July 17, 2018

Accounting News Roundup: Estimates, ‘Rough’ Balance Sheets, and Repeat Embezzlers | 10.09.17

accounting news private jet

Estimates

Elon Musk is a big thinker, a visionary, perhaps a bit insane, but that’s why people love him. He sees the world’s potential and wants to make that potential a reality, not getting too hung up on details like sales estimates, production guidance, etc. The Wall Street Journal pointed out over the weekend, however, that “estimate” is a loose term when it comes to Tesla:

The Wall Street Journal reported Friday that Tesla has recently been building major portions of the Model 3 by hand. This comes less than a week after Tesla announced it fell short of its third-quarter production guidance of 1,500 cars by more than 80%.

Citing another example, Musk said back in July that customer deposits for 500,000 Model 3s had been received. Later on a conference call, he said it as 455,000, calling the previous number “just a guess.”

I imagine Tesla’s accounting department to either the most fun and magical place to work, sorta like Willy Wonka’s Chocolate Factory but with spreadsheets instead of candy, or the stuff of accountants’ nightmares. If you have personal experience, we’d love to hear about it.

SEC enforcement

I’m overgeneralizing here, but lawyers getting involved in the nuts and bolts of accounting seems like a bad idea:

The Securities and Exchange Commission today announced that it filed fraud charges against an attorney Marc A. Celello based on his alleged participation in a Ponzi scheme.

The SEC’s complaint, filed in federal court in Atlanta on October 5, 2017, alleges that Celello who, along with Canton, Ga.-resident James A. Torchia, was a partner in Credit Nation Capital LLC and served as general counsel for the underlying entities, helped orchestrate a Ponzi scheme involving unregistered promissory notes which falsely promised a 9% return. He allegedly prepared offering memoranda and directed sales and marketing representatives to lie to investors that the promissory notes were secure investments “backed by hard assets dollar for dollar.” The complaint further alleges that Celello knew that Credit Nation Capital was insolvent and directed an employee to fabricate a fraudulent balance sheet that made it appear to be profitable.

According to the complaint, Celello instructed this employee to create a “rough balance sheet” which leads me to suspect that other phrasing like “make it work” and “plug the numbers” might have been thrown around.

Accountants behaving badly

Norma Jean Adams (aka Norma Jean LaMantia) pleaded guilty last week to stealing over $160,000 from the School Nutrition Association of Iowa from 2010 through 2016. This was not her first rodeo, however:

In March 2003, Adams pleaded guilty in Rock Island County Circuit Court to one count of theft of more than $10,000 but less than $100,000, a Class 2 felony under Illinois law, according to circuit court electronic records.

She had been working for the public television station WQPT at that time.

Is embezzlement a scarlet letter for an accountant? That’s a tough one. You’d certainly think twice about hiring an accountant whose Google results include taking their employer’s money. Still, I can’t imagine that the School Nutrition Association of Iowa is beating off accounting talent with a stick. Pros and cons, I guess.

Previously, on Going Concern…

Megan Lewczyk wrote about the data breach at Deloitte.

Also, if you’re in Atlanta on October 18th, come hear Going Concern people yak about the gig economy. More details and RSVP here.

In other news:

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Accounting News Roundup | 01.21.10

How to find the “best and brightest” [CPA Success]
This may be a better topic for the friendly HR professional but figuring out who these future accounting rock stars are before they show up on their first day is “more art than science”, as Tom Hood notes.
Popular to some old-school thought, GPA does not always indicate who’s going to dominate in the real world and “soft skills” — besides being a terrible term — are in more demand than ever.
Help The The American Red Cross of Greater Chicago Help Haiti [Re: The Auditors]
The American Red Cross of Greater Chicago is having a drive today and since Francine’s friend is the CFO, we’ll be glad pass around the news:

One of my oldest and dearest friends, Guillermo Becerra, is the CFO of the American Red Cross of Greater Chicago. I asked him how I could help him, and the Red Cross, during what must be an incredibly busy time post-Haiti earthquake.


“The Chicagoland community will come together on Thursday, January 21 to give to the American Red Cross as we help the people of Haiti recover from the catastrophic earthquake that devastated their country last week.
The Chicago Helps Haiti media relief drive begins at 5 a.m. and lasts until 11 p.m. Nearly every TV and radio station in our area will be promoting this fundraising effort throughout the day. You can help too, by giving via phone or online, and sharing your thoughts here, on Facebook or Twitter, and by asking others to give.
To give from 5 a.m. to 11 p.m. CALL 1 (877) 565-5000 or visit www.chicagoredcross.org/haiti

Plus, we’re guessing that if you give, your 2009 tax return isn’t much of a concern.
If Your Password Is 123456, Just Make It HackMe [NYT]
The Times is concerned that you have a shitty password which puts you at a huge risk of being hacked by someone sitting in their parents’ basement.

Imperva found that nearly 1 percent of the 32 million people it studied had used “123456” as a password. The second-most-popular password was “12345.” Others in the top 20 included “qwerty,” “abc123” and “princess.”

You know who you are, ye with stupid passwords. Also, don’t even think of changing it to “654321” because that drops in at #19.

Accounting News Roundup: Haiti Relief Passes Senate; Accounting Job Surge? CPAs Basically Control People’s Lives | 01.22.10

Senate votes for faster tax breaks for Haiti gifts [WaPo]
As expected, the U.S. Senate unanimously passed legislation yesterday that allows taxpayers to deduct donations made for Haiti relief efforts. You have until the end of February to donate so that it may be included on your 2009 return.

Maybe it’s bad legislation but we’ve been over that.

CPA Jobs Set for Surge. But When? [CPA Trendlines]
That’s the question, isn’t it? Rick Telberg, who has done a great job of tracking the Bureau of Labor Statistics on accountants, points out that while the latest BLS forecasts a 22% increase (279,400 jobs) by 2018, there’s no indication that it’s happening now:

[M]any tax, accounting and finance professionals are still slogging through the Great Recession. The Association for Financial Professionals, for instance, reported that about one in four respondents say their organizations will contract in 2010. At the same time, a PricewaterhouseCoopers survey of private companies found 43 percent of CEOs and CFOs still budgeting no expansion over the next 12 months to 18 months. The data just seem to reinforce economic uncertainties and a weak outlook.


The BLS is looking past the past the recession for the jump in opportunities but just when the hell will that be? Just because the economy isn’t contracting currently, doesn’t mean it won’t in the future and this “recovery” has been tepid at best.

Theismann to CPAs: You Are the Conscience of America [Web CPA]
Joe Theismann gets it. He knows that without all of you out there in CPA land, your clients don’t stand a chance. They’d be finished. Finished!

“You’re the conscience of America,” Theismann told conference-goers. “You are the survivors in tough times. With accountants, I’m not looking for someone to file taxes and do my financials. I can do that myself online. In your position you can basically control people’s lives.”

So get out there and control somebody’s life. Joe Theismann is expecting it.