Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting, Video Updates.

Short-seller and hedge fund manager, Jim Chanos, contends that the Alibaba Group is as problematic in its accounting positions as the now-defunct, corrupt energy giant, Enron.

Questions:
1. What part of the company’s operations are most problematic and why?
2. What does cash flow have to do with this story?
3. What does Chanos claim is the problem with off-balance sheet entities and why is this like Enron?
4. As the video shows, this is not the first time that Alibaba has had problems with its accounting. What was the issue in the previous situation?

Source:
Gandel, S. (2016). Here’s Why Alibaba’s Accounting Is As Alarming As Enron’s. Fortune, May 12 (Retrievable online at http://fortune.com/2016/05/12/jim-chanos-alibaba-accounting/)

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

According to the New York Times, a federal appeals court ruled last week that companies cannot force their employees to sign away their rights to band together in legal actions. In doing this, they delivered a major victory for American workers and opened an opportunity for the Supreme Court to weigh in.

Questions:
1. What company is at the heart of this ruling? Discuss the specifics of the case and why the judges feel that the company violated the laws.
2. Why have arbitration issues increased over the last 10 years? Discuss both benefits and costs.
3. What decisions in 2011 and 2013 by the Supreme Court blessed the widespread use of arbitration? Discuss whether you think this appeals case is different.

Source:
Silver-Greenberg, J. and N. Scheiber. (2016). Court Rules Companies Cannot Impose Illegal Arbitration Clauses. The New York Times, May 26 (Retrievable online at http://www.nytimes.com/2016/05/27/business/dealbook/court-rules-companies-cannot-impose-illegal-arbitration-clauses.html)

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Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting, Uncategorized.

This article explains the latest spate of attacks on banks in Bangladesh and Southeast Asia, which security researchers say is the first time that a nation has used malicious code to steal purely for financial profit. The country is North Korea.

Questions:
1. Security researchers and American government officials have tied thousands of attacks to nations in the past, but why were these different?
2. How have security researchers tied several attacks together and point to them being from the same group?
3. What is Swift and how does it figure into this story?

Source:
Perlroth, N. and M. Corkery. (2016). North Korea Linked to Digital Attacks on Global Banks. The New York Times, May 26 (Retrievable online at http://www.nytimes.com/2016/05/27/business/dealbook/north-korea-linked-to-digital-thefts-from-global-banks.html).

money_ball

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

A recent report about the composition of Boards of Directors over the last seven years indicates that the greatest obstacle for minorities in gaining entry to the boardroom is the lack of operating or financial experience. According to the report, networks of white men who connect through college, work and social activities feel more comfortable with people who look like themselves and this results in similar board replacements for open seats that rarely turnover.

Questions:
1. According to the article, which minorities are losing ground on the boards? Discuss the specifics and percentages.
2. When does the group writing the report predict that women will achieve parity with men on the boards?
3. The article proposes ways to correct this barrier situation. What measures do they propose?
4. What do you see as the benefits in diversity on Boards?

Source:
Olson, Elizabeth. (2016). Barriers to Board Positions Persist for Minorities and Women, Report Shows. The New York Times, May 16 (Retrievable online at http://www.nytimes.com/2016/05/17/business/dealbook/corporate-boards-minorities-women.html)

Proxy fight

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Fraud Accounting, Intermediate Accounting, Managerial Accounting.

Professional golfer Phil Mickelson was recently named in an SEC complaint regarding insider trading information that he received from William Walters, a sports gambler.

Questions:
1. During what period did the insider trading take place?
2. Phil has been named as a “relief defendant.” What does that mean?
3. What shares did Phil buy and how much profit did he make? What was the information that he acted upon?

Source:
Bonesteel, M. (2016) Phil Mickelson earned $1 million from insider trading. The SEC wants it back. The Washington Post, May 19 (Retrievable online at https://www.washingtonpost.com/news/early-lead/wp/2016/05/19/phil-mickelson-earned-1-million-from-insider-trading-the-sec-wants-it-back/)

Phil

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Fraud Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

Dance Moms, a show on Lifetime TV is in its 6th season. The host is Abby Lee Miller, who is facing 20 counts of fraud due to allegations that she fudged specifics when it came to a bankruptcy filing. If found guilty on all counts, Ms. Miller is facing $5 million in fines and five years in prison.

Questions:
1. What specifics were omitted or fudged in her bankruptcy filing? What was the relationship between the show Dance Moms and the bankruptcy filing?
2. What is the latest news about the trial, since the initial indictment came back in October 2015? How many delays have there been so far?
3. What is the link between channel surfing and the specifics that were fudged? Detail as much as possible.

Source: Carey, S. (2016). Dance Moms’ Star Abby Lee Miller’s Court Case Update: Star Gets Additional Extension From Court, Makes Plans For International Tour. Inquisitr.com (Retrievable online at http://www.inquisitr.com/2847952/dance-moms-star-abby-lee-millers-court-case-update-star-gets-additional-extension-from-court-makes-plans-for-international-tour/)

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Intermediate Accounting, International Accounting, Managerial Accounting, Uncategorized.

According to a study released last Tuesday, U.S. multinational companies are saving $100 billion a year by shifting their profits overseas to lower their tax bills.

Questions:
1. Is this tax fraud? Why or why not?
2. Explain the mechanism they are using.
3. Which countries are companies shifting profits to and why (be specific)?
4. How much in tax revenues are being lost by the U.S. each year and how could the Congress act to prevent this?

Source:
Merle, R. (2016). U.S. companies are saving $100 billion a year by shifting profits overseas, report says. The Washington Post, May 10 (Retrievable online at https://www.washingtonpost.com/news/business/wp/2016/05/10/u-s-companies-are-saving-100-billion-a-year-by-shifting-profits-overseas-report-says/)

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting.

Some Chinese state-owned entities, backed by the key government agency that oversees major state industrial companies, have adopted a controversial defense when they face U.S. lawsuits – we enjoy sovereign immunity.

Questions:
1. The article says that this policy is an indication of something much deeper. What is that?
2. The article mentioned Chinese audit firms. What did they do?
3. Discuss the facts of the drywall case and your opinion about what should happen.
4. What is the legal argument by the Chinese Foreign Ministry?

Source:
Miller, M. and M. Martina. (2016). Chinese state entities argue they have ‘sovereign immunity’ in U.S. courts. Reuters.com, May 11 (Retrievable online at http://www.reuters.com/article/us-china-usa-companies-lawsuits-idUSKCN0Y2131)
Investors talk in front of an electronic board showing stock information, filled with green figures indicating falling prices, at a brokerage house in Nantong

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Tara Zoumer thought she had found her dream job when she was hired at WeWork, a $16 billion start-up that rents office space to young entrepreneurs. As a salaried employee, she was soon asked to expand her duties to include many things that an hourly custodian should do. When she tried to get other employees to join her in a class-action suit against her employer to fight for overtime pay. That was when she found out that the company had implemented arbitration for HR disputes, making her lawsuit null and void.

Questions:
1. When Tara did not sign the new company policy, what happened?
2. What other companies were mentioned in the article that made their employees sign an arbitration clause?
3. What was the most interesting part of this article to you?
4. Would you sign an arbitration clause? Why or why not?

Source:
Silver-Greenberg, J. and M. Corkery. (2016). Start-Ups Embrace Arbitration to Settle Workplace Disputes. The New York Times, May 14 (Retrievable online at http://www.nytimes.com/2016/05/15/business/dealbook/start-ups-embrace-arbitration-to-settle-workplace-disputes.html)
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Posted by & filed under Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

A $5 million suit was filed in Federal court alleging that Starbuck’s is deceiving customers by filling drinks with too much ice.

Questions:
1. Based on the allegation, do you think that Starbuck’s should report the lawsuit as a contingency in their upcoming annual report? Why or why not?
2. Besides claiming that too much ice is in drinks, what other issues does the plaintiff allege?
3. After reading Bort’s article, what are some of the other reasons that Starbuck’s has been sued? What is your favorite?
4. What percentage of the suits listed in the Bort article do you estimate are frivolous?

Sources:
Bort, R. (2016). THE (MANY) REASONS PEOPLE HAVE SUED STARBUCKS. Newsweek, May 6 (Retrievable online at http://www.newsweek.com/starbucks-lawsuits-list-456294)
Bowerman, M. (2016). Starbucks: Lawsuit over ice in chilled coffee, tea is ‘frivolous.’ USA Today, May 4 (Retrievable online at http://www.usatoday.com/story/money/nation-now/2016/05/04/woman-sues-starbucks-5-million-ice-chilled-coffee-tea/83920832/)