Jim Ulvog

Time to start paying attention to Ernst and the collapse of Lehman

The New York AG has sued Ernst & Young over its role in the collapse of Lehman Brothers.  Probably a good time for those of us CPAs who are far removed from the Big 4 world to start paying attention.  The article in the Wall Street Journal here is a good place to start.  The articles I’ve read at the WSJ and elsewhere are starting to have those “where were the auditors” type of questions.  I know you don’t have enough things to do, but might be worth reading a few articles on point.

What in the world are presumptively mandatory and unconditional requirements? And why does SSARS 19 talk about should and must?

What in the world are unconditional requirements and presumptively mandatory requirements?

If you provide audits to your clients, you know those terms.  If you don’t deal with audits in your firm, these are two very weird terms in the SSARSs world, newly introduced by SSARS 19These phrases have been around since SSARS 16, which was effective December 2007.  The impact hadn’t been that large because there was only SSARS 17 and 18.  These two phrases are lots more important since they show up in SSARS 19 quite frequently.

How do you present complex data? Look at these visualizations

(cross post from www.ulvog.wordpress.com)

Check out how to present multiple pieces of data from every country on the planet over a 40 year trend in such a way that anyone can get your point.  Professor Hans Rosling has a way of showing extremely complicated data so you can get the idea in a few minutes.

Some examples:

Economic development makes every country healthier and richer

Cross post from www.ulvog.wordpress.com

Incredible visualization of 200 years of economic development and improvements in health around the world.  A professor creates an entertaining visual of how health and wealth has increased in 200 countries over 2 centuries.  Does it all in under 5 minutes.  In 1810 all countries of the world were poor and sick.  The industrial revolution started many countries up the health and wealth climb.  World War I and the influenza epidemic knocked everyone back.  The great depression moved many countries back in wealth but not in health.  After WWII, lots of countries really took off.  There are big disparities in 2009, but the improvements everywhere from 1810 to 2009 are mind-boggling.  Few countries are left in the poor and sick area.  Most people live in the middle of wealth scale and most of the people on the planet are at the upper end of the health scale.

The million dollar question?  What drives the improvement?  Watch it twice to see if you think that economic development is the driver for all of it.  Compare what you know about when countries started adopting the capitalist, industrial approach to their economy.

Lessons?  Take your pick.  War is bad for everyone.  Epidemics are really bad.  Economic growth helps everyone.  More economic growth would close the gap between top and bottom.

Biggest factor I see in the video?  Economic growth from capitalism means a country can afford better infrastructure and disease prevention meaning everyone is healthier.  If we can keep from killing ourselves from another world war and keep from killing the economic engine that got us here, the future is brighter than today!

Hat tip Exurban League

A creative way to communicate fraud prevention to your clients

As CPAs, we look for creative ways to persuade our clients to implement good internal controls.  I fear that our comments as CPAs usually fade along with all the other you-gotta’-do-this-now messages in our regulatory heavy culture.  Another approach is to explain the devastation that arises from fraud.  I have a new post at my other blog that takes this approach:  The tragedy of fraud.  …