Professor Elam

The Art of Accounting

Labor Day Weekend 2012

 

One day as an undergraduate I watched a scene I remember to this day. A student was standing in the hallway of the UT Austin College of Business office building.  He clearly was having difficulty with an accounting question in the textbook. Dr. Griffin, whose advanced accounting text was then in its fourth edition I think, happened by. The student hurriedly asked him The Question. Quickly Dr. Griffin took his unlit cigar out of his mouth, read the question and said oh, you just debti such and such and credit so and so. Having spoken he replaced the cigar, which he used to great advantage as a prop in class, and went about his way. I still recall though the student standing there looking at the text puzzled, his entire expression saying

How'd he do that?

Is there an art to mastering accounting?  What do I mean by that?  Take a look at Robin Wong's photography blog.  You will quicly grasp that Robin is an artist. Even his street shots look well
composed and lit. Why do Robin's shots look professional but yours and mine look like typical snapshots? What is the difference?  it is I think

talent

repetition

an artistic way of seeing the world

Professionals have that sense of 'how to do it.'  I recall taking my bicycle in with a flat tire. The owner of the shop seemingly threw my bike on his repair stand, spun the wheel, produced a tool from nowhere and next thing h I knew, the tire and tube were off the wheel. The whole thing had taken maybe twenty seconds, how did he do that?  Well practice helps a lot. As George Strait says, write that down.

I am interested in your take on these observations. What is the difference in the pro and the amateur, and how does one move up the ladder?

I took piano lessons as a kid and tried it again in college. I got to where I could play the notes in a recognizable fashion, but I was never a musician.  Jerry Lee Lewis plays the piano, he is a musician. He's a pro, I was just hitting notes on an instrument.

 

 

Intern in San Antonio

Thursday August 30 2012

INterninSanAntonio will have its next  event

Fall Internship Fair Info

Event Date:         Saturday, September 8th from 2:00 - 5:00PM
Event Location:   San Antonio Food Bank at 5200 Old Highway 90 West San Antonio, TX 78227
Event Details:      To see what to expect, watch this quick 3 minute Video of a prior Internship Fair

Are any of you interested in attending?  I am the Intern Coordinator for Accounitng. Let me know of your interest.

Speeding up the Lunch Line

Thursday August 30 2012

MCD, SBUX, and CMG   are all working to speed up the service during peak hours. This is an excellent example of what we study in managerial accounting. 

There are several concepts in volved here. The British refer to a waiting line as a que. Queing theory is all about how long someone will wait in line. Another concept is the idea of a constraint. The lunch hour so to speak only lasts so long. And the key to restaurant is traditionally the number of times one turns over the tables, how many tables of people does one serve during the lunch hour. Clearly this idea is expanded with take out and drive thru windows. MCD for example has a standard of 90 seconds as the time between the drive in order and when you get your sack of burgers at the window. Indeed some locations are adding a second drive in window. 

So the idea is to maximize the number of sales in a given time. This is done by eliminating non value added activities, the idea of just in time inventory supply chain delivery  and activity based costing. The next time you are in a fast food joint, pay attention to what they are doing and how they do it, if one of the servers disappears into the back of the store, something went wrong. 

More Museum Woes

Thursday August 30 2012

The Texas Highway Patrol Museum was supposed to help the families of officer slain in the line of duty. But as so often happens, eveyrone's money is no one's money in the public sector. The Texas Atty General sued the museum and it is now being liquidated. 

Here is yet another example of the importance of internal conrols, internal auditing, and the value of an indepdent external audit. Far too often individuals use funds for their own purposes rather than the original goal of the enterprise. If you are ever appointed to a Board of a non profit, plan to ask the hard questions. 

The Most Important Book You Will Ever Read

Wednesday August 29 2012

I happened to mention that the most important book you wil ever read is Dale Carnegie's 

How to Win Friends and Influence People. 

The book was written in the 1930s but while times change people don't. The book has sold millions of copies and when I amazoned it I was amazed to discover that new editions still fetch $12. My yellowed copy reported it was the 18th printing, an amazing record for a non fiction book. 

Carnegie sums it up this way

You will make more friends in two months by showing an interest in other people than 

you will make in two years trying to get them interested in you. 

No kidding. 

Carnegie himself was amazed at the results. Even during the Depression the book sold thousands of copies, people would flock to his seminars. 

My students have suggested, and I agree, that it would benefit from a re write to have more modern examples in the book. Admimttedly Carnegie of course writes in his own day and age, Clark Gable, not Brad Pitt, was the reigning movie star. And the letters he re prints are dated but still genuine. 

Try it, you wil like it. 

Second Saturday Film Festival

Wednesday August 29, 2012

TAMUSA hosts free films the second saturday of each month. The are shown in the larger auditorium at the rear of the Brooks Building.

 

September 8	Moneyball	PG-13	Tracy Hurley & Douglas Carter
October 13	Too Big To Fail	PG-13	Syed Harun

What Matters in A College Education

Wed August 29 2012

In the rush to embrace technology, this essay by a physics professor contends that interaction between professors and students is the key to learning and college success. I'd call it motivation, I don't think an onlline class in and of itself motivates anyone, that has to come from within the student. 

I am increasingly dubious about the value, for example, of online homework in accounting. I think it dilutes the idea of he accounting cycle and process. The student far too often simply asks, what number goes in the blank?  That hardly leads to an understanding of the accounting procees. 

What are the successful elements of the college process? Please sound off. 

Another Horatio Alger Success Story

Wed August 29, 2012

The promotion of the Fidelity Chairman of the Board daughter  qualifies as our tongue on cheek

Horatio Alger success story of the week.  Alger wrote a series of stories about luckless impoverished boys accidentally wandering into success. Someone who inherits their job, wealth, or success is ironically noted as a Horatio Alger success story. 

The Only Way to Dodge Student Loan Debt

Wednesday August 29, 2012

Dave Ramsey  reveals the one and only way to discharge your student loan debt to Sallie Mae without actually paying it off. Click to find out. Death and taxes are said to be inevitable, here is one silver lining to that rule. 

Students now to this blog should be aware that I for see a Black Swan event in terms of the trillion dollars of student loan debt out there. Nassim Taleb has written about random behavior of events. His point is that they occur more often than people think upsetting conventional wisdom. 

The student loan debacle has all the earmarks of the sub prime mortgage crisis. 

• Everyone believes the government is behind the loans.
• An entire industry has grown based on that belief-higher education, lavish campuses, 
• All of which reaquires an infinite linear demand for more education
• The belief that the demand of education is inelastic, consumers will pay any price demanded
• There is no substitution, even if a brick and motar campus begins offering on line classes

All of these beliefs are now smack up against the reality of college graduates that cannot find jobs in their field, such as law school or humanities graduates. 

There is however a demand for accounting graduates who obtain certifications in the accounting field. Plan on being in that group. 

 

Boomerang

Tuesday August 28, 2012

In Boomerang  financial journalist Mike Lewis visits Iceland, Greece, and then Ireland before finishingwith a, surprise, bike ride with Arnold S, who reflects on our version of those countries, California. 

After reading his account of how the Greeks operate, Germany can attempt a bail out but I would not expect the outcome to be any different. Greece has been in default of half of its modern existence, since 1823, and no wonder. In an election year the politicians pull the tax collectors off the street. No credit cards, people pay cash and under rerport their income, even corporations. Hundreds of occupations got themselves categorized as arduous and obtained a retirement at age  50 something. 

Recall my comment this past weekend about Turkey, as many billionaires as in Moscow or London, a lavish spread in the weekend WSJ. Money never sleeps and it moves to productive economies. As MarkSteyn observed in his latest book After America, the Europeans are all demonstrating for the government to 'rescue them.'  In America the Tea Party demonstrates for the government to leave them alone. In Turkey and the Eastern Bloc countries they are all thrilled to be working. And so the money marches East.