Year 2007 Quarter 1: January 1 - March 31 Additions to
Bob Jensen's Bookmarks
Bob Jensen at
earlier editions of New Bookmarks go to
Tidbits Directory ---
Click here to search Bob Jensen's web site if you have key words to enter ---
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
March 31, 2007
Bob Jensen's New Bookmarks Between January
1 and March 31, 2007
Bob Jensen at
For earlier editions of Tidbits go to
For earlier editions of New Bookmarks go to
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
Bob Jensen's Blogs ---
Current and past editions of my newsletter called New Bookmarks ---
Current and past editions of my newsletter called
Current and past editions of my newsletter called Fraud Updates ---
Bob Jensen's past presentations and lectures
Bob Jensen's various threads ---
(Also scroll down to the table at
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
Bob Jensen's Home Page is at
Tidbits and Quotations Between January 1 and March 31, 2007
February 25 (There were fewer editions this month due to Erika's
Tidbits Directory for Earlier Years ---
Click Here for Humor Between January 1 and March 31, 2007
Bob Jensen's threads ---
Links to Documents on Fraud ---
Bob Jensen's search helpers are at
Bob Jensen's Bookmarks ---
Bob Jensen's links to free electronic literature, including free online textbooks ---
Bob Jensen's links to free online video, music, and other audio ---
Bob Jensen's documents on accounting theory are at
Bob Jensen's links to free course materials from major universities ---
Bob Jensen's links to online education and training alternatives around the world ---
Bob Jensen's links to electronic business, including computing and networking security, are at
Bob Jensen's links to education technology and controversies ---
Bob Jensen's home page ---
Bob Jensen's complete set of Enron Updates are at
Bob Jensen's threads on the Enron scandal are at
Accounting is a prime example of how
close cooperation with our US partner is bearing fruit. The EU and the US are
advancing on a roadmap for removal of reconciliation requirements based on the
principle of equivalence. The Commission is working together with the US SEC
towards removing the costly and unnecessary reconciliation requirements for IFRS
and US GAAP. Earlier this month I met SEC Commissioner Christopher Cox and we
took stock on the progress of the roadmap. I am pleased to confirm that we are
well on track. We are both committed to further improving our regulatory
Charlie McCreevy, European Commissioner for Internal Market and Services,
Priorities in the Internal (EU) Market ---
In theory, distance education is
supposed to open up an era when all students have a range of
options not limited by geography. But
a new report from Eduventures finds
that most distance students enroll at distance programs run by
institutions in their own geographic regions, and that more than
a third of these students take online courses offered by an
institution within a 50-mile radius.
Inside Higher Ed
, March 28, 2007 ---
All of which goes into
the file for an essay that might be called –
with a nod to Anthony Trollope – “The Way We
Read Now.” If you doubt that Borders (chain of
bookstores with coffee shops inside) has had a
profound effect, not just on the book trade, but
on how readers interact with one another and
with texts, then keep an eye out for a
remarkable new documentary called “Indies Under
Fire: The Battle for the American Bookstore.” It
has been making the rounds of film festivals and
been screened at libraries and bookshops, and a
trailer for it is
"Indies Under Fire," Inside Higher Ed,
March 29, 2007 ---
MIT now has most of its entire curriculum of course materials
in all disciplines available free to the world as open
courseware. This includes the Sloan School of Business Courses
Especially note the FAQs ---
By the end of the year all MIT's course materials will be
available, which is probably the most extensive freely open
knowledge initiative (OKI) in the entire world.
MIT OpenCourseWare (MIT OCW) has formally partnered with three
organizations that are translating MIT OCW course materials into
Spanish, Portuguese, Simplified Chinese, and Traditional Chinese
Other top universities are also sharing more and more course
materials, videos of lectures, etc. ---
Accountant Shortage Increases Outsourcing
Today’s shortage of skilled accounting staff may be
widening the need for outsourcing, reports the Ohio Society of CPAs Corporate
Focus. Cutting costs is cited as the primary reason for finance and accounting
outsourcing, according to 42 percent of those surveyed by FAO Research Inc. Lack
of internal accounting and finance staff followed with 33 percent.
AccountingWeb, March 14, 2007 ---
Pricewaterhouse Coopers (PwC) FAQs are online at
Congratulations to Don Carter for Receiving Canada's
Outstanding Accounting Educator Award
March 20, 2007 message from John Gunn
I am pleased to advise that the committee has
selected Don to receive the award. How about that??
Thanks for your contribution to making this happen.
Best wishes as Erika continues her recovery.
John D. Gunn, MEd, FCA
CEO, CA School of Business
March 21, 2007 reply from Bob Jensen
Please let me know when there is a Website announcing the award. I would
like to post the link in my newsletter called Tidbits.
I am thrilled that Don won this award. He’s exceptionally talented and
dedicated to accounting education.
I’m also very proud to have been a small part of of CASB’s outstanding
online masters program ---
You've proved that competency-based education really works.
Robert (Bob) Jensen
"Microsoft Access: Best Spreadsheet Add-In," AccountingWeb,
March 14, 2007 ---
Of the main office applications used
in professional firms, word processors are the least well used, spreadsheets
the most overused, and databases the most underused. Part of the reason for
this is that database applications are often seen as being the preserve of
experienced developers, who use them to create comprehensive database
This is indeed one of their capabilities, but
desktop database applications can also be used to develop very effective
solutions to a range of problems with no more technical skill, and often
considerably less, than that which would be needed to solve the problem
using a spreadsheet. The real benefit for many users of obtaining some
understanding of databases comes not from creating standalone databases, but
using or working with databases to get more out of their spreadsheets, word
processors and accounts applications.
Think Link A key feature of a database is the
ability to link easily to existing sources of data. This means that you can
exploit the capabilities of a database without ever having to create your
own tables of data or enter a single item of data. However, you do have to
have some idea of how relational databases are constructed. Anyone who can
manage to use an Excel Lookup function should be able to cope with this
without too much difficulty.
This ability to link to existing data means that
you can not only use existing tables of data from a single source, but also
combine data from different sources, or add additional data of your own
without having to interfere with any existing database or application. All
you need is some basic understanding and a reliable link between the
different tables of data such as a unique client code. By making data
accessible in this way you can make your use of the other office
applications a great deal more efficient and reliable.
Continued in article.
Bob Jensen's video tutorials on MS Access and Excel are at
I prefer the wmv files to the rm compressions.
AICPA Launches 'Feed the Pig' Podcasts (What a dumb title for
for a personal finance helper initiative)
AccountingWeb, March 27, 2007 ---http://www.accountingweb.com/cgi-bin/item.cgi?id=103336
Feed the Pig, the
American Institute of Certified Public Accountants’ (AICPA) public service
campaign, this week launched a free podcast series to instruct 25- to
34-year-olds on how to take control of their finances.
The first podcast,
"Managing Your Student Loans," is available now through Apple iTunes store:
The next four episodes
Buying Your First Home
Paying Down Debt vs. Saving for the
Filing Your Taxes
A new podcast will be
available every 10 days.
According to an AICPA-commissioned
study, the median net worth of Americans 25 to 34 years of age is
significantly lower than it was 20 years ago, despite increases in income:
In 1985, it was $6,788; in 2004, it was $3,746. In addition, there is an
increased willingness among Americans in this age group to acquire unsecured
debt: The average level of debt in 1985 was $3,118, whereas in 2004, it
climbed to $4,733.
Bob Jensen's personal finance helpers are at
2007 International Accounting Standards
From IASPlus on March 13, 2007
March 2007: 2007 IFRS Bound Volume is published
The International Accounting
Standards Board has published the 2007
Bound Volume of International Financial Reporting
Standards. This bound volume includes all IFRSs,
International Accounting Standards (IASs), IFRIC and
SIC Interpretations, and IASB-issued supporting
documents, including application guidance,
illustrative examples, implementation guidance,
bases for conclusions, and dissenting opinions
approved at 1 January 2007. IFRS Bound Volume 2007
(English, ISBN: 978-1-905590-26-1) may be ordered
The IASB Website. The
price is £60 plus shipping. Discounts apply to low
and middle income countries and orders for more than
10 copies. Translations into other languages will be
On February 28, 2007 Deloitte published the popular IFRS versus U.S. GAAP
Deloitte's IFRS Global Office
has published a new
Comparison of International Financial Reporting
Standards and United States GAAP
(PDF 208k, 36 pages) as of 28
February 2007. While this comparison is
comprehensive, it does not attempt to capture all of
the differences that exist or that may be material
to a particular entity's financial statements. Our
focus is on differences that are commonly found in
practice. The significance of the differences
enumerated in this publication – and others not
included – will vary with respect to individual
entities depending on such factors as the nature of
the entity's operations, the industry in which it
operates, and the accounting policy choices it has
are pleased to grant permission for accounting
educators and students to make copies for
Main News Site for International Accounting Happenings ---
Paul Pacter and Deloitte provide a statistical database (with
data about international accounting) at
International Financial Reporting Standards (IFRS) Summary ---
Use of IFRS varies by nation ---
If you click on the Search tab and enter something like (IFRS AND China)
to compare IFRS with the domestic standards of a given nation ---
Bob Jensen's threads on accounting theory are at
Vote for the Accounting Horizons' Best Paper Award
March 13, 2007 message from
Dear Accounting Horizons Subscriber:
The American Accounting Association announces the
Accounting Horizons Best Paper Award. The award is presented annually for
the best paper published each calendar year in Horizons. All papers
appearing in Horizons in 2006, except for editorials written by the editor
and committee reports, are eligible. The winner will be announced in the
Accounting Education News. The award, a plaque and $2,500 funded by McGraw
Hill, will be presented at the 2007 AAA Annual Meeting.
The award winner will be selected by online voting
that is open to all Horizons subscribing members of the AAA.
DEADLINE to submit your ballot is midnight (EDT) on
April 30, 2007.
Following is the link to the online ballot
Thanks for your participation,
iGAAP (International GAAP) 2007 Financial Instruments: IAS 32,
IAS 39 and IFRS 7 Explained (Third Edition)
Deloitte & Touche LLP (United Kingdom) has developed
iGAAP 2007 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Third
Edition), which has been published by CCH. This publication is the authoritative
guide for financial instruments accounting under IFRSs. The 2007 edition expands
last year's edition with further interpretations, examples, discussions from the
IASB and the IFRIC, updates on comparisons of IFRSs with US GAAP for financial
instruments, as well as a new chapter on IFRS 7 Financial Instruments
Disclosures including illustrative disclosures. iGAAP 2007 Financial
Instruments: IAS 32, IAS 39 and IFRS 7 Explained (628 pages, March 2007) can be
CCH Online or by phone at +44 (0) 870 777 2906 or by email:
IAS Plus, March 24, 2007 ---
Bob Jensen's threads on the differences between U.S. and
International GAAP are at
Bob Jensen's tutorials on IAS 39 (Derivative Financial
Instruments) are linked at
Why don't we begin to integrate IFRS-SFAS differences into intermediate and
advanced accounting textbooks?
March 25, 2007 message from Denny Beresfo
Here's a link to an interesting speech by the head of the Division of
Corporation Finance at the SEC on international accounting and the
possibility that it may be used by U.S. companies too -
Note his words that, "For example, I was surprised to learn that colleges
in the U.S. do not today generally teach IFRS to accounting students. So,
while we might allow U.S. companies to report in IFRS, there would seem to
be a large learning curve before there would be sufficient accountants to
prepare those financial statements, or to audit them for that matter. All
the same, I feel that U.S. issuers reporting in IFRS, like ending
reconciliation, is an end we can see. We just need to figure out how to get
March 26, 2007 reply from Bob Jensen
I suspect we don't teach IFRS in the U.S. because IFRS is
not on the CPA examination and, therefore, is not generally included in
intermediate and advanced accounting textbooks. Given the progress being
made to eliminate SFAS domestic standards with a greatly expanded IFRS, it
is probably time to begin to integrate IFRS into our U.S. textbooks.
I suggest that one place to begin is for our textbooks to
have a section at the end of each textbook chapter highlighting the
differences between SFAS versus IFRS standards. Links to such differences
are provided at
March 26, 2007 reply from John Brozovsky
At Virginia Tech we have already moved IFRS down
into Intermediate Accounting (of course this is our first year at it). I am
not sure how much is really being incorporated as the instructors generally
do not know much about IFRS and the textbooks do not give it much coverage
so coverage must all be supplemental to the book. We did hand out Deloittes
IFRSs in your Pocket 2006 and PWC's Similarities and Differences A
comparison of IFRS and US GAAP.
March 27, 2007 reply from Linda Kidwell, University of Wyoming
This has been a pet peeve of mine for years. I've
changed my auditing text for next year to the Knechel book, which finally
gives the international auditing standards and the IFAC Code of Ethics (a
fabulous document, in my opinion) their due. I was very pleased to see that
this text had really raised the visibility of international professional
By the way, one reason the intermediate textbooks
really should increase their international content is that the American
books are widely adopted outside of the US. Some of the other English
language countries have insufficient markets to support their own texts, and
universities everywhere that have English language business classes would be
well served by more options as well.
Facebook for Student Recruiting
March 5, 2007 message from Barry Rice
I have suggested to my Accounting Department colleagues that Loyola should consider using Facebook as a tool to help recruit accounting majors. Perhaps we could set up a group called "Accounting as a Major" or "Why Major in Accounting?" or whatever. Facebook has a tool called "Create Related Event" that could be use to publicize meetings, etc. Have any of you looked into using Facebook in this way? Anyone using it for Beta Alpha Psi?
Barry Rice AECM Founder
E. Barry Rice, MBA, CPA
Director, Instructional Services
Emeritus Accounting Professor
Loyola College in Maryland
Bob Jensen's threads on careers are at
"Microsoft Launches MySpace for Accountants,"
AccountingWeb, March 15, 2007 ---
Microsoft has announced its plans to
launch an online community site for financial professionals, similar to the
popular MySpace networking site.
Calling it a “MySpace for financial pros,”
Microsoft has yet to give the Dynamics Live Beta Community site a more
The site will be aimed at corporate controllers,
finance managers, finance staff and accountants and includes blogs, forums,
tagging, RSS syndication and other community-specific features.
The news follows Reuters’ recent announcement that,
it too, will launch a “MySpace for Finance” in the near future.
The software giant made the announcement at its
Convergence 2007 conference in San Diego as a way to help its Dynamics Live
Beta Community better connect with their external communities of customers,
suppliers and partners.
"You can think of it as the MySpace for financial
professionals," said Satya Nadella, corporate vice president of Microsoft
Business Solutions group. "It's how you can have a Convergence [show] 365
days a year."
In talking to customers, one of their main reasons
for attending the Convergence show is to engage with their peers, said James
Utzschneider, general manager of Dynamics marketing at Microsoft.
The vendor has been spending a lot of time recently
looking at the Web 2.0 world to discover how the social-networking
technology mostly aimed at teenagers could be applied to a business setting,
March 3, 2007 message from
I would like to inform you that the Journal of Derivatives Accounting
(JDA) has a new website at
The JDA is published quarterly since 2004 and focuses on derivatives accounting standards, applicable tax rules, regulations and also market and corporate practices.
Papers are welcome for the next issue which with structured products (see call for papers).
I look forward do receiving your papers.
Bob Jensen's tutorials on accounting for derivatives are at
How to Track Commodities and Hedging Derivatives Values
March 27, 2007 message of a controller of a foreign company that
lists on the NYSE and therefore must follow FAS 133 rules
Many thanks for the quick response and the link to
your presentations! They are wonderful.
To show you what I wanted to say concerning
"derivatives" and the connection to the "purchasing department" I want to
make the following example:
The Purchasing department wants to buy raw material
and energy. As they believe prices for this kind of raw material and energy
will rise in the future, they decide to close a raw material derivative and
a energy derivative deal with a fixed price for the next 12 months. These
deals must be reported as soon as possible to the Accounting department to
enable them to show the results of these deals in their books according to
My question now is the following: Is there a
general process (like any standard forms to fill out by the purchasing
department and sent to Accounting,...) of how the purchasing department
reports such kind of deals to the Accounting department? How should the
purchase department report changes in fair value to Accounting?
Many thanks for your help!
March 27, 2007 reply from Bob Jensen
Now I understand. I was thinking more in terms of interest rate hedging.
I have consulted previously with a commodities broker that sells software
for tracking commodities values and hedging derivatives values. The software
is not free, but it is relatively easy to use. The Company is called RJ
Customers can not only track values at the RJ Obrien Website, they can
obtain software that will download these values automatically. Both your
purchasing department and your accounting department can share the trading
One problem in derivative instruments for commodities is that the
derivatives such as options are really traded in separate markets relative
to the commodities themselves. In other words, commodities users buy
commodities but buyers of commodity derivatives are often (not always)
speculators who have no intention of ever taking delivery of a commodity.
Hence commodities derivatives markets are often more volatile than
commodities markets themselves. This makes many derivative hedges
ineffective from the standpoint of qualifying for full hedge accounting
under IAS 39 or FAS 133. Of all the complicated rules under FAS 133, the
rules for options are now the most hated rules due to difficulties of
meeting effectiveness tests. Scroll down to the term "Ineffectiveness" at
Also see my PowerPoint file on options at
Bob Jensen's tutorials on FAS 133 and IAS 39 rules can be
CEO Resigns Under Backdating Cloud
Cirrus Logic, a maker of audio and video chips,
announced that David D. French has resigned as president and chief executive
officer and as a director after an internal review determined that he was aware
of possible backdating of stock option grants.
Stephen Taub and Dave Cook, "CEO Resigns Under Backdating Cloud," CFO
Magazine, March 9, 2007 ---
Bob Jensen's threads on stock option accounting are at
From The Wall Street Journal Accounting Weekly Review on
March 30, 2007
Censure Over Independence, Agrees to $1.5 Million Settlement
by Judith Burns
Mar 27, 2007
Click here to view the
full article on WSJ.com
TOPICS: Accounting, Advanced Financial
Accounting, Auditing, Auditing Services, Auditor Independence,
Financial Accounting, Sarbanes-Oxley Act, Securities and
SUMMARY: Ernst & Young (E&Y) "was
censured by the Securities and Exchange Commission (SEC) and
will pay $1.5 million to settle charges that it compromised its
independence through work it did in 2001 for clients American
International Group Inc. and PNC Financial Services Group.
"Regulators claimed AIG hired E&Y to develop and promote an
accounting-driven financial product to help public companies
shift troubled or volatile assets off their books using
special-purpose entities created by AIG." PNC accounted
incorrectly for its special purpose entities according to the
SEC, who also said that "PNC's accounting errors weren't
detected because E&Y auditors didn't scrutinize important
corporate transactions, relying on advice given by other E&Y
1.) What are "special purpose entities" or "variable interest
entities"? For what business purposes may they be developed?
2.) What new interpretation addresses issues in accounting for
variable interest entities?
3.) What issues led to the development of the new accounting
requirements in this area? What business failure is associated
with improper accounting for and disclosures about variable
4.) For what invalid business purposes do regulators claim that
AIG used special purpose entities (now called variable interest
entities)? Why would Ernst & Young be asked to develop these
5.) What audit services issue arose because of the combination
of consulting work and auditing work done by one public
accounting firm (E&Y)? What laws are now in place to prohibit
the relationships giving rise to this conflict of interest?
Reviewed By: Judy Beckman,
University of Rhode Island
Bob Jensen's threads on audit firm professionalism and
independence are at
Bob Jensen's threads on Ernst & Young are at
From The Wall Street Journal Accounting Weekly Review on
March 30, 2007
Standard Setters--Independent and Tough
by Robert E.
Mar 26, 2007
Click here to view the
full article on WSJ.com
Financial Accounting Standards Board, Governmental Accounting
SUMMARY: Robert E. Denham is Chairman
of the Financial Accounting Foundation (FAF), the oversight
organization of trustees for the Financial Accounting Standards
Board (FASB) and the Governmental Accounting Standards Board (GASB).
In this editorial page discussion, he responds to concerns
expressed in a March 9, 2007, editorial by former SEC Chairman
Arthur Levitt, Jr. Mr. Denham discusses the benefits of stable
funding that has been achieved for the FASB through
Sarbanes-Oxley requirements and wishes for such a resource for
the GASB. He comments on the fact that the FASB and the GASB
recently have taken "concrete steps to improve user input to the
standard-setting process." He also describes how the Boards have
faced enormous opposition at times from corporations and
Congressional leaders to do things that have in hindsight turned
out to be "the right thing to do. "As they demonstrated in
standing up to corporate and governmental pressure on options
expensing, the trustees act to protect the independence of the
standards setters when they are attacked by special interest
groups seeking to block or reverse the decisions of the boards.
Students may answer questions by referring to the organizations'
web sites at http://www.fasb.org/faf/ http://www.fasb.org/
1.) What is the Financial Accounting Foundation? What is its
role in relation to the Financial Accounting Standards Board (FASB)
and the Governmental Accounting Standards Board (GASB)?
2.) Why is it important that the FASB and GASB operate on an
independent basis? How did implementation of the Sarbanes-Oxley
law improve that ability for the FASB?
3.) What challenges do the FASB and GASB face in setting
standards that are controversial? How does independence help in
facing those challenges? Glean all you can from the articles or
from your own knowledge.
Reviewed By: Judy Beckman, University of Rhode
by Arthur Levitt, Jr.
Mar 09, 2007
Bob Jensen's threads on accounting standard setting are at
Second Life for Accountants
March 20, 2007 Message from Barry Rice
To learn how our profession is beginning to use
Second Life, go to
www.cpasuccess.com and search for
"Speaking of generations: Do you Web 2.0 and have a Second Life?" This is a
blog site created by the Maryland Association of CPAs. The rest of this post
is copied from a blog by Tom Hood, my former student and Executive
Director/CEO of the MACPA.
Later the same day, we heard a session on "Podcasting:
What it means to CPE" by Ray Schroeder, director of Technology-Enhanced
Learning for the University of Illinois at Springfield. Ray's presentation
included some great looks at how higher education is positioning itself to
reach the "net generation." He talked about various formats and constant
access. He posts all of his lectures as podcasts, posts PowerPoints online
so students have 24/7 access to all of the learning. I see some real changes
for us in the CPE business!
While his focus was podcasting, his presentation
was really about Web 2.0 technologies as he covered blogs, wikis, podcasts,
video podcasts and other social media -- like Second Life. Ray said the U of
Illinois is in the process of building virtual classrooms in Second Life
that will be hosting classes by the fall of 2007. He closed with a
statement: "If you are teaching to the students who are graduating in the
next few years, you had better have a working knowledge of Second Life,
because they will be using that platform."
Wow, I am glad we are beginning to explore Second
Later that evening, there was a lot of discussion
about Second Life and how it could be used to tap into the next generation
of college students that all CPAs are interested in. I hope to be meeting
many of the attendees in Second Life real soon.
For more on how we are using Second Life, see my
CPA road show debuts in Second Life
Second Life Association of CPAs
SLACPA Debuts in Second Life for next generation of
CPAs First CPA firm in Second Life [End quote]
March 20, 2007 reply from Steven Hornik
Thanks for the post. I've been in Second Life since
October, exploring and trying to understand it's use as a learning platform.
Needless to say for the next generation of students it will be a very
important learning platform, though whether this will be SL or some other 3D
immersive environment we'll have to see.
I've begun building some 3D model's for my
Financial Accounting class, right now I'm just trying to get some basic
stuff working, a model of A = L + E, that students can touch and play with
and I'd eventually like to make a 3-D financial statement that would pull in
data (mabye XBRL data) from the web into SL (I'm dreaming...).
Anyway, if anybody else on this list is in or is
considering checking out Second Life let me know, I could use the company.
My avatar name in second life is Robins Hermano, send me an IM if your
Lastly, for those interested in investigating
Second Life for Eduation, a great resource is the Second Life Educators
(SLED) listserve, which you can sign up for here:
Dr. Steven Hornik
University of Central Florida
College of Business Administration
Search for Accounting Software
March 21, 2007 message from
Anyone have any good ideas/experience with POS
software for a start up restaurant/catering establishment?
Looking for ideas to investigate.
Suzann D Medicus CPA
Chief Executive Officer
SDM Consulting Group Inc
dba Liberty Tax 3418
offices in Catonsville, Arbutus and Ellicott City
Corporate headquarters in Clarksville
March 21, 2007 reply from Bob Jensen
You might search for various kinds of accounting software at
Bob Jensen’s software helpers are at
Statistical Sampling for Auditors
March 19, 2007 message from Linda Kidwell, University of Wyoming
Does anyone know of a good tutorial on statistical
sampling in auditing? This is absolutely my least favorite topic to teach,
and I'm never satisfied with how I go about it. I loved stats as a graduate
student, but I simply don't know how to teach it in an interesting and
Thanks for any suggestions!
March 21, 2007 reply from Bob Jensen
AuditNet provides resources for statistical sampling at
I did a literature search at
Most of the hits are from the 1980s and early 1990s.
It appears that there is not much in the way of current literature on this
topic except as you might find in revised chapters of auditing textbooks.
You might take particular note of "Statistical Sampling Revisited," by
Neal B. Hitzig, CPA Journal, 2004 ---
May 22, 2007 reply from Barbara Scofield
For current research in audit sampling as well as
extensive links, see Will Yancey's work at
http://wwww.willyancey.com He is a colleague
of mine from the doctoral program at UT Austin who has his own consulting
practice in which he designs (and defends in court) sampling plans for
Barbara W. Scofield
Associate Professor of Accounting
University of Dallas Irving, TX 75062
America's Most Trustworthy Companies
The Good Bookkeepers
Forwarded by David Albrecht
America's Most Trustworthy Companies
The Good Bookkeepers
Forbes.com staff 03.27.07, 6:00 AM ET
Alexander the Great is reputed to have said, "Upon the conduct of each
depends the fate of all."
More than two millennia on, the words of the Macedonian king echo true in
the boardrooms of America, where the tainted winds of option backdating,
insider trading and questionable pension accounting blow fitfully--along
with the occasional gust still from the Enron-era corporate scandals.
Trust in free-market capitalism requires that shareholders and other
stakeholders in the system have confidence in the probity of companies.
Hence accounting standards and governance rules, and the regulators'
requirement that they be transparent.
Audit Integrity, an independent Los Angeles firm that
does research on corporate governance best practice (and which is a data
supplier to Forbes.com), has drawn up its first list of 100 American
companies that, in its judgment, "showed the highest degree of accounting
transparency and fair dealing to stake-holders during 2006."
Using financial and nonfinancial measures designed originally to monitor the
factors associated with fraud or financial misrepresentation, Audit
Integrity constructs an Accounting and Governance Risk score for each
company. Full details of the methodology can be found
At the top of its list is AllianceBernstein Holding, a New York asset
management company, followed by Bemis, a Neenah, Wis.-based manufacturer of
flexible packaging and containers for industries ranging from food to
pharmaceuticals, and CDI, a Philadelphia company that provides information
technology outsourcing services.
Continued in article at:
LSU Forensic Accounting Program
March 12, 2007 message from Larry Crumbley
For your information (see attached;
can also be found at
From The Wall Street Journal Accounting Weekly Review on March 2, 2007
"KPMG Germany's Failure to Spot Siemens Problems Raises Questions" by Mike Esterl, David Crawford, and David Reilly, The Wall Street Journal, Feb 24, 2007, Page: B3 ---
Click here to view the full article on WSJ.com
TOPICS: Audit Quality, Auditing
SUMMARY: "German prosecutors say they suspect Siemens employees funneled money through sham consulting contracts into slush funds to bribe potential customers." Part of the evidence may indicate that KPMG failed to investigate questionable items uncovered by a junior auditor. This possibility was documented in statements made by a former executive financial officer of Siemen's telecom equipment unit while imprisoned subsequent to a German police raid of the company's offices. The executive has been released after agreeing to cooperate with authorities and remains a suspect. KPMG Germany has not been charged and has denied any wrongdoing in its auditing practices.
1.) "Despite...alarm bells, KPMG Germany signed off on Siemens's books and the adequacy of its internal controls..." What are the "alarm bells" described in the article that authorities are now saying should have brought potentially fraudulent payments to the attention of Siemens's auditors, KPMG Germany?
2.) What is an auditor's responsibility to detect fraud?
3.) In general, what are an auditor's responsibilities in reporting on a company's internal controls? To verify the types of reports issued, you may examine the Siemens 2005 financial statements filed with the SEC on Form 20-F and referred to in the article
4.) Given that "Siemens, with KPMG Germany's help, identified...($551.8 million) in suspicious transactions spanning seven years and restated its financial results in December," is it possible that KPMG Germany fulfilled its audit obligations identified above? Explain.
5.) What makes it likely that a junior auditor would be the one to uncover questionable practices at a large company? How does a staff auditor's inexperience make it difficult for him or her to exercise judgment on matters examined in an audit?
SMALL GROUP ASSIGNMENT: Allow students to form small groups of two or three. Provide each student with the following statement: Suppose that you are the junior auditor who raised questions about the payments made by Siemens for consulting services, now alleged to be fraudulently reported to cover payments for bribes. Suppose further that you observe that your management letter comment about the matter was removed in "partner review", but that you were convinced there were potentially improper payments you had not investigated during your audit field work. What should you do? Discuss all possible courses of action.
Bob Jensen's threads on KPMG are at
Bob Jensen's threads on audit professionalism and independence are at
1,420 Restatements of Corporate Financial Statements in 2006
Sets a Dubious New Record
Almost 10% of U.S. public companies announced a record 1,420 financial
restatements in 2006. It was a record -- but continues an accelerating trend of
financial restatements, from 2% in 2000 and more than 4% in 2004.
These restatements impose large costs on the capital markets. The GAO
estimated that, between July 2002 and September 2005, the market capitalizations
of restating companies decreased by a total of $36 billion in the days
immediately following the initial restatement. Two academic studies have shown
that stock prices decline not only for the restating firm but also for its
direct competitors -- presumably because of fears about the financials of the
whole industry. More broadly, as the SEC has noted: "Restating financial
statements of prior periods may dilute public confidence in financial statements
and may confuse those who use them."
The initial spurt of restatements during 2002 to 2004 was related partly to
the more intensive reviews of internal controls mandated by Section 404 of the
Sarbanes-Oxley Act. However, Sarbox is not the main problem. From 2005 to 2006,
there was a 14% decrease in the number of financial restatements by the larger
public companies required to perform internal control reviews under Section 404,
according to a Glass Lewis study. Yet for the same period, that study found a
40% increase in the number of financial restatements by smaller public companies
not yet required to implement Section 404.
The main problem is that many public companies are being forced to restate
their financials for technical accounting reasons of dubious significance to
investors. On March 12, 2007, for example, a Nasdaq company called Isle of Capri
Casinos announced a delay in filing its SEC reports to complete the restatement
of its financials for the prior three years because of adjustments to the
amortization of its space leases.
Yet, Standard & Poor's concluded that "we do not believe the issue causing
the restatement and the filing delay to be material." No wonder ordinary
investors are confused: how should they react to a financial restatement caused
by an accounting adjustment to a non-cash item, which is declared immaterial by
an expert firm?
To be sure, some financial restatements are certainly justified, most
importantly those resulting from the negligent or intentional misapplication of
well-established accounting standards. Nevertheless, others are the result of
significant reinterpretations of complex accounting standards that could not
realistically have been foreseen by company executives.
While such reinterpretations may be an appropriate response to changing
markets or new accounting perspectives, they should be adopted only with advance
notice by the regulators together with an opportunity for public comment.
Moreover, significant reinterpretations of accounting standards should be
applied prospectively, not retroactively, to reduce the number of unnecessary
financial restatements that damage companies and confuse investors.
The adoption and amendment of U.S. accounting standards occurs through a
formal process led by the Financial Accounting Standards Board. This process,
which often takes several years, involves the promulgation of a detailed draft,
a lengthy period for public comment and careful decision-making by a board of
distinguished members. By contrast, significant changes in interpreting existing
accounting standards have episodically been announced through speeches or
informal communications by the SEC staff -- without any advance notice or public
"Small Companies Lead Pack of Restatements,"
AccountingWeb, January 2, 2007 ---
Smaller companies more often restated their financial results through the third quarter of 2006 than the largest companies, a financial research firm has found. Glass, Lewis & Company, which tracks the number of restatements by U.S. companies, said companies with market capitalizations of less than $75 million filed the most restatements in the first nine months of 2006, compared with the same period in 2005. Overall, the number of restatements rose 12 percent to 1,063, compared with 952 in the 2005 period, the report said.
The San Francisco-based firm says that larger companies – with market capitalizations of $750 million or more – had fewer restatements.
Glass, Lewis & Company points to Sarbanes-Oxley as the reason for the disparity, the New York Times reported. Big companies were required to enact the strict financial controls under Section 404 earlier so their balance sheets are cleaner. Smaller companies haven’t yet made the changes that could prevent errors in financial statements because the deadline has been extended.
"Simply put, micro-cap companies haven't yet had to comply with SOX 404," Glass Lewis researchers wrote in the report. "As such, their lax internal controls, which remain untested by independent auditors, continue to produce materially erroneous financial reports."
Scott A. Taub, the acting chief accountant of the Securities and Exchange Commission, commented on the large number of restatements (1,195 in all of 2005) in a Nov. 17 speech. “Some suggest the large number of restatements shows that an overly conservative attitude pervades, resulting in restatements for errors that simply are not material," he said. "Others believe that the large number of restatements shows that the reforms of recent years are working, causing companies to look harder at financial reporting and correct errors that arose in earlier years. Others argue that the rise in restatements can be traced to the increased complexity of accounting standards and reporting rules.”
Taub said that his staff informally reviewed restatements from 2003 to 2005 to see what companies were saying about the errors. He said that well over half of the errors were caused by “ordinary books and records deficiencies or by simple misapplications of the accounting standards.”
Stock options backdating probes triggered some of the restatements last year, Reuters reported.
Through the first nine months of 2006, 14 companies had filed restatements related to the timing of stock option grants. By December, 84 companies had announced they would need to restate financials to correct accounting for prior stock option grant awards, the Glass Lewis report said.
"The SEC's Fuzzy Math," by Robert C. Pozen, The Wall Street
Journal, March 23, 2007; Page A11 ---
Almost 10% of U.S. public companies announced a
record 1,420 financial restatements in 2006. It was a record -- but
continues an accelerating trend of financial restatements, from 2% in 2000
and more than 4% in 2004.
These restatements impose large costs on the
capital markets. The GAO estimated that, between July 2002 and September
2005, the market capitalizations of restating companies decreased by a total
of $36 billion in the days immediately following the initial restatement.
Two academic studies have shown that stock prices decline not only for the
restating firm but also for its direct competitors -- presumably because of
fears about the financials of the whole industry. More broadly, as the SEC
has noted: "Restating financial statements of prior periods may dilute
public confidence in financial statements and may confuse those who use
The initial spurt of restatements during 2002 to
2004 was related partly to the more intensive reviews of internal controls
mandated by Section 404 of the Sarbanes-Oxley Act. However, Sarbox is not
the main problem. From 2005 to 2006, there was a 14% decrease in the number
of financial restatements by the larger public companies required to perform
internal control reviews under Section 404, according to a Glass Lewis
study. Yet for the same period, that study found a 40% increase in the
number of financial restatements by smaller public companies not yet
required to implement Section 404.
The main problem is that many public companies are
being forced to restate their financials for technical accounting reasons of
dubious significance to investors. On March 12, 2007, for example, a Nasdaq
company called Isle of Capri Casinos announced a delay in filing its SEC
reports to complete the restatement of its financials for the prior three
years because of adjustments to the amortization of its space leases.
Yet, Standard & Poor's concluded that "we do not
believe the issue causing the restatement and the filing delay to be
material." No wonder ordinary investors are confused: how should they react
to a financial restatement caused by an accounting adjustment to a non-cash
item, which is declared immaterial by an expert firm?
To be sure, some financial restatements are
certainly justified, most importantly those resulting from the negligent or
intentional misapplication of well-established accounting standards.
Nevertheless, others are the result of significant reinterpretations of
complex accounting standards that could not realistically have been foreseen
by company executives.
While such reinterpretations may be an appropriate
response to changing markets or new accounting perspectives, they should be
adopted only with advance notice by the regulators together with an
opportunity for public comment. Moreover, significant reinterpretations of
accounting standards should be applied prospectively, not retroactively, to
reduce the number of unnecessary financial restatements that damage
companies and confuse investors.
The adoption and amendment of U.S. accounting
standards occurs through a formal process led by the Financial Accounting
Standards Board. This process, which often takes several years, involves the
promulgation of a detailed draft, a lengthy period for public comment and
careful decision-making by a board of distinguished members. By contrast,
significant changes in interpreting existing accounting standards have
episodically been announced through speeches or informal communications by
the SEC staff -- without any advance notice or public comment.
Continued in article
A Great Library Price for
Electronic Versions of American Accounting Association Research Journals
March 27, 2007 message from Tracey
You and your students can have desktop access to
all 13 of the American Accounting Association's premier scholarly journals
which are now available in the AAA's Electronic Journal Package. We
encourage you to either forward this email to your librarian asking them to
arrange for a trial or reply to this email indicating your interest and we
will contact the library on your behalf.
This new package offers the industry's leading
collection of journals in accounting that address a wide range of topics
including: education, public interest, taxation, auditing, impact on
behaviors, technology, systems, legal, international, and management. The
AAA's newest section journal, Current Issues in Auditing, is open access,
and is also included in this package.
Key features of the package include:
* The most current issues as they are published
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* MyAlerts and RSS automated journal update
A one year discounted package subscription rate of
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Amigos Library Services handles sales of the AAA Electronic Journal Package
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for orders and trials.
Providing access long term to the AAA journals
insures you and your students continued access to the best literature in
Studying Cost Structures, Sales
Mix, and the Competition
From The Wall Street Journal
Accounting Weekly Review on March 23, 2007
McCracken and Paul Glader
Mar 20, 2007
Click here to view the
full article on WSJ.com
Financial Accounting, Inventory Systems, Managerial Accounting
SUMMARY: The article
discusses details of strategies to cut costs by the Big Three
Automakers. In doing so, the article references financial
accounting system information, such as a problem supplier list,
and purchasing system efforts to reduce materials cost, tracked
via inventory control systems. The article then extends that
discussion to consider a supplier's perspective and its efforts
to revise cost structures. The result was a change in its own
sales mix and an increased ability to deal with the auto
manufacturers to set prices profitably. A related article
reports on automaker CEO statements in a recent House panel
hearing, and "translates" their statements into plainer
English--useful for students' understanding.
1.) What are the cost issues currently facing U.S. automobile
manufacturers? In particular, what past decisions have led to
current heavy cost burdens not faced by auto manufacturers
outside of the U.S.?
2.) How are these cost issues leading to tactics of relying on
price concessions by auto parts suppliers? What factors
traditionally have led to auto manufacturers' ability to rely on
3.) Based on the "translations" offered in the related article,
summarize the issues facing chief executives as expressed in
recent Congressional testimony. In your answer, compare chief
executives' responsibilities to the responsibilities handled by
executives described in the main article.
4.) Tom Sidlik, head of global purchasing at DaimlerChrysler,
says he receives a list "every two weeks of troubled suppliers."
Suppose you are the accounting head responsible for providing
that information to Mr. Sidlik. From what account system
database would you obtain the information? What information
would you include in the report?
5.) Again consider preparing the report for Mr. Sidlik. Given
the current situation described in the article, what potential
issues do you see in regards to the data provided in the report?
What steps would you take to investigate potential problems?
6.) Consider now the smaller parts suppliers such as Bluewater
Plastics, now headed by Michael Lord who came in from another
industry. What steps did Mr. Lord take to change the company's
cost structure? How did those changes also lead to changes in
their product sales mix? Be specific.
7.) In a dispute between Ford Motor company and Navistar, a
diesel engine supplier, "...Ford began debiting Navistar's
account by tens of millions of dollars..." What does this
statement mean? How does it indicate that Navistar was "...the
victim of Ford's heavy hand..."?
Reviewed By: Judy Beckman, University of Rhode
March 2007 Updates on the Sad State of Accounting Research in
Nearly two years ago I sent out an "Appeal" for accounting
educators, researchers, and practitioners to actively support what I call The
Accounting Review (TAR) Diversity Initiative as initiated by last year's
American Accounting Association President Judy Rayburn ---
In it I noted that a bright ray of hope for changing narrow
focus of The Accounting Review (TAR) was the appointment of Bill McCarthy
as Associate Editor for purposes of introducing Accounting Information Systems
research into TAR.
I now have an expanded paper written in partnership with Jean
The MS Word version is at
This paper is forthcoming in the December 2007 edition of the Accounting
March 27, 2007 message from McCarthy, William
This thread and other AECM posts regarding
information technology research in accounting casts a grim picture for
people who wish to do computer science related work aimed at the major
accounting academic journals. This has been an "us vs. them" problem for
most of my 30 years in AIS research.
While it is indeed true that JAR, JAE, and the
other private accounting journals remain in the Stone Age as far as
accounting technology issues are concerned, there have been significant
steps taken by TAR to open up the main AAA journal to this kind of work. Dan
Dhaliwal appointed me as an editor with the express purpose of having a
person knowledgeable in information systems and computer science research
methods available to the AIS research community for manuscript review and
Surprisingly, as I have outlined at both the
sectional and national AAA meetings, the problem has not been as much with
"them" as it has been with "us," at least in the last 15 months or so. Quite
simply, the number of AIS submissions to TAR has been alarmingly low. In
Washington last August, I set a target of 12-18 for the AIS community for
this academic year, a number I thought was modest and achievable. However,
it does not look like we will come close to that at our present rate.
As I mentioned in Washington, the submission
procedure is this:
Do the work and make sure it is rigorous according
to accounting, IS, and/or computer science standards,
Submit the paper and note or show that it deals
with an important accounting issue issue by using AIS, MIS or CS methods,
Ask that the paper be assigned to me as the editor
most familiar with IS and CS methods.
If you make a convincing case on these points and
if the senior editor thinks it is high quality, then I get it, I assign the
referees, and I get to make the consolidated judgment.
Paraphrasing the famous Canadian hockey player
Wayne Gretzky, the AIS research and the accounting practice communities will
miss on 100% of the good ideas that never get submitted to TAR. If we want
change the face of accounting research, the time for action is now. Do the
work and submit "that" paper. Additionally, send your name off to me as a
possible referee, outlining your particular expertise in either methods or
Michigan State University
March 27, 2007 reply from Paul Williams
What we may be paying as the price for dragging
doctoral education in accounting back to the Stone Age about 40 years ago,
is the phenomenon you describe. People have become so disenchanted with TAR
that they have found other more comfortable venues for pursuing their work.
In spite of public declarations about the new openness, we have heard this
before only to have it turn out to be disengenuous PR. I think your appeal
here might encourage people to trust you once and submit a paper, BUT it
better produce some postitive experiences.
Another issue is "rigor." Everything must be
RIGOROUS, but most GOOD IDEAS aren't "rigorous". They are typically fraught
with error, but they open new vistas and ways of thinking about things. The
history of science is filled with tales of earth changing ideas that were
not offered in a RIGOROUS way (we know Mendel fudged his data on sweet peas,
so did Milliken and Keynes General Theory... was notoriously cobbled
together). We have become so fixated on method and our public appearance as
rigorous scientists that all accounting scholarship in the U.S. at least
follows the same template. Our idea of rigor is, frankly, naïve, based more
on appearance than substance. Robert Heilbroner once remarked that
"Mathematics brought great rigor to economics.
Unfortunately it also brought mortis." Bill, you
now have some power (?). Take some chances. What is the point of an academic
discourse confined only to statistical model building where, simultaneously,
replication is emphatically discouraged? Empirical rigor means doing it over
and over by independent investigators with rigorous controls. We may not
even be doing what we currently do "rigorously."
March 27, 2007 reply from J. S. Gangolly
Methodological hangups, fetish about quantitative
rigour, phobia about normative research, all have afflicted most disciplines
at one time or the other. We in accounting seem to have them all at the same
I remembering sitting on a doctoral committee with
folks from psychology, and was frightened to discover my own prejudices
after hearing a well known (Skinnerian) psychologist fellow committee member
asked me to be a bit more understanding of methodologies used by others.
I have found the accounting crowd reward conformity
with received wisdom from the self-anointed sages.
Much of my work has been normative, and therefore
considered "unsuitable" for publications in better known accounting journals
(statement made by editor of one of the top rated accounting journal). I
feel driven out of the field years ago into Operations Research, Information
Systems, Computing & Information Sciences.
In none of those fields have the journal editors/
referees used any litmus tests. On the other hand, the referees at an AAA
section journal, (about 20 years ago) was bold enough to state that my paper
was an insult to the excellent work done by others in the field (the paper
was later published in a respected journal in IS with few changes; it was
the last paper I submitted to any establishment accounting journals).
Bill's message gives me hope in a way I never
imagined. As a test balloon, I will submit TAR one of our papers that I had
targeted for a CSI journal.
We need a balance between rigour, relevance, and
methodological purity. Above all, we need tolerance for work that differs
from our own perspective on each of these. We also need a diversity of
approaches to the issues in the papers.
Given the dire shortage of accounting doctoral students, there's an
explosion in part-time accounting faculty.
This is also the trend in most other disciplines.
"Inexorable March to a Part-Time Faculty," by Doug Lederman, Inside
Higher Ed, March 28, 2007 ---
New data from the U.S. Education
Department confirm what faculty leaders increasingly bemoan:
The full-time, tenure-track faculty member is becoming an
endangered species in American higher education.
A new report from the National Center for
Education Statistics shows that of the 1,314,506 faculty members at colleges
that award federal financial aid in fall 2005, 624,753, or 47.5 percent,
were in part-time positions. That represents an increase in number and
proportion from 2003,
full survey of institutions, when 543,137 of the
1,173,556 professors (or 46.3 percent) at degree-granting institutions were
part timers. (The statistics may not be directly comparable because the
department reported part-time/full-time figures only for degree-granting
institutions in 2003, and for all Title IV institutions in 2005.)
The new report, “Employees in
Postsecondary Institutions, Fall 2005, and Salaries of
Full-Time Instructional Faculty, 2005-06,” also finds the
proportion of all professors who are tenured or on the
tenure track to be shrinking. Of the 675,624 full-time
faculty members at degree-granting colleges and universities
in 2005, 414,574, or 61.4 percent, were either tenured or on
the tenure track. That is down from the 411,031 of 630,419
(or 65.2 percent) of professors at degree-granting
institutions who were tenured or tenure track in 2003.
Full-time Faculty at
Degree-Granting Institutions, 2005 and 2003
|Not on tenure track/
no tenure system
*Figure includes 25,879 staff
members with faculty status.
The NCES report contains a wealth
of other information about faculty and staff members at
colleges and universities. Among the other highlights:
- The proportion of full-time
faculty members at degree-granting institutions who are
women rose slightly, to 40.6 percent in 2005 from 39.4
percent in 2003.
- The proportion of full-time
faculty members who are white dropped slightly, to 78.1
percent in 2005 from 80.2 percent in 2003. The biggest
gain was among Asian/Pacific Islanders, whose share of
the full-time professoriate rose to 7.2 percent from 6.5
percent. The proportion who are black dipped by a tenth
of percentage point (from 5.3 percent to 5.2 percent),
while the share who are Hispanic rose to 3.4 percent
from 3.2 percent.
- Men were significantly more
likely to be tenured or tenure track than were women. Of
full-time male professors, 47.5 percent were tenured and
18.1 percent were tenure track, while 33.9 percent of
women were tenured and 21.3 percent were tenure track.
Bob Jensen's threads on higher education controversies are at
Bob Jensen's threads on the Obsolete and Dysfunctional System of Tenure:
Over 62% of Full-Time Faculty Are Off the Tenure Track ---
March 28, 2007 reply from Elliot Kamlet
I am a low esteem lecturer, albeit full time not
part time. Eliminating us is very expensive, especially at a State
University like mine. For example, say we hire a brand new PhD at (to use a
low but round number) $100,000 per year. (S)he teaches, say, 2 sections per
semester at 40 students each. That is a total of 160 students per year or,
on average $625 per student. The student takes 8 courses per year for about
$4350 in tuition. Therefore there might be a problem growing if we want to
pay our professor benefits, turn on the lights, run the buildings, run the
administration, etc. Of course our professor will research and publish.
While that brings additional recognition to us, it takes a while before it
might bring some money. Like it or not, that’s the way it is.
March 29, 2007 reply from James M. Peters
The problem is far worse in larger state schools.
When I was the Department Chair at the U. of Maryland, we would have had to
pay $180,000 for a new PhD, including summer support, which pretty much had
to be guaranteed as long as they were research active, to teach 3 sections
per year. We still couldn’t hire a new PhD because we couldn’t compete for
any that had a chance of making tenure at Maryland. The last assistant that
was tenured at Maryland was in 1976, 31 years ago, and they currently have
no assistant professors and are not hiring any. We required 5 JAR, JAE, or
TAR hits in their first five years for tenure. Nothing else really counted.
So we tried to hire tenured Associates at higher rates. However, again
because of the tenure standards and the short supply, most of the new hires
wanted 2 section teaching loads (per year).
As our Dean was famous for saying, every business
school in the US is working with a “going out of business” model. We just
can’t continue to pay research faculty more and more to teach less and less.
That is a “going out of business” economic model. Given the importance of
research to a major school’s reputation, however, the top school must
continue to compete for research faculty.
I believe the only solution is to do what Maryland
did (and CMU did when I was there), and develop a cadre of full-time
teaching faculty that are consider full faculty members, except for Tenure
and PhD issues. This is the European model. It means downsizing the research
faculty and it also means a form of enforced specialization. It isn’t that
most research faculty aren’t dedicated teachers, it is just that the
competition in the research market, particularly in the “big three”
journals, is so intense that they cannot afford to put time into the
classroom and survive on the research side.
So, we need to move to a model with fewer research
faculty that form the intellectual core of our departments and who regularly
interact with the teaching faculty to share their research results. However,
the core of teaching cannot be done by research faculty anymore. We just
can’t afford them.
March 29, 2007 reply from Peters, James M
The problem with trying to affect tenure
requirements is that they are driven by free labor and free "reputation"
markets, and not under anyone's control. Also, there is an excellent theory
developed by an MIT economist who speaks to this issue and explains why, due
to basic human overconfidence, a ratcheting up of both review standards and
tenure requirements is inevitable. Any University that unilaterally dropped
tenure requirements would have their reputation trashed.
As for the classic argument that research benefits
teaching, I see very little in the articles published in the "big three"
that I can bring into a graduate classroom, much less and undergraduate one.
And, again, it isn't because doing so might not be a bad idea, it is because
research faculty can no longer afford to focus on teaching.
The bottom line is the system is badly broken and
out of control, but no one can fix it. The system is a free labor market and
a free "reputation" market for schools that no one controls and will have to
correct itself, probably after a "train wreck."
March 29, 2007 reply from Paul Williams
On 29 Mar 2007 at 12:34, Richard C. Sansing wrote:
> Perhaps the best solution involves evaluating
research by reading and
> thinking instead of just categorizing and counting.
Bravo Richard. this is now an ongoing debate in our
college at the moment: a journal list of "elite" "high quality" and "other."
There is simply no substitute for reading your colleagues' work regardless
of where or how it is published. Counting is likely a feature of
administrators creating butt covering criteria to make hard decisions
easier. I remember when Maryland got to where it is and Robin is quite
correct. Maryland hired a new chancellor who proclaimed the institution
would be a top tier school and issued a ukase that only publishing in the
so-called elite journals would count (this was 30 years ago). The accounting
program at Maryland has yet to recover from an administration that opted to
make the autocratic way the way to greatness: do it, or else. For many
programs at Maryland it appears that "or else" was their choice. In D.
McCloskey's The Rhetoric of Economics she discusses the dangers of modernist
pretensions of science (what commentators on this net mean by rigorous). She
provides this little ditty on page 52:
Little wonder that youths in science are durnk with
methodology. "Ale, man, ale's the stuff to drink For fellows whom it hurts
to think. And faith, 'tis pleasant till 'tis past The mischief is that
'twill not last Output, man, output's the stuff to get SO DEANS AND CHAIRMEN
WILL NOT FRET.
March 29, 2007 reply from J. S. Gangolly
I completely agree.
AACSB requirements on PHD AQ faculty is a ploy to
support PhD programs (irrespective of their quality or relevance), to
artificially inflate salaries to monstrous proportions, and create
artificial shortages (to justify the salaries) totally out of line with what
the market would pay PhDs in the profession with little practice
I find it unconscionable to have to pay an ABD,
with NO real world experience in the chosen profession IN WHICH EXPERTISE IS
CLAIMED, salaries higher than what we pay world-renowned scholars who have
won Lancaster Prizes, Guggenheim Fellowships, McArthur Fellowships, Pulitzer
Prizes,... Justification based on the "market" shortage is a phony argument,
since the "market" has been rigged.
We are buying an option, in many cases with
taxpayers' money, that has often a high probability of becoming worthless in
a few years.
I think there has to be a balance. However, to
denigrate practice to a second-class status in a professional field is
Can you imagine a medical school where you are a
second class citizen if you do not have a PhD? Or a law school where a
person without a PhD is a second class citizen?
In begging for respectability in the academia, by
denigrating the profession, we have forfeited our rightful claim to the
status of a learned profession. By ignoring the profession in our research,
we also have forfeited our right to be serious academics in a profession. We
have become Finance wannabes, Economics wannabes,... just plain whatever
wannabes, without gaining respectability of serious disciplines.
We also have become irrelevant to both the academia
and the profession.
March 30, 2007 reply from Bob Jensen
Hi Paul and Jagdish,
I'm hesitant to call this a "ploy." The word "ploy"
implies some type of planned conspiracy to create shortages of doctoral
students in accountancy and increase salaries. The root causes are much more
complicated and indeed even naïve.
I think the only "conspiracy" or "ploy" (both words
are too pejorative in this well-intended context) commenced in the 1960s on
the part of deans and business faculty in reaction to the Pierson Carnegie
Report  and the Gordon and Howell Ford Foundation Report . The
intent was to instill scientific research skills (especially mathematics,
statistics, econometric, and psychometric skills) into virtually every
accounting doctoral student.
Added funding such as grants to doctoral programs
from the Ford Foundation initially increased enrollments in accounting
doctoral programs. In fact I would never have become one of Stanford's three
accounting doctoral students in the 1960s had it not been for Ford
Foundation money given to Stanford. Stanford laundered that money and gave
me five years of room, board, tuition, and incidental funding. In those five
years I took only one course (from Bob Jaedicke) in accounting. The rest of
the courses in all those years were taught outside Stanford's business
school. Stanford wanted to make me a scientist.
And I was not unique. Under Tom Burns at Ohio State
did any accounting doctoral students take accounting courses? When I was on
the faculty at Michigan State a doctoral student named Jim McKeown used to
brag that he was not required to take a single accounting course in the
New doctoral programs in accounting emerged across
the U.S. and around the world. At the same time the AACSB made it more
difficult in the business school accreditation processes for accounting
programs to use doctoral graduates from other disciplines such as from
economics and education departments. I think this was somewhat an effort to
strengthen accounting doctoral programs. But I do not think it was a ploy to
create shortages and higher salaries.
In the 1960s academic accounting research journals
started to give preference to empirical and quantitative analytical
submissions. The eventual outcome by the end of the 20th Century is that
virtually all accounting doctoral graduates are applied mathematicians,
econometricians, and/or psychometricians. This is necessary for any hope of
publishing in top academic accounting research journals.
The problem with this is that most accounting
doctoral students are now drawn from the pool of younger professionals in
public accounting firms who have 1-10 years experience. Many of these
professionals would like to enter doctoral programs that focus to on
accountancy rather than science. They have little interest in spending the
next four years of their lives studying quantitative research methods that
are increasingly more rigorous in virtually all accounting doctoral
The bottom line is that we have a mismatch between
the interests and aptitudes of the potential doctoral studies pool of
accounting professionals and the scientific requirements of virtually all
doctoral programs. Many solid accountants, especially auditors, AIS, and tax
specialists, simply do not want to become mathematicians, statisticians,
econometricians, and psychometricians. They would rather study accountancy.
You can read more about the evolution these
phenomena in the 20th Century at
The bottom line is that our five-year programs churn
out accountants who then enter the practicing profession. Our doctoral
programs subsequently try to lure them back to become scientists. In the
process we perhaps accidentally created a huge mismatch between the doctoral
candidate pool and the doctoral program content.
In the 1960s doctoral programs had four choices:
Keep the status quo and rely on economics department doctoral graduates
to become the lead research scholars in our accounting departments.
Make schools of accountancy more like law schools where accounting
students study accountancy for three years after their baccalaureate
degree. Faculty in schools of accounting would then be generated much
like faculties are generated for schools of law.
Teach accountancy in undergraduate and masters professional programs and
make doctoral programs advanced professional programs for financial,
managerial, AIS, and tax advanced concentrations. The intent here would
be for doctoral programs to create super professionals much like law
schools create super professionals in legal specialties and legal
Teach accountancy in undergraduate and masters professional programs and
make doctoral programs applied science programs for accounting research.
In the process almost all accountancy is removed from doctoral programs
in favor of mathematics, statistics, economics, and other social science
For whatever reasons, Alternative 4 above transpired
over the past 60 years. Alternative 4 created a relatively small number of
outstanding researchers who know virtually nothing about accounting beyond
what they learned as undergraduates and masters students plus a few years of
on-the-job experience. This means that practicing accountants with more than
10 years experience really know more financial accounting, managerial
accounting, AIS, and tax than our tenured accounting professors who, often
reluctantly, have to teach professional accountancy courses in undergraduate
and masters accountancy programs.
Alternative 4 also created the shortages and high
salaries that greatly limits number of applicants for accounting faculty
positions. This in turn has created the explosion of the so-called second
class non-tenured teachers of accounting that are increasingly necessary to
enrollments in accountancy course.
I close with one of my most depressing quotations
from an Accounting Horizons referee who rejected publishing the remarks of
Dennis Beresford’s address to the AAA membership at the 2005 Annual AAA
Meetings in San Francisco. The arrogant referee wrote the following to the
Editor of Accounting Horizons:
1. (Professor Beresford's)
paper provides specific recommendations for things that accounting
academics should be doing to make the accounting profession better.
However (unless the author believes that academics' time is a free good)
this would presumably take academics' time away from what they are
currently doing. While following the author's advice might make the
accounting profession better, what is being made worse? In other words,
suppose I stop reading current academic research and start reading news
about current developments in accounting standards. Who is made better
off and who is made worse off by this reallocation of my time?
Presumably my students are marginally better off, because I can tell
them some new stuff in class about current accounting standards, and
this might possibly have some limited benefit on their careers. But
haven't I made my colleagues in my department worse off if they depend
on me for research advice, and haven't I made my university worse off if
its academic reputation suffers because I'm no longer considered a
leading scholar? Why does making the accounting profession better take
precedence over everything else an academic does with their time?
As quoted at
March 31, 2007 reply from Denny Beresford
Your comments are very interesting to me as a
"nontraditional" academic. (After ten years I'm not sure I can still say I'm
a complete neophyte.) Someone from Financial Executives International
recently asked me how many accounting classes the accounting PhD students at
the University of Georgia were required to take. When I looked it up on our
website I found the total to be zero, just as suggested in your message. On
the other hand, some of the students' research methodology classes are
taught by accounting faculty and I know they discuss articles from the
Accounting Review and the like. Once (in ten years) I was even asked to make
a guest presentation to one of the PhD classes.
I teach "Accounting Policy" to our 5th year MAcc
students, which I would describe as a sort of applied advanced accounting
theory class. Fairly early in my time here I suggested to a couple of the
senior faculty that it might be a good idea for the PhD students to take my
class. I don't recall the exact response but I think it was something along
the lines of "they already have enough accounting." One of the PhD students
did take my class for credit and another took it as a directed study but
both of these were on their own initiative rather than encouragement from
other faculty to the best of my knowledge.
Somewhat naively I thought that an opportunity to
take a class from a former FASB board member and current audit committee
chair for three very large corporations would be something an accounting PhD
student would jump at. Of course, I also naively thought that Accounting
Horizons might be interested in publishing my remarks at the AAA annual
meeting, which, as you point out, was a very bad assumption.
Notwithstanding the relative lack of response to my
various offers to help, I keep trying!
April 2, 2007 reply from Ed Scribner
I keep reminding Bob of the quote attributed to economist C. E. >Ferguson,
"The real world is only a special case, and not a very >interesting one at
April 2, 2007 reply from Denny Beresford
Spending three and a half years inside of WorldCom/MCI and now nearly a year
inside of Fannie Mae has actually been pretty interesting. Guess how many
questions about these experiences I've had from PhD students? Or, for that
matter, from faculty members?
March 31, 2007 reply from J. S. Gangolly
Perhaps ploy is a loaded word I should have
avoided. A better characterisation would have been to term the faculty
shortage an unintended consequence of AACSB acreditation policies.
My experience recruiting for my school has been the
paucity of PhDs with working-world professional accounting experience. The
market does not discriminate between PhDs with no such experience and those
who have such experience.
Those with practice experience have attractive
alternative opportunities, while those with PhDs but no practice exposure do
not (unless they have specific skills which have markets). That being the
case, it does not make much sense to treat the two groups identically.
We need to learn from the medical schools where
there are both PHDs and MD, PHDs. The former do not have the same
alternative job opportunities that the latter have, and the difference is
reflected in differential compensation. Also, PhDs in medical schools are
required to bring in external research funding in addition to publications,
quite unlike in accounting where not many bring in external funding during
early years of careers.
One way to accomplish this in accounting would be
for AACSB to say a specified percentage of faculty (say, 80% for example)
should be certified and/or hold licenses and have adequate recent relevant
experience. Those who have PhDs but no relevant certification and relevant
experience could have a much smaller presence, say 25% (the percentages are
Also, we need to bring in the practice to evaluate
research on the dimension of relevance, for example, by requiring practice
referees for all discipline-based research. This may be too radical a step,
but AAA could provide support by implementing it for AAA journals.
March 31, 2007 reply from Amy Dunbar
I cannot imagine our faculty without both of these
former partners. They add tremendous value. I am sure the rest of the
faculty would agree wholeheartedly.
On another point, I think the starting salaries are
high because we have a shortage of faculty, in part because people with
accounting skills aren't too thrilled to give up at least five years of
their life for PhD student hell. To go from a decent salary to a TA stipend
and the status of whale doo doo seems to be a bit irrational to me. I was
divorced mother of a five-year old daughter, and I made the choice to move
from Denver to Austin to enter a PhD program. I made more money before I
went into the PhD program than I made in my first position after getting out
of the PhD program.
I have no problem with the new PhDs getting high
salaries. They gave up a lot of money-making years and then they take on a
lot of risk trying to get tenure and knowing they will probably not succeed
at their first school. Our tenure-track faculty are under tremendous stress,
and they work incredibly hard.
March 31, 2007 reply from Ramsey, Donald
1. My comprehension of AACSB's history is that it
was intended to achieve respectability in a university context, especially
in terms of tenure. This in context of the old "Business Colleges".
2. Most academic disciplines do not operate in
fields with professional certifications as potentially part of the
qualifications of faculty and graduates.
3. How does Accounting compare, in terms of
salaries and tenure policies, to such professions as law and engineering
(we've already discussed medicine, which is economically in a class by
itself, I think). At our institution, for example, the law school is not
part of the union, due to its consolidation history. Go figure.
4. Qualification in pedagogy seems to have fallen
by the wayside. How many university professors have any kind of teaching
credentials? How much teaching at accredited universities is actually done
by their glorious and expensive researchers, in Accounting or any other
5. Some institutions reportedly have three tracks:
teaching, research, and a combination of those two.
6. What exactly is the purpose of tenure? Academic
freedom (which presumably everyone has anyway)? Completion of an
apprenticeship? Filling slots for a maximum of 6 years, despite only a
marginal hope of continuation?
7. Somewhere I saw an article about learning
institutions (in contrast to research institutions and teaching
institutions). Will have to look that one up.
Cheers on a Saturday morning, [someone in
accounting practice once said, "If you like casual Fridays, you'll love
casual Saturdays and Sundays!]
Donald D. Ramsey, CPA,
Department of Accounting, Finance, and Economics,
School of Business and Public Administration,
University of the District of Columbia,
Room 404A, Building 52 (Connecticut and Yuma St.),
4200 Connecticut Ave., N. W., Washington, D. C. 20008.
March 31, 2007 reply from Bob Jensen
Comparing salaries is a bit like comparing apples and oranges. Often law
professors are the highest paid in terms of straight salaries. But this is
misleading, because the student-faculty ratio is extremely high in even the
most prestigious law schools. This means that the total faculty budget per
student for the law school may actually be less than for other schools in
the university. Also law schools never seem to be bothered by having to
frequently use part-time faculty for specialty law courses.
The highest paid faculty are generally in the medical school, but it is
almost impossible to compare medical school faculty budgets with other
schools in the university. Some universities have a "profit sharing plan"
where the profits from medical school hospitals are shared with the medical
school faculty. Income may thus vary depending upon those profits. Other
medical schools allow faculty both to draw a salary and to bill patients
served in the university hospital.
If you look at the AAUP faculty salary data for most universities,
medical school faculty are generally the highest paid.
Then there is always the problem of comparing research grant income that
often comes on top of the contracted salaries. There are various ways that
top scientists make more than top accountants.
As far as the purpose of tenure, I have some threads on tenure and its
Tenure used to be a protection against having administrators being able to
easily fire some faculty because they happen to have different philosophies
or politics or religions. It's more complicated these days.
Keep in mind that a seniority system is tantamount to tenure if a college
does not have a tenure system but abides by a seniority policy. Hence the
villain sometimes is not the tenure policy if the seniority policy is in
But there are some added advantages and
disadvantages to tenure versus seniority systems. Most tenure policies force
universities to make hard decisions about keeping or dropping new faculty
after seven years. Tenure forces the weeding out of the weak performers, but
it may give too much weight to publication performance.
I personally don't like the AAUP tenure rules because I think that the
seven-year up-or-out policy is too arbitrary and dysfunctional. For one
thing it leads to short-term research focus to pile up publications. It
encourages "paper splitting" for publication. It also encourages joint
authoring games. Three professors can each write a paper and list the other
two professors as joint authors arising from minimal input. That way the
three professors get credit for three papers rather than the one they
primarily wrote. I attribute the explosion of joint authorship in accounting
and business research journals to this unethical survival tactic of faculty.
April 1, 2007 reply from Roger Collins,
Hello Bob. I thought you might appreciate this
article, not as a reflection on the state of cancer research but as a
reflection of research in accounting. Best wishes to Erika and yourself.
Roger Roger Collins
TRU School of Business
"To Break the Disease, Break the Mold," by Susan
Love, The New York Times, April 1, 2007
WITH the cancer recurrences of Elizabeth
Edwards and Tony Snow the question arises: Why does this still happen?
As is often the case, the answer isn’t very satisfying: not all cancers
are alike, early detection doesn’t always work and treatments are still
far from perfect.
But there’s another problem: we keep focusing
on doing the same thing better rather than trying something new. It is
as if we are wearing blinders that let us see only one path and not the
If you look at most cancer research journals
you will see that our focus remains on finding smaller cancers, doing
less surgery and radiation and developing new drugs to add to the old
ones in an attempt to treat the cancers we detect. This approach —
finding the enemy, and then slashing, burning and poisoning it — hasn’t
changed since I was a resident in training 30 years ago. We have
certainly refined it over the years — two publications just came out
that recommended expanding the use of M.R.I. scans in women who have
breast cancer or are at risk for it — but, as in this situation where
the additional exam only identified 3 percent more cancers, each
progressive development leads to a smaller increment in benefit.
Why do we lack new approaches? One of the key
problems is the way research on cancer is carried out. In the past it
was common for clinicians to observe their patients, come up with a
hypothesis regarding diagnosis or treatment and then head to the lab to
test it out. For instance, in 1983, two Australian clinicians — one was
a pathologist, the other a gastroenterologist — observed bacteria in
stomach biopsies and went on to prove that ulcers were caused not by
acid, as had been assumed, but by a bacterial infection. Ulcer
researchers, who had spent their careers studying gastric acid, thought
the idea was absurd but much to their amazement it turned out to be
The curious clinician is becoming increasingly
rare. Medicine and science have become so complicated that it is almost
impossible for one person to be an expert at both. Researchers tend to
take a discovery from the lab and apply it to patients; the reverse trip
is more and more uncommon. More often than not, someone makes an
interesting discovery in the lab and then tries to find a clinical
application. There is little chance, much less financing, for the wild
idea that might prove revolutionary.
This situation is not helped by the incentives
we give to young cancer researchers but not to experienced clinicians
who want to test a hypothesis developed over years of treating patients.
It is difficult indeed to obtain a grant to do research if you haven’t
spent your career in the laboratory. As the baby boomer generation of
doctors approaches retirement, we should harness their experience and
wild ideas by offering training in science or partnering them with
younger research colleagues. Otherwise we risk inventing and discovering
without reference to actually helping cancer patients.
Another aspect of the problem is our peer
review system for financing research. It works well at eliminating poor
investments, but it squelches innovation and fosters the old boy
network. Organizations that give out “innovator” and “pioneer” awards
claim to want to support new ideas but end up giving money to better
ways of doing the same thing. And our academic and research institutions
reward projects with clearly defined objectives that have a good chance
of quickly leading to publications and tenure. If you have a wild idea
or a completely new paradigm, forget about it.
Cancer of the cervix is one of the few cancers
where we have been able to break the mold. We have moved from the Pap
smear, which merely discovers abnormal cells, to a vaccine that can
prevent the resulting cancer by protecting women against the virus
strains that cause it.
At a breast cancer conference in San Antonio
last December, a leading cancer researcher, James Holland, presented
evidence suggesting that breast cancer may also have viral associations.
A wild idea indeed; however, rather than being greeted with enthusiasm
by the attending scientists and members of the press it was dismissed.
Might there be something to it? We’ll probably never know.
Continued in article
April 2, 2007 reply from Eileen Taylor
With reference to the disconnect between research
and one practice:
One can look at the opportunities (or lack thereof)
for an accounting PhD in practice, compared with opportunities for JDs and
MDs to see that we are quite removed from the accounting profession. The
worth of a PhD in practice appears close to nil.
It seems the question is: "What indeed do we offer
practice, and what should we offer practice?" Keep in mind that we are the
educators of future practitioners!
Eileen Z. Taylor, PhD Assistant Professor,
Department of Accounting
North Carolina State University
Campus Box 8113,
Nelson Hall Raleigh, NC 27695-8113
April 2, 2007 reply from J. S. Gangolly
I think we need to study the evolution of professional education in the US
in relation to the same in Britain and Europe to get an understanding of why
we are where we are today.
Till the first world war, professional education in
the US closely paralleled that in Britain in that the first professional
degree is Bachelors and not doctoral, or required no preparation beyond high
school for entry (for example, in medicine MB,BS or MB,ChB and not MD, in
law LL.B and not JD, in business B.Com and not PhD or dottore Commercialisti
as in Italy).
After the first war, interestingly, professions in
the United States (medicine and Law; engineering, architecture and business
including Accounting continued with the British model) switched to the
European model with liberal arts education followed by a professional
doctoral degree. Actually, it is my understanding that Harvard and Yale
switched from LLB to JD not too long ago.
Both medicine and law have considerably enhanced
their stature with this move.
There is a considerable difference between medicine and law. Much of the
"research" done by MDs in medicine is little more than of "drug testing"
variety often bankrolled by pharmaceutical companies. Most "real" research
in medicine is done by PhDs and MD, PhDs and bankrolled by federal taxpayers
through NSF, NIH, NIMH,... Except at some selected schools, MD has virtually
no research component except for those in the MD, PHd programs. Also, there
seems to be a dichotomy between "research" oriented medical schools
(Harvard, Yale are examples) as opposed to "practice" oriented medical
schools (Northwestern or UCLA for example).)
A typical MD is not trained in research unless (s)he
does a year or more of post-residency research fellowship in the chosen
specialty, and even then it is usually of the drug-testing variety.
In case of law schools on the other hand, there has
always been a tradition of scholarship quite unlike in medicine, specially
in surgery (in Britain surgeons are not even referred ti as Dr.).
Both in medicine and surgery, there are ways in
which the education and practice are brought together in synergistic ways.
In medicine you have rotations, internships, and rounds/grand rounds; in law
you have moot courts and law reviews.
I think we in accounting should try to find out how
we can leverage the experience of medicine and law to come up with an
education model that meets our professional and research needs.
I agree fully with Paul that we need to address the
issue of the wall of separation that exists between the academe and the
profession on accounting.
"Prosecutors End Case in Long AOL Fraud Trial:
Executives Accused Of Making Sham Deals," by Carrie Johnson, The Washington Post, January 5, 2007 ---
Federal prosecutors concluded their accounting-fraud case against two former AOL executives yesterday afternoon, signaling that the long-running trial soon may end after unusual twists including a mistrial for one of the defendants.
The case, which began in an Alexandria federal courtroom in mid-October, is one of the longest criminal trials ever in a jurisdiction that is widely known as "the rocket docket" for its speedy and efficient justice, legal analysts said.
More than three dozen government witnesses testified about complex accounting tricks that hearkened back to early 2001, when the technology boom had turned into a bust. At the time, the Dulles Internet service provider struggled to show revenue and advertising gains by making questionable deals with dot-com business partners in which no revenue changed hands.
"There was an intense focus to get revenue," testified Jason Witt, a manager in AOL's aggressive and freewheeling business affairs unit, which has been disbanded. "It's probably the greatest pressure I've seen since ever."
A number of witnesses recounted how the AOL defendants -- former business affairs executive Kent D. Wakeford and former Netbusiness unit vice president John P. Tuli -- felt squeezed between the expectations of their employer to close more deals and demands from dot-com clients who themselves were struggling to stay afloat.
Witt, for example, said Wakeford told him not to put terms of a deal in writing. He also spoke of a 2002 meeting with Tuli in the AOL parking garage in which they discussed whether regulators had begun to inquire about AOL's dealings with two high-tech business partners. Defense lawyers contend that the accounting treatment on the deals had been vetted by experts in the company and by far-higher-ranking executives.
But the trial perhaps is most notable for the absence of the former AOL officials who led the business-affairs operation, such as David M. Colburn and Eric Keller, whose names came up regularly in testimony and who once had been the focus of government investigation. Time Warner, which absorbed AOL, agreed to pay more than $500 million to settle joint civil and criminal charges two years ago.
Neither Colburn nor Keller was charged with a crime. The five-year statute of limitations against them expired early last year. Prosecutors told U.S. District Judge Walter D. Kelley Jr. with the jury outside the courtroom that the U.S. attorney's office for the Eastern District of Virginia continues to investigate whether Keller misled investigators in sworn testimony to securities regulators. But there have been few, if any, signs of an active criminal investigation. The Securities and Exchange Commission, which has the power to seek the return of bonuses and other compensation, continues to scrutinize a number of former AOL executives.
The courtroom drama eased with the departure more than a month ago of its most colorful presence, Las Vegas entrepreneur Charles E. "Junior" Johnson. Johnson founded PurchasePro.com, a software manufacturing company that prosecutors say made a series of sham deals with AOL in early 2001 in an effort to stave off financial doom.
Johnson, who entertained spectators and courthouse personnel with his lively stories, was removed from the trial in November and a mistrial was declared for reasons that remain secret. Prosecutors say they intend to retry Johnson, who is accused of directing subordinates to destroy e-mail messages and forge accounting documents. That leaves his former employee Christopher J. Benyo as the only PurchasePro representative sitting at a defense table next to the former AOL executives.
Defense lawyers could wrap up their case in the next several days, putting their clients' fate in the hands of a jury that has remained attentive despite the trial's sometimes plodding pace. Earlier this week, five jurors dressed in business attire took notes and pored over documents, although a few panelists' eyes wandered as the morning dragged. So far, none of the three defendants has said he will testify in his own defense. Their lawyers will ask the judge to dismiss the charges against them in arguments today.
Central to the prosecution case are former PurchasePro executives R. Geoffrey Layne and James S. Sholeff, both of whom pleaded guilty in early 2005 and agreed to testify against their former business associates. Layne and Sholeff said they conspired with Johnson at the Bagel Cafe in Las Vegas in April 2001 to forge documents that allowed the company to reach revenue goals after the financial quarter had ended.
Their accounts over the course of the trial mostly implicated Johnson. They testified that they shredded documents and destroyed computers at his direction, then buried the ashes or raked the pieces into Sholeff's yard. Layne and Sholeff also mentioned conversations with Wakeford and Tuli, who were under heavy pressure to close revenue gaps at AOL.
Continued in article
Bob Jensen's Fraud Updates are at
Tidbits Directory ---
Humor Between January 1 and March 31, 2007, 2007
The Comedy Corner ---
Crazy stunt wins a top Darwin Award (High on Life) ---
Two students who died after climbing into a huge helium-filled balloon for the 'buzz' of inhaling the gas have been named the winners of the 2006 Darwin Awards. Jason Ackerman and Sara Rydman, both 21, were discovered with their feet sticking out of a deflated balloon used to advertise property in LakeView, South Florida. The two apparently pulled the balloon out of the sky and squeezed themselves inside, where they died of oxygen starvation.
"Crazy stunt wins Darwin Award" ---
The 2006 Darwin Awards are listed at
Forwarded by Paula
A blonde lady motorist was about two hours from San Diego when she was flagged down by a man whose truck had broken down.
The man walked up to the car and asked, "Are you going to San Diego ?
"Sure," answered the blonde, "do you need a lift?"
"Not for me. I'll be spending the next three hours fixing my truck. My problem is I've got two chimpanzees in the back which have to be taken to the San Diego Zoo. They're a bit stressed already so I don't want to keep them on the road all day. Could you possibly take them to the zoo for me? I'll give you $100 for your trouble."
"I'd be happy to," said the blonde. So the two chimpanzees were ushered into the back seat of the blonde's car and carefully strapped into their seat belts. Off they went.
Five hours later, the truck driver was driving through the heart of San Diego when suddenly he was horrified!! There was the blonde walking down the street and holding hands with the two chimps, much to the amusement of a big crowd.
With a screech of brakes he pulled off the road and ran over to the blonde. “What the heck are you doing here?" he demanded, "I gave you $100 to take these chimpanzees to the zoo!"
"Yes, I know you did," said the blonde, "but we had money left over---so now we're going to Sea World....."
Forwarded by Paula
* I used to eat a lot of natural foods until I learned that most people die of natural causes. . * Never take life seriously. Nobody gets out alive anyway.
* There are two kinds of pedestrians: the quick and the dead.
* Life is sexually transmitted.
* Health is merely the slowest possible rate at which one can die
* Health nuts are going to feel stupid someday, lying in hospitals dying of nothing.
* Whenever I feel blue, I start breathing again.
* In the 60's, people took acid to make the world weird. Now the world is weird and people take Prozac to make it normal.
* Who was the first person to look at a cow and say, "I think I'll squeeze these dangly things here, and drink whatever comes out?"
* Does pushing the elevator button more than once make it arrive faster?
*Why doesn't glue stick to the inside of the bottle?
* Do you ever wonder why you gave me your email address?
Forwarded by Auntie Bev
The year is 1906. One hundred years ago. What a difference a century makes ! Here are some of the U.S. Statistics for the Year 1906
The average life expectancy in the US. Was 47
A three-minute call from Denver to New York City cost eleven dollars.
There were only 8,000 cars in the U.S. and only 144 miles of paved roads.
The maximum speed limit in most cities was 10 mph.
Alabama, Mississippi, Iowa, and Tennessee were each more heavily populated than California.
With a mere 14 million people, California was only the 21st most populous state in the Union..
The tallest structure in the world was the Eiffel Tower !
The average wage in the US. Was 22 cents per hour.
The average U.S. Worker made between $200 and $400 per year
A competent accountant could expect to earn $2000 per year, A dentist $2,500 per year,
A veterinarian between $1,500 and $4,000 per year,
And a mechanical engineer about $5,000 per year.
More than 95 percent of all births in the U.S. Took place at HOME
Ninety percent of all U.S. Doctors had NO COLLEGE EDUCATION !
Instead, they attended so-called medical schools, many of which were condemned in the press and the government as "sub-standard."
Sugar cost four cents a pound.
Eggs were fourteen cents a dozen.
Coffee was fifteen cents a pound.
Most women only washed their hair once a month, and used borax or egg yolks for
Canada passed a law that prohibited poor people from entering into their country for any reason.
The Five leading causes of death in the U.S. Were: 1. Pneumonia and influenza 2. Tuberculosis 3. Diarrhea 4. Heart disease 5. Stroke
The American flag had 45 stars. Arizona , Oklahoma, New Mexico, Hawaii, and Alaska hadn't been admitted to the Union yet
The population of Las Vegas, Nevada, was only 30 !!!!
Crossword puzzles, canned beer, and ice tea hadn't been invented yet.
There was no Mother's Day or Father's Day.
Two out of every 10 US. Adults couldn't read or write.
Only 6 percent of all Americans had graduated from high school
Marijuana, heroin, and morphine were all available over the counter at the local corner drugstores.
Pharmacists said, "Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and bowels, and is, in fact, a perfect guardian of
Eighteen percent of households in the U.S. had at least one full-time servant or domestic help.
There were about 230 reported murders in the ENTIRE U.S.A. !
Now I forwarded this from someone else without typing it myself, and sent it to you and others all over the United States, possibly the world, in a matter of seconds
Now having read this try to imagine what it may be like in another 100 years.
Forwarded by a friend who's married to a blonde.
BLONDE GOING TO HOUSTON
THE PLANE IS ON ITS WAY TO HOUSTON WHEN A BLONDE IN ECONOMY CLASS GETS UP AND MOVES TO THE FIRST CLASS SECTION AND SITS DOWN.
THE FLIGHT ATTENDANT WATCHES HER DO THIS AND ASKS TO SEE HER TICKET.
SHE THEN TELLS THE BLONDE THAT SHE PAID FOR ECONOMY CLASS AND THAT SHE WILL HAVE TO SIT IN THE BACK. THE BLONDE REPLIES, "I'M BLOND, I'M BEAUTIFUL, I'M GOING TO HOUSTON AND I'M STAYING RIGHT HERE."
THE FLIGHT ATTENDANT GOES INTO THE COCKPIT AND TELLS THE PILOT AND THE CO-PILOT THAT THERE IS A BLONDE SITTING IN FIRST CLASS THAT BELONGS IN ECONOMY AND WON'T MOVE BACK TO HER SEAT.
THE CO-PILOT GOES BACK TO THE BLONDE AND TRIES TO EXPLAIN THAT BECAUSE SHE ONLY PAID FOR ECONOMY SHE WILL HAVE TO LEAVE AND RETURN TO HER SEAT.
THE BLONDE REPLIES, "I'M BLONDE, I'M BEAUTIFUL, I'M GOING TO HOUSTON AND I'M STAYING RIGHT HERE."
THE CO-PILOT TELLS THE PILOT THAT HE PROBABLY SHOULD HAVE THE POLICE WAITING WHEN THEY LAND TO ARREST THIS BLONDE WOMAN WHO WON'T LISTEN TO REASON.
THE PILOT SAYS, "YOU SAY SHE IS A BLONDE? I'LL HANDLE THIS. I'M MARRIED TO A BLONDE. I SPEAK BLONDE."
HE GOES BACK TO THE BLONDE AND WHISPERS IN HER EAR, AND SHE SAYS, "OH, I'M SORRY."
SHE GETS UP AND GOES BACK TO HER SEAT IN ECONOMY.
THE FLIGHT ATTENDANT AND CO-PILOT ARE AMAZED AND ASKED HIM WHAT HE SAID TO MAKE HER MOVE WITHOUT ANY FUSS.
I TOLD HER, "FIRST CLASS ISN'T GOING TO HOUSTON.
Forwarded by Paula
Top New Year's Resolutions for the computer addict
10. I will try to figure out why I need all those separate email addresses.
9. I will stop checking my email at 3am, 4:30am is much more practical.
8. I will answer my snail~mail with the same enthusiasm as my emails.
7. I will think of a password other than password.
6. I will stop sending email and instant messages while simultaneously on the phone with that person.
5. I will work with neglected children ~ my own!
4. I will stop emailing questions to my spouse when I can just walk downstairs and ask him.
3. I will try and see my family and friends instead of just emailing them.
2. I will try to laugh out loud once in a while instead of saying LOL.
..... and the number 1 reason
1. I will spend less than one hour a day online, Well no more than two...... OKAY....... 5 max!
May God Bless You in 2007!
Forwarded by Auntie Bev
Math Conversions that make sense
1. Ratio of an igloo's circumference to its diameter = Eskimo Pi
2. 2000 pounds of Chinese soup = Won ton
3. 1 millionth of a mouthwash = 1 microscope
4. Time between slipping on a peel & hitting the ground = 1 bananosecond
5. Weight an evangelist carries with God = 1 billigram
6. Time it takes to sail 220 yds at 1 nautical mile/hr = Knotfurlong
7. 16.5' in the Twilight Zone = 1 Rod
8. Half a large intestine = 1 semicolon
9. 1,000,000 aches = 1 megahurt
10. Basic unit of laryngitis = 1 hoarsepower
11. Shortest distance between two jokes = A straight line
12. 453.6 graham crackers = 1 pound cake
13. 1 million-million microphones = 1 megaphone
14. 2 million bicycles = 2 megacycles
15. 365.25 days = 1 unicycle
16. 2000 mockingbirds = 2 kilomockingbirds
17. 52 cards = 1 decacards
18. 1 kilogram of falling figs = 1 FigNewton
19. 1000 milliliters of wet socks = 1 literhosen
20. 1 millionth of a fish = 1 microfiche
21. 1 trillion pins = 1 terrapin
22. 10 rations = 1 decoration
23. 100 rations = 1 C-ration
24. 2 monograms = 1 diagram
25. 4 nickels = 2 paradigms
26. 4 statute miles of intravenous surgical tubing at = 1 IV League
27. 100 Senators = Not 1 decision
Forwarded by Aaron Konstam
YOU'VE BEEN IN CORPORATE AMERICA TOO LONG WHEN...
1. You ask the waiter what the restaurant's core competencies are.
2. You decide to reorganize your family into a "team_based organization."
3. You refer to dating as test marketing.
4. You can spell "paradigm."
5. You actually know what a paradigm is.
6. You understand your airline's fare structure.
7. You write executive summaries on your love letters.
8. Your Valentine's Day cards have bullet points.
9. You think that it's actually efficient to write a ten page presentation with six other people you don't know.
10. You celebrate your wedding anniversary by conducting a performance review.
11. You believe you never have any problems in your life, just "issues" and "improvement opportunities."
12. You calculate your own personal cost of capital.
13. You explain to your bank manager that you prefer to think of yourself as "highly leveraged" as opposed to "in debt."
14. You end every argument by saying "let's talk about this off_line."
15. You can explain to somebody the difference between "re_engineering", "down_sizing", "right_sizing", and "firing people's asses."
16. You actually believe your explanation in number 15. You talk to the waiter about process flow when dinner arrives late.
18. You refer to your previous life as "my sunk cost."
19. You refer to your significant other as "my Co_CEO."
20. You like both types of sandwiches: ham and turkey.
21. You start to feel sorry for Dilbert's boss.
22. You believe the best tables and graphs take an hour to comprehend.
23. You account for your tuition as a capital expenditure instead of an expense.
24. You insist that you do some more market research before you and your spouse produce another child.
25. At your last family reunion, you wanted to have an emergency meeting about their brand equity.
26. Your "deliverable" for Sunday evening is clean laundry and paid bills.
27. You use the term "value_added" without falling down laughing.
28. You ask the car salesman if the car comes with a white board and Internet connection.
29. You give constructive feedback to your dog.
Forwarded by Aaron Konstam ---
486 _ The average IQ needed to understand a PC.
State_of_the_art _ Any computer you can't afford.
Obsolete _ Any computer you own.
Microsecond _ The time it takes for your state_of_the_art computer to become obsolete.
G3 _ Apple's new Macs that make you say "Gee, three times faster than the computer I bought for the same price a Microsecond ago."
Syntax Error _ Walking into a computer store and saying, "Hi, I want to buy a computer and money is no object."
Hard Drive _ The sales technique employed by computer salesmen, esp. after a Syntax Error.
GUI _ What your computer becomes after spilling your coffee on it.
Keyboard _ The standard way to generate computer errors.
Mouse _ An advanced input device to make computer errors easier to generate.
Floppy _ The state of your wallet after purchasing a computer.
Portable Computer _ A device invented to force businessmen to work at home, on vacation, and on business trips.
Disk Crash _ A typical computer response to any critical deadline.
Power User _ Anyone who can format a disk from DOS.
System Update _ A quick method of trashing ALL of your software.
Forwarded by Paula
With all the new technology regarding fertility recently, a 65-year-old woman was able to give birth. When she was discharged from the hospital and went home, her relatives came to visit. ''May we see the new baby?" one asked.
"Not yet," said the mother. "I'll make coffee and we can visit for a while first."
Thirty minutes had passed, and another relative asked, "May we see the new baby now?"
"No, not yet," said the mother.
After another few minutes had elapsed, they asked again, "May we see the baby now?"
"No, not yet," replied the mother.
Growing very impatient, they asked, "Well, when can we see the baby?"
"WHEN HE CRIES!" she told them.
"WHEN HE CRIES?" they demanded. "Why do we have to wait until he CRIES?
"BECAUSE, I FORGOT WHERE I PUT HIM, O.K.?"
Forwarded by Dick Haar
A Not-So Politically Correct School
This is the message that the
Pacific Palisades High School (California) staff voted unanimously to
record on their school telephone answering machine. This is the
actual answering machine message for the school. This came about
because they implemented a policy requiring students and parents to be
responsible for their children's absences and missing homework. The
school and teachers are being sued by parents who want their
children's failing grades changed to passing grades - even though
those children were absent 15-30 times during the semester and did
not complete enough schoolwork to pass their classes. The outgoing
Hello! You have reached the automated answering service of your
school. In order to assist you in connecting to the right staff
member, please listen to all the options before making a selection:
· To lie about why your child is absent - Press 1
· To make excuses for why your
child did not do his work- Press 2
· To complain about what we do -
· To swear at staff members - Press
· To ask why you didn't get
information that was already enclosed in your newsletter and several
fliers mailed to you - Press 5
· If you want us to raise your
child - Press 6
· If you want to reach out and
touch, slap or hit someone - Press 7
· To request another teacher, for
the third time this year - Press 8
· To complain about bus
transportation - Press 9
· To complain about school lunches
- Press 0
· If you realize this is the real
world and your child must be accountable and responsible for his/her
own behavior, class work, homework and that it's not the teachers'
fault for your child's lack of effort: Hang up and have a nice day!
· If you want this in Spanish, you must be in the wrong country
Forwarded by the Regens
ABBOTT:� Super Duper computer store. Can I help you?
COSTELLO:� Thanks. I'm setting up an office in my den and I'm thinking about
buying a computer.
COSTELLO:� No, the name's Lou.
ABBOTT:� Your computer?
COSTELLO:� I don't own a computer. I want to buy one.
COSTELLO:� I told you, my name's Lou.
ABBOTT:� What about Windows?
COSTELLO:� Why? Will it get stuffy in here?
ABBOTT:� Do you want a computer with Windows?
COSTELLO:� I don't know. What will I see when I look at the windows?
COSTELLO:� Never mind the windows. I need a computer and software.
ABBOTT:� Software for Windows?
COSTELLO:� No. On the computer! I need something I can use to write
proposals, track expenses and run my business.? What do you have?
COSTELLO:� Yeah, for my office. Can you recommend anything?
ABBOTT:� I just did.
COSTELLO:� You just did what?
ABBOTT:� Recommend something.
COSTELLO:� You recommended something?
COSTELLO:� For my office?
COSTELLO:� OK, what did you recommend for my office?
COSTELLO:� Yes, for my office!
ABBOTT:� I recommend Office with Windows.
COSTELLO:� I already have an office with windows! OK, let's just say I'm
sitting at my computer and I want to type a proposal.? What do I need?
COSTELLO:� What word?
ABBOTT:� Word in Office.
COSTELLO:� The only word in office is office.
ABBOTT:� The Word in Office for Windows.
COSTELLO:� Which word in office for windows?
ABBOTT:� The Word you get when you click the blue "W".
COSTELLO:� I'm going to click your blue "w" if you don't start with some
straight answers.? What about financial bookkeeping? You have anything I can
track my money with?
ABBOT T:� Money.
COSTELLO:� That's right. What do you have?
COSTELLO:� I need money to track my money?
ABBOTT:� It comes bundled with your computer.
COSTELLO:� What's bundled with my computer?
COSTELLO:� Money comes with my computer?
ABBOTT:� Yes. No extra charge.
COSTELLO:� I get a bundle of money with my computer? How much?
ABBOTT:� One copy.
COSTELLO:� Isn't it illegal to copy money?
ABBOTT:� Microsoft gave us a license to copy Money.
COSTELLO:� They can give you a license to copy money?
ABBOTT:� Why not? THEY OWN IT!
???????? (A few days later)
ABBOTT:� Super Duper computer store. Can I help you?
COSTELLO:� How do I turn my computer off?
ABBOTT:� Click on "START".............
Forwarded by Paula
CRABBY OLD MAN....
When an old man died in the geriatric ward of a small hospital near
Tampa, Florida, it was believed that he had nothing left of any value.
Later, when the nurses were going through his meager possessions, they
found this poem. Its quality and content so
impressed the staff that copies were made and distributed to every nurse in
the hospital. One nurse took her copy to Missouri.
The old man's sole
bequest to posterity has since appeared in the Christmas edition of
the News Magazine of the St. Louis Associationfor Mental Health. A
slide presentation has also been made based on his simple, but
eloquent, poem. And this little old man, with nothing left to give
to the world, is now the author of this "anonymous" poem winging
across the Internet.
What do you see nurses? .....What do you see?
What are you thinking......when you're looking at me?
A crabby old man, .....not very wise,
Uncertain of habit .......with faraway eyes?
Who dribbles his food.......and makes no reply.
When you say in a loud voice....."I do wish you'd try!"
Who seems not to notice .....the things that you do.
And forever is losing .............. a sock or shoe?
Who, resisting or not...........lets you do as you will,
With bathing and feeding ....... the long day to fill?
Is that what you're thinking? Is that what you see?
Then open your eyes, nurse......you're not looking at me.
I'll tell you who I am ...... as I sit here so still,
As I do at your bidding, .......as I eat at your will.
I'm a small child of Ten......with a
father and mother,
Brothers and sisters ......who love one another
A young boy of Sixteen ...........with wings on his feet
Dreaming that soon now. ..........a lover he'll meet.
A groom soon at Twenty ........my heart gives a leap.
Remembering, the vows........that I promised to keep.
At Twenty-Five, now .......... I have young of my own.
Who need me to guide ....... and a secure happy home.
A man of Thirty ........ my young now grown fast,
Bound to each other ......... with ties that should last.
At Forty, my young sons ........have grown and are gone,
But my woman's beside me........to see I don't mourn.
At Fifty, once more, .......... babies play 'round my knee,
Again, we know children ........ my loved one and me.
Dark days are upon me .......... my wife
is now dead.
I look at the future .............I shudder with dread.
For my young are all rearing .......young of their own.
And I think of the years...... and the love that I've known.
I'm now an old man.........and nature is cruel.
Tis jest to make old age ......look like a fool.
The body, it crumbles..........grace and vigor, depart.
There is now a stone........where I once had a heart.
But inside this old carcass ...... a
young guy still dwells,
And now and again .........my battered heart swells.
I remember the joys.............. I remember the pain.
And I'm loving and living.......... ...life over again.
I think of the years ...all too few......gone too fast.
And accept the stark fact........that nothing can last.
So open your eyes, people .........open and see..
Not a crabby old man. Look
Forwarded by a Friend
Working people frequently ask retired people what they do to make their days
Well, for example, the other day I went downtown and went into a shop. I was
only in there
for about 5 minutes and when I came out there was a cop writing out a parking
I went up to him and said, "Come on, man, how about giving a retired person a
He ignored me and continued writing the ticket. I called him a "Nazi."
He glared at me and started writing another ticket for having worn tires.
So I called him a "doughnut eating Gestapo."
He finished the second ticket and put it on the windshield with the first.
Then he started writing a third ticket. This went on for about 20 minutes.
The more I abused him, the more tickets he wrote. Personally, I didn't care.
I came downtown on the bus and the car that he was putting the tickets on had
a bumper sticker that said "Hillary in '08."
I try to have a little fun each day now that I'm retired. It's important for
A few from Maxine ---
They hold elections in November, because that's the best month for picking
out a turkey.
I hear you changed your mind at last. What did you do with the diaper?
Pitching a tent is no problem. I pitched mine into the trash years ago.
You're welcome to kiss the cook. Guess where?
I always cook with charcoal. The gas comes later!
It's tourist season. How come we can't shoot them?
Don't let aging get you down. It's hard to get back up.
Butt jiggle is just another way of waving goodbye.
My definition of computer chips is what's left over after the sledge hammer.
If you woke up breathing then congratulations. It means you have another
I think I've reached my sexpiration date.
I'm not saying sixty is old. But I'm thinking it.
Forwarded by Dick Haar
The Three Little Pigs
Three Little Pigs went out to dinner one night. The waiter came and took
their drink order.
"I would like a Sprite," said the first little piggy.
"I would like a Coke," said the second little piggy.
"I want beer, lots and lots of beer," said the third little piggy.
The drinks were brought out and the waiter took their orders for dinner.
"I want a nice big steak," said the first piggy.
"I would like the salad plate," said the second piggy.
"I want beer, lots and lots of beer," said the third little piggy.
The meals were brought out and a while later the waiter approached the table
and asked if the piggies would like any dessert.
"I want a banana split," said the first piggy.
"I want a cheesecake," said the second piggy.
"I want beer, lots and lots of beer," exclaimed the third little piggy.
"Pardon me for asking," said the waiter to the third little piggy,"
But why have you only ordered beer all evening?"
You're gonna LOVE me for this....
The third piggy says -
"Well, somebody has to go 'Wee, wee, wee, all the way home!
Forwarded by Doug Jensen
CHILDREN'S THOUGHTS ON THE SEA- SOOO FUNNY
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 incontinent. (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 tradewinds 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 have been better off eating beans. (William age
8) I like mermaids. They are beautiful, and I like their shiny tails. And how
on earth do mermaids get pregnant? Like, really? (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, and it makes my willy
small. (Kevin age 6)
12) Divers have to be safe when they go under the water. Two divers can't go
down alone, so they have to go down on each other. (Becky age 8)
13) On holidays my Mom went water skiing. She fell off when she was going
very fast. She says she won't do it again because water fired right up her fat
ass. (Jule age 7)
Forwarded by Aaron Konstam
A person who has stopped growing at both ends and is now growing in the
A place where women curl up and dye.
Someone who is fed up with people.
The only animals you eat before they are born and after they are dead.
A body that keeps minutes and wastes hours.
Mud with the juice squeezed out.
Someone who is usually me_deep in conversation.
A person who will never tell a lie if the truth will do more damage.
Cutting money in half without damaging the paper.
A female moth.
An insect that makes you like flies better.
Grape with a sunburn.
Something you tell to one person at a time.
A bunch of bones with the person scraped off.
The pain that drives you to extraction.
One of the greatest labor saving devices of today.
An honest opinion openly expressed.
Something other people have. You have character lines.
Unverified Facts Forwarded by Moe (Maureen)
Some are very questionable, especially the paper folding claim and the duck echo
A dime has 118 ridges around the edge.
A cat has 32 muscles in each ear.
A crocodile cannot stick out its tongue.
A dragonfly has a life span of 24 hours.
A goldfish has a memory span of three seconds.
A "jiffy" is an actual unit of time for 1/100th of a second.
A shark is the only fish that can blink with both eyes.
A snail can sleep for three years.
Al Capone's business card said he was a used furniture dealer.
All 50 states are listed across the top of the Lincoln Memorial on the back
of the $5 bill.
Almonds are a member of the peach family.
An ostrich's eye is bigger than its brain.
Babies are born without kneecaps. They don't appear until the child reaches 2
to 6 years of age.
Butterflies taste with their feet.
Cats have over one hundred vocal sounds. Dogs only have about 10.
"Dreamt" is the only English word that ends in the letters "mt".
February 1865 is the only month in recorded history not to have a full moon.
In the last 4,000 years, no new animals have been domesticated.
If the population of China walked past you, in single file, the line would
never end because of the rate of reproduction.
If you are an average American, in your whole life, you will spend an average
of 6 months waiting at red lights.
It's impossible to sneeze with your eyes open.
Leonardo Da Vinci invented the scissors.
Maine is ! the only state whose name is just one syllable.
No word in the English language rhymes with month, orange, silver, or purple.
On a Canadian two dollar bill, the flag flying over the Parliament building
is an American flag.
Our eyes are always the same size from birth, but our nose and ears never
Peanuts are one of the ingredients of dynamite.
Rubber bands last longer when refrigerated.
"Stewardesses" is the longest word typed with only the left hand and
"lollipop" with your right.
The average person's left hand does 56% of the typing.
The cruise liner, QE2, moves only six inches for each gallon of diesel that
The microwave was invented after a researcher walked by a radar tube and a
chocolate bar melted in his pocket.
The sentence: "The quick brown fox jumps over the lazy dog" uses every letter
of the alphabet.
The winter of 1932 was so cold that Niagara Falls froze completely solid.
The words 'racecar,' 'kayak' and 'level' are the same whether they are read
left to right or right to left (palindromes).
There are 293 ways to make change for a dollar.
There are more chickens than people in the world.
There are only four words in the English language which end in "dous":
tremendous, horrendous, stupendous, and hazardous
There are two words in the English language that have all five vowels in
order: "abstemious" and "facetious."
There's no Betty Rubble in the Flintstones Chewables Vitamins.
Tigers have striped skin, not just striped fur.
TYPEWRITER is the longest word that can be made using the letters only on one
row of the keyboard.
Winston Churchill was born in a ladies' room during a dance.
Women blink nearly twice as much as men.
Your stomach has to produce a new layer of mucus every two weeks; otherwise
it will digest itself
The liquid inside young coconuts can be used as a substitute for blood
No piece of paper can be folded in half more than seven (7) times.
Donkeys kill more people annually than plane crashes.
You burn more calories sleeping than you do watching television.
Oak trees do not produce acorns until they are fifty (50) years of age or
The first product to have a bar code was Wrigley's gum.
The king of hearts is the only king without a mustache.
American Airlines saved $40,000 in 1987 by eliminating one (1) olive from
each salad served in first-class.
Venus is the only planet that rotates clockwise.
Apples, not caffeine, are more efficient at waking you up in the morning.
Most dust particles in your house are made from dead skin.
The first owner of the Marlboro Company died of lung cancer. So did the first
Walt Disney was afraid of mice. Pearls melt in vinegar.
The three most valuable brand names on earth: Marlboro, Coca Cola, and
Budweiser, in that order.
It is possible to lead a cow upstairs...but not downstairs.
A duck's quack doesn't echo, and no one knows why.
Dentists have recommended that a toothbrush be kept at least six (6) feet
away from a toilet to avoid airborne particles resulting from the flush.
Richard Millhouse Nixon was the first U.S. president whose name contains all
the letters from the word "criminal." The second ? William Jefferson Clinton
(Please don't tell me you're SURPRISED!)
And the best for last..... Turtles can breathe through their butts. (I know
some people like that; don't YOU?) Now you know everything there is to know.
How did we survive till now without knowing all these things?
Forwarded by Paula
First Day With the Hook
A pirate walked into a bar and the bartender said, "Hey, I haven't seen you
in a while. What happened? You look terrible." "What do you mean?" said the
pirate, "I feel fine."
"What about the wooden leg? You didn't have that before."
"Well, we were in a battle and I got hit with a cannon ball, but I'm fine
"Well, o.k. but what about that hook? What happened to your hand?"
"We were in another battle. I boarded a ship and got into a sword fight. My
hand was cut off. I got fitted with a hook. I'm fine, really."
"What about that eye patch?'
"Oh, one day we were at sea and a flock of birds flew over. I looked up and
one of them crapped in my eye."
"You're kidding," said the bartender. "you couldn't lose an eye just from
some bird crap."
"It was my first day with the hook."
Forwarded by Moe
Why We Love Children
1. A nursery school pupil told his teacher he'd found a cat, but it was dead.
"How do you know that the cat was dead?" she asked her pupil. "Because I pissed
in its ear and it didn't move," answered the child innocently. "You did WHAT?"
the teacher exclaimed in surprise. "You know," explained the boy, "I leaned over
and went 'Pssst' and it didn't move"
2. One summer evening during a violent thunderstorm a mother was tucking her
son into bed. She was about to turn off the light when he asked with a tremor in
his voice, "Mummy, will you sleep with me tonight?" The mother smiled and gave
him a reassuring hug. "I can't dear," she said. "I have to sleep in Daddy's
room." A long silence was broken at last by his shaky little voice: "The big
3. When I was six months pregnant with my third child, my three year old came
into the room when I was just getting ready to get into the shower. She said,
"Mummy, you are getting fat!" I replied, "Yes, honey, remember Mummy has a baby
growing in her tummy." "I know," she replied, but what's growing in your bum?"
4. A little boy was doing his math homework. He said to himself, "Two plus
five, that son of a bitch is seven. Three plus six, that son of a bitch is
nine...." His mother heard what he was saying and gasped, "What are you doing?"
The little boy answered, "I'm doing my math homework, Mum." "And this is how
your teacher taught you to do it?" the mother asked "Yes," he answered.
Infuriated, the mother asked the teacher the next day, "What are you teaching my
son in math?" The teacher replied, "Right now, we are learning addition." The
mother asked, "And are you teaching them to say two plus two, that son of a
bitch is four?" After the teacher stopped laughing, she answered, "What I taught
them was, two plus two, THE SUM OF WHICH, is four."
5. One day the first grade teacher was reading the story of Chicken Little to
her class. She came to the part of the story where Chicken Little tried to warn
the farmer. She read, ".... and so Chicken Little went up to the farmer and
said, "The sky is falling, the sky is falling!" The teacher paused then asked
the class, "And what do you think that farmer said?" One little girl raised her
hand and said, "I think he said: 'Holy Shit! A talking chicken!'"
6. A little girl asked her mother, "Can I go outside and play with the boys?"
Her mother replied, "No, you can't play with the boys, they're too rough." The
little girl thought about it for a few moments and asked, If I can find a smooth
one, can I play with him?"
7. A little girl goes to the barber shop with her father. She stands next to
the barber chair, while her dad gets his hair cut, eating a snack cake The
barber says to her, "Sweetheart, you're gonna get hair on your muffin." She
says, "Yes, I know, and I'm gonna get boobs too."
Forwarded by Dick Haar
Some comments which were reportedly made in 1955
- If things keep going the way they are it's going to be impossible to buy a
weeks worth of groceries for $20.
- Have you seen the sticker prices on the new cars? It won't be long until
$2,000 will only buy a used car.
- If cigarettes keep going up, I'm going to quit! A quarter a pack is just
- Did you hear the postoffice wants to chare a dime to mail a letter?
- If they raise the minimum wage to $1 no one will be able to afford outside
- When I started driving who would have thought that gas could cost $.29?
- I read the other day where some scientists think it will be possible to put
a man on the moon by the end of the century.
- I'm afraid to send the kids to the movies. Since the let Gable get away
with cussing, almost all movies now have it.
- Did you see where some baseball player just signed a contract for $75,000
just to play baseball. It won't surprise me if someday they make more money than
- Too bad things are so tough. I see where some married women are having to
work to make ends meet.
- I bet the VW is going to open the door to a whole lot more foreign
- Thank goodness I won't live to see the day that the government takes half
our income in taxes. I sometimes wonder if we're electing the best people to
- If they think I'll pay $1 for a haircut, forget it!
- No one can afford to get sick anymore. $35 a day for a hospital room is
ONLY A HALF A CENTURY AGO - DOESN'T TIME FLY?
Forwarded by Paula
A cardiologist died and was given an elaborate funeral. A huge heart covered in flowers stood behind the casket during the service. Following the eulogy, the heart opened and the casket rolled inside. The heart then closed, sealing the doctor in the beautiful heart forever. At that point, one of the mourners burst into laughter. When all eyes stared at him, he said, "I'm sorry, I was just thinking of my own funeral........I'm a gynecologist."
The proctologist fainted.
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Professor Robert E. Jensen (Bob)
190 Sunset Hill Road
Sugar Hill, NH 03586