An Expensive Glitch

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

On April 24, a computer outage hit 7,000 U.S. Starbuck’s company-owned stores and 1,000 Canadian company-owned Starbuck’s locations. The outage was resolved Friday night after several hours.

Questions:
1. Did all locations deal with the problem in the same way? What did they do?
2. Why do you think that the outage did not affect licensed stores?
3. What was the source of the glitch?
4. Do you think that Starbuck’s needs a disaster plan for each store in the event that this happens again?
5. Were you surprised that they gave away coffee? How do you think they will account for this?

Source:
Associated Press Staff writer. (2015). Starbucks stores reopen after computer glitch led to free coffee for some. The Guardian, April 25. (Retrievable online at http://www.theguardian.com/business/2015/apr/25/starbucks-fixes-computer-glitch-that-gave-customers-free-coffee)

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Adjuncts with Ph.D.s are now Rising in the Ranks with the Working Poor

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

Are academics actually resorting to government aid? According to the article by Jeremy Weissman, 25% of part-time college faculty are on government aid.

Questions:
1. According to NBC News, how many part-time faculty are on public assistance?
2. What programs do these include?
3. According to the article, what are the three things that need to happen before wages are raised for part-time University faculty?
4. What are the costs and benefits of being an adjunct faculty?
5. In your opinion, do you think that the risks outweigh the rewards or vice versa? Discuss.

Source:

Weissman, J. (2015). Someone Calculated How Many Adjunct Professors Are on Public Assistance, and the Number Is Startling. Slate, April 13 (Retrievable online at http://www.slate.com/blogs/moneybox/2015/04/13/adjunct_pay_a_quarter_of_part_time_college_faculty_receive_public_assistance.html)

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How would you like a Big Raise?

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

Dan Price, the founder of Gravity Systems—a credit card processing company based in Washington—shocked his employees by raising the minimum wage to $70,000 over the next three years.

Questions:
1. What percentage raise will that be based on the average wage now?
2. Where did Dan get the idea?
3. Do you think that his plan will be a success? Detail your answer with examples.

Source:
Hayden, Jen (2015). Washington employer shocks employees by raising his company’s minimum wage—to $70,000 per year. The Daily Kos, April 14 (Retrievable online at http://www.dailykos.com/story/2015/04/14/1377642/-Washington-employer-shocks-employees-by-raising-his-company-s-minimum-wage-to-70-000-per-year)

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Grandmaster Scandal

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

Gaioz Nigalidze’s rise through the ranks of professional chess began in 2007, the year the first iPhone was released. In hindsight, the timing might not be coincidental.

Questions:
1. What other instances have you heard of about cheating with an iPhone or smart phone?
2. What characteristic of this story constitutes fraud?
3. Who would have been harmed if Nigalidze was allowed to stay in the game?
4. Do you think your grandmother could be a grandmaster in chess as long as she had an iPhone with the right app? Discuss.
5. What red flags pointed to his fraud?

Source:
Miller, M.E. (2015). Chess grandmaster accused of using iPhone to cheat during international tournament. The Washington Post, April 14 (Retrievable online at http://www.washingtonpost.com/news/morning-mix/wp/2015/04/14/chess-grandmaster-caught-using-iphone-to-cheat-during-international-tournament/?tid=hp_mm&hpid=z3)
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How Do you Assess Likelihood about the Unknown: Insurers and Driver-less Cars

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

Tesla Motors is going to roll out a self-driving feature on selected cars this summer. The dilemma for insurance companies is “how do you assess the risk without an existing track record?”

Questions:
1. Even when self-driving cars are widely available, what will delay their widespread adoption?
2. Why do you think that California is leading the nation in trying to understand the insurance issues?
3. How is auto insurance regulated?
4. According to the article, what is the biggest issue in the event of a crash?
5. What is the bright side of this story? Discuss.

Source:
Kaufman, A.C. (2015). Tesla’s Self-Driving Feature Leaves Insurers Idling As States Scramble. Huffington Post.com, April 13 (Retrievable online at http://www.huffingtonpost.com/2015/03/28/tesla-self-driving-cars_n_6961922.html?utm_hp_ref=business)

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Student Loan Forgiveness – To Forgive or not to Forgive, that is the Question!

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

It’s been over a month since fifteen former students of Corinthian Colleges said they would not pay a dime of their student loans because the school broke the law. The failing for-profit giant
used deceptive marketing and lied to the government about its graduation rates. The Consumer Financial Protection Bureau invited a group of these disgruntled students to Washington to discuss the issues surrounding debt cancellation.

Questions:
1. Why was the revolt a risky move by the students of Corinthian Colleges?
2. What type of authority does the Department of Education have that would help the students?
3. What has the Department of Education already done with respect to private loans, like the Genesis program?
4. Why is it such a difficult decision to help forgive federal student loans?
5. Assume that a private lender changes the terms of a 5%, $20,000 loan, so that 40% is immediately forgiven and the length of the loan is extended from 5 years to 10 years. Based on this information, what initial journal entry would the lender make to record the change?
6. Assume that the borrower is a company; what journal entry would the borrower make based on information shown in #5?

Source:
Douglas-Gabriel, D. (2015). A revolt is growing as more people refuse to pay back student loans. The Washington Post, March 30 (Retrievable online at http://www.washingtonpost.com/news/get-there/wp/2015/03/30/a-revolt-is-growing-as-more-people-refuse-to-pay-back-student-loans/)
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Need a Repair? Need Drum Lessons?

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

Need a plumber? If Amazon.com succeeds, it will soon be a very large marketplace of home services and will connect customers with electricians, plumbers and painters in a move to have its services tied to every product sold on its website.

Questions:
1. How will this change Amazon’s chart of accounts?
2. Provide three accounts that Amazon will have to create as a result of this new service.
3. What is the estimate of the gains that Amazon will receive as a result of this new service?
4. Do you think that it is a wise strategic move?
5. Do you think that this will impact other service provider companies like Angie’s List and Home Depot? Discuss.

Source:
Reuters staff. (2015). Amazon Now Lets You Hire People To Do Chores, Fix Stuff. Reuters News Service, March 30 (Retrievable online at http://www.huffingtonpost.com/2015/03/30/amazon-home-services_n_6968490.html?utm_hp_ref=business&ir=Business)
Geuss, M. (2015). Amazon launches “Home Services” business, wants to give you drum lessons. ARS Technica, March 30 (Retrievable online at http://arstechnica.com/business/2015/03/amazon-launches-home-services-business-wants-to-give-you-drum-lessons/)

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The World of Drones

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

At a farm in Dublin, Ireland, Paul Brennan took a video that has gone viral for its creativity in using drones – rounding up sheep.

Questions:

1. Put on your thinking cap. Is there any task that a drone could do in the future to assist the accountant or auditor?
2. Besides Amazon, what other large companies are planning to use or are using drones to improve operations?
3. What are the costs and the benefits of commercial uses for drones?

Source: BBC Staff (2015). Farmers test out flying sheepdog. BBC.com, March 30 (Retrievable online at http://www.bbc.com/news/technology-32121702)
YouTube.com (2015). Dog days are over? Farmer herds sheep with drone. March 28 (Retrievable online at https://www.youtube.com/watch?v=fMmKVOo6Ehs)

Tax Laws for Tangible Property

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

Late in 2013, the IRS issued final regulations regarding repair regulations and rules regarding the treatment of expenditures for acquiring, maintaining, or improving tangible property. The IRS issued final regulations on the treatment of disposing tangible property in 2014. This article provides guidance on the capitalization and expenditure rules contained within the regulations.

Questions:
1. What five general areas are addressed by the new tax regulations?
2. How are supplies to be accounted for under the new regulations?
3. What is the De Minimis Safe-Harbor Election?
4. What did you find most interesting about this article?

Source:
Abdoo, K. M. Duffy, and J. Rohrs. (2015). What Taxpayers Need to Know to Comply With the Final Tangible Property Regulations. The Tax Advisor, April 1 (Retrievable online at http://www.aicpa.org/Publications/TaxAdviser/2015/april/Pages/Rohrs_Apr15.aspx)08economy3-articleLarge

No longer Big Brother watching – Now its Big Teacher!

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting.

At Rutgers University, online student must download Proctortrack, a new anti-cheating technology, prior to taking exams.

Questions:
1. Did you agree or disagree that the software was intrusive? Discuss the pros and cons of it.
2. Do you agree or disagree that human behavior in test taking can be reduced to an algorithm? Discuss.
3. What problems could you see with this type of software and taking accounting courses? Discuss.
4. If you were given the choice between a proctor and an online exam with the software, which would you choose and why?
5. What item did you find most interesting about the article?

Source:
Singer, N. (2015). Online Test-Takers Feel Anti-Cheating Software’s Uneasy Glare. The New York Times, April 5 (Retrievable online at http://www.nytimes.com/2015/04/06/technology/online-test-takers-feel-anti-cheating-softwares-uneasy-glare.html?hpw&rref=technology&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well&_r=0)

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