I marvel at how much mere happenstance can play in a career.  I might not have become a teacher, or gone to graduate school but for one meeting with an administrator when I was a senior at Cornell. Twenty years later, I was privileged to serve as the academic fellow in the SEC’s Office of… The post Walter Schuetze: 1932 – 2017 first appeared on Accounting Onion ..read more

Yesterday was a very good day for investors! The SEC finally approved PCAOB rules that will make a lot more information public about what actually went down during the audit. It is certainly fair to say that the new model for the audit report is of historic significance.   And of the new items, by… The post Rays of Sunlight to Shine on Audits — and Auditability first appeared on Accounting Onion ..read more

An Honest Financial Accounting: Draft of Chapter 1 – Part I Chapter Title: Financial Accounting versus Financial Reporting Draft Table of Contents In this chapter we consider where – within the broader activity of “financial reporting” –“financial accounting” should begin and end. “Accounting” A popular way to begin discussing the basic ideas of “accounting” is ..read more

An Honest Financial Accounting: Draft of Chapter 1 – Part II Chapter Title: Financial Accounting versus Financial Reporting Draft Table of Contents “Financial” Accounting In the Securities Exchange Act of 1934, Congress gave the new Securities and Exchange Commission broad powers to regulate the disclosures of public companies, including the rules of accounting. But sensing ..read more

Draft Table of Contents An Honest Financial Accounting: Draft of Introduction to Preliminary Edition – Part I Every report by independent auditors on the financial statements of US public companies must state that, in their opinion, said financial statements are “fairly presented” in accordance with “accounting principles generally accepted in the United States of America ..read more

Dear reader: With this first post to The Accounting Onion in almost four(!) years, I am establishing a portal for commenting on my book project, of An Honest Financial Accounting: The Myth, and Making it a Reality.  By publishing a series of first drafts, I hope to solicit comments. Eventually, a “first preliminary edition” will ..read more

Alas, I have not posted very much of late.  But, it’s only because I am trying to find as much time as possible to write my book describing a simple, comprehensive and robust basis of accounting that any public company could use; and that would produce more relevant information for investors than U.S. GAAP or IFRS.  Progress has been slower than I had hoped, but to-date I have drafted the chapter explaining the objectives of my “Shareholder-Oriented Financial Accounting” (S-OFA), and am now drafting what I call the foundational constraints of S-OFA. I decided to take time away from book writin ..read more

In recent years I have presented an update on the activities of the PCAOB at the annual meeting of the Association of Audit Committee Members.  From that experience — particularly this past year — I can tell you that audit committees are not happy with PCAOB rulemaking.  Much of it feels to them kind of like we all feel when taking off our shoes for the TSA: because of one misguided and inept soul (pun intended), everyone pays a price.  To add insult to injury, we have absolutely no idea whether our collective acts of compliance do anything to make us safer. The most recent source of audit com ..read more

The accounting topic of the season is income taxes.  But, as the nation contemplates what Congress could end up passing, I want to talk about how one under-the-radar amendment to financial accounting standards has been quietly adding to the federal budget deficit for two decades and counting. The amendment I speak of came into existence as EITF 96-15, Accounting for the Effects of Changes in Foreign Currency Exchange Rates on Foreign-Currency-Denominated Available-for-Sale Debt Securities.  One of the touchstone issues of the current tax debates (such as they are) is that U.S. companies with f ..read more

I marvel at how much mere happenstance can play in a career.  I might not have become a teacher, or gone to graduate school but for one meeting with an administrator when I was a senior at Cornell. Twenty years later, I was privileged to serve as the academic fellow in the SEC’s Office of the Chief Accountant (known as OCA).   The other lucky part of my own story is that Walter Schuetze was the Chief Accountant. Walter became Chief Accountant in January 1992.  I was hired the previous September by his predecessor George Diacont (also a really dedicated public servant who it was my privilege to ..read more