Peeling away financial reporting issues one layer at a time

Author Tom Selling

Rays of Sunlight to Shine on Audits — and Auditability

Yesterday was a very good day for investors! The SEC finally approved PCAOB rules that will make a lot more information public about what actually went down during [Read More...]

A Perspective on “Professional Skepticism” — Part 2 of 2

(Part 1 is here.)

I have found that a useful way to home in on the drivers of audit quality is to regard an audit as two distinct engagements: (1) verifying facts, [Read More...]

A Perspective on “Professional Skepticism” (Part 1 of 2)

I was recently invited to make a presentation to a conference of auditors. The leadership asked me to address “professional skepticism,” one of those difficult-to-nail-down ideas, yet a recent point of emphasis in PCAOB inspections.

The [Read More...]

Re-introducing Principles to Financial Accounting

A long time ago —  in 2004, to be exact — the FASB and IASB announced that they would jointly develop a common “conceptual framework.” They divided the work into eight phases.  It took them [Read More...]

“Going Public” is More than a Memoir by an SEC Staffer — Which is Unfortunate

There is more to the securities laws and their administration by the SEC than just the ’33 and ’34 Acts.  The Investment [Read More...]

Double-Entry Accounting in Modern Times

My Shareholder Oriented Financial Accounting (S-OFA) Standards will require that debits equal credits.

Duh.  But if I am truly going to start with a clean sheet of paper, then I am compelled [Read More...]

Non-Voting Shares are in Vogue: Do (Lousy) Accounting Rules Play a Part?

I’m starting a company and I want you to invest.  I will put up $100 of my money for $10 million of yours.  I will own 100 shares of voting stock, and you will [Read More...]

The Asset Impairment Song and Dance (Part 2 of 2)

My latest post was about general problems with asset “impairment” accounting —  its absurdity, high cost and dubious information value.  And I haven’t even begun to hone in on the wurst part: goodwill impairment.

It is [Read More...]

The Asset “Impairment“ Song and Dance (Part 1 of 2)

Two recent news items have made this an opportune time for a post — actually, two posts —  about the accounting for the “impairment” of an asset.

The SEC is considering whether Exxon violated the [Read More...]

Introducing ‘Shareholder-Oriented Financial Accounting’

Last December, I announced that I have started to write a book that would propose a very different basis for financial accounting by public companies.  I’m calling it ‘Shareholder-Oriented Financial Accounting’ (S-OFA), and this [Read More...]