The SEC Auditor

The Worst Part of Busy Season

By Joel Ungar on March 20th, 2012

Ask me “what is the worst part of busy season” and I’ll tell you exactly what it is. My firm and my clients get the best part of me for 3 1/2 months solid. By the time I get home after 12 – 13 hours at the office, there is nothing left for my family.

I can take the fatigue. I can take not taking good care of myself. It really irritates me that when I get home to the most important people in my life I’m totally useless. I can’t pay attention to conversations. I plop on the couch and watch TV for an hour or so, go to bed, and repeat it the next day.

Idea for the AICPA: Drop initiatives like “Feed the Pig” and get serious on improving the quality of life for CPAs in public practice.

How Not to Make a Connection on LinkedIn Part III

By Joel Ungar on December 13th, 2011

Some LinkedIn users, unfortunately, are finding new ways to abuse the system. The latest instance of this, in the form of a connectioninvitation, was more like a cold call than antying else:

Andrea has indicated you are a person they’ve done business with at QLT Recruiters

Hi Joel, Your profile caught my attention today. We have been retained by a profitable consulting company that provides professional services in the not-for-profit vertical. We are searching for a CFO for a client facing role. Please contact me at 555.555.5555 to discuss this. Regards, Andrea

(All names changed to protect the guilty.)

You’ve guessed it – I don’t know Andrea, and I’ve never done business with her or her company.

At least this one starts nicely – “Your profile caught my attention today” was nice. But after that it turns totally to her and what she wants. Apparently not much of my profile really caught her attention, as there is nothing in it that suggests I work with non-profits (I don’t). This is once again equivalent to the person who is “me me me” at a networking event.

I wrote Andrea: Your invitation says we’ve done business together but I’m pretty sure I’ve never met you and I know I’ve never done business with QLT.

Her response:

I am sorry that I chose that option for how we were to connect. I wanted to reach out to you to network regarding an opportunity I am working on for a CFO/Controller opportunity located in Plymouth, MI. Please let me know if you would like to speak further or learn more details about the position. I can be reached at 555.555.5555.

At least this now makes a little sense – Plymouth is in metro Detroit; in fact I drove through it this morning going to the dentist.

There are other ways to reach out to someone – seek an introduction through someone I know. Send an “InMail” to me.

My advice: don’t start a relationship with a falsehood.

Social Media 2 comments

How Not to Make a Connection on LinkedIn Part II

By Joel Ungar on November 7th, 2011

You know those LinkedIn connection invitations:

I’d like to add you to my professional network. – Joan (made up name).

Do I know Joan. No. So why should I accept?

I think I’ve written before my rule on LinkedIn connection requests from the Detroit area: If I don’t know them, I meet them first, then I’ll accept.

So I wrote back to Joan:

Hi Joan,

Thanks for your invitation. I have a rule when it comes to people from the Detroit area that I don’t know who send me a connection invitation. I don’t accept them until I’ve met them. So if you’d like to meet, odds are about 99 44/100% I’ll accept after.

That was a week and a half ago. Today I get the following reply:

Thank you so much for the response and I would love to meet with you to hear more about Foundation Company. I am a Commercial Relationship Manager with Acme Bank (made up name) and would like to tell you a little more about Acme Bank along with offering my assistance to you and your clients for your commercial lending and banking needs. My home office is in Troy, where are you located? Would you, by chance, have a few moments available next week?

What’s wrong with this? For starters, I don’t work for “Foundation Company.” If you look at my LinkedIn profile, you’ll see I used to work for Michigan Foundation Company. I left there eight years ago. I started my firm after I left Michigan Foundation. ”Joan” clearly hasn’t taken time to learn who I am, or anything about my practice. The fact is that while there is nothing wrong with a Commercial Relationship Manager wanting to meet CPAs, I’m not the best choice. Our practice is very niche focused, and our clients generally aren’t in need of a local bank.

If you want to connect with me, I’m usually more than willing. But not when you put this little effort into it. I’m hitting Ignore.

But I do thank Joan for giving me a topic for a good blog post.

FASB 1 comment

Latest Lease Accounting Proposal Still Leaves Me Not Happy

By Joel Ungar on November 2nd, 2011

The Financial Accounting Standards Board (“FASB”) working in concert with the International Accounting Standards Board (“IASB”) are bound and determined to issue a new lease accounting standard that they both can live with. Unfortunately, making lease accounting standards easier doesn’t seem to an objective.

I’ve long had an issue with the part of the current standard that requires rent expense to be flat-lined over the length of the lease term. This does not reflect the economic reality of the lease and leads to complications in accounting and reporting. The part I especially don’t care for is that say you have a 10 year lease that flat-lines at $50,000 a year. At lease expiration, you enter into a new 10 year lease that flat-lines at $100,000 a year. Rent expense in year 10 of the old lease is $50,000 then the next year with the new lease your rent expense is $100,000. That just doesn’t make sense to me. And it doesn’t reflect the cash flows.

The latest proposal does back off on some aspects of previous proposals. Instead of the flat-line approach, a recent CFO.com article notes that the proposal favors “a system requiring companies to front-load their rent expense on the income statement by splitting it into an amortization expense and an interest expense.”

Bad idea. This doesn’t reflect the economic reality at all. The CFO.com article suggests that users would prefer retaining the current, flat-line approach. I think they should go one step further and have it more closely reflect the cash flows. Furthermore, the proposed standard brings more subjectivity into the process, and along with it abuse.

Current lease accounting rules are outdated and too easily gamed. I’m hoping the FASB and IASB can come up with something better and that is not more complicated than the current rules.

the proposed standard would require companies to front-load their rent expense on their income statement by splitting into an amortization expense and

FASB 1 comment

The Accounting Onion – One of my Favorite Accounting Blogs

By Joel Ungar on October 31st, 2011

I’ve never met Tom Sellings, an accounting PhD and consultant to numerous public companies, but I feel like I’ve gotten to know him from reading his blog, The Accounting Onion. Tom doesn’t mince words, a trait I admire and don’t always succeed at achieving.

Tom has been particularly focal on the push by the international community to get the US to adopt IFRS (International Financial Reporting Standards). The SEC has been pushing “condorsement”, an approach where essentially one by one the US starts adopting aspects of IFRS. I’m not going to try to get into all of the details here, but Sellings is against it, and he’s got some very good arguments. His latest blog post, More SEC Reports on IFRS Coming: Will they be Genuine Analysis or Just More Dithering? is a good example of his views.

I am not enthused about the prospect of IFRS coming to the US. The whole thing seems like a hostile takeover to me. I’ve talked with accountants in other countries, and they aren’t exactly thrilled with IFRS. I’m not saying US GAAP is perfect, but who is to say that IFRS is better than US GAAP?

Read and subscribe to Tom Selling’s blog. Well worth the read.

FASB No comments yet

CFO.com: Finance Execs Cheer Goodwill Shortcut

By Joel Ungar on October 31st, 2011

Just read the CFO.com article on finance executives plans to adopt the new goodwill impairment shortcuts. The key point as to how much they are cheering:

Sixty-nine percent of those working for private companies and 81% at public companies expect their employers to take advantage of the option for some or all of their reporting units.

I’m surprised the percentages aren’t higher, especially at private companies. The goodwill impairment rules have been incredibly complex, confusing preparers, auditors, and users of financial statements. FASB has a history of replacing or changing standards by giving us even harder to understand rules; this is one time where they actually made it easier.

My take: Read the rules carefully and adopt them. However, as the article notes, caution is advised if you have narrowly passed the tests under the old rules.

Off topic No comments yet

18 months

By Joel Ungar on October 27th, 2011

Life has certain defining moments. Marriage, kids, death of my mother were all big events. I think the major one of my adult life though occurred March 24, 2010 when my urologist told me I had prostate cancer.

The “adventure” started about six weeks earlier at a bathroom in LAX when I noticed some blood; it continued for two days. Went to my doctor, who sent me to the urologist, who told me my PSA was 3.1 (over 2.5 was the baseline for concern). He then did a biopsy and they found cancer.

I was lucky. It was found very early. I was Stage 1 and my Gleason score was 6, about as low as that can go. My prostate was removed April 27, 2010. I was off work for two weeks and it took another two months to last a full day at work. I was sore for a long time, and there are other lingering side effects. 8 weeks later my PSA was zero, and it has remained there since. I’m effectively cured.

I was lucky. All in all, I’d rather have not gone through the whole experience. I live with the memory of it every day. That was why it was such a defining moment. My life was one way before that trip to the bathroom at LAX, and then it was changed forever.

I’m thankful for all of the support I got from my wife, kids, family, and friends.

Am I a better person? I don’t know. I just try every day to be better.

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The SEC Auditor

Commentary on PCAOB and FASB developments, and social media too.

The Worst Part of Busy Season

Latest Lease Accounting Proposal Still Leaves Me Not Happy

The Accounting Onion – One of my Favorite Accounting Blogs

CFO.com: Finance Execs Cheer Goodwill Shortcut

18 months

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