Severe Cuts for Higher Education in Louisiana….Who’s Next?

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

Governor Bobby Jindal’s new budget in Louisiana proposes off-setting declines in oil revenue by cutting $1.6 million from the budget of state higher education institutions. At the same time as it is predicted that 60% of adults in 2025 will have to have postsecondary credentials in order for the U.S. to maintain its economic edge, it appears that states are getting out of the public higher-education business.

Questions:
1. Summarize the new analysis of the Pell Group regarding state funding of public higher education.
2. Based on your opinion, discuss the following question: Is it possible to cut our way to prosperity, through austere measures?
3. How is the austerity plan working out in European countries?
4. Do you agree or disagree with the statement in the article: The cuts would be “gubernatorial malpractice of the highest order.” Support your answer with a cost benefit analysis.

Source:
Wong, Alia (2015). Bobby Jindal, Budget Cuts, and the Uncertain Fate of Louisiana’s Universities. Atlantic, May 7 (Retrievable online at http://www.theatlantic.com/education/archive/2015/05/bobby-jindal-budget-cuts-and-the-uncertain-fate-of-louisianas-public-universities/392552/)

Video by LSU alumni. (2015). Education Not Guaranteed: Louisiana State U. in Crisis, A Case Study available on YouTube.com

A Legalized Scam?

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

Most people do not shop around for title insurance when they buy a home. Instead, they usually just go to the title insurance company that the real estate agent recommends.This article highlights the problem with this model.

Questions:
1. Using the fraud triangle, discuss what factors are at work in the title insurance industry.
2. What two groups have uncovered corruption in this industry? What type of specific schemes did they unearth?
3. Explain why the 2014 rule set forth by the Consumer Financial Protection Bureau is flawed.

Source:
Editorial Board. (2015) The Title Insurance Scam. The New York Times, May 12 (Retrievable online at http://www.nytimes.com/2015/05/12/opinion/the-title-insurance-scam.html?action=click&pgtype=Homepage&version=Moth-Visible&module=inside-nyt-region&region=inside-nyt-region&WT.nav=inside-nyt-region&_r=0)

leases

Bad may be Good?

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Intermediate Accounting, Managerial Accounting.

While it wasn’t a particularly good 2014 for big pension fund earnings, those who managed the funds saw incredible pay! According to the New York Times, the top 25 hedge fund managers reaped $11.62 billion in compensation in 2014. Yes, that’s billions with a “B”!

Questions:
1. The 2014 compensation of the top 25 hedge managers is down from 2013. By how much in dollars and percentage change?
2. What is the world’s largest hedge fund and what amount of assets do they manage?
3. What has happened to hedge fund investors for the sixth consecutive year?
4. What was the most ironic or interesting part of this article to you?

Source:

Stevenson, A. (2015). For Top 25 Hedge Fund Managers, a Difficult 2014 Still Paid Well. The New York Times, May 5 (Retrievable online at http://www.nytimes.com/2015/05/05/business/dealbook/top-25-hedge-fund-managers-took-bad-14-all-the-way-to-the-bank.html?ref=dealbook)

Money

The Hidden Costs of Beautiful Nails

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Manicures were once for special occasions only. Now they have become a staple for women across the economic spectrum. With more than 17,000 nail salons in the United States, there are about 2,000 nail salons in New York City alone. This New York Times research article looks at the dirty little secret of exploitation of workers in the nail industry.

Questions:
1. Based on the interviews, what did the New York Times find out about the pay, working conditions, and treatment of workers in this industry?
2. What is the average price of a manicure in Manhattan? How does it compare with the rest of the country? Based on the article, where are the costs shifted?
3. What are the barriers for entry to start a nail salon?
4. Explain the issue of the ethnic caste system in nail salons and how that affects wages.
5. Has there been a lack of investigations in this industry? Why? Explain.

Source:

Nir, S. (2015). The Price of Nice Nails. The New York Times, May 7 (Retrievable online at http://www.nytimes.com/2015/05/10/nyregion/at-nail-salons-in-nyc-manicurists-are-underpaid-and-unprotected.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news&_r=0)
10nailsweb9-master1050-v2

Schedules: The Next Labor Fight

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Intermediate Accounting, Managerial Accounting, Video Updates.

While the minimum wage issue has come to the top of political agendas over the past few years, it appears that the new frontier in labor reform will be schedules and pushing back against the corporate trend to time shifts when labor is needed.

Questions:
1. What are some of the requirements that proponents hope to get into job legislations?
2. Explain the concept of “open shifts.”
3. What are some of the hidden costs of open shift scheduling?
4. Do you agree or disagree with the San Francisco regulations for comprehensive scheduling? Discuss.
5. What is the main reason why laws that enact scheduling reforms have not worked?

Source:
DePillis, L. (2015). The next labor fight is over when you work, not how much you make. The Washington Post, May 8 (Retrievable online at http://www.washingtonpost.com/blogs/wonkblog/wp/2015/05/08/the-next-labor-fight-is-over-when-you-work-not-how-much-you-make/)

Like-Kind Exchange Being Challenged in the Art World

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

According to Josh Baer, “You can defer millions of dollars of taxes,” with the like kind exchange for high-end art.Experts say the use of this tax break has expanded in response to surging prices for art and the rising number of savvy investors, often veterans of the real estate industry or Wall Street, who have come to view paintings and sculptures as tradable commodities.

Questions:
1. What is a like-kind exchange? Explain.
2. What was the like-kind exchange originally created for?
3. If this loophole is eliminated, how much in additional tax collections could the Treasury gain?
4. Give an example of how an art collector would use this loophole. Include as much detail as possible.
5. Discuss…do you think that the loophole should be eliminated? Why or why not?

Source:
Bowley, G. (2015) Tax Break Used by Investors in Flipping Art Faces Scrutiny. The New York Times, April 26 (Retrievable online at http://www.nytimes.com/2015/04/27/arts/design/tax-break-used-by-investors-in-flipping-art-faces-scrutiny.html?rref=homepage&module=Ribbon&version=origin&region=Header&action=click&contentCollection=Home%20Page&pgtype=article)
LOOPHOLEWEB4-blog427

We Pay Top Dollar for Musicians!

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

Overbuilding has led to ghost towns in China with towering rows of luxury apartments sitting completely empty, especially in smaller cities in China’s hinterlands. However, the real estate companies who now must sell these empty towns believe that filling their remote buildings with foreign faces, even for a day, suggests that the area is “international.” This is the buzzword in provincial areas that often translates into “buy.”

Questions:
1. What was the most interesting part of this story in your opinion?
2. Do you think that this marketing campaign will work? Discuss.
3. Explain why property prices in China continue to decline.
4. Would this be a good time to invest in China? Discuss the pros and cons.

Source:

Borenstein, D. (2015) Rent-a-Foreigner in China. The New York Times, April 28 (Retrievable online at http://www.nytimes.com/2015/04/28/opinion/rent-a-foreigner-in-china.html?&moduleDetail=section-news-4&action=click&contentCollection=Opinion&region=Footer&configSection=article&isLoggedIn=false&module=MoreInSection&pgtype=article)

Don’t speed in Finland!

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In Finland, speeding infractions fines are calculated according to income. This article notes that in Nordic countries, like Finland, many citizens believe that the rich people should pay more for the same offense if justice is to be served.

Questions:
1. According to U.S. Tax laws, are speeding tickets tax deductible?
2. How much over the speed limit was Mr. Kuisla traveling and how much in U.S. dollars was his fine?
3. What does that work out to be per mile over the speed limit?
4. Do you agree that it is a tax rather than a fine? What is the difference? Discuss.
5. What was the eventual reduction in Mr. Kuisla’s ticket? (express in a percentage)

Source:
Daley, S. (2015) Speeding in Finland Can Cost a Fortune, if You Already Have One. The New York Times, April 25 (Retrievable online at http://www.nytimes.com/2015/04/26/world/europe/speeding-in-finland-can-cost-a-fortune-if-you-already-have-one.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news)

Finnish Manor of Mr. Kuisla

Finnish Manor of Mr. Kuisla

ATM Dogs: The Future or Just Plain Weird?

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

Soomi Park, a futuristic artist and designer currently exhibiting at Biennale Internationale Design in France, has been intrigued with the issue of privacy, security, and mass-collection of personal data by governments and corporations. In response to the changes, her exhibit, The Republic of Privacy, focuses on an imagined utopia where citizens are guaranteed total privacy.

Questions:
1. What does the dachshund have to do with this utopia and what is the device that the dog is wearing in the picture?
2. Who are “the Stasi” that she mentions with the strips of cloth from interrogation room chairs?
3. Why does she say her security solution is flawed?
4. Are there any other internal controls that use dogs? Discuss.

Source:
Buchan, K. (2015). ATM dog: Forgotten your pin? Please join the queue for the dachshund. The Guardian, April 9 (Retrievable online at http://www.theguardian.com/technology/2015/apr/09/atm-sniffer-dog-privacy-issues-soomi-park-art-design)

dachshund

A Solution for Separation Anxiety

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People feel guilty about leaving their dogs home all day alone. Now there’s a solution – DogTV. Some viewers even report that their dogs were on medication for separation anxiety, but since subscribing to the channel, the dogs no longer need the drugs.

Questions:
1. What year was the channel launched and in what country? How many countries does it reach?
2. What is the science (three factors) that DogTV follows?
3. What does DogTV avoid showing and why?
4. Why is DogTV better than just leaving the TV on a channel like Animal Planet?
5. What type of journal entries do you think would be made for the subscriptions, assuming that they are prepaid each year? Do you think the accounting would be the same for individuals as it is for Cable providers? Discuss.
6. What type of revenue model(s) does DogTV pursue in addition to direct subscriptions?