Watch Your Wallet

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Behavioral and Social Issues Related to Accounting, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

According to the New York Times, corporate America is lifting prices and bragging about bigger profits as consumers open their wallets and spend heartily.

Questions

  1. What products/services does the article cover?
  2. How do these price adjustments affect inflation?
  3. What are some of the reasons why consumers are will to pay more?
  4. Have you seen changes in your spending? Why or why not?

Source:

Smialek, J. (2022). Corporations Raise Prices as Consumers Spend ‘With a Vengeance’. The New York Times, Feb. 27 (Retrievable online at https://www.nytimes.com/2022/02/27/business/economy/price-increases-inflation.html)

Major Supplier Under Cyberattack

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Behavioral and Social Issues Related to Accounting, Cost Accounting, Financial Accounting, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting, Uncategorized.

According to the New York Times, Toyota, the world’s largest automaker, said on Monday that it had suspended all production in Japan after a possible cyberattack at a major supplier.

Questions:

  1. What is the name of Toyota’s major supplier?
  2. Why have cyberattacks become increasingly more common in Japan in recent years?
  3. What will the stoppage include?

Source:

Dooley, B. and H. Ueno. (2022). Toyota stops production in Japan after a possible cyberattack at a supplier. The New York Times, Feb. 28 (Retrievable online at https://www.nytimes.com/2022/02/28/business/toyota-stoppage-cyberattack.html)

Failing Grade? Maybe or maybe not?

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Behavioral and Social Issues Related to Accounting, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

According to Nigel Jaquiss, Portland was recently ranked 71st out of the largest 75 cities in America for its financial health by a national watchdog group.

Questions:

  1. What is the name of the watchdog group?
  2. What does the failing grade stem from?
  3. What do city officials offer in defense of their denial of the group’s ranking?
  4. Explain the bond ratings, the rating agency, and the bonds’ relationship to the city’s pension plan.
  5. What are unfunded actuarial liabilities?

Source:

Jaquiss, N. (2022). City Officials Dispute Failing Financial Grade From Accounting Watchdog. The Willamette Weekly, Feb. 13 (Retrievable online at https://www.wweek.com/news/2022/02/13/city-officials-dispute-failing-financial-grade-from-accounting-watchdog/)

Are they the Bitcoin Bonnie and Clyde?

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Behavioral and Social Issues Related to Accounting, Cost Accounting, Ethical Dilemma, Financial Accounting, Fraud Accounting, Intermediate Accounting, International Accounting, Managerial Accounting, Uncategorized, Video Updates.

According to the New York Times, Ilya Lichtenstein and Heather Morgan were charged with conspiracy to launder billions of dollars worth of Bitcoin.Credit.

Questions:

  1. What was the Bitfinex hacking?
  2. What was the role of the complex shuffling of Bitcoin by the couple in the fraud in January 2017?  
  3. When the government executed a search warrant at their Manhattan apartment, how many electronic devices were found and seized?
  4. What was the involvmenet of the couple’s cat in the arrest?

Source:

Watkins, A. and B. Weiser. (2022). Inside the Bitcoin Laundering Case That Confounded the Internet. The New York Times, Feb. 13 (Retrievable online at https://www.nytimes.com/2022/02/13/nyregion/bitcoin-bitfinex-hack-heather-morgan-ilya-lichtenstein.html)

Easing Mandate

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Behavioral and Social Issues Related to Accounting, Ethical Dilemma, Managerial Accounting, Uncategorized.

According to the Washington Post, Walmart will no longer require fully vaccinated workers to wear masks while working in stores unless required under local or state rules, the company said in a memo to its U.S. employees.

Questions:

  1. How many employees does this change affect?
  2. Will all vaccinated Walmart employees be allowed to drop the requirement?
  3. Has Walmart required masks since 2020?
  4. How does this change affect Walmart’s sister company, Sam’s Club?

Source:

Firozi, P. (2022) Walmart employees can ditch masks if they’re vaccinated, company says. Washington Post, Feb. 13 (Retrievable online https://www.washingtonpost.com/business/2022/02/13/walmart-mask-mandate/)

Suspension of Automated Notices

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Behavioral and Social Issues Related to Accounting, Income Taxes, Managerial Accounting, Uncategorized.

According to Accounting Today, the IRS will suspend more than a dozen automated letters it sends out to taxpayers, including collection notices, balance due notices and unfiled tax return notices, until it catches up on its backlog of unprocessed returns.

Questions:

  1. Why is it doing this?
  2. A coalition of tax professionals was instrument in promoting this move. Who was included in the coalition?
  3. Why is there so great a backlog in processed filings at the IRS?

Source:

Cohn, M. (2022). IRS suspends many of its automated notices. Accounting Today, Feb.9 (Retrievable online at https://www.accountingtoday.com/news/irs-suspends-many-of-its-automated-notices)

Walmart’s Top E-commerce Omni Strategy Executive is Leaving

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

Questions:

  1. When did Mr. Casey join Walmart?
  2. What company did he work at prior to coming to Walmart?
  3. By how much did Walmart’s global e-commerce sales increase during the nine months ended Oct. 31 as compared with the same period the prior year?
  4. What is Omni?
  5. Why do you think there is a post-holiday executive shuffle at Walmart?

Source:

Nassauer, S. (2022). Walmart’s Top U.S. E-Commerce Executive Is Leaving. The WSJ, Jan. 20 (Retrievable at https://www.wsj.com/articles/walmarts-top-u-s-e-commerce-executive-is-leaving-11642689116)

Fraud at Amazon Warehouse

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

According to The Verge, an Amazon warehouse manager faces long prison sentence and fine when pleading guilty to stealing $273,000 worth of computer parts and selling them to a wholesaler.

Questions:

  1. What was the position of the manager?
  2. Why is it more likely that a person in his position rather than basic warehouse staff would be able to do this?
  3. Where was the warehouse and during which period did this happen?
  4. What was the prison sentence and the fine imposed?

Source:

Lyons, K. (2022). Amazon warehouse manager pleads guilty to stealing $273K of computer parts. The Verge, Jan. 31 (Retrievable online at https://www.msn.com/en-us/money/companies/amazon-warehouse-manager-pleads-guilty-to-stealing-24273k-of-computer-parts/ar-AATkvbH)

High Rents

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According to the Washington Post, rising rents are expected to be a driving force in inflation this year and have been an ongoing policy challenge for the Biden administration.

Questions:

  1. By what percentage have rents increased in a number of cities?
  2. What is the average rent in cities like Austin, New York and Miami?
  3. What is the lag before rising rents show up in inflation measures?
  4. Based on a 2018 Harvard study, how many households spend more than half of their monthly income on rent?

Source:

Bhattarai, A. (2022). Rents are up more than 30 percent in some cities, forcing millions to find another place to live. The Washington Post, Jan. 30 (Retrievable online at https://www.washingtonpost.com/business/2022/01/30/rent-inflation-housing/).

Kraft Heinz Fraud

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Behavioral and Social Issues Related to Accounting, Cost Accounting, Ethical Dilemma, Financial Accounting, Fraud Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized, Video Updates.

Today’s column offers a review of a clawback fraud; CFO.com explains that Kraft-Heinz (KHC) reported supplier contracts that made it appear as if expense savings were provided in exchange for past or same-year events performed by the company when, in reality, they were upfront payments in exchange for a future benefit from KHC. This was done in order to improperly recognize costs savings prematurely.

Questions:

  1. When did the U.S. Securities and Exchange Commission allege that the accounting fraud began at Kraft Heinz?
  2. Approximately how many misleading accounting transactions were recorded during the fraud?
  3. Which division of Kraft Heinz had improperly managed expenses resulting in unrealistic cost savings and inflated profits?

Source:

Heller, M. (2021). Kraft Heinz Fined $62M for Accounting Fraud. CFO.com, Sep. 3 (Retrievable online at https://www.cfo.com/accounting-2/2021/09/kraft-heinz-fined-62m-for-accounting-fraud/)