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| Volume 9, Issue 7 |
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In This Issue:
 Why we expect 4% GDP growth
 Mortgage rules exclude even good risks
 Audit overseer faults BDO, Grant Thornton
Financial software's winners and losers
[Travel expenses] think small
Revenue recognition: Will a single model fly?
 The equity factor at work
Smart presentations: Remember this
Productivity coach's corner: Reflect on one habit to improve your productivity
 Manage your boss
Getting over being passed over
Let Gen Y teach you tech
 Are you ready to manage in an irrational world?
 Engage people by showing how their work contributes
 In finance, recent signs of hiring
Eleven ways to boost your energy
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Why we expect 4% GDP growth
Even conservative estimates show a rise in 2009 and 2010.
Our forecast for the second half of this year and all of next year is that real (inflation-adjusted) economic growth is going to average more than 4% at an annual rate, well above the consensus, which expects below-trend growth of about 2%. To be more precise, we are forecasting that real gross domestic product (GDP) grows at a
3.5% rate in the second half of 2009 and 4.5% next year. But, in all truth, we are much more confident about the overall 4%-plus figure for the full 18-month period than about the exact growth rate for any particular quarter. For example,...
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Mortgage rules exclude even good risks
Inna Komarovskaya was ready to do her part to revive the economy: She found a “really cute” condo to buy.
Despite a good credit score, a six-figure income and an ample down payment, Dr. Komarovskaya, a recent dental school graduate, could not get a loan. Her mortgage broker told her she ran afoul of new rules requiring two years of sufficient tax returns from some home buyers, instead of only one. “Everyone
says this is a buyer’s market, but they wouldn’t let me buy,” said Dr. Komarovskaya, 30. “It’s not fair.” Not fair, perhaps, but far from unique, brokers and agents say...
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Audit overseer faults BDO, Grant Thornton
The PCAOB says BDO had trouble testing revenue-recognition controls, while Grant Thornton did not adequately identify GAAP errors. Both firms complain that the board criticized judgment calls.
Annual inspection reports for BDO Seidman and Grant Thornton, released last Thursday by the Public Company Accounting Oversight Board, criticized some of the audit testing procedures and practices at the two large accounting firms. The review of BDO focused mainly on issues related to testing controls around revenue recognition,
while Grant Thornton was chastised for not identifying or sufficiently addressing errors in clients' application of generally accepted accounting principles with respect to pension plans, acquisitions, and auction-rate securities. With regard to
BDO, the inspection staff reviewed seven of the company's audits performed from August 2008 through January 2009 as a representation of the firm's work. The report highlighted several deficiencies tied to...
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Financial software's winners and losers
Controls-monitoring software is overly bothersome, the recession adds value to budgeting and receivables packages, and other observations from Forrester Research.
Just about every organization has an automated accounting system. Almost as popular are technologies that facilitate financial reporting, cash management, and tax planning. But there are lots of other types of financial management applications out there to evaluate. For a small or midsized company that doesn't have
account-reconciliation software, would getting some be a smart investment? How about internal controls monitoring applications or expense-reporting systems? A new report from Forrester Research analyzes the state of 12 categories of financial applications. It focuses on their relative or potential levels of "success"
(defined as adding value to businesses, not in terms of product sales), and on their movement along a technology-maturity spectrum. The study results are mostly qualitative, not quantitative; the methodology involved examining past research, interviewing experts, studying the functional and technical aspects of the
solutions, and factoring in intelligence gained by responding to client inquiries. Three categories were deemed to be in the "survival" phase of maturity (which follows chronologically after the phase of "creation" in labs and early pilot
projects, and before the "growth" phase when product adoption starts to take off):...
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[Travel expenses] think small
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"Door-to-door" expense management can be a great way to reduce the cost of business travel.
Heading off on a business trip? Don't forget to get a receipt — from the chambermaid, the coat-checker, and the barista. Sound impractical? Maybe, but these days no travel expense is taken for granted, and travel policies now routinely impose strict guidelines on reimbursements and the documentation you need to get
them. That may not surprise CFOs, who don't just abide by such policies but often champion them. Having wrung as much cost as they can out of big-ticket items like flights, hotels, and rental cars — which typically account for 75% of every T&E dollar, according to a recent survey by Procurement.travel — companies are focusing
on the remaining 25% of the travel budget, which consists of smaller costs like airport parking, sedan services, meals, and, yes, tips. Approaching travel with this "door-to-door" mind-set represents a new front in the war to subdue costs. Business travelers, in short, are being asked to sweat the small stuff...
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Revenue recognition: Will a single model fly?
Elements unique to long-term contracts pose a challenge for FASB and IASB in their bid to create one standard covering all customer relationships.
Can U.S. and international accounting standard-setters realize their dream of fashioning a single revenue-recognition standard that would apply to all customer contracts? While the answer won't be known for some time, it's safe to say there are hurdles on the road ahead. In a joint discussion paper issued last December in which
the Financial Accounting Standards Board and the International Accounting Standards Board proposed a model for a lone standard, they acknowledged that an alternative approach could be needed for some contracts. The almost 200 letters they received in
a comment period that ended June 19 did nothing to remove any doubts about whether having one standard will be viable...
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The equity factor at work
Let's play a game. Here are the rules: We'll be asked to split a sum of money. I get to make the split, and you get to choose whether to accept or reject the split. And if you reject it, both of us will walk away empty-handed.
Rationally, I should realize my advantage and offer a lopsided split in my favor and you should accept the uneven split—because any amount of money is better than nothing. Right?
Wrong. If we're like everyone else who plays the game, we'll end up with an even split. Here's why...
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Smart presentations: Remember this
The greatest truths are the simplest.
Often, they touch what we know or believe, but with an economy of words and a clarity that cuts through all the B.S. and makes us realize the wisdom. Here's one that should be burned in the brain of anyone and everyone in business: Logic leads
to conclusions. Emotion leads to action. Makes sense, doesn't it? Think how much better...
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Productivity coach's corner: Reflect on one habit to improve your productivity
Every day, productivity and energy is lost not because people manage their time poorly. Instead, their productivity "habits" slow them down and make things harder than they need to be.
At the end of a typical workday, do you reflect on how much you've accomplished? Or, on how much further you have to go? Of course, there is power in focusing on a goal—on what is not yet finished; athletes and other professionals do it all the
time. However, if you're constantly coming up short or consistently putting things off to the last minute, it may be time to look at your habits and behaviors...
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Manage your boss
Your job performance depends not only on how well your supervisor guides you but also on how you (strategically) guide him or her.
The moment has come for employees everywhere to be put through the midyear microscope, as supervisors assess their employees' performances for the first six months of 2009 and gauge what they need to focus on in the future. But this is also a useful time to remember one of Peter Drucker's most fundamental teachings: Your
success depends not just on how well you do your job. It also depends, a great deal, on how well the person to whom you report does his or hers. And that means you must become adept not only at managing yourself and those who work for you but also at managing the boss...
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Getting over being passed over
You didn't get the promotion you wanted, deserved, and expected? Don't get mad. Get going on further refining your professional profile.
"We've decided to go in a different direction." You can't believe you're hearing those words—or some variation—telling you someone else is getting the big job. This promotion—which seemed all but assured—was supposed to be your reward. You handled those dirty jobs no one would touch. You worked punishing hours; losing touch with
friends, forsaking hobbies, and missing precious moments with your family. You bit your tongue and swallowed your pride 1,000 times. Sure, your bosses will say, "we'll make it up to you." But you feel as if you're starting from scratch. They may as
well have demoted you... [But what do you do now (other than make sure you don't compose that resignation letter or angry e-mail)? Consider these strategies:...]
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Let Gen Y teach you tech
Once derided as sandboxes for slackers, messaging and social networking sites are the new organizing centers, town halls, and news sources, says Sylvia Ann Hewlett.
You say you want a revolution? Better set up a Twitter or YouTube account. Once derided as sandboxes for Gen Y slackers, messaging and social networking sites are the new soapboxes, organizing centers, town halls and, as the recent events in Iran have shown, an increasingly powerful news source. Much has been made of the youth
engine driving Iran's demonstrations—half of the country's 71 million people are under the age of 25 and nearly two-thirds are under 30. "Just look at a single photo of a rally on www.youtube.com/citzentube to see hundreds of hands raised in the air and holding a cell-phone camera to get a sense of how tech-savvy this generation
is," says Steve Grove, head of news and politics for YouTube (now owned by Google). "Now the activism that young people have always engaged in is being reflected in mass platforms for mass distribution. But it's not just about documenting an event," he adds. "It opens a conversation about what's taking place."...
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Are you ready to manage in an irrational world?
Have you noticed that we are being bombarded by a flood of work by neuroscientists and behavioral economists, aided by such things as clever research design, the use of improved technologies for measuring brain activity, and the admission by Alan Greenspan that markets acted in ways he had not anticipated?
The work shares several common counter-intuitive conclusions that: (1) human behavior is much less rational than has been assumed, (2) this renders much of conventional teaching in fields such as economics and management obsolete, and (3)
it makes suspect much of what we do as managers. Consider two examples that came to my attention this past week...
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Engage people by showing how their work contributes
Day after day, Rick works hard. He likes his work, he's paid well, and he gets along with his coworkers. But Rick is considering looking for work elsewhere.
Why? Because Rick doesn't have a clue about what direction his company's goals or where they are heading. Practically everyone where Rick works is kept in the dark about the company's goals. Whenever Rick asks his boss about it he's routinely waived off. As a result, his commitment is starting to wear thin. Rick wants what
most workers want. That is to understand how his work contributes to the big picture. A school teacher I know, whom we'll call Jerri, hears about the big picture on a regular basis. Jerri teaches junior high school math, and she feels totally
plugged into what's going on at her school and how her work factors in. The reason? Her principal makes it a practice too...
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In finance, recent signs of hiring
Job hunters' stock may be rising on Wall Street.
Large and midsize financial-services institutions are hiring again, albeit modestly. Recruiters cite improving financial markets and increasing investor confidence as catalysts. They say some firms that laid off too many workers at the start of the recession now want to take advantage of the large amount of talent available. Most
desired are proven performers skilled in areas such as credit, refinancing, wealth management and restructuring. "People are starting to unlock the doors and talk to us about wanting to hire," says Richard G. Lipstein, managing director at executive-search firm Boyden World Corp. in New York. His firm recently won...
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Eleven ways to boost your energy
How to use nutrition, exercise, and stress relief to refuel your body and energize your mind.
Fatigue is one of the biggest problems of modern life. But most of us deal with the problem in all the wrong ways. We want a magic bullet--an energy bar or supplement or tonic that will make us feel like a superhero. So is there an easy and quick solution to our energy crisis? Yes and no...
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