I’ve got nothing substantive to add, just wanted to vent.

Don’t worry, I’m not gonna do what you all think I’m gonna do, which is, you know, FLIP OUT!

That Tom Cruise quote from Jerry Maguire is a perfect example of how not to separate yourself from an employer. The time to flip out is while you still work there and can affect a change, not on your way out the door. My resignation from State Street, on the other hand, was quite professional and I left on very good terms with everyone at the office.

I’m not going to get into the reasons I just resigned from a Fortune 500 company in the middle of a recession with no guarantee of job but will say it was time to move on and pursue other opportunities.

It might seem crazy to resign from a decent paying job while the economy sputters, but I’ve done a very, very good job over the past two and a half years of paying off my debts and saving up enough money to sustain myself for at least the next 6 months.

Overall, I enjoyed my time at State Street and learned a good deal about the corporate world but it was time for me to move on.

I’ve got a few plans for the coming months and my now abundance of “free” time but will tackle that topic in another post.

To all the people I’ve met over the past two and a half years at State Street, thank you for the memories and good luck to all of you!

The posts were broken up by category so you’ll find my top 3 favorite posts, listed arbitrarily, from each category below. These posts were chosen based on personal preference and relative usefulness so don’t be discouraged if your site isn’t listed!

Blogging

• 3 Sure Fire Way to Advertise Your Blog on a Shoe String by Engtech

Good advice.

• 3 Ways to Track Your Comments by David

I always lose track of comments I made somewhere so these sites are very useful. I tried cocomment once but will have to give it another whirl or try the other two sites.

• Top 3 tips to pick up girls/boys using blogs by Mario

Be careful using this one!

Honorable Mention: Three Things That I’ve Yet To Achieve as a Blogger by Rhys

Business & Career

• 3 Great Alternatives to Paper by Using Web-based Solutions by Ryan

Too bad I work for a financial services firm, which does a lot of accounting so this isn’t very applicable. Accounting relies on paper.

• 3 Reason Why Entrepreneurs Succeed! by Ray

Great insight and very true.

• 3 Reasons Job Search Spam Should Scare You by Jacob

Useful information and advice for everyone, even if you’re not looking for a job right now.

Honorable Mention: Top 3 Reasons Why You Have to Work from Home by Alfa

Entertainment

• 3 movies that can change you by WebStuffScan

Though I disagreed with the top three (check out the comments on the post for my top three), the idea and writing is solid.

• Got Independence? 3 things you should do this July 4th by Joe

Reading the Declaration of Independence, good advice for any day.

• Three Free Willie Nelson Songs by Liz

Free + Willie Nelson = Awesome!

Honorable Mention: Three Great Anime Blogs and Maybe Anime? by Carlie

Health & Fitness

• 3 Things I Have Done To Save My Own Life by Eric

Good advice for diabetics, and a good read in general.

• Three reasons to try a marathon… by Shane

I’ve always wanted to run the Boston Marathon, hopefully this post will encourage me.

• 3 Reasons Running is Good for You Alexander

And this post will motivate me to get in shape for the marathon.

Honorable Mention: The Top Three Reasons Why I hate Diets by Joey

Make Money Online

This category only had 3 submissions, so to be fair to the other categories I’m only choosing one post.

• 3 Things no one told you about web monetizing by Pedro

As an economics geek, Pedro’s analysis of the opportunity costs of blogging was a very interesting read.

Technology

• Three Reasons You Should Hate the Prius by Michael

Interesting analysis of how the Prius is not the best thing since sliced bread, for some people.

• 3 simple ways to drive more traffics from Flickr by Kuanhoong

Wicked useful! Thanks Kuanhoong.

• 3 coolest PC Mods by Madhur

As someone who built my own PCs back in the day, this post was cool!

Honorable Mention: 3+3 free tools for moving your life and your stuff online by Tanya

Travel

• The three places in Japan I would love to visit by Jamaipanese

I’ve always wanted to visit Japan, seems like such a cool place.

• 3 Ways to Have a Luxurious Hawaii Vacation on the Cheap by Sheila

Honestly, I don’t have a huge desire to go to Hawaii, but if I do I can go on the cheap!

• Three reasons to Visit Cyprus by Rajaram

Great, now add Cyprus to list of places to visit…this list is too big!

Honorable Mention: 3 wonders of the world that designers should have voted for by Mirko

Web Development & Design

• 3 Ways to Improve the Comment Styles on Your Blog (With Examples) by Ryan

Nice, I’ve been considering making a unique style on this blog so look out for some changes.

• 3+1 Ways to Make Your Website Load Faster by Pallab

Very useful tips, especially on javascript compression.

• 3 + 3 + 3 Places Where You Can Get Free Icons For All Seasons And Reasons by Joel

Very handy, I need to implement some icons on this blog so this is very good timing.

Honorable Mention: How I built 10,000 links in 3 weeks

Random Topics

• The last three times I lost my wallet… by Johan

This guy needs a wallet chain wicked bad.

• 3 little words by Paris

Funny (and useful) phrases women like to hear. Thanks Paris!

• Three Reasons Why Superheroes Wear Their Underwear On The Outside by Brown Baron

Simply awesome.

Honorable Mention: Ten things i didn’t know about the number 3 until now by Blaiq

Good job everyone and thanks to Daniel for hosting this project/contest!

Many of you probably know of Intuit, or at least have heard of their insanely popular Turbo Tax software. Intuit is a medium-sized company, employing 7,500 people, and was founded in Mountain View in 1983. Intuit develops accounting and finance software to anyone who needs it, businesses, consumers and accountants. I personally use their software at least once a year, via their free electronic tax filing program. In addition to being one of the 25 best managed companies, according to Forbes.com, it also is listed as one of the top 100 best places to work for on Forbes list.

Using my intuition (no pun intended), I would think that Intuit would have to have a high level of attention to detail. Not only is Intuit in the Accounting industry, in which a slight error could literally cost millions of dollars (if not more), they are also in the software industry, where, based on my personal knowledge of computer programming via my Computer Science AP class in high school, the slightest miscalculation, typo, or omission could literally cause an entire program not to run. From the Fobers.com profile, it’s also apparent that Intuit is oriented to both outcomes and people, as the CEO, Steve M Bennet, points out "We win because we emphasize customer-driven innovation, along with technology-driven innovation" (Intuit profile). In this industry, it’s especially crucial for Intuit to listen to their customers and actually develop their products to meet their customers’ needs. Intuit is challenged by new and old rivals constantly. Intuit controls 91% of  the small business and 74% of the consumer markets. These two markets are very unique in what they need. Some people only need a very simple accounting program to help them file their taxes, while some small business owners may have global operations for which the accounting can becoming very intimidating, very quickly. In order to keep their customers happy and away from competitors, Intuit must be receptive of its’ customers ever-changing demands. They accomplish this in a manner of unique ways, for instance the Practical Accountant reports that Intuit has devised software that can read data from scanned tax forms and input it into Intuit software for analysis (Practical Accountant, Tech Bulletin, pg. 20 Vol. 40 No. 1, LexisNexis1). This will help small accountants by eliminating the need to manually type in data from their clients tax forms. New programs such as this one point to Intuit allowing their employees to take risks to enable a strong innovative culture in which ideas can flourish. Another example of the strongly innovative culture at Intuit is their acquisition of Digital Insight Inc., an online banking services provider, which will enable the merged company to better position itself to offer a full suite of financial services to its small business customers (Accounting Today Pg. 1 Vol. 21 No. 1 2007, LexisNexis2). This acquisition is a huge risk for Intuit as it is a leap from their traditional business, however, in the grand scheme the merger represents a huge benefit to both company’s customers as they can now go to one source for many of their financial services needs.

Intuit is also a huge proponent of its’ employees being the reason for their success and in turn Intuit aims to keeps its’ employees happy. Looking at the career section on their website, I’m very intrigued by their culture, from the simple motto of "It’s the people" to the fact that they issue employee surveys to which managers are expected to respond. These surveys have enabled Intuit to go beyond meeting it’s employees basic needs and seems  to have created a great work-place. Managers are graded on employee expectations to:

• Help me be productive, do great things and be the best I can be
• Let me know where I stand and how I’m doing
• Invest in me to help me grow fast
• Pay me fairly and recognize my contributions
• Make me an integral part of the team
• Create a positive work environment

(Career section of Intuit.com)

Even though Intuit is successful because of it’s employees and innovative products, they are also in a good industry, as there will almost always be a demand for tax preparation assistance. In this regard, Intuit faces a pretty stable environment. Intuit continually emphasizes that is employees are a huge reason for it’s success, it only makes sense then that quality people are a huge supply issue for Intuit. They are located in a good location, near Palo Alto and the many intelligent people who live in the area. As Intuit is moving more and more to a web-based format, bandwidth from internet service providers is another crucial supply issue. Another supplier for Intuit would the banks who provided them the means to download data to the customer’s computers so it can be loaded into the Intuit program. Although there are many competitors to Intuit, they clearly hold the market lead for their targeted markets. Microsoft has recently begun to go after Intuit but so far has not been able to match the quality provided by Intuit. Another supplier for Intuit would be the various accounting standards groups, as they are the ones who alter accounting rules which in turn forces Intuit to put out new versions of their software that is in compliance with the new accounting rules.

It’s very clear that Intuit is a very responsive company. It’s managers must not only be aware of and respond to customers but also to employees, "In fact, people are so important that the primary job of each manager here is to help people be more effective in their jobs and to help them grow and develop at Intuit." (Intuit Operating Values). The managers at Intuit are true managers, in that they are not expected to go hands on and do the work of their employees, rather they are expected to guide and help the employees do the work Intuit needs them to do. In my mind, I can imagine Intuit managers being the ones responsible for predicting customer demand and notifying employees of new accounting rules, so that the employees can focus on developing the software, interface, and equations that will allow consumers to manger their finances. Intuit is also a huge proponent of teams and the sharing of ideas amongst those teams. This contributes to Intuit’s success because they do not value who comes up with a new idea but the idea itself. This seems to loosen up the culture inside Intuit to enable employees to make progress and continually innovate the products as employees do not have to deal with the politics of the office. Many people consider accounting to be a boring and stuffy topic, and with the creative, open culture at Intuit, it allows the company to portray an easy-going image which directly impacts it’s software and customer’s perception of the company and it’s products.

Another way the internal culture of Intuit complements the external environment it functions in is it’s emphasis on integrity. The first point in the Operating Value section of Intuit’s website is "Integrity without compromise"; it is inherently important for an accounting software company to display integrity, especially in light of the new Sarbanes-Oxley law enacted to deal with corporate scandals revolving around lying about financial results.

Another operating value of Intuit that correlates directly with the environment they exist in is "Think Smart, Move Fast", which is described as coming up with new ideas and implementing them quickly to maintain their technological advantage over Intuit’s competitors. In the world of software companies, the playing field is constantly changing, and if Intuit’s employees were not allowed to exchange ideas freely and implement them quickly, Intuit would quickly fall behind it’s competitors and would lag behind in providing customers features they need and want. Although Intuit is in a very delicate industry, helping people and business manage their money, it seems to be a great place to work as managers are given the freedom and responsibility to ensure that the workplace is an efficient exchange of ideas.

Hopefully that explains why, even though I got a small refund, I’m pumped that I even got a refund! I won’t bore you with the full details of my return, but I will share some interesting interpretations of U.S. tax law in relation to college tuition expenses.

I will only discuss the federal tax implications as I did not receive any tax benefit from Massachusetts for my tuition expenses. Massachusetts does not allow for full deduction/credit of tuition expenses. Rather you must compute your adjusted gross income and then, if the tuition expenses exceed 25% of your AGI you may deduct them (mine did not). In my situation, it wouldn’t have increased my refund that much more, but it’s still just plain silly. This state should encourage residents to obtain a college education and the current tax structure does not. College educated residents make more money, which in turn generates more money for the state.

In the Spring of 2006, I enrolled in two classes at UNC – Chapel Hill, for which I paid $1320 in tuition and fees ($660 per class) out of my own pocket. This past Fall semester, I took two courses at Northeastern University for which I paid $2208. My employer reimbursed me $1636 for these two classes, but not until 2007. At the end of the year I also signed up for a class at my current school, Umass Amherst, but the money wasn’t taken out of my account until 2007. Depending on which interpretation of accounting standards you follow, this transaction could be claimed in 2006 or 2007! I have an e-mail showing that I sent my payment to Umass Amherst in 2006, so I could use that to show that I paid for the class in 2006, just that Umass did not accept my payment until 2007.

There are a few options on how to calculate these expenses:

1. $1320 + $2208 = $3528
2. $1320 + $2208 – $1636 = $1892
3. $1320 + $2208 + $1240 = $4768
4. $1320 + $2208 + 1240 – $1636 = $3132
5. $1320 + $2208 +1240 – $1636 – $1200 = $1932

The UNC tuition is pretty standard and will be claimed as tuition & fees expense of $1320 in all four methods. The Northeastern tuition on the other hand could be claimed as $2208 or as $572. The reason for this is that the $1636 reimbursement can be used to offset the tuition expense in the year the tuition expense is filed, even though the reimbursement was not received until 2007; it does not not need to be filed this way though, hence why the option for claiming $2208 is also available.

Options 3 through 5 are merely adding in the Umass tuition on the basis that the payment was sent out in 2006. Option 4 deducts the Northeastern reimbursement from the tuition expenses and option 5 deducts the reimbursement for both Northeastern ($1636) and Umass ($1200).

You might think there’s one clear method to use, but the IRS’ stance on the issue, found on their Lifetime Learning Credit page, is somewhat murky. They state that the reimbursement should be claimed in the year it is received, however, if you receive the reimbursement before you file your claim, you may reduce your tuition expense by the reimbursed amount. In essence, if you reduce your tuition expense by the reimbursed amount, you reduce your tax credit for that year. If you do not reduce your tuition expense by the reimbursed amount for the year you paid the tuition, then you must make note of it on the following year’s income statement.

So which option did I choose and why? I claimed tuition expense of $3528, option 1. Techically, I could have claimed option 3 and received a bigger refund this year, but it would have only netted me an extra $200. Considering that I’ll have un-reimbursed tuition expenses this year, I decided to keep the Northeastern reimbursement and Umass tuition cost & it’s corresponding reimbursement in this year to offset those tuition costs I won’t receive a reimbursement for.

Sure, I could have received an extra $200 this year and then put it in my 6% HSBC savings account but it would have meant a much larger tax windfall next year.

What do you think I should have claimed? Do you see any flaws in my reasoning? Do you know of any other methods to compute tuition costs & fees for tax purposes? If, so please do share!

The fraudulent transaction came to light in 2004 as part of a continuing investigation into the insurance industry’s accounting practices, during which the Attorney General’s office and NY Insurance Department began looking more closely into AIG. The SEC had previously expressed curiosity in AIG’s business practices, in particular, the SEC was troubled by a product called “loss mitigation insurance” which AIG advertised to corporations through a brochure. The SEC brought litigation against AIG and several companies they believed AIG helped disguise losses in their financial statements. All of these trials were settled out of court. The investigation then turned to whether AIG had manipulated its own financial statements , which brought to light the shady accounting of the reinsurance transaction, as well as several off shore entities practically owned by AIG. According to one critic,

It’s been an open secret for years on Wall Street that no one outside the company really understood its accounting. AIG has long been called ‘opaque’ on Wall Street, which is what analysts say when they can’t figure out a company’s books because much of the detail is off the books.²

The SEC, in conjunction with the U.S. Department of Justice, New York Attorney General, and New York State Department of Insurance, again filed litigation against AIG shortly thereafter.

In the 2005 court proceedings, General Re executives admitted they knew ahead of time that AIG would plan to use a reinsurance transaction to increase its loss reserves, as AIG had been under scrutiny by analysts because of the low balance in their reserves. Many AIG executives admitted the transaction should have been classified as a loan, not as insurance. A crucial grey area here, which the Sarbanes-Oxley Act does not truly address, is how reinsurance should be categorized. As reinsurance is usually a loan, should it be classified as debt? Insurance companies such as AIG traditionally use reinsurance to protect themselves from risk. Reinsurance involves one company, AIG, ordering insurance from another company, Gen Re, to cover an insurance policy they wrote to a customer [insurance for insurance]. In particular AIG has been criticized for wrongly categorizing the finite insurance they purchased from Gen Re. Finite insurance, in essence, distributes the cost of a large insurance policy over several years. In the event that AIG is forced to pay a claim to its customer during the first few years of the policy being in effect, they would file a claim with Gen Re. During this short time period AIG is paying Gen Re a large premium, in effect paying the cost of the insurance policy it granted to its customer over several years. If no claims are made, most of the premium AIG paid is returned to AIG. Accounting standards in this area are open to interpretation,

…there is a question about the accounting for finite policies. ‘Whether it’s an attempt to trick people or not depends on how you are using it,’ Shore notes. ‘The question is: To what extent is this not insurance? To get paid a dollar today in exchange for a dollar tomorrow … that’s not insurance.’³

The real red flag here, is that the reinsurance roles were switched in this case. AIG paid Gen Re $5 million to move $500 million of insurance contracts and their corresponding $500 million worth of premiums to AIG. Then, AIG claimed their cash reserves increased by $500 million, where in essence they had actually taken out a loan. If no claims were made to Gen Re within the specified time period, AIG would return the majority of the $500 million, hence why most accountants would classify this transaction as a loan. The grey area here is that for this cash movement to be considered insurance, some risk has to be transferred between the insuree and insurer. The common thought in this scenario is that risk was not transferred and thus the $500 million should be classified as a loan, thus increasing AIG’s liabilities. The intent of the Sarbanes-Oxley Act is to prevent companies from hiding losses or reporting unearned revenue, in this aspect AIG adhered to the Sarbanes-Oxley Act perfectly,

Early in January, auditors reported that they had finished a yearlong effort analyzing A.I.G.’s internal controls as required under the Sarbanes-Oxley Act, the tough securities law adopted in the wake of the Enron and WorldCom collapses. A.I.G. scored quite high, the auditors proudly reported.⁴

As a result of the investigation, AIG restated five year’s worth of financial reports, lowering its net income by 10%. In February 2006, the SEC filed an enforcement action against four Gen Re (former) employees and one AIG employee, finding that they violated anti fraud and other federal securities laws. Final settlements call for AIG to pay $1.64 billion toward a combination of shareholder lawsuits, SEC-monitored funds for investor payments, and underpayment of workers’ compensation premium taxes in all 50 states.

Sarbanes-Oxley Act of 2002: Potential Effects

The Sarbanes-Oxley Act of 2002, had it been in place at the time of the 2000 and 2001 fraudulent events by AIG and Gen Re, may have helped prevent it from happening in the first place. One of the act’s primary goals is to enforce auditor independence and require companies like AIG to have their own independent audit committees to monitor the company interaction with it auditor. Had these and other more strict internal controls been in place, both AIG’s own self-monitoring and their auditor, PricewaterhouseCooper (PwC) LLP’s, would have raised the red flag and possibly prohibited AIG from classifying the $500 million as revenue.

In fact, after the AIG fraud came to light, investigation into PwC revealed that it had been dishonest in its long-time auditing relationship with AIG, and that PwC had knowingly ignored warning signs and “red flags” regarding AIG’s poor accounting methods. The audit committee of AIG’s own board of directors repeatedly insisted it could not verify AIG’s accounting methods. In a 2005 Washington Post article, the effects of the Sarbanes-Oxley Act on responsibility was emphasized. According to a spokesman for PwC, prior to the Sarbanes-Oxley Act,

Auditors would not have seen this as a ‘red flag’ or a scope limitation, as the board’s proxy language simply described what was and what was not the responsibility of its audit committee at that time. Auditors also would not have been surprised to see that descriptive language changed after the passage of the Sarbanes-Oxley Act in 2002. The act was designed to make executives responsible for their companies’ accounting.⁵

Among the other impacts the Sarbanes-Oxley Act could have had on the AIG/Gen Re scam is a potential fear factor that might have prohibited executives from getting involved in the first place. Under the Act, the penalties—both monetary and in terms of jail time—are much harsher than they once were for executives who knowingly commit fraud by misstating financial statements. In the SEC investigation of the Gen Re and AIG executives who concocted the plan, the fraud was treated lightly, and even joked about on recorded phone lines, as if there were to be no consequences. In testimony, former Gen Re executive John Houldsworth’s phone records were revealed. Houldsworth, who pleaded guilty to criminal charges of misstating AIG’s finances, was recorded as laughing about the scam: “They’ll find ways to cook the books, won’t they?” he said to CFO Elizabeth Monrad.⁶ She was reported to joke back. Had the Sarbanes-Oxley Act been in place, the risk on consequences for committing fraud may have been no joking matter.

One of the issues here with how the Sarbanes-Oxley Act applies to AIG & Gen Re is that the Sarbanes-Oxley Act’s main purpose was to prevent companies from using loopholes and hiding their activities. At AIG and Gen Re, high-level executives conspired to miscategorize insurance as revenue. AIG intended to commit fraud, planned how to cover the fraud, committed the fraud, and then put into action their cover up plan. No act, no matter how strict, can force someone to tell the truth and to play the game fairly.

Here in the U.S., collaborative convergence efforts have begun between the Financial Accounting Standards Board [FASB] and International Accounting Standards Board [IASB]². Although, the FASB creates and publishes accounting standards for domestic companies in the U.S., they have recognized the rising popularity of the IASB and their IFRS publication. Even though the FASB has joined the global accounting standard setting discussion late, they are still exerting a significant influence over how these international standards are being defined, as noted by the FASB:

In April 2004, to further the goal of promoting convergence of accounting standards used internationally, the Boards decided to combine their respective projects on the reporting and classification of items of revenue, expense, gains, and losses. In agreeing to pursue their similar projects jointly, the Boards agreed to take a fresh look at the presentation of information in the financial statements. The joint project has an expanded scope beyond presentation and display of items of income and expense; the project addresses presentation and display on the face of the financial statements that constitute a complete set of financial statements.³

As the American economy is such a large part of the global economy, this makes sense and benefits the global economy, in addition to our domestic market.

There exist several crucial differences between US GAAP and the IFRS system now used by a majority of countries around the world. For instance, in IFRS LIFO [Last in-First out] and extraordinary items are prohibited⁴. Note that by prohibiting extraordinary items, the IFRS also differs in how EPS is reported on the Income Statement. This and many other differences affects the way investors, analysts, creditors, government agencies, and business analyze financial statements. All of the parties just mentioned would agree that a global set of standards would reduce the complexity of these statements and thus reduce the time needed to properly utilize the financial statements:

By placing Global GAAP [Generally Accepted Accounting Principles] at the base of the new reporting model, the authors acknowledge the importance of being able to compare business results regardless of where a company is located. As barriers to international trade continue to get knocked down (through efforts that include the North American Free Trade Agreement and establishment of the European Union), and cross-border capital flows more freely, investors and others want reliable standards that share common metrics. In contrast, as DiPiazza and Eccles note, public capital markets today may use local GAAP, or principles based on national or international standards. Further, ‘the quality of these standards varies widely as does how well they are applied’⁵

Many complications exist in converging the IFRS and U.S. GAAP, because of this level of difficulty the IASB and FASB have publicly acknowledged that this is a long-term project with a final solution many years in the future.

The IFRS uses more principles bases accounting versus the rules based accounting of GAAP in the U.S., as noted in this article from the Wharton Business school at the University of Pennsylvania, “For example, while U.S. GAAP is based on rules and specific details, International Financial Reporting Standards tend to be more broadly based on principles.”⁶ The IFRS’s reliance on principles over rules based accounting inherently increases the potential for different interpretations, but also provides guidance in more areas. A key debate in the convergence project between FASB and IASB, is whether the final accounting standard which emerges should be rules or principles based. Arguments from the IASB propose that the explosion in accounting frauds in the US are due to corporations following the letter of the law, rather than the spirit of the law. The FASB counters that real-world accounting contains literally an infinite amount of exceptions and unique situations, that a principle based system will never be able to fully describe how to act in all situations.

As a principle is more open to interpretation than a rule, the FASB does possess a valid point in their argument; however, a principle based accounting system has many more merits than the one currently employed by the FASB. Grey areas in principles can be clarified by the standards setting board, and cover more areas and provide for less exceptions than a rules based system. Thus a principles based system is easier to adhere to and less convoluted for outside parties to understand. International companies tend to agree with the IASB, as Mark Armour, Chairman of the FTSE 100 has stated, “We have a sensible accounting regime, the IASB is adopting a principles-based approach, and that should not be sacrificed on the altar of convergence on a global basis.”⁷ In the FASB’s domestic market, most concerned entities seem to align their opinion with that of the president and CEO of Nokia, Olli-Pekka Kallasvuo, who was quoted as saying,

I see a danger of bipolarization when it comes to global accounting,’ Olli-Pekka Kallasvuo told a corporate-governance seminar, according to Reuters. ‘There should be a really strong effort to make global harmonization possible. We need less discussion on whose rule is better[and] more on how to make [harmonization] possible.’⁸

Due to the uncertainty of what the future American accounting standard will be, individuals and organizations in the US, would rather have the FASB pick one of the options and declare that it will stick with it, rather than debate for eons over the positive and negative aspects of the principles and rules based approach. Due to the massive number of accounting frauds here, I do believe this is an area in which the FASB should cede to the IASB, especially as I consider the IASB’s principles based method better. This difference in methodology is partly the reason for an indefinite time window on completion of the convergence.

We are already on track to a Global GAAP, as the IASB and FASB are in constant talks on how to converge both IFRS and U.S. GAAP. I applaud the FASB’s efforts here to bring its accounting standards more in line with those of the IASB. As many prominent countries are already using the International Financial Reporting Standards, the representatives of American accounting must act now to align us with the IFRS; otherwise we face potentially being shut out from the formation process of these standards which will affect all international companies. As Mr. Cummings points out:

CFOs of U.S.-based companies would be well advised to get up to speed with IFRS, according to a new PricewaterhouseCoopers paper that explores the implications for U.S. companies of what it calls ‘global GAAP.’ ‘The train heading towards global GAAP has left the station,’ notes Marie Kling, senior manager in PwC’s national office in Florham Park, N.J., and author of the paper. While it won’t reach its destination overnight, there’s no turning back. ‘Even a U.S.-based company with no international operations will be affected by the move towards convergence,’ she reports.⁹

The FASB’s cooperative work with the IASC will result in a true Global GAAP; once the IFRS is aligned with the U.S. GAAP system, the American companies will issue statements according to the IFRS, as the SEC has declared that “it will remove the reconciliation requirement once it is satisfied that IFRS are of a sufficient standard.”¹⁰ The completion of convergence will be a boost to the global economy, and inherently, all underlying economies, as it will standardize the practice of accounting, allowing more work to go into principles and theory research, and increase the pool of available and applicable accountants. No longer will investors have to reconcile financial statements to an accounting style they are familiar with and neither will accountants have to prepare statements differently in various countries.

Apparently, Intuit, the makers of Turbo Tax, are hosting a contest on YouTube for the best rap video about Turbo Tax. If you think that video is as funny as I do, please go here and vote for them. I’ve looked through some of the other entries, and these guys have them all beat, hands down.

Some of the best lines:

“…it’s the best software since Oregon Trail.”

“Don’t wanna go toe to toe wit Uncle Sam, cuz you cooked your books like a Christmas ham.”

“I been around, I seen some things, I throw tea in the harbor when I’m mad at the king.”