Security? Maybe not.

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

Under legislation passed by Congress in 2014, potential cuts are possible for the first time for financially distressed multi-employer pension plans who want to reduce benefits for retirees in order to improve the solvency of the fund.

Questions:
1. Which fund is among the first to apply to take advantage of the legislation and who are their constituents?
2. How long has pension security been protected according to the article?
3. How effective is the Pension Benefit Guaranty Corporation in bailing out pension funds and why?
4. What caused the investment imbalance in the Central States Pension Fund?

Source: Marte, J. (2016). One of the nation’s largest pension funds could soon cut benefits for retirees. The Washington Post, April 20 (Retrievable online at https://www.washingtonpost.com/news/get-there/wp/2016/04/20/one-of-the-nations-largest-pension-funds-could-soon-cut-benefits-for-retirees/?hpid=hp_hp-more-top-stories_pension-711a%3Ahomepage%2Fstory)

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Fantasy Accounting?

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

According to the New York Times, a recent study shows that 90 percent of companies in the Standard & Poor’s 500-stock index reported non-GAAP results last year, which is up from 72 percent in 2009.

Questions:
1. Do you think investors truly understand the consequences of this?
2. Which one of the tactics used do you find to be the most troubling?
3. Why do you think the SEC has not been more aggressive in stopping this practice?

Source:
Morgensen, G. (2016). Fantasy Math Is Helping Companies Spin Losses Into Profits. The New York Times, Apr. 22 (Retrievable online at http://www.nytimes.com/2016/04/24/business/fantasy-math-is-helping-companies-spin-losses-into-profits.html)
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Beware: Don’t Push that Button

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While some thought this was an April Fool’s joke, Amazon assured them that the new Dash Button is a serious device to buy that one item that you always need!

Questions:
1. Approximately how many brands and how many devices does Amazon have on dash buttons?
2. What are the charges associated with a Dash button?
3. What are the risks of the Dash Button?
4. Would you use it? Why or why not?

Source:
Wingfield, N. More Brands Mean Many More Buttons for Quirky Amazon Service. The New York Times, March 31 (Retrievable online at http://www.nytimes.com/2016/04/01/technology/amazon-widens-its-push-button-e-commerce-horizons.html)

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Pet Valuation: A slippery slope or not?

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

The Monyak family decided to board their 2 dogs when they took a vacation in France. The Monyaks gave special instructions to the caretakers to give an anti-inflammatory prescription to one of the dogs. Unfortunately, the kennel gave it to the wrong dog who died from an overdose shortly after the family returned. The Monyak’s sued The Inn, one of five Atlanta-area kennels run by Barking Hound Village that advertises its “private suites and secluded areas for rest and relaxation.” The question of damages has made its way to the state’s highest court.

Questions:
1. What have courts typically upheld in these types of cases?
2. What is Barking Hound Village’s view as filed in their brief?
3. Why is the kennel’s argument hypocritical? What do you think this will do to the image of the company and its future viability from a cost benefit standpoint?
4. What is unique about a pet’s value and how would you argue this case from a pro-pet position?

Source:
Brulliard, K. (2016). How much is a pet dog worth? A court will soon decide. The Washington Post, April 12 (Retrievable online at https://www.washingtonpost.com/news/animalia/wp/2016/04/12/how-much-is-a-pet-dog-worth-a-court-will-soon-decide/?hpid=hp_hp-more-top-stories_animalia-petworth-220pm%3Ahomepage%2Fstory)

Plan Ahead

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

According to the Washington Post, five of the country’s largest banks, including JPMorgan Chase and Bank of America, still do not have credible plans for winding down their operations without taxpayer help if they start to fail.

Questions:
1.How long do these banks have to submit their detailed bankruptcy plans to requlators?
2. What are the consequences if they do not meet this deadline?
3. What was the name of the 2010 legislation that is aimed at preventing a repeat of the taxpayer bailouts?
4. What companies have regulators identified as financial firms, apart from banks, that could pose a threat to the economy?
5. Why does GE claim that it is no longer one of these threats?

Source:

Merie, R. (2016). Regulators reject plans of 5 big U.S. banks for preventing another taxpayer bailout. The Washington Post, April 13.(Retrievable online at https://www.washingtonpost.com/news/business/wp/2016/04/13/regulators-reject-the-plans-of-5-large-u-s-banks-for-preventing-another-taxpayer-bailout/?hpid=hp_hp-top-table-main_banks-835am%3Ahomepage%2Fstory).
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The benefits of offshore without leaving the country

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

For wealthy Americans looking to veil their assets and shield some of their income from taxation, there is no need to go to Panama or any other offshore tax haven. According to the New York Times, it’s easy to establish a shell corporation right here at home and virtually no questions are asked.

Questions:
1. What states did the article mention in particular?
2. About how much of the world’s financial wealth is hidden in offshore accounts? Percentage and dollars?
3. Explain why American banks are awash in money from foreign investors using shell corporations?
4. What is the U.S.Treasury doing to combat hidden wealth?

Source:
Cohen, P. (2016). Need to Hide Some Income? You Don’t Have to Go to Panama. The New York Times, April 7 (Retrievable online at http://www.nytimes.com/2016/04/08/business/need-to-hide-some-income-you-dont-have-to-go-to-panama.html)

Want to Buy a State? OMG!

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

When Colin Fultz, the grandson of a bootlegger, opened a gourmet distillery in Kentucky last fall, he ran afoul of University of Kentucky basketball. He trademarked his moonshine with the name Kentucky Mist Moonshine and that is when the trouble began.

Questions:
1. Do you think anybody should own the rights to the name of a state? What did Mr. Fultz do about it?
2. Why have University athletic departments around the nation grown increasingly aggressive about defending what they see as their intellectual property?
3. Why do you think the team is going after the small businessman, rather than the large corporations?

Source:
Stohlberg, S.G.(2016). (Legal) Moonshiner and University Battle Over Rights to ‘Kentucky.’ The New York Times, April 9 (Retrievable online at http://www.nytimes.com/2016/04/10/us/-legal-moonshiner-and-university-battle-over-rights-to-kentucky.html)

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Collateral from a future job

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

Some undergraduates will have a new option to help finance their degrees: pledging to pay a percentage of their future incomes in return for funds today.

Questions:
1. How does the income-sharing program work?
2. What school is piloting this idea?
3. What are some aspects of the legal gray zone associated with these human capital contracts?
4. How successful has the idea been in other countries?

Source:
Cowley, S. (2016). Getting a Student Loan With Collateral From a Future Job. The New York Times, April 8 (Retrievable online at http://www.nytimes.com/2016/04/09/business/dealbook/getting-a-student-loan-with-collateral-from-a-future-job.html)
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Oh, The Times They are A…Changin’

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

While the authorities in southwestern China apparently thought their Cultural Revolution-style “shaming” was still effective, they found out how it backfired in the current economy and environment. As officials paraded eight workers through the streets, who had demanded back wages, the public turned the tables on officials and instead called for deadbeat bosses to be humiliated.

Questions:
1. Why are wage arrears such a big problem for Chinese laborers?
2. What are some of the ways that workers have used to draw attention to wage arrears?
3. What is the Chinese government’s plan to deal with wage arrears in China’s slowing economy?
4. What is the solution for unpaid wages in the U.S.? What are some of the reasons that this or similar solutions are not proposed by the Chinese government?

Source:
Tang, D. (2016). Public sentencing of protesting workers backfires in China. AP Wire – Big story, March 25 (Retrievable online at http://bigstory.ap.org/article/2a7b9a2d1d0643cda5c4fce2e0f5a5ae/public-sentencing-protesting-workers-backfires-china)Proxy fight

A new retirement plan in the works for California

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

Lawmakers in California are considering a state-run 401K program to help private-sector employees that don’t get a retirement savings plan from their employer.

Questions:
1. What types of workers is the plan targeting?
2. How many Californians does this include?
3. How much is the expected contribution by workers?
4. Can the plan be transferred if you change jobs?
5. How is the proposed California plan, Secure Choice, going to be different from the Federal plan called myRA?

Source:
Lowenberg, O. (2016). How California wants to help workers save for retirement. The Christian Science Monitor, March 29 (Retrievable online at http://www.csmonitor.com/Business/new-economy/2016/0329/How-California-wants-to-help-workers-save-for-retirement)