Professor Elam

Prof Elam on DeLoitte's Adverse Opinion

3/7/2025

Black eye'

Dennis Elam, a certified public accountant and associate professor in the Accounting and Finance Department at Texas A&M University-San Antonio’s College of Business, said the adverse opinion is a “black eye” for Biglari.

 

“Regulatory compliance is expensive, but that is another cost of being a public company,” he said in an email. “That is why firms should employ CPAs who are compliant with continuing education license requirements.”

Problems that lead to an adverse audit opinion need to be corrected, he said, adding that changing auditors is not the solution and raises red flags. 

“If communication to the Board of Directors and presumably the (board’s) Audit Committee is impaired, we are in (a situation where) the left hand does not know what the right is doing,” Elam said. “It was the lack of internal control at Enron that allowed them to move debt off the balance sheet.” That made the Houston energy company appear more profitable than it was. It went bankrupt in 2001.

Biglari Holdings will need to correct the problem by its next audit, Elam said.

The “Report of Independent Registered Public Accounting Firm” that Deloitte & Touche prepared as part of Biglari Holdings’ annual report is mandated by the Sarbanes-Oxley Act of 2002. The law regulates financial reporting for public companies and followed financial scandals, including at Enron and telecommunications company Worldcom, which went bankrupt in the wake of accounting fraud.

 

Oversight

Audits of public companies are overseen by the Public Company Accounting Oversight Board, a nonprofit that launched in 2002. Its mission is to “improve audit quality to protect investors” and it’s been pressing accounting firms to do a better job.

In its 2023 inspection of 56 Deloitte & Touche audits, the board found 12, or 21%, were deficient — meaning the firm “had not obtained sufficient appropriate audit evidence to support its opinion(s) on the issuer’s financial statements and/or internal control over financial reporting.”

Deloitte & Touche fared better than accounting firms as a whole. The board found 46% of the engagements it reviewed had at least one deficiency related to financial statements and/or internal control over financial reporting, though it added the percentage is “leveling off.”

“Still, overall deficiency rates are unacceptable, and firms must do better,” board Chair Erica Y. Williams said in an August statement. “Now is the time to double down on efforts to improve and deliver the audit quality investors deserve.”

 

Elam, the UTSA professor, said the board's oversight could be having an impact.

“Perhaps we are seeing a more detailed assessment from some auditors as a result,” he said. 

In their answer to the board’s report, Deloitte officials said the firm has taken actions “to comply with our professional responsibilities.”

“We are committed to our shared objective to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports,” the officials said. 

 

 

 

 

 

March 7, 2025

Patrick Danner

Senior Reporter

Patrick Danner is a business reporter for the San Antonio Express-News. He can be reached at [email protected].

 

 

The truth About Literature Classes

3/6/2025

 

1. Opinion
2. Letters
    

Robert Frost Wasn’t So Frightening

A fond memory of the poet.

 

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March 6, 2025 2:13 pm ET

 

 

 

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Robert Frost Photo: Popperfoto via Getty Images

I was surprised that, in her review of a new book on Robert Frost, Abigail Deutsch refers to the poet as a “terrifying man” (Books, Feb. 22). That doesn’t track with my own experience.

In my graduating year, 1954-55, Frost sat down with a handful of students at Yale. My impression of him has been a little diamond in my life ever since. In a gentle, relaxed, congenial tone, with warm eye contact, he said, more or less: “You are all probably taking literature classes in which the professors teach how to get behind authors’ words to determine their deeper meanings. In my case, they teach that the crow shaking snow from a hemlock tree means that evil, black, stands in contrast to the pure white good of the snow around it, like in life. They are wrong. I saw the crow, and the tree, and the snow. It was beautiful. I stopped to enjoy it. Period.”

Perhaps I was sitting with a terrifying man 70 years ago. If so, I didn’t see him.

Stephen N. Miller

One Ringy Dingy Classic Lily Tomlin

3/6/2025

 

the classic satire of TPC the Phone Company

 

Tariffs and Trade Wars

3/5/2025

Britannica on tariff and currency wars

Trump' Plan for Higher Ed by Jason Riley

3/5/2025

I think Higher Ed is  about like the coyote and the road runner in this image

Jason Riley in the WSJ has this summation.

A social-media post last month from the Trump administration triggered fainting spells throughout the academy. The National Institutes of Health, which funds biomedical research, announced that it is reducing the amount of money the government pays grant recipients for overhead costs.

According to NIH, $9 billion of the $35 billion that it granted for research last year “was used for administrative overhead, what is known as ‘indirect costs.’ ” A school that receives a grant typically gets an additional 50% of its modified total direct costs (which includes salaries, materials and supplies, services, travel and some subcontract payments) to cover these administrative expenses. At prestige schools such as Harvard, the overhead payments—for the use of buildings, electricity, support staff, etc.—can run as high as 70%. The Trump administration wants to cap this figure at 15%, which it estimates will save taxpayers more than $4 billion annually.

The labor economist Richard Vedder thinks this is exactly the shock to the system that higher education needs. “Of course the universities with heavy research grants are going crazy over this,” he told me. “But if you talk to anyone at a university, you know that those overhead costs are vastly inflated compared with the true marginal cost, or extra cost, to the university doing the research.” He added that many schools collect so much overhead money that they give some of it back to researchers as an incentive to apply for more research grants. “It’s kind of a con game, all based on false assumptions and faulty economics,” Mr. Vedder says. A nonnegotiable uniform rate would be far more efficient.

In a forthcoming book, “Let Colleges Fail: The Power of Creative Destruction in Higher Education,” Mr. Vedder argues that one of the biggest problems with higher ed today is that colleges aren’t sufficiently disciplined by market forces. The result is too much administrative bloat subsidized by the government. His subtitle is a reference to the free-market economist Joseph Schumpeter (1883-1950), who described capitalism as a process of “creative destruction” whereby markets reallocate resources from unproductive to productive uses. “It’s worked pretty well for American business,” Mr. Vedder said. “Why don’t we have it for higher ed?”

One problem, the book explains, is that universities are essentially wards of the state. “Colleges and universities are dominated by people operating outside of the normal profit-oriented private market economy,” Mr. Vedder writes. By his calculations, the productivity of university employees over the past 50 years has declined not only in comparison with the average U.S. worker but also in absolute terms. It took more faculty and staff to educate a college student in 2021 than it did in 1972.

The reality is that there are inefficiencies almost everywhere you look in higher ed. Start with our overly generous student-loan programs, which have caused tuition to rise faster than inflation because colleges know that the government is absorbing most of the cost. Far more people attend college today than stand to benefit from the experience, judging from the roughly 40% who don’t graduate and the fact that so many people who do get a degree wind up in jobs that don’t require one.

Meanwhile, college access for the poor—the intended beneficiaries of student loans—has barely budged over the decades. Mr. Vedder reports that the percentage of graduates who come from the bottom 25% of the income distribution is similar to what it was in 1970. If colleges want to accept students regardless of their chances of success, give schools “skin in the game,” he writes. Force colleges “to share in the costs of loan forfeiture if they accept a lot of mediocre students who drop out or fail to repay their student loans.”

You don’t need to be an expert in the economics of higher education to understand that academia is in decline. In a 2023 poll conducted by the National Opinion Research Center and The Wall Street Journal, 56% of respondents said that college was “not worth the cost because people often graduate without specific job skills and with a large amount of debt to pay off.” Worse, people who have most recently experienced college, those 18 to 34, are less likely than older cohorts to say the cost of college was worth it.

“If higher education can somehow change its ways and better emulate the market-oriented private economy,” Mr. Vedder writes, “it would improve some of the maladies facing it”—rising costs, falling enrollment, low public support—“and possibly even deal with what I now view as the greatest problem: a shocking decline in intellectual diversity and a worsening environment conducive to free expression and civil debate.”

 

Carlos Uresti Today

3/5/2025

Experienced Client Liaison @ Guerra LLP | Trial Attorneys

San Antonio, Texas, United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Guerra LLP

St. Mary's University School of Law

 

 

 

About

With over 25 years of public service and legal experience, I am a Client Liaison at Guerra LLP, a national premier law firm that specializes in complex litigation. In this role as a Client Liaison, I use my analytical skills, extensive customer relationship management (CRM) expertise, and customer-focused service to help support the firm's clients and attorneys in various cases, such as mass torts, personal injury, and commercial disputes. I also leverage my background as a former Texas state Senator and a U.S. Marine officer to bring diverse perspectives and experiences to the team, and to align with the firm's mission of providing justice and advocacy for the injured and the wronged. My goal is to continue to learn from and contribute to the firm's culture of excellence, integrity, and compassion, and to help Mr. Guerra and this amazing firm achi

Book Keeper On Bond Arrested Again!

3/5/2025

Already under two arrests, she commits another theft while out on bond

A rash of book keeper frauds

Liz Holmes Defiant after Appeal Refused

3/5/2025

Holmes say failure is not a faud!

Experts Say It's the End of the Road

SATXCPA Scholarships

3/4/2025

 

Apply by April 4, click here for details

The Young Accountants, An Original Script by DLE

3/1/2025

Accountants Get Their Due

Everybody is famous for fifteen minutes

Andy Warhol

Everybody else has had their fifteen minutes on television. In spite of the huge spate of lawyer jokes, hey, they look great on television (Law and Order). Policemen (CSI), doctors (ER), firemen and EMTs (Rescue Me) all achieve heroic status every week. Well, enough is enough. It's high time our team got its due. Yep, coming to a network near you is the next season's hard hitting, comedy-drama. Sex, intrigue, gorgeous scenery, the inevitable black and white human dilemmas that turn to gray, we'll have it all on--- THE YOUNG ACCOUNTANTS!

Clearly we need a hard driving, six beats to the bar theme song. The one Harold Faltermeyer did for Beverly Hills Cop or something akin to the old Mod Squad or Miami Vice shows would be about right. And the opening shots will be catchy and dramatic. No wooden faces or green eye shades here. Let's see, we'll need a dramatic backdrop for our larger than life characters. It will be located in a smaller place well outside New York or Chicago, allowing for great out door shots. The gang will be so financially successful they can live anywhere they want. So, hmm, how about Santa Fe, New Mexico? Our heroes and heroines will be framed shushing down the slopes, steadily peering at laptop screens while on their cell phones (during a break in a mountain bike race, of course), and, always, emerging triumphant from the IRS offices. Now to flesh out the cast….

Our hero, Braxton Slade (allowing everyone to call him Brax, for short) has graduated from the University of New Mexico in 2.5 years. While there he persuaded the railroad industry to found a $50 million scholarship fund for Native Americans in memory of those tribes displaced by the Westward move of the rails. He rejected law school to do something "really relevant." His graduate degree is in Forestry while he picked up a CPA after zipping through the review course, finishing in the top ten percent nationally, of course.

Sharon West is tan, firm jawed, and pilates certified. She finished at the University of Colorado at Boulder where she earned a bronze on the US Olympic ski team. Her graduate degree is in Public Administration where she served an internship with Colorado's Native American Senator. This guarantees our team special insight and access to government.

Every Lucy needs an Ethel and every Cisco Kid a Pancho. So, Booker T. Washington (allowing him to be called 'Book') is the resident computer guru and detail man. He finished at Grambling while helping to build the computer infrastructure for Black Entertainment TV. He's hip, he's always cracking jokes, and knows more about the internet than Al Gore ever will.

OK, in our first episode, the gang is logging on to e mail while helping sponsor Special Olympics for Skiing at Vail. Over pumpkin bread and potato soup, Brax receives a distress e mail from Manuel Guiterrez. Manuel runs Santa Fe's oldest custom saddler and is facing eminent domain eviction from the City for yet another civic center / hotel. The gang hops on their King Air, piloted by ex Viet Nam Ace, Major Skip Chapman, US Air Force Reserve.

Manuel is frantic. Brax jogs across the plaza to confront Manuel's lawyer. Bernie Short, Attorney, is hiding behind and almost under his desk. Sweat is pouring off his balding head which features a few wisps of graying hair pulled sideways, Sam Donaldson style. "You can't expect me to go up against City Hall," Short retorts. “Besides, the hotel firm is represented by Ketchum and Gigem, the best politically connected firm in the State.”

Brax does not even deem the plea worthy of comment and spins on the balls of his feet to face Sharon. Her Ray Ban Aviators glisten against her tanned face. Her tawny hair falls perfectly across the sheepskin collar of her leather bomber jacket. 'Book already has the answer we need,' she replies. They run from the office and Short collapses into his chair, hands shaking. (The lawyer's hands will shake and their heads will perspire a lot, on OUR show.)

Back at the office (an historic pueblo style building once used by Kit Carson as the Territorial Governor), Book already has already e mailed the National Commission for the Preservation of Historic Places. Book directs Sharon to the Courthouse where she determines that Manuel is sitting on the very spot where Kit Carson and his old friend Jim Bridger witnessed the official New Mexcio statehood ceremony. The laser printer spits out the form for Manuel's tax rebate on his improvements to his historic site. Brax faxes Ketchum that their client faces Federal fines and prison if they destroy as much as one adobe brick at the saddle company. As word of Manuel's rescue spreads, the Sierra Club recognizes the gang with a special award to protect Historic Environments.

Sharon’s iPhone rings. The IRS has seized the assets of the National Lead Dogs for the Blind, asserting as a non-profit 501c3 they are making money. The scene is set for next week's episode....and that's how we'll finally get our fifteen minutes.

Dennis Elam PhD CPA teaches at  Texas A & M San Antonio campus and blogs at

http://www.themarketperspective.com