No Such Thing as a Free Ride

I promise this will be my last auto-centric column for a while.

But in my meager defense this vignette actually has an accounting angle – sort of.

Over the weekend my health club displayed a gleaming new McLaren automobile – of course cordoned off from touchy feely onlookers with thick velvet ropes and patrolled by a security guard who looked like someone straight out of the Blackwater recruiting catalogue.

Apparently, the local dealership was giving gym members a chance to win the car via $250 raffle tickets. Should you hit the proverbial jackpot a $300,000 McLaren Spider Coupe was all yours.

One member whom I shall refer to as Ralphie, decided to take a chance. Now Ralphie does not have the financial means of a hedge fund manager or a plastic surgeon – in fact Ralphie is one of the school bus drivers in my district. So, $250 would more than likely take a sizeable bite out of his weekly budget.

I tried mightily to talk him out of it. Thus, the conversation went something like this:

Car Shopping Made Easy!

A while back I used this space to veer decidedly from accounting and regaled you with adventures of perhaps my least favorite pursuit – car shopping.

In terms of pure enjoyment, I would rate shopping for my next automobile just slightly below a visit to a wax museum.

In other words, I’m not a fan.

But along the lines of “good things come to those who wait,” just this week I received an email declaring me the proud winner of a 2019 BMW Model 530i, metallic silver, 6-speed automatic transmission and equipped with a special cold weather package.

According to various websites, the vehicle MSRP on that model is roughly $55,000. Wow, I could not believe it, my first-ever luxury car! Providing you discount the 1969 Cadillac de Ville I was driving circa 1981.

And, apparently, I’ve also won a check for $1.5 million authorized by the British Gaming Board and the BMW Lottery Department. Odd, I wasn’t aware that BMW had a lottery department. But boy, does that fill a lot of financial potholes at Chez Carlino!

Now all I must do is email all my pertinent financial information to someone whose IP address ends with BMW@aol.com.

You see where I’m going with this right?

In Other News Water is Wet

As you might imagine, after either covering or consulting with the accounting profession for some 20 years, I’ve seen and read my share of industry-related surveys. I’ve seen polls on salaries and employment, technology, fraud, taxes and succession to name just a few.

And more often than not, I have taken something away for future use – usually when I’m teaching a live CPE session.

But I’ll have to admit in two decades of doing this I’ve never quite encountered a finding with such an absurdly obvious conclusion as I did last week.

One accounting publication featured an article co-written by a student and a professor at a Northeastern college which concluded that auditor productivity and quality declines when said employees are sick with the flu.

Let me repeat that – productivity declines with the onset of influenza.

What’s next, water is found to be wet?

Now, let me be clear – the flu is nothing to make light of.

Hiding in Plain Sight

For those who followed the Bernie Madoff scandal, you might recall that his company, which purportedly held nearly $65 billion in assets under management was – ahem – “audited” by a miniscule 3-person CPA firm located in a strip mall in bucolic Rockland County, N.Y.

Apparently, this accounting mismatch did little to attract any more than cursory attention from regulators and exactly none from the New York State Society of CPAs which, incredibly, allowed the owner to pen a regular column on auditing ethics. Let me repeat that auditing ethics. That was of course prior to the episode imploding into the biggest financial fraud in American history and earning Madoff a 150-year prison sentence.

Trust me, I can’t make this stuff up.

Along the same lines, but not nearly the same in scope, it has now come out that Key Worldwide Charity - the California non-profit at the nucleus of the burgeoning “Operation Varsity Blues” college admissions scandal failed to attract any notice from the IRS despite listing no employees, three officers who worked ZERO hours and no independent directors in its filings and taking in over $7 million in donations over the past four years.

And to think I got a rather terse email earlier this year from the IRS claiming an additional $3,000 in taxes stemming from a modest IRA disbursement.

And yet, with more yellow flags than undertow warnings at a beach resort, no one gave this organization a second look.

Entitlement Part II

Last week in this space I felt, or at least I hoped, I waxed rather eloquently about the recent “Varsity Blues” college admission scandal, whereupon a virtual national network of bribes, testing irregularities and fabricated athletic achievements were doled out like the buffet at Golden Corral in order for the children of hedge funders and celebrities to gain admission to some of the country’s most prestigious colleges.

Again, I was not only astonished by the scope of these egregious acts, but rather some of the attitudes of the children of these parents who are now going to either serve jail time for or pay out astronomical amounts in fines and prepare to perform public service.

Which brings me to sort of an ancillary topic – accumulation of college debt and this ongoing call for “student debt forgiveness.”

How many times have you recently seen the media interview some clueless student who purports to be the leader of this or that movement, demanding free college tuition and elimination of all school debt loans? “Student loan forgiveness,” they call it. They insist a college education is literally a birthright and should be free.

But then in the next breath, admit they have absolutely no clue on how to pay for it.

For the moment, let’s take the cry for loan forgiveness and apply it to say, purchasing a car.

Was it Really Worth It?

More years ago than I care to remember I had just completed a two-year hitch at a junior college due to an overlong apprenticeship as a young screw-off and was in the process of filling out applications to several four-year schools.

In the end, I had narrowed the choices to two: Cornell University or the University of Denver. The choice was made easier for me when the powers that be at Cornell took a look at my grades and told me to go to Denver. Technically, Cornell wait-listed me much to my father’s amazement.

“You? Cornell? Really?”

So much for a patenal booster in self-confidence. But to be fair, my mother was equally astonished.

So, I spent the next several years in the Mile-High City getting my degree and like countless other students, accruing debt from school loans.

Flash forward to the present. I, like probably millions of others was a bit shocked when the national scandal broke concerning under-the-table payments for admission into elite colleges, a ring that included coaches, administrators, scores of obscenely wealthy parents and two high-profile actresses who, often played rather wholesome characters on television.

Not that I was so naïve as to believe that test cheating and side bribes to get into college didn’t occur on a regular basis, but what was so hard to believe was the massive scope of this national disgrace.

My first question was “where were all these people when I was applying?” I was joking of course.

Sort of.

You Can Lead ‘em to Water…

As a parent for nearly three decades, I’m sort of used to having my advice ignored. Whether it be music, TV, clothing or food, my daughters dutifully listened to their father’s suggested guidance and then just as promptly ignored it.

But that goes with the territory – especially during that joyful tantrum-filled period between middle school and high school graduation. I think I personally kept the manufacturers of Maalox in business or at least buoyed their share price.

But perhaps no urging I put forth was as vehement was my strong directive that each study accounting in college. Having either covered or consulted on the accounting profession for nearly 20 years I was well-aware of both the opportunities and the large talent void in the pipeline that existed.

And true to form each decided to eschew accounting and instead pursue marketing and public relations. Not that they haven’t up to this point become successful – in fact one recently received a promotion to media buyer. And each explained that what they currently do is/was far more exciting than looking at tax and audit spreadsheets in some cubicle. To that point it was hard to argue.

But along these lines I noticed an online survey titled College Factual recently unveiled a list of the top 10 accounting schools in the country and wouldn’t you know it, my youngest’s alma mater Binghamton University, a school well-known for its engineering and STEM curriculum in upstate New York, was ranked No. 8.