Monthly Archives: March 2014

Warning about Emails

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting.

Four former leaders of the law firm, Dewey & LeBoeuf, were charged by New York prosecutors with orchestrating a nearly four-year scheme to manipulate the firm’s books during the financial crisis. In emails they talked openly about “fake income,” “accounting tricks” and their ability to fool the firm’s “clueless auditor.” Questions: 1. Explain the role… Read more »

The Largest Jury Award in the History of the EOE

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting.

This article presents a “Dickensian” story about Atalissa, Iowa and the largest jury award in the history of the Equal Employment Opportunity Commission. Questions: 1. What was the amount of the awarded damages? Why was the amount reduced? 2. If or when Henry’s Turkey Service pays the judgment for damages and back pay, how would… Read more »

Humans are Bad at Understanding Compound Interest

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting.

Maybe you haven’t even thought about your retirement, but according to Matthew O’Brien, you should. This is particularly true if you are contributing to a 401 (k). Questions: 1. What should you look at rather than the returns when picking your 401(k) funds? 2. According to O’Brien, what do 1.25 % annual fees for retirement… Read more »

How do you steal Bitcoins?

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, Intermediate Accounting, International Accounting, Video Updates.

According to McMillan, the world’s largest bitcoin exchange appeared to be a towering example of renegade entrepreneurism. However, insiders have claimed that Mt. Gox was a messy combination of poor management, neglect, and raw inexperience. Herein lies the makings of a $460 million hack of the bitcoin. Questions: 1. Would you consider a bitcoin to… Read more »

You Get What you Pay for?

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Intermediate Accounting.

The SEC regulators are becoming very “worried” that pressure to reduce auditor fees due to economic cycles could lead to worse audits. Questions: 1. How do auditor switches impact fees? 2. What legal issues could affect audit committees where auditor fee reductions occur? 3. How does fee-hunting exacerbate this situation? 4. What does the study… Read more »

Chapter 11 for Quiznos

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Intermediate Accounting, Video Updates.

Quiznos, the Denver-based sandwich chain, is preparing to file for bankruptcy in the next few weeks, due to debt and declining sales. Questions: 1. This is not the first time that Quiznos has negotiated with creditors. Explain its out-of-court restructuring deal that occurred two years ago. 2. Assuming that the past debt load was similar… Read more »