Aaron Beam & Weston Smith

If you weren’t there for yesterday’s roundtable with Aaron Beam & Weston Smith, I strongly urge you to view the archived copy of it.  I was fascinated by their rendition of the Health South fraud (both CFO’s there).  How many journal entries do you think it took each quarter to manage the books.  You’ll be [...] Read more > >

Fix It: Roundtable with HealthSouth's Former CFO, Aaron Beam

If HRC’s actual results fell short of expectations, Scrushy would tell HRC’s management to “fix it” by recording false earnings on HRC’s accounting records to make up the shortfall. – SEC vs. HealthSouth Corporation[HRC] You look back and think, ‘What was I thinking? Why didn’t I just do the right thing?’ But when you’re caught [...] Read more > >

More on Jim Leisenring's session

I was thinking about Jim’s comments about research helping standard setters.  A long time ago there was some debate on the ability of archival researchers to do ex ante research … some back and forth on that point.  I’m not an archival person so I don’t think about whether they can do ex ante or not, and [...] Read more > >

Teaching DIT's this term? Did you know??

From a Credit Suisse First Boston report From a Credit Suisse First Boston report By David Zion, Amit Varshney, and Christopher Cornett Spinning Losses into Gold November 12, 2009 Last Friday President Obama signed into law the Worker, Homeownership and Business Assistance Act of 2009, which among other things contains an amendment that would temporarily [...] Read more > >

Leisenring: IFRS 9 Abuse "Inevitable"

Somehow I ended up on the mailing list of Risk.Net, which hails itself as “The world’s leading monthly magazine dedicated to the risk management and derivatives industries.”  In this week’s top story, headlined “Abuse of revised IFRS standards “inevitable” – IASB’s Leisenring“, Jim is quoted as expressing concern about using management intent to determine how [...] Read more > >

I'm in APIC hell.

I have a comment and a question for all of you. Comment, I think the credit to APIC on a non-qualified employee stock option plan is crazy.  I understand the logic that the reason why we are crediting APIC is because our GAAP compensation expense is less than the tax deduction, so to credit ITexpense [...] Read more > >

The Financial Instruments Reporting and Convergence Alliance and This Week's Joint FASB-IASB Meetings

I learned today of a consortium of financial industry groups called “The Financial Instruments Reporting and Convergence Alliance” (FIRCA).  The groups who joined together to form FIRCA include: American Council of Life Insurers, Commercial Mortgage Securities Association, Council of Federal Home Loan Banks, Group of North American Insurance Enterprises, Mortgage Bankers Association, Property Casualty Insurance [...] Read more > >

Finance Professors Won't Bet on Market Ineffienciency

Read this. Read more > >

Much of What We Publish Is Wrong…Even More, If It's About Fair Value

That would be the implication of this research study, which makes a fairly simple statistical point.  We already know that papers are more likely to be published if they include a positive result (they reject the null).  Less politically correct to admit is that when the data gets messy, researchers tend to make a lot [...] Read more > >

Yes, Virginia: Recognized Information is Viewed as More Reliable

I presented FASRI’s report on Financial Statement Presentation to the IASB (last Thursday) and to the FASB (yesterday).  The report is based on an experiment conducted with Frank Hodge, Pat Hopkins and Kristi Rennekamp.  Several Board members seemed pleasantly surprised by the ability of the research to address the issues being deliberated, and are clearly [...] Read more > >