Professor Elam

Romania Day Two

Wednesday may 29 2013

Dr. Dan Glaser is lecturing in Romania, We are re producing his thoughts and experiences for our readers.

 

My second day at Babes Bolyai University went pretty well. I presented to a group of undergraduate students at 9:30 in the morning. I found that the class was a mix of about 1/3 ethnic Hungarians (Romania’s two largest ethnic groups are Hungarians and Roma), and one Italian and one Russian student. They were all in the English management program. Getting my computer to work for my presentation took a little adjusting and it is always a case of amazement on my part to see students whiz through deep technical parts of anything Microsoft. It happens on all my trips here. It seems that 1) Microsoft is the king in Romania and other places I have visited (it is like as if all academic users have it, just like air and water) and 2) my Romanian students, irrespective of major, seem to know it inside out.

After the presentation, Irina, my host, took me out to lunch and we discussed the material needs for our video. The main materials will be cardboard, Styrofoam, tape, markers, rubber bands, three ring notebook binders, Velcro, etc. Finding the Romanian word for Velcro took a while to figure out. The technical or non-brand name in English is hook and loop fastener. We will be looking for these items in the next few days.

In the evening, Ovidiu Bordean and his wife took me out to dinner. We ate some nice traditional food at a Romanian restaurant named Valachia (It turns out that last night was also his wedding anniversary. They married two years ago. Geez, I felt I was crowding their style.).  Ovidiu is a new Assistant Professor. I’ve known him for a few years, since about 2005. He spent a summer in San Antonio partially hosted by OLLU and on an EU grant gathering data for his dissertation in the summer of 2007. Having an international experience is an important factor for promotion for professors at Babes Bolyai University. Ovidiu is fully  fluent in English and has done post-doctoral work in England and in Germany. He is now also working on the journal Marketing and Management (http://www.managementmarketing.ro/). Check out their website. It is excellent! Ovidiu asked me to tell my US colleagues that he is looking for articles from US professors. A foreign presence improves the journal's  prestige in Romania. Their journals are evaluated at the national level and having foreign authors is an important criteria.  If you are considering submitting a paper, please let me know. I am an on the editorial board and we can make things happen. 

DanGlaser in Romania

Wednesday May 29, 2013

 

Dear Colleagues,

 

I will be in Romania for two weeks. I was invited to be the plenary speaker at a management conference at the University of Babes Bolyai in the city of Cluj Napoca on June 7 & 8. I suggested that I could also teach two weeks prior to the conference. They said yes and  provided me, free of charge, a hotel room with a kitchenette at the dormitory for visiting professors. Last night, Irina Salanta (a visiting Foreign Scholar at TAMUSA in the fall of 2012) and Calin Covaciu, Irina's fiancé, picked me up at the airport and brought me here. They had already left fruit, chocolate and a savarina, one of my favorite desserts, in my room. They also left me with an iphone with international minutes and a 3G USB internet device. The room also has wifi. It is this kind kind of help that, while not expected, sure helps make a stay become more pleasant.

 

Today I taught a class (yes, in English) on the relationship of Teams to Innovation for a master's class. It went well. The classroom was something that I wish we could have at Brooks City Base (Nice seats and decor). After class we went grocery shopping and then stopped off downtown at the Days of Cluj Napoca Festival for a minutes to enjoy a beer. BTW, the draft Ursus beer at the outside festival was only a $1.50. This Wednesday, Calin and Irina will take me to a soccer game and I also plan to go the Transylvania Film Festival on Saturday (http://tiff.ro/en).  

 

I am back at my room preparing for tomorrow's class. I am sending this continuing story over the next two weeks to introduce you to a study abroad experience for professors.

Sergio Marchionne Makes an Offer Banks Can't Refuse

Weekend May 25, 2013

Sergio Marchionne is a Canadian Chartered Accountant. He became head of Fiat ten years ago. Now he is putting together a deal which will bring Fiat and Chrysler together as a company. 

His experience and expertise as an Chartered (the Canadian term, in the US we are Certified) Accountant is certainly valuable in understanding how to structure such deals. This will be interesting to follow to learn more about corporate finance and accounting. 

48% Pay No Income Tax

Wed May 22 2013

A student made this post regarding the Apple Testimony about corporate tax rates. 

We as individuals pay at a minimum 10% to taxes. If you take into account all the money that Apple avoided paying taxes on, the 6 billion they did pay in taxes would be less than 5% paid to taxes. Apple is not the only corporation doing this. Last year and the year before if was Microsoft and HP that were under the microscope. Last year GE paid ZERO.

As a matter of fact the first asentence is grossly incorrect. About 48% of Americans pay zero income tax at all, the same as GE paid last year. 70%  all income taxes are paid by the highest ten percent of wage earners. but don't take my word for it, here is the link to the national taxpayer union site and table

http://www.ntu.org/tax-basics/who-pays-income-taxes.html

Add to this the fact that we have the 

Earned Income Tax Credit

 

This is anegative income tax. Those that meet certain qualificaitons actually receive a check back from teh government. Ie, we have potentially 48% of the vote with no skin in the game, no money at stake vis a vis what the government does. This is by design of course. If the Democrats can create a permanent 51% voting majority that pays no income tax, they shold have a permanent hold on  all elections. If Texas slides intothat category, the Repbulicans will likely never win the White House again. 

Believe me there are millions of people that have adjusted their lifestyles so that they 

pay no income tax

qualify for the ETC

Live in subsidized housing

and have zero zip nada plans to change

Apple in fact paid $6 B in taxes, and following the tax code that Carl Levin authored, avoided taxes by having locations in Ireland.  An Apple official noteas the Apple tax return is two feet high. What a disgrace!  Politicians think all money is their money, not so. This is why people invest in companies like Apple, to make more money, and hopefully keep some of it. 

I think everyone should pay some income tax as the student thought, otherwise politicians are beholden to no one, free to concoct whatever vote buying schemes they can. and the tax code is just that a mammoth vote buying scheme. 

Steve forbes had it right, a ten percent flat tax, no IRS, period, but neither party will vote for that as they both wan the patronage that dispensing favors via the IRS allows. 

Speaking of Certifications....

Tuesday May 21 2013

Students in my classes repeatedly hear me emphasize the importance of focusing on a certification and obtaining it ASAP. Today I received an announcement from Aventine Hill Partners. Aventine hires experienced Comptrollers and then contracts their work to various companies for different purposes. 

Here is a description of their recent hire. I reprint this so you will read all the way down to the last paragraph, Ron has FOUR certifications. This is the perfect example of the trend I have been describing to you. 

 

As part of our continuing effort to increase the ability to support the needs of our clients, Aventine Hill CFOs is pleased to announce Ron Stefani has joined the firm as a Partner in the Houston market. Beth Hair, President of Aventine Hill, stated "Adding Ron to our team expands our firm's ability to better help companies address compliance risks and requirements such as the Foreign Corrupt Practices Act (FCPA) and Sarbanes-Oxley. Ron also increases Aventine Hill's industry experience in manufacturing, chemicals, and oil & gas." Ron brings over 30 years of international business experience in leadership roles for Fortune 500, medium, and small private companies in the areas of Finance, Accounting, Auditing, and Operations. As a Chief Audit Executive for several large companies, Ron started the audit and enterprise risk management department and turned-around under-performing audit departments. Ron played a key role in helping a major oil & gas company remediate its FCPA violations by establishing sound internal controls in high-risk countries.

As a Regional CFO, Ron was instrumental in driving profitability through new metrics and steps to improve communication and coordination among the key stakeholders, and cost reduction initiatives using Lean Sigma techniques. As a Controller, Ron led and assisted with acquisitions, divestitures, process improvement projects; and ERP design, selection, and implementation projects involving multiple IT platforms.

Ron is a public speaker on FCPA, Enterprise Risk Management, internal audit, compliance, and human capital development matters and presents for the Institute of Internal Auditors and universities.

Ron earned his Bachelor of Science Degree from Iowa State University, and MBA in Corporate Finance from The University of Georgia. Ron is a Certified Public Accountant, Certified Management Accountant, Chartered Global Management Accountant, and is Certified in Risk Management Assurance.

 

Apple Seeks out Tax Havens

Tuesday May 21 2013

Tim Cook Apple CEO is scheudled to speak on corporate tax policy today. This article shows that while paying $6 B in taxes, Apple was also creative in avoiding some taxes with tax havens around the world. 

Carl Levin just does not get it, it is not his money it is Apple's. 

The Cost of College

Friday May 17 2013

Here is another article on the cost of college.

Your take?

A Lesson in Bankruptcy

Thursday May 16 2013

Tommy Moore's restaurant is headed for foreclosure. Moor had taken Chapter 13 in April 2012. Then he showed $272,000 in assets and nearly $853,000 in liabilities. How that plan got approved in court is beyond me. 

Now he has defaulted on a $441,626 note with Frost Bank. He is now planning on filing a Chapter 11 reorganization bankruptcy. 

Tommy knows how to cook chicken, but he does not understand how to calculate break even or target profit. He says it is tough operating on the East Side but reports are that the eatery is quite popular. 

Managerial accounting is the key to business success. We will be studying just that this summer. 

Learning the Bond Market

Monday May 13 2013

ACCT 3312 students have difficulty grasping just what a bond does and just how accountng for stocks operates. Interestingly there is yet another movie version of Gatsby out, which has received poor reviews by Joe Morgenstern in the WSJ  and elsewhere. In this version Toby Maquire plays Nick Carraway the narrator. Recall from the book that Nick had come to New York to learn the Bond Market, though that is about all the coverage bonds got in Fitzgerald's book. 

 

 

 

 

In Bonfire of the Vanities, Tom Hanks is portrayed by Tom Wolf as a Master of the Universe, he is a successful bond trader. 

But the best way to learn about bonds is by reading on the credit markets everyday. We will be requiring a subscription to the WSJ so students can do just that. 

Here is an article from Bloomberg on bond prices falling with the rising dollar. Understanding these concepts is key to understanding rather then memorizing accounting solutions to bond reporting. 

Accounting - Only One Grade Matters

Friday May 10 2013

 

Yes it's that time of the semester, grades will be posted. I am receiving reminders from students about this and that two points here and there. Don't let the larger picutre pass you by. 

The larger picture is that for an aspiring accountant, passing a certified exam is now the right of passage to success. The college degree is a requisite to taking that exam. This week I visited with someon who had passed the Certified Fraud Examiner test, she suggested it was easier than the CIA exam. 

Set your sights on one of the certified exams, now. See my previous post on a Ladder of Success. 

http://www.mastersinaccounting.info/ladder-of-success-accounting-certification/

Yes your employer will expect a good record from a name University. But chances are certification will be required, not optional.