June 24, 2018

Accounting News Roundup: Standardizing Non-GAAP and Fraud Takes No Vacations | 07.05.16

Non-GAAP worries

I spent the better part of two weeks away, but I see that people worrying about non-GAAP accounting never take a break. This morning, we have an article that focuses on the troublesome issue of defining what a non-GAAP metric is:

[T]here is no accepted standard for what CFOs should add or exclude to calculate non-GAAP figures. This means there’s no apples-to-apples comparison between different companies.

CFOs and accountants also frequently get stumped on whether something is a non-GAAP figure. For example, Rockwell Collins Inc. combined the income of two business segments — both are GAAP measures — to show investors the impact of its restructuring efforts. But the resulting figure was judged to be a non-GAAP metric.

“There’s no adjustment involved, it’s just GAAP inputs,” said CFO Patrick Allen.

It seems kinda strange to me that people are concerned that "there's no apples-to-apples comparison between different companies," because we have one — it's GAAP! But now it sounds like people want to another set of comparable standards for non-GAAP accounting? If that were done, would that create a set of GAAP for non-GAAP measures? And if there were standards for adjustments to GAAP, would some companies want to make adjustments to the adjustments? Would those be non-non-GAAP measures? My main concern is that this could all get very confusing very quickly.

Accountants behaving badly

Committing fraud is hard work, which means little time for vacations. Besides, someone might discover what you're up to while you're away. A recent example features Gary Tiffany II, an accountant and office manager for an investment advisor who allegedly carried out a scheme from June 2010 to July 2015:

During that time, law enforcement officials alleged that Tiffany obtained a total of more than $3.38 million from the company by wiring funds from its accounts to his personal accounts and forging checks from the company’s accounts payable to himself.

Tiffany allegedly concealed the payments by, among other things, making false entries in the company’s electronic accounting system and by manipulating the company’s bank statements to remove references to wire transfers he had made into his personal accounts.

I'd be willing to bet that Tiffany took no vacation during that time. The company only discovered the fraud after putting him on a permanent vacation (i.e. downsizing).

Then this story got me thinking something silly — what if Americans' vacation aversion is being driven by fraud? I mean, we all know it's really just people who can't get over themselves and don't trust colleagues to do right by them while they're away. But I like the idea that we're all too busy committing fraud to take a vacation, even if it is slightly ludicrous. 

Elsewhere in bad accountants: 'The Little Couple' Producer Sues Ex-Accountant for Embezzlement

Previously, on Going Concern…

Thanks to the contributors who pitched in while I was away: Bryce Sanders, Greg Kyte, Leona May and Megan Lewczyk. Open Items was busy too, including: Will the IRS lose its battle against weed sellers?

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.