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ELS session

    Shifei Chung
    Go Green in Teaching Accounting Courses
    ELS session posted August 5, 2010 by Shifei Chung, last edited February 10, 2012 
    825 Views, 5 Comments
    title:
    Go Green in Teaching Accounting Courses
    names(s), affiliation(s):
    Shifei Chung (Rowan University) & Ramesh Narasimhan (Montclair State University)
    date:
    August 2, 2010 12:30pm - 2:00pm

    Comment

     

    • Robert E Jensen

      "Save a Forest: Print Your Emails:  It's okay to use paper. Trees are renewable, recyclable and sustainable," by Chuck Leavell and Carlton Owen, The Wall Street Journal, March 31, 2011 ---
      http://online.wsj.com/article/SB10001424052748704471904576228712797236124.html?mod=djemEditorialPage_t

      Chuck's email tagline reads: "Notice: It's OK to print this email. Paper is a biodegradable, renewable, sustainable product made from trees. Growing and harvesting trees provides jobs for millions of Americans. Working forests are good for the environment and provide clean air and water, wildlife habitat and carbon storage. Thanks to improved forest management, we have more trees in America today than we had 100 years ago."

      Now, understand that we don't advocate wanton waste of paper or any other material, but avoiding the print option does absolutely nothing to save the planet or forests. More forests are dying of insect infestation and disease or being paved over across this country right now than could be converted to an email print-out in a thousand years.

      Paper is good. Around 105 A.D., man discovered that paper traveled and transcribed better than stone; it became the renewable medium of choice. Frankly, the human eye can only stare at a computer screen for so long.

      We appreciate and applaud people who are sensitive to environmental issues. We both love forests and are avid environmentalists. But we are going to continue to print out those necessary emails without guilt.

      Honest, it's okay to print. Trees are renewable, recyclable and sustainable.

      Jensen Comment
      The paper companies are the largest single landowners in Maine, New Hampshire, and Vermont --- owning millions of acres of mostly conifer forests used for making paper pulp. I view paper manufacturing as good for the environment since bad types of forest removal is typically forestalled as long as the paper companies can harvest and replant the timber.

      Think of the air you breathe. Much of the oxygen in that air was generated by a forest. Think of how we are depleting the oxygen when we ravage our forests.

      Sadly the last paper mill in New Hampshire closed its doors as the world transitions to electronic books, eReader newspapers, and PDF legal documents. Some efforts are being made to revive the mill in Gorham, but similar closings have taken place in other paper mills around the world.

      We might naively hope that these vast forests will be replanted with beautiful hardwood trees for fine furniture, but the fact of the matter is that hardwood trees are too slow growing to be a profitable replacement of the fir, pine, and spruce forests used in paper making. Meanwhile the rain forests in the tropics are being ravaged for hardwood furniture.

      Softwood trees can be replanted for home building, but new and better materials are replacing much of the wood in home building, especially materials that are more fire and termite resistant.

      Hence, I encourage printing computer documents since this helps to save the forests that transform our harmful carbon dioxide into wonderful oxygen in a photosynthesis process that went on for millions of years before animal forms of life commenced on this beautiful planet.

      Fortunately, there's not been technology to replace the paper rolls beside the commodes even if the sitters are now holding Kindles and iPads while they do their bathroom business. Fortunately we've not yet completely wiped out the paper industry.

    • Robert E Jensen

      From The Wall Street Journal Weekly Accounting Review on August 10, 2012

      Fraud Fears Put a Chill in Fuel Program
      by: Ryan Tracy and Ben Lefevre
      Aug 03, 2012
      Click here to view the full article on WSJ.com
       

      TOPICS: Assurance Services, Auditing, Fraud

      SUMMARY: The article describes the credit trading programs used to meet mandates set by Congress in 2005 and 2007 for gallons of production of diesel-motor fuel made from sources such as waste cooking oil and soybeans. Major oil producers who have purchased credits from bio-diesel producers to meet their mandated quotas are now shying away from using the markets because increasing numbers of sellers of the credits have been shown to have committed fraud or are accused of doing so. The article also states that the EPA now requires companies purchasing bio-mass fuel credits to replace ones found to be bogus-putting the audit onus on the purchasers of these credits. An economic result also is that small producers' credit prices are slammed because of their perceived risk for fraudulent credits.

      CLASSROOM APPLICATION: Questions ask students to understand the nature of credit trading schemes to support innovation in fuel industries and the need for auditing the certificates sold in these schemes.

      QUESTIONS: 
      1. (Introductory) Summarize the government mandates described in the article that are helping to achieve growing levels of alternative fuel production. When were these programs put into place?

      2. (Introductory) Refer to the graphic entitled "Power Play." How long has it taken to see increasing production of alternative fuel relative to when U.S. Congress first initiated quotas for these fuels?

      3. (Advanced) How do the government systems over biomass fuel production require an audit verification process?

      4. (Advanced) Refer to the article description of Absolute Fuels of Lubbock, TX. What evidence indicates fraud may have occurred behind this company's sale of credits for biofuel production to large oil producers?

      5. (Advanced) What audit steps could be taken to identify these fraudulent practices? Who should be responsible for undertaking these audit steps? Explain your answer.
       

      Reviewed By: Judy Beckman, University of Rhode Island

       

      "Fraud Fears Put a Chill in Fuel Program," by Ryan Tracy and Ben Lefevre, The Wall Street Journal, August 10, 2012 ---
      http://professional.wsj.com/article/SB10000872396390444840104577550944057955070.html?mod=djem_jiewr_AC_domainid&mg=reno64-wsj

      A government program designed in part to foster innovative new producers of alternative diesel fuels is now endangered by fears of burgeoning fraud.

      Congress in 2005 and 2007 set mandates requiring major oil refiners to purchase credits representing gallons of diesel-motor fuel made from alternative sources, such as cooking oil and soybeans. The idea was to jump-start a new industry by attracting start-ups that otherwise would have trouble competing on price with established biodiesel producers.

      But federal charges that two small producers passed along worthless credits—and warnings that more cases could be coming—have spooked major buyers, threatening the viability of the small companies trying to gain a foothold.

      One company fearing the fallout is New Leaf Biofuel in San Diego, which makes diesel from used cooking oil collected at area restaurants. "We are nowhere near the margins that we had," said Chief Executive Jennifer Case, citing the case of a trash hauler with hundreds of trucks that backed away from doing business with her company.

      "The current issues as well as the future fraud threatens tens of thousands of jobs in the renewable-fuel industry," said Thomas Paquin, president of biofuel marketer VicNRG LLC, in testimony before Congress last month.

      When a producer such as New Leaf produces a gallon of alternative diesel fuel from sources deemed renewable by the EPA, it simultaneously creates a tradable credit representing roughly that amount of production, which is then assigned a 38-digit number.

      Big refiners can buy the credits to fulfill their legal requirements for biodiesel output, but at the moment they are offering low prices or nothing at all for credits from little-known producers that are perceived as risks for offering fake numbers.

      Allegedly bogus numbers are at the core of the federal cases.

      In December 2010, a Lubbock, Texas-based company, Absolute Fuels, sold about $1 million worth of numbers representing an equivalent amount of biofuel output to Tesoro Corp., one of the country's largest oil refiners, according to affidavits filed by a Secret Service investigator in federal court. Tesoro said it believed the numbers were valid and has turned in additional numbers to the EPA to replace those it bought from Absolute.

      The trade capped a big quarter for Absolute, which had closed similar deals with other big refiners. On Jan. 5, 2011, the firm registered a Gulfstream G-1159A multi-engine turbojet worth $2.5 million, according to documents filed by the Secret Service in federal court in Texas. Two months later, Environmental Protection Agency inspectors visited the Absolute factory and discovered the facility didn't appear to be producing any fuel, the documents said.

      Jeffrey Gunselman, Absolute's chief executive, was arrested last month and pleaded not guilty to the fraud charges, said his lawyer, Dan Cogdell. Mr. Cogdell said Mr. Gunselman has cooperated with investigators and that he was "instrumental in turning over tens of millions of dollars to the government during this investigation."

      The case against Mr. Gunselman is still pending.

      Rodney Hailey, owner of Maryland's Clean Green Fuel LLC, was convicted June 25 of fraudulently selling about $9 million of phony credits and is awaiting sentencing. His lawyer, Joseph Evans, says Mr. Hailey isn't guilty. Mr. Evans said an appeal was possible and that the government intends "to crush him beyond reason, even assuming that he did absolutely everything that they said he did."

      Under EPA rules, refiners that purchase phony credits are on the hook to replace them. According to an estimate by VicNRG, the biofuel marketer, the $140 million of allegedly fraudulent credits identified by the EPA so far would cost more than $200 million to replace at current market prices.

      While the market turmoil could temporarily help some established producers get higher prices for their credits, it could have negative longer-term effects for the alternative-fuel business. If too many producers drop out of the market, total output may fall short of the EPA's target of about one billion gallons a year.

      Continued in article

      Bob Jensen's Fraud Updates are at
      http://www.trinity.edu/rjensen/FraudUpdates.htm

    • Robert E Jensen

      "Cheap Solar Panels Aren't Enough to Make Solar Installers Profitable:  SolarCity's IPO filings show it needs to grow and lower costs," by Kevin Bullis, MIT's Technology Review, October 8, 2012 --- Click Here
      http://www.technologyreview.com/view/429533/cheap-solar-panels-arent-enough-to-make-solar/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20121009

      Jensen Comment
      This article might be useful in cost, managerial, and environmental accounting courses as well as courses in financial analysis of the IPO filings.

       

    • Robert E Jensen

      "The 5 Million Green Jobs That Weren't," by Ira Boudway, Business Week, on October 11, 2012 ---
      http://www.businessweek.com/articles/2012-10-11/the-5-million-green-jobs-that-werent

      In 2008 candidate Barack Obama promised to create 5 million green jobs. He laid out a plan to invest $150 billion over 10 years that would advance a clean-energy economy built around biofuels, hybrid cars, low-emission coal plants, and renewable sources such as solar and wind. How many has he actually created?

      The Bureau of Labor Statistics began tracking green jobs two years ago, but it counts only how many existed as of the end of 2010. It doesn’t keep a running total of newly created jobs, so there’s no way to tell how many existed before Obama’s election. The Brookings Institution also has a tally, but it too goes only through 2010, and of the nearly 2.7 million green jobs it identifies, most were bus drivers, sewage workers, and other types of work that don’t fit the “green jobs of the future” that Obama imagined. The report does zero in on cleantech, which includes the wind, solar, fuel-cell, and smart-grid industries. In 2010, Brookings shows, there were 184,699 such jobs nationwide—up 2,642 since the president took office in 2009.

      The American Recovery and Reinvestment Act of 2009 set aside $90 billion in renewable energy grants and loans for a grab bag of thousands of projects—wind farms, solar installations, natural gas fueling stations, biofuel research, and a $5 billion weatherization project for low-income homes. Digging into the public records of the $21 billion spent so far through 19 U.S. Department of Energy programs reveals 3,960 projects that employ 28,854 people.

      That’s not 5 million. In November 2010, the President’s Council of Economic Advisers said federal recovery spending had “saved or created” 225,000 clean-energy jobs, including “both the direct jobs of people involved in the construction of a particular project and also the jobs generated by the additional economic activity sparked by these projects.”

      Continued in article

    • Robert E Jensen

      "Why a Low Carbon Price Can Be Good News for the Climate," by Eric Pooley, Harvard Business Review Blog, November 21, 2012 --- Click Here
      http://blogs.hbr.org/cs/2012/11/why_a_low_carbon_price_is_good.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

      Coal is Still King