First, I hadn’t realized that the Frank-Dodd Act created an Office of Financial Research (OFR) within the Department of the Treasury. Aside from the fact that they are not limited to the typical government pay scale, I was interested to learn that Congress authorized an academic fellowship program as part of the OFR (Sec. 152 (i)). How many other academic fellowships among financial regulators can say they were created by an act of congress?

Second, I found that the GASB now has a support fee assessed against members of the national securities association (Sec. 978). I imagine this will make the GASB feel about as excited as the SOX support fees made the FASB feel–very excited. No longer can constituents threaten to withhold donations or other necessary support when a standard doesn’t suit them.

Third, I discovered that an audit firm that relies on a foreign audit firm’s work to conduct its audit must secure “the agreement of any foreign public accounting firm to [provide its workpapers], as a condition of the reliance by the registered public accounting firm on the work of that foreign public accounting firm” (Sec. 929J). I guess the PCAOB was getting tired of pursuing foreign audit firm workpapers and getting snubbed. This should take care of that little problem.

Fourth, nationally recognized statistical rating organizations (i.e., credit rating agencies) are required by law to include among a rating’s quantitative disclosures that indicate the “5 assumptions made in the ratings process that, without accounting for any other factor, would have the greatest impact on a rating if the assumptions were proven false or inaccurate” (Sec 932). I imagine these disclosures could be pretty useful, if for nothing else than a great discussion on uncertainties in a financial statement analysis class or a finance class.

Last of all (for now), the Financial Stability Oversight Council (Sec. 112) has authority to “monitor domestic and international financial regulatory proposals and developments, including insurance and accounting issues, and to advise Congress and make recommendations in such areas that will enhance the integrity, efficiency, competitiveness, and stability of the US financial markets.” I wonder how the creation of this “advisory” mechanism will influence the already pretty powerful lobbying mechanisms that companies use to defeat unwanted accounting proposals. I guess we’ll have to wait to see.

I must say that I didn’t find this Act nearly as fun to read as the Sarbanes-Oxley Act, but I’m sure there’s just more than I could swallow in one or even fifty readings. But I take comfort in knowing I’m with the majority of congress who probably haven’t had a chance to read it yet either.

No Top Financial Bloggers Hail From Accounting Departments....Yet

The Wall Street Journal has an interesting article about the top economics blogs.

If you don’t read many blogs, you should definitely read the article and navigate along to the websites.  They even provide a listing of 30 recommended econ/finance blogs.

That said, I would like to emphasize that the FASRI blog has a goal quite different from these other sites.  They seek a popular audience of financially-minded readers from the broader public.  In contrast, FASRI is really intended to reach the far narrower audience of academic researchers and standard setters, with the occasional practitioner thown in.

Still, reading these blogs will give you a sense of what new media can mean to academics, with quite varying styles.

This point in particular gets at one of the more uncomfortable parts of blogging for the academic:

As always, there’s a trade-off between quantity and quality. Should you write more, with lower quality, or less, with higher quality? Fortunately, the blogosphere has been around for long enough that we have a simple empirical answer to this question: given the choice, go for quantity over quality. You might not like it — I certainly don’t — but I defy you to name a really good blogger who doesn’t blog frequently.

On the other hand, this paragraph strikes me as a reason blogging is natural for an academic already actively engaged with the research literature:

Another necessary quality of any decent conversationalist is that he or she be a good listener. The same goes for blogging — to a very large extent, blogging isn’t writing, it’s reading. I have hundreds of blogs in my RSS reader, I use Google Alerts and other tools to let me know what other people are saying about me, I spend a lot of time reading my comments, and of course I read lots of other blogs avidly. Blogging, certainly the way I do it, is to a large degree about synthesizing information — connecting this news article here to that blog entry there, putting things into context, and making connections. And so although I produce a lot of content, I consume orders of magnitude more.

I read papers and think about them in the ordinary course of my job as a researchers.  Writing some of my thoughts doesn’t take that much extra time.  Just like I came across Mr. Salmon’s article in the ordinary course of reading news.  Writing this post took about 5 minutes.

If you are interested in adding your voice to FASRI, let me know!

Hey, thanks for sending this, and good luck with the blog.  I am glad to put you on the blog roll, and I would love to write a post announcing your new blog.  Are you willing to do this in the form of a text interview?  Here are the questions I would like on-the-record (copy and pastable) answers to.

RJB:  Congratulations on starting a blog.  Blogs are unusual for academics, and almost non-existent for accounting academics.  What made you decide to do this?

AARON Z. We meet together frequently and discuss current events in fraud.  We feel that our discussions are very useful in helping us to better understand fraud.  We decided to start FraudBytes because we wanted to create a forum where all can benefit by participating in the discussion of fraud.  We plan to focus on corporate governance and external auditing as a deterrent to financial statement fraud.

RJB: Who is your target audience?  Other academics?  Readers of the popular business press?

AZ:  We hope that our blog can be a resource to both academics and practitioners who have an interest in preventing and detecting financial statement fraud.

RJB:  Will you be bringing on other authors?

AZ:  We would like to feature occasional guest authors who are experts in fraud detection and prevention.  If we have guest authors who would like to contribute regularly to our blog, we would consider inviting them to be permanent authors.

RJB: Some blogs focus on just getting the message out, while others work hard to get rich comment streams and lots of user input.  Which direction will you go?  (If the latter, how will you get accounting researchers to participate.

AZ: Our focus is mainly to provide good content that is useful for those who want to keep current on fraud.  We hope for comments but don’t have specific plans to encourage participation.

RJB: We are both accountants, so eventually our conversation will turn toward metrics for performance evaluation.  Do you have specific objectives for your blog?  Have you thought about how are you going to measure “success”?

AZ: We hope that individuals who are introduced to our blog will keep coming back and we hope to maximize our exposure to individuals interested in fraud prevention and detection.  We are using Google Analytics to measure our blog exposure and visitor loyalty.

RJB:  You’ve been reading the FASRI blog.  Any advice for us?

AZ:  We find the posts to the FASRI blog to be very interesting, however, we would love to see more frequent posts.

Of course…it’s all about the content.  Maintaining an active blog is a lot of work, but ieach individual post doesn’t take much time.  If you would like to see more frequent posts on FASRI, help us out.  One post every other week adds up, when we get a lot of hands (and minds) on board.  Climb on!