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  • Deirdre Harris
    Michael Kraten on LIBOR, Accounting and the Public Interest11
    news item last edited November 13, 2012 by Deirdre Harris, tagged 2012, general news 
    Michael Kraten on Libor, Accounting and the Public Interest

    Since the London interbank offered rate (LIBOR) scandal was brought to light months ago, Michael Kraten’s research work has been an important source of information for high-profile media sources including: Bloomberg Businessweek, The Economist and The Wall Street Journal. Even the UK House of Commons discussed the study.

    Rosa M. Abrantes-Metz, Michael Kraten, Albert D. Metz and Gim Seow co-authored “LIBOR Manipulation?”. The authors used their combined expertise in forensic accounting, econometric tools and capital markets to analyze the Libor rates for their article written in 2008.

    “We found that there were unusual patterns in the way that individual banks were submitting quotations that were being utilized to calculate LIBOR. There should be a fair amount of randomness; we failed to see those periods of randomness for an extended amount of time,” Kraten said.

    There were periods of time when the quotations would not fluctuate at all, not even by even a tiny basis point or two. The rate should reflect the banks’ underlying financial strength, which varies day by day, he said.

    There were other periods of time when the rate would fluctuate but not in the direction that the business environment would predict that it would fluctuate, said Kraten. For instance, in the middle of the financial crisis, when global financial markets were doing poorly, the rate would show that the banks were actually strengthening financially.

    The authors made it clear that they did not have proof. There was no way they could look at the quotations and know if the banks were having secret discussions, Kraten said. At the time the academic authors found trends in the data that raised the question whether price fixing might be occurring. They were concerned that there might be illegal manipulation going on based on their quantitative analysis.

    In 2010, Kraten presented their findings at the Public Interest Section’s midyear meeting, which helped increase exposure.

    Fast forward to mid-2012, when news broke that American regulatory agencies found certain email messages from global financial company, Barclays, that did indicate illegal conversations were occurring.  

    It was an American regulator called the Commodities Futures and Trading Commission (CFTC) that went public with the scandal by declaring Barclays guilty of manipulation of the rate and enforcing a $450 million dollar fine.

    On June 28, 2012, Ben Gummer, a member of the UK House of Commons, mentioned a paper circulated around New York University that “raised the issue of manipulation of LIBOR.” You can read the transcript HERE under column 480. 

    “What I suspect happened is that our paper here was first revealed, or first disclosed, if you will, on the floor of the House of Commons during this parliamentary debate, and then people started to ask questions, curiously, about what this paper was, who wrote it and what it said,” said Kraten.

    Colleagues encouraged Kraten to go on the record with recommendations. Kraten co-writes a blog with his wife, Maureen Kraten. The blog is called AQPQ. Micheal Kraten wrote a blog entry called “LIBOR and the Public Interest” and made two recommendations. He said the numbers should be audited, and Britain may want to create a government oversight agency that is similar to the PCAOB to oversee the accounting and the auditors.

    Four days after Kraten’s blog entry posted, Brian Mairs of the British Bankers’ Association (BBA) posted a comment on the blog stating that Kraten had a factual error in his blog post. The BBA collects data and manages the calculation of the LIBOR rate. Mairs wrote that Kraten had stated that the BBA sets LIBOR. Kraten replied that he never said that the BBA sets the rate, and he agrees that the BBA obtains the information from other banks.

    The Federal Reserve Bank of New York released a series of letters between Treasury Secretary Timothy Geithner, head of the Federal Reserve Bank of New York at the time, and Bank of England Governor Mervyn King, proving that the American government knew about problems with LIBOR in 2008. Privately, Geithner gave a set of six major recommendations including that independent accountants needed to audit the Libor rate.

    “As far as I knew, I was the first person to publicly call for external auditors auditing the LIBOR rate. As it turns out, the treasury secretary was privately calling for the same thing for the last four years,” Kraten said.

    We now know that there was significant correspondence between the major American and British regulators. Geithner says that because it was a British matter under British jurisdiction all he could do was bring his concerns to the Bank of England’s attention and make recommendations. King’s response is that Geithner only gave recommendations and observations without any proof of wrongdoing.

    Kraten speculates that they felt that coming out publicly during the financial meltdown with this major global scandal could have shattered public confidence in the banking system.

    Colleagues have asked Kraten if he has spoken with regulators or received offers to speak at banking trade association conferences, but he had not engaged in any conversations with regulators prior to this interview.

    “We are trying as hard as we can to keep the issue alive, to keep our recommendations alive, and to move forward from simply being able to identify that there was a problem, which is what we did in our original paper, to trying to get people to hear our prescriptive solutions that we are proposing.”

    Kraten said that as “guardians of the public trust” it is important for the members of the American Accounting Association to focus on the question: “What should we do to proactively reform the system so that it is operating in the public interest?”

    Michael Kraten is the luncheon speaker for the Public Interest Section Mid-Year Meeting in New Orleans in March 2013.

    -- Lindsay Peters, AAA

  • Deirdre Harris
    Task Force Finalizes Curriculum to Bridge ‘Skills Gap’1
    news item posted January 22, 2013 by Deirdre Harris, tagged 2013, general news 
    January 15, 2013

    Two thought leaders in accounting education, IMA® (Institute of Management Accountants) and AAA’s (American Accounting Association) Management Accounting Section (MAS), are working to bridge the gap between the skills currently provided in accounting education and those required in practice. Ultimately, these skills translate to greater business performance and shareholder protection.

    The IMA-MAS Curriculum Task Force presented its initial recommendations on January 12 at the 2013 Management Accounting Section Research and Case Conference in New Orleans, La. The presentation featured a transformational integrated accounting educational framework relevant to all accounting students.

    “This achievement reflects IMA’s longstanding commitment to education reform and to addressing the talent shortage in management accounting,” said Raef Lawson, Ph.D., CMA®, CPA, IMA vice president of research, who serves as Task Force chair. “Accounting curricula must embrace how accountants today add organizational value in a variety of organizational settings, including content on strategy formulation and analysis, planning, and execution.”

    The task force’s charge of developing a comprehensive integrated educational framework is responsive to recommendations made by the Pathways Commission, on which IMA has a representative. The Commission was formed in 2010 as a joint initiative between AAA and the American Institute of Certified Public Accountants to study the future of accounting education.

    IMA’s research initiatives aimed at addressing the skills gap date back to 1986 with its contributions to the AAA’s Bedford Report, “Future Accounting Education: Preparing for the Expanding Profession,” which examined accounting education and found a severe gap between what accounting educators teach and what organizations need from their accounting and financial staff.

    To access Dr. Lawson’s presentation from the conference, visit: http://bit.ly/XyruKt.

    About IMA® (Institute of Management Accountants)

    IMA®, the association of accountants and financial professionals in business, is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) program, continuing education, networking, and advocacy of the highest ethical business practices. IMA has a global network of more than 65,000 members in 120 countries and 200 local chapter communities. IMA provides localized services through its offices in Montvale, N.J., USA; Zurich, Switzerland; Dubai, UAE; and Beijing, China. For more information about IMA, please visit www.imanet.org.

    About AAA (American Accounting Association)

    The American Accounting Association is the largest community of accountants in academia. Founded in 1916, we have a rich and reputable history built on leading-edge research and publications. The diversity of our membership creates a fertile environment for collaboration and innovation. Collectively, we shape the future of accounting through leading-edge research, education, publications, and a powerful network, ensuring our position as thought leaders in accounting. For more information about the AAA, please visit http://aaahq.org

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  • Deirdre Harris
    Richard G. Brody Elected to ACFE Board of Regents
    news item last edited January 22, 2013 by Deirdre Harris, tagged 2013, achievement, general news 
    UNM Accounting Professor Brody Elected to ACFE Board of Regents

     

    The Association of Certified Fraud Examiners (ACFE), the world’s largest anti-fraud organization and premier provider of anti-fraud training and education, has announced that Richard G. Brody, Ph.D., CFE, CPA, has been elected to the ACFE Board of Regents.

    Brody is the Douglas Minge Brown Professor of Accounting at the University of New Mexico and a Daniels Fund Business Ethics Fellow. He is a prolific author and an expert on fraud, and was honored as the ACFE’s 2012 Educator of the Year.

    Brody and another newly elected regent, Bruce G. Dubinsky, M.S., CFE, CPA, will begin their two-year terms when they take office at the board’s Feb. 19-20, 2013 meeting at the ACFE headquarters in Austin, Texas.

    Elected by Certified Fraud Examiners (CFEs) worldwide, members of the ACFE Board of Regents are responsible for setting membership standards that promote professionalism and ensure the future of fraud examination as a whole. They have authority over the admission of members, continuing professional education and ethics requirements, and all other matters necessary to maintain the high standards of the ACFE.

    Brody earned his doctorate in accounting from Arizona State University and previously worked as a staff auditor for Deloitte Haskins + Sells as a cost analyst for Hewlett Packard and as a senior financial reporting analyst for Tandem Computers.

    Brody has authored or co-authored more than 80 refereed publications and has made more than 100 presentations at national and international conferences and seminars. He served on a panel, “It may be legal, but is it ethical?” at the 23rd Annual ACFE Fraud Conference & Exhibition, and has been on the editorial advisory committee for Fraud Magazine since 2007.

    Brody serves as an expert witness and has experience in both civil and criminal cases. He has worked with the U.S. Secret Service, the U.S. Department of Justice, the New Mexico Attorney General’s Office and the Second Judicial District Attorney’s Office in New Mexico.

    About the Association of Certified Fraud Examiners

    The ACFE is the world’s largest anti-fraud organization and premier provider of anti-fraud training and education. Together with nearly 65,000 members, the ACFE is reducing business fraud worldwide and inspiring public confidence in the integrity and objectivity within the profession. For more information about the ACFE, visit ACFE.com

  • Deirdre Harris
    Richard Brody Named ACFE Educator of the Year
    news item last edited September 5, 2012 by Deirdre Harris, tagged 2012, achievement, general news 
    University of New Mexico Professor Richard Brody Honored at ACFE

    The Association of Certified Fraud Examiners (ACFE) is hosting its annual conference in Orlando, FL this week.  One of the awards it will be handing out will go to University of New Mexico (UNM) professor Richard Brody who is to receive its Educator of the Year award.

    The award is presented to an ACFE Educator member who has made an outstanding contribution in anti-fraud education.  In a press release from UNM, Dr. Craig White, Chair of the Anderson Accounting Department at UNM said, “He [Brody] has created awareness and excitement among our students on the issue of fraud detection and prevention.”  Brody is preparing tomorrow’s accountants with the tools to not only be investigators of fraud, but also professionals that prevent fraud from occurring int he first place.

    UNM, located in Albuquerque, NM, is situated near the FBI’s Regional Computer Forensic Lab (RCFL).  The lab has proved to be a good learning opportunity for students that are part of the university’s Information Assurance program, a study in the area of computer forensics.  The curriculum, which consists of students from both accounting and management information systems, includes using computer programs to uncover fraud related to money laundering, analyzing digital forensics and developing systems to prevent fraud.

    “I’m all about prevention,” said Professor Brody in a recent interview.  ”At UNM we have a program where our students do an assessment of small non-profit organizations to evaluate their processes.  Our students are intimidated at first but they quickly realize that what they are learning here is applicable to these small operations.”  These nonprofit organizations could not otherwise afford such an in-depth assessment, nor could they afford the consequences of a fraud that could result in significant financial losses.  ”Our students analyze the processes, procedures and the information systems of the non-profit,” Brody said.  ”When they are done, the students feel more confident that they actually helped and the organization feels they received a valuable service.  When we first started the program I could hardly find a non-profit to participate, now we have to put them off for a semester or two until we can get to them.”

    Beyond non-profits, Professor Brody and others at UNM have worked to place their students with the FBI, Secret Service and other governmental agencies that battle white-collar crime.  ”For our accounting majors, it gives them a skill set that other accountants may not have with an accounting degree alone,” Brody explained.  ”Not everyone is cut out to be in law enforcement, but these students will be better equipped to perform audits and dig deeper with their questions when they get into the real world.”

    Some students do have a knack for crime fighting and UNM interns have worked with local and state law enforcement looking for and solving white-collar frauds.

    Congratulations to the University of New Mexico and Professor Brody.

  • Judy Cothern
    Gary John Previts and Reed Storey inducted to Hall of Fame
    news item last edited October 27, 2011 by Tracey Sutherland, tagged 2011, achievement, general news 
    The Accounting Hall of Fame Elects Two Distinguished Accountants—August 8, 2011

    Columbus, OH - Two distinguished accountants were inducted into The Accounting Hall of Fame on Monday, August 8, 2011 at the American Accounting Association Annual Meeting in Denver, Colorado. The 2011 inductees are Gary John Previts, E. Mandell de Windt Professor and Distinguished University Professor at Case Western University, and Reed Karl Storey, Director of Accounting Research for the Accounting Principles Board and later Senior Technical Advisor to the Financial Accounting Standards Board.

    Honorees are selected by the Accounting Hall of Fame's international board of electors.  Eighty-eight influential and respected accountants from academe, accounting practice, government and business have been elected to the Accounting Hall of Fame since its establishment in 1950 at Ohio State University's Fisher College of Business.

  • Judy Cothern
    G. Peter Wilson earns AICPA's Distinguished Achievement...
    news item last edited October 27, 2011 by Tracey Sutherland, tagged 2010, achievement, general news 
    Wilson Earns AICPA's Distinguished Achievement in Accounting Education Award

    G. Peter Wilson, Carroll School of Management at Boston College, was presented with the AICPA's Distinguished Achievement in Accounting Education Award by Bob Harris, chair of the AICPA, during the Institute’s spring meeting.

    Upon acceptance of the award, Wilson talked about the importance of teaching students how to answer open-ended questions. He noted there is an over-reliance on testing students using multiple choice or true and false questions. “We put the next generation of CPAs at great risk,” he said. “The next generation will run the risk of being outsourced. Teach students to answer open-ended questions and [they] can gain competitive advantage by becoming proficient in this area.”

  • Deirdre Harris
    Susan Crosson's success with YouTube videos
    news item last edited October 27, 2011 by Tracey Sutherland, tagged achievement, general news 
    Susan Crosson Interviewed about her YouTube Teaching Videos
  • AAA HQ
    Stephen Shepard
    news item posted September 3, 2009 by Judy Cothern, tagged 2009, general news 
    New COO Joins the AAA Staff, June 2009

    The American Accounting Association is pleased to announce that Stephen Shepard has joined the AAA staff as our Chief Operating Officer. Steven comes to us most recently from the Institute of Management Accountants (IMA) where he focused on member interests and support as Director of Member Services and Global Community Relations Manager. Before that he lived in the Washington, D.C. area while serving as Director of Training and Operations for the Society of American Military Engineers.

    As a Certified Association Executive (CAE), he brings experience in association management, membership development, association leader support, staff development, and a lot of enthusiasm for accounting education. Welcome Stephen!