empirical study," with C.E. Arrington and W.A. Hillison, Journal of Accounting Research, Vol. 22, No. 1, Spring 1984, 298-312 --- http://www.jstor.org/view/00218456/di008028/00p0193i/0 
    39.
    "Aggregation (Composition) Schema for Eigenvector Scaling of Priorities in Hierarchial Structures," Multivariate Behavioral Research, Vol. 18, January 1983, 63-84.
    38.
    Review of Forecasts: Scaling and Analysis of Expert Judgments Regarding Cross-Impacts of Assumptions of Business Forecasts and Accounting Measures, (Sarasota, FL: American Accounting Association, 1983).
    36.
    "Scaling Multivariate performance Criteria: Subjective Composition Versus the Analytic Hierarchy Process," with C.E. Arrington and Masao Takutani (of Seiker University in Japan), Journal of Accounting and Public Policy, Vol. 1 Winter 1982, 95-125.
    34.
    "Competition in Auditing: An Assessment" in Symposium on Auditing Research IV (Urbana, IL: The Board of Trustees of the University of Illinois, 1982, 451-468).
    33.
    "Accounting Futures Analysis: An Eigenvector Model for Subjective Elicitations of Variations in Cross-Impacts Over Time," Decision Sciences, January 1982, Vol. 13, 15-37.
    32.
    "Scenario Probability Scaling: An Eigenvector Analysis of Elicited Scenario Odds Ratios," Futures, December 1981, Vol. 13, 489-98.
    31.
    "The Evaluation of Generic Cross-Impact Models: A Revised Balancing Law for the R-Space Model," Futures, June 1981, 217-220.
    28.
    "A Dynamic Programming Algorithm for Cluster Analysis," Mathematical Programming in Statistics, Edited by Arthanari and Dodge, New York, John Wiley & Sons.
    Hope this Helps,
     
    Bob Jensen
    
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    Return to the Oxford Model in U.S. Universities
     
    "Hogwarts U.," by Robert J. O’Hara, Inside Higher Ed, November 28, 2006 --- http://www.insidehighered.com/views/2006/11/28/ohara 
    What does private and wealthy Princeton University have in common with the public and less-wealthy University of Central Arkansas? What links Acadia University in the Canadian Maritimes and Vanderbilt University in the American South? What does the new International University in Bremen, Germany, share with the Universidad de las Américas, in Puebla, Mexico? 
    Each of these institutions has established, is planning, or is expanding an internal system of residential colleges: permanent, cross-sectional, faculty-led societies that bring the educational advantages of a small college into the environment of a large university. This wave of college founding, taking place in public and private institutions from Kentucky to Louisiana, from Missouri to Florida, from Pennsylvania to Arkansas, and elsewhere around the world, is one of the most substantive structural reform movements in higher education today, and it promises to repair a half-century of destructive bureaucratic centralization. 
    Dividing a large university into cross-sectional residential colleges is not a new idea: it is the organizational structure of Oxford, Cambridge, and Durham Universities in Great Britain, and as such is one of the oldest ideas in higher education. The collegiate organizational model is common in universities in Canada, Australia, and New Zealand, and it was adopted by the undergraduate divisions of Harvard and Yale Universities in the 1930s and by Rice University in the 1950s. But residential college systems have remained rare in American higher education until quite recently. Paradoxically, they are better understood by many American undergraduates today than by American senior faculty and administrators, since, as students often remind me, the collegiate model is “just like Harry Potter.” The fictional School of Witchcraft and Wizardry in J.K. Rowling’s popular young adult novels is divided into a system of four “houses” that parallel, in their structure, the structure of a collegiate university.
    Although many universities that are in the process of establishing residential college systems are also embarking on construction projects at the same time, the two do not have to be connected. Creating residential colleges within a larger institution is more a matter of arranging resources that already exist than it is a matter of acquiring new resources. It need not be expensive, and it doesn’t require any changes to the curriculum.
    The residential college movement today is guided not by financial concerns or questions of curricular reform, but rather by four organizational principles: decentralization, faculty leadership, social stability and genuine diversity. Each of these principles attempts to repair a portion of the damage that was wrought during the “industrialization” of higher education in the post-World War II era, and especially in the post-1960s era, two periods of widespread bureaucratic massification when student numbers exploded, central administrative offices proliferated, faculty retreated, high-rise dormitories sprouted, and alienation spread.
    Decentralization is a fundamental principle of both new and old residential college systems because all education is local. Real education — the substantive development of intellect and character — depends on sustained personal contact between students and teachers over the long term. But universities forgot this basic principle when they ballooned in size from the 1960s onward. No matter how many slogans campus public relations people may invent about being “student-centered” and “caring,” a university with high-rise dormitory towers, vast impersonal dining halls, and central advising offices that students report to for 15 minutes each term to have their schedules checked cannot possibly offer the sustained, local, personal contact that is fundamental to real education. The slogans are phony, and the students know it.
    Small, decentralized residential colleges counteract the effects of educational massification by bringing students and faculty from all academic disciplines together into rich and cohesive social communities. Because of their small size — 400 members is ideal — residential colleges ensure that all students are known one by one, and that no student is anonymous. And while these collegiate societies are usually called “residential” colleges, they need not be entirely residential, and can be established within any university regardless of the number of students who actually live on campus. The emphasis is on the word college as a small, intimate society of members, rather than on the word residential.
    Faculty leadership of residential college systems is fundamental because as universities became more centralized and bureaucratic over the past half-century, the oversight of campus life within them was largely handed off to a class of full-time residence life managers. However well-meaning these officials have been, because they are detached from the academic structure of the university, they have not been able to create meaningful educational environments for students. Even more noxiously, some universities have come to see campus dormitories as income-generating tools analogous to parking lots and vending machines. For more than a generation these deep structural flaws have cheated students out of the most important thing a university can offer them: sustained personal contact with their teachers in a rich and diverse educational environment for years at a time.
    Residential college systems return the management of campus life to the faculty, and distribute most of the functions now performed by departments of student affairs and residence life into the faculty-led residential colleges. And they treat student life and housing as academic functions of a university, not as business functions. Residential colleges, as faculty-led academic societies, are consciously crafted to provide a wide range of informal educational opportunities for their members day and night, week after week, year after year. Their object is to ensure that students’ formal learning in the classroom is integrated in every way with their external life in the world.
    Continued in article
     
     
    
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    From Dartmouth College
    Chance News --- http://chance.dartmouth.edu/chancewiki/index.php/Main_Page 
    Tutorial on Statistics (focus is on learning exercises and how to view media reports critically)
     
    A list of some useful links related to Statistics Education from Juha Puranen, Department of Statistics, University of Helsinki --- http://noppa5.pc.helsinki.fi/links.html 
     
     
    Online Tutorials for Learning About Statistics and Research
    Against All Odds: Inside Statistics ---  http://www.learner.org/resources/series65.html 
     
     
    Bob Jensen's links to free online mathematics and statistics tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#050421Mathematics  
     
     
    
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    Can I Have A Word? [Helpers for Writers and Poets] --- http://www.barbican.org.uk/canihaveaword/ 
     
    Bob Jensen's writing helpers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Dictionaries 
     
     
    
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    Open Sharing Tutorial on Environmental Water Science
    Water on the Web --- http://waterontheweb.org/index.html 
     
    Water on the Web (WOW) helps college and high school students understand and solve real-world environmental problems using advanced technology. 
    WOW is a complete package containing two sets of curricula, data from many lakes and rivers nationwide, extensive online primers, data interpretation and Geographic Information System Tools, and additional supporting materials. 
    Basic Science consists of individual lessons for infusion into a wide range of exisiting science cources. Water Resource Science is a two-semester water resource management curriculum for second year technical students and undergraduates in water or environmental management disciplines.
    Bob Jensen's threads on free online science tutorials are at http://www.trinity.edu/rjensen/bookbob2.htm#Science 
     
    
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    Truck Driver Test Questions & Answers
    CDL Online Practice Questions --- http://www.testprepreview.com/cdl_practice.htm 
     
    
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    "Choosing Who Can See What on Your Blog:  Web Service Offers Features For Privacy, Adding Media; Registration Is a Turn-Off ," by Walter S. Mossberg and Katherine Boehret, The Wall Street Journal, November 22, 2006; Page D7 --- http://online.wsj.com/article/the_mossberg_solution.html 
    A big problem with blogs is privacy. While some people -- especially MySpace fans -- don't mind posting personal news, photos and videos for anyone to read, many of us hesitate to leave details about our personal lives online. 
    This week, we tested a new, free blogging service called Vox, www.vox.com, from Six Apart Ltd., a blogging software company. One of Vox's best attributes is its ability to label each individual post, or entry, with a different privacy filter, so that instead of setting your blog to be entirely private or entirely public, you can pick and choose what you want to share. 
    Vox also excels at making it easy to add photos, audio, videos and book links to your blog without any prior expertise. It lets you incorporate content from Web sites like YouTube, Amazon and photo-sharing site Flickr in only a couple of steps. Viewing of each multimedia element can also be restricted to people you choose. Vox is supported by ads that aren't intrusive or distracting. 
    We each made a blog in Vox, and updated them several times. We found the process to be quick and simple, and the results to be attractive. We liked the privacy features. But while its intentions are good, Vox has a few downsides. Its idea of making each blog post visible to different groups is useful. But everyone who views your privacy-protected entries must also be registered with Vox, a quick process, but one that will discourage many potential users.
    Also puzzling are Vox's categories for labeling those who view your blog. Everyone must be labeled as friends, family or neighbors, but the filters that determine who can view your posts don't include neighbors at all. 
    Vox also doesn't do a great job of implementing many features that are standard in blog services. These features include interactive elements on a page such as drag-and-drop organizing. 
    We got started by signing up for Vox -- a process that involved entering our email address, creating a password and URL, and entering personal information. A Design section walked us through choosing a layout and theme from numerous choices. Katie chose the Cityscape Washington, D.C., theme, which includes the Capitol and Washington Monument. Walt chose Firefly Night, which includes the moon and stars and a silhouette of a tree. 
    To prompt you to blog, the Vox homepage always offers a Question of the Day, or QOTD. With one click, you can optionally answer the QOTD in your own blog. When you post your answer, or enter any post, a drop-down menu lets you choose who can view it: The World (Public), Your Friends and Family, Your Friends, Your Family or Just You. If, for example, you choose to allow only your friends to see a post, other groups won't know that they're not seeing the friends-only post. 
    If you see another person's Vox blog and would like to bookmark it so that his or her latest entries are constantly updated on a special page just for you, you can add that blogger to your neighborhood. Friends and family are automatically part of your neighborhood, but when choosing who can see your content, neighborhood isn't an option. Vox plans to make the neighborhood concept more understandable in an updated version due out by December.
    Continued in article
     
    Bob Jensen's threads on Weblogs and blogs are at http://www.trinity.edu/~rjensen/245glosf.htm#Weblog 
     
     
    
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    "Thinking Machines:  Danny Hillis talks about the real-world challenges of creating artificially intelligent machines," by  Jason Pontin, MIT's Technology Review, November 14, 2006 --- http://www.technologyreview.com/InfoTech/17709/ 
     
    In 1982, when he was still a student at MIT, Danny Hillis cofounded Thinking Machines, one of the most famous failures in the history of computing. A hive of wayward and brilliant researchers, Thinking Machines tried to build the world's first artificial intelligence. But if the company did not succeed in "building a machine that will be proud of us" (its corporate motto), its Connection Machine demonstrated the practicality of parallel processing, the foundation of modern supercomputing. Today, Danny Hillis is cochair of Applied Minds, a design and invention company, and he is building the Clock of the Long Now, a mechanical timepiece meant to last 10,000 years.
    TR: Why is creating an artificial intelligence so difficult?
    Hillis: We look to our own minds and watch our patterns of conscious thought, reasoning, planning, and making analogies, and we think, "That's thinking." Actually, it's just the tip of a very deep iceberg. When early AI researchers began, they assumed that hard problems were things like playing chess and passing calculus exams. That stuff turned out to be easy. But the types of thinking that seemed effortless, like recognizing a face or noticing what is important in a story, turned out to be very, very hard.
    TR: Why did Thinking Machines fail to create a thinking machine?
    Hillis: Well, the glib answer is that we just didn't have enough time. But enough time would have been decades, maybe lifetimes. It is a hard problem, probably many hard problems, and we don't really know how to solve them. We still have no real scientific answer to "What is a mind?"
    TR: The Connection Machine was an effective platform for supercomputing. Why didn't Thinking Machines prosper as a supercomputing company?
    Hillis: Supercomputing turned out to be a technology, not a business. My friend Nathan Myhrvold, who was running Microsoft Research at the time, once told me, "It is at least as hard to make software for a supercomputer as for a PC, but you only have a few thousand customers, and we have billions. Not only that, but each of those customers actually expects you to give them exactly what they need." 
    TR: What were the successful commercial applications of the research at Thinking Machines?
    Hillis: The commercial applications were mostly chip design, data mining, text search, cryptology, computational chemistry, computer graphics, financial optimization, seismic processing, and fluid flow modeling. Scientific applications like astronomy, climate modeling, or quantum chromodynamics were exciting when they helped get a result on the cover of Nature, but we never made money on them.
    TR: What happened to the patents from Thinking Machines? More than anyone else, you are responsible for massive parallel processing. You get credit, but no payment. Who gets it, and why?
    Hillis: Well, first of all, I should be clear that I am just one of many people who contributed to developing massively parallel computing. As for the patents, one of the consequences of Thinking Machines' failure is that I lost any rights to the technologies. In retrospect, that turned out to be a blessing, because it saved me from spending the next decade of my life in court. 
    Continued in article
    
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    ProQuest Digital Dissertations ---  http://wwwlib.umi.com/dissertations/  
     
    Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm 
     
    
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    Bad FEI Audio With Good Intentions
     
    FEI had good intentions when putting out audio clips of a series of interviews with some of the leaders of the financial reporting community. I thank Denny Beresford for sending me the link and a warning that the audio was bad ---
    http://www.phillivingston.com/FEI CFRI/testing.html 
     
    I found the audio to be so broken up that I could hear these interviews. Perhaps the fact that the file is named "testing" means that better recordings will be posted later. 
     
    I was glad to see Phil is still with the FEI. I once had lunch with him and was impressed that a 6-foot-ten Super Bowl lineman (Oakland) could be so articulate and knowledgeable. 
     
     
    
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    From the University of Illinois Issues in Scholarly Communications Blog on November 21, 2006 --- http://www.library.uiuc.edu/blog/scholcomm/ 
     
    Top 100 Global Universities
    An August 2006 article in the international edition of Newsweek evaluated universities from around the world on their "globalness", providing a ranked list of the top 100. We're pleased to see that one of their criteria was the size of the library.
    We evaluated schools on some of the measures used in well-known rankings published by Shanghai Jiaotong University and the Times of London Higher Education Survey. Fifty percent of the score came from equal parts of three measures used by Shanghai Jiatong: the number of highly-cited researchers in various academic fields, the number of articles published in Nature and Science, and the number of articles listed in the ISI Social Sciences and Arts & Humanities indices. Another 40 percent of the score came from equal parts of four measures used by the Times: the percentage of international faculty, the percentage of international students, citations per faculty member (using ISI data), and the ratio of faculty to students. The final 10 percent came from library holdings (number of volumes).
    The top 10 were:
     
    
    1. Harvard University 
    2. Stanford University 
    3. Yale University 
    4. California Institute of Technology 
    5. University of California at Berkeley 
    6. University of Cambridge 
    7. Massachusetts Institute Technology 
    8. Oxford University 
    9. University of California at San Francisco 
    10. Columbia University 
    The University of Illinois at Urbana-Champaign came in 48th, behind other big ten universities such as Michigan (11), U Chicago (20), Wisconsin (28), Minnesota (30), Northwestern (35), and Penn State (40). Others from the Big 10 that made the list of 100 included Michigan State (62), and Purdue (86).
    Read the entire list of the 100 top global universities at MSNBC as well as a related story. 
    Note: You may also be interested in reading the Times of London's analysis of the "Top 100 Universities", worldwide. By their accounting, the University of Illinois ranked 58 in 2005 and 78 in 2006. According to this listing, the top universities are:
    1. Harvard
    2. Cambridge
    3. Oxford
    4. MIT
    4. Yale
    6. Stanford
    7. California Institute of Technology
    8. UC Berkeley 
    9. Imperial College, London
    10. Princeton
    11. University of Chicago
    Controversial issues in rankings of universities are discussed at http://www.trinity.edu/rjensen/HigherEdControversies.htm#BusinessSchoolRankings 
     
    
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    Question
    Are there any respected online doctoral programs in accountancy?
     
    November 16, 2006 message from David Raggay [draggay@TSTT.NET.TT] 
     
    Please forgive me bringing up this topic again. I know that things are rapidly changing and I also ask the question from a broader perspective than the initial query.. 
    Are any of the current online doctorate programs in business/accounting and/or finance highly recommended? If so which ones? 
    Alternatively, are there any highly recommended part-time programs in the areas mentioned above? If so which ones? 
    Regards, 
    David 
    November 16, 2006 reply from Richard Campbell [campbell@RIO.EDU] 
    David: 
    Let me relate my experience in investigating an online Ph.D. program in accounting - www.sarasota.edu  (Florida) - part of Argosy University. They have revised their web site, and the information that I talk about may not now be currently referenced on their web site. The web site referred to the lead accounting professor as being a Ph.D. graduate of the University of Buffalo. I checked the U of Buffalo web site and his name was not included on the list of Ph.D graduates on a list that went back to 1970. There was no link to a vita of that professor. There WAS a mention, however, that the professor was an excellent woodworker. Incidentally, I feel strongly that all students have the ability to see the vita of their professors. I have mine on my own web page. I urge my local colleagues to do the same. 
    I called the North Central accrediting agency and asked if U of Sarasota was accredited - and I was told they were - as part of the Illinois Argosy connection. I then called the Admissions counselor at Sarasota U and asked a few questions. I got the "hard sell" and was told that my studies would be a pleasant journey, although a costly ($30K) one. I would be able to arrange the quarterly Florida visits around trips to Disney World, Cape Canaveral and other hot spots. I then asked the counselor some questions that she could not readily answer. 1. Could you verify that Accounting Professor X is a Ph.D. graduate of the University of Buffalo, and could you provide me a vita for him? 2. Could I have a list of ALL your FULL TIME faculty with their degrees and vitae? 3. Could you provide me with a list of graduates and their current professional affiliations? 4. Can you give me more information about the accreditation process of your Ph.D program? 
    My questions must have been unanswerable - I never received a response in return. 
    Some additional observations - some accrediting agencies are simply NOT doing their jobs in discriminating diploma mills from legitimate institutions. And some legitimate institutions are cheapening their reputations by lending their good names to dubious ventures who just build a graphically pleasing web site. 
    So in summary, I don't know if there are legitimate online business doctoral programs out there. 
    Richard J. Campbell 
    School of Business 
    218 N. College Ave. 
    University of Rio Grande Rio Grande, OH 45674
    http://faculty.rio.edu/campbell 
     
    November 17, 2006 reply from Bob Jensen
    Hi David, 
    I spend a lot of time tracking distance education and training programs. I know of NO (NONE, NILL) respected alternatives for an online doctoral degree in accounting. There are a few respected doctoral programs in selected disciplines like education, pharmacy, and law (a JD is a doctoral degree) --- http://www.trinity.edu/rjensen/Crossborder.htm  
    Since I've made presentations for you in Trinidad, I'm well aware that you reside outside the U.S. But for U.S. residents, the best alternative is probably to earn a distance education masters degree in accounting or tax and then a JD degree in a respected online law school program or an EED from a respected College of Education. Remember that above all else the recognizable name of the university on the diploma means more than anything else on the diploma (including the discipline of study). 
    There are many online masters programs in accountancy since so many highly respected state universities have added online programs to their onsite masters degree programs --- http://www.trinity.edu/rjensen/crossborder.htm#MastersOfAccounting  
    There are some gray zone doctoral programs like Nova's programs, but I don't yet have high regards for Nova. The Nova formula is to hire doctoral faculty who moonlight for Nova, but nobody has ever convinced me that a Nova doctoral degree is respected for a tenure track position in a respected university even though there may be some respected baccalaureate Nova alternatives --- http://www.nova-university.org/
    It may be possible to negotiate with some respected doctoral programs for an increased balance of online courses combined with onsite requirements. But I doubt that the there is a very serious proportion of accounting doctoral courses that can be taken online. 
    Remember that doctoral programs generally have negligible requirements for accounting and tax courses and don't require many, or any, of those courses from their masters degree programs. Doctoral studies courses are in mathematics, statistics, econometrics, psychometrics, and economic theory. Doctoral program advisors are very particular about content in those courses and very few online courses suffice for these accountics, yes I spelled that accountics, foundation courses --- http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm  
    I must admit that I've not investigated all foreign alternatives for distance education doctoral degrees. For example, there might be one or two popping up among the vast number of distance education alternatives in the United Kingdom --- http://www.trinity.edu/rjensen/crossborder.htm#England  
    But I've not yet encountered a respected doctoral degree program. 
    The classic U.K. doctorate entails little course work and heavy private tutoring such that U.K. doctorates are more conducive to modern online technology. But respected U.K. universities probably still turn up their noses at online doctoral degrees. They're still pretty stuffy in the U.K. and in former nations of the British Empire.
    Beware of any program for any degree that grants credit for life experience. All God's children have life experience --- http://www.trinity.edu/rjensen/crossborder.htm#CLEP  
    Bob Jensen
    November 17, 2006 reply from J. S. Gangolly [gangolly@CSC.ALBANY.EDU] 
     
    I too agree with most caveats expressed. 
    However, I beg to differ with respect to requiring a PhD in accounting. 
    In my opinion, the ideal candidate would have a liberal education background followed by a CPA (with audit experience) followed by a PhD in any related field (Economics, Criminal Justice, CSI, ...), and finally motivation to do research in accounting related areas. 
    There are very few that fit the bill, but that I think is the ideal background for an academic. 
    Having gone through the doctoral hamster mills in both Operations Research and Accounting (didn't complete PhD in OR due to the demise of my intended supervisor), accounting doctoral education, in my opinion leaves much to be desired, relative to that in other fields. This is as it should be, for accounting is a profession; it is debatable if it is an academic discipline (though, of course it can be). 
    As usual, I am being provocative. 
    Respectfully submitted, 
    Jagdish
     
    
    November 17, 2006 reply from Tom Lechner [acttal@BUSINESS.UTAH.EDU] 
     
    While I agree with almost everything that was said, I would add two precautions. First, I am not at all sure that a Ph.D. in another field would be an acceptable substitute for a Ph.D. in accounting. When I chaired a search committee at a teaching oriented school, we would not consider a Ph.D. in another field. As far as I can recall, the applicant was an MBA/CPA. The applicant lived several thousand miles from the nearest AACSB school that offered a Ph.D., so that applicant had gotten a Ph.D. in education. While we understood the applicant's situation, we did not consider him. 
    Second, I believe that the LLM in law is more equivalent to a Ph.D. than a JD. While an MBA + JD would be acceptable for teaching tax at many schools, it might not provide terminal qualification for a position in another area of accounting. 
    I suggest that you contact some schools that have current openings that you would be interested in. Ask them how they would view various combinations of credentials. 
    Tom 
    Dr. Thomas A. Lechner, CPA 
    Assistant Professor (Lecturer) 
    David Eccles School of Business School of Accounting and Information Systems 
    University of Utah
    November 18, 2006 reply from Bob Jensen
     
    Hi Tom, 
    I agree with what you say. I should have pointed out that in the College of Education there are often two doctoral programs, the EED vs. the PhD. in Education. The EED is more for school administrators and the PhD is more of a traditional teaching and research degree. 
    Although many business programs do not consider either College of Education degree as a terminal qualification, it will enhance other qualifications if it was granted from a highly respected university. Particularly the PhD in Education should enhance both teaching and research skills. It is not very common to encounter such College of Education doctoral degrees in AACSB schools, although JD and LLM degrees are quite common, especially among tax faculty. However, attorneys who also have CPA licenses commonly teach in areas other than tax. 
    Bob Jensen
    November 17, 2006 reply from Bernadine Raiskums [berna@GCI.NET] 
     
    Hi David, 
    I am CPA, CIA, MEd. and currently currently pursuing online PhD in Education from Capella and really would recommend the school for quality of program as well as administration. Capella does have a couple of PhD in business, and an MBA in accounting, but might be worth checking it out. www.capella.edu 
    Bernadine Raiskums in Anchorage 
     
    November 19, 2009 reply from Bob Jensen
     
    Hi Bernadine, 
    We've both written previously and favorably about Capella's distance education programs. I think Capella sets one of the best examples of a for-profit corporation that's a good role model for similar online corporations. 
    I would like to point out that Capella does not yet have online doctoral programs in traditional business education disciplines of accounting, finance, and marketing. It's online organization management doctoral programs to date are linked at http://www.capella.edu/schools_programs/degrees/phd.aspx  
    Specializations: 
    Human Resource Management 
    Information Technology Management 
    Leadership 
    Organization & Management General 
    Capella has even wider arrays of doctoral programs in education and psychology --- 
    http://www.capella.edu/schools_programs/degrees/phd.aspx  
    We are always grateful to hear from students enrolled in distance education graduate programs. 
    Thank you,
    Bob Jensen
    Capella Education’s initial public offering on Friday sent its stock up by about 25 percent, The Pioneer Press reported.
    Inside Higher Ed, November 13, 2006
    
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    New Thoughts About Herman Melville's Sexual Orientation and Multiculturalism
    Herman Melville: great American novelist or great American hipster? Well, it isn’t an either/or kind of situation. Rereading Moby Dick for the first time in ages (now minus the English major’s mental tic of obsessing over how each little part fit into a vast symbolic architecture), I recently underwent the astonishing revelation that Melville (1) definitely has a sense of humor, (2) pretty much invented the postmodern “maximalist” novel of the sort we now associate with Thomas Pynchon, and (3) is so overtly gay and so stridently multiculturalist that Fox News should probably look into how he ever got into the canon.
    Scott McLemee, "Where’s Herman?" Inside Higher Ed, November 22, 2006 --- http://www.insidehighered.com/views/2006/11/22/mclemee 
     
     
    
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    November 21, 2006 message from Dennis Beresford [dberesfo@TERRY.UGA.EDU] 
    Here is a link to an interesting speech by Secretary of the Treasury Paulson on competitiveness of capital markets, with particular emphasis on accounting and auditing related matters.
    Denny Beresford
    http://www.treasury.gov/press/releases/hp174.htm
    
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    From AccountingEducation.com on November 25, 2006 --- http://accountingeducation.com/ 
     
    Most football clubs in England and Scotland will make a loss over the next 12 months, according to their finance directors, despite frantic efforts to rein in spending ahead of the start of the season next month
    "How football (Soccer Football that is) got its finances wrong," AccountancyAge, November 2006 --- http://www.accountancyage.com/accountancyage/specials/2162919/football-got-finances-wrong 
     
     
    
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    From CPANet on November 20, 2006
    AICPA Financial Literacy Initiative
    ------------------------------
    360 Degrees of Financial Literacy - http://www.cpanet.com/up/s0611.asp?ID=1270
    Financial Literacy Resource Center - http://www.cpanet.com/up/s0611.asp?ID=1271
    Feed the Pig - http://www.cpanet.com/up/s0611.asp?ID=1272
    MySpace: Benjamin Bankes - http://www.cpanet.com/up/s0611.asp?ID=1273
    CPAs Asked to Mobilize the Pig - http://www.cpanet.com/up/s0611.asp?ID=1274
    State-Level Involvement - http://www.cpanet.com/up/s0611.asp?ID=1275
    Financial Literacy Topics - http://www.cpanet.com/up/s0611.asp?ID=1276
    Ask the Money Doctor - http://www.cpanet.com/up/s0611.asp?ID=1277
    Blog Your Business
    ------------------------------
    The Unseen Blogosphere: Internal Blogs - http://www.cpanet.com/up/s0611.asp?ID=1278
    BlogWrite for CEOs - http://www.cpanet.com/up/s0611.asp?ID=1279
    Getting the Word Out - http://www.cpanet.com/up/s0611.asp?ID=1280
    A Crash Course in Corp Blogging - http://www.cpanet.com/up/s0611.asp?ID=1281
    16 Ways to Drive Traffic to Your Business Blog - http://www.cpanet.com/up/s0611.asp?ID=1282
    Blogs for Marketing Purposes? - http://www.cpanet.com/up/s0611.asp?ID=1283
    Romancing the Bloggers - http://www.cpanet.com/up/s0611.asp?ID=1284
     
    
     
    
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    Ethanol Use Has No Effect On Carbon Dioxide Levels
    Oil releases carbon that has been deep within the earth for millions of years. Ethanol comes from corn, which procured its carbon from the atmosphere. In other words, ethanol is not introducing any carbon into the atmospheric system that was not there to begin with. Therefore ethanol, unlike oil, can have no net effect on atmospheric carbon dioxide levels. I am no ardent supporter of Big Ethanol. There are plenty of environmental problems associated with cultivating millions of more acres of corn. To say nothing of the massive systems required for fermentation and purification of billions of gallons of fuel. However, it is a step in the right direction and further scientific breakthroughs that could rectify some of these problems might be just over the horizon. Aside from this, doesn't it seem only prudent to diversify our national energy portfolio when facing such loose cannons as Iran and Saudi Arabia?
    James Wagandt, "Ethanol Use Has No Effect On Carbon Dioxide Levels," The Wall Street Journal,  November 25, 2006; Page A9 --- 
    http://online.wsj.com/article/SB116441989972532456.html?mod=todays_us_opinion 
     
     
    
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    Doomsday Hurricane Forecasters Blown Away
    It was not the hurricane season we expected, thank you. With cataclysmic predictions that hurricanes would swarm from the tropics like termites, no one thought 2006 would be the most tranquil season in a decade. Barring a last-second surprise from the tropics, the season will end Thursday with nine named storms, and only five of those hurricanes. This year is the first season since 1997 that only one storm nudged its way into the Gulf of Mexico.
    Neil Johnson, "Hurricane Predictions Off Track As Tranquil Season Wafts Away," The Tampa Tribune, November 27, 2006 --- http://www.tbo.com/news/metro/MGBHKNBE0VE.html 
     
    
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    Updates from WebMD --- http://www.webmd.com/ 
    Latest Headlines on November 24, 2006
    Greater Variation Seen in Human Genome 
    Bird Flu: Mild to Fatal in 2 Countries 
    Contact Lens Solution Recall 
    Eat Your Words? Some Can Taste Them 
    Exercise May Cut Snoring in Kids 
    Need Flu Shot? It's Not Too Late 
    Teen Births Down, Unmarried Births Up 
    Job Burnout May Increase Diabetes Risk 
    Beware Bogus Botox 
    RSS WebMD Health News 
    Latest Headlines on November 28, 2006
    Study: Quit Smoking, Don't Cut Back 
    AIDS May Become No. 3 Cause of Death 
    Age, Obesity, and Breast Cancer Risk 
    Fastest Osteoporosis Drug: Actonel 
    Statin Drugs May Help the Healthy 
    Cancer After Bone Marrow Transplant? 
    Yo-Yo Dieting Ups Men's Gallstone Risk 
    New Clues on How Cancer Spreads 
    'Chemo Brain' May Be Temporary 
    RSS WebMD Health News 
    Latest Headlines on November 29, 2006
    New Urine Test ID's Prostate Cancer 
    Treating Allergies With Allergic Food 
    Study: Quit Smoking, Don't Cut Back 
    AIDS May Become No. 3 Cause of Death 
    Age, Obesity, and Breast Cancer Risk 
    Fastest Osteoporosis Drug: Actonel 
    Statin Drugs May Help the Healthy 
    Cancer After Bone Marrow Transplant? 
    Yo-Yo Dieting Ups Men's Gallstone Risk 
    RSS WebMD Health News 
     
    
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    The Glimmering Promise of Gene Therapy 
    Its history is marred by failures, false hopes, and even death, but for a number of the most horrendous human diseases, gene therapy still holds the promise of a cure. Now, for the first time, there is reason to believe that it is actually working. 
    Horace Freeland, "Part 1:  The Glimmering Promise of Gene Therapy," MIT's Technology Review, November 14, 2006 --- 
    http://www.technologyreview.com/BioTech/17725/ 
    
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    Doctors put bite on snake venom for stroke treatment
    Ancrod, an anti-clotting drug derived from the venom of Malaysian pit vipers, is only effective in treating stroke victims if given within three hours, according to a study that appears in Saturday's Lancet. European doctors assessed ancrod, when administered within six hours of a stroke, against a harmless lookalike compound, called a placebo, among 1,220 patients in Europe, Australia and Israel. No significant benefit was found when the drug was administered beyond three hours, according to the paper. 
    "Doctors put bite on snake venom for stroke treatment," PhysOrg, November 24, 2006 --- http://physorg.com/news83591511.html 
     
    
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    Playing Catch-Up After Lost Time In Alzheimer's Labs
    Orthodoxy also stifles research on other culprits. "Where the field made its mistake was in trying to make everything fit one common [amyloid] pathway," says Robert Mahley, president of the J. David Gladstone Institutes, San Francisco. "We've got to realize there are multiple ways you can wind up with [Alzheimer's]."
    Sharon Begley, "Playing Catch-Up After Lost Time In Alzheimer's Labs," The Wall Street Journal, November 24, 2006; Page B1 --- http://online.wsj.com/article/science_journal.html 
     
     
    
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    Scientists to freeze women's ovaries
    U.S. researchers are launching an experimental program for young female cancer patients in which an ovary is removed and frozen for possible future use. The Center for Reproductive Research at Northwestern University said the program is designed for young women who might be at risk of losing their ovarian function and fertility following treatment for cancer. Teresa Woodruff, associate director of the university's Lurie Comprehensive Cancer Center in Chicago says the long-term goal is to be able to extract and mature eggs from cryopreserved ovarian tissues to initiate pregnancies once cancer treatment has been completed.
    "Scientists to freeze women's ovaries," PhysOrg, November 28, 2006 --- http://physorg.com/news83960481.html 
     
    
    
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    One-off treatment to stop back pain -- Using patients' own stem cells
    A University of Manchester researcher has developed a treatment for lower back pain using the patient’s own stem cells, which could replace the use of strong painkillers or surgery that can cause debilitation, neither of which addresses the underlying cause.Dr Stephen Richardson, of the University’s Division of Regenerative Medicine in the School of Medicine (FMHS), has developed the treatment; and in collaboration with German biotechnology company Arthrokinetics and internationally-renowned spinal surgeons Spinal Foundation are hoping to enter pre-clinical trials next year. It is expected to rapidly yield a marketable product which will revolutionise treatment of long-term low back pain. 
    "One-off treatment to stop back pain -- Using patients' own stem cells," PhysOrg, November 30, 2006 --- http://physorg.com/news84113927.html 
     
     
    
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    Consumers Not Warned of Mercury in Fish 
    Not a single West Virginia grocery store is warning consumers of the possible dangers of mercury in fish, an environmental group says, even though the state and federal governments have been issuing advisories to anglers for at least two years. Oceana, a Washington, D.C.-based activist group, issued a report this week that concludes fewer than 20 percent of the nation's grocery stores are posting in-store warnings about mercury. West Virginia is one of four states with zero in-store warnings, the report says. The others are Mississippi, Alabama and North Dakota.
    "Consumers Not Warned of Mercury in Fish," PhysOrg, November 23, 2006 --- http://physorg.com/news83476474.html 
     
    
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    When it comes to child porn, it pays to have friends in high places
     
    "Court shocker: 10 months for kiddie porn producer:  Democrat activist faced 81 years in jail on charges involving kids as young as 6," WorldNetDaily, November 25, 2006 --- http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53070  
     
    Authorities say Andrew Douglas Reed, 53, who reported for an abbreviated jail term just a few weeks ago, had pleaded guilty to a page-long list of counts of 2nd-degree sexual exploitation of a minor. 
    Court records in the Asheville, N.C., case said he admitted that he would "record, develop and duplicate material containing a visual representation of a minor engaging in sexual activity." That activity is defined by state law as including masturbation, intercourse and "touching – in apparent sexual stimulation or sexual abuse – of the genitals, pubic area or buttocks." 
    However, instead of the 967 months in jail – nearly 81 years – for which he was liable, Judge Robert Lewis, another Democrat, gave him, in a plea bargain with the office of District Attorney Ron Moore, who was elected as a Democrat, a 10-12 month sentence.
     
    Continued in article
     
     
    
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    November 21, 2006 message from Naomi Ragen [nragen@netvision.net.il] 
    If you want to cheer yourself up in a profound way, go to the following website: http://www.arabsforisrael.com/ 
    This is not a hoax, but an actual website, filled with many letters from Arabs and Muslims who reject anti-Semitism and who truly love Israel. It is such an amazing thing to read these letters. For the first time in a long time I realized that real peace could be possible if only our enemy were not brainwashed with lies and causeless hatred, had an elementary education, and had ever met real Jews/Israelis. 
    Below, a remarkable letter posted on the website. 
    Naomi 
    
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    "Friedman's Sampler," by Emily Parker and Joseph Rago, The Wall Street Journal, November 18, 2006 --- http://www.opinionjournal.com/extra/?id=110009267 
    On Freedom
    It is important to emphasize that economic arrangements play a dual role in the promotion of a free society. On the one hand, "freedom" in economic arrangements itself a component of freedom broadly understood, so "economic freedom" is an end in itself to a believer in freedom. 
    In the second place, economic freedom is also an indispensable means toward the achievement of political freedom. . . .
    A citizen of the United States who under the laws of various states is not free to follow the occupation of his own choosing, unless he can get a license for it, is likewise being deprived of an essential part of his freedom. So economic freedom, in and of itself, is an extremely important part of total freedom. 
    The reason it is important to emphasize this point is because intellectuals in particular have a strong bias against regarding this aspect of freedom as important. They tend to express contempt for what they regard as material aspects of life and to regard their own pursuit of allegedly higher values as on a different plane of significance and as deserving special attention. But for the ordinary citizen of the country, for the great masses of the people, the direct importance of economic freedom is in many cases of at least comparable importance to the indirect importance of economic freedom as a means of political freedom.
    Viewed as a means to the end of political freedom, economic arrangements are essential because of the effect which they have on the concentration of power. A major thesis of the new liberal is that the kind of economic organization that provides economic freedom directly, namely, organization of economic activities through a largely free market and private enterprises, in short, through competitive capitalism, is also a necessary though not a sufficient condition for political freedom.
    The central reason why this is true is because such a form of economic organization separates economic power from political power and in this way enables the one to be an offset to the other. I cannot think of a single example at any time or any place where there was a large measure of political freedom without there also being something comparable to a private enterprise market form of economic organization for the bulk of economic activity.
    --from "Capitalism and Freedom: Why and How the Two Ideas Are Mutually Dependent," May 17, 1961
     
    
    
     
    On the Free Market 
    What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really lack of belief in freedom itself. 
    The essence of political freedom is the absence of coercion of one man by his fellow men. The fundamental danger to political freedom is the concentration of power. The existence of a large measure of power in the hands of a relatively few individuals enables them to use it to coerce their fellow men. Preservation of freedom requires either the elimination of power where that is possible, or its dispersal where it cannot be eliminated. 
    It essentially requires a system of checks and balances, like that explicitly incorporated in our Constitution. . . .
    The person who buys bread doesn't know whether the wheat from which it was made was grown by a pleader of the Fifth Amendment or a McCarthyite, by person whose skin is black or whose skin is white. The market is an impersonal mechanism that separates economic activities of individual from their personal characteristics. It enables people to cooperate in the economic realm regardless of any differences of opinion or views or attitudes they may have in other areas. 
    --from "The New Liberal's Creed: Individual Freedom, Preserving Dissent Are Ultimate Goals," May 18, 1961
     
    
    
     
    On Free Trade 
    What we ought to do is practice what we preach. We have been going around preaching the virtues of free enterprise, of free competition in a free market. What have we been doing? We've been practicing the opposite, not only through our foreign aid program, but also at home. We tell other countries, use the market: we tell our farmers, look to Washington. We tell other countries, don't try to be self-sustained; try to develop valuable industries that can compete on the international market, and then what do we do? We impose import quotas on oil, we impose tariffs on goods that come in, we dump agricultural products abroad, and impose quota on their import at home. The rest of the world listens to what we say and they think, "now there is a fine bunch of hypocrites," and they are right. 
    --from "An Alternative to Aid: An Economist Urges U.S. to Free Trade, End Grants of Money," April 30, 1962
     
    
    
     
    On Inflation 
    If the Fed does not explain to the public the nature of our problem and the costs involved in ending inflation, if it does not take the lead in imposing the temporarily unpopular measure required, who will?
    --From "Why Curbing Inflation Is the Fed's Job, March 6, 1974
     
    
    
     
    On Taxes 
    To summarize, deficits are bad--but not because they necessarily raise interest rates. They are bad because they encourage political irresponsibility. They enable our representatives in Washington to buy votes at our expense without having to vote explicitly for taxes to finance the largesse. The result is a bigger government and a poorer nation. That is why I favor a constitutional amendment requiring Congress to balance the budget and limit taxation. 
    --from "The Taxes Called Deficits," April 24, 1984
     
    
    
     
    On the Economy 
    The Wall Street Journal has been a firm and dedicated supporter of free markets at home and free trade abroad. It has repeatedly stressed its view that the invisible hand of Adam Smith is a far more effective and equitable means of organizing economic activity than the visible hand of government. Yet when it comes to foreign economic policy, a recent editorial, "Beyond Venice" (June 8), relies upon a wholly different and thoroughly incompatible set of ideas. 
    According to that editorial, "The economic summits of leading free-market nations are a sound recognition that the world economy defies sovereign borders, and can be run only through international cooperation." 
    Would the Journal describe the American economy as being "run," whether through international cooperation or by the powers that be in Washington or through cooperation among the individual states? Or would it rather, in accordance with its general philosophy, describe it as a system that is coordinated by the voluntary activities of millions of individuals, a system that runs but is not run? 
    --from "Please Reread Your Adam Smith," June 24, 1987
     
    
    
     
    On Social Security 
    I have long been a critic of Social Security, basically because I believe that it is not the business of government to tell people what fraction of their incomes they should devote to providing for their own or someone else's old age. On a more pragmatic level, Social Security is another example of the generalization that government programs typically have effects that are the opposite of those intended by their well-meaning sponsors (what Rep. Richard Armey calls the "invisible foot of government"). 
    The well-meaning sponsors intended Social Security to ensure a minimum income to the poor in their old age. It has largely done that, but at the cost of what they would have regarded as a perverse redistribution of income from the young to the old, from black to white, from the relatively poor to the relatively well-to-do. 
    From its inception, Social Security has been an unholy combination of two items: a flat-rate tax on earnings up to a maximum with no exemption and a benefit program that awards subsidies that have essentially no relation to need but are based on such criteria as marital status, longevity and recent earnings. As I wrote many years ago, "hardly anyone approves of either part separately. Yet the two combined have become a sacred cow. What a triumph of imaginative packaging and Madison Avenue advertising!" 
    --from "Social Security: The General And the Personal," March 15, 1988
     
    
    
     
    On the Future 
    Let us put aside the scarecrows of the twin deficits and face up to the real problems that threaten U.S. growth and prosperity: excessive and wasteful government spending and taxing, including in particular the real time bomb in Social Security, Medicare and Medicaid programs; concealed taxes in the form of mandated expenditures on private business; excessive and misguided regulation of individuals as well as businesses; the changes in tort legislation that are discouraging innovation; and not least, the recent increase in protectionism and the threat of a further major increase. We should and can do something about these problems, not allow ourselves to be diverted by politically convenient scarecrows. 
    --from "Why the Twin Deficits are a Blessing," Dec. 14, 1988
     
    
    
     
    On Health Care Prices 
    Toward the end of World War II, I served as an instructor in a quality-control course for Navy procurement officers. It was held in Hershey, Pa. As I recall, we stayed at the Hershey Hotel, on the corner of Cocoa Avenue and Chocolate Boulevard, across the street from the Hershey Junior College, where the actual instruction took place, a block or so from the Hershey Department Store, and so on. You get the idea. The stench--or perfume--of paternalism was heavy in the air. 
    Early in the century such company towns, most far less benevolently paternalistic than Hershey, were common. Workers who were employed at mines or factories located far from large cities, in towns that typically had only a single major employer, were often required, or induced, to live in company housing and buy their food and other supplies at company stores. In effect, they were paid in kind rather than in cash--the so-called truck system. . . .
    The company town has been revived in one major area: medical care. It is taken for granted that workers should receive their pay partly in kind, in the form of medical care provided by the employer. How come? Why single out medical care? Surely food is no less essential to life than medical care. Why is it not at least as logical for workers to be required to buy their food at the company store as to be required to buy their medical care at the company store?
    --from "Pricing Health Care: The Folly of Buying Health Care at the Company Store," Feb. 13, 1993
     
    
    
     
    On Jobs 
    Proposed economic policies tend to be judged in terms of jobs "created." That is the wrong criterion. The economic problem is not creating jobs. That is easy: Hire people at minimum wages (or lower) to dig holes and fill them. True, raising taxes to finance that project would destroy jobs, but the jobs destroyed would be high-wage jobs, the jobs created low-wage jobs, so for each job destroyed more than one job would be created--a net gain of jobs. 
    The real problem is to establish an economic environment in which there is a demand for workers at wages that those workers not only regard as satisfactory, but are qualified to earn: Better qualified workers and better wages--not simply more jobs--is the real problem. 
    --from "Better Workers, Better Wages: The Real Issue," June 1, 1993
     
    
    
     
    On the Federal Reserve 
    My favorite "moderate" proposal for the Fed (my "extreme" proposal is to abolish it) is that (1) at the beginning of each quarter, have it estimate how much it will have to add net to its holdings during that quarter to achieve its target monetary growth; (2) divide that number by 12; and (3) announce that every Monday morning at 11 a.m. it will buy that amount of securities from the lowest bidder, and then close up shop until the next Monday, except for replacing maturing securities. 
    What harm would that do? It would mean day-to-day and week-to-week fluctuation in the federal-funds rate. However, the sophisticated financial markets have surely demonstrated their capacity to handle wide daily fluctuations in all kinds of securities prices. Dealing with the fluctuations in the federal-funds rate would be child's play. 
    --from "End the Fed's Fine-Tuning," Sept. 15, 1993
     
    
    
     
    On the Flat Tax 
    The only way we are ever likely to get it is if there is a drive for a constitutional convention to repeal the 16th Amendment (which gives Congress the power to tax income) and replace it with one mandating a flat-rate tax. 
    However, I regret that that is not an immediate prospect. 
    --from "Why a Flat Tax Is Not Politically Feasible," March 30, 1995
     
    
    
     
    On Government Spending 
    The typical rhetoric, Republican as well as Democratic, about the current battle to balance the budget is that cutting government spending imposes short-term pain more than compensated by long-term gain. That is utter nonsense. Cutting government spending and government intrusion in the economy will almost surely involve immediate gain for the many, short-term pain for the few, and long-term gain for all. 
    --from "Budget Cutting: A Lot of Gain, Little Pain," June 15, 1995
     
    
    
     
    On Hong Kong 
    By some accident of officialdom, the colonial office assigned John Cowperthwaite, a Scotsman and a disciple of Adam Smith, to serve as financial secretary of Hong Kong. Cowperthwaite's free market policies are widely credited with producing the subsequent economic miracle that led to a phenomenal rise in the average level of living despite a nearly 10-fold rise in population. 
    It is hard to conceive of a more severe test of free market policies. Hong Kong is an island devoid of any significant natural resources other than a great harbor. When the Communists took over China, refugees came streaming over the borders with only the possessions they could carry. They and their successors produced a rapid rise in population. Hong Kong received negligible if any foreign aid to assist the assimilation of the refugees. 
    Under these adverse circumstances, the salvation of Hong Kong has been its complete free trade and free market policy. No tariffs on imports, no subsidies or other privileges to exports. (The only restrictions are those that Hong Kong has been forced to impose by pressure from other countries, including the U.S., as under the multifiber agreement.) There is no fixing of prices or wages; few if any restrictions on entry into business or trade; and government spending and taxes have been kept low. The top tax rate on personal income is 25%, with a maximum average rate of 15%. . . .
    What a contrast to the experience of most of the colonies to which Britain gave their freedom after the war. And what a striking demonstration of how much better free trade and free markets are for the ordinary citizen than the protectionism of Mr. Buchanan and the "fair trade" of President Clinton. "Fair" is in the eye of the beholder; free is the verdict of the market. (The word "free" is used three times in the Declaration of Independence and once in the First Amendment to the Constitution, along with "freedom." The word "fair" is not used in either of our founding documents.) 
    --From "Hong Kong vs. Buchanan," March 7, 1996
     
    
    
     
    On Health Care 
    The best way to restore freedom of choice to both patient and physician and to control costs would be to eliminate the tax exemption of employer-provided medical care. However, that is clearly not feasible politically. The best alternative available is to extend the tax exemption to all expenditures on medical care, whether made by the patient directly or by employers, to establish a level playing field, in terms of the currently popular cliche. 
    Many individuals would then find it attractive to negotiate with their employer for a higher cash wage in place of employer-financed medical care. With part or all of the higher cash wage, they could purchase an insurance policy with a very high deductible, i.e., a policy for medical catastrophes, which would be decidedly cheaper than the low-deductible policy their employer had been providing to them, and deposit all or part of the difference in a special "medical savings account" that could be drawn on only for medical purposes. Any amounts unused in a particular year could be allowed to accumulate without being subject to tax, or could be withdrawn with a tax penalty or for special purposes, as with current Individual Retirement Accounts--in effect, a medical IRA. Many employers would find it attractive to offer such an arrangement to their employees as an option. 
    --from "A Way Out of Soviet-Style Health Care," April 17, 1996
     
    
    
     
    On 'Reform' 
    The present crisis is not the result of market failure. Rather, it is the result of governments intervening in or seeking to supersede the market, both internally via loans, subsidies, or taxes and other handicaps, and externally via the IMF, the World Bank and other international agencies. We do not need more powerful government agencies spending still more of the taxpayers' money, with limited or nonexistent accountability. That would simply be throwing good money after bad. We need government, both within the nations and internationally, to get out of the way and let the market work. The more that people spend or lend their own money, and the less they spend or lend taxpayer money, the better. 
    --from "Markets to the Rescue," Oct. 13, 1998
     
    
    
     
    On Ronald Reagan 
    To Mr. Reagan, of course, holding down government spending was a means to an end, not an end in itself. That end was freedom, human freedom, the right of every individual to pursue his own objectives and values so long as he does not interfere with the corresponding right of others. That was his end in every phase of his remarkable career. 
    We still have a long way to go to achieve the optimum degree of freedom. But few people in human history have contributed more to the achievement of human freedom than Ronald Wilson Reagan. 
    --from "Freedom's Friend," June 11, 2004
     
    
    
     
    On Communism 
    In the almost six decades since the end of World War II, intellectual opinion in the United States about the desirable role of government has undergone a major shift. At the end of the war, opinion was predominantly collectivist. Socialism--defined as government ownership and operation of the means of production--was seen as both feasible and desirable. Those few of us who favored free markets and limited government were a beleaguered minority. 
    In subsequent decades opinion moved away from collectivism and toward a belief in free markets and limited government. By 1980 opinion had moved enough to enable Ronald Reagan to win the presidency on a quasi-libertarian agenda. 
    The collapse of the Soviet Union in 1989 delivered the final blow to the belief in socialism. Hardly anyone today, from the far left to the far right, regards socialism in the traditional sense of government ownership and operation of the means of production as either feasible or desirable. Those who profess socialism today mean by it a welfare state. 
    --from "The Battle's Half Won," Dec. 9, 2004
     
    
    
     
    On School Choice 
    One result has been experimentation with such alternatives as vouchers, tax credits, and charter schools. Government voucher programs are in effect in a few places (Wisconsin, Ohio, Florida, the District of Columbia); private voucher programs are widespread; tax credits for educational expenses have been adopted in at least three states and tax credit vouchers (tax credits for gifts to scholarship-granting organizations) in three states. In addition, a major legal obstacle to the adoption of vouchers was removed when the Supreme Court affirmed the legality of the Cleveland voucher in 2002. However, all of these programs are limited; taken together they cover only a small fraction of all children in the country. 
    Throughout this long period, we have been repeatedly frustrated by the gulf between the clear and present need, the burning desire of parents to have more control over the schooling of their children, on the one hand, and the adamant and effective opposition of trade union leaders and educational administrators to any change that would in any way reduce their control of the educational system. 
    --from "Free to Choose," June 9, 2005 
     
    
    --------------------------------------------------------------------------------
    --------------------------------------------------------------------------------
    --------------------------------------------------------------------------------
    Forwarded by Erika's sister Nancy
    The embers glowed softly, and in their dim light,
    I gazed round the room and I cherished the sight.
    My wife was asleep, her head on my chest,
    My daughter beside me, angelic in rest.
    Outside the snow fell, a blanket of white,
    Transforming the yard to a winter delight.
    The sparkling lights in the tree I believe,
    Completed the magic that was Christmas Eve.
    My eyelids were heavy, my breathing was deep,
    Secure and surrounded by love I would sleep.
    In perfect contentment, or so it would seem,
    So I slumbered, perhaps I started to dream.
    The sound wasn't loud, and it wasn't too near,
    But I opened my eyes when it tickled my ear.
    Perhaps just a cough, I didn't quite know, 
    Then the sure sound of footsteps outside in the snow.
    My soul gave a tremble, I struggled to hear,
    And I crept to the door just to see who was near.
    Standing out in the cold and the dark of the night,
    A lone figure stood, his face weary and tight.
    A soldier, I puzzled, some twenty years old, 
    Perhaps a Marine, huddled here in the cold.
    Alone in the dark, he looked up and smiled, 
    Standing watch over me, and my wife and my child.
    "What are you doing? " I asked without fear,
    "Come in this moment, it's freezing out here!
    Put down your pack, brush the snow from your sleeve,
    You should be at home on a cold Christmas Eve!"
     For barely a moment I saw his eyes shift,
    Away from the cold and the snow blown drift.
    Then he sighed and he said "Its really all right,
    I'm out here by choice. I'm here every night." 
    "It's my duty to stand at the front of the line,
    That separates you from the darkest of time.
    No one had to ask or beg or implore me,
    I'm proud to stand here like my fathers before me.
    My Gramps died at 'Pearl on a day in December,"
    Then he sighed, "That's a Christmas 'Gram will always remember."
    My dad stood his watch in the jungles of 'Nam',
    And now it is my turn and so, here I am. 
    I've not seen my own son in more than a while,
    But my wife sends me pictures, he's sure got her smile.
    Then he bent and he carefully pulled from his bag,
    The red, white, and blue... an American flag.
    I can live through the cold and the being alone,
    Away from my family, my house and my home.
    I can stand at my post through the rain and the sleet,
    I can sleep in a foxhole with little to eat.
    I can carry the weight of killing another,
    Or lay down my life with my sister and brother..
    Who stand at the front against any and all,
    To ensure for all time that this flag will not fall." 
    "So go back inside," he said, "harbor no fright,
    Your family is waiting and I'll be all right."
    "But isn't there something I can do, at the least,
    "Give you money," I asked, "or prepare you a feast?
     It seems all too little for all that you've done,
    For being away from your wife and your son."
    Then his eye welled a tear that held no regret,
    "Just tell us you love us, and never forget.
    To fight for our rights back at home while we're gone,
    To stand your own watch, no matter how long.
    For when we come home, either standing or dead,
    To know you remember we fought and we bled.
    Is payment enough, and with that we will trust,
    That we mattered to you as you mattered to us."
    
    --------------------------------------------------------------------------------
    Forwarded by Michael Moore 
    Cut and Run, the Only Brave Thing to Do --- http://www.michaelmoore.com/words/message/index.php?id=202  
    Jensen Comment
    We have to be very brave to retreat from the Middle East. Chances for nuclear winter become very high indeed as nations going nuclear surround Israel with full intentions to wipe Israel off the map. It takes a great deal of courage to encourage our enemies to obtain more and more WMDs and wait at home with our heads in the sand while Israel stands alone on the front lines. Michel Moore is good for one liners but he never addresses serious policy issues like how to end terrorist attacks in Israel or whether Iran should have its fair share WMDs.
    Most chilling of all, could the festering differences precipitate a military confrontation involving the use of nuclear weapons? It is known that Israel has a major nuclear arsenal and the capability to launch weapons quickly, and some neighboring states are believed to be attempting to acquire their own atomic bombs. Without progress toward peace, desperation or adventurism on either side could precipitate such a confrontation.
    Jimmy Carter, Palestine: Peace Not Apartheid
    There is no terrorist threat in this country. This is a lie. This is the biggest lie we've been told. 
    Michael Moore 
    If someone did 9/11 to get back at Bush, then they did so by killing thousands of people who DID NOT VOTE for him! Boston, New York, DC, and the planes' destination of California - these were places that voted AGAINST Bush! 
    Michael Moore 
    I'm a millionaire, I'm a multi-millionaire. I'm filthy rich. You know why I'm a multi-millionaire? 'Cause multi-millions like what I do. 
    Michael Moore 
    The Iraqis who have risen up against the occupation are not 'insurgents' or 'terrorists' or 'The Enemy.' They are the revolution, the Minutemen, and their numbers will grow - and they will win. 
    Michael Moore
    Jensen Comment
    As far as I know British soldiers were not standing between warring "tribes" of Minutemen killing and torturing each other in unimaginable horror. Once again Michael proves he's never read a history book --- he probably does not have the time because he's too busy adding more millions to his millions.
     
    
     
    
    --------------------------------------------------------------------------------
    --------------------------------------------------------------------------------
    --------------------------------------------------------------------------------
    Forwarded by Aaron Konstam
    WHY ARE WE BADLY PAID... MATHEMATICALLY PROVEN. 
    Here is a simple explanation that is also mathematical proof: 
    Knowledge is Power. 
    Time is Money. 
    And, as every engineer knows: 
    Power = Work / Time 
    If Knowledge = Power, and Time = Money, then 
    Knowledge = Work / Money 
    Solving for Money, we get: 
    Money = Work / Knowledge 
    Thus, Money approaches infinity as Knowledge approaches zero, regardless of the Work done. What this means is: 
    The Less you Know, the More you Make --- QED
    
    --------------------------------------------------------------------------------
    From the Readers Digest, December 2006, Page 153
    Flying to Toronto at Crhistmastime, I arrived at the airport check-in. As the security guard cleared my bags, I noticed a sprig of mistletoe dangling from him.
    "What's the mistletoe for?" I asked.
    "That?" He smiled. "That's so you can kiss your luggage goodbye."
    
    Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
    190 Sunset Hill Road
    Sugar Hill, NH 03586
    Phone:  603-823-8482  
    Email:  rjensen@trinity.edu   
     
     
     
     



    I snapped this picture while on a walk in the good old summer time (sigh).
    The clouds were hanging low over Franconia Notch between Lafayette and Cannon mountains.

    Don't Believe Everything Advertised Widely on TV
    FreeCreditReport.com is a Scam! ---
    http://www.consumerismcommentary.com/2006/11/16/freecreditreportcom-is-a-scam/

    This isn’t the first time, but now the State of Florida Office of the Attorney General is investigating FreeCreditReport.com. You’ll notice I don’t link to the site. This site, run by credit reporting agency Experian is taking advantage of the ruling that anyone can receive a free annual credit report from each of the three major agencies. FreeCreditReport.com is not the website that offers free credit reports in conjunction with this directive. It’s misleading, and here’s the fine print on the site:

    When you order your free report here, you will begin your free trial membership in Triple AdvantageSM Credit Monitoring. If you don’t cancel your membership within the 30-day trial period, you will be billed $12.95 for each month that you continue your membership. If you are not satisfied, you can cancel at any time to discontinue the membership and stop the monthly billing; however, you will not be eligible for a pro-rated refund of your current month’s paid membership fee.

    Bob Jensen's threads on the dirty secrets of credit card companies and credit rating agencies are at http://www.trinity.edu/rjensen/FraudReporting.htm#FICO
    I also show you the legitimate place to go for a free credit report.
     

    Tidbits on December 18, 2006
    Bob Jensen

    For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm
    For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 

    Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
    For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.


    Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   



    Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/


    Bob Jensen's blogs and various threads on many topics --- http://www.trinity.edu/rjensen/threads.htm
           (Also scroll down to the table at http://www.trinity.edu/rjensen/ )




    Online Video, Slide Shows, and Audio
    In the past I've provided links to various types of music and video available free on the Web. 
    I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

    The Danes thought that they had a great solution to driver speed control until they found that it created gridlock --- http://5x5m.com/files/speedbandits/
    I'll have a Danish to go please!

    Video: Nuckin Futs 2006 Year in Review Children's Musical --- http://www.jibjab.com/nuckin_futs
    This video follows a video commercial.

    Video: One Laptop per Child --- http://www.technologyreview.com/

    Stories of Professors at ThePhantomProf Blog --- http://phantomprof.blogspot.com/2006/12/post-it.html

    For a spirited defense of the life of the mind, intellectual rigor, meaningful debate and facial hair, we recommend video of Wednesday night’s “Colbert Report,” which featured an interview with John Sexton, president of New York University. Video is available in the show’s archive of “celebrity interviews.” (From Inside Higher Ed on December 8, 2006)
    http://www.comedycentral.com/shows/the_colbert_report/videos/celebrity_interviews/index.jhtml

    20 voices [Armenian life in the Ottoman Empire] --- http://www.twentyvoices.com/

    AISH (Jewish Spiritual) --- http://www.aish.com/

    The (New) National World War One Museum (includeds video introduction) --- http://www.libertymemorialmuseum.org/
    Review by Mark Yost, "Why Kansas City ? The Great War gets an official museum of its own," The Wall Street Journal, November 29, 2006 ---
    http://www.opinionjournal.com/la/?id=110009313 

    Education Secretary Margaret M. Spellings is among the stars of a White House video to celebrate Christmas --- http://www.whitehouse.gov/holiday/2006/barneycam.html

    Happy Holidays from Ernst & Young --- http://happyholidays.ey.com/national/bzecards2.nsf/eCard_candles_7.html

    President Bush:  Hu's on First --- http://youtube.com/watch?v=WHvFqvd1xg0

    Drunk (in the early morning) Danny Devito Bashes Bush on NBC's "The View" ---
    http://www.youtube.com/watch?v=46wakJ8oggM&eurl=

    How do I buy online movies and what can I do with them? ---
    http://www.technologyreview.com/read_article.aspx?id=17890&ch=infotech

    Dave Berry's 2006 commencement address at the University of Miami ---  Click here to view the archived webcast
    Fourteen Things That It Took Me Over 50 Years To Learn, by Dave Barry --- http://www.lucidcafe.com/library/pearls.html

    1. Never, under any circumstances, take a sleeping pill and a laxative on the same night.

    2. If you had to identify, in one word, the reason why the human race has not achieved, and never will achieve, its full potential, that word would be "meetings."

    3. There is a very fine line between "hobby" and "mental illness."

    4. People who want to share their religious views with you almost never want you to share yours with them.

    5. You should not confuse your career with your life.

    6. Nobody cares if you can't dance well. Just get up and dance.

    7. Never lick a steak knife.

    8. The most destructive force in the universe is gossip.

    9. You will never find anybody who can give you a clear and compelling reason why we observe daylight savings time.

    10. You should never say anything to a woman that even remotely suggests that you think she's pregnant unless you can see an actual baby emerging from her at that moment.

    11. There comes a time when you should stop expecting other people to make a big deal about your birthday. That time is age eleven.

    12. The one thing that unites all human beings, regardless of age, gender, religion, economic status or ethnic background, is that, deep down inside, we ALL believe that we are above-average drivers.

    13. A person who is nice to you, but rude to the waiter, is not a nice person. (This is very important. Pay attention. It never fails.)

    14. Your friends love you anyway.

    Thought for the day: Never be afraid to try something new. Remember that a lone amateur built the Ark. A large group of professionals built the Titanic.


    Free music downloads --- http://www.trinity.edu/rjensen/music.htm

    Holiday Music (Free Downloads) --- http://www.trinity.edu/rjensen/music.htm#Holiday

    From Jessie
    If the sound does not commence after 30 seconds, scroll to the bottom of the page.
    Bob Jensen's Rusty Chevrolet --- http://www.jessiesweb.com/chev.htm
    Christmas in Dixie (not in New Hampshire) --- http://www.jessiesweb.com/dixie.htm
    Blue Christmas --- http://www.jessiesweb.com/bluejovi.htm
    Jingle Bell Rock (Randy Travis) --- http://www.jessiesweb.com/jinglebellrock.htm
    Jingle Bells (Dean Martin) --- http://www.jessiesweb.com/jinglebells.htm 
    Please Come Home for Christmas --- http://www.jessiesweb.com/bellsjovi.htm
    Redneck 12 Days of Christmas --- http://www.jessiesweb.com/redneck.htm
    The Christmas Song --- http://www.jessiesweb.com/poem.htm
    Silent Night --- http://www.jessiesweb.com/reminder.htm

    From Janie
    I Want Elvis for Christmas --- http://www.jbreck.com/elvischristmas.html
    Christmas With Elvis --- http://www.jbreck.com/cmashomeelvis.html
    I could not get the audio to work on this ne one from Janie --- http://mjbreck.com/elvisgracelandchristmasbyjbw.html
    Many more Elvis selections that do work --- http://jbreck.com/myelviswebsite.html

    The Best Holiday Jazz CDs Ever, from WDUQ --- http://www.npr.org/templates/story/story.php?storyId=6594501

    Great Big Band Holiday Music --- http://www.lulliloodesign.com/figaro_tunes.htm

    Great Orchestration of the 12 Days of Christmas --- http://www.jacquielawson.com/viewcard.asp?code=1017129949136

    Santa's Dreaming of a White Christmas --- http://badaboo.free.fr/merryxmas.swf

    Mary Do You Know  --- http://www.youtube.com/v/A1oHJR2g7Tw

    The Best, Worst and Weirdest in Holiday CDs --- http://www.npr.org/templates/story/story.php?storyId=6527454

    Mutter, Orkis Explore the Genius of Mozart --- http://www.npr.org/templates/story/story.php?storyId=6544360

    Director's Cuts: Holiday Gift Picks for 2006 --- http://www.npr.org/templates/story/story.php?storyId=6527803

    NPR Online Concerts --- http://www.npr.org/templates/story/story.php?storyId=5194329

    Christian Pop Gets Metaphysical -- and Tuneful --- http://www.npr.org/templates/story/story.php?storyId=6551361

    Digital Sheet Music Collection: University of Colorado http://ucblibraries.colorado.edu/music/smp/index.html

    Witty Tunes Are Jonathan Coulton's 'Thing' --- http://www.npr.org/templates/story/story.php?storyId=6603466

    Ethan Ong The Drummer Drum prodigy and Youngest Busker in Singapore --- http://www.metacafe.com/watch/324123/ethan_ong_the_drummer/

    Ernst & Young Accounting Firm Happy Days (Video) --- http://www.youtube.com/watch?v=lmEp0PHHA80
    This may secretly be a celebration of Happy Days brought about by Sarbanes.


    Photographs and Art

    Great Holiday Pictures --- http://jsmagic.net/emissarypage1a/

    Capturing the 'Dark Side' of Ellis Island --- http://www.npr.org/templates/story/story.php?storyId=6600709

    Wild Camels Run Amok in Australia's Outback --- http://www.npr.org/templates/story/story.php?storyId=6599903

    Drawing a Woman from Scratch (with a whole lot of erasing) --- http://fcmx.net/vec/get.swf?i=003702

    When the Taliban were driven from power in 2001, they left behind a broken country and an infamous act of destruction: reducing to rubble two monumental Buddhas that had stood for 1,500 years --- http://www.npr.org/templates/story/story.php?storyId=6616167

    Nick Brandt Photography Gallery --- http://www.younggalleryphoto.com/photography/brandt/brandt.html

    Nice foliage shots in the U.K. (you have to scroll down to find them) --- http://www.numberwatch.co.uk/2006 November.htm
     


    Online Books, Poems, References, and Other Literature
    In the past I've provided links to various types electronic literature available free on the Web. 
    I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

    International Spy Museum --- http://www.spymuseum.org/
    Also see "A prowl through the Spy Museum, by George Melloan, The Wall Street Journal, December 12, 2006 --- Click Here

    Free from Random House, The 100 Best Novels --- http://www.randomhouse.com/modernlibrary/100bestnovels.html

    Quotiki (quotations) --- http://www.quotiki.com/

    One Sentence Stories --- http://www.onesentence.org/

    New Poems by Robert Louis Stevenson (1850-1894) --- Click Here

    Fantastic Fables by Ambrose Bierce (1842 1914) --- Click Here 

    Shatter Writer's Block --- http://www.writinginfo.org/Shatter-Writers-Block/409
    Bob Jensen's writing helpers --- http://www.trinity.edu/rjensen/bookbob3.htm#Dictionaries

    Booksellers Pick Their Holiday Favorites --- http://www.npr.org/templates/story/story.php?storyId=6593957

    NPR Picks Holiday Favorites --- http://www.npr.org/templates/story/story.php?storyId=6582665

    NPR Picks Holiday Books for Kids --- http://www.npr.org/templates/story/story.php?storyId=6631429

    Books for Everyone on Your Holiday Gift List --- http://www.npr.org/templates/story/story.php?storyId=6589823




  • Never speak of others in a bad way. The negative energy that you put out into the universe will multiply when it returns to you.
    Native American Code of Ethics
    --- http://eveningrain.com/Ethics.html

    They (9/11 Al Qaeda terrorists) were targeting those people I referred to as 'little Eichmanns.' These were legitimate targets.
    Ward Churchill at New College on December 6, 2006 --- http://www.newcollege.edu/
    Jensen Comment
    Yeah right! Over 3,000 deaths don't matter much according to Ward Churchill since, in his mind, the 9/11 kills were "legitimate targets" suffering from capitalistic excesses built and sins of  longtime dead ancestors they never met ---
    http://www.trinity.edu/rjensen/HypocrisyChurchill.htm

    An ethnic studies professor from the University of Colorado, Ward Churchill, received a standing ovation last night from a crowd of more than 200 New School (an activist college in California) students after blaming the 2001 World Trade Center attacks on America's support of Israel and its sanctions against Iraq in 1996. In a two-hour speech at the New School titled "Sterilizing History: The Fabrication of Innocent Americans," delivered without notes, Mr. Churchill traced what he called a pattern of mass murder as American foreign policy from the time of the country's inception to the events of September 11, 2001, which he said the country...
    Annie Karni, "New School Students Cheer Ward Churchill Speech," New York Sun, December 12, 2006 ---
    http://www.nysun.com/article/44971
    Jensen Comment
    Fiery speakers like Ward Churchill can expect standing ovations when they're preaching to their own choirs.

    Those who don't build must burn. It's as old as history and juvenile delinquence.
    Ray Bradbury, FAHRENHEIT 451

    The extreme left (they prefer to be called progressive) does seem to have abandoned any idea of creating a socialist utopia; today it is devoted solely to uncreative destruction.
    Opinion Journal, February 11, 2005
    Jensen Comment
    At least Karl Marx, Nozick, and Heilbroner had a visions

    The aim of the university is not to make ideas safe for students, but to make students safe for ideas.
    Clark Kerr as quoted by David Shapiro at http://irascibleprofessor.com/comments-03-15-06.htm

    Islamic militants are using northern Pakistan to increase their ties with al-Qaeda and train suicide bombers as well as foreign fighters. All of this adds up to training that could easily translate into increased violence in Afghanistan next year. One of the clearest signs of al-Qaeda's influence in the area is the rising number of suicide bombings, a tactic that was not common before before 2001. One tribal leader says there are so many recruits willing to become suicide bombers that volunteers are sent home and told to wait their turn.
    Daniel Politi, "Death Becomes Him," Slate, December 11, 2006 --- http://www.slate.com/id/2155239/
    Jensen Comment
    Just goes to show you that one bird in hand is not worth 72 in the bush.

    I wanted to give you a heads-up on a story that will be running this Sunday, Dec. 17 (7PM ET/PT on CBS) on "60 MINUTES" about a long-secret German archive that houses a treasure trove of information on 17.5 million victims of the Holocaust. The archive, located in the German town of Bad Arolsen, is massive (there are 16 miles of helving containing 50 million pages of documents) and until recently, was off-limits to the public. But after the German government agreed earlier this year to open the archives, CBS News' Scott Pelley traveled there with three Jewish survivors who were able to see their own Holocaust records. It's an incredibly moving piece, all the more poignant in the wake of this week's meeting of Holocaust deniers in Iran. We're trying to get word out about the story to people who have a special interest in this subject. So we were hoping you'd consider sending out something to your listserv and/or posting something on your website. Further information will also be available on our website
    ( http://www.cbsnews.com/stories/1998/07/08/60minutes/main13502.shtml  ) . . .
    December 16, 2006 email message from Naomi Ragen [nragen@netvision.net.il]

    Iran's President reaffirmed his intention to "eradicate" Israel
    "The establishment of the Zionist regime was a move by the world oppressor against the Islamic world," the president told a conference in Tehran on Wednesday, entitled The World without Zionism. "The skirmishes in the occupied land are part of a war of destiny. The outcome of hundreds of years of war will be defined in Palestinian land," he said. "As the Imam said, Israel must be wiped off the map," said Ahmadinejad, referring to Iran's revolutionary leader Ayat Allah Khomeini. His comments were the first time in years that such a high-ranking Iranian official has called for Israel's eradication, even though such slogans are still regularly used at government rallies.
    "Ahmadinejad: Wipe Israel off map; Iranian President Mahmoud Ahmadinejad has openly called for Israel to be wiped off the map," Al Jazeera --- http://english.aljazeera.net/news/archive/archive?ArchiveId=15816
    Also see "Holocaust conference begins in Iran," by Nasser Karimi, Boston Globe, December 12, 2006 --- Click Here


  • "
    The number of victims at the Auschwitz concentration camp could be about 2,007," Australian Frederick Toben told the conference, according to a Farsi translation of his remarks. "The railroad to the camp did not have enough capacity to transfer large numbers of Jews," said Toben, who was jailed in 1999 in Germany for casting doubt on the Holocaust.

    The two-day conference was initiated by President Mahmoud Ahmadinejad in an apparent attempt to burnish his status as a tough opponent of Israel. The hard-line president has described the Holocaust as a "myth" and called for Israel to be wiped off the map. Earlier this year, his government backed an exhibition of anti-Israel cartoons in a show of defiance after Danish cartoons caricaturing Islam's Prophet Muhammad were published in Europe, raising an outcry among Muslims.

    Organizers and participants touted the conference as a scholarly gathering aimed at discussing the Holocaust away from Western taboos and the restrictions imposed on scholars in Europe. In Germany, Austria and France, it is illegal to deny aspects of the Holocaust.

    Duke, a former Louisiana state representative, praised Ahmadinejad for his "courage" in holding a conference "to offer free speech for the world's most repressed idea: Holocaust revisionism."

    "In Europe, you can freely question, ridicule and deny Jesus Christ. The same is true for the Prophet Muhammad, and nothing will happen to you," Duke said. "But offer a single question of the smallest part of the Holocaust and you face prison."

    Also among participants were two rabbis and four other members of the group Jews United Against Zionism, who were dressed in the traditional long black coats and black hats of ultra-Orthodox Jews. The group rejects the creation of Israel on the grounds that it violates Jewish law.

    Rabbi Ahron Kohen urged participants not to deny the Holocaust. "If we say that this crime did not happen, it is a humiliation and insult to the victims," he said, according to a translation of his remarks.

    But he added that Zionists have used the Holocaust to "give legitimacy to their illegitimate project," the creation of Israel.

    Another participant, Robert Faurisson, has been convicted five times in France for denying crimes against humanity -- most recently last month, when he was fined for denying in an interview with Iranian TV that the Nazis meant to exterminate Jews.

    The truth is as difficult to deny as it is to hide.
    Ernesto Che Guevara (1928-1967) --- http://en.wikipedia.org/wiki/Che_Guevara
    Jensen Comment
    The number 2,007 cited above is an accurate-sounding number in Iran but does not have any backing among world scholars. French scholar George Wellers was one of the first to use Nazi data on deportations to estimate the number killed at Auschwitz, arriving at 1.613 million dead, including 1.44 million Jews and 146,000 Poles. A larger study started around the same time by Franciszek Piper used time tables of train arrivals combined with deportation records to calculate 1.1 million Jewish deaths and 140,000-150,000 Polish victims, along with 23,000 Roma & Sinti (Gypsies). This number has met with "significant, though not complete" agreement among scholars. Additionally, untold thousands of homosexuals were also killed at Auschwitz.

    Iran's President Ahmadinejad is so damaging to Islamic credibility I sometimes wonder if he was not invented by Israel. However, Iran's nuclear threat to Israel is now so grave that Jewish factions are supporting Saudi Arabia's bid for nuclear technology on the Sunni side in the spreading civil war between  Sunni Islam and Iranian Shi'a Islam.

    Israeli officials this week made two painfully honest nuclear pronouncements. The first -- Prime Minister Ehud Olmert's indirect admission on Monday that Israel had nuclear weapons -- got the lion's share of attention. Another statement, however, was easily as interesting: On Wednesday Israeli officials publicly applauded Saudi Arabia's announcement that it and its Gulf Cooperation Council (GCC) neighbors intended to develop "peaceful nuclear energy." Why Jerusalem's endorsement? Because, as Israeli officials explained, these Arab nations' announcement was "directed against Iran." That is, it threatened to check Iran's bomb activities with a Sunni nuclear-weapons option.
    Henry Sololski, "Hair-Raising New World," The Wall Street Journal, December 15, 2006; Page A20 --- Click Here

    A Canadian professor says he gladly accepted an invitation from Iran's hardline Islamist government to speak at an international conference (December 13) questioning the Holocaust. But Dr. Shiraz Dossa, a soft-spoken political science professor at Nova Scotia's St. Francis Xavier University, said he doesn't put himself in the same category as some of the "hacks and lunatics'' attending the event. The two-day gathering drew some of the world's most notorious Holocaust deniers, Nazi sympathizers and scholars such as former Ku Klux Klan Grand Wizard David Duke. Dossa, the lone Canadian at the event, told The Globe and Mail he presented a paper about how the Holocaust has been used to justify anti-Islamic policies in the U.S. war on terror. The academic said no one pressured him to change his point of view, which he says has nothing to do with Holocaust denial. Dossa describes himself as an admirer of left-wing American scholar Noam Chomsky. He said the paper he presented was about the war on terrorism, and how the Holocaust plays into it. "Other people have their own points of view, but that (Holocaust denial) is not my point of view," he told The Globe.
    "Canadian prof shocked by Holocaust gathering," CTV, December 13, 2006 --- Click Here
    Also see "Professor’s Attendance at ‘Conference’ Stuns Canada," Inside Higher Ed, December 15, 2006 --- http://www.insidehighered.com/news/2006/12/14/holocaust

    “My essential point is that the Jewish loss — which is, of course, a reality, and anyone who denies it is a lunatic — the focus here is on how the Holocaust is a political construct, distinct from the Jewish loss at the hands of the Nazis. And that political construct has been used to justify certain policies by people, some of whom are Zionists. And now that whole issue plays into the war on terrorism, which is essentially a war on Islam,” he told the newspaper.
    Scott Jaschik quoting Shiraz Dossa (Canadian professor who was an invited speaker at Iran's Holocaust denial conference), Inside Higher Ed, December 15, 2006 --- http://www.insidehighered.com/news/2006/12/14/holocaust 

    A man is rich in proportion to the number of things he can afford to let alone.
    Henry David Thoreau (1817-1862) --- http://en.wikipedia.org/wiki/Henry_David_Thoreau

    It's scary when you start making the same noises as your coffee maker.
    Maxine

    Ever get a feeling that your stuff strutted off without you?
    Maxine

    It's great to be back in England. I feel like Jack The Ripper days are back. Nothing ever changes here.
    Oliver Stone at the British Comedy Award Ceremony. His bad-taste attempt at comedy was met with jeers and gasps of horror from the celebrity audience in light of the recent Suffolk murders.
    "Stone's Ripper joke shocks audience," RTE, December 14, 2006 ---http://www.rte.ie/arts/2006/1214/stoneo.html

    The New Orleans school system, re-created in the wake of Hurricane Katrina, is beginning to look like something designed by FEMA.
    Lisa Delpit and Charles Payne, "Katrina's Last Victims?" The Nation, December 14, 2006 --- http://www.thenation.com/docprem.mhtml?i=20070101&s=delpit

    We therefore advocate a revolution against the industrial system. This revolution may or may not make use of violence: it may be sudden or it may be a relatively gradual process spanning a few decades. We can't predict any of that. But we do outline in a very general way the measures that those who hate the industrial system should take in order to prepare the way for a revolution against that form of society. This is not to be a POLITICAL revolution. Its object will be to overthrow not governments but the economic and technological basis of the present society.
    "Full Text: Unabomber's Manifesto," CBS5 San Francisco, November 28, 2006 --- http://cbs5.com/reference/local_story_332145319.html 

    Mexican lawlessness is reaching epidemic proportions. It is true that AMLO -- as the Mexican press calls the defeated PRD candidate -- is now mostly an unpopular annoyance even to those who voted for him. It is also true that if the PRD wants to remain a serious political party it has to show that it is willing to work within the system. But other violent actors who prefer the path of terror and extortion to gain power and resources are threatening national security. Some of the blame lies with Mr. Fox and his weak response to extreme political groups. Some of it lies with the U.S. demand for illegal drugs, which is fueling an ever more powerful organized-crime problem in a country ill-equipped to fight back.
    Mary Anastasia O'Grady, "It's High Noon in Mexico," The Wall Street Journal, December 1, 2006; Page A13 --- Click Here

    How Terrorists Use Civilians for Cover and Gullible Media Exploitation
    The most persuasive evidence here is photographic, so we urge readers to access the report itself on the Web site of the American Jewish Congress
    (ajcongress.org). Hezbollah's headquarters in Aita al-Shaab, for instance, sits in the heart of the village. Hezbollah leader Hassan Nasrallah's office and home are in a densely built neighborhood of Beirut. In the town of Qana--site of an Israeli bombing on July 30 that killed 28 and that Hezbollah's apologists were quick to label a "massacre"--an arms warehouse can be seen adjacent to a mosque. There are photographs of rockets in the back seats of cars, missile launchers adjacent to farm houses, storage bunkers hidden beneath homes. There is also a trove of before-and-after photography demonstrating the precision of most Israeli bombing.
    "Whose War Crimes? Evidence from Lebanon about how terrorists use civilians," The Wall Street Journal, December 11, 2006 --- http://www.opinionjournal.com/editorial/feature.html?id=110009371

    " . . . there are a lot of good things that are happening that aren't covered and I think the drumbeat in the country from the media...is discouraging" as she hoped for "more balanced coverage" in the future.
    CyberAlert, December 15, 2006 --- http://www.mrc.org/cyberalerts/2006/cyb20061215.asp

    Congressman (Dennis Kucinich) from Cleveland explains an urgent need for human unity, human security and peace motivated him to run for President.
    Joshua Scheer, "What Makes Kucinich Run?" The Nation, December 15, 2006 --- http://www.thenation.com/doc/20070101/scheer
    Jensen Comment
    Yeah right. His utterly hopeless candidacy more likely has more despicable motives.

    EVERYONE who laughed when the elfin Dennis Kucinich threw his hat in the ring to run for president in 2004 should realize why he smiles. He had 2,955,963 reasons to smile. That is how many bucks federal taxpayers gave his ridiculous campaign for president. Kucinich had no chance. Yet under the bizarre federal election rules, taxpayers had to give this fool $2,955,963 just to humor his vanity. Ralph Nader took $798,827 from taxpayers in 2004 to indulge his fantasy of being elected president. Consumers beware. I look for this demagogue to run again. Lyndon LaRouche is another likely candidate. Last...
    Don Surber, "Demagoguery earns Kucinich millions," Charlestown Mail, December 15, 2006 --- Click Here

    Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.
    Kenneth Boulding (1910-1993) --- http://en.wikipedia.org/wiki/Kenneth_Boulding

    Start Digging and Pave the Streets of the Earth With Gold
    Searching for a pot of gold? Try the center of the Earth. More than 99 percent of Earth's gold is missing—it all sank to the center of the planet billions of years ago. In fact, says geologist Bernard Wood of Macquarie University in Australia, there's enough gold in Earth's core to coat its surface in 1.5 feet of the stuff. How did it get there? Earth formed from a series of smaller planetesimals that crashed together over the course of 30 million to 40 million years. Wood deduced how much gold ought to be present in Earth's crust by comparing...
    Anne Wootten, "Earth's Inner Fort Knox," Discover Magazine, September 2006 --- http://www.discover.com/issues/sep-06/rd/innerfortknox/

    Start Digging on the Moon for Nuclear Fuel
    NASA's proposed 2024 moon base will be a steppingstone to Mars, but it may also be a mining outpost. The moon is an abundant source of helium-3, a potent fuel for next-generation nuclear reactors. Trouble is, China, India and Russia have their eyes on it too.
    John Lasker, "Race to the Moon for Nuclear Fuel," Wired News, December 15, 2006 --- http://www.wired.com/news/technology/space/0,72276-0.html?tw=wn_index_8





    The Best Science Fictions --- http://www.wired.com/wired/archive/14.12/start.html?pg=15
    By Aria Pearson, Wired Magazine, December 2006

    Fiction: If you fall into quicksand, you’ll be sucked under and die.
    Fact: You’ll only sink up to your waist.

    Fiction: Sitting too close to the TV will ruin your eyes.
    Fact: It causes fatigue but no permanent damage.

    Fiction: Earth’s rotation causes bathtubs, sinks, and toilets to drain clockwise in the northern hemisphere, counterclockwise in the southern hemisphere.
    Fact: They can go either way in either hemisphere. The shape of the basin and the direction of the incoming flow overwhelm the minuscule effect of planetary spin.

    Fiction: Benjamin Franklin’s kite was struck by lightning.
    Fact: The kite picked up electricity from the air, causing an arc between Franklin’s hand and a key tied to his end of the string.

    Fiction: A penny dropped from the top of a skyscraper can kill someone.
    Fact: It could never pick up enough velocity to kill, just to bang you up a little.

    Fiction: Swimming after you eat will cause cramps and lead to drowning.
    Fact: There is a very slight risk of cramps, but only for vigorous swimmers.

    Fiction: A drunken teenager can tip over a sleeping cow.
    Fact: It would take several semisober people and a paralyzed cow. Anyway, cows sleep lying down.

    Fiction: There’s a dark side of the moon.
    Fact: The entire lunar surface receives sunlight during the moon’s monthly orbit around Earth.

    Fiction: Swallowed chewing gum takes seven years to digest.
    Fact: Gum is not digested. It passes through the gastro-intestinal system, usually within 24 hours.

    Joy to the world
    I'm getting laid
    I'm getting laid tonight.
    We'll light the Yule log
    Deck the halls
    And then we'll play some
    Jingle balls.
    It's been a real long wait
    This is our second date
    It's Christmas Eve
    And I'm getting laid.

    Charlie Sheen to the tune of a famous Christian hymn, Two and a Half Men, December 11, 2006
    "AFA: 'Fornication' song requires network apology," by Bob Unruh, WorldNetDaily, December 16, 2006 --- http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53387
    Jensen Comment
    In addition to being sacrilegious, this illustrates how low prime time "family television shows" have sunk --- they should be X-Rated.

    More on Science Fiction
    Charlie Sheen is one of the most famous proponents of the 9/11 conspiracy

    Speaking to The Alex Jones Show on the GCN Radio Network, the star of current hit comedy show Two and a Half Men and dozens of movies including Platoon and Young Guns, Sheen elaborated on why he had problems believing the government's version of events. Sheen agreed that the biggest conspiracy theory was put out by the government itself and prefaced his argument by quoting Theodore Roosevelt in stating, "That we are to stand by the President right or wrong is not only unpatriotic and servile, but is morally treasonable to the American public."
    "Actor Charlie Sheen Questions Official 9/11 Story," PrisonPlanet, March 20, 2006 --- http://www.prisonplanet.com/articles/march2006/200306charliesheen.htm

    Say What? An Ultraliberal Magazine Debunks the 9/11 Conspiracy Theory
    The Reichstag example also holds a lesson for those who would dismiss the very notion of a conspiracy as necessarily absurd. It was perfectly reasonable to suspect the Nazis of setting the fire, so long as the evidence suggested that might have been the case. The problem isn't with conspiracy theories as such; the problem is continuing to assert the existence of a conspiracy even after the evidence shows it to be virtually impossible.
    "9/11: The Roots of Paranoia," by Christopher Hayes, The Nation, December 8, 2006 --- http://www.thenation.com/doc/20061225/hayes

    According to a July poll conducted by Scripps News Service, one-third of Americans think the government either carried out the 9/11 attacks or intentionally allowed them to happen in order to provide a pretext for war in the Middle East. This is at once alarming and unsurprising. Alarming, because if tens of millions of Americans really believe their government was complicit in the murder of 3,000 of their fellow citizens, they seem remarkably sanguine about this fact. By and large, life continues as before, even though tens of millions of people apparently believe they are being governed by mass murderers. Unsurprising, because the government these Americans suspect of complicity in 9/11 has acquired a justified reputation for deception: weapons of mass destruction, secret prisons, illegal wiretapping. What else are they hiding?

    This pattern of deception has not only fed diffuse public cynicism but has provided an opening for alternate theories of 9/11 to flourish. As these theories--propounded by the so-called 9/11 Truth Movement--seep toward the edges of the mainstream, they have raised the specter of the return (if it ever left) of what Richard Hofstadter famously described as "the paranoid style in American politics." But the real danger posed by the Truth Movement isn't paranoia. Rather, the danger is that it will discredit and deform the salutary skepticism Americans increasingly show toward their leaders.

    The Truth Movement's recent growth can be largely attributed to the Internet-distributed documentary Loose Change. A low-budget film produced by two 20-somethings that purports to debunk the official story of 9/11, it's been viewed over the Internet millions of times. Complementing Loose Change are the more highbrow offerings of a handful of writers and scholars, many of whom are associated with Scholars for 9/11 Truth. Two of these academics, retired theologian David Ray Griffin and retired Brigham Young University physics professor Steven Jones, have written books and articles that serve as the movement's canon. Videos of their lectures circulate among the burgeoning portions of the Internet devoted to the cause of the "truthers." A variety of groups have chapters across the country and organize conferences that draw hundreds. In the last election cycle, the website www.911truth.org  even produced a questionnaire with pointed inquiries for candidates, just like the US Chamber of Commerce or the Sierra Club. The Truth Movement's relationship to the truth may be tenuous, but that it is a movement is no longer in doubt.

    Truth activists often maintain they are simply "raising questions," and as such tend to focus with dogged persistence on physical minutiae: the lampposts near the Pentagon that should have been knocked down by Flight 77, the altitude in Pennsylvania at which cellphones on Flight 93 should have stopped working, the temperature at which jet fuel burns and at which steel melts. They then use these perceived inconsistencies to argue that the central events of 9/11--the plane hitting the Pentagon, the towers collapsing--were not what they appeared to be. So: The eyewitness accounts of those who heard explosions in the World Trade Center, combined with the facts that jet fuel burns at 1,500 degrees Fahrenheit and steel melts at 2,500, shows that the towers were brought down by controlled explosions from inside the buildings, not by the planes crashing into them.

    If the official story is wrong, then what did happen? As you might expect, there's quite a bit of dissension on this point. Like any movement, the Truth Movement is beset by internecine fights between different factions: those who subscribe to what are termed LIHOP theories (that the government "let it happen on purpose") and the more radical MIHOP ("made it happen on purpose") contingent. Even within these groups, there are divisions: Some believe the WTC was detonated with explosives after the planes hit and some don't even think there were any planes.

    To the extent that there is a unified theory of the nature of the conspiracy, it is based, in part, on the precedent of the Reichstag fire in Germany in the 1930s. The idea is that just as the Nazis staged a fire in the Reichstag in order to frighten the populace and consolidate power, the Bush Administration, military contractors, oil barons and the CIA staged 9/11 so as to provide cause and latitude to pursue its imperial ambitions unfettered by dissent and criticism. But the example of the Reichstag fire itself is instructive. While during and after the war many observers, including officials of the US government, suspected the fire was a Nazi plot, the consensus among historians is that it was, in fact, the product of a lone zealous anarchist. That fact changes little about the Nazi regime, or its use of the fire for its own ends. It's true the Nazis were the chief beneficiaries of the fire, but that doesn't mean they started it, and the same goes for the Bush Administration and 9/11.

    The Reichstag example also holds a lesson for those who would dismiss the very notion of a conspiracy as necessarily absurd. It was perfectly reasonable to suspect the Nazis of setting the fire, so long as the evidence suggested that might have been the case. The problem isn't with conspiracy theories as such; the problem is continuing to assert the existence of a conspiracy even after the evidence shows it to be virtually impossible.

    Debunking The 9/11 Myths -Popular Mechanics examines the evidence and consults the experts to refute the most persistent conspiracy theories of September 11 --- http://www.popularmechanics.com/technology/military_law/1227842.html


    In India, abortion is not gender neutral
    Ten million girls have been killed by their parents in India in the past 20 years, either before they were born or immediately after, a government minister said on Thursday, describing it as a "national crisis" . . . A UNICEF report released this week said 7,000 fewer girls are born in the country every day than the global average would suggest, largely because female foetuses are aborted after sex determination tests but also through murder of new borns.
    Palash Kumar, "India has killed 10 mln girls in 20 years," Yahoo News, December 154 2006 ---     http://news.yahoo.com/s/nm/20061214/india_nm/india280322


    How to check on a charity or church before you donate

    International Center for Not-for-Profit Law --- http://www.icnl.org/ 

    FTC Charity Fraud Site --- Search at http://www.ftc.gov/

    You can begin with IRS Form 990 disclosures, but these may be more misleading than helpful. You can access them from Guidestar at http://www.guidestar.org/index.jsp

    Guidestar also provides salary disclosures for top executives in the charity. However, funds can be diverted by cheats in other ways.

    Research Tools
    Analyst Reports
    Charity Check
    Grant Explorer
    Data Services
    Nonprofit Compensation Reports
    Salary Search

    "Giving Freely—And Wisely:  One site names preachers who may be misusing money and suggests that you 'prayerfully' consider giving to other ministries instead," Jane Bryant Quinn, Newsweek, December 18, 2006, Page 51 --- http://www.msnbc.msn.com/id/16127630/site/newsweek/
     

    Unfortunately, you can't always believe what the (IRS Form) 990 says. It's supposed to show how much the nonprofit spends on actual services, as opposed to fund-raising and administration. But the law isn't much enforced. In a report covering part of the 1990s, the General Accounting Office found that 64 percent of public charities claimed to have zero—zero!—fund-raising expenses. Do you believe that? Neither do I.

    Some of the rating services adjust for these problems. Uncharitably, they often slam each other's methods while touting their own. I'm a civilian in these wars, so my advice is to look for good grades from every source. Start your research here:

    1. The Better Business Bureau Wise Giving Alliance (Give.org). It currently posts reports on more than 900 nonprofits, testing them by a number of standards including good governance. About 65 percent of them pass. The rest fail, or refuse to be evaluated (a bad sign, no matter what excuse the charity gives).

    2. American Institute of Philanthropy (CharityWatch.org). It's the toughest of the bunch, rating more than 500 charities on a scale of A+ down to F. Because it disregards certain, potentially suspect, expenses and donations, it fails some nonprofits that the other raters approve. Readers of this column can get its latest Charity Rating Guide free from AIP, P.O. Box 578460, Chicago, IL 60657.

    3. CharityNavigator.org rates 5,100 nonprofits on a scale of zero to four stars. This site draws only from a nonprofit's latest 990 form, which could mislead. But I like its Top Ten lists, such as 10 Charities Overpaying Their For-Profit Fund-Raisers.

    4. MinistryWatch.com rates more than 500 evangelical groups on a scale of 1 to 5 stars. It's an ardent advocate for financial disclosure. The site names preachers who may be misusing money and suggests that you "prayerfully" consider other ministries instead. Withholding that advice, says MinistryWatch.com, would be "tantamount to condoning sin." Hear, hear.

    5. The Evangelical Council for Financial Accountability (Ecfa.org) accredits Evangelical churches and charities based on such standards as audited financial reports and ECFA's own field reviews. If your group hasn't joined (or is on the lists of those that left) you should ask why. There's no comparable service for Jewish, Muslim or Catholic organizations.

    You'll find other sources. GuideStar.org gives no ratings, just access to 990s for nearly 700,000 charities. Pennsylvania's Department of State lists nonprofits that ran into trouble there. They may be fund-raising in other states.

    Still, most people donate simply because someone asks them to, says William Meehan, chair of Philanthropic Research, parent of GuideStar. Charity ratings haven't had much impact, because they're flawed and not enough people follow them. Besides, the ratings don't help you choose among similar charities. For that, you need to know how well they do their jobs. That's the next step—and a new Web site should help it along. Watch for GreatNonprofits.org, launching next spring. People familiar with specific charities—clients, donors, staff and volunteers—will be able to post opinions there, for you to read before you decide to give.

    Continued in article

    Bob Jensen's threads on reporting fraudulent charities are at http://www.trinity.edu/rjensen/FraudReporting.htm#CharityFrauds


    Question
    Do hybrid vehicles (today, at least) appear to be another feel good/do nothing hoax?

    Comparisons of Hybrid Fuel Saving Automobiles --- http://avt.inl.gov/pdf/hev/sae_gov_ind_may_2005_hevs.pdf

    It's beginning to look like a hoax --- http://www.freerepublic.com/focus/f-news/1752922/posts

    The drop in performance with air conditioning is considerable. Maybe a Marin County, CA or Cambridge, MA granola cruncher and live without A/C, but in the Sunbelt we cannot. Driving around in 90+ weather with the windows down won’t cut it.

    Given that the acclaimed fuel efficiency of hybrids is much less with the air on, I wondered how they compared with standard vehicles. Using Edmunds.com, I made a few direct comparisons. This is interesting stuff…

    2003 CIVIC...

    2003 Civic Hybrid
    Air Off: 47 MPG
    Air On: 36 MPG

    2003 Civic LS Auto 4 Cyl.
    City: 29 MPG
    Hwy: 38 MPG
    Avg: 33.5 MPG

    2005 ACCORD...

    2005 Accord Hybrid
    Air Off: 29 MPG
    Air On: 24 MPG

    2005 Accord LX Auto 4 Cyl.
    City: 26 MPG
    Hwy: 34 MPG
    Avg: 30 MPG

    2005 Accord LX Auto 6 Cyl.
    City: 21 MPG
    Hwy: 30 MPG
    Avg: 25.5 MPG

    2005 SILVARADO...
     

    2005 Silvarado 2WD Hybrid
    Air Off: 16 MPG
    Air On: 19 MPG

    2005 Silvarado 2WD Hybrid
    City: 16 MPG
    Hwy: 19 MPG
    Avg: 17.5 MPG

    2005 ESCAPE...

    2005 Escape 2WD Hybrid
    Air Off: 25 MPG
    Air On: 32 MPG

    2005 Escape 2WD 3.0L
    City: 20 MPG
    Hwy: 25 MPG
    Avg: 22.5 MPG
     

    COMPARISON...
    I compared the hybrid fuel savings with air on to the conventional vehicle’s city/highway average. The Civic and Escape hybrids each got a whopping 2.5 MPG better than the conventional vehicles. The Accord and Silvarado hybrids performed worse!

    Civic: Hybrid +2.5 MPG
    Accord 4Cyl: Hybrid -6 MPG
    Accord 6 Cyl: Hybrid -1.5 MPG
    Silvarado: Hybrid -1.5 MPG
    Escape: Hybrid +2.5 MPG

    In some parts of the country, people may not need air conditioning. Where the air is kept on most of the year, the hybrids aren’t such a good deal. In fact, they may get worse fuel efficiency. And we haven’t even discussed the energy cost to recycle the batteries every eight years.


    National security costs hidden in every barrel of oil
    In his new book, Lives Per Gallon, former secretary of the California EPA Terry Tamminen examines the health, environmental and national security costs hidden in every barrel of oil. Wired News interview by John Gartner.
    John Gartner, "The Pernicious Price of Petroleum," Wired News, December 13, 2006 --- http://www.wired.com/news/technology/autotech/0,72266-0.html?tw=wn_index_29


    Google Plants Solar Trees
    The search giant joins a growing trend by landscaping its headquarters' parking lots with pole-mounted panels that provide shade and generate clean power in one fell swoop.
    Marty Graham, "Google Plants Solar Trees," Wired News, December 13, 2006 --- http://www.wired.com/news/technology/0,72292-0.html?tw=wn_index_32


    Corporate Monopoly:  Radio Is Wrecked--But It Can Be Repaired
    A handful of homogenized music formats now dominates the airwaves. Jazz, the classics, folk and new rock are hard to find. Listeners are tuning out. John Nichols reports on a new study by musicians and fans that documents how corporate consolidation is killing American radio--and how the FCC can fix it.
    John Nichols, "Radio Is Wrecked--But It Can Be Repaired," The Nation, December 15, 2006 ---
    http://www.thenation.com/blogs/thebeat?pid=148791


    The knowledge economy of Europe --- http://www.theworkfoundation.com/Assets/PDFs/KE_Europe.pdf
    (Including how Europe compares with the U.S. in terms of the knowledge economy.)


    Native American Code of Ethics --- http://eveningrain.com/Ethics.html


    Saudi Arabia's Method for Terminating Corruption Investigations
    Tony Blair, the British prime minister, has said he takes full responsibility for the decision to abandon an investigation into alleged corruption and bribery. The decision to abandon a two-year corruption inquiry into BAE Systems came after Saudi Arabia suggested it might cancel an order for 72 Eurofighter Typhoon jets from BAE Systems.
    "Blair defends Saudi arms decision," Al Jazeera, December 16, 2006 ---
    http://english.aljazeera.net/NR/exeres/1E0DDA3F-CA29-4CD9-9F9F-53C7A783F6B2.htm

    Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


    EU leaders still divided on future
    European Union leaders have remained far from united about the future shape of the union, set to grow to 27 members when Bulgaria and Romania join on January 1. On the final day of a summit, there were still divisions about further expansion beyond that date and about whether and how to revive a stalled EU constitution rejected by French and Dutch voters.
    "EU leaders still divided on future," Al Jazeera, December 15, 2006 ---
    http://english.aljazeera.net/NR/exeres/3BFC3168-27AB-48A2-A1C0-9BC7EBC7DCA2.htm


    Taxation of Dividends Creates European Union Stir
    The Institute of Chartered Accountants in Ireland (ICAI) said that the European Court of Justice (ECJ) ruling this week on the UK dividends case creates issues for other European countries, including Ireland, which have a similar system of taxation of dividends to that in the UK. The ECJ ruled on the principles of freedom of establishment and freedom of movement of capital in relation to the UK dividends system. See further details in our full news item.
    Andy Lymer, "ECJ DIVIDENDS CASE CREATES ISSUES FOR IRELAND," AccountingEducation.com, December 14, 2006 --- http://accountingeducation.com/index.cfm?page=newsdetails&id=144069


    True deficit: $3.5 trillion:  Analyst says coming Treasury report will document 'unsustainable' pace
    A report scheduled to be released by the Treasury Department tomorrow is expected to show the true deficit in the
    Bush administration's 2006 federal budget to be an astounding $3.5 trillion in the red, not $248.2 billion as previously reported.
    Jerome R. Corsey, "True deficit: $3.5 trillion," WorldNetDaily, December 14, 2006 ---
    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53366


    Johns Hopkins Gets a Separate B-School
    What's better than one Carey B-school? How about another one? The same person who endowed the W.P. Carey School of Business at Arizona State has done it again, this time at Johns Hopkins University in Baltimore. Johns Hopkins officials said Dec. 5 that the school received a $50 million donation from trustee emeritus William Polk Carey to go toward the creation of the university's first separate business school. Carey is chairman of New York real estate investment firm W.P. Carey & Co.
    Julie Gordon, "Johns Hopkins Gets a Separate B-School," Business Week, December 5, 2006 --- http://www.businessweek.com/bschools/content/dec2006/bs20061205_466430.htm?link_position=link4
    Jensen Comment
    What a tough challenge! Can you imagine trying to hire a new business school faculty from scratch? It is absolutely certain that Johns Hopkins will want prestigious faculty. It will be interesting to see who they snare. About three weeks ago I flew into Baltimore and took a limo down to Crystal City, Virginia. I was truly impressed by the number of trees in full foliage. Our leaves blew off the trees over six weeks ago.


    In spite of legislation and voter mandates, universities will always have race-based affirmative action

    As we wrote at the time, "a cynic might conclude that the decisions mean universities can still discriminate as long as they're not too obvious about it." That is exactly what Wayne State is doing. Its new law school admission guidelines, unveiled last week, avoid mention of race and other preference criteria explicitly banned by Prop 2. Instead, applicants will be invited to describe their family's socio-economic status and educational history, past experiences of discrimination, any foreign languages spoken at home, etc.
    "The Racial Runaround The University of Michigan isn't accepting voters' rejection of affirmative action," The Wall Street Journal, December 15, 2006 --- http://opinionjournal.com/taste/?id=110009387

    Bob Jensen's threads on affirmative action in college admissions and grading are at http://www.trinity.edu/rjensen/HigherEdControversies.htm#AcademicStandards


    The press is an evil for which there is no remedy. Liberty depends upon freedom of the press and that cannot be limited without being lost.
    Thomas Jefferson (1743-1826) --- http://en.wikipedia.org/wiki/Thomas_Jefferson

    "The Media Is in Need of Some Mending," by Peter R. Kann, The Wall Street Journal, December 11, 2006; Page A18 --- Click Here

    At its best news informs and enlightens the citizens of a free society and thereby safeguards and strengthens our democracy. At its worst -- dishonest, unfair, irresponsible -- the media has potential to erode the public trust on which its own success depends and to corrode the democratic system of which it is so indispensably a part. So, let me touch on 10 current trends in the mass media that ought to disturb us.

    The blurring of the lines between journalism and entertainment. Journalism that puts too high a priority on entertaining is almost destined to distort and mislead. Compounding this confusion is a diffusing definition of "journalist." When political operatives moonlight at moderating news shows, when people alternate between being political editors and political consultants, when celebrity newspeople pocket $20,000 fees speaking at corporate conventions while criticizing congressman for conflicts of interest -- we jumble public perceptions of newspeople as well as news.

    The blurring of lines between news and opinion. Newspapers have a format that helps maintain the distinction. The Internet, TV and most magazines have neither that format nor that tradition. The result is a blending of news and views. The two are not ingredients to mix together for a tastier meal, they are different courses. Part of the problem here lies in fashionable new philosophies that argue there are no basic values of right and wrong, that news is merely a matter of views. It's a dangerous philosophy for our society and a dagger at the heart of genuine journalism.

    The blending of news and advertising, sponsorships or other commercial relationships. The resulting porridges may be called "advertorials" or "infomercials"; they may be special sections masquerading as news, news pages driven by commercial interests, or Web pages where everything somehow is selling something. Without clear distinctions between news and advertising, readers or viewers lose confidence in the veracity of a news medium. And advertisers lose the business benefit of an environment of trust.

    The problems and pitfalls inherent in pack journalism. Individually, most reporters are decent, dedicated, fair-minded people. But the press, en masse, tends to lose its common sense and its sense of fairness and independence and what we see all too often is the spectacle of a pack of hounds in pursuit of a quarry. We frequently see this phenomenon in political reporting, where the faintest whiff of scandal, or even of weakness, can send the pack in pursuit. At its worst, the pack, not finding a real problem, proclaims the "perception" of one and this perception becomes self-fulfilling.

    The issue of conflict and context. On most issues most Americans are not on polar extremes. On abortion, for example, most seek a sensible center. Where is that center reflected in media coverage that mainly portrays rabid feminists or irate pro-life activists? Balance is not achieved by the talk show format of two extremists yelling at each other. And how many of us recognize our own communities from their depiction on local TV news shows -- a nonstop montage of mayhem, murder, rape, arson, child molestation and more?

    The exaggerated tendency toward pessimism. Just look back a few years over much of the media coverage of "American competitiveness." All those news magazine covers on the coming "Japanese Century." And along with it, all the pessimism about the ability of U.S. industry to compete globally. It was nonsense. Similarly, it's one thing -- and an appropriate one -- for the press to probe particular instances of political corruption. It's quite another thing to jump to the cynical conclusion that our political process, and all politicians, are corrupted -- that "they all do it." They don't, and they aren't. Skepticism and criticism are essential to the media's role; reflexive pessimism is not.

    The growing media fascination with the bizarre, the perverse and the pathological -- John Mark Karr journalism. Such so-called journalism helps instantly legitimize crackpot ideas, deviant behavior, or alleged victimization in our society. My point is not to argue for "good news" vs. "bad news," but to ask whether much of this amounts to news at all?

    Social orthodoxy, or political correctness. These are reflected in a media whose job is not to parrot prevailing fashions, but to question, probe and thereby challenge them. Businessmen are not, by definition, greedy, and environmentalists, by definition, saintly. Third World poverty is not, by definition, a result of overpopulation as opposed to inane economic policies. And so on.

    The media's short attention span. As the press hops from Baghdad to Beirut, Natalee Holloway to Valerie Plame, Super Bowls to Super Tuesdays, it justifiably can blame some combination of the nature of the news and the short attention span of the public. The public, meanwhile, bombarded and bewildered can blame a fickle and shallow press. There are too many instant celebrities. Too many two-day crises. Too many "defining moments" from people in search of instant history. In a world where everything is considered critical, nothing needs to be taken very seriously.

    The matter of power. The press is at least partially responsible for greater public skepticism toward traditional institutions in America. But the truth, not lost on our public, is that the press is a large and powerful institution, too: "60 Minutes" is more powerful than almost all of the subjects it exposes. This newspaper, arguably, has more influence on national economic policy than do most corporations. Networks are owned by giant industrial corporations, magazines by entertainment conglomerates, and most newspapers by national chains. Given these realties, we cannot plausibly pretend to be a David out there smiting Goliaths and expect the public to believe it.

    Mr. Kann, a Pulitzer-winning journalist, is chairman of Dow Jones.
     


    Question
    What is IBM's new super computer called Deep Thunder?

    "Personalized Weather Forecasts: An IBM supercomputer forecasts weather down to a one-kilometer resolution," by Duncan Graham-Rowe, MIT's Technology Review, December 12, 2006 --- http://www.technologyreview.com/InfoTech/17885/

    IBM has launched a new weather service called Deep Thunder that can predict the rain, the wind, and temperature conditions down to a one-kilometer resolution. In time, IBM researchers say they should even be able to nail the resolution down to individual streets.

    The idea is to provide weather-sensitive businesses in metropolitan areas with information that's more accurate than what government agencies are capable of providing, says Lloyd Treinish, a researcher at IBM's TJ Watson Research Center, in Yorktown Heights, NY.

    At a local submetropolitan level, the weather really can vary quite significantly, says Treinish. Yet typical forecasts will often slap a single simplistic symbol, such as the sun, a cloud, or a snowflake, on an area representing a small city.

    A huge number of businesses really depend on accurate weather forecasts, says Stephen Lord, director of the National Oceanic and Atmospheric Administration's Environmental Modeling Center, in Camp Springs, MD. Transportation, energy distribution, shipping, and even sporting events are all at the mercy of the weather, he says. Indeed, as much as $1 trillion worth of the U.S. economy is weather sensitive, says Treinish. By providing more-detailed forecasts, IBM hopes to help businesses streamline their operations and save money.

    For example, local municipal services such as snowplowing could be deployed more efficiently with more-detailed information about precisely where snow will fall. Similarly, by being more prepared, utility companies could better manage energy demand and better cope with outages caused by severe weather. Even airports and postal services would benefit: they could plan and schedule operations around weather conditions.

    Government agencies, such as the National Weather Service (NWS), are currently unable to provide the same level of detail. This is partly because they don't have the technical resources, but it's also because they are mandated to offer a uniform level of service across the nation, preventing them from providing higher resolutions for some areas and not others. Even at a metropolitan level, where local meteorological services try to improve on NWS forecasts by factoring in local measurements and conditions, the resolution is rarely much better than eight kilometers, says Treinish.

    When combined, all these factors represent a gap in the market that companies like IBM could fill by tailoring their services to individual businesses. "We want to think about the information in relation to solving particular business problems," says Treinish.

    Continued in article

    Deep Thunder --- http://services.alphaworks.ibm.com/deepthunder/

    The FAQ answers about Deep Thunder are at http://services.alphaworks.ibm.com/deepthunder/faq.html 

    What is most important is to scroll down the above FAQ page to view the amazing graphics.

    Jensen Comment
    To see the limited examples now available, I clicked on the "Try It Now" link. After I agreed to terms and conditions, a map showing three metropolitan areas appeared. I tried it for Kansas City. Then I chose President Truman's birthplace in Independence, Missouri. Instructions are fairly detailed.

    If you're interested in news about related IBM alphaWorks technologies, probably the best thing to do is create a personalized RSS feed at http://www.alphaworks.ibm.com/rss

    What struck me is how this supercomputing technology may be expanded to services other than weather reports. Within each square kilometer we may one day get reports on entertainment, real estate development, local government initiatives, business services, traffic reports, museums, parks, crime reports, etc. Eventually there may even be investment reports, accounting data in XBRL markups, etc. You might even be able to peer, God forbid, into my front window and watch Bob Jensen in long underwear typing out these Tidbits while looking over the snow at this morning's spectacular sunrise and dreaming of a Deep Thunder forecast of summer's wild roses.

    Bob Jensen's threads on travel and weather are at http://www.trinity.edu/rjensen/Bookbob3.htm


    December 12, 2006 message from David Raggay [draggay@TSTT.NET.TT]

    Any one aware of any outstanding train the trainer programs?

     

     

    Regards,

     

    David

    December 12, 2006 reply from Bob Jensen

    Hi David,

    I personally am turned off by some of these so-called train-the-trainer programs and speakers who are long on form and shallow on substance, particularly those who sometimes receive over $10,000 for a presentation on the latest Harvard Business Review fads. The worst presentations, in my viewpoint, are some of those hired for executive conferences, AACSB programs, and on rare occasions AAA plenary sessions (there was a flood of people streaming out early from one of these plenary sessions at the annual meetings in August 2004.)

    If you really want to pursue this type of thing you might contact Chad Herman at Carnegie Mellon University. He’s a specialist in Business Communication --- http://homepage.mac.com/chadhermann/iblog/

    Keeping in mind that top teachers are not always the best presenters, I would still try to study in some way professors who are deemed truly outstanding teachers. Some may have helpful Websites. Some may be willing to share thoughts with you (us?) if approached diplomatically. Some may even appear at a program sponsored by you down at Trinidad.

    Business Week attempted to identify the top teachers in business schools --- My Favorite Professor

    An accounting winner was Joe Ben Hoyle at the University of Richmond according to Business Week, September 20, 2006 --- Click Here
    Also see http://oncampus.richmond.edu/~jhoyle

    I previously mentioned the popularity of accounting professor Merle Hopkins at the University of Southern California. He also is rated a "Favorite Professor" by Business Week.

    Edward Hums at Notre Dame is an accounting "Favorite Professor."

    C.J. Skender at the University of North Carolina is an accounting "Favorite Professor."
    (He cheats by handing out candy bar bribes.)

    And my personal favorite is Amy Dunbar at the University of Connecticut (tax). She can do it all --- live lectures and online. She’s also a veteran user of education technologies.


    Things I bet you did not know Google can do for you

    December 10, 2006 message from Glen Gray [glen.gray@CSUN.EDU]

    There is a great little article at http://www.informit.com/articles/article.asp?p=675528&rl=1  that outlines many of the special searches you can do on www.google.com 

    Glen L. Gray, PhD, CPA
    Dept. of Accounting & Information Systems
    College of Business & Economics California State University,
    Northridge Northridge, CA 91330-8372 818.677.3948

    http://www.csun.edu/~vcact00f

    Google is a great search engine, but it's also more than that. Google has tons of hidden features, some of which are quite fun and most of which are extremely useful— if you know about them. How do you discover all these hidden features within the Google site?
    See http://www.informit.com/articles/article.asp?p=675528&rl=1


    How KB Home CEO's pay went through the roof
    KB Home may be the fifth-largest U.S. home builder, but it was No. 1 when it came to pay for its chief executive. Over the last three years, former CEO Bruce Karatz made $232.6 million in compensation.
    Kathy M. Kristof and Annette Haddad, LA Times, December 17, 2006 --- http://www.latimes.com/services/site/premium/access-registered.intercept

    Jensen Comment
    I'd be more impressed if KB homes bought back the fundamentally-flawed cracked foundations of all those defective homes built in Texas --- http://ths.gardenweb.com/forums/load/build/msg0122380524478.html?12

    Bob Jensen's threads on outrageous executive compensation are at http://www.trinity.edu/rjensen/FraudConclusion.htm#OutrageousCompensation


    Auto and Truck Repair and Advice --- http://www.econofix.com/
    (includes a module on how to listen for problems)


    Google added historic map overlays to its free interactive online globe of the world to provide views of how places have changed with time.
    "Google Earth maps history," PhysOrg, November 14, 2006 --- http://physorg.com/news82706337.html

    Google Earth --- http://earth.google.com/

    Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm


    "Credit Card 101: Advice Before Shopping," AccountingWeb, November 22, 2006 ---
    http://www.accountingweb.com/cgi-bin/item.cgi?id=102824
    Repeated in this edition of Tidbits because it is so important!!!

    Bob Jensen's threads on the dirty secrets of credit card and credit scoring companies are at http://www.trinity.edu/rjensen/FraudReporting.htm#FICO


    Parent Resource Page for Daycare Centers --- http://www.fccimn.com/parentresource.htm


    "How to Bring Our Schools Out of the 20th Century," by Claudia Wallis and Sonja Steptoe, Time Magazine Cover Story, December 10, 2006 --- Click Here

    Right now we're aiming too low. Competency in reading and math--the focus of so much No Child Left Behind (NCLB) testing--is the meager minimum. Scientific and technical skills are, likewise, utterly necessary but insufficient. Today's economy demands not only a high-level competence in the traditional academic disciplines but also what might be called 21st century skills. Here's what they are:

    Knowing more about the world. Kids are global citizens now, even in small-town America, and they must learn to act that way. Mike Eskew, CEO of UPS, talks about needing workers who are "global trade literate, sensitive to foreign cultures, conversant in different languages"--not exactly strong points in the U.S., where fewer than half of high school students are enrolled in a foreign-language class and where the social-studies curriculum tends to fixate on U.S. history.

    Thinking outside the box. Jobs in the new economy--the ones that won't get outsourced or automated--"put an enormous premium on creative and innovative skills, seeing patterns where other people see only chaos," says Marc Tucker, an author of the skills-commission report and president of the National Center on Education and the Economy. Traditionally that's been an American strength, but schools have become less daring in the back-to-basics climate of NCLB. Kids also must learn to think across disciplines, since that's where most new breakthroughs are made. It's interdisciplinary combinations--design and technology, mathematics and art--"that produce YouTube and Google," says Thomas Friedman, the best-selling author of The World Is Flat.

    Becoming smarter about new sources of information. In an age of overflowing information and proliferating media, kids need to rapidly process what's coming at them and distinguish between what's reliable and what isn't. "It's important that students know how to manage it, interpret it, validate it, and how to act on it," says Dell executive Karen Bruett, who serves on the board of the Partnership for 21st Century Skills, a group of corporate and education leaders focused on upgrading American education.

    Developing good people skills. EQ, or emotional intelligence, is as important as IQ for success in today's workplace. "Most innovations today involve large teams of people," says former Lockheed Martin CEO Norman Augustine. "We have to emphasize communication skills, the ability to work in teams and with people from different cultures."

    Can our public schools, originally designed to educate workers for agrarian life and industrial-age factories, make the necessary shifts? The Skills commission will argue that it's possible only if we add new depth and rigor to our curriculum and standardized exams, redeploy the dollars we spend on education, reshape the teaching force and reorganize who runs the schools. But without waiting for such a revolution, enterprising administrators around the country have begun to update their schools, often with ideas and support from local businesses. The state of Michigan, conceding that it can no longer count on the ailing auto industry to absorb its poorly educated and low-skilled workers, is retooling its high schools, instituting what are among the most rigorous graduation requirements in the nation. Elsewhere, organizations like the Bill and Melinda Gates Foundation, the Carnegie Foundation for the Advancement of Teaching and the Asia Society are pouring money and expertise into model programs to show the way.

    What It Means to Be a Global Student

    Continued in article


    A national survey of freshmen has found that what they most value in a college education is professional preparation, followed by academic quality and affordability. The survey was conducted by Eduventures, a consulting company.
    Inside Higher Ed, December 12, 2006 --- http://www.insidehighered.com/news/2006/12/12/qt


    "The Failure of Critical Thinking," by John V. Lombardi, Inside Higher Ed, December 12, 2006 --- http://www.insidehighered.com/views/2006/12/12/lombardi

    The current controversies over admission practices of elite public and private institutions illustrate what happens when we allow ourselves to fight about the wrong things. This lack of critical thinking begins with a false premise and continues with an attack on institutions that do not conform to the false premise. Sometimes, rather than pointing out the false premise, institutions and their leaders react defensively as if the false premise were correct. Both attacker and respondent in this circumstance fail the test of critical thinking.

    The error is usually at the beginning. Someone ( most recently the Education Trust, but the list of commentators who have taken the same tack is long) asserts that elite public universities should be admitting as many poor people as there are in the population of high school graduates in their states. Having asserted this erroneous notion, they compile data (that may also be flawed) using often unreliable methodologies, and issue a manifesto damning elite public universities because they don’t meet the original false premise. Rather than pointing out the error, some elite universities, sensing a politically correct risk, counter with data showing how much they do to recruit and subsidize the poor people who want to come to their university.

    All this is not very helpful in addressing issues of access and affordability. We do indeed have to pay attention to the possibility that some graduates of high school who have the preparation and interest might be priced out of an opportunity to acquire a quality higher education, either by virtue of a high net cost of attendance or by the imposition of admissions standards that less affluent students find difficult to meet. This, however, is not a problem that belongs to elite public or private universities alone but is a challenge faced by all the providers of higher education in America. To focus on elite institutions is to make some pernicious and inaccurate assumptions about all the other institutions of higher education.

    If we assume that everyone should have an equal opportunityto attend an elite public or private institution (since both are heavily subsidized by taxpayers), then we must also assume that attendance at a non-elite public or private institution represents an unsatisfactory and therefore unequal outcome for a student. If the community colleges, state colleges, non-flagship state institutions, and many non-elite private colleges represent an unsatisfactory and inequitable opportunity, compared to what we call elite institutions, that would seem to require us to assume that they do a poor job of educating students; that the results of their educational efforts are second rate; and that anyone who attends such places is sure to be deficient upon graduation. This kind of thinking may reflect the snobbery of some elite groups who can’t imagine a good education coming from a campus of the California State University system, or a fine education at a combination of Greenfield Community College and Westfield State College in Massachusetts. Such an assumption also reflects a profound ignorance about the actual academic performance of the students who graduate from these “non-elite” institutions.

    The notion of “elite institution” deserves some attention. We who live and work in institutions labeled elite have every reason to accept the premise that only an education in our remarkable places is worth having even if we can present little evidence to demonstrate that our elite characteristics result in higher performance after graduation. Research that attempts to demonstrate the higher value of elite compared to non-elite education seems to indicate that while some people may benefit from instruction at a small private elite college, most students do just about as well after graduation, all other things being equal, whether they go to elite or non-elite institutions.

    The elite status of an institution comes from its ability to spend more money than institutions deemed “non-elite.” These expenditures do indeed make a different institution. For example, a state flagship institution may have its faculty teaching only half time, assigning the other half time to research. The student activities supported by the elite institution may be more elaborate, the residential spaces more elegant, the quality of the buildings and other facilities more impressive, the student recreation center more comprehensive, and the intercollegiate sports program more nationally visible. These amenities define elite status for undergraduates, and many assume that the amenities reflect academic quality. Students and their parents like these amenities, they ask about them when they visit campus, and they appear willing to pay a premium for the opportunity to participate in the residential life of an elite university. Still, the data that would tell us that the students really learn more and will do much better after graduation as a result of these amenities is not very persuasive.

    If we figure the cost of attendance at one of these elite institutions and compare it to the cost of attending a community college and state college, near where the student lives and where the student can hold down a job, we find that the best educational bargain by far is the community college-state college combination.

    When we worry about whether poor people can get access to college, some imagine that a zero cost of attendance will solve the problem. That doesn’t really work. Even when an institution pays for the tuition and fees, including room and board, for students below some income marker, these students still come up short an additional $10K to make up for the opportunity cost of living away from home and losing the income from a regular 12-month part-time or full-time job. The public cost of subsidizing elite education for all is very high for rather limited gains. And, of course, there are not enough spots in what we call elite institutions to accommodate all the deserving students of all income levels.

    Because space is limited, even in elite public institutions with enrollments over 40,000, the institutions select students based on various criteria, some related to geography, some related to ethnicity, some related to academic preparation, and some related to athletic skill. It would certainly be possible to add other criteria to this list to try and achieve an equal opportunity for all students. However, the only truly “fair” admission process would do what we suggested in an earlier Reality Check: fill the class using random selection from a pool composed of all high school graduates who meet the institution’s minimum admission criteria. There is a certain simplistic charm to this notion.

    Continued in article

    Bob Jensen's threads on college admission affirmative action controversies are at http://www.trinity.edu/rjensen/HigherEdControversies.htm#AcademicStandards
     


    Writing Guidelines for Engineering and Science Students --- http://www.writing.eng.vt.edu/

    Novel Ideas aids for writers (with audio) --- http://www.npr.org/templates/story/story.php?storyId=6484932

    Bob Jensen's writing helpers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Dictionaries


    Helpers for Managing a Restaurant
    Restaurant Doctor --- http://www.restaurantdoctor.com/index.html

    Bob Jensen's online training links are at http://www.trinity.edu/rjensen/Crossborder.htm#Training


    DealBook is a financial news service produced by The New York Times.
    It is published daily, Monday-Friday, except on U.S. Market holidays and during the last week of the year. A daily digest of DealBook is also available via email, delivered before the market opens.
    The New York Times --- http://dealbook.blogs.nytimes.com/

    Bob Jensen's investment helpers are at http://www.trinity.edu/rjensen/Bookbob1.htm


    White Collar Crime Pays Even If You Get Caught
    (It's similar to arresting a Mafia boss in Italy)

    "Despite convictions, Rigases live in the lap of luxury," by Jerry Zremski, Buffalo News, December 3, 2006 --- http://www.buffalonews.com/editorial/20061203/1074150.asp

    Instead of facing immediate prison time, experts say Rigases might win a new trial.

    Nearly two and a half years after being convicted of bank fraud and other corporate crimes, former Buffalo Sabres owner John J. Rigas and his son Timothy remain comfortably at home in Coudersport, Pa., awaiting the results of their appeal.

    Meanwhile, many other executives who found themselves on the government's rap sheet in recent years - Andrew Fastow of Enron, Bernard Ebbers of WorldCom, Dennis Kozlowski of Tyco are all behind bars.

    What's more, lawyers close to the Rigas case and independent experts are now entertaining a possibility that, to trial-watchers, seemed laughable at the time of the Rigases' conviction in July 2004: that they could win their appeal and thus face a retrial.

    While it's rare for a federal appeals court to reverse a criminal conviction, it's also rare for a court to take nearly six months to decide such a matter. Yet that's how long ago a three-judge appellate panel in New York City heard the Rigas appeal, and some lawyers think the long wait for a decision is indication that the court is taking the appeal very seriously.

    "Usually, you expect a decision in a case like this in about a month and a half," said Mark Mahoney, the Buffalo attorney who won freedom for one of the Adelphia Communications Corp. defendants, Michael Mulcahey. "The delay means they are taking more time because the issues here are somewhat knotty."

    Of course, the elaborate frauds concocted at Enron, WorldCom and Tyco are inherently knotty, but courts were able to unravel them sufficiently to make sure that the convicts in each case went to prison comparatively quickly.

    Ebbers was convicted in March 2005, lost an appeal and was sent to a federal prison in Louisiana in September.

    Fastow was sentenced in September and joined Ebbers in Oakdale Federal Detention Facility this month.

    And Kozlowski was sent to Mid-State Correctional Facility in Marcy within weeks after his 2005 conviction and even before he appealed.

    There's one thing that separates all those cases from the one that ensnared the Rigases, who ran Adelphia, a huge cable company based in Coudersport. Their appeal raises a serious legal question that even the judge in their trial agreed ought to be heard.

    At a little-noticed court hearing in July 2005, a month after he sentenced John Rigas to 15 years and Timothy Rigas to 20 years in prison, Judge Leonard B. Sand allowed them to go free on bail pending their appeal.

    He said he did so because the defense raised a novel argument: the government persuaded the jury to convict the Rigases of fraud and conspiracy based on their violations of generally accepted accounting principles but never called an expert witness to explain what those principles are.

    At the hearing, Sand said he didn't necessarily buy that argument, but added it "is something that I can't call frivolous."

    Mahoney said "a lot of people felt it was generous" when Sand let the Rigases out on bail, because it's rare that people convicted in the federal courts win that sort of freedom.

    Denise O'Donnell, a former U.S. attorney in the Western District of New York, agreed.

    "There is a presumption against bail in the federal system, so the Rigases had a very high hurdle to overcome just to get released pending the appeal," she said.

    The fact that they were released shows that they "raised a substantive question of law" that could lead to the reversal of their conviction, O'Donnell added.

    Attorneys for the Rigases spelled out that question at a hearing before a three-judge federal appeals panel on June 13.

    Without an expert witness explaining accounting rules, "the jury was never put in a position to decide whether the Rigases' conduct was proper or improper," argued John Nields, the lawyer for Timothy Rigas.

    Richard Owens, the prosecutor in the case, countered by saying the government didn't want to prolong an already lengthy trial by starting "a battle of the experts."

    Three federal judges are still pondering that argument, and independent legal experts agreed with the Rigas attorneys that the appeal needs to be taken seriously.

    "I was surprised" that such an expert witness wasn't called, said Eugene O'Connor, a former federal prosecutor who now teaches law and accounting at Canisius College. "The question I have is: How is the jury to assess with some certainty that these men violated the accounting standards?"

    Then again, the prosecution laid out a case that, in the court of public opinion at least, might be seen as difficult to refute.

    Arguing that the Rigases treated Adelphia as their "private piggy bank," Owens showed that John Rigas billed the company for his Columbia House record club and used the corporate jet to send Christmas trees to his daughter in New York City.

    Timothy Rigas, meanwhile, dipped into corporate funds to purchase 100 pairs of luxury slippers and a flight meant to impress an actress friend.

    In total, prosecutors said the Rigases "looted" Adelphia of $100 million while hiding $2.3 billion in debt and misleading banks and investors about Adelphia's earnings.

    The jury convicted John and Timothy Rigas of 18 of the 23 charges against them. A mistrial was declared in the case of another Rigas son, Michael, who later pleaded guilty and was sentenced to home confinement.

    That's not entirely different than what John and Timothy Rigas are currently facing. Paul Shechtman, John Rigas' appeals lawyer, said both John and Timothy Rigas are still in Coudersport.

    "Under the circumstances, John is doing as well as can be expected," Shechtman said. "He's enjoying his grandchildren."

    Of course, those circumstances could change at any time. Lawyers close to the case said they don't know what to think about the fact that the appeals court is taking so much time to render a decision.

    "It's usually a good sign," Shechtman said. "I know they've issued opinions in cases that were heard after ours in several instances."

    However, the Second Circuit U.S. Court of Appeals is especially busy and may simply want to take its time poring over the record of the four-month trial, several lawyers said.

    One thing is for sure: if the appeals court rules for the Rigases and orders a retrial, it will be issuing an opinion that will have ramifications far beyond the borough of 2,600 that the Rigases call home.

    "It would be a huge decision with wide ramifications in financial fraud cases," O'Donnell said. "I can't think of any other similar case where this could happen."

    It was the largest fine ever imposed on an auditing firm
    Deloitte & Touche LLP incurred the wrath of federal regulators Tuesday over public statements that appeared to shift the blame away from the auditing firm for failed audits of Adelphia Communications Corp. and Just for Feet Inc. Deborah Harrington, a Deloitte spokeswoman, said regulators requested that the firm revise the first press release it put out. The second release omitted some disputed statements. Deloitte, the U.S. accounting branch of Big Four accounting firm Deloitte Touche Tohmatsu, Tuesday agreed to pay $50 million to settle charges by the Securities and Exchange Commission that it failed to detect fraud at Adelphia. It was the largest fine ever imposed on an auditing firm.
    "SEC Rebukes Deloitte on Adelphia Audit Spin," SmartPros, April 28, 2005 --- http://accounting.smartpros.com/x48015.xml

    You can read more about why white collar crime pays at http://www.trinity.edu/rjensen/FraudConclusion.htm#CrimePays

    You can read more about the Rigas' crimes and the Adelphia accounting scandals at http://www.trinity.edu/rjensen/fraud001.htm#Deloitte 


    The Meaning of Mean (Professors)
    "No, you didn't," says a girl in the back row, admiringly, while a few others clap, saying the first student has done what they wish they had the courage to do. "I'm paying $50,000 of my own money for this education," one says. "What these professors don't realize is that they're working for me! I'm the customer!" "Oh, my goodness," I'm saying. "Oh, my goodness." Customer service? What is this, a tire store?
    Marie Laskas, "The Meaning of Mean," The Washington Post, December 7, 2006 --- Click Here


    "Plagiarism and 'Atonement'," by Eugene Volokh, The Wall Street Journal, December 12, 2006; Page A18 --- http://online.wsj.com/article/SB116588497688347029.html?mod=opinion&ojcontent=otep

    Two nurses, both aspiring novelists, helped tend British soldiers during World War II. Briony, the protagonist of Ian McEwan's award-winning novel "Atonement," is fictional. The late Lucilla Andrews is real: She became an author, pioneering romantic "hospital fiction," and also wrote a memoir of her war years. Therein lies the latest plagiarism scandalette to hit the news, sparked by an article in the British press. To be a credible character in a historical novel, Briony had to do the things wartime nurses did, and see the things they saw. It is no surprise that Mr. McEwan read Andrews's book when researching his own; and several passages from his book strongly resemble passages from her memoir.

    "Our 'nursing' seldom involved more than dabbing gentian violet on ringworm, aquaflavine emulsion on cuts and scratches, lead lotion on bruises and sprains," wrote Andrews (to give one example). "In the way of medical treatments, she had already dabbed gentian violet on ringworm, aquaflavine emulsion on a cut, and painted lead lotion on a bruise. But mostly she was a maid," wrote Mr. McEwan.

    Plagiarism? Legally actionable? Ethically reprehensible? Bad manners? Or good research, needed to produce accurate historical fiction?

    Plagiarism is easy to condemn but often hard to define. This is partly because the legal rules differ sharply from the ethical ones, and the ethical rules in scholarship, journalism and fiction differ from each other. And it is partly because the rules for using the facts uncovered by writers of history -- whether memoirists, historians or contemporaneous journalists -- must be different from the rules for using the original phrases that the writers created.

    Let's start with the law. It generally bans not plagiarism as such, but rather copyright infringement. (Trademark law might play a role in extreme plagiarism cases, but not in the typical ones.) And copyright infringement is both broader and narrower than what most people see as "plagiarism."

    For instance, an author can be held liable under copyright law even when he credits the original source from which he copies. The law concerns itself more with protecting authors' ability to profit from their works than with ensuring credit where credit is due. So if I translate Mr. McEwan's novel into Russian without his permission, trumpeting Mr. McEwan's authorship and saying that I am merely the translator, I am a copyright infringer, though not a plagiarist.

    On the other hand, an author is not liable for copying the facts that others have discovered, regardless of whether he gives credit. Copyright law doesn't give authors exclusive rights to facts, because such a monopoly would undermine debate, scholarship and literature. If I write a scholarly legal article that uses without attribution historical facts uncovered by another scholar, my failure to attribute is a serious ethical breach -- but not copyright infringement.

    So on to professional ethics, which properly differs depending on the profession. Academics have the most stringent obligations. If I write an academic work using, without attribution, facts uncovered by another historian, I commit two sins: First, I falsely claim originality for my own work. Second, I wrongly deny a scholar credit that is important to the scholar's reputation. The academic must therefore scrupulously attribute those facts that others have uncovered, and the long and heavily footnoted format of academic books and articles makes this easy.

    But the rules for newspaper articles that mention historical matters are different. Such articles usually don't claim originality of historical research; no reader would assume that snippets of history in an article about modern-day Iraq stem from the journalist's own archival research. The articles do not generally deny historians due professional credit: Scholars get professional respect chiefly based on other scholars' use of their work, not based on citations by reporters. And because space is short, and good journalism often relies on multiple historical sources, newspaper articles can't be expected to acknowledge each historian whose work the journalist used.

    The rules for novels are in between. Novelists are similar to journalists, but they do have space at the end of the book to briefly acknowledge the historical works on which they rely, without distracting from the novel's flow. If you've relied substantially on another's work, acknowledging this is the kind thing to do. Omitting the acknowledgment probably isn't unethical; it's not a lie, or the denial of the credit needed for success in the original author's profession. But it isn't very nice.

    Yet what about copying not just facts, but also another author's words, either literally or in a close paraphrase? Would a general acknowledgment at the end of the book be enough to justify this? Or is such copying impermissible, at least unless you expressly note it using quotation marks, or by writing "as Lucilla Andrews said"? In academic work, the answer is simple: Quote the original, and insert a footnote at the place you quote it. But what about a novel?

    A historical novel, to be accurate, must borrow those words needed to accurately reproduce the historical facts, even when the facts were uncovered by others. If nurses treated ringworm by dabbing gentian violet on it, that's what they did, and novelists must be able to say so. Nor can a novelist note the borrowing using quotation marks and footnotes, as they would interrupt the novel's flow. Writers who strive for factual accuracy must thus remain free to closely paraphrase the factual accounts of others.

    On the other hand, when the historian or memoirist depicted the facts in a colorful way that she herself created, the particular words shouldn't be copied, at least without express acknowledgment. A historical novelist is responsible for creating his own colorful descriptions.

    So where does this leave Mr. McEwan? Likely not guilty on any of the counts, if the account in the newspaper that first broke the story (the Nov. 26 Daily Mail) is thorough. Mr. McEwan borrowed facts, and those words that accurately described the facts. He is not guilty of copyright infringement, or of taking another's original expression without specific notation. And while he did rely on Andrews's autobiography, his acknowledgments page noted being "indebted" to Andrews and her book. Any such acknowledgment could always be made more prominent; but it appears to have been prominent enough.

    More broadly, we should recognize that not all use of another's words requires detailed acknowledgment. Words represent facts; and facts, once revealed, are there to be used, including in novelists' unfootnoted prose.

    Mr. Volokh is a professor of law at UCLA School of Law.

    Bob Jensen's threads on plagiarism are at http://www.trinity.edu/rjensen/plagiarism.htm


    Controversies in Regulation of Distance Education

    "All Over the Map," by Elia Powers, Inside Higher Ed, December 8, 2006 --- http://www.insidehighered.com/news/2006/12/08/regulation

    As the distance learning market continues to grow, state agencies charged with regulating the industry continue to operate in a “fragmented environment,” according to a report presented Thursday at the 2006 Education Industry Finance & Investment Summit, in Washington.

    One of the main questions these agencies must consider is what constitutes an institution having a “physical presence” in their state. In other words, what is an appropriate test to determine whether regulation is needed?

    More than 80 percent of agencies that are included in the report said that they use some sort of “physical presence” test. But few agree on how to define the word “presence,” in part because there are so many elements to consider.

    That’s clear in “The State of State Regulation of Cross-Border Postsecondary Education,” the report issued by Dow Lohnes, a firm with a sizable higher education practice. (The firm plans to release an updated report early next year after more responses arrive.)

    Continued in article

    Bob Jensen's threads on the dark side of education technology are at
    http://www.trinity.edu/rjensen/000aaa/theworry.htm

    Bob Jensen's threads on cross-border distance education and training alternatives are at http://www.trinity.edu/rjensen/crossborder.htm


    Federal Regulators Fine Grant Thornton $300,000 Over Audit of Failed Bank
    Federal bank regulators have fined the accounting firm Grant Thornton LLP $300,000 for what they called "reckless conduct" in its audit of First National Bank of Keystone, a West Virginia institution whose collapse in 1999 was one of the costliest U.S. bank failures in the past decade.
    Marcy Gordon, "Federal Regulators Fine Grant Thornton $300,000 Over Audit of Failed Bank, SmartPros, December 11, 2006 --- http://accounting.smartpros.com/x55776.xml

    Bob Jensen's threads on Grant Thornton (especially the Refco audit failure) are at http://www.trinity.edu/rjensen/Fraud001.htm#GrantThornton


    The seamy underside of asbestos litigation
    In the legal trade, this is known as "double dipping"--the process by which lawyers file claims at many different bankruptcy trusts on behalf of a single plaintiff. Each trust is told a different story about how the client got sick, and the plaintiff collects from all of them. Of course, the lawyers collect too. This practice may well have remained unexposed had not Brayton Purcell decided to cash in on Kananian one more time. It sued Lorillard Tobacco, this time claiming its client had become sick from smoking Kent cigarettes, whose filters contained asbestos for several years in the 1950s. That suit has now exploded on Brayton, exposing one of the asbestos bar's more lucrative cash cows.
    Kimberley A. Strassel, "Trusts Busted:  The seamy underside of asbestos litigation," The Wall Street Journal, December 5, 2006 --- http://www.opinionjournal.com/columnists/kstrassel/?id=110009343

    Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


    Greater Accounting Transparency Sought by the Community College of Philadelphia
    A faculty and staff union at the Community College of Philadelphia plans to pose one major question to the institution’s administration at a demonstration scheduled for today: Teachers and students open their books every day — why won’t administrators? The Faculty & Staff Federation of the Community College of Philadelphia, an affiliate of the American Federation of Teachers, plans to distribute leaflets and circulate a “mobile billboard” around the college’s main campus starting at 9 a.m. today to draw attention to their calls for greater financial transparency on the part of the institution, the latest development in ongoing contract negotiations.Classes will not be interrupted.
    Elizabeth Redden, "Open the Books, Professors Plead," Inside Higher Ed, December 8. 2006 --- http://www.insidehighered.com/news/2006/12/08/ccp

    Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


    Forwarded by Debbie Bowling

    Major breach of UCLA's computer files
    In what appears to be one of the largest computer security breaches ever at an American university, one or more hackers have gained access to a UCLA database containing personal information on about 800,000 of the university's current and former students, faculty and staff members, among others. UCLA officials said the attack on a central campus database exposed records containing the names, Social Security numbers and birth dates — the key elements of identity theft — for at least some of those affected. The attempts to break into the database began in October 2005 and ended Nov. 21, when the suspicious activity was detected and blocked, the officials said.
    Rebecca Trounson, "Major breach of UCLA's computer files: Personal information on 800,000 students, alumni and others is exposed; Attacks lasted a year, the school says," LA Times, December 12, 2006 ---
    http://www.latimes.com/news/local/la-me-ucla12dec12,0,7111141.story?coll=la-home-headlines

    The University of California at Los Angeles is notifying about 800,000 people that some of their personal information may have been available to a hacker who intruded into parts of the university’s computer network. Those whose identifying information may have been seen include current and former students, professors and other employees, plus applicants and the parents of applicants who applied for financial aid.
    Inside Higher Ed, December 13, 2006 --- http://www.insidehighered.com/news/2006/12/13/qt

    Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


    Continued Controversies in Assessment of Colleges

    "Feeling the Winds From Washington," by Doug Lederman, Inside Higher Ed, December 11, 2006 --- http://www.insidehighered.com/news/2006/12/11/accredit

    The 600 academic administrators and professors who gathered in Philadelphia last week for the annual meeting of the Middle States Commission on Higher Education are on the front lines of the accreditation. They’re the ones who lead self-studies of their own colleges or participate on visiting teams that review other institutions. They are charged with ensuring that their campuses are fulfilling their missions of educating students, and of enticing or prodding occasionally recalcitrant faculty members to measure their effectiveness and change their ways if they come up short.

    And to judge by some of the recent rhetoric coming out of Washington, where the accreditation system has become a central focus of the Education Department’s early efforts to carry out the work of the Secretary of Education’s Commission on the Future of Higher Education, they and the rest of the accreditation system are falling short.

    Although the commission abandoned many of the harshest words and radical ideas that had been bandied about during its deliberations — including the possibility of replacing the current system with a “national” (read: federal) framework — its final report still offered a highly critical view of accreditation. Accreditors and higher education officials, the commission concluded, have done far too little to figure out whether college students are coming out of their institutions with the skills they need to be productive workers and citizens.

    Accreditors “still focus on process reviews more than bottom-line results for learning or costs,” the report said. “The growing public demand for increased accountability, quality and transparency coupled with the changing structure and globalization of higher education requires a transformation of accreditation.”

    How has the criticism of accreditation played with those in the trenches? If participants in the Middle States meeting are any indication, they tend to think the accreditors – or at least their own accreditor – have gotten a bit of a bum rap. Middle States, they say, has for several years been pressuring the institutions it accredits (colleges in Delaware, the District of Columbia, Maryland, New Jersey, New York, Pennsylvania and Puerto Rico) to better define what they want their students to know and be able to do, and to find concrete ways to measure their success.

    “This is what the accreditors are trying to achieve already,” said Warren Olip-Ammentorp, a professor of English at Cazenovia College, a small, private college in central New York. “We’ve all been trying to focus on student learning and to use the assessment results to improve that learning, partly because it’s what we’re supposed to do as educators and because we know Middle States is going to hold us accountable on the issue.”

    Indeed, virtually every college official interviewed, at private colleges like Cazenovia and at midsize public universities such as Indiana University of Pennsylvania, described efforts – often years in the making – to gauge student outcomes and to use that information to inform curricular and other changes aimed at improving how students fare.

    The college officials, almost to a one, also said they worried that the commission’s and the Education Department’s push for colleges to use common indicators that might allow a consumer to more easily compare one against another would, almost inevitably, result in oversimplification. And many of them expressed fears that the department would, as it signaled at meetings of a panel that advises it on accreditation last week, start asking accreditors to set minimum standards for colleges to meet, a role most of them see as inappropriate.

    At the same time, they acknowledge flaws in the system. They generally accept the criticism that the accreditation process is too internally focused and that much more disclosure to the public is necessary. And some – particularly at public institutions – believe that colleges with similar missions can work together toward agreement on a menu of common measures that might allow for even more comparisons about their performance.

    Perhaps most importantly, despite the lumps, many of them see a bright side to the fact that the feds have taken them to task. “The Spellings commission is having an incredible impact,” said Brent David Ruben, executive director of the Center for Organizational Development and Leadership at Rutgers University. “Sure, some of the criticism has been unfair. But it is prompting review and reflection, which I think is a positive thing.”

    Assessment in the Air

    It would have been hard for Education Secretary Margaret Spellings or Charles Miller, who headed the Spellings commission, to walk away from last week’s Middle States meeting — dubbed “Navigating the Winds of Change in Higher Education” — thinking that higher education isn’t taking accountability seriously. For the first time, the entire first day of the meeting was set aside for a special track on “effective and innovative assessment,” and it sold out at 300 people. In the conference’s subsequent days, many if not most of the sessions revolved around or at least touched on discussion of the sort of “outcomes measures” that the Spellings commission says accreditors and colleges underemphasize.

    At one roundtable discussion, for instance, Cheryl T. Samuels, provost of Indiana University of Pennsylvania, described her institution’s efforts – begun three years ago, in the wake of its Middle States self study – to adopt and hold departments accountable for achieving university-wide student learning outcomes for undergraduate education.

    “We’re at the point where we’ve made a decision that we need to do this anyway,” said Samuels. “We know that if we do not take this responsibility ourselves, through accreditation and our own institutions’ work, and move in this direction, it could be forced on us. But we’re fairly confident that we can do this ourselves – we’re the experts.”

    She and Rick Ruth, interim provost of Shippensburg University, noted that the Pennsylvania State System of Higher Education, to which both institutions belong, has long collected and published information from its member universities on more than 60 measures of student and other performance. “We’ve been under that accountability lens for a long time, at least from the system perspective,” said Ruth.

    If anyone at the Middle States meeting hadn’t been paying attention to the pressure on higher education accountability out of Washington, the group also heard directly from the Spellings commission itself, in the form of Charlene R. Nunley, the president of Montgomery College, who was among the commission members who helped transform its written report from one focused primarily on accountability and transparency to one that equally emphasizes student access and expanding financial aid.

    Nunley acknowledged that some members of the Spellings panel, particularly those representing corporations and the public, “don’t really understand where you are and what you’ve done, and that it’s far ahead of where they think you are.” She noted that despite the early saber rattling about moving to a federal system of accreditation, the commission’s final report did not dictate excessively to higher education. “It did not recommend federalization of accreditation of higher education” and “did not recommend a single standardized test or even a set of tests,” she said.

    But that does not, she said, suggest that colleges can afford to do nothing to better measure and report their successes and failures in educating students. “How many of you would say your institutions are doing enough in terms of measuring student learning outcomes?” she asked the college presidents, administrators and professors in the audience. A small scattering of hands, perhaps 25 among the 500 people in the room, went up. “I couldn’t raise my hand either – I admire your honesty,” Nunley said. “When we are honest with ourselves as college leaders, there is not nearly enough happening on our campuses.”

    The key going forward, she said, is that “if we in higher education take leadership, we have a chance of making sure that these standards recognize the differences in our institutions,” rather than having oversimplified, inappropriate measures “imposed on us.”

    The accreditors and college officials in the audience seemed to appreciate that message. But lest they were inclined to get too comfortable, Jean Avnet Morse, the president of Middle States, followed Nunley’s speech by telling the audience about what she had seen in Washington last week at a meeting of an Education Department advisory panel on accreditation. At that meeting, she said, some of the panel’s members signaled that they wanted accrediting groups not just to require the institutions they oversee to set appropriate goals for student learning, but also to ask: “How do we know that the levels being met are acceptable?”

    Morse’s implication, though she stopped short of saying it, was that in carrying out the Spellings commission’s report, the Education Department might be looking to push even harder than the report itself suggested. Lots of head shaking ensued.

    Full Disclosure to Consumers of Higher Education (including assessment of colleges and the Spellings Commission Report) --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#FullDisclosure

     

    Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm

     

    Bob Jensen's threads on higher education controversies --- http://www.trinity.edu/rjensen/HigherEdControversies.htm

     


    December 11, 2006 message from Carl Hubbard

    Bob:

    Did you see the MSNBC story last night of the murder several years ago of the two Dartmouth professors at their secluded country home?  It was a sobering story of a thrill killing by two teenage boys.  I hope you still have that Rossi 38 Special and that you have it in your back pocket when you answer your door.  There is a related story. at Behind the Dartmouth murders - Books - MSNBC.com

    Carl

    December 11, 2006 reply from Bob Jensen

    Hi Carl,

    Nobody ever comes to our front door. If it should happen, we have a mounted video camera that takes their pictures before they even start up the steps. Then we tell them to go to the garage where we talk with them over an intercom.

     

     

    I do remember the Dartmouth case. Fortunately that type of thing is rare in NH. There’s really no way to prevent a totally random happening. An unmarried man who lives down the road is the son of a former FBI Director (Sullivan). He was shot four years ago while walking in the woods. However, that was a hunting accident. Even though we have beautiful woods during hunting season, I generally avoid woods trails during deer and moose season.

     

     

    I do have 20-40 wild turkeys that come to my front lawn and wait for me to throw out sunflower seeds. Erika says they’re my relatives.

     

     

    I do have the 38 that you helped me buy. Now if I just had some idea where to look for it.

     

     

    Have a great holiday!

    Bob Jensen


    From Jim Mahar's Blog on December 9, 2006 --- http://financeprofessorblog.blogspot.com/

    Andrew Metrick: Governance Index Data (Wharton)

    I was recently asked where a reader could find the corporate governance index, so I figured others might like to know that it is available through Andrew Metrick's website.

    Andrew Metrick: Governance Index Data: "Governance Index Data by Firm, 1990-2006
     
    "For details on the construction of the Governance Index, see Gompers, Paul A., Joy L. Ishii, and Andrew Metrick, 'Corporate Governance and Equity Prices', The Quarterly Journal of Economics 118(1), February 2003, 107-155."

    Bob Jensen's threads on corporate governance are at http://www.trinity.edu/rjensen/fraud001.htm#Governance


    Question
    Who is the highest paid actress in the world?

    "Nicole Kidman is the queen of Hollywood when it comes to money. The Oscar winner, who earns as much as $17 million per movie, tops the fifth annual list of highest-paid actresses released Wednesday by The Hollywood Reporter. In second place, with $15 million per movie, was Reese Witherspoon, 30, who won the best-actress Oscar this year for her performance in "Walk the Line." Renee Zellweger, Drew Barrymore and Cameron Diaz placed third, fourth and fifth, respectively. They also get $15 million for each film. Rounding out the top 10 are Halle Berry ($14 million), Charlize Theron ($10 million), Angelina Jolie ($10 million), Kirsten Dunst ($8 million to $10 million) and Jennifer Aniston ($8 million). The list will appear in the Women in Entertainment Power 100 issue to be published by The Hollywood Reporter on Dec. 5.  ---  http://www.breitbart.com/news/2006/11/29/D8LN2OFG1.html 


     

    Should Christian fraternities be allowed on campus?
    The University of Georgia on Thursday agreed to recognize a Christian fraternity that sued the institution this week, The Atlanta Journal-Constitution reported. The university had previously said that the fraternity was violating the university’s anti-bias policy, which protects students from discrimination based on religion, by requiring all members to pledge their belief in Jesus. The university is now considering an exemption for that policy.
    Inside Higher Ed, December 8, 2006 --- http://www.insidehighered.com/news/2006/12/08/qt

     

     


    "10 biggest media lawsuit payouts listed Media Law Research Center: Cash awards often reversed on appeal," WorldNetDaily, November 30, 2006 --- http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53153

     

    Here is the Top Ten list of "trial awards" in media libel, privacy and related cases, assembled by the Media Law Research Center:

    1. $222.7 million. MMAR Group, Inc. vs. Dow Jones & Co. This developed after The Wall Street Journal ran an article making allegations about the securities firm and its use of client money. Less than a month later MMAR went out of business. The $222.7 million is the highest award ever from a jury in the reports compiled by MLRC. But a trial court later ruled the plaintiff withheld evidence from the defendant, and the award was erased.

       

    2. $58 million. Feazel v. A.H. Belo Corp. Dallas' WFAA-TV reporter Charles Duncan broadcast an 11-part series of stories critical of the local prosecutor, discussing various allegations and a pending federal investigation. Feazell later was indicted on racketeering and bribery charges but was acquitted and sued. The $58 million judgment was on appeal when the case was settled.

       

    3. $40.3 million. Guccione vs. Hustler Magazine. The magazine published a photograph of a male body which had the head of Bob Guccione, a publisher of various magazines including Penthouse, superimposed on it. The award first was reduced by the court, then reversed and dismissed by the Ohio Supreme Court.

       

    4. $40 million. Lerman v. Chuckleberry Publishing, Inc. Plaintiff Jackie Collins Lerman was misidentified in two photographs published by Adelina magazine that were culled from the movie "Married Men," whose screenplay was written by Lerman. The jury awarded $40 million, the court immediately struck $30 million and an appeals court reversed the case and dismissed it.

       

    5. $34 million. Sprague (II) v. Philadelphia Newspapers. The defendant published several articles linking the plaintiff, a local prosecutor, to an apparent murder coverup. The jury awarded Sprague $34 million, but the court reduced that by $10 million and it ultimately was settled for an undisclosed sum.

       

    6. $29 million. Srivastava vs. Harte-Hanks. The plaintiff was a heart surgeon when he lost privileges at two San Antonio hospitals. The Harte-Hanks television station reported that revocation and detailed the mishandling of several cases based on information given secretly to the reporter by the plaintiff's secretary. The station appealed, but settled before that could be heard.

       

    7. $26.5 million. Pring vs. Penthouse International. A former Miss Wyoming sued Penthouse after the magazine published a short piece describing a Miss Wyoming who engaged in oral sex, alleging the depictions "create the impression" that the story subject was her. The jury awarded her $26.5 million, which was reversed and dismissed on appeal.

       

    8. $25 million. Graves vs. Warner Bros. (This is wrongful death case, not defamation or libel). Plaintiffs were parents of Scott Amedure, a guest on the Jenny Jones show who was killed days after he revealed a homosexual crush on another male guest during a taping of the show. Jury awarded $25 million in damages.

       

    9. $24.5 million. Doe vs. TCI Cablevision. Plantiff Tony Twist, a professional hockey player, sued over the character in a series of Spawn comic books. Jury awarded $24.5 million, but that was set aside by the court and a new trial resulted in a $15 million judgment, which was on appeal.

       

    10. $19 million. Newton vs. NBC. Inc. Wayne Newton accused NBC of broadcasting a news report that created the impression he sought and got financial backing from a man with links to organized crime. The trial court reduced that to $5 million and an appeals court reversed and dismissed the case.

    Here is the Top Ten list of "final awards" in media libel, privacy and related cases, assembled by the Media Law Research Center. All of these cases involve libel, except one which is noted:

     

    1. $58 million. Feazell lvs. A.H. Belo Corp.

       

    2. $29 million. Svivastava vs. Harte-Hanks. Settled for $8.5 million.

       

    3. $24 million. Sprague (II) vs. Philadelphia Newspapers. Settled for estimated $20 million.

       

    4. $13.5 million. Newcome & Assoc. vs. Plain Dealear Publishing Co. Settled for unknown amount before appeal.

       

    5. $11.9 million. Lee vs. Duddy.

       

    6. $11 million. Prozeralik (II) vs. Capital Cities/ABC, Inc. Settled for unknown amount.

       

    7. $5.9 million. Cramlet (II) vs. Multi-Media Program Productions. Settled for unknown amount. (This was a claim over interference with parent-child relationship)

       

    8. $5 million. Nguyen vs. Nguyen

       

    9. $3 million. Brown & Williamson vs. Jacobson.

       

    10. $2.9 million. Kentucky Kingdom, Inc., vs. Journal Broadcasting of Kentucky.


    December 14, 2006 message from David Albrecht [albrecht@PROFALBRECHT.COM]

     

    There's a nice slide show on e-week. Students might like it.

    http://www.eweek.com/slideshow/0,1206,pg=0&s=26705&a=196169,00.asp?kc=EWEWEMNL121106EP23A 

    David Albrecht
    BGSU

     


    "How to Eliminate That One-Word Page That Trails a Print Job," by Walter S. Mossberg, The Wall Street Journal,  December 7, 2006; Page B1 --- http://online.wsj.com/article/personal_technology.html

    GreenPrint inserts itself between your Web browser (or any other program that prints) and your printer. It takes the form of a faux printer. You print to this virtual printer, called GreenPrint, as if it were real. Then, it analyzes the document, identifies and eliminates wasted pages, and hands the document off to your actual printer, which prints it.

    The product also has some other nice features. It can save any Web page as a PDF file, which can be called up later in the free Adobe Reader program. It can also show you a detailed preview of a Web page, or any other document you're printing, and allow you to manually eliminate pages from the printout.

    GreenPrint costs $25 after a 14-day free trial (it goes to $35 after the holidays) and works only on Windows XP and Windows 2000 for now. A Macintosh version is planned for next summer. It's available from the company's Web site, printgreener.com.

    I tested GreenPrint on two Windows computers. Each was connected to my home printer, an HP DeskJet 5850 model, which automatically prints on both sides of the page.

    In my tests, GreenPrint worked well, correctly identifying and eliminating wasted pages and properly creating PDF copies of Web pages. I tried it with both the Firefox and Internet Explorer Web browsers, and also with Microsoft Word, for non-Web documents.

    After you install GreenPrint, it adds two new entries to your list of printers. One, called GreenPrint, is the virtual printer you use to eliminate the extra pages. The other, called GreenPrint PDF, is used to directly save Web pages and other documents as PDF files. GreenPrint doesn't erase your actual printer from the Windows printer list. You can still select your regular printer and bypass GreenPrint, but you won't get the benefits of GreenPrint. In fact, while it makes sense to make GreenPrint your default printer, you don't have to do so.

    GreenPrint can work automatically in the background. But, if you want to make sure it's only eliminating unimportant pages, or if you want the opportunity to cull the printout manually, you should use its preview feature. This presents a very nice print preview, better than the one in the new IE 7 browser.

    If you double-click on any page in this preview, it turns red and won't be printed. You can also right-click on any page to have GreenPrint eliminate images or text before printing. From this preview screen, you can also save the document as a PDF file.

    You can tweak how GreenPrint works. For instance, you can specify how few lines of text a page must display before it's considered worthy of elimination. Or you can add or subtract other factors GreenPrint uses to decide if printing a page would be a waste, such as whether a page has nothing but a border, or nothing but a single image.

    If you want, you can set the program to analyze and eliminate only the final page in a document, or to only display its preview if it finds a wasted page.

    There are some rough edges, however, and the product is something of a work in progress. At first, GreenPrint wouldn't allow my printer to print on both sides of the paper. I asked the manufacturer about that and the company quickly sent me a new version of the product that fixed the problem. GreenPrint also crashed several times in my tests after I changed configuration settings. The company says a new version that avoids those crashes will be available for download by the time you read this.

    Continued in article


     

    "Creating Your Own Photo Book Becomes Easier:  Upgrades Help in Turning Digital Images Into Paper; We Test Three Offerings," by Walter S. Mossberg and Katherine Boehret, The Wall Street Journal, December 6, 2006; Page D11--- http://online.wsj.com/article/the_mossberg_solution.html

     

    One of the most satisfying ways to share digital photos is to do so using an increasingly popular and delightfully analog item: the photo book. These books contain a collection of your digital photos, professionally printed on heavy paper and handsomely bound with hard or soft covers. They are fairly priced and can be made and ordered with little effort or skill.

    MyPublisher Inc. (www.mypublisher.com), the company that started this business over five years ago, continues as a main player in the field. It now offers its books in various sizes and prices, and recently released a new version of its book-assembling software program, BookMaker 2.0.

    But other companies know well the emotional draw of these books -- and so sell their own photo books that play to their strengths. Apple Computer Inc. uses iPhoto, the stellar photo-organizing program that comes on its computers, as a starting point for making books, incorporating handy editing within the company's famously simple user interface.

    Eastman Kodak Co.'s Kodak EasyShare Gallery (www.kodakgallery.com), one of the most popular Web sites for sharing digital photos, encourages users to make a book using photos that may already be uploaded for sharing. Its book-assembling software is a Web-based interactive program.

    Each company offers a hardcover photo book that measures roughly the same size and costs $30 for 20 printed pages. The only way to know how each book will look is to assemble and order one from each company. So this week, we did the job for you, taking time to make and order books from MyPublisher, Apple and Kodak EasyShare Gallery.

    All three contenders use book-making software that allows you to choose various themes and layouts. With each, you can either start from scratch, manually placing every photo, or you can start with an auto-fill feature that initially places your photos throughout the book, but allows you to rearrange, resize or delete them, or add others.

    In our test, MyPublisher, which runs on Mac and Windows operating systems, reigned supreme, though Apple wasn't far behind. MyPublisher offers three book sizes, three cover materials, two ways to display a cover photo, an intuitive assembling software program and elegant layouts. Though Apple's iPhoto books were a pleasure to make and produced some of the most artistically appealing books with 19 optional themes, iPhoto runs only on Macs, leaving out most computer users. And it doesn't offer as much overall variety as MyPublisher.

    Kodak's books cost the same or more than those from MyPublisher and Apple, yet stood out as the most difficult to assemble and the least attractive. And because Kodak EasyShare Gallery's book-making software lives online, it's slower.

    We used the same set of photos from Katie's summer vacation to make each book in standard size -- about 8.5" by 11" for MyPub and Apple and 9" by 10" for Kodak -- and started with each company's auto-fill feature.

    We also created the newest extra-large books offered by Kodak and MyPublisher; respectively, they measure 12" by 14" and 11.5" by 15" and cost about $70 and $60 for 20 pages. Apple doesn't offer larger books.

    MyPublisher's BookMaker 2.0 follows five steps: Get Photos, Organize, Make Book, Preview and Purchase. These numbered sections appear at the bottom of your screen with your current step highlighted; moving ahead or back is done by selecting another section. To get your photos into MyPublisher, you can drag and drop them into BookMaker 2.0 from anywhere on your computer.

    We spent most of our time in MyPublisher's third step: Make Book. Here, we edited images, moved them around to tweak the auto-fill feature and changed page layouts. A bar at the top of the screen offers a place for dragging and dropping unused photos or those you'd rather use later. After assembling a page filled with sailboat images, we saved one unused sailboat shot for later in the book and this area served as a reminder that it was there.

    Continued in article

     


    This could make a good case study for an accounting theory course

     

    From The Wall Street Journal Accounting Weekly Review on December 8, 2006

     

    TITLE: Making Use of Frequent-Flier Miles Gets Harder
    REPORTER: Scott McCartney
    DATE: Dec 05, 2006
    PAGE: D5
    LINK: http://online.wsj.com/article/SB116528094651740654.html?mod=djem_jiewr_ac 
    TOPICS: Accounting, Auditing

    SUMMARY: The Department of Transportation (DOT) has undertaken audit procedures on airlines to review how they are "living up to their 1999 'Customer Service Commitment.'" This document was written when "airlines were under pressure from Congress and consumers for lousy service and long delays" in order to "stave off new legislation regulating their business." The airlines also report little about the frequent flier mile plans they offer, and particularly focus only on the financial aspects of these plans in their annual reports and SEC filings, rather than, say, information about ease of redeeming miles in which customers may be particularly interested.

    QUESTIONS:
    1.) What information do airlines provide about frequent flier mileage offerings and redemptions in their annual reports and SEC filings?

    2.) Why is this information important for financial statement users? In your answer, describe your understanding of the business model and accounting for frequent flier miles, based on the description in the article.

    3.) Why did the Department of Transportation (DOT) undertake a review of airline practices? What type of audit would you say that the DOT performed?

    4.) What audit procedures did the airlines abandon due to financial exigencies? What was the result of abandoning these audit procedures? In your answer, describe the incentives provided by the act of undertaking audit procedures on operational efficiencies and effectiveness.

    Reviewed By: Judy Beckman, University of Rhode Island

    "Making Use of Frequent-Flier Miles Gets Harder Falling Redemption Rate Is One of Many Service Issues, Government Report Find," by Scott McCartney, The Wall Street Journal, December 5, 2006; Page D5 --- http://online.wsj.com/article/SB116528094651740654.html?mod=djem_jiewr_ac

     

     

  • Which airline is the most accommodating when it comes to letting consumers cash in frequent-flier mileage awards? It's hard to know, a new government report says, because airlines disclose so little information.

    One thing is clear: Over the past four years, the percentage of travelers cashing in frequent-flier award tickets has declined at four of the five biggest airlines, even though miles accumulated by consumers have increased.

    The Department of Transportation's inspector general went back and checked how airlines were living up to their 1999 "Customer Service Commitment." Back then, airlines were under pressure from Congress and consumers for lousy service and long delays, and they promised reform to stave off new legislation regulating their business.

    Seven years later, Inspector General Calvin L. Scovel III found that under financial pressure, many airlines quit auditing or quality control checks on their own customer service, leading to service deterioration. Airlines don't provide enough training for employees who assist passengers with disabilities, the investigation found, and don't always follow rules when handling passengers who get bumped from flights.

    And as travelers have long complained, government auditors studying 15 carriers at 17 airports found airline employees often don't provide timely and accurate information on flight delays and their causes, and don't give consumers straightforward information about frequent-flier award redemptions.

    "They can do better and must do better, and if they don't do better, Congress has authority to wield a big stick," said U.S. Rep John Mica, the outgoing chairman of the House Aviation Subcommittee who requested the inspector general's customer-service investigation. He said he's eager to hear the airline industry's response before making final judgments, but the report card gives airlines only "average to poor grades in a range of areas that need improvement."

    Since airlines are returning to profitability and aggressively raising fares, there's more attention being paid to customer-service issues. Delays have increased; baggage handling worsened. As traffic has rebounded, airlines still under financial pressure because of high oil prices may not have adequate staff to live up to the promises they made on customer service.

    The report called on the DOT to "strengthen its oversight and enforcement of air-traveler consumer-protection rules" and urged airlines to get back on the stick for customer service. The inspector general also reminded consumers that since airlines incorporated the customer-service commitment into their "contract of carriage" -- the legal rules governing tickets -- carriers can be sued for not living up to their customer-service commitment.

    The industry says it is paying attention. The inspector general's Nov. 21 report "is a good report card for reminding us where we need to improve," said David Castelveter, a spokesman for the Air Transport Association, the industry's lobbying group, which coordinated the "Customer Service Commitment." Airlines will "react accordingly," he said.

    One of the stickiest areas is frequent-flier redemptions because airlines are loath to release detailed information about their programs, considering it crucial competitive information. Frequent-flier programs have become big money-makers for airlines since they sell so many miles in advance to credit-card companies, merchants, charities and others. That allows them to pocket cash years in advance of a ticket, then incur very little expense when consumers eventually redeem the miles, if they ever do.

    In 1999, airlines pledged to publish "annual reports" on frequent-flier redemptions. But at most carriers, the disclosure didn't change at all. Today, as then, carriers typically bury numbers deep in filings with the Securities and Exchange Commission and report only the number of awards issued, the estimated liability they have for the cost of awards earned but not yet redeemed and the number of awards as a percentage either of passengers or passenger miles traveled.

    The inspector general said the hard-to-find information has only "marginal value to the consumer for purposes of determining which frequent-flier program best meets their need."

    What you'd really want to know is which airline makes it easiest to get an award, particularly the cheapest domestic coach ticket, typically 25,000 miles, which is the most popular award. But airlines don't disclose how many awards are at the lowest level, and how many consumers have to pay double miles or so for a premium award of an "unrestricted" coach ticket.

    The award market follows ticket prices and availability, so recent years have seen an increase in the price people have to pay to get the awards they want, and less availability of award seats, particularly at the cheapest level, because some airlines have cut capacity and demand for travel has been strong. Add in the flood of miles airlines are issuing, and the value of a frequent-flier mile has declined sharply.

    The inspector general's report compares award-redemption rates at big airlines over the past four years and found a relatively steady drop at four carriers: UAL Corp.'s United Airlines, Continental Airlines Inc., AMR Corp.'s American Airlines and Northwest Airlines Corp. US Airways Group Inc. actually saw higher rates of redemption in 2005 than in 2002, and Delta Air Lines Inc. was unchanged. Both Delta and US Airways had higher redemption rates than competitors.

    to claim short-trip tickets, adding more seats to award inventory this fall and offering a new credit card with easier redemption features. Northwest said its numbers have remained relatively consistent -- roughly one in every 12 seats is a reward seat.

    Other airlines said declining redemption rates result from factors including an increase in paying customers, fuller planes and shifts in airline capacity. American says the number of awards it has issued has remained fairly constant, and while the number of passengers it carries has climbed, its seat capacity hasn't. In addition, several airlines said customer preferences like using miles for first-class upgrades or hoarding miles longer to land big international trips can affect the redemption rate. "Reward traffic does not spool up and absorb capacity increases as fast as revenue traffic does," said a Continental spokesman.

    Those numbers don't include awards that their customers redeem on partner airlines, so some of the decline could be attributable to an increase in consumers' opting to grab award seats on foreign airlines or other partners, says frequent-flier expert Randy Petersen. American, for example, does disclose more redemption data on its Web site and showed that last year, it issued more than 955,000 awards for travel on its partners, compared with the 2.6 million used on American and American Eagle flights.

    "The data can be misleading," said Mr. Petersen, founder of InsideFlyer.com. He'd like to see more data, including numbers on how many customers made requests but couldn't find seats.

    But further disclosure is unlikely to happen unless the government forces it. "Left to their own devices," said Tim Winship, publisher of FrequentFlier.com, "I see no reason to expect airlines to step up and disclose more."

     

     

    Bob Jensen's threads on off-balance-sheet-financing and risk are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#OBSF2


     


    November 28, 2006 message from a Trinity alum

    I'm a former student of Trinity, and I've used your great collection of misc. links on several occasions´. I would just like to thank you for the effort put into this quite extensive resource.

    As I've noticed that it hasn't been updated for a while now, I thought that I'd try to come up with a suggestion for you, to further extend and improve it. I have personally found MortgageLoan.com to be a great reference for everything related to real estate and mortgage, with independent information as well as calculators and other tools. Perhaps it would fit into the "Finance"-section in your bookmarks collection.

    Aaron

    November 28, 2006 reply from Bob Jensen

    Hi Aaron,

     

    I added MortgageLoan.com to http://www.trinity.edu/rjensen/FraudReporting.htm#MortgageAdvice

     

    Bob Jensen

     

    Bob Jensen's investment helpers are at http://www.trinity.edu/rjensen/Bookbob1.htm

     



    What an attention grabber!
    From The Washington Post on December 11, 2006

     

    Who topped Yahoo's list of popular search terms?

    A. Paris Hilton
    B. Donald Trump
    C. President Bush
    D. Britney Spears

     


     

    From The Washington Post on December 13, 2006

    Iran recently blocked access to which Web site?

    A. MySpace.com
    B. YouTube.com
    C. State.gov
    D. Amazon.com
     

     


    "Five Macroeconomic Myths," by Edward C. Prescott, The Wall Street Journal,  December 11, 2006; Page A18 ---
    http://online.wsj.com/article/SB116579723019846033.html?mod=opinion&ojcontent=otep

    Myth No. 1: Monetary policy causes booms and busts.
    Greg Mankiw, former chairman of the Council of Economic Advisers, wrote the following in a 2002 paper: "No aspect of U.S. policy in the 1990s is more widely hailed as a success than monetary policy. Fed Chairman Alan Greenspan is often viewed as a miracle worker." Or, as Mr. Mankiw later asks, was Mr. Greenspan just lucky?

    One of the mysteries of the 1990s is how to explain the economic boom when the increase in capital investments -- as measured by the national accounts -- grew at a subdued pace. The numbers simply don't add up. However, it turns out that something special happened in the 1990s, and it wasn't monetary policy. In a recent paper, Minneapolis Fed senior economist Ellen McGrattan and I show that intangible capital investment -- including R&D, developing new markets, building new business organizations and clientele -- was above normal by 4% of GDP in the late 1990s.

    This difference is key to understanding growth rates in the 1990s: Output, correctly measured, increased 8% relative to trend between 1991 and 1999, which is much bigger than the U.S. national accounts number of 4%. Associated with this boom in unmeasured investment is the huge amount of unmeasured savings that showed up in the wealth statistics as capital gains. This was the people's boom, the risk-takers' boom. We should hang gold medals around these entrepreneurs' necks. So indeed, it does seem that Mr. Greenspan was lucky in that a boom happened under his watch; but we can at least say that he did a pretty good job of keeping inflation in check. Here's hoping for the same performance from our current chairman.

    What about busts? Let's begin with the assumption that tight monetary policy caused the recession of 1978-1982. This myth is so firmly entrenched that I could have called this downturn the "Volcker recession" and readers would have understood my reference. To accept the myth, you have to accept a consistent relationship between monetary policy and economic activity -- and as we've just seen, this relationship is simply not evident in the data.

    Between 1975 and 1980, the inflation-corrected federal funds rate was low; at the same time, output trended upward until late 1978. So far, things look somewhat promising for the mythmakers. But looking closer at the data we see that output began its downward trend in late 1979 while monetary policy was still easy through most of 1980. Also, output continued its decline through 1982, when it began to climb at a time when monetary policy remained tight.

    These facts do not square with conventional wisdom. Our obsession with monetary policy in the conduct of the real economy is misplaced.

    One caveat: I am not saying that there are no real costs to inflation -- there certainly are. And if we get too much inflation we can exact high costs on an economy (witness Argentina as an example). However, I am talking here of the vast majority of industrialized countries who live in a low-inflation regime and who are in no danger of slipping into hyperinflation. It is simply impossible to make a grave mistake when we're talking about movements of 25 basis points.

    Myth No. 2: GDP growth was extraordinary in the 1990s.
    Even though I referred to the expansion of the '90s as a boom, inasmuch as it was a period of above-trend growth, and I noted the strong gains due to unmeasured investment, we have to put things into historical context. So let's return to the data. GDP growth relative to trend in the early 1960s was 12%, and in the famous 1980s boom (from the end of 1982 to mid-1989) it was a very impressive 9.7%.

    And how about the boom from the previous decade? From 1996 to 1999, GDP grew 3.8%, about in line with the 3.9% growth of the early 1970s and less than the 5.5% growth of the mid-1970s expansion. Even when we account for unmeasured investment and add four percentage points, the 1990s growth spurt -- fueled by rapid growth in tech industries -- still falls short of the 1980s boom and does not approach the 1960s, both of which were fueled by tax cuts.

    So we have to be careful about mythologizing the 1990s and drawing misguided policy lessons; yes, it was a boom, and it was better than we think, but let's keep that boom in perspective.

    Myth No. 3: Americans don't save.
    This is a persistent misconception owing to a misunderstanding of what it means to save. To get a complete picture of savings we need to investigate economic wealth relative to income. Our traditional measures of savings and investment, the national accounts, do not include savings associated with tangible investments made by businesses and funded by retained earning, government investments (like roads and schools) and business intangible investments.

    If we want to know how much people are saving, we need to look at how much wealth they have. People invest themselves in many and varied ways beyond their traditional savings accounts. Viewing the full picture -- economic wealth -- Americans save as much as they always have; otherwise, their wealth relative to income would fall. We're saving the right amount.

    Myth No. 4: The U.S. government debt is big.
    The key measure here is privately held interest-bearing federal government debt, which includes debt held by foreign central banks, and does not include debt held by the Fed or government debt held by the government. So let's turn to the historical data once again.

    Privately held interest-bearing debt relative to income peaked during World War II, fell through the early 1970s, rose again through the early 1990s, and then fell again until 2003. Even though that number has been rising in recent years (except for the most recent one), it is still at levels similar to the early 1960s, and lower than levels in most of the 1980s and 1990s. This debt level was not alarming then, and it is not alarming now. From a historical perspective, the current U.S. government debt is not large.

    Myth No. 5: Government debt is a burden on our grandchildren.
    There's no better way to get people worked up about something than to call on their sympathies for their beloved grandkids. The last thing that I want to do is to burden my own grandchildren with the sins of profligacy. But we should stop feeling guilty -- at least about government debt -- because we are in better shape than conventional wisdom suggests.

    Theory and practice tell us that the optimal amount of public debt that maximizes the welfare of new generations of entrants into the workforce is two times gross national income, or GDP. This assumes 1% population growth, 2% productivity growth, 4% real after-tax return on investments, and that people work to age 63 and live to age 85. Currently, privately held public debt is about 0.3 times GDP, and if we include our Social Security obligations, it is 1.6 times GDP. In either case, we could argue that we have too little debt.

    What's going on here? There are not enough productive assets -- tangible and intangible assets alike -- to meet the investment needs of our forthcoming retirees. The problem is that the rate of return on investment -- creating more productive assets -- decreases as the stock of these assets increases. An excessive stock of these productive assets leads to inefficiencies.

    Total savings by everyone is equal to the sum of productive assets and government debt, and if there is an imbalance in this equation it does not mean we have too little or too many productive assets. The fix comes from getting the proper amount of government debt. When people did not enjoy long retirements and population growth was rapid, the optimal amount of government debt was zero. However, the world has changed, and we in fact require some government debt if we care about our grandchildren and their grandchildren.

    If we should worry about our grandchildren, we shouldn't about the amount of debt we are leaving them. We may even have to increase that debt a bit to ensure that we are adequately prepared for our own retirements.

    * * *

    There are at least three lessons here. First: Context matters. Take what you read in the paper with a many grains of historical salt. Second: Current data often provide poor guidance for effective policy making. To make forward-looking policies you have to understand the past. Finally: Establish good rules, change them infrequently and judiciously, and turn the people loose upon the economy. Booms will follow.

    Mr. Prescott is senior monetary adviser at the Federal Reserve Bank of Minneapolis and professor of economics at the W.P. Carey School of Business at Arizona State University. He is a co-recipient of the 2004 Nobel Prize in economics.

     

     




    Updates from WebMD --- http://www.webmd.com/

     

  • Latest Headlines on December 12, 2006

    Latest Headlines on December 13, 2006

    Latest Headlines on December 14, 2006

    Latest Headlines on December 15, 2006

     



    "Diabetes breakthrough:  Toronto scientists cure disease in mice," by Tom Blackwell, National Post, December 15, 2006

    In a discovery that has stunned even those behind it, scientists at a Toronto hospital say they have proof the body's nervous system helps trigger diabetes, opening the door to a potential near-cure of the disease that affects millions of Canadians.

    Diabetic mice became healthy virtually overnight after researchers injected a substance to counteract the effect of malfunctioning pain neurons in the pancreas.

    "I couldn't believe it," said Dr. Michael Salter, a pain expert at the Hospital for Sick Children and one of the scientists. "Mice with diabetes suddenly didn't have diabetes any more."

    The researchers caution they have yet to confirm their findings in people, but say they expect results from human studies within a year or so. Any treatment that may emerge to help at least some patients would likely be years away from hitting the market.

    But the excitement of the team from Sick Kids, whose work is being published today in the journal Cell, is almost palpable.

    "I've never seen anything like it," said Dr. Hans Michael Dosch, an immunologist at the hospital and a leader of the studies. "In my career, this is unique."

    Their conclusions upset conventional wisdom that Type 1 diabetes, the most serious form of the illness that typically first appears in childhood, was solely caused by auto-immune responses -- the body's immune system turning on itself.

    Continued in article

     


     

    Can you judge a man’s faithfulness in advance by his face?
    How about whether he would be a good father, or a good provider? Many people believe they can, according to a University of Michigan study published in the December issue of Personal Relationships, a peer-reviewed academic journal. U-M social psychologist Daniel J. Kruger conducted a series of on-line experiments showing 854 male and female undergraduate students versions of composite male faces that had been altered to look more or less masculine by adjusting, for example, the shape of the jaw, the strength of brow ridges and the thickness of lips. Participants were asked which of the men they preferred as mates, dates, parents of their children, or companions for their girlfriends. They were also asked which men were most likely to behave in certain ways—starting a fight or hitting on someone else’s girlfriend, for example. "It's remarkable that minor physiological differences lead people to pre-judge a man's personality and behavior," said Kruger, a research scientist at the U-M School of Public Health and the U-M Institute for Social Research (ISR). "But even though physiognomy (the attribution of personality to faces) is thought to be a pseudoscience, a lot of people believe there's a link between looks and personality."
    "Does he love you so? Maybe it really is in his face…," PhysOrg, December 14, 2006 --- http://physorg.com/news85337845.html

     

     


    Moderate drinking may help older women live longer
    A study published in Journal of the American Geriatrics Society finds that moderate alcohol intake (1-2 drinks/day for 3-6 days/week, depending on alcoholic content) may lead to increased quality of life and survival in older women. The Australian Longitudinal Study on Women’s Health followed nearly 12,000 women in their 70’s over a 6 year period. The group was comprised of non-drinkers, occasional drinkers and moderate drinkers.
    "Moderate drinking may help older women live longer," PhysOrg, December13, 2006 --- http://physorg.com/news85253884.html

     


     

    New hope for wrinkles
    A new anti-aging ingredient developed by Australian researchers is expected to be available in skin products next year. The new additive - gamma glutamyl cysteine (GGC) - is a precursor for an effective antioxidant known as glutathione, which has a broad range of potential health benefits. Glutathione is the body's key defense for detoxifying harmful compounds implicated in cancer, diabetes, aging along with other diseases and degenerative conditions. After nine years in development, researchers Dr Wallace Bridge and Dr Martin Zarka, of the University of New Sotuh Wales (Sydney, Australia) have established a new, cost-effective process for manufacturing GGC.
    "New hope for wrinkles," PhysOrg, December 15, 2006 --- http://physorg.com/news85400492.html

     


     

    Reversing Trend, Big Drop Is Seen in Breast Cancer
    Rates of the most common form of breast cancer dropped a startling 15 percent from August 2002 to December 2003, researchers reported yesterday. The reason, they believe, may be because during that time, millions of women abandoned hormone treatment for the symptoms of menopause after a large national study concluded that the hormones slightly increased breast cancer risk.
    Gina Kolata, "Reversing Trend, Big Drop Is Seen in Breast Cancer," The New York Times, December 15, 2006 --- http://www.nytimes.com/2006/12/15/health/15breast.html

     


    Child Stem Cell Recipient Heads Home
    Daniel Kerner's parents knew the experimental brain surgery was risky, but without it the 6-year-old surely would die. Last month in Portland, Ore., doctors for the first time transplanted stem cells from aborted fetuses into his head in a desperate bid to reverse, or at least slow, a rare genetic disorder called Batten disease. The so-far incurable condition normally results in blindness and paralysis before death.
    "Child Stem Cell Recipient Heads Home," PhysOrg, December 12, 2006 --- http://physorg.com/news85116317.html
    Also see http://www.technologyreview.com/read_article.aspx?id=17888&ch=biotech

     

    Jensen Comment
    My wife Erika has a nephew and niece who both died from Batten's disease. At the time there was no known cure. It is more common in male rather than female children. Degenerative symptoms are something like Lou Gehrig's fatal neuromuscular disease amyotrophic lateral sclerosis. However, Batten's disease attacks children at a very early age.

     



    More and more people are buying prescription drugs from shady online marketers. That could be hazardous to their health

     

    From the outside, it looked like any other white-walled, terra cotta-roofed bungalow in sun-bleached Belize, perhaps someone's quaint tropical hideaway. Inside, however, the house's peripatetic occupants didn't act like they were on vacation. Workers in sneakers, shorts, and rubber gloves produced mountains of allegedly counterfeit prescription pills. Hundreds of pounds of raw ingredients came from China via a broker in New Jersey. The drugmakers whipped up their products in a dented mixing machine and blender. Finished tablets—imitations of Viagra, the cholesterol medication Lipitor, and Ambien, a sleep aid—were stored in gray garbage bins before being shipped out in plastic sandwich bags. The pills allegedly were hawked via spam e-mail and sold, without prescriptions, from such Web sites as www.planetpharmacy.bz

    "Bitter Pills," Business Week, December 18, 2006 --- Click Here

     



    Operating in a legal grey area, their doctors write thousands of prescriptions for people, sight unseen. Is better regulation required?

     

    Checking his e-mail one day, Schmidt noticed spam pitches for the anxiety drug Xanax and the painkiller Ultram—quick remedies requiring no doctor's visit and no waiting on pharmacy lines. He only had to fill out an online questionnaire and type in his credit-card number. Unknown to Schmidt, two doctors—one in New Jersey, another in Philadelphia—then clicked on a button to approve the prescriptions. Neither had ever seen or spoken with Schmidt.
    Keith Epstein, "The Deadly Side Effects of Net Pharmacies," Business Week, December 18, 2006 --- Click Here  

     


    A hobo spider is not a recluse spider, but it can still be torturous
    A small spider bite turned out to be a big problem for Cindy Pettey. Pettey awoke when she was bitten on the stomach in the middle of the night a few weeks ago, but thought little else of it. Then she started running a fever, she felt achy and weak. The bite sore became larger.
    "Spider Bite Turns Serious for Ore. Woman," PhysOrg, December 12, 2006 --- http://physorg.com/news85116424.html

    Next thing Pettey knew, a doctor was telling her he believed she'd been bitten by a dangerous hobo spider.

    Pettey had surgery that removed 10 pounds of skin and flesh, leaving her with an abdomen covered in stitches.

    "It looks like I was bit in half by a shark," Pettey said.

    Rob Hendrickson, a physician and director of the Oregon Poison Control Center, said the hobo is a non-aggressive spider that bites only when cornered. For example, when someone puts on a shoe with a spider inside.

    The hobo is one of two dangerous spiders in Oregon. The other is the black widow. The brown recluse does not exist in Oregon, he said.

    "In reality, most spiders are venomous, but aren't capable of penetrating human skin," Hendrickson said.

    Hobo spider venom may cause necrosis, or death of the skin. When a spider injects venom below the skin, it reddens, swells, then turns black. But there is some doubt in the medical community about whether venom causes the skin death, Hendrickson said.

     

     

     


    New research shows big improvement in survival after stroke
    A new research report by The George Institute for International Health, in collaboration with Auckland City Hospital and The University of Auckland, has revealed a 40% decline in the number of deaths after stroke in the total population of Auckland, New Zealand over the past 25 years. The study attributes the improved survival rate to health care factors associated with an increase in hospital admission and brain imaging during the most severe phase of the illness.
    PhysOrg, December 11, 2006 --- http://physorg.com/news85054965.html

     

     


     

    U.S. scientists have found inhibiting glucocorticoid, a type of steroid, can prevent skin abnormalities induced by psychological stress.

     

    The study, conducted by researchers from the Veterans Affairs Medical Center in San Francisco and the University of California-San Francisco, also showed how psychological stress induces skin abnormalities that could initiate or worsen skin disorders such as psoriasis and atopic dermatitis. Previous research has shown psychological stress increases glucocorticoid production. In addition, it is well recognized psychological stress adversely affects many skin disorders, including psoriasis and atopic dermatitis.
    PhysOrg, December 11, 2006 --- http://physorg.com/news85073987.html

     


     

    Carter's Palestine: Peace Not Apartheid

    A new book by former president Jimmy Carter is generating wide controversy. Pro-Israel groups are offended by Carter's Palestine: Peace Not Apartheid, and say the book is unworthy of a former U.S. president . . . In the book, Carter sites failure on all sides -- the Palestinians, Israel, the U.S. -- to bring about a a peace deal. But the book is particularly critical of Israel, likening its policies in the Palestinian territories to the former policy of apartheid in South Africa.
    Jackie Northam, "Jimmy Carter's Book Stirs Criticism, Complaint," NPR, December 11, 2006 ---
    http://www.npr.org/templates/story/story.php?storyId=6605934

    Also "Mideast Fantasies," December 13, 2006 --- http://www.rep-am.com/story.php?id=16730

    Of course, the Palestinians also have an opinion on that subject. On Friday, Palestinian Prime Minister Ismail Haniyeh made his first visit abroad since taking office in March -- to Tehran.

    He said the United States "and Zionists ... want us to recognize the usurpation of the Palestinian lands and stop jihad and resistance and accept the agreements reached with the Zionist enemies in the past" but that, as The Associated Press reported, "his Hamas-led government will never recognize Israel and will continue to fight for the 'liberation of Jerusalem.'"

    High on Haniyeh's list of unacceptable "agreements reached with the Zionist enemies in the past" would have to be the 1978 Camp David Accords that Carter continues to rank among the greatest achievements of his presidency.

    No wonder longtime aide Kenneth Stein, the first executive director of the Carter Center think tank in Atlanta and the founder of its Mideast program, late last week resigned from the center and released a letter denouncing Carter's book as one-sided and filled with factual errors, material copied from other sources and "simply invented segments."

    Without mentioning the onslaught of attacks by Palestinian terrorists, former President Jimmy Carter told a national audience watching the "Tonight Show with Jay Leno" there is "horrible persecution" of Palestinians at the hands of Israelis, and he is urging a return to peace talks between the residents of the embattled region."In Palestinian territory, there is horrible persecution of the Palestinians who live on their own land," Carter said.
    "Carter to Leno: Treatment of Palestinians 'horrible'," WorldNetDaily, December 12, 2006 ---
    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53337
    Jensen Comment
    Although Carter purportedly has many inaccuracies in his new book, there are some awful things that Israeli settlers have done to Palestinians and some reckless actions by the IDF that make it possible to blame all sides in this never-ending war.

    Jimmy Carter, it appears, needed a scapegoat for his failed presidency and Israel served as a convenient target.
    Joseph Puder, "Palestine: Peace, Not Prejudice," FrontPageMagazine, December 15, 2006 --- http://www.frontpagemag.com/Articles/ReadArticle.asp?ID=26028
    Jensen Comment
    I don't think that it's quite as simple as that. President Carter was quite close to Yasser Arafat and learned a great deal about the plight of the Palestinians in refuge camps for over 30 years. Carter sincerely believes that worldwide pressure on Israel might help to resolve this long-standing obstacle to peace in the Middle East. The problem is that media hammering of Israel is dysfunctional because terror and media successes fan the fires of deadly jihadists bent of take over of first the entire Middle East and eventually the world.

    Former President Carter has decided not to visit Brandeis University to talk about his new book "Palestine: Peace not Apartheid" because he does not want to debate Harvard Law professor Alan Dershowitz as the university had requested. "I don't want to have a conversation even indirectly with Dershowitz," Carter told The Boston Globe. "There is no need ... for me to debate somebody who, in my opinion, knows nothing about the situation in Palestine."
    "Former President Carter says he won't visit Brandeis," WorldNetDaily, December 15, 2006 --- Click Here
    Jensen Comment
    Seems like Carter is passing up a good opportunity to educate a heavily Jewish student body and a popular Harvard law professor who "knows nothing about the situation in Palestine." Rather than an academic debate, Carter would rather appear on late night comedy TV.

    HARRY TRUMAN famously said that if you can't take the heat, stay out of the kitchen. By refusing Brandeis's invitation to take part in a debate about his new book, "Palestine: Peace Not Apartheid," former president Jimmy Carter is saying that he can't take the heat -- after giving his book a controversial title and boasting of a desire to be provocative.
    Globe Editorial, "Jimmy Carter vs. Jimmy Carter," Boston Globe, December 16, 2006 --- Click Here
    Jensen Comment
    What struck me about the above quotation is not its content. Rather it is its source, the very liberal Boston Globe.

    Leno said to the president who held office more than 25 years ago, "But when Israel gives something back, it doesn't seem like they get anything for it. It seems like it just moves some angry people closer to them." "No, that's not true at all," responded Carter. "Israel hasn't really tried to give 'Palestine' back to the Palestinians. They did give up some of Gaza. And then they moved out, and the Palestinians captured one soldier and tried to swap [him] for 300 children – some as young as 12 years old – and 94 women, but the Israelis wouldn't swap. So then Israel reinvaded Gaza. But if Israel ever wants peace – and they do want peace – a majority of Israelis have always said, 'Let's get rid of the land, and let's have peace.' That's what we need to have."
    "Carter to Leno: Treatment of Palestinians 'horrible'," WorldNetDaily, December 12, 2006 ---
    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53337
    Jensen Comment
    Perhaps Israel has been wrong all along by detaining suicide bombers when they're women or children as young as 12 years old. Women and young male children should be given at least a second chance for a kill.


     

    Jimmy Carter's not the only author criticized for writing a pro-Palestinian book with bad scholarship
    First published by Pantheon in 1978 and eventually translated into some three dozen languages, Said’s book (
    Orientalism) was an ambitious effort to use concepts from 20th century cultural theory to scrutinize the way Western academics and writers understood “the East” during the era of European imperial expansion. Said treated Western literature and scholarship as an integral part of the process of absorbing, assimilating, and policing the colonial Other. That interpretation is now often taken more or less for granted in some parts of the humanities  . . . Beyond catching Said in various misstatements, Irwin’s argument is that the field of European research into Middle Eastern language, culture, and history was by no means so tightly linked to Western imperial ambitions as Orientalism suggests. He is also very skeptical of the value of analyzing Orientalist scholarship alongside Western literary texts devoted to the East — evading the distinctions between kinds of texts by treating them all as manifestations of a colonialist discourse . . . Said wrote lots of valid political polemic, but Orientalism was a rotten book and it was inevitable that someone should blow a whistle on it. It has been a delusive distraction. It converted real political and social issues into a campus dog-fight. Soothing displacement activity indeed.
    Scott McLemee, "What Said Said," Inside Higher Ed, December 13. 2006 --- http://www.insidehighered.com/views/2006/12/13/mclemee

     

     




     

     

    Forwarded by Dick Haar

     

    Made in the USA --- Spoiled Brats

     

    The other day I was reading Newsweek magazine and came across some poll data I found rather hard to believe. It must be true given the source, right? The same magazine that employs Michael (Qurans in the toilets at Gitmo) Isikoff.   Here I promised myself this week I would be nice and I start off in this way.

    The Newsweek poll alleges that 67 percent of Americans are unhappy with the direction the country is headed and 69 percent of the country is unhappy with the performance of the president. In essence 2/3s of the citizenry just ain't happy and want a change.

    So being the knuckle dragger I am, I starting thinking, ''What we are so unhappy about?''

    Is it that we have electricity and running water 24 hours a day, 7 days a week? Is our unhappiness the result of having air conditioning in the summer and heating in the winter? Could it be that 95.4 percent of these unhappy folks have a job? Maybe it is the ability to walk into a grocery store at any time and see more food in moments than Darfur has seen in the last year?

     

    Maybe it is the ability to drive from the Pacific Ocean to the Atlantic Ocean without having to present identification papers as we move through each state? Or possibly the hundreds of clean and safe motels we would find along the way that can provide temporary shelter? I guess having thousands of restaurants with varying cuisine from around the world is just not good enough. Or could it be that when we wreck our car, emergency workers show up and provide services to help all involved. Whether you are rich or poor they treat your wounds and even, if necessary, send a helicopter to take you to the hospital.

    Perhaps you are one of the 70 percent of Americans who own a home, you may be upset with knowing that in the unfortunate case of having a fire, a group of trained firefighters will appear in moments and use top notch equipment to extinguish the flames thus saving you, your family and your belongings. Or if, while at home watching one of your many flat screen TVs, a burglar or prowler intrudes; an officer equipped with a gun and a bullet-proof vest will come to defend you and your family against attack or loss. This all in the backdrop of a neighborhood free of bombs or militias raping and pillaging the residents. Neighborhoods where 90 percent of teenagers own cell phones and computers.

    How about the complete religious, social and political freedoms we enjoy that are the envy of everyone in the world? Maybe that is what has 67 percent of you folks unhappy.

    Fact is, we are the largest group of ungrateful, spoiled brats the world has ever seen. No wonder the world loves the U.S. yet has a great disdain for its citizens. They see us for what we are. The most blessed people in the world who do nothing but complain about what we don't have and what we hate about the country instead of thanking the good Lord we live here.

    I know, I know. What about the president who took us into war and has no plan to get us out? The president who has a measly 31 percent approval rating? Is this the same president who guided the nation in the dark days after 9/11? The president that cut taxes to bring an economy out of recession? Could this be the same guy who has been called every name in the book for succeeding in keeping all the spoiled brats safe from terrorist attacks? The commander in chief of an all-volunteer army that is out there defending you and me?

    Make no mistake about it. The troops in Iraq and Afghanistan have volunteered to serve, and in many cases have died for your freedom. There is currently no draft in this country. They didn't have to go. They are able to refuse to go and end up with either a ''general'' discharge, an ''other than honorable'' discharge or, worst case scenario, a ''dishonorable'' discharge after a few days in the brig.

    So why then the flat out discontentment in the minds of 69 percent of Americans? Say what you want but I blame it on the media. If it bleeds it leads and they specialize in bad news. Everybody will watch a car crash with blood and guts. How many will watch kids selling lemonade at the corner? The media knows this and media outlets are for-profit corporations. They offer what sells. Just ask why they are going to allow a murderer like O.J. Simpson to write a book and do a TV special about how he didn't kill his wife but if he did … insane!

    Stop buying the negative venom you are fed everyday by the media. Shut off the TV, burn Newsweek, and use the New York Times for the bottom of your bird cage. Then start being grateful for all we have as a country. There is exponentially more good than bad.

    I close with one of my favorite quotes from B.C. Forbes in 1953:

    ''What have Americans to be thankful for? More than any other people on the earth, we enjoy complete religious freedom, political freedom, social freedom. Our liberties are sacredly safeguarded by the Constitution of the United States, 'the most wonderful work ever struck off at a given time by the brain and purpose of man.' Yes, we Americans of today have been bequeathed a noble heritage. Let us pray that we may hand it down unsullied to our children and theirs.''

    I suggest we sit back and count our blessings for all we have. If we don't, what we have will be taken away. Then we will have to explain to future generations why we squandered such blessing and abundance. If we are not careful this generation will be known as the ''greediest and most ungrateful generation.'' A far cry from the proud Americans of the ''greatest generation'' who left us an untarnished legacy.

     

     





    December 13, 2006 message from Roger Lewis [rplewis@stcloudstate.edu]

    Here's a little song in the holiday spirit for our first final today . . . The tune should be familiar.

    It’s the most wonderful time of the year.
    While the students are yelling
    Professors are telling them
    “Finals are here!”
    It’s the most wonderful time of the year.

    It’s the hap, happiest season of all.
    But some students are crying
    while pencils are flying ‘round
    in Stewart Hall.
    It’s the hap, happiest season of all!

    There’ll be cramming till midnight
    books open till just right
    before all the finals will start.
    There’ll be scary old stories of
    finals so gory and teachers
    who don’t have a heart.

    It’s the most wonderful time of the year.
    There’ll be much celebrating
    with “A’’s for the taking
    but some students will hear
    “Kid, you failed, so we’ll see you next year!”

    Roger P. Lewis, MAc, CPA (exp)
    Instructor, Department of Accounting
    G.R. Herberger College of Business
    Saint Cloud State University
    720 Fourth Avenue South - BB 259
    Saint Cloud, MN   56301-4498
    (320)308-4950

    e-mail:  rplewis@stcloudstate.edu
     


    Forwarded by Auntie Bev

     

    Children Writing About the Sea..
    1) This is a picture of an octopus It has eight testicles. 
    (Kelly age 6)

    2) Oysters' balls are called pearls. (James age 6)

    3) If you are surrounded by sea you are an Island. If you don't
    have sea  all round you, you are in continent. (Wayne age 7)

    4) Sharks are ugly and mean, and have big teeth, just like Emily
    Richardson. She's not my friend no more. (Kylie age 6)


     
    5) A dolphin breaths through an asshole on the top of its head.
    (Billy age 8)

    6) My uncle goes out in his boat with pots, and comes back with
     crabs.(Millie age 6)

    7) When ships had sails, they used to use the trade winds to cross
    the ocean. Sometimes, when the wind didn't blow, the sailors would
    whistle to make the wind come. My brother said they would be
    better off eating beans. (William age 7)

    8) I like mermaids. They are beautiful, and I like their shiny
    tails.  How  do mermaids get pregnant? (Helen age 6)

    9) I'm not going to write about the sea. My baby brother is
    always screaming and being sick, my Dad keeps shouting at my
    Mom, and my big sister has just got pregnant, so I can't think
    what to write.  (Amy age 6)

    10) Some fish are dangerous. Jellyfish can sting. Electric eels
    can give  you a shock. They have to live in caves under the sea
    where I think they have to plug themselves into chargers.
    (Christopher age 7)

    11) When you go swimming in the sea, it is very cold & it makes
    my willy small.  (Kevin age 6)
     

     


    Forwarded by Team Carper
    Husband's note on refrigerator for wife:

    Someone from the Gyna Colleges called.
    They said the Pabst beer is normal.
    I didn't know you liked beer.


    Forwarded by Dick Haar

    Cannibal restaurant

    A cannibal was walking through the jungle and came upon a restaurant opened by a fellow cannibal. Feeling hungry, he sat down and looked over the menu...

     

    Broiled Missionary: $10.00

     

    Fried Explorer: $15.00

     

    Baked Politician: $100.00.

     

    The cannibal called the waiter over and asked, "Why such a price difference for the politician?"

     

    The cook replied: "Have you ever tried to clean one?"

     


    Forwarded by Michael Schweitzer

    GIFT-WRAPPING TIPS FOR MEN:

    1. Whenever possible, buy gifts that are already wrapped. If, when the
    recipient opens the gift, neither one of you recognizes it, you can claim
    that it's myrrh.

    2 If you're giving a hard-to-wrap gift, skip the wrapping paper! Just put it
    inside a bag and stick one of those little adhesive bows on it. This creates
    a festive visual effect that is sure to delight the lucky recipient on
    Christmas morning:

    YOUR WIFE: "Why is there a Hefty trash bag under the tree?"
    YOU: "It's a gift! See? It has a bow!"
    YOUR WIFE (peering into the trash bag): "It's a leaf blower."
    YOU: "Gas-powered! Five horsepower!"
    YOUR WIFE: "I want a divorce."
    YOU: "I also got you some myrrh."

    3. The editors of Woman's Day magazine recently ran an item on how to make
    your own wrapping paper by printing a design on it with an apple sliced in
    half horizontally and dipped in a mixture of food coloring and liquid starch
    They must be smoking crack!

    In conclusion, remember that the important thing is not what you give, or how you wrap it. The really important thing, during this very special time of year, is that you save the receipt.

     




    More Tidbits from the Chronicle of Higher Education --- http://www.aldaily.com/

    Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
    For earlier editions of New Bookmark s go to http://www.trinity.edu/rjensen/bookurl.htm 
    Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

    Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
    For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

    Three Finance Blogs

    Jim Mahar's FinanceProfessor Blog --- http://financeprofessorblog.blogspot.com/
    FinancialRounds Blog --- http://financialrounds.blogspot.com/
    Karen Alpert's FinancialMusings (Australia) --- http://financemusings.blogspot.com/

    Some Accounting Blogs

    Paul Pacter's IAS Plus (International Accounting) --- http://www.iasplus.com/index.htm
    International Association of Accountants News --- http://www.aia.org.uk/
    AccountingEducation.com and Double Entries --- http://www.accountingeducation.com/
    Gerald Trite's eBusiness and XBRL Blogs --- http://www.zorba.ca/
    AccountingWeb --- http://www.accountingweb.com/   
    SmartPros --- http://www.smartpros.com/

    Bob Jensen's Sort-of Blogs --- http://www.trinity.edu/rjensen/JensenBlogs.htm
    Current and past editions of my newsletter called New Bookmarks --- http://www.trinity.edu/rjensen/bookurl.htm
    Current and past editions of my newsletter called Tidbits --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm
    Current and past editions of my newsletter called Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm

    Richard Torian's Managerial Accounting Information Center --- http://www.informationforaccountants.com/ 

    Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
    190 Sunset Hill Road
    Sugar Hill, NH 03586
    Phone:  603-823-8482 
    Email:  rjensen@trinity.edu  

     




     

  •  

     

    Humor Between December 1 and December 31, 2006

  • The Comedy Corner --- http://www.comedycorner.org/

    Forwarded by Dick Haar

    Cannibal restaurant

    A cannibal was walking through the jungle and came upon a restaurant opened by a fellow cannibal. Feeling hungry, he sat down and looked over the menu...

    Broiled Missionary: $10.00

    Fried Explorer: $15.00

    Baked Politician: $100.00.

    The cannibal called the waiter over and asked, "Why such a price difference for the politician?"

    The cook replied: "Have you ever tried to clean one?"

     


    Forwarded by Bob Booth

    An older lady gets pulled over for speeding...

    Older Woman: Is there a problem, Officer?

    Officer: Ma'am, you were speeding.

    Older Woman: Oh, I see.

    Officer: Can I see your license please?

    Older Woman: I'd give it to you but I don't have one.

    Officer: Don't have one?

    Older Woman: Lost it, 4 years ago for drunk driving.

    Officer: I see...Can I see your vehicle registration papers please.

    Older Woman: I can't do that.

    Officer: Why not?

    Older Woman: I stole this car.

    Officer: Stole it?

    Older Woman: Yes, and I killed and hacked up the owner.

    Officer: You what?

    Older Woman: His body parts are in plastic bags in the trunk if you want to see.

    The Officer looks at the woman and slowly backs away to his car and calls for back up.

    Within minutes 5 police cars circle the car. A senior officer slowly approaches the car, clasping his half drawn gun.

    Officer 2: Ma'am, could you step out of your vehicle please! The woman steps out of her vehicle.

    Older woman: Is there a problem sir?

    Officer 2: One of my officers told me that you have stolen this car and murdered the owner.

    Older Woman: Murdered the owner?

    Officer 2: Yes, could you please open the trunk of your car, please.

    The woman opens the trunk, revealing nothing but an empty trunk.

    Officer 2: Is this your car, ma'am?

    Older Woman: Yes, here are the registration papers. The officer is quite stunned.

    Officer 2: One of my officers claims that you do not have a driving license.

    The woman digs into her handbag and pulls out a clutch purse and hands it to the of ficer.

    The officer examines the license. He looks quite puzzled.

    Officer 2: Thank you ma'am, one of my officers told me you didn't have a license, that you stole this car, and that you murdered and hacked up the owner.

    Older Woman: Bet the liar told you I was speeding, too.

    MORAL:

    Don't Mess With Little Old Ladies

     


     

    An actual drawing and note sent to the pilot by an eight year old girl --- http://tlf.cx/bilder/qantas.jpg

     


    We recent attended a wonderful 70th birthday party up the street for a neighbor named Sid (this is true).

    He's a retired military officer, and friends from all over the world traveled in to celebrate the occasion.

     

    They roasted Sid a bit in good humor.

     

    One friend named Bob recalled the time he and Sid were walking in New York when they spotted a huge German Shepherd doing what male dogs do best --- licking its genitals.

     

    Bob smiled and purportedly said "I wish I could do that."

     

    Sid responded, "I think it would be wise to first simply try to pet the dog on the head."

     


     

    The Oops List --- http://www.micom.net/oops/

     

    Funny Air Traffic Controller Quotations --- http://www.businessballs.com/airtrafficcontrollersfunnyquotes.htm

     

    A military pilot had been having difficulty with smooth landings and the crew was required to make note of the exact time the plane landed at different bases. One particular landing took several bounces before staying on the ground. The crew reportedly called up to the pilot, "Which landing shall we note for the record, Sir?" (Ack A & M Martin)

    Tower: "Delta 351, you have traffic at 10 o'clock, 6 miles!"
    Delta 351: "Give us another hint! We have digital watches!"

    "TWA 2341, for noise abatement turn right 45 Degrees."
    "Centre, we are at 35,000 feet. How much noise can we make up here?"
    "Sir, have you ever heard the noise a 747 makes when it hits a 727?"

    From an unknown aircraft waiting in a very long takeoff queue: "I'm f...ing bored!"
    Ground Traffic Control: "Last aircraft transmitting, identify yourself immediately!"
    Unknown aircraft: "I said I was f...ing bored, not f...ing stupid!"

    Control tower to a 747: "United 329 heavy, your traffic is a Fokker, one o'clock, three miles, Eastbound."
    United 239: "Approach, I've always wanted to say this.... I've got the little Fokker in sight."

    A DC-10 had come in a little hot and thus had an exceedingly long roll out after touching down. San Jose Tower noted: "American 751, make a hard right turn at the end of the runway, if you are able. If you are not able, take the Guadalupe exit off Highway 101, make a right at the lights and return to the airport."

    A military pilot called for a priority landing because his single-engine jet fighter was running "a bit peaked." Air Traffic Control told the fighter pilot that he was number two, behind a B-52 that had one engine shut down. "Ah," the fighter pilot remarked, "The dreaded seven-engine approach."

    Allegedly, a Pan Am 727 flight waiting for start clearance in Munich overheard the following:
    Lufthansa (in German): "Ground, what is our start clearance time?"
    Ground (in English): "If you want an answer you must speak in English."
    Lufthansa (in English): "I am a German, flying a German airplane, in Germany. Why must I speak English?"
    Unknown voice from another plane (in a beautiful British accent): "Because you lost the bloody war."

    Tower: "Eastern 702, cleared for takeoff, contact Departure on frequency 124.7"
    Eastern 702: "Tower, Eastern 702 switching to Departure. By the way, after we lifted off we saw some kind of dead animal on the far end of the runway."
    Tower: "Continental 635, cleared for takeoff behind Eastern 702, contact Departure on frequency 124.7. Did you copy that report from Eastern 702?"
    Continental 635: "Continental 635, cleared for takeoff, roger; and yes, we copied Eastern... we've already notified our caterers."

    One day the pilot of a Cherokee 180 was told by the tower to hold short of the active runway while a DC-8 landed. The DC-8 landed, rolled out, turned around, and taxied back past the Cherokee. Some quick-witted comedian in the DC-8 crew got on the radio and said, "What a cute little plane. Did you make it all by yourself?" The Cherokee pilot, not about to let the insult go by, came back with a real zinger: "I made it out of DC-8 parts. Another landing like yours and I'll have enough for another one."

    Allegedly the German air controllers at Frankfurt Airport are renowned as a short-tempered lot. They, it is alleged, not only expect one to know one's gate parking location, but how to get there without any assistance from them. So it was with some amusement that we (a Pan Am 747) listened to the following exchange between Frankfurt ground control and a British Airways 747, call sign Speedbird 206.
    Speedbird 206: "Frankfurt, Speedbird 206 clear of active runway."
    Ground: "Speedbird 206. Taxi to gate Alpha One-Seven." The BA 747 pulled onto the main taxiway and slowed to a stop.
    Ground: "Speedbird, do you not know where you are going?"
    Speedbird 206: "Stand by, Ground, I'm looking up our gate location now."
    Ground (with quite arrogant impatience): "Speedbird 206, have you not been to Frankfurt before?"
    Speedbird 206 (coolly): "Yes, twice in 1944, but it was dark,... and I didn't land."

    Allegedly, while taxiing at London's Gatwick Airport, the crew of a US Air flight departing for Ft. Lauderdale made a wrong turn and came nose to nose with a United 727. An irate female ground controller lashed out at the US Air crew, screaming: "US Air 2771, where the hell are you going?! I told you to turn right onto Charlie taxiway! You turned right on Delta! Stop right there. I know it's difficult for you to tell the difference between C and D, but get it right!" Continuing her rage to the embarrassed crew, she was now shouting hysterically: "God! Now you've screwed everything up! It'll take forever to sort this out! You stay right there and don't move till I tell you to! You can expect progressive taxi instructions in about half an hour and I want you to go exactly where I tell you, when I tell you, and how I tell you! You got that, US Air 2771?" US Air 2771: "Yes, ma'am," the humbled crew responded. Naturally, the ground control communications frequency fell terribly silent after the verbal bashing of US Air 2771. Nobody wanted to chance engaging the irate ground controller in her current state of mind. Tension in every cockpit out around Gatwick was definitely running high. Just then an unknown pilot broke the silence and keyed his microphone, asking: "Wasn't I married to you once?"

    Continued

     


    Forwarded by Dick Haar

    A woman married three times walked into a bridal shop one day and told the sales clerk that she was looking for a wedding gown for her fourth wedding.

    "Of course, madam," replied the sales clerk, "exactly what type and color dress are you looking for?"

    The bride to be said: "A long frilly white dress with a veil."

    The sales clerk hesitated a bit, then said, "Please don't take this the wrong way, but gowns of that nature are considered more appropriate for brides who are being married the first time - for those who are a bit more innocent, if you know what I mean? Perhaps ivory or sky blue would be nice?"

    "Well," replied the customer, a little peeved at the clerk's directness, "I can assure you that a white gown would be quite appropriate. Believe it or not, despite all my marriages, I remain as innocent as any first-time bride.

    You see, my first husband was so excited about our wedding, he died as we were checking into our hotel.

    My second husband and I got into such a terrible fight in the Limo on our way to our honeymoon that we had that wedding annulled immediately and never spoke to each other again."

    "What about your third husband?" asked the sales clerk?

    "That one was a Democrat," said the woman, "and every night for four years, he just sat on the edge of the bed and told me how good it was going to be."

     



    Forwarded by Paula

    A husband and wife go to a counselor after 15 years of marriage.

    The counselor asks them what the problem is and the wife goes into a tirade listing every problem they have ever had in the 15 years they've been married. She goes on and on and on.

    Finally, the counselor gets up, walks around the desk, embraces the wife and kisses her passionately.

    The woman shuts up and sits quietly in a daze.

    The counselor turns to the husband and says, "This is what your wife needs at least three times a week. Can you do this?"

    The husband thinks for a moment and replies:

    "Well, I can drop her off here on Mondays and Wednesdays, but on Fridays, I ride my Harley "


    Forwarded by an old and decrepit professor

    A wealthy old lady decides to go on a photo safari in Africa , taking her faithful aged poodle named Cuddles, along for the company.

    One day the poodle starts chasing butterflies and before long, Cuddles discovers that he's lost.. Wandering about, he notices a leopard heading rapidly in his direction with the intention of having lunch.

    The old poodle thinks, "Oh, oh! I'm in deep doo-doo now!" Noticing some bones on the ground close by, he immediately settles down to chew on the bones with his back to the approaching cat. Just as the leopard is about to leap the old poodle exclaims loudly, "Boy, that was one delicious leopard! I wonder if there are any more around here?"

    Hearing this, the young leopard halts his attack in mid-strike, a look of terror comes over him and he slinks away into the trees. "Whew!", says the leopard, "That was close! That old poodle nearly had me!"

    Meanwhile, a monkey who had been watching the whole scene from a nearby tree, figures he can put this knowledge to good use and trade it for protection from the leopard. So off he goes, but the old poodle sees him heading after the leopard with great speed, and figures that something must be up. The monkey soon catches up with the leopard, spills the beans and strikes a deal for himself with the leopard.

    The young leopard is furious at being made a fool of and says, "Here, monkey, hop on my back and see what's going to happen to that conniving canine!

    Now, the old poodle sees the leopard coming with the monkey on his back and thinks, "What am I going to do now?", but instead of running, the dog sits down with his back to his attackers, pretending he hasn't seen them yet, and just when they get close enough to hear, the old poodle says.

    "Where's that damn monkey? I sent him off an hour ago to bring me another leopard!

    Moral of this story....

    Don't mess with old farts...age and treachery will always overcome youth and skill! Bullshit and brilliance only come with age and experience.


    Forwarded by Paula
    How to know when a lawyer is lying --- then again maybe he's telling the truth!

    A car was involved in an accident in a street. As expected a large crowd gathered. A lawyer, anxious to get there first, could not get near the car.

    Being a clever sort, he started shouting loudly, "Let me through! Let me through! I am the son of the victim."

    The crowd made way for him.

    Lying in front of the car was a donkey. (Probably was his relative!)


    Forwarded by Aaron Konstam

    WHY ARE WE BADLY PAID... MATHEMATICALLY PROVEN.

    Here is a simple explanation that is also mathematical proof:

    Knowledge is Power.

    Time is Money.

    And, as every engineer knows:

    Power = Work / Time

    If Knowledge = Power, and Time = Money, then

    Knowledge = Work / Money

    Solving for Money, we get:

    Money = Work / Knowledge

    Thus, Money approaches infinity as Knowledge approaches zero, regardless of the Work done. What this means is:

    The Less you Know, the More you Make --- QED


    Funny Signs (not for children) ---http://thefunniest.info/recent/
    Also see http://www.xmarkjenkinsx.com/outside.html


    Forwarded by Aaron Konstam

    Yesterday

    All those backups seems a waste of pay.

    Now my database has gone away.

    Oh, I believe in yesterday.

    Suddenly,

    There's not half the files there used to be.

    And there's a milestone hanging over me,

    The system crashed so suddenly.

    I pushed something wrong

    What it was I could not say.

    Now all my data's gone away.

    I long for yesterday_ay_ay_ay

    Yesterday

    The need for backup seemed so far away

    I knew my data was all here to stay,

    Now I believe in yesterday.


    Forwarded by Aaron Konstam

    WHISKEY

    The tea-totaler teacher of 5th grade wanted to teach a lesson about the evils of Demon Rum, et al, so he took a glass of water, a glass of whiskey, and a couple of angler worms (so called for their use in fishing). Asking the class to observe closely, he dropped one worm in the water, where it was about as happy a worm in water could be.

    Then he took the other and dropped it in the whiskey, where it writhed painfully and fell to bottom, dead as a doornail.

    "Now, class", he asked, "what lesson can we learn from this demonstration?"

    From the back row, Little Johnny answered wisely, "Drink whiskey and you won't get worms".


    Forwarded by Team Carper

    Idiot Awards for 2004

    These people are actually allowed out in public ~ without supervision!
     
    Number One Idiot of 2004 - I am a medical student currently doing a rotation in toxicology at the poison control center.  Today, this woman called in very upset because she caught her little daughter eating ants.  I quickly reassured her that the ants are not harmful and there would be no need to bring her daughter into the hospital.  She calmed down and at the end of the conversation happened to mention that she gave her daughter some ant poison to eat in order to kill the ants.  I told her that she better bring her daughter into the emergency room right away. Here's your sign, lady.  Wear it with pride.
     
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
     
    Number Two Idiot of 2004 - Early this year, some Boeing employees on the airfield decided to steal a life raft from one of the 747s.  They were successful in getting it out of the plane and home.  Shortly after they took it for a float on the river, they noticed a Coast Guard helicopter coming towards them.  It turned out that the chopper was homing in on the emergency locator beacon that activated when the raft was inflated.  They are no longer employed at Boeing. Here's your sign, guys.  Don't get it wet; the paint might run.
     
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
     
    Number Three Idiot of 2004 - A true story out of San Francisco: A man, wanting to rob a downtown Bank of America, walked into the branch and wrote "this iz a stikkup.  Put all your muny in this bag" While standing in line, waiting to give his note to the teller, he began to worry that someone had seen him write the note and might call the police before he reached the teller's window.  So he left the Bank of America and crossed the street to Wells Fargo.  After waiting a few minutes in line, he handed his note to the Wells Fargo teller. She read it and, surmising from his spelling errors that he wasn't the brightest light in the harbor, told him that she could not accept his stickup note because it was written on a Bank of America deposit slip and that he would either have to fill out a Wells Fargo deposit slip or go back to Bank of America.  Looking somewhat defeated, the man said, "OK" and left.  He was arrested a few minutes later, as he was waiting in line back at Bank of America. Don't bother with this guy's sign.  He probably couldn't read it anyway.
     
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
     
    Number Four Idiot of 2004 - A guy walked into a little corner store with a shotgun and demanded all of the cash from the cash drawer.  After the cashier put the cash in a bag, the robber saw a bottle of Scotch that he wanted behind the counter on the shelf.  He told the cashier to put it in the bag as well, but the cashier refused and said, because I don't believe you are over 21.  " The robber said he was, but the clerk still refused to give it to him because he didn't believe him.  At this point, the robber took his driver's license out of his wallet and gave it to the clerk.  The clerk looked it over and agreed that the man was in fact over 21 and he put the Scotch in the bag.  The robber then ran from the store with his loot. The cashier promptly called the police and gave the name and address of the robber that he got off the license.  They arrested the robber two hours later. This guy definitely needs a sign!
     
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
     
    Idiot Number Five of 2004 - A pair of Michigan robbers entered a record shop nervously waving revolvers.  The first one shouted, "Nobody move!" When his partner moved, the startled first bandit shot him. This guy doesn't need a sign, he probably figured it out himself.
     
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
     
    Idiot Number Six of 2004 - Seems this guy wanted some beer pretty badly.  He decided that he'd just throw a cinder block through a liquor store window, grab some booze, and run.  So he lifted the cinder block and heaved it over his head at the window.  The cinder block bounced back and hit the would be thief on the head, knocking him unconscious.  It seems the liquor store window was made of Plexiglas.  The whole event was caught on videotape.  Oh, that smarts. Give him his sign.
     
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
     
    Idiot Number Seven of 2004 - Ann Arbor: The Ann Arbor News crime column reported that a man walked into a Burger King in Ypsilanti, Michigan at 12:50 A.M., flashed a gun and demanded cash.  The clerk turned him down because he said he couldn't open the cash register without a food order.  When the man ordered onion rings, the clerk said they weren't available for breakfast.  The man, frustrated, walked away.  Sign please.
     
    Please note that all of the above people are allowed to vote and have children!
     

    History Exam forwarded by Auntie Bev

    1. In the 1940's, where were automobile headlight dimmer switches located? a. On the floor shift knob b. On the floor board, to the left of the clutch c. Next to the horn

    2. The bottle top of a Royal Crown Cola bottle had holes in it. For what was it used? a. Capture lightning bugs b. To sprinkle clothes before ironing c. Large salt shaker

    3. Why was having milk delivered a problem in northern winters? a. Cows got cold and wouldn't produce milk b. Ice on highways forced delivery by dog sled c. Milkmen left deliveries outside of front doors and milk would freeze, expanding and pushing up the cardboard bottle top.

    4. What was the popular chewing gum named for a game of chance? a. Blackjack b. Gin c. Craps!

    5. What method did women use to look as if they were wearing stockings when none were available due to rationing during W.W.II a. Suntan b. Leg painting c. Wearing slacks

    6. What postwar car turned automotive design on its ear when you couldn't tell whether it was coming or going? a. Studebaker b. Nash Metro c. Tucker

    7. Which was a popular candy when you were a kid? a. Strips of dried peanut butter b. Chocolate licorice bars c. Wax coke-shaped bottles with colored sugar water inside

    8. How was Butch wax used? a. To stiffen a flat-top haircut so it stood up b. To make floors shiny and prevent scuffing c. On the wheels of roller skates to prevent rust

    9. Before in-line skates, how did you keep your roller skates attached to your shoes? a With clamps, tightened by a skate key b. Woven straps that crossed the foot c. Long pieces of twine

    10. As a kid, what was considered the best way to reach a decision? a. Consider all the facts b. Ask Mom c. Eeny-meeny-miney-mo

    11. What was the most dreaded disease in the 1940's-50's?

    a. Smallpox b. AIDS c. Polio

    12. "I'll be down to get you in a ________, Honey" a. SUV b. Taxi c. Streetcar

    13. What was the name of Caroline Kennedy's pet pony? a. Old Blue b. Paint c. Macaroni

    14. What was a Duck-and-Cover Drill? a. Part of the game of hide and seek b What you did when your Mom called you in to do chores c. Hiding under your desk, and covering your head with your arms in an A-bomb drill.

    15. What was the name of the Indian Princess on the Howdy Doody show? a. Princess Summerfallwinterspring b. Princess Sacajawea c. Princess Moonshadow

    16. What did all the really savvy students do when mimeographed tests were handed out in school? a. Immediately sniffed the purple ink, as this was believed to get you high b. Made paper airplanes to see who could sail theirs out the window c. Wrote another pupil's name on the top, to avoid their failure

    17. Why did your Mom shop in stores that gave Green Stamps with purchases? a. To keep you out of mischief by licking the backs, which tasted like bubble gum b. They could be put in special books and redeemed for various household items c. They were given to the kids to be used as stick-on tattoos

    18. Praise the Lord, and pass the _________? a. Meatballs b. Dames c. Ammunition

    19. What was the name of the singing group that made the song "Cabdriver" a hit? a. The Ink Spots b. The Supremes c. The Esquires

    20. Who left his heart in San Francisco ? a. Tony Bennett b. Xavier Cugat c. George Gershwin -------------------------------------------------------------------------

    ANSWERS

    1. b) On the floor, to the left of the clutch. Hand controls, popular in Europe , took till the late '60's to catch on.

    2. b) To sprinkle clothes before ironing. Who had a steam iron?

    3. c) Cold weather caused the milk to freeze and expand, popping the bottle top.

    4. a) Blackjack Gum.

    5. b) Special makeup was applied, followed by drawing a seam down the back of the leg with eyebrow pencil.

    6. a) 1946 Studebaker.

    7. c) Wax coke bottles containing super-sweet colored water.

    8 a) Wax for your flat top (butch) haircut.

    9. a) With clamps, tightened by a skate key, which you wore on a shoestring around your neck.

    10. c) Eeny-meeny-miney-mo.

    11. c) Polio. In beginning of August, swimming pools were closed, movies and other public gather- ing places were closed to try to prevent spread of the disease.

    12. b) Taxi. Better be ready by half-past eight!

    13. c) Macaroni.

    14. c) Hiding under your desk, and covering your head with your arms in an A-bomb drill.

    15. a) Princess Summerfallwinterspring. She was another puppet.

    16. a) Immediately sniffed the purple ink to get a high.

    17. b) Put in a special stamp book, they could be traded for household items at the Green Stamp store.

    18. c) Ammunition, and we'll all be free.

    19. a) The widely famous 50's group: The Inkspots.

    20. a) Tony Bennett, and he sounds just as good today..

    SCORING

    17 - 20 correct: You are older than dirt, and obviously gifted with mental abilities. Now if you could only find your glasses. Definitely someone who should share your wisdom!

    12 -16 correct: Not quite dirt yet, but you're getting there.

    0 -11 correct: You are not old enough to share the wisdom of your experiences.


    Forwarded by Aaron Konstam

    THE 12 DAYS OF AOL

    On the first day of AOL those Bozos gave to me, a jerk cursing in a chat room.

    On the second day of AOL those Bozos gave to me, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the third day of AOL those Bozos gave to me, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the fourth day of AOL those Bozos gave to me, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the fifth day of AOL those Bozos gave to me, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the sixth day of AOL those Bozos gave to me, 6 disconnections, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the seventh day of AOL those Bozos gave to me, 7 frozen IMs, 6 disconnections, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the eight day of AOL those Bozos gave to me, 8 hours of busy signals, 7 frozen IMs, 6 disconnections, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the ninth day of AOL those Bozos gave to me, 9 frozen chat rooms, 8 hours of busy signals, 7 frozen IMs, 6 disconnections, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the tenth day of AOL those Bozos gave to me, 10 hours without mail, 9 frozen chat rooms, 8 hours of busy signals, 7 frozen IMs, 6 disconnections, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the eleventh day of AOL those Bozos gave to me, 11 channels not working, 10 hours without mail, 9 frozen chat rooms, 8 hours of busy signals, 7 frozen IMs, 6 disconnections, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail, and a jerk cursing in a chat room.

    On the twelveth day of AOL those Bozos gave to me, 12 reasons to cancel, 11 channels not working, 10 hours without mail, 9 frozen chat rooms, 8 hours of busy signals, 7 frozen IMs, 6 disconnections, 5 web crashes, 4 idiots at tech help, 3 error messages, 2 pieces of junk mail,

    and a jerk cursing in a chat room.

     


    From Free Republic on November 9, 2006

    Microsoft Christmas

    'Twas the night before Christmas, when all through the house
    Not a creature was stirring, except Papa's mouse.

    The computer was humming, the icons were hopping,
    As Papa did last-minute Internet shopping.

    The stockings were hung by the modem with care
    In hope that St. Nicholas would bring new software.

    The children were nestled all snug in their beds,
    While visions of computer games danced in their heads.

    PageMaker for Billy, and Quicken for Dan,
    And Carmen Sandiego for Pamela Ann.

    The letters to Santa had been sent out by Mom,
    To santaclaus@toyshop. northpole. com

    Which has now been re-routed to Washington State
    Because Santa's workshop has been bought by Bill Gates.

    All the elves and reindeer have had to skedaddle
    To flashy new quarters in suburban Seattle.

    After centuries of a life that was simple and spare,
    St. Nicholas is suddenly a new billionaire,

    With a shiny red Porsche in the place of his sleigh,
    And a house on Lake Washington that's just down the way

    From where Bill has his mansion. The old fellow preens
    In black Gucci boots and red Calvin Klein jeans.

    The elves have stock options and desks with a view,
    Where they write computer code for Johnny and Sue.

    More rapid than eagles the competitors came,
    And Bill whistled, and shouted, and called them by name.

    "Now, ADOBE! now, CLARIS! now, INTUIT! too,
    Now, APPLE! and NETSCAPE! you are all of you through,

    It is Microsoft's SANTA that the kids can't resist,
    It's the ultimate software with a traditional twist -

    Recommended by no less than the jolly old elf, And on the package, a picture of Santa himself.

    Get 'em young, keep 'em long, is Microsoft's scheme,
    And a merger with Santa is a marketer's dream.

    To the top of the NASDAQ! to the top of the Dow!
    Now dash away! dash away! dash away - wow!"

    And Mama in her 'kerchief and I in my cap,
    Had just settled down for a long winter's nap,

    When out on the lawn there arose such a clatter,
    The whir and the hum of our satellite platter,

    As it turned toward that new Christmas star in the sky, The SANTALITE owned by the Microsoft guy.

    As I sprang from my bed and was turning around,
    My computer turned on with a Jingle-Bells sound.

    And there on the screen was a smiling Bill Gates
    Next to jolly old Santa, two arm-in-arm mates.

    And I heard them exclaim in voice so bright,
    Have a MICROSOFT CHRISTMAS, and TO ALL A GOOD NIGHT.


    Replies from Santa forwarded by Auntie Bev

    deer santa: I wud like a kool toy space ranjur fer Xmas. Iv ben a gud boy all yeer. Yer Frend, BiLLy

    Dear Billy, Nice spelling. You're on your way to a career in lawn care. How about I send you a frigging book so you can learn to read and write? I'm giving your older brother the space ranger. At least HE can spell! Santa


    Dear Santa, I have been a good girl all year, and the only thing I ask for is peace and joy in the world for everybody! Love, Sarah

    Dear Sarah, Your parents smoked pot when they had you, didn't they? Santa


    Dear Santa, I left milk and cookies for you under the tree, and I left carrots for your reindeer outside the back door. Love, Susan

    Dear Susan, Milk gives me the trots and carrots make the deer fart in my face when riding in the sleigh. You want to do me a favor? Two words, Jim Beam. Santa


    Dear Santa, Do you see us when we're sleeping, do you really know when we're awake, like in the song? Love, Jessica

    Dear Jessica, Are you really that gullible? Good luck in whatever you do. I'm skipping your house. Santa


    Dearest Santa, We don't have a chimney in our house, how do you get into our home? Love, Marky

    Mark, First, stop calling yourself "Marky", that's why you're getting your ass kicked at school. Second, you don't live in a house, you live in a low-rent, ghetto apartment complex. Third, I get inside your pad just like all the burglars do, through your bedroom window. Sweet Dreams, Santa


    Forwarded by Michael Schweitzer

    GIFT-WRAPPING TIPS FOR MEN:

    1. Whenever possible, buy gifts that are already wrapped. If, when the
    recipient opens the gift, neither one of you recognizes it, you can claim
    that it's myrrh.

    2 If you're giving a hard-to-wrap gift, skip the wrapping paper! Just put it
    inside a bag and stick one of those little adhesive bows on it. This creates
    a festive visual effect that is sure to delight the lucky recipient on
    Christmas morning:

    YOUR WIFE: "Why is there a Hefty trash bag under the tree?"
    YOU: "It's a gift! See? It has a bow!"
    YOUR WIFE (peering into the trash bag): "It's a leaf blower."
    YOU: "Gas-powered! Five horsepower!"
    YOUR WIFE: "I want a divorce."
    YOU: "I also got you some myrrh."

    3. The editors of Woman's Day magazine recently ran an item on how to make
    your own wrapping paper by printing a design on it with an apple sliced in
    half horizontally and dipped in a mixture of food coloring and liquid starch
    They must be smoking crack!

    In conclusion, remember that the important thing is not what you give, or how you wrap it. The really important thing, during this very special time of year, is that you save the receipt.


    The Ultimate Rejection Letter (actually a reply to a rejection letter) --- http://www.chaosmatrix.org/library/humor/reject.html


    Dilbert  has a blog --- http://dilbertblog.typepad.com/the_dilbert_blog/

     

     

     

     

     


    November 30, 2006

     

     

    Bob Jensen's New Bookmarks on November 30, 2006
    Bob Jensen at Trinity University 

    For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm
    For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 

    Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
    For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

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    Current and past editions of my newsletter called Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
     

    Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   
     

    Bob Jensen's various threads --- http://www.trinity.edu/rjensen/threads.htm
           (Also scroll down to the table at http://www.trinity.edu/rjensen/ )

    Click here to search this Website if you have key words to enter --- Search Site.
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    Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/




    Click Here for Tidbits and Quotations Between November 1 and November 30, 2006

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    I think this is a good deal for accounting students everywhere!

    November 9, 2006 message from Tracey E. Sutherland [membership@aaahq.org]

    I am proud to announce that student membership in the American Accounting Association is now available to full-time students residing anywhere in the world. Student members pay discounted membership dues and receive their selected Association journals online. Student membership also allows students to attend national, section, and regional meetings of the Association without vote but at reduced rates. Student members are also eligible to purchase Association publications at member prices.

    Student membership dues in the AAA are as follows:

    One electronic journal option - $25

    Two electronic journal option - $35

    Three electronic journal option - $45

    Also included in student membership are electronic and hard copy versions of the AAA newsletter and updates/emails about upcoming events and conferences. Student members are also welcome to join any of our 15 interest sections at the discounted rate of only $6 per section.

    Please encourage your students to take advantage of this new option to participate in the accounting education community, and share the news of this new opportunity with your colleagues.

    Information about student membership in the AAA and an online student membership application can be found online at http://aaahq.org/membership/student_member.htm. If you have any questions about student membership, please feel free to contact Deirdre Harris at membership@aaahq.org or 941-921-7747, ext. 319.

    Best regards,
    Tracey Sutherland
    Executive Director
    American Accounting Association
    Phone: 941/921-7747 ext. 311
    Fax: 941/923-4093
    AAA website:
    http://aaahq.org
    Email: tracey@aaahq.org

    Although current issues of AAA publications are not free, I remind readers that back issues of The Accounting Review (up to I think year 2000) can be downloaded free as images (not PDF text) from http://maaw.info/TheAccountingReview.htm
    You have to click on the "(Non USF user link)".

    I've never found sources for free back issues of other AAA publications, although most college libraries subscribe to databases that provide free downloads of page images (not PDF text for older editions).


    Congratulations Bill (Well Deserved)
    The Management Accounting Section of the American Accounting Association is pleased to announce that it has awarded the Lifetime Contribution to Management Accounting Award to Professor William L. Ferrara. The AICPA sponsored award recognizes individuals who have made significant contributions to management accounting education, research, and practice over a sustained period of time through scholarly endeavors, teaching excellence, educational innovation, and service to the Management Accounting Section. The award extends profession-wide recognition to the recipient and promotes role models in management accounting.

    "LIFETIME ACHIEVEMENT AWARD GIVEN TO WILLIAM FERRARA FOR CONTRIBUTIONS TO MANAGEMENT ACCOUNTING," AccountingEducation.com, December 7, 2006 --- http://accountingeducation.com/index.cfm?page=newsdetails&id=144010


    Study: Most Audit Committees Do Not Have Even One Accountant
    Then why call them audit committees?
    A new report says that in 2005 the number of accountants sitting on audit committees doubled compared to four years prior, but that six out of 10 companies still did not have at least one accountant on their committee. The research from Huron Consulting is based on a sample of more than 700 audit committee members at 178 public companies from the NASDAQ 100 and Fortune 100 listings. The report analyzed patterns of audit committee composition between 2002 and 2005 using information contained in the companies' annual proxy statements and 10-K disclosures filed with the U.S. Securities and Exchange Commission.
    "Study: Most Audit Committees Lack Accountant ," SmartPros, November 30, 2006 --- http://accounting.smartpros.com/x55639.xml

    Bob Jensen's threads on proposed reforms are at http://www.trinity.edu/rjensen/FraudProposedReforms.htm


    December 4, 2006 --- Dennis Beresford [dberesfo@TERRY.UGA.EDU]

    The first of the PCAOB's inspection reports on Big 4 firm audits for the 2004 year end has been posted to the PCAOB's web site. It can be accessed at:

    http://www.pcaobus.org/Inspections/Public_Reports/2006/Deloitte.pdf

    Denny

    December 9, 2006 reply from Bob Jensen

    I'm getting increased messaging from companies who complain that the PCAOB inspections of Audits are making auditors highly conservative, especially regional auditing firms.

    In particular auditors are becoming very tough about testing for hedge ineffectiveness under FAS 133. No auditing firm wants to get caught up anything like KPMG got caught up in before being fired from the Fannie Mae audit.

    You can read more about ineffectiveness testing under the term "Ineffectiveness" at http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#I-Terms

    Because Denny is the new head of Fannie Mae's Audit Committee, I suspect he's heard a lot about ineffectiveness testing as of late.

    Bob Jensen

    December 9, 2006  reply from Denny Beresford [DBeresfo@TERRY.UGA.EDU]

    Bob,

    Without commenting on specific situations, it appears that the regulators would like companies and their auditors to actually follow the accounting literature. Seems pretty reasonable to me.

    Denny


    "FASB Proposes Improved Derivatives, Hedging Disclosures," SmartPros, December 11, 2006 --- http://accounting.smartpros.com/x55778.xml

    The Financial Accounting Standards Board issued a proposal that would provide investors and others with better information about the effects of derivative and hedging activities on a company's financial statements.

    The proposed statement specifically addresses constituents' concerns that existing disclosure requirements associated with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, do not provide adequate information to financial statement users.

    "The proposed disclosure requirements are intended to enhance understanding of how and why entities use derivatives, how they are accounted for in an entity's financial statements, and how they affect an entity's financial position, results of operations, and cash flows," said Kevin Stoklosa, FASB Project Manager.

    The exposure draft would enhance the current disclosure framework by requiring that objectives and strategies for using derivative instruments be discussed in terms of underlying risk and accounting designation. The exposure draft would require tabular disclosure of notional and fair value amounts of derivatives instruments and the gains and losses on derivatives instruments and related hedged items. Additionally, the proposed statement would require disclosure of information about counterparty credit risk and the existence and nature of contingent features in derivative instruments.

    The requirements of the proposed Statement would be effective for financial statements issued for fiscal years and interim periods ending after Dec. 15, 2007, with early application encouraged. The proposed statement would encourage but would not require disclosures for earlier periods at initial adoption. In years after initial adoption, the proposed statement would require disclosures for earlier periods.

    The board is seeking written comments on the proposal by March 2, 2007.

    For a short time you can download the proposed FAS 133 amendment from http://www.fasb.org/draft/ed_derivatives_disclosure.pdf

    Bob Jensen's tutorials on FAS 133 and IAS 39 are at
    http://www.trinity.edu/rjensen/caseans/000index.htm

    A slide show on FAS 133 and IAS 39 disclosure rules is available at http://www.cs.trinity.edu/~rjensen/Calgary/CD/JensenPowerPoint/


    Accounting Snags Push Dresser to Restate Problems with derivative transactions, inventory controls
    Dresser Inc. said it will restate its financial statements for 2001 through 2003 based on a host of accounting errors. In May, the industrial engineering company had warned that it would restate its 2004 annual filing, its 2004 and 2005 quarterly financial statements, and would be evaluating the potential need to restate prior periods. The accounting errors relate to inventory valuation and derivative transactions under the Financial Accounting Standards Board's FAS 133. Other accounting errors relate to the company's businesses which were sold in November 2005.
    Stephen Taub, "Accounting Snags Push Dresser to Restate Problems with derivative transactions, inventory controls, keep IPO on hold," CFO Magazine, November 26, 2006 ---
    http://www.cfo.com/article.cfm/8346406/c_8347143?f=FinanceProfessor.com

    Dresser Inc. changed its independent auditor to Pricewaterhouse Coopers (PwC) in 2002 and with plans to restate its 2001 financial statements after it changed auditors. The previous auditor was KPMG.

    Bob Jensen's threads on KPMG are at --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG


    Monster says it made monster accounting errors
    Monster Worldwide Inc. said on Wednesday it overstated profit from 1997 to 2005 by a total of $271.9 million, a result of its investigation into historical stock option grants and accounting. In a filing with the U.S. Securities and Exchange Commission, the parent of job search Web site Monster.com recorded a net charge of $9.2 million for 2005, $14.4 million for 2004, $27 million for 2003, $44.9 million for 2002, $65.6 million for 2001, and $110.8 million for the cumulative period of 1997 through 2000.
    "Monster says overstated '97-'05 profit by $271.9 m," Rueters, December 13, 2006 --- Click Here

    The Independent Auditor for Monster Worldwide is KPMG --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG


    It just gets deeper and deeper for KPMG

    Fannie Mae Sues KPMG
    The mortgage lending company Fannie Mae filed suit on Tuesday against its former auditor KPMG, accusing the firm of negligence and breach of contract for its part in the flawed accounting that led to a $6.3 billion restatement of earnings. Fannie Mae states in its complaint that KPMG applied more than 30 flawed principles and cost it more than $2 billion in damages. Fannie Mae fired the accounting firm in mid-December 2004, just a week after the Securities and Exchange Commission ordered the company to restate more than two years of flawed earnings. A KPMG spokesman, Tom Fitzgerald, said the company planned to “pursue our own claims against Fannie Mae.”
    "Fannie Mae Sues KPMG," The New York Times, December 13, 2006 --- http://www.nytimes.com/2006/12/13/business/13kpmg.html?_r=1&oref=slogin

    KPMG fired back at former audit client Fannie Mae this week, saying it would counter the mortgage giant’s $2 billion negligence and breach of contract lawsuit. KPMG “will pursue our own claims against Fannie Mae” in the U.S. District Court in Washington, D.C., spokesman Tom Fitzgerald told reporters Tuesday. Fannie Mae filed its lawsuit Tuesday in the Superior Court of the District of Columbia. Fitzgerald said the issues raised in Fannie Mae's lawsuit “are already pending" in shareholder lawsuits before the federal district court. He did not elaborate on what claims KPMG would make against Fannie Mae, Reuters reported.
    "KPMG Plans Counter Suit of Fannie Mae," AccountingWeb, February 14, 2006 ---
    http://www.accountingweb.com/cgi-bin/item.cgi?id=102902 

    Bob Jensen's threads on KPMG are at --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG


    "Fannie Mae Faces Work After Restatement," by Marcy Gordon, SmartPros, December 8, 2006 --- http://accounting.smartpros.com/x55766.xml

    Mortgage giant Fannie Mae has taken a significant stride in its march out of an accounting scandal by completing a restatement of past earnings but still faces tough work to make its financial reporting current.

    The restatement for 2001 through June 30, 2004, made public on Wednesday, wiped out $6.3 billion in profit for the government-sponsored company, which finances one of every five home loans in the United States. But it was well below Fannie Mae's earlier estimate of $10.8 billion. Ordered by the government two years ago, the massive reworking of its accounting has cost the company some $1 billion this year to carry out.

    Shares of Fannie Mae rose $1.64, or almost 3 percent, to $60.14 in early trading Thursday on the New York Stock Exchange. It has traded in a range of $46.17 to $62.37 over the last 52 weeks, compared with its peak of around $80 in early 2004.

    It was the first earnings statement filed by Fannie Mae since late 2004. The scandal erupted in the fall of that year when federal regulators accused Washington-based Fannie Mae - with its long-standing prestige, vaunted political clout and reputation for financial excellence - of serious accounting problems and earnings manipulation to meet Wall Street targets.

    Fannie Mae also announced Wednesday an increase in its quarterly dividend to 40 cents from 26 cents, where it had been since being slashed in half in January 2005.

    "We believe that returning higher levels of capital back to shareholders is a top priority at Fannie Mae, and this marks an important first step," Moshe Orenbuch, an analyst at Credit Suisse, said in a research note issued Thursday.

    The company hasn't said when it will get caught up and report its results for 2005 and 2006; it could take a year or two.

    The restatement "is a key step forward for the company and represents two years of hard work," James B. Lockhart, director of the Office of Federal Housing Enterprise Oversight, said in a statement Wednesday. "Much remains to be done. ... Fannie Mae faces enormous challenges in fixing its operational and risk management systems, in (financial controls) compliance, and in producing audited financial statements for 2005 and 2006."

    Jim Vogel, an analyst with FTN Financial Capital Markets, said in a research note that for Wall Street, the concern is "if there's a pattern of sustained quarterly losses that appear to reflect more difficulties in risk management than the market had thought."

    OFHEO is the federal agency that regulates Fannie Mae and Freddie Mac, its smaller sibling in the $8 trillion home-mortgage market. Last May, it issued a blistering report alleging a six-year accounting fraud at Fannie Mae, the second-largest U.S. financial institution after Citigroup Inc. Regulators said the scheme included manipulations to reach quarterly earnings targets so that company executives could pocket hundreds of millions in bonuses from 1998 to 2004.

    Lockhart also said Wednesday the agency plans to file a lawsuit before year's end to recover tainted bonus money from former Fannie Mae officials, including ex-chief executive Franklin Raines and chief financial officer Timothy Howard. Raines, a prominent Washington figure who was White House budget director in the Clinton administration, was swept out of office in December 2004 along with Howard. A number of senior executives and board directors have left the company.

    Fannie Mae paid a record $400 million civil fine in a settlement with OFHEO and the Securities and Exchange Commission. It also agreed to limit the growth of its multibillion-dollar mortgage holdings, capping them at $727 billion, and to make top-to-bottom changes in its corporate culture, accounting procedures and ways of managing risk.

    The company also disclosed Wednesday that its chief executive, Daniel Mudd, received a pay package of $13.1 million, including a $2.6 million bonus, for 2005. Mudd, who was the top operations official at the time of the accounting misdeeds, was elevated to the CEO in a management shakeup in December 2004.

    In detailing its restatement, Fannie Mae cited a $7 billion net decrease from previously reported earnings for periods prior to 2002, a $705 million reduction for 2002, a $176 million increase for 2003 and a $1.2 billion increase for the first six months of 2004.

    Over the last two years, Fannie Mae has disclosed a passel of new accounting problems that had been uncovered in several areas, including its core business of issuing securities backed by the billions of dollars of home mortgages annually that it buys from lenders and bundles together for resale to investors worldwide. Other problems were revealed in loans, houses acquired through foreclosures, interest on delinquent home loans and reverse mortgages.

    They all were in addition to the accounting-rule violations that came to light in September 2004 involving derivatives, the financial instruments that Fannie Mae and Freddie Mac use to hedge against swings in interest rates.

    Fannie Mae escaped criminal prosecution over the accounting failure. The Justice Department had pursued a criminal investigation, but federal prosecutors said in August that they had shut down their probe without bringing any action. The SEC still could bring civil actions against individual executives, including people no longer at Fannie Mae, with the burden of proof less stringent than in criminal prosecutions. Several shareholder lawsuits have been filed against the company and current and former executives.

    Fannie Mae and Freddie Mac were created by Congress to pump money into the home-mortgage market to keep interest rates low and make home ownership affordable for low- and moderate-income people.

    Freddie Mac, which also is government-sponsored and has its stock publicly traded, had its own accounting scandal that came to light in June 2003. The company misstated earnings by some $5 billion - mostly underreported - for 2000-2002 to smooth out volatility in profit and uphold its image on Wall Street as a steady performer.

    Bob Jensen's threads on Fannie Mae are
    http://www.trinity.edu/rjensen/caseans/000index.htm


    Where can you learn more about FAS 133?

    February 15, 2006 message from XXXXX

    Bob,

    . . . .The purpose of my email is to solicit your opinion on the best resources I can leverage to answer various issues that arise and generally broaden my understanding of FAS 133. work in risk management but have difficulties with the accounting side of FAS 133.  [Other portions of message deleted]

    Thanks for your time!

    XXXXX

    February 15, 2006 reply from Bob Jensen

    Hi XXXXX,

    I receive inquiries like this almost daily. Usually these questions come from accountants who do not have sufficient background in derivative instruments contracting and economic hedging and, as a result, have not been able to tackle FAS 133 and IAS 39. Sometimes the inquiries come from people like your self who have good background in finance and risk management but cannot comprehend the quirks of accounting that led to this monstrous set of incomprehensible rules for booking and/or disclosing derivative financial instruments.

    When accountants do not understand derivatives and risk management, I tell them to work through one of the best textbooks I've ever seen (which has no accounting whatsoever inside):
    Derivatives:  An Introduction by Robert A Strong, Edition 2
    (Thomson South-Western, 2005, ISBN 0-324-27302-9)

    When people like yourself who understand derivatives and risk management but cannot understand the quirks of accounting, I begin with an illustration of a basic quirk in accounting--- a quirk discussion that also introduces the concepts of "forecasted transaction" and "firm commitment" hedging under FAS 133 rules.

    Unbooked Financial Risks
    One of the first things we learned in Accounting 101 is that accountants traditionally do not book (and usually do not even disclose) purchase/sales contracts until legal title to the goods and services actually changes hands. Reasons are complicated, but the most fundamental reason is that defaulted purchase/sales contracts are usually settled in court or out of court for a small fraction of contracted amounts, i.e., settlements are usually based upon damages rather than contracted amounts in full. For example, when Dow Jones contracts with St. Regis Paper Company for paper purchases over the next 50 years of publishing The Wall Street Journal it would be absurd to try to book a soft estimate of the billions of the actual contracted dollars of this contract. Damage estimates are virtually impossible to estimate and change from month to month as more trees for paper harvesting are planted.

    Hence the biggest problem finance and economics professors have with accounting professors is that purchase/sales contracts entail financial risks that accounting professors refuse to book. Furthermore these purchase/sales contract risks are commonly hedged. When the notional (quantity) and underlying (price or rate) are contracted, the purchase/sales contract is called a "firm commitment" under FAS 133. There is no cash flow risk in firm commitments, but they can be hedged for fair value (when future spot prices differ from contracted prices). When the notional (quantity) is contracted or otherwise reasonably certain and the underlying is not specified there is cash flow risk that can be hedged with a cash flow hedge defined in FAS 133. Also firm commitments and forecasted transactions can be hedged for foreign currency (FX) risk apart from U.S. dollar risks. Most accountants do not even understand that it is impossible to simultaneously hedge for fair value and cash flow.

    FAS 133 as Source Material for Comedy Central TV
    My purpose here is not to launch into a tutorial about purchase/sales contract hedge accounting rules under FAS 133. Rather my purpose is to illustrate the dilemma caused by traditional quirks in accounting. Where finance and accounting professors differ is on the basic concept of financial risk. Finance professors are confused when there are financial risks that can be hedged even though those risks are virtually ignored by accountants because legal title has not changed hands. Then along comes FAS 133 that declares the hedge contracts for unbooked hedged items must be booked and maintained at fair value even though the hedged items themselves are not booked until title passes. This begins to sound like great source material for Comedy Central TV --- perhaps the Cobert Report!

    Where To Begin
    Adding pain to misery is the fact that FAS 133 rules for fair value hedges differ greatly from rules for cash flow and FX hedges. Finance professors find the stated reasons in FAS 133 incomprehensible. Accounting professors don't bother to open FAS 133 and never get out of the starting gate in understanding derivatives, hedging, risk management, and FAS 133.

    So where do you begin to understand the accounting quirks in FAS 133? My first piece of advice is to totally ignore accounting textbooks, including those that may claim to be derivatives accounting textbooks. These are worthless. Second ignore the finance and economics textbooks since authors of these books do not understand accounting quirks.

    You mentioned Ira Kawaller. Ira is an economist who admits to having difficulties understanding accounting quirks. This is why he sometimes brings me into partner with him on teaching FAS 133 --- my role is to teach accounting quirks of FAS 133. I also give my own workshops on this topic --- http://www.trinity.edu/rjensen/resume.htm#Presentations

    I also provide free online FAS 133 and IAS 39 tutorials and videos --- http://www.trinity.edu/rjensen/caseans/000index.htm

    But the bottom line is that my audiences and my readers conclude that my biggest success in life is confusing them about accounting for derivatives. My defense is that it is very difficult to explain the huge gap between financial risk versus what accountants book. I get a lot of compliments for what I provide online, but the most common complaint is that my online materials are a nightmare to navigate

    Where should you dig into to learn about the accounting quirks of FAS 133? The bottom line is that I don't know! You can pay thousands of dollars to attend one of our seminars, but these are so broad brushed that our audiences feel like they've just had a meal on hors'deovers.

    The bottom line is that it is probably best to dig into the FASB's "Green Book" line for line as painful as that becomes for 873 pages of jargon ---
    http://fasbpubs.stores.yahoo.net/dc133-3.html
     

    Also request the FASB's supplemental documentation (119 pages to date) of error corrections in the Green Book.

    Secondly, memorize the FAS 133 and IAS 39 rules rather than try to find a rationale. For example, it is utterly frustrating trying to reason why hedge accounting for cash flow/FX hedges use OCI offsets that are verboten  fair value hedges (never OCI for FV hedges). You should just to do or die, not reason why.

    I do suggest that you especially look at my Excel workbooks at http://www.cs.trinity.edu/~rjensen/Calgary/CD/FAS133AppendixB/

    I also suggest that you look at my PowerPoint files at http://www.cs.trinity.edu/~rjensen/Calgary/CD/ 

    There is much pressure outside and within the FASB and the IASB to simplify rules for accounting for derivative financial instruments. This is a bit like appeals to reduce felony statutes to a mere Ten Commandments on stone tablets. Simplification sounds great as a principle, but in my viewpoint oversimplification will be disastrous. The reason is that there are thousands of different kinds of risk management contracts, and it's impossible to derive ten commandments covering all the variations arising in the practice of risk management.

    Some argue that fair value accounting (in place of historical cost accounting) is the answer, but I have my doubts about this oversimplification ---
    http://www.trinity.edu/rjensen/FairValueDraft.htm
    Also see
    http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue

    For example, fair value accounting is no panacea to accounting for purchase/sales contracts.

    Bob Jensen

     


    Federal Regulators Fine Grant Thornton $300,000 Over Audit of Failed Bank
    Federal bank regulators have fined the accounting firm Grant Thornton LLP $300,000 for what they called "reckless conduct" in its audit of First National Bank of Keystone, a West Virginia institution whose collapse in 1999 was one of the costliest U.S. bank failures in the past decade.
    Marcy Gordon, "Federal Regulators Fine Grant Thornton $300,000 Over Audit of Failed Bank, SmartPros, December 11, 2006 --- http://accounting.smartpros.com/x55776.xml

    Grant Thornton LLP said it will challenge recent Treasury Department (DoT) findings and penalties stemming from the firm’s audit of a bank that collapsed in 1999. The Office of the Comptroller of the Currency, the Treasury agency that regulates nationally chartered banks, on Friday announced the telling $300,000 fine against the Chicago-based CPA firm that audited First National Bank of Keystone in 1998.
    "Grant Thornton to Fight Claim of “Reckless” Audit," AccountingWeb, December 12, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102894

    Bob Jensen's threads on Grant Thornton (especially the Refco audit failure) are at http://www.trinity.edu/rjensen/Fraud001.htm#GrantThornton


    "Accounting Firms Seek Overhaul," by Tad Kopinski, Institutional Shareholder Services ISS, November 20, 2006 ---
    http://blog.issproxy.com/2006/11/accounting_firms_seek_overhaul.html

    The six biggest international audit firms have called for a complete overhaul of corporate financial reporting as the U.S. and Europe move toward convergence of international audit standards.

    In a Nov. 8 report, the accounting firms propose to replace static quarterly financial statements with real-time, Internet-based reporting that encompasses a wider range of performance measures, including non-financial ones. The report was signed by the chiefs of PricewaterhouseCoopers International, Grant Thornton International, Deloitte, KPMG International, BDO International, and Ernst & Young. The report can be downloaded here.

    "We all believe the current model is broken," Mike D. Rake, KPMG's chairman, told the Financial Times. "There are significant shortcomings to U.S. GAAP [Generally Accepted Accounting Principles] and issues of concern with International Financial Reporting Standards. We're not in a very happy situation."

    Rake noted that quarterly reporting and the short-term focus on companies' ability to meet Wall Street earnings expectations helped foster accounting scandals. The firms have been working on their proposals for more than a year.

    The large discrepancy between the "book" and "market" values of many listed companies is clear evidence that the content of traditional financial statements is of limited use, the report said. The audit firms recommend using non-financial measures that would provide more valuable indications of a company's future prospects, such as customer satisfaction, product or service defects, employee turnover, and patent awards.

    The report said the following developments need to occur to ensure capital market stability, efficiency, and growth:

    --Investor needs for information are well defined and met;
    --The roles of the various stakeholders in these markets--financial statement preparers, regulators, investors, standards setters, and auditors--are aligned and supported by effective forums for continuous dialogue;
    --The auditing profession is vibrant, sustainable, and provides sufficient choice for all stakeholders in these markets;
    --A new business-reporting model is developed to deliver relevant and reliable information in a timely way;
    --Large, collusive frauds are more and more rare; and
    --Information is reported and audited pursuant to globally consistent standards.
     

    ICGN Expresses Concerns Over Convergence

    Meanwhile, the International Corporate Governance Network (ICGN) has expressed concerns about a draft proposal on harmonizing international and U.S. accounting standards. The ICGN argues that the draft doesn't pay sufficient attention to shareholder rights and the stewardship role of boards and investors.

    "Convergence must be there to raise standards," ICGN Executive Director Anne Simpson told the Financial Times. "Convergence for its own sake is not of value."

    The ICGN letter was in response to a request for comment by the International Accounting Standards Board (IASB) and its U.S. counterpart, the Financial Accounting Standards Board (FASB) on a discussion paper on harmonization objectives. The IASB and the FASB have been working on harmonizing the two accounting systems since October 2002 and have set 2008 as the goal for finalizing the process.

    Unlike the current IASB auditing framework, the discussion paper endorses a model more similar to U.S. standards, dropping a key shareowner safeguard embedded in U.K.-style standards, the ICGN noted. Rather than focusing audits on past transactions, the discussion paper calls for audits to focus on "decision-usefulness" that can affect company cash flows, the letter said.

    "We are concerned that this emphasis on the ability to forecast the future does not fully capture the requirements of stewardship, which is concerned with monitoring past transactions and events," Mark Anson, the CEO of Hermes Pensions Management who chairs the ICGN, wrote in the Nov. 2 letter. (A Hermes affiliate is a part owner of ISS.)

    "In many jurisdictions, financial statements provide significant input into the decisions we make as shareholders, by providing an account of past transactions and events and the current financial position of the business," the ICGN letter noted. "In de-emphasizing things that are particularly [relevant to shareholders' risks and rights], the standards setters could achieve the perverse effect of actually increasing the cost of capital."

    The ICGN includes more than 400 institutional and private investors, corporations, and advisers from 38 countries with capital under management in excess of $10 trillion, according to its Web site. The ICGN letter also was signed by Claude Lamoureux, CEO of the Ontario Teachers' Pension Plan.

    A copy of the IASB discussion paper, which was published in July, can be downloaded here.

     

    Bob Jensen's threads on standard setting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#MethodsForSetting

    Bob Jensen's threads on fair value accounting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue

    Bob Jensen's threads on troubles in the big international accounting firms are at http://www.trinity.edu/rjensen/Fraud001.htm

    Bob Jensen's threads on proposed reforms are at
    http://www.trinity.edu/rjensen/FraudProposedReforms.htm


    Bob Jensen's threads on audit firm litigation instances are at http://www.trinity.edu/rjensen/Fraud001.htm

    From The Wall Street Journal Accounting Weekly Review on November 3, 2006

    TITLE: Booming Audit Firms Seek Shield From Suits
    REPORTER: David Reilly
    DATE: Nov 01, 2006
    PAGE: C1
    LINK: http://online.wsj.com/article/SB116235111161209823.html?mod=djem_jiewr_ac 
    TOPICS: Auditing, Auditing Services

    SUMMARY: The Big Four U.S. audit firms--PricewaterhouseCoopers, Deloitte & Touche, Ernst &Young, and KPMG--want legal limits on court damages granted to investors and others after failure of publicly traded companies they audit. "Their argument is being championed by an influential group recently formed to study the competitiveness of U.S. financial markets with the encouragement of Treasury Secretary Henry Paulson." Others, including the U.S. Chamber of Commerce and the European Commission, are considering similar measures.

    QUESTIONS:
    1.) The argument against limiting legal liability of public accounting firms argues that auditors should "be held to a high standard of performance." Explain this argument and describe who in business and investing activities likely holds this view.

    2.) The argument for limiting legal liability includes the point made by the chief executive of Deloitte Touche Tohmatsu in the article that "the cost of ...audits was never built for insuring capital markets." Summarize the argument in support of limiting legal liability for audit firms, including and explanation of this statement.

    3.) How did the Arthur Andersen firm failure result from the Enron scandal? How was the possibility of a similar fate for KPMG avoided? How do these events contribute to the debate on this issue?

    4.) How did the Committee on Capital Markets Regulation become involved in the debate on limiting audit firms' legal liability?

    5.) How does the discussion in the article indicate the international focus on this issue? Cite all points you can find in the article.

    Reviewed By: Judy Beckman, University of Rhode Island

    --- RELATED ARTICLES ---
    TITLE: Panel's Mission: Easing Capital-Market Rules
    REPORTER: Alan Murray
    PAGE: A2
    ISSUE: Sep 12, 2006
    LINK: http://online.wsj.com/article/SB115802003723560082.html?mod=djem_jiewr_ac

    "Booming Audit Firms Seek Shield From Suits," by David Reilly, The Wall Street Journal, by November 1, 2006; Page C1 ---
    http://online.wsj.com/article/SB116235111161209823.html?mod=todays_us_money_and_investing

    Business is booming at the world's biggest accounting firms, so their top lobbying priority may seem ironic: They want government protection from a big financial hit.

    Revenues at the Big Four -- PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young and KPMG -- have grown at a double-digit pace in recent years as audit fees soared. Regulatory overhauls enacted in the wake of accounting scandals earlier this decade have led to new work for firms. One of the biggest problems facing the Big Four these days is a lack of staff to meet the huge demand for services.

    Yet the Big Four want to limit court damages that investors and others can seek from them for flawed audits of public companies. Without such a shield, the firms say, it's only a matter of time before one of them is felled by a massive court award.

    Their argument is being championed by an influential group recently formed to study the competitiveness of U.S. financial markets with the encouragement of Treasury Secretary Henry Paulson. The group is expected to recommend in coming weeks that the government enact new protections for auditors. A panel set up within the powerful U.S. Chamber of Commerce is sounding a similar theme. In Europe, the European Commission is studying the issue and is likely to recommend limitations on the damages accounting firms can face.

    How much risk the big firms actually face has been largely absent from the debate over auditor liability. Despite a slew of big-ticket lawsuits that emanated from corporate scandals earlier this decade, none of the firms suffered a fatal blow from those legal actions. The one big firm that folded, Arthur Andersen LLP in 2002, fell victim not to a lawsuit but to a criminal obstruction-of-justice conviction, later overturned on appeal.

    "I don't see that auditors have a real need for any kind of special protections," said Bill Kelley, general counsel at the Retirement Systems of Alabama, which has sued accounting firms following corporate blowups. "Auditors need to be held to a high standard. Those are the outsiders we rely on. It's tough to have that responsibility, but that's what they're getting paid for."

    Mr. Kelley and likeminded critics say it's also difficult to quantify the risk the firms face from a big court award. That's because the accounting firms are private partnerships that don't, in most cases, disclose their financial condition or results. So outsiders don't know how much capital the firms have, their level of profitability or even how much insurance they carry.

    If anything, the risk from class-action lawsuits appears to be dwindling. The number of class actions that cite auditors as defendants declined to five last year from 14 in 2002, according to the Stanford Law School Securities Class Action Clearinghouse.

    The bigger threat to firms has stemmed not from civil litigation, but from alleged criminal actions related to their conduct. In addition to the Arthur Andersen case, KPMG LLP suffered a near-death experience last year due to its sale of improper tax shelters; federal prosecutors ultimately decided not to indict the firm, a move that likely would have put it out of business.

    The Andersen and KPMG cases have led some lawyers to claim that the Big Four are already seen by government as too big to fail. "The fact is that the government couldn't indict KPMG for policy reasons," said Sean Coffey, a partner at New York law firm Bernstein Litowitz Berger & Grossmann LLP, who has sued several accounting firms. "These folks are effectively immune to being put out of business and now they're trying to find ways to further inoculate themselves from accountability."

    The firms also have shown they can weather pretty big hits. Over the past two years, KPMG has agreed to pay out nearly $700 million in fines and settlements related to criminal and civil actions. In 2000, Ernst & Young LLP settled for $335 million a shareholder suit related to its work for Cendant Corp.

    Accounting firms argue the danger they face from civil litigation is real and that there are still many scandal-era actions that have yet to work their way through the courts. What is needed, the firms say, are litigation caps similar to those many states have enacted to protect doctors from malpractice suits.

    The firms say special protection is warranted because they can be sued not just by the companies whose books they audit, but also by others, such as investors. These investors, the firms add, try to use auditors to recoup stock-market losses.

    "The cost of our audits was never built for insuring the capital markets," said William G. Parrett, chief executive of Deloitte Touche Tohmatsu, the international arm of Deloitte & Touche. "I don't think we're saying we shouldn't have any liability, but it has to be in proportion to our participation in any problem."

    The firms also say they can't get sufficient insurance because their liability is almost unlimited, encompassing in a worst-case scenario the total stock-market value of the companies they audit. So they are forced to settle lawsuits rather than risk a trial.

    A study for the European Commission, released in September, said the total costs of judgments, settlements, legal fees and related expenses for the U.S. audit practices of the Big Four firms had risen to $1.3 billion in 2004, or 14.2% of revenue, up from 7.7% in 1999. In addition, according to a study by insurer Aon, there were 20 claims outstanding against U.S. auditors as of September 2005 where damages sought or estimated losses topped $1 billion. Accounting firms say they couldn't survive an award of that size.

    Advocates of liability caps frame the issue around the broader debate over U.S. market competitiveness.

    "I think the whole issue of liability is one of the major reasons why foreign companies aren't coming here" to list their stocks on U.S. exchanges, said Hal S. Scott, a Harvard Law School professor and a founding member of the Committee on Capital Markets Regulation, the group formed with Mr. Paulson's blessing to study market competitiveness. Mr. Scott added that while court awards can serve as a deterrent to shoddy audit work, "if we left this to the legal process, we might come up with the right amount of damages to deter bad behavior but have just two or three accounting firms" because one will have gone out of business.

    Recognizing, though, that auditor liability overhaul might be a tough sell on Capitol Hill, the committee may suggest that the U.S. Securities and Exchange Commission come up with a solution, Mr. Scott said. "The SEC could modify their own rules regarding liability," he added. One idea under study: Allowing accounting firms to negotiate liability caps with clients, a practice now barred to preserve auditors' independence.

    November 2, 2006 reply from Mark Eckman, Rockwell Collins [mseckman@ROCKWELLCOLLINS.COM]

    With tongue firmly planted in cheek, why don't we let the audit firms become insurance companies and let them charge premiums based on the risk of material misstatement and deny coverage when the risk is too high? Turn auditors into underwriters and I believe you would see a vast difference in how audits are conducted.

    Mark S. Eckman

    November 2, 2006 reply from Deborah Johnson [vicjohn@SPRINTMAIL.COM]

    I have to agree. Even though you regard it as tongue in cheek, it actually sounds more rational than the current situation. Let each company comply with Sarbanes, and purchase two Bonds from an Insurer. The first Bond for the materiality of the Financial Statements. The Second Bond for Fraud Insurance.

    November 5, 2006 reply from Bob Jensen

    For years some professors like Josh Ronen (NYU) have made arguments for auditing firms to insure financial reports (not necessarily internal fraud that does not materially affect annual reports).

    There are some very good reasons why it makes sense to do this, especially from the perspective of reducing litigation costs for misleading financial reports. However, there are some huge differences between auditing and insurance risks. Insurance risks are measured by actuarial studies of relatively stable systems such as mortality, home fires, wind damage, etc. Insurance companies tend to write in coverage exceptions for things that are less predictable like nuclear war and earthquakes that arise in non-stationary systems. Financial fraud and auditor errors that hugely impact financial statements are more like nuclear war and earthquakes.

    Audits are conducted in much less stationary systems that defy actuarial prediction of losses. One problem is that the systems themselves are reactionary. The current rash of executive option backdating is a good example. Who could've predicted that thousands of executives would commence to backdate options? Events transpired to inspire these frauds, including changes in FAS 123, changes in tax constraints, and a window of opportunity before SOX went into effect. My point is that each new accounting standard, EITF, interpretation, law change (especially tax law), and political outcomes (with power shifting between conservatives and liberals) changes the entire system being audited such that actuarial calculations are impossible.

    Bob Jensen

    Bob Jensen's threads on proposed reforms are at http://www.trinity.edu/rjensen/FraudProposedReforms.htm

    November 5, 2006 reply from Mark Eckman, Rockwell Collins [mseckman@ROCKWELLCOLLINS.COM]

    Very good analysis. Still, I would raise the point that there are specialty underwriting segments available; viz., one can insure for exceptional things such as war, inconvertibility of currency, expropriation, kidnap & ransom, etc. that have no actuarial basis. However, where a need exists and the pvt insurance sector cannot or will not take on the entire risk, govt insurance entities as primary insurers, reinsurers, or insurers of last resort are frequently seen. My former employer, the Overseas Private Investment Corporation, is an example. Whether these coverages can provide indemnity in the same way as auto insurance is doubtful. Even so, as one looks for solutions to the increasingly complex problem of the modern role of financial auditing, these alternatives should be carefully examined.

    Paul Bjorklund, CPA
    Bjorklund Consulting, Ltd.
    Flagstaff, Arizona

    November 9, 2006 reply from Tom Hardy [thardy@IVESINC.COM]

    In response to several inquiries that we have received regarding the Nov 1, 2006 Wall Street Journal article on Big 4 Litigation cases entitled “Booming Audit Firms Seek Shield on Suits,” I am making the attached analysis available to AECM.

     

    Big 4 Securities Class Action Litigation- Citing Auditor as Defendant” highlights the number of security class action cases involving Big 4 Accounting Firms between 2002 and 2005. It also lists each case by year.

     

    This research was compiled using the Audit Analytics Litigation Module. If you would like additional information or a demonstration of this new AuditAnalytics.com database please give me a call or send me an e-mail.

     

    Tom Hardy
    AuditAnalytics.com
    IVES Group, Inc.
    9 Main St. Suite 2F
    Sutton, MA 01590
    508-476-7007 Ext. 28

    thardy@ivesinc.com 

     


    Taxation of Dividends Creates European Union Stir
    The Institute of Chartered Accountants in Ireland (ICAI) said that the European Court of Justice (ECJ) ruling this week on the UK dividends case creates issues for other European countries, including Ireland, which have a similar system of taxation of dividends to that in the UK. The ECJ ruled on the principles of freedom of establishment and freedom of movement of capital in relation to the UK dividends system. See further details in our full news item.
    Andy Lymer, "ECJ DIVIDENDS CASE CREATES ISSUES FOR IRELAND," AccountingEducation.com, December 14, 2006 --- http://accountingeducation.com/index.cfm?page=newsdetails&id=144069


    "2007 Excellence in Project Accounting Philosophy Essay Scholarship Contest Begins," AccountingWeb, December 8, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102883

    The 2007 Excellence in Project Accounting Philosophy essay scholarship contest launches on January 1, 2007. The winning essayist will receive $500 toward college tuition and fees from Journyx, the first company to provide Web-based time-tracking and project accounting solutions that guide customers to per-person, per-project profitability.

    “Journyx is committed to eradicating cost ignorance from our knowledge worker society and leading organizations to the highest levels of profitability through innovation,” Curt Finch, chief executive officer (CEO) of Journyx said in a prepared statement. “We developed this essay scholarship so that we could educate and share our philosophy with some of the bright minds about to enter the workforce, as well as learn new ideas from them. We will choose the submission that is the most creative and has the most real-world business applicability.”

    The scholarship is open to full-time student enrolled in a graduate level masters or doctoral level degree program at a university in the United States. Interested students should contribute an essay of 1,000 words or less on one of the following two topics:

     

    • Persuade someone who doesn’t want to track his time on a per product per-activity basis why it is in his best interests to do so.

       

    • Describe a real situation that you’ve encountered where project oriented time tracking has made a positive difference in the world.

    Complete rules and details, including how the essays will be scored, where to send the entries, etc., can be found at www.journyx.com/company/scholarship.html All entries must be received by 5:00 p.m. CST on June 1, 2007.

     


    Question
    What happens when you don't qualify for the "Shortcut Method" for interest rate swaps under FAS 133?

    How to avoid ineffectiveness testing for interest rate swaps using the Short-Cut Method --- http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#Shortcut

    Also see --- http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm#ShortCut

    December 2006 article by Ira Kawaller on Long Haul Hedge Accounting --- http://www.kawaller.com/pdf/BALM_Long_Haul.pdf


    Pension Fund Accounting Fraud in San Diego

    "San Diego Charges," by Nicole Gelinas, The Wall Street Journal, November 27, 2006; Page A12 --- http://online.wsj.com/article/SB116459315111633209.html?mod=todays_us_opinion

    The SEC has announced that it has resolved its pension-fund fraud case against San Diego, with the city agreeing not to commit illegal shenanigans in the future and to hire an "independent monitor" to help it avoid doing so. Although the SEC went easy on the residents and taxpayers of San Diego in its settlement, it still has an opportunity to make an example of the former officials who the SEC determined committed the fraud. The feds should seize that chance to show they're serious about policing a sector of the investment world that remains vulnerable to similar fraud.

    San Diego ran into legal trouble with its pension fund because elected officials wanted to keep its municipal workers happy by awarding them more generous pension and health-care benefits, but also wanted to keep taxpayers happy by sticking to a lean budget. The two goals were mathematically irreconcilable. So San Diego officials, with the cooperation of the board members of the city employees' retirement system (the majority of whom were also city officials), intentionally underfunded the pension plan for years. They used the "savings" to award workers and retirees more benefits, some retroactive. Because taxpayers couldn't see how much retirement benefits for public employees eventually would cost them, they couldn't protest against those high future costs. The fund also violated sound investment principles by using "surplus" earnings in boom years to pay extra benefits to retirees, including a "13th check" in some years. Trustees should have put such "surpluses" aside for years in which the market was down.

    But the alleged escalated in 2002 and 2003, when city officials brushed aside warnings from outside groups, as well as from an analyst it had itself commissioned, about the fund's parlous financial straits. Although figures clearly showed that the pension fund would face a seven-fold increase in its deficit, to more than $2 billion, over less than a decade, San Diego didn't disclose what, according to the SEC, it "knew or was reckless in not knowing" was an inevitability, instead maintaining its charade. City officials disclosed not a word of the fund's financial troubles to potential investors or bond analysts as it raised nearly $300 million in new municipal securities during those two years.

    The SEC elected to go easy on the city. The feds won't levy a fine against it, reasoning that it would end up being the taxpayers who would pay. This argument has merit, since these taxpayers are already on the hook for the $1.5 billion deficit -- roughly equal to the city's operating budget -- the pension-fund fraud had concealed. Taxpayers could face fallout if wronged investors sue the city. But while SEC won't punish taxpayers, it can't afford to go so easy on the officials it's still investigating. (The SEC doesn't name the current and former officials under its scrutiny, but former Mayor Dick Murphy, former city manager Michael Uberuaga and former auditor Ed Ryan, as well as members of the City Council, all had degrees of responsibility for and knowledge of the pension fund's operations.) The SEC must demonstrate that it considers the fraud officials committed against the city's bondholders to be just as grave as similar frauds in the private sector.

    People who invest in municipal bonds do so because they feel that such investments are safer than investing in the common stocks of corporations. That's why cities and states enjoy access to capital at affordable interest rates. And, for tax reasons, municipal-bond investors often invest in the bonds of the city in which they reside, so they face double jeopardy. In the first place, if city officials are committing fraud, their bonds will turn out not to be as sound (and thus not as valuable) as they thought they were. The second risk is that they will have to pay higher taxes, or suffer lower government services, to cover pension-funding shortfalls in their city's budget if that is the case.

    Continued in article

    Bob Jensen's threads on pension fund and post-retirement accounting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#Pensions


    The Cost Approach for Financial Reporting

    From IASPlus on November 21, 2006 --- http://www.iasplus.com/index.htm

    The International Valuation Standards Committee has published Proposed Revisions to International Valuation Guidance Note 8 – The Cost Approach for Financial Reporting {PDF 193k). The proposed revisions are the result of requests for clarification and suggestions of minor improvements to the 2005 version of GN8. Comment deadline is 31 December 2006. The IVSC has also released an update of its work programme:

    Bob Jensen's threads on underlying bases for balance sheet valuation --- http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#UnderlyingBases


    The CEO Who Jousted With Regulators
    Options Backdating Takes Its Toll at Cyberonics

    The tumultuous tenure of Robert P. Cummins as chairman, president and chief executive of the medical device maker Cyberonics has ended, the company disclosed yesterday. Mr. Cummins, 52, who is known as Skip, is a former venture capitalist who joined the board of Cyberonics in 1988 and became chief executive in 1995. He gained a reputation as one of nation’s most passionate and intimidating business leaders in dealing with critics, regulators and investors.
    Barnaby J. Feder, "Head of Cyberonics Resigns as Options Inquiry Expands," The New York Times, November 21, 2006 --- http://www.nytimes.com/2006/11/21/business/21device.html?_r=1&oref=slogin

    Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


    Maybe Apple Corporation will backdate its 2006 annual report
    Apple Computer Delays Filing Annual Report With SEC Due to Ongoing Stock Option Investigation NEW YORK (AP) -- Apple Computer Inc. said Friday it has delayed filing its annual report with the Securities and Exchange Commission due to its ongoing investigation into stock option grants. In a filing with the SEC, the company said it needs to restate historical financial statements to record charges for compensation related to past grants. As a result, Apple was unable to file its 10-K Form for the fiscal year ended Sept. 30 by the required filing date of Dec. 14.
    "Apple Delays Filing Its Annual Report," Yahoo News, December 15, 2006 --- http://biz.yahoo.com/ap/061215/apple_options.html?.v=3

    Executive Compensation Fraud at Apple Corporation:
    Apple's mea culpa on backdating last week was eloquently incomplete
    Apple's mea culpa on backdating last week was eloquently incomplete, and all the more intriguing because the gaps seemed almost Socratically mapped to invite the media to fill the holes by asking obvious questions. The big joke here is that the logic of the witch hunt will stop the media from asking the obvious questions, not least because CEO Steve Jobs is a hero to much of the press and there's little appetite for bringing him down. Don't misunderstand. We believe it would be a gross injustice if he were defenestrated over backdating, just as we have serious doubts about the prosecutions launched against other backdating CEOS. And Apple's likely purpose in issuing its statement, naturally, was not lexical comprehensiveness but saving Mr. Jobs's job.
    Holman W. Jenkins, Jr., "A Typical Backdating Miscreant, The Wall Street Journal, October 11, 2006; Page A15 --- http://online.wsj.com/article/SB116052823194588801.html?mod=opinion&ojcontent=otep

    "Apple C.E.O. Apologizes for Stock Practices," The New York Times, October 5, 2006 --- Click Here

    Now that an internal investigation over Apple Computer Inc.'s stock-option practices has helped abate investor worries over Steve Jobs' role as CEO, a key lingering concern will be the impact of pending earnings restatements.

    Apple said Wednesday its three-month investigation did not uncover any misconduct of any current employees but did raise ''serious concerns'' over the accounting actions of two unnamed former officers.

    The iPod and Macintosh maker also said its former chief financial officer, Fred Anderson, had resigned from the company's board of directors.

    Jobs -- his position intact -- apologized.

    The probe found that Jobs knew that some option grants had been given favorable dates in ''a few instances,'' but he did not benefit from them and was not aware of the accounting implications, the company said.

    ''I apologize to Apple's shareholders and employees for these problems, which happened on my watch,'' Jobs said in a statement. ''We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again.''

    Apple said it will likely have to restate some earnings due to revised tax and stock option-related charges. Auditors are still reviewing the situation, and Apple said it has not yet determined the extent of the financial impact.

    The looming restatements could dramatically reduce some of the windfall generated during the company's recent run of record profit, analysts said.

    Shares of Apple shed 10 cents to $75.28 in midday trading Thursday on the Nasdaq Stock Market. The stock has traded between $47.87 and $86.40 over the past year.

    Apple has reported profit totaling $3.1 billion during the past four years. If the restatements are severe, it could dent Apple's stock, said IDC analyst Richard Shim.

    ''The restatements have the potential to bite them again depending on how large they end up being,'' Shim said. ''That said, the company is certainly firing on all cylinders so investors may be willing to forgive them, but it's something that will linger in the backs of their minds.''

    Piper Jaffray analyst Gene Munster said he and other investors are breathing a sigh of relief that Jobs kept his job throughout the scandal.

    ''The risk was that if something bizarre happened and Steve Jobs got fired over it,'' Munster said from his office in Minneapolis. ''That could have significantly impacted the company in a negative way. Steve Jobs is Apple. Ultimately, the scope of the backdating was bigger than we thought, but the impact turned out to be less severe.''

    Apple is one of the most prominent among more than 100 companies caught in the nationwide stock options mishandling scandal. Cupertino-based Apple initiated its own stock-options investigation in June after problems at other companies began to unravel.

    In many instances, the problem has centered on the ''backdating'' of stock options -- a practice in which insiders could make the rewards more lucrative by retroactively pinning the option's exercise price to a low point in the stock's value.

    Apple said its probe found irregularities in the recording of stock option grants made on 15 dates between 1997 and 2002, with the last one involving a January 2002 grant, the company said. The grants had dates that preceded the approval of those grants.

    Apple spokesman Steve Dowling said the 15 grants represented 6 percent of the total issued during that period. He said he did not have further details regarding the specific grants or whether they were awarded to officers or employees.

    The company did not identify the two former officers whose accounting, recording and reporting of option grants raised ''serious concerns'' during the probe.

    Apple said Anderson, who served as the company's chief financial officer from 1996 until 2004, resigned from the board, citing he did so in ''Apple's best interest.''

    Dowling said the company will provide more details about the probe to the Securities and Exchange Commission.

    The company's special committee conducting the investigation examined more than 650,000 e-mails and documents, and interviewed more than 40 current and former employees, directors and advisers.

    "Apple Says Jobs Knew of Options," by Laurie J. Flynn, The New York Times, October 5, 2006 --- Click Here

    The external auditor for Apple Corporation is KPMG --- http://www.trinity.edu/rjensen/Fraud001.htm#KPMG

    Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


    They not only teach about options backdating at the University of Phoenix
    The Apollo Group, which as owner of the University of Phoenix is the largest player in for-profit higher education in the United States, on Thursday announced that some former officials may have concealed information about the handling of stock-option grants, a key issue in light of ongoing investigations by various authorities into stock-option violations at many top American corporations. As a result of Apollo’s continuing investigation, the company announced that it would need to delay the release of quarterly and annual financial reports that would normally be due on December 31. Bloomberg reported on some of the details of the problems at Apollo.
    Inside Higher Ed, December 15, 2006 --- http://www.insidehighered.com/news/2006/12/15/qt

    Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


    Home Depot may see fallout over options backdating
    Home Depot Inc.'s admission this week that some stock option grants were backdated could spur lawsuits, result in fines and have tax implications, analysts and other experts said. The disclosure of 19 years of backdating tops off a difficult year for the world's No. 1 home improvement retailer as it continues to be dogged by criticism about executive pay, a disappointing stock performance and the fallout from the slower U.S. housing market.
    "Home Depot may see fallout over options backdating," Reuters, December 8, 2006 --- Click Here
    Jensen Comment
    Those that blame back dating on changes in tax laws and/or newer options expense requirements under FAS 123(R) should note the 19 years of backdating by Home Depot.

    "Options backdating might never have happened if reasonable options accounting had been required years ago," by Floyd Norris, The New York Times, October 13, 2006 --- http://norris.blogs.nytimes.com/?ref=business

    Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


    "How Backdating Helped Executives Cut Their Taxes:  Evidence Suggests Recipients Of Some Stock-Option Grants Manipulated Exercise Dates," by Mark Maremont and Charles Forelle, The Wall Street Journal, December 12, 2006; Page A1 --- http://online.wsj.com/article/SB116589240479347248.html?mod=todays_us_page_one

    New evidence suggests that corporate executives may have found another way to manipulate their stock options, this time to cheat on their income taxes.

    In a paper that began circulating in recent days, a Securities and Exchange Commission economist concludes there is strong statistical evidence that executives manipulated the exercise dates of their options as part of a tax dodge. And a review of corporate filings turns up some companies with startling options-exercise patterns.

    The new information could open another front in the options-backdating scandal. Backdating already has sparked the broadest corporate-fraud probe in decades, with more than 130 companies under investigation by federal authorities. So far, attention has focused on the practice of retroactively selecting favorable dates to grant options. The new wrinkle involves rigging the dates on which options are exercised, sometimes years after they're granted.

    The tax dodge related to options, however, almost certainly involves fewer executives than are caught up in the furor over the backdating of grants. (See related article.)

    The reason it can be tempting to backdate the exercise of options lies in the way the Internal Revenue Service treats different types of income for tax purposes. Options, a common part of executive pay packages, give the recipient the right to buy a company's stock at a fixed price in the future. That price, known as the strike price, is usually the stock's market price on the day the options were granted.

    About three-quarters of the time, executives immediately sell the shares they buy when they exercise options. Under IRS rules that typically apply, those executives must pay ordinary income tax, as well as payroll taxes, on the difference between the stock's value on the date the option was exercised and the option's strike price. The highest federal marginal income tax rate is 35%.

    But for a variety of reasons, including corporate rules that require top managers to own a certain amount of stock, some executives don't sell immediately. Those who hold the shares for at least a year pay a much lower capital-gains tax -- currently 15% -- on any profit between the time they exercise and when they eventually dispose of the shares. That lower rate gives the executive an incentive to exercise the options at a relative low point for the stock: The move reduces the amount of money that would be owed at the ordinary income tax rate, and shifts the difference so it is potentially taxed at the much-lower capital gains rate.

    Consider an executive who holds options on 100,000 shares with a strike price of $10. If he exercises and sells when the price is $20, he realizes $1 million in income and must pay $350,000 in income taxes.

    If he instead can claim an exercise price of $16, he lowers his income tax to $210,000. If he then sells a year later and the stock is at the same price of $20, he pays $60,000 in capital-gains levies, for a total tax bite of $270,000. In other words, he has the same $1 million gain but saves $80,000 in taxes. The problem arises if the executive misrepresents when the exercise occurred to claim a lower exercise price.

    Determining which executives or companies might be involved is difficult, and it's impossible to know what information they may have included in their tax returns. But some executives have exhibited unusual timing in their options exercises.

    At Maxim Integrated Products Inc., a Sunnyvale, Calif., chip maker, chief executive John F. Gifford exercised options and held shares seven times between 1997 and 2002, according to regulatory filings and insider-trading data from Thomson Financial. In all but one case, Mr. Gifford's reported exercise date was the very day the stock reached its lowest closing price of the month. After the Sarbanes-Oxley corporate-reform law took effect in 2002, drastically reducing the opportunity to backdate by tightening reporting requirements, his fortunate timing vanished.

    Maxim is facing investigations by the SEC and federal prosecutors in California over its option-granting practices. A special committee of directors is also probing the matter.

    Chuck Rigg, a Maxim vice president, said the company is "looking into" questions about Mr. Gifford's options exercises, but said initial data don't indicate any problems. Mr. Rigg added that the company used an outside broker to handle options exercises. "There's not a way you can backdate that," he said. Mr. Gifford didn't respond to requests for comment.

    Continued in article

    Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


    Evidence that options backdating scandals are not uniquely caused by U.S. tax law

    "Options backdating:  The latest U.S. corporate scandal involves executives falsifying the dates on stock options. A series of reviews in Canada is starting to reveal worrisome patterns," by Janet McFarland and Paul Waldie, The Globe and Mail, January 12, 2006 --- Click Here 

    In the spring of 2001, the two founders and co-chief executive officers of Research In Motion Ltd. were each granted 100,000 stock options. Back then, the company relied heavily on stock options for its compensation, and often granted its executives 100,000 options at a time.

    The timing was fortuitous for the executives. RIM's share price was $33.60 on April 2 when the options were granted -- its lowest point so far that year and its lowest level since the previous May, almost a year earlier.

    By the time investors learned of the grant when it was disclosed publicly on June 8, the share price had climbed to $50, an increase of $16.40. That means within five weeks of the grant date, each CEO already had seen a gain of $1.64-million in the value of his options.

    It wasn't the first time RIM had granted its CEOs options before a healthy climb in the company's share price. In 1998 and 1999, RIM granted options at a particularly low point, just prior to an increase in the share price.

    How did this good luck come about?

    This is the question being pondered by investors and regulators. The company itself has launched an internal review of its past stock option grants. RIM is not saying anything about what it is specifically examining, but co-CEO Jim Balsillie has said that RIM is "in the same position as a lot of other companies" these days.

    Canadian companies haven't been drawn into the stock option backdating scandal that has swept through the United States, where regulators have launched more than 180 investigations of backdating cases, and many top executives have been forced to resign in disgrace.

    But legal and accounting experts believe Canada will not remain immune to the scandal. They say many Canadian companies have quietly launched internal reviews of their options practices to determine whether they have scandals lurking in their corporate closets. And while Canada had tougher rules for options than the U.S., these same experts believe they do not prevent options backdating.

    Backdating involves manipulating the date that stock options are granted to executives. Normally options are granted at the price of the company's stock that day. That means the options only have value if the share price climbs in the future. Many companies, including RIM, don't allow executives to cash out options right away, often making them wait several years.

    Companies involved in backdating use the benefit of hindsight to look back and choose a date when their share price was low, then falsely claim that the options were granted on that date. It's as if a participant in a hockey pool could retroactively pick winners of games after they were played.

    A Report on Business review of option grants to CEOs at more than 30 large Canadian companies between 1997 (when company filings were first available electronically) and 2005 found numerous examples of especially well-timed option grants just before an increase in the company's share price. But it is hard to draw conclusions from individual examples because an outsider cannot easily determine which cases were lucky timing and which, if any, were manipulation.

    Some studies have suggested there is a problem in Canada based on a broader market review. Independent analysis firm Veritas Investment Research, for example, looked at all companies comprising the S&P/TSX 60 index and examined their option grants between 2003 and 2006. It concluded option timing "is alive and well in Canada," with stock prices over all tending to drop toward the date of option grants and climb afterward.

    University of Manitoba economists have done a more detailed review of the same period, examining 5,644 options granted to senior executives by companies listed in the S&P/TSX 60 between June, 2003, and October, 2006.

    According to a preliminary review of the data, "the evidence is suggestive of the occurrence of backdating in Canada," the researchers found.

    "We expected to find nothing with that kind of data, and the fact that we found something is sort of like, wow," said Lindsay Tedds, an assistant professor who led the study. Prof. Tedds said the results don't confirm that backdating is necessarily occurring, but she added: "There's something going on. We didn't expect to find much of a pattern in this aggregate data."

    Continued in article


    Hundreds of old-economy companies also committed backdating fraud
    Abuses of stock option grants are perceived to have spread like a virus among high-technology companies. But a new study suggests that hundreds of old-economy companies may also have caught the backdating bug. In a paper to be released today, researchers estimate that 590 nontechnology companies appear to have manipulated options so their chief executives received them at the lowest price of the month. That compares with 130 technology companies that appear to have backdated their chief executives’ options to a monthly low.
    Eric Dash, "Study Charts Broad Manipulation of Options," The New York Times, November 17, 2006 --- http://www.nytimes.com/2006/11/17/business/17options.html?_r=1&oref=slogin


    From The Wall Street Journal Accounting Weekly Review on November 10, 2006

    TITLE: UnitedHealth Expects Probe to Result in 'Greater' Charges
    REPORTER: Steve Stecklow and Vanessa Fuhrmans
    DATE: Nov 09, 2006
    PAGE: B1
    LINK: http://online.wsj.com/article/SB116299996219517252.html?mod=djem_jiewr_ac 
    TOPICS: Accounting, Accounting Changes and Error Corrections, Sarbanes-Oxley Act, Securities and Exchange Commission, Stock Options

    SUMMARY: "UnitedHealth Group Inc. said it would have to take charges related to its backdated stock options that will be 'significantly greater' than its previous estimates and expects the charges to impact more than 10 years of previously reported earnings."

    QUESTIONS:
    1.) Describe the options backdating scandal that has developed since March, 2006. If you are unfamiliar with the issue, you may click on the link for "Perfect Payday: Complete coverage" on the left hand side of the on-line article.

    2.) For how long has options backdating been going on at UnitedHealth? Have the accounting requirements remained the same throughout that period of time? Summarize the required accounting and other financial reporting practices for executive and employee stock options over the last 10 years.

    3.) Suppose that, once UnitedHealth finishes its review, the restatement of earnings nearly doubles to $500 million and that the restatement applies equally to each of the preceding 10 years. What accounting entry must be made to correct this $500 million error? What will be the ultimate impact on each year's earnings and on stockholders' equity at the end of each year? How will this correction be disclosed? In your answer, cite the accounting standards which require the treatment you present.

    4.) Click on "Read the full text" of UnitedHealth's Nov. 8 filing with the SEC on the right-hand side of the on-line article. What Form number did UnitedHealth file? Summarize the implications of the depth of the options backdating problem found at this company.

    5.) Refer to the related article. What role does the Public Accounting Oversight Board fill in assisting accountants to audit companies' accounting for stock options?

    Reviewed By: Judy Beckman, University of Rhode Island

    --- RELATED ARTICLES ---
    TITLE: Guidelines Set for How to Audit Stock Options
    REPORTER: Siobhan Hughes
    PAGE: A10 ISSUE: Oct 18, 2006
    LINK: http://online.wsj.com/article/SB116114078518696161.html?mod=djem_jiewr_ac

    "HealthSouth Agrees to $445 Million Settlement," AccountingWeb, October 2, 2006 ---
    http://www.accountingweb.com/cgi-bin/item.cgi?id=102629

    HealthSouth Corp. announced on Wednesday that it will pay $445 million to settle several lawsuits that were filed against the company and some of its former directors after an accounting scandal.

    HealthSouth will pay $215 million in common stock and warrants, and its insurance carriers will pay $230 million in cash, the company said. Also, federal securities class-action plaintiffs will get 25 percent of any future judgments obtained by or on behalf of HealthSouth regarding certain claims against fired CEO Richard Scrushy, former auditors Ernst & Young, and the company’s former investment bank, UBS. Each party remains a defendant in the derivative actions and the federal securities class actions.

    A judge must approve the settlement, which is nearly the same as a preliminary settlement that was reached in February.

    "This settlement represents another significant milestone in HealthSouth's recovery and is a powerful symbol of the progress we have made as a company," said HealthSouth President and CEO Jay Grinney. HealthSouth, the Birmingham, Ala.-based rehabilitation and medical services chain, does not admit any wrongdoing in the settlement, nor does any other settling defendant, the company said.

    The settlement does not include Ernst & Young, UBS, Scrushy or any former HealthSouth officer who entered a guilty plea or was convicted of a crime in connection with the company's financial reporting activities ending in March 2003.

    Scrushy and more than a dozen top executives were accused of recording as much as $2.7 billion in bogus revenues on the company's books over six years. UBS and Ernst & Young have denied knowing about the fraud. Last year, Scrushy was acquitted of all criminal charges in the fraud. He was convicted of conspiracy, bribery and mail fraud charges in a separate government corruption trial.

    Note that the above settlement does not include a settlement with Ernst & Young auditors.
    Bob Jensen's threads on the HealthSouth Corp. fraud are at http://www.trinity.edu/rjensen/Fraud001.htm#Ernst

    Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm

    Bob Jensen's threads on accounting for employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm


     

    Scrushy to Pay HealthSouth $31 Million
    Richard M. Scrushy, founder of the HealthSouth Corporation, has agreed to pay the company $31 million as part of a settlement of litigation over his bonuses and legal fees. Mr. Scrushy dropped a lawsuit seeking $21 million for legal fees after HealthSouth agreed to credit that amount against the $52 million he owed for inflated bonuses, said Teresa Tomlinson, one of his lawyers. HealthSouth ousted Mr. Scrushy in 2003 after auditors uncovered a $2.7 billion accounting fraud at the chain of rehabilitation centers.
    "Scrushy to Pay HealthSouth $31 Million," The New York Times, November 30, 2006 --- http://www.nytimes.com/2006/11/30/business/30health.html


    Link forwarded by Roger Collins

    How dominant shareholders screw the small investors
    What matters, though, is that the non-family shareholders have not fully benefited from deals over the years. Moreover, because of these transactions, investors have lost influence over their company to a dominant shareholder. In essence, the Bouygues' financial cunning enabled the family to acquire stakes in companies that arguably should have been entirely in the hands of Bouygues SA. But the dealing was extremely subtle; any ordinary investor living through the drawn-out creation of the Bouygues family's stake would have found it almost impossible to follow. This raises a broader lesson. Investors battered by scandals over stock-options and golden parachutes sometimes look to family-run companies for salvation. Although professional managers, with the advantages of time and inside knowledge, can run a business to suit their own interests, family owner-managers are often thought to be less prone to such “agency risk”. Yet the story of Bouygues SA suggests that family capitalism, so common in continental Europe, can sometimes backfire as much as any share-option scheme.
    "Creative construction," The Economist, November 30, 2006 ---
    http://www.economist.com/business/displaystory.cfm?story_id=8348645&fsrc=nwlbtwfree


    Complicated Accounting Rules and Employee Pressures

    November 7, 2006 message from Amy Dunbar [Amy.Dunbar@BUSINESS.UCONN.EDU]

    I am teaching a class, Research for Accounting Professionals, and I have been thinking about how to prepare my students for the "real world." I am looking for some insight re: the apparent increased pressure on accountants. For example, some say that the financial reporting environment is rivaling the tax world for the number of new rules that come out every year. I counted the number of statements issued since per year and found that the 1980s was the busiest period, with 1982 being the highest year with 18 statements. Does anyone know why that was? If the number of statements isn't increasing, is it the guidance from SEC that has increased, or is the pressure coming from the SOX environment with its emphasis on internal controls? Has the internal control guidance stepped up? Or is the pressure simply the same pressure that all business people are facing from increased global competition?

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    Amy Dunbar
    University of Connecticut
    School of Business
    Department of Accounting
    2100 Hillside Road, Unit 10