Question:

Let’s not forget that both the WorldCom and Enron insolvencies, layoffs and collapse were caused NOT by their reporting frauds but by massive negative cash flow over a long time, and no prospects for recovery. They both went belly up because of *particularly bad* business decisions during the telecom bubble which was, itself a combination of a mass delusion among investors and some executives, and a mass taking from them by many individuals in finance, capital equipment, and within the companies who knew the investments wouldn’t pay off. Let’s have fun crucifying these Kenneth Lay types.   But the real issue is where the money actually was spent. Hundreds of billions of cash went into stocks and bonds, into telecom companies and out to equipment vendors, properties, construction contracts, and all kinds of financial and marketing and supply chain intermediaries and software companies that delivered *nothing*.  Who are all *those* people? Where is the beef? Hundreds of billions of dollars! And the CTOs and IT staffs who presided over these vast wastes of assets, should be held very responsible. They have a very special responsibiity because there is no way anybody else but professional IT people could understand what they were doing.  It took hundreds of years, to fix the professional responsibilities of controllers, auditors, lawyers, etc. now, let’s penalize IT technologists who make excessive promises. The fact is telephone, wireless and internet equipment and software underperformed so badly it was possibly the biggest factor in the  meltdown of technology stocks. The shit was so insecure you couldn’t even use it. Software and hardware vendors intentionally cocked up their designs just to be incompatible with other vendors, to the injury of users and carriers. etc.etc. Small wonder Andersen didn’t fight the capitalization of operating expenses.  There were so many other intangible assets that were no more concrete.  YOu fall into this mental impression that the whole gestalt is what matters, what makes the company run.  The whole thing is an asset, even maintenance labor.  All assets!  If I were a 25 year old staff auditor I would be in awe of these vast pyramid companies. I would say "Glory hallalujah, brother!  Amen!" and get in my BMW without a worry. A lot more telecom companies will fail in the coming 12-24 months. So what.  That’s how markets operate. Sometimes I wonder if fraudulent reporting isn’t itself, an intentional technique to destroy the company in a more total and cathartic way.  In one stroke, it diverts attention from the whole rotten cabal of financiers and vendors who really got the money, it creates a lot of disorganization, doubt, and disruption around fiber and equipment taking it off the market to reduce the excessive supply, hopefully forever. It scrambles up the information of how the company operates, by blowing away all the employees who knew how to operate anything. These big frauds are the least-cost way for the industry together with its financiers.  They stick the blame on a couple of bigshots and some outside auditors and let the whole system, itself continue. The only hard part is getting enough people like Bernie Ebbers, Scott Sullivan, Kenneth Lay, John Sidgmore, etc. etc. to spread the blame around in plausible ways.  Well that can be arranged when, behind the scenes, directors and conspirators might be agreeing to pay them hundreds of millions.  I myself, would be glad to sit in prison for 4 or 5 years like Michael Milken etc. for that kind of money!  With THAT much money I could pay off enough politicians like Marc Rich did, and get completely pardoned, TOdd

Response:

FRom http://www.townhall.com/columnists/wfbuckley/printwfb20020629.shtml townhall.com William F. Buckley, Jr. (back to story) June 29, 2002 Redirecting a managerial class  I know a distinguished social pathologist who is wondering, at this juncture, whether there is a new component in the economic picture in America. Something is certainly new, given the near-daily advent of a fresh company detected in evasion and worse. The free-market models give us: entrepreneurs, stockholders, accountants, federal watchdogs, bankruptcies — and jails. The mix of those elements is supposed to encourage thrift, investment, merchandising, and profits — to the stockholders and to the buying public. What appears to the inquirer as unique in today’s situation is a body of actors who disengage from the accepted disciplines and do so with apparent impunity. The big question today is: Are these individual miscreants, or do we have an operating class beyond the reach of the law, on the order of the profession of prostitution? We have here the second wave of apparently deracinated evildoers in the course of a single year. The first was the priests, who, in outrageous defiance of primary obligations of their profession, abuse children, no less. Abusing stockholders is perhaps less iniquitous. But this set of miscreants are giving reasons why they did as they did, high exercises in self-exculpatory art. When an official of WorldCom reports that he could see nothing wrong, let alone unusual, about classifying moneys dispensed as capitalized expenditures when in fact they were moneys spent in doing business, the question arises: Can that man see anything as wrong? And if so, does he emerge as simply one criminal practitioner, or is he a member of a class newly acceptable in American business? There has been speculation over two generations about who actually controls business enterprise. James Burnham, in l940, argued the thesis of the Managerial Revolution. It isn’t the stockholders who run things; it is the people they nominate to serve in management, people they almost immediately lose control of, he argued. This is so because keeping up with what they do, let alone supervising what they do, is a practical impossibility. Stockholders are left with the power to remove, which can be likened to the power of Congress to impeach. They have the advantage of a hypothetical watchdog, requiring the execution of certain formalities, like a company’s annual reports. What was envisioned as supplementing stockholders’ rights was the concept of the public’s rights. A WorldCom CEO who dissimulates damages his stockholders, but hurts also a public that, taking heed of what happened at WorldCom Inc., hesitates to back other ventures, slowing down the dynamic of capitalism and inducing skepticism about the very idea of private enterprise. Congress is busy trying to come up with revised systems of auditing. The most prominent reform being discussed is outlawing the accounting firm that acts in a second capacity as company consultant. That idea would seem to be commendable, though the practice of it could be hard on the smaller of the 16,000 publicly traded companies that would now have to add an entire service echelon to the cost of doing business. What is needed quickly and extensively is: punishment. In the late l930s, no less a figure than a former president of the New York Stock Exchange went to jail for the misuse of funds. This is not a call to the denial of due process, but a call to the legitimate use of public punishment as a retributive act. In the public-school lore of Great Britain there is the story of the senior boy nailed for public indecorum and had up for a flogging. He pleads, in deference to his seniority, to be punished outside the view of voyeuristic fellow students. Permission denied, on the grounds that the public humiliation was an essential part of the punishment. Richard Whitney was sent to jail in l938. We need his successors to go to jail in 2002. The alternative is to sit by, supine in the gestation of a managerial class that violates the very idea of a capitalist class bound by laws and practices which make it a proud part of a free economy, whose leaders in large enterprises have done their best to discredit. This is a very real public issue and inevitably will separate many Republicans from many Democrats. The possibilities open to demagogues are great. But the Republicans would do eternal disservice to their responsibilities if they failed to take action against the great post- Marxian challenge to capitalism.

Response:

To: David Farber <*******cis.upenn.edu Dave: Some of my readers suggested I send this to you regarding Worldcom. It’s from my issue of May 6 and appears online at http://www.a-clue.com/archive/02/cl020506.htm [.......] The expected bankruptcy of the largest Tier One Internet Service Provider follows the bankruptcy filing of Global Crossing, and the more-recent filing of Williams Communications (http://news.com.com/2100-1033-888913.html). Sitting in the bankruptcy waiting room are such companies as Qwest (http://quote.yahoo.com/q?h=1&s=q&d=v1) and AT&T (http://quote.yahoo.com/q?h=1&s=t&d=v1). Do you notice the pattern? All these filings prove the same point, Moore’s Law applies to fiber. Because fiber capacity can be expanded exponentially using Wavelength Division Multiplexing, with capacity increasing by a factor of 1,000 (http://www.firstpr.com.au/telco/articles/wdm_links.html), the billions of dollars invested in the 1990s ringing the globe and every major city with fiber can’t be recouped. Infinite supply and a finite demand creates a price of near-zero. Since Internet telephony has also been incorporated into phone switches over the last few years, turning voice into bits, long distance voice prices too are plunging toward zero. The latest estimate I read was that it costs 2/10th of a cent per minute to move a long distance voice call, and 155 Mbps fiber lines were recently leasing for as little as $15,000 per month (http://dc.internet.com/news/article/0,1934,2101_1016421,00.html). Those 10-10-220 calls (run by Worldcom) are a major rip-off. The billions of dollars invested in fiber throughout the 1990s were invested based on the assumption that the value of fiber bandwidth would rise over time, due to increased demand. But even if phone companies, cable companies, wireless providers and ISPs had managed to convince people to buy broadband, even if sites were free to deliver broadband content, and even if everyone had "last mile" services at affordable prices, Moore’s Law would not have kept bandwidth prices level. It’s not just a matter of having everyone wired to broadband, but of everyone demanding the services of broadband at once, that fills those fiber pipes. Moore’s Law is putting all of the telecommunication industry’s big balance sheets – voice and data, national and international, wired and wireless – in the dumper. Since it’s cheaper to buy an "all you can eat" long distance plan from a cellular provider than a wire line carrier, AT&T and Sprint are just as threatened as Worldcom. This competition will eventually put cellular providers under pressure. Moore’s Law operates everywhere, meaning such giants as Deutsche Telekom, British Telecom, and Cable & Wireless are all under threat. I’ve been warning about this for years. But it doesn’t really help to be right. The question is what will we do about it? In Net Paradox (http://www.netparadox.com/) David Isenberg and David Weinberger propose that governments take major networks out of bankruptcy and run them as public utilities. In his latest "Cook Report" (http://cookreport.com/11.03-4.shtml) Gordon Cook claims the ILECs, or the "Teleban," are succeeding in getting government policies that force consumers to buy their monopoly services at monopoly prices. But even a government bailout of the ILECs and re-monopolization on behalf of the "Teleban" would be a short-term fix. Moore’s Law is irresistible, and it applies to radios, not just fiber. Other nations are applying this Moore’s Law of Radios to their own wireless worlds, so American intransigence could mean Mexico or even South Africa will have better service than Americans within the next five years. In any case, America’s monopoly of telecommunications capacity is going to end, because it’s so cheap to reproduce it. Even if you’re totally "clued-in," Moore’s Law means that billions of dollars in long-term debt, originally rated AAA, won’t be repaid. It can’t be, because the customer revenue needed to repay it can’t come in. The first point to be made today is we’re just at the start of this crash. Enron, which was highly leveraged based on rising bandwidth prices (it tried to make a market in the stuff), was just the tip of the iceberg, the canary in the mine shaft. These early-year bankruptcies are like the recent calving of the Ross Ice Shelf (http://nsidc.org/iceshelves/larsenb2002/). The actual event is like global warming, only in fast-motion. The second point is that this doesn’t completely sink the telecommunications equipment sector. Moore’s Law means that wireless broadband will continue to improve, and thus such "last mile" solutions will find a market. New fiber routing systems and diodes that increase fiber capacity will continue to be sold, to someone, because they do pay for themselves. But a lot of people talked in the 1990s about the idea that "bandwidth is free" and as they get their wish some will find it a nightmare. How should we deal with this? The first and most important thing to do is go through the grieving process, starting now. We’re still in denial – we need to reach acceptance. This is a titanic financial event, and given the inter-relationships between the public sector and telecommunications (financial interdependencies in many developing countries) it’s going to pop to the top-of-the-stack for real policymakers, not just elites. Left unmanaged (and it’s unmanaged today) we’re talking about a reversal of the recent "recovery" by the third quarter, with many of our very-best jobs disappearing. We’re talking about a deflationary spiral rivaling that of the 1930s. What’s the solution? Government will have to step in and buy this unused cap acity at some point, spinning it out (hopefully at a profit) following a reorganization. That’s what the laws of capitalism demand – stock and bondholders made mistakes and must pay. It’s funny, though, how many "market conservatives" will be calling for bail-outs in the next few years. When they do, bring a laugh track. There’s another lesson. Connectivity by itself is worthless. Only services, content, and software are meaningful. There must be a market negotiation to value services, content and software, in a world where their delivery costs nothing. Trying to ban technology turns the economy’s chief profit-center into nothing but a cost-center. This (http://zdnet.com.com/2100-1105-891781.html)  can’t be borne. There’s a lesson for you and I in all this as well. Make something unique, then make something else. This is something folks in the computer business have accepted for decades. It’s the only way out of Moore’s Law. And it’s coming to a telephone near you.

Response:

Question:

Hello, I have been reading this news group for a while searching for opinions on accounting packages.  I have read lots of interesting posts by many knowledgeable individuals but I have not found exactly what I am looking for.  Therefore I thought I would post my questions a see if anyone had some opinions.  I would like to thank you in advance for considering my questions. I am a software developer by profession and I oversee, on the side (for my mother), two bowling centers.  My office is located in one city (Portland Oregon) and the bowling centers are located in two other cities.  I am looking for an accounting package that will allow the following: I would like the employees in each center to be able to enter data into the bookkeeping system (e.g. sales figures, payroll hours, inventory changes etc.).  They should be able to generate reports.  I would also like to generate reports while in Portland. The bowling centers are mostly cash businesses and so we have numerous cash control systems that follow the cash around.  These are done manually or on excel spreadsheets.  I would like to have this information along with journal files from our cash register system to somehow end up in the accounting database. I currently use QB as the accounting package.  There are quite a few problems with this: 1)    I can’t really use the QB multi-user system over the Internet as each QB package will want to access the complete database (10+ Megs). All of the data will have to be passed to the querying client. 2)    I have to manually reenter data from our cash control systems into QB.  I have looked at QB’s import facility and it seems fraught with problems (e.g. data could be accidentally imported twice and then it’s a big mess to straighten things out). So, I have considered a few solutions: 1)   I could get multi-user QB and put three computers in one location (networked, one for me, and one for each remote business).  Then each remote user would have to use remote desktop to talk to their computer, which would be running QB.  This seems like a kluge to me-I would have to have two extra computers, etc.  This also doesn’t solve the data re-entry problems.  Also, report printing would be fairly complex, as the central QB system would want to print the report locally. 2)    I could use some net-based accounting system.  I don’t like this idea as I would like to be in control of my data. 3)    I could find some client/server system and locate the server somewhere.  Then each remote user could be a client.  This seems more esthetically pleasing to me.  I still need to figure out how to avoid the data reentry. So, it seems like I would like to find a client server accounting package.  It would be great if this accounting package allowed me to design input screens and also could import data files (e.g. spreadsheets and journal files written by our cash register system). And one final issue:  These business are small business (< $1M between both of them) so I can afford to spend $000s for an accounting package. Does anyone have suggestions of packages to look at? Again, thanks for your time. Greg Laird

Response:

Search on this newsgroup or the QuickBooks newsgroup for discussions on windows terminal server and look on the internet for netledger (I think thats the name, its from Oracle). – Hide quoted text — Show quoted text – Hello, I have been reading this news group for a while searching for opinions on accounting packages.  I have read lots of interesting posts by many knowledgeable individuals but I have not found exactly what I am looking for.  Therefore I thought I would post my questions a see if anyone had some opinions.  I would like to thank you in advance for considering my questions. I am a software developer by profession and I oversee, on the side (for my mother), two bowling centers.  My office is located in one city (Portland Oregon) and the bowling centers are located in two other cities.  I am looking for an accounting package that will allow the following: I would like the employees in each center to be able to enter data into the bookkeeping system (e.g. sales figures, payroll hours, inventory changes etc.).  They should be able to generate reports.  I would also like to generate reports while in Portland. The bowling centers are mostly cash businesses and so we have numerous cash control systems that follow the cash around.  These are done manually or on excel spreadsheets.  I would like to have this information along with journal files from our cash register system to somehow end up in the accounting database. I currently use QB as the accounting package.  There are quite a few problems with this: 1)    I can’t really use the QB multi-user system over the Internet as each QB package will want to access the complete database (10+ Megs). All of the data will have to be passed to the querying client. 2)    I have to manually reenter data from our cash control systems into QB.  I have looked at QB’s import facility and it seems fraught with problems (e.g. data could be accidentally imported twice and then it’s a big mess to straighten things out). So, I have considered a few solutions: 1)   I could get multi-user QB and put three computers in one location (networked, one for me, and one for each remote business).  Then each remote user would have to use remote desktop to talk to their computer, which would be running QB.  This seems like a kluge to me-I would have to have two extra computers, etc.  This also doesn’t solve the data re-entry problems.  Also, report printing would be fairly complex, as the central QB system would want to print the report locally. 2)    I could use some net-based accounting system.  I don’t like this idea as I would like to be in control of my data. 3)    I could find some client/server system and locate the server somewhere.  Then each remote user could be a client.  This seems more esthetically pleasing to me.  I still need to figure out how to avoid the data reentry. So, it seems like I would like to find a client server accounting package.  It would be great if this accounting package allowed me to design input screens and also could import data files (e.g. spreadsheets and journal files written by our cash register system). And one final issue:  These business are small business (< $1M between both of them) so I can afford to spend $000s for an accounting package. Does anyone have suggestions of packages to look at? Again, thanks for your time. Greg Laird

Response:

Check BEST enterprise suite. It will do everything you need. DB is SQL Server. BUt I don’t think you will be able to afford this one – Hide quoted text — Show quoted text – Hello, I have been reading this news group for a while searching for opinions on accounting packages.  I have read lots of interesting posts by many knowledgeable individuals but I have not found exactly what I am looking for.  Therefore I thought I would post my questions a see if anyone had some opinions.  I would like to thank you in advance for considering my questions. I am a software developer by profession and I oversee, on the side (for my mother), two bowling centers.  My office is located in one city (Portland Oregon) and the bowling centers are located in two other cities.  I am looking for an accounting package that will allow the following: I would like the employees in each center to be able to enter data into the bookkeeping system (e.g. sales figures, payroll hours, inventory changes etc.).  They should be able to generate reports.  I would also like to generate reports while in Portland. The bowling centers are mostly cash businesses and so we have numerous cash control systems that follow the cash around.  These are done manually or on excel spreadsheets.  I would like to have this information along with journal files from our cash register system to somehow end up in the accounting database. I currently use QB as the accounting package.  There are quite a few problems with this: 1)    I can’t really use the QB multi-user system over the Internet as each QB package will want to access the complete database (10+ Megs). All of the data will have to be passed to the querying client. 2)    I have to manually reenter data from our cash control systems into QB.  I have looked at QB’s import facility and it seems fraught with problems (e.g. data could be accidentally imported twice and then it’s a big mess to straighten things out). So, I have considered a few solutions: 1)   I could get multi-user QB and put three computers in one location (networked, one for me, and one for each remote business).  Then each remote user would have to use remote desktop to talk to their computer, which would be running QB.  This seems like a kluge to me-I would have to have two extra computers, etc.  This also doesn’t solve the data re-entry problems.  Also, report printing would be fairly complex, as the central QB system would want to print the report locally. 2)    I could use some net-based accounting system.  I don’t like this idea as I would like to be in control of my data. 3)    I could find some client/server system and locate the server somewhere.  Then each remote user could be a client.  This seems more esthetically pleasing to me.  I still need to figure out how to avoid the data reentry. So, it seems like I would like to find a client server accounting package.  It would be great if this accounting package allowed me to design input screens and also could import data files (e.g. spreadsheets and journal files written by our cash register system). And one final issue:  These business are small business (< $1M between both of them) so I can afford to spend $000s for an accounting package. Does anyone have suggestions of packages to look at? Again, thanks for your time. Greg Laird

Response:

Question:

Now Chris, don’t tell me in a firm full of auditors, some of the smartest and most experienced auditors on earth, none of the other managers or partners knew what was going on.  So, choose your colleagues wisely,

How the hell are people on the west coast or new england or the southeast going to have any idea what is going on with an audit client in Houston? Chris

Response:

On at least one very notable occasion, the largest one, I’m fairly sure I could have "gotten away with" doing otherwise, and knew it at the time.   There was substantial fraud involved, and I wasn’t willing to turn a blind eye.  A larger, more "prestigious" firm from a nearby city was more than happy to accept a bit of agreed "myopia", no doubt in exchange for a very nice fee. — end copy / paste — The crybaby stuff gets exactly nowhere with me.   You no doubt have a good education.  Go get another job. —

It’s very apparent to me that you have alot of hostility towards the "big 5" accounting firms.   I have been with Andersen for 3 1/2 years, and I can’t think of an instance where an ethics or integrity concern has even seriously crossed my mind. Chris

Response:

How the hell are people on the west coast or new england or the southeast going to have any idea what is going on with an audit client in Houston?

You don’t know what’s going on specifically, but "you" as a collective group of employees and partners didn’t do a whole lot to stop the shredding of documents that may or may not have been crucial in determining the facts. Any one of you could have, and a whole lot of you should have, stepped up to the plate and said STOP THIS. And while a few priests have disgraced the priesthood as well as the Catholic Church, so have a few Andersen CPA’s disgraced Andersen as well as every CPA in the world. Now we all have to wait to see just how muddied the designation has become, and if the stain ever washes off. THANK YOU AA. — Paul A. Thomas, CPA Athens,  Georgia http://www.pat-cpa.com

Response:

How the hell are people on the west coast or new england or the southeast going to have any idea what is going on with an audit client in Houston?

A real problem–but one that any Big 5 firm is going to face.  It’s the nature of the beast that you have potential exposure to the actions of people in other offices. You would hope that the internal and quality controls are sufficient to give assurance that such problems aren’t happening undetected for a long period of time.  In fact, professional standards demand The results in Waste Management, Sunbeam, Baptist Foundation of Arizona and Enron suggest that, in fact, those systems weren’t working very well at Andersen. That said, you say you have 3.5 years with Andersen.  If you started with them straight out of school, that means you are in the very early stages of your career.  I would caution you that over your career you are going to experience a lot of ups and downs–and, in fact, while this situation appears terrible today, you are extremely likely to recover from it relatively quickly.   The work Andersen did is still going to be done–just by other firms.  And those firms are going to be hiring accountants, assuming they weren’t terribly overstaffed to start with.  You should be in a good position to go with whatever firm landed the account you just lost.

Response:

It’s very apparent to me that you have alot of hostility towards the "big 5" accounting firms.

You mean the "Final Four"? I have been with Andersen for 3 1/2 years, and I can’t think of an instance where an ethics or integrity concern has even seriously crossed my mind.

Therein lies the problem.  It should be crossing your mind every day. I know that’s the case in my (and I mean I own it) practice.  Whether it’s a tax issue, accounting, billing, collection, employee issues, client acceptance, retention, etc. the decisions made each day affect your ethics, morality, integrity, etc. – not to mention the bottom line.  And in my practice, my income is based on what’s left over for me after the business bills get paid.  I’ve lost clients (big ones) and/or never obtained a client because I wouldn’t DO what they thought should be done.  And of course that not only hurts the business bottom line, but my personal earnings as well. I am sure that similar (albeit significantly larger in dollars) pressure resides with the partners at AA and the other four firms. — Paul A. Thomas, CPA Athens,  Georgia http://www.pat-cpa.com

Response:

…. It’s very apparent to me that you have alot of hostility towards the "big 5" accounting firms.

Most likely:  As ye sow so shall ye reap. I have been with Andersen for 3 1/2 years, and I can’t think of an instance where an ethics or integrity concern has even seriously crossed my mind.

You might want to re – phrase that, or maybe not. I am reminded of hard hitting investigative reporter Jack Anderson’s statement of all the years he was in Utah he had never see or was made aware of an instance of polygamy. — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for six years, mistake of being an accountant.  * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

The client I probably spent 25% of my time on left us and went to another firm this week.  It was completely caused by the indictment and had nothing to do with our quality of service or dedication to the job.  They had stuck by us through all of the bad press, but were worried that the public might perceive our opinion as being "tainted".   Thanks DOJ and media.  Hopefully, you will be in the same position that we are someday.  Guilt by association is a wonderful thing. Chris

Response:

I take it you are an Andersen employee or associate.  You seem to be blaming DOJ and the media for Andersen’s screw ups.  So let me see what should be done here. Should everyone just turn a blind eye to this fiasco in which YOUR firm was involved?  Muzzle the media?  And the Department of Justice should give preferential treatment to Andersen and not investigate and prosecute if there were wrong doings or fraud?  It is regrettable that you are losing customers and I understand that you had nothing to do with the fiasco, but your anger is directed at the wrong people.  The DOJ and media are doing their jobs.  Your anger needs to be directed at the top Andersen Brass, they are responsible for your plight, not the media.  By not investigating and reporting on this the DOJ and media would be doing a disservice to all American and some foreigners as some Enron stock was held by foreigners.  So what you are saying is your interests should be protected at the expense of everybody else’s.  I’m sorry, that’s not equitable. As for your customers bailing out on you I do sympathize, if you gave them unparalleled service for many years it seems unfair.  But it’s a free country and you have to understand that some customers are nervous and they don’t want the additional stress of being unsure about their accounting firm.  Business is hard enough without headaches that one doesn’t need or have any control over, so they are acting with prudence and due care.  They are protecting their interests.  If the whole thing really blows right apart why should they be unwitting victims? They really have nothing to do with this, they are not Andersen employees or associates, they are customers.  In business if one of your suppliers is about to go bankrupt or get sued you have to take measures to ensure uninterrupted supplies and continuance of your affairs as smoothly as possible.  You cannot expect anything else, not doing so would be poor business practice. This whole thing is somewhat comparable to the Ford Explorer debacle.  When Firestone tires were flying apart and Explorers were flying head first in ditches a lot of people who were not directly responsible suffered.  There was only 2 line of Firestone tires that were at issue, yet sale of all Firestone tires suffered, even wheelbarrow tires.  People who had never even seen a Ford Explorer were affected.  Employees of Bridgestone Tires, which owns Firestone, lost their jobs even though there was nothing wrong with their products.  And Ford employees who weren’t in anyway even closely working on Explorers lost their jobs, not to mention Ford suppliers, dealers and contractor.  What should have been done then? No congressional investigation and muzzle the media?  Just be thankful you’re not a 75 year old widow who has lost all of her life savings on Enron stock. John – Hide quoted text — Show quoted text – The client I probably spent 25% of my time on left us and went to another firm this week.  It was completely caused by the indictment and had nothing to do with our quality of service or dedication to the job.  They had stuck by us through all of the bad press, but were worried that the public might perceive our opinion as being "tainted". Thanks DOJ and media.  Hopefully, you will be in the same position that we are someday.  Guilt by association is a wonderful thing. Chris

Response:

That concept is really too much for me.  Its like blaming all Germans for No. It’s like blaming the people responsible for Andersen’s policies and decision making for not meeting their responsibilities to their profession, their colleagues, and the users of the financial statements they pretended to audit.

We agree to disagree on that.  Most of the people at Andersen probably didn’t have the remotest clue of what was going.  I will believe that until it is proved otherwise.  They don’t deserve the sticks and stones. – Hide quoted text — Show quoted text – <<SNIP I have people working on different jobs…many are so dedicated that they don’t have time to fool with office gossip or deal with the facts on another job.  They have enough to deal with.  Yes, I have been in organizations where the slightest wrong doing or perception of wrong doing floated around to a select few. And the point of that is what? People you work with are subject to being screwed over if colleagues they trust do wrong? Tell me, if someone in your organization breaks the law – say your boss, for example – and the company ceases to exist because when the boss is caught and indicted, the business goes under, are you going to blame your boss, who broke the law, or are you going to blame the cops who arrested him?

Actually, I just went through that.  Six or seven allegations were thrown out against the head of my organization and supported by the W Post.  The allegations seem oh so true.  However, ALL of the allegations were disapproven. The issues are now dead.  Had my organization been AA, we would be out of business based on the unscrouplous tactics of a few– those making the allegations.   ///I just can’t write what needs to be written above and had to remove about 5 lines.  //// I know what you are trying to say.  My issue was that AA people are not all equally guilty.  We don’t know the extent that upper level people were involved in the decision making.  We do know the system of quality control was ineffective if not totally broken.  Indict those who broke the law, not those who were not connected.  I see nothing wrong with Cris questioning the tactics of the "cops."  The fact is that cops/investigators have a mission and they don’t mind hurting the innocent a bit a long the way to get the guilty.  Car chases, exposed whistle blowers, and others are obvious examples.  Depending on the damage done, I would even support a bit of that to get the guilty….I’m not sure where the line is and I’m glad I don’t get involved in that area. The fact that he chose to attack that aspect doesn’t preclude that he would attack the actual perpetrators at AA.  He has been silent on that probably because everyone has already discussed that and he probably agrees. Your example doesn’t fit well because they aren’t attacking the boss alone, they are going after the firm, which is thousands of people, some of which could be your friends and relativess and who are perfectly innocent of any wrong doing.  He has every right to be ticked at the methodology no matter how much you agree with it. Andersen as a firm may deserve to go down the tubes…but I intuitively believe that the AA people are as professional, ethical, and moral as the members of any other comparable sized CPA firm.  To paint them all with the broad brush of association should be left to the media and the public, not their professional colleagues. Mostly, I’m painting the ones who were directly involved in the wrong doing and the ones who insist upon defending the indefensible.

That’s find…but the tone in this thread has been recently and continues to be that all of AA had to know what went on and are therefore guilty of at least inaction.  I don’t buy that and must challenge that position. By the way, I very much fear the Other 4, as organizations, are not all that different from Andersen, as an organization. If my fears are realized, you haven’t begun to see the negative impact on the stock market in particular and the economy in general.

In that, we agree.  I will tell you this— if the big 5 are tainted, they run rings around the small firms in terms of ethics.  I think in a year or two, this aspect will become clear.  The free ride is over and the AA debacle has made it easier to challenge the work of all CPAs. Respectfully, Tippy – Hide quoted text — Show quoted text – Regards, Bill

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By the way, I very much fear the Other 4, as organizations, are not all that different from Andersen, as an organization. If my fears are realized, you haven’t begun to see the negative impact on the stock market in particular and the economy in general.

There’s truly the frightful part. If there are substantial problems with the other guys, there are two possibilities:  - Perhaps the "blood-letting" at AA may be a sufficient scare to     draw others back from the brink of further disaster;  - Alternatively, perhaps there’s worse to come, including problems     of devaluation of all sorts of companies out there. The latter is what people should be quite fearful of, and both possibilities represent good political reason for the DOJ to be as harsh as possible with AA. That’s small comfort for those unjustly affected by the harshness; it wouldn’t be the first time, and it won’t be the last.  Ronald Reagan fired about 12000 air traffic controllers, which was rather harsh, and bites people to this day.  At that time, the issue was "defense of the airways;" today, it’s "defense of stock valuations." And of course, in _this_ situation, things are quite conflated because there are _two_ plausible causes for the bleeding away of AA clients:  a) Really, really, really bad publicity about Enron, coming in the     wake of some other "bad publicity" scenarios, and  b) DOJ becoming an adversary. Blaming all the problems on the DOJ indictment represents a very _convenient_ apologia; I suppose we’ll never know for sure if things would have come to a similar "head" without that indictment. — http://www.ntlug.org/~cbbrowne/spiritual.html Rules of the Evil Overlord #200. "During times of peace, my Legions of Terror will  not be permitted to  lie around drinking  mead and eating roast boar. Instead they will be  required to obey my dietician and my aerobics instructor." <http://www.eviloverlord.com/

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That concept is really too much for me.  Its like blaming all Germans for

No. It’s like blaming the people responsible for Andersen’s policies and decision making for not meeting their responsibilities to their profession, their colleagues, and the users of the financial statements they pretended to audit. <<SNIP I have people working on different jobs…many are so dedicated that they don’t have time to fool with office gossip or deal with the facts on another job.  They have enough to deal with.  Yes, I have been in organizations where the slightest wrong doing or perception of wrong doing floated around to a select few.

And the point of that is what? People you work with are subject to being screwed over if colleagues they trust do wrong? Tell me, if someone in your organization breaks the law – say your boss, for example – and the company ceases to exist because when the boss is caught and indicted, the business goes under, are you going to blame your boss, who broke the law, or are you going to blame the cops who arrested him? Andersen as a firm may deserve to go down the tubes…but I intuitively believe that the AA people are as professional, ethical, and moral as the members of any other comparable sized CPA firm.  To paint them all with the broad brush of association should be left to the media and the public, not their professional colleagues.

Mostly, I’m painting the ones who were directly involved in the wrong doing and the ones who insist upon defending the indefensible. By the way, I very much fear the Other 4, as organizations, are not all that different from Andersen, as an organization. If my fears are realized, you haven’t begun to see the negative impact on the stock market in particular and the economy in general. Regards, Bill

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I’d love to see your reactions if your career was dramatically affecting by the unfortunate conduct of a few, especially if you didn’t even work in the audit practice, like at least 60% of the people employed by Andersen.

I’d be pissed as hell and I’d be blaming the ones who committed the "unfortunate conduct," not the cops for bringing them to justice. By the way, I had a job in a Big 8 firm – back in the days when at least in that office, there was a note of pride in the voices of the professional staff when commenting that the partner in charge was a man of _integrity_.

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– Hide quoted text — Show quoted text – …. It’s very apparent to me that you have alot of hostility towards the "big 5" accounting firms. Most likely:  As ye sow so shall ye reap. I have been with Andersen for 3 1/2 years, and I can’t think of an instance where an ethics or integrity concern has even seriously crossed my mind. You might want to re – phrase that, or maybe not. I am reminded of hard hitting investigative reporter Jack Anderson’s statement of all the years he was in Utah he had never see or was made aware of an instance of polygamy.

It is entirely plausible that in 3 1/2 years, the individual in question hasn’t been near enough to _serious_ involvement with marketing or practice management to see much in the way of "scary issues." Contrary to Hollywood scenarios as in _The Rainmaker_, where just-out-of-school lawyers immediately get thrown into complex negotiations, with their practical education coming from senior lawyers who run strip clubs on the side and outrun FBI investigations, in the _real world,_ it takes a few years for those in the big firms to get around to dealing with sensitive situations. Someone who may have barely been a CPA for a year or maybe two isn’t likely to be out pounding the pavement in the "business development" area which _is_ the place where thare are likely to be hefty ethical challenges. Indeed, a junior auditor working in Utah is liable to be too busy writing up timesheets and searching for billable time to have the time to look for terribly many polygamists.  :-) — http://www3.sympatico.ca/cbbrowne/languages.html "The classic  Common Lisp defmacro is  like a cook’s knife; an elegant idea which seems dangerous, but which experts use with confidence." — Paul Graham, _On Lisp_

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With incredible insight like that it’s really surprising that you’re unemployed with your MBA & CPA credentials.  Did you learn your know it all sarcasm in your graduate program. Let alone all the bitter holier than thou sole proprietors just waiting to pile on the Big 5 firms because you couldn’t get hired out of college. I know this isn’t the case with all of the respondents in this newsgroup, but it sure is the general tone of the piling on uninformed responses that I’ve read. I’d love to see your reactions if your career was dramatically affecting by the unfortunate conduct of a few, especially if you didn’t even work in the audit practice, like at least 60% of the people employed by Andersen. Take a look in the mirror before you slam the concerns of the mostly excellent professionals working at Andersen.

– Hide quoted text — Show quoted text – …. It’s very apparent to me that you have alot of hostility towards the "big 5" accounting firms. Most likely:  As ye sow so shall ye reap. I have been with Andersen for 3 1/2 years, and I can’t think of an instance where an ethics or integrity concern has even seriously crossed my mind. You might want to re – phrase that, or maybe not. I am reminded of hard hitting investigative reporter Jack Anderson’s

statement of all the years he was in Utah he had never see or was made aware of an instance of polygamy. – Hide quoted text — Show quoted text – — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for six years, mistake of being an accountant.  * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

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Tippy w/ unpopular views

Without a difference of opinion there could be no discussion. — Jim Hudspeth, CFE, CPA   http://survivalworks.com

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It’s very apparent to me that you have alot of hostility towards the "big 5" accounting firms. Most likely:  As ye sow so shall ye reap. I have been with Andersen for 3 1/2 years, and I can’t think of an instance where an ethics or integrity concern has even seriously crossed my mind. You might want to re – phrase that, or maybe not.

I suspect he meant that he never detected an issue of integrity, ethics, or independence or that such matters never surfaced as an issue to him.  As similarly stated by Paul (I think), auditors should always have an awareness of such matters.  As authority increases, so does the need to keep an awareness of these matters.  But even a junior auditor can compromise work by applying to work for the client without recusing himself from work on that client. I am reminded of hard hitting investigative reporter Jack Anderson’s

statement of all the years he was in Utah he had never see or was made aware of an instance of polygamy. – Hide quoted text — Show quoted text –

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That concept is really too much for me.  Its like blaming all Germans for the holocaust when many left the country and many helped the Jews escape. Yes, people still believe that *all* Germans were responsible for the holocaust.  Or blaming all of any group.  The idea that people throughout the entire organization (AA) at all levels had at least an inkling belies realistic behavior. I have people working on different jobs…many are so dedicated that they don’t have time to fool with office gossip or deal with the facts on another job.  They have enough to deal with.  Yes, I have been in organizations where the slightest wrong doing or perception of wrong doing floated around to a select few. Andersen as a firm may deserve to go down the tubes…but I intuitively believe that the AA people are as professional, ethical, and moral as the members of any other comparable sized CPA firm.  To paint them all with the broad brush of association should be left to the media and the public, not their professional colleagues. Tippy w/ unpopular views – Hide quoted text — Show quoted text – How the hell are people on the west coast or new england or the southeast going to have any idea what is going on with an audit client in Houston? You don’t know what’s going on specifically, but "you" as a collective group of employees and partners didn’t do a whole lot to stop the shredding of documents that may or may not have been crucial in determining the facts. Any one of you could have, and a whole lot of you should have, stepped up to the plate and said STOP THIS. And while a few priests have disgraced the priesthood as well as the Catholic Church, so have a few Andersen CPA’s disgraced Andersen as well as every CPA in the world. Now we all have to wait to see just how muddied the designation has become, and if the stain ever washes off. THANK YOU AA. — Paul A. Thomas, CPA Athens,  Georgia http://www.pat-cpa.com

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Now Chris, don’t tell me in a firm full of auditors, some of the smartest and most experienced auditors on earth, none of the other managers or partners knew what was going on.  So, choose your colleagues wisely, How the hell are people on the west coast or new england or the southeast going to have any idea what is going on with an audit client in Houston? Chris

There are some very smart people in this group…but empathy is not always easy when the whole profession has been tainted by your colleagues.   I am not in agreement with most of the group–respectfully, I see an attitude of "holier than thou" that will diminish over time.  (Some posters are strictly factual or speculative rather than emotional.) For the most part, few are challenging the prevailing view here.  When there is near consensus, you won’t see much sympathy for those I believe were unfairly tainted. OTOH, why would anyone want their financial statements examined by Andersen when its reputation has been so tainted.  I suspect that potential investors would worry about why a tainted CPA firm is continuing to opine on the corporation…are shenanigans going on between AA and the firm.  Fair? Perhaps. Tippy

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- Hide quoted text — Show quoted text – On at least one very notable occasion, the largest one, I’m fairly sure I could have "gotten away with" doing otherwise, and knew it at the time. There was substantial fraud involved, and I wasn’t willing to turn a blind eye.  A larger, more "prestigious" firm from a nearby city was more than happy to accept a bit of agreed "myopia", no doubt in exchange for a very nice fee. — end copy / paste — The crybaby stuff gets exactly nowhere with me. You no doubt have a good education.  Go get another job. — It’s very apparent to me that you have alot of hostility towards the "big 5" accounting firms.

It is more a mixture of contempt and sorrow.   I once held the "Big 8" in high regard.  No more.  In my quieter moments I grieve for what we have all lost, primarily as a result of the unbridled greed of a few. I have been with Andersen for 3 1/2 years, and I can’t think of an instance where an ethics or integrity concern has even seriously crossed my mind.

Innocence lost.  It happens to most of us sooner or later. You will no doubt get caught up in the next 3 1/2. — Jim Hudspeth, CFE, CPA   http://survivalworks.com

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It remains to be seen whether DOJ has a winnable case.  The media rarely gets the facts right, they take the easy road until they find out they are on losing side of an issue and then they turn on the other side like a dog. In the meantime, honorable people get hurt.  But the end justifies the means, right.  As much as I admire most of the intentions of our "crimefighters," they sometimes get it wrong and people are hurt.  More often than not, information is somehow leaked that taints individuals and firms…and the investigations lead nowhere.  Oftentimes, politicians pressure investigators and others in government…the pressure is powerful sometimes.  Years ago, I led a multiagency federal (PCIE) audit that yielded results different than the politician wanted to see.  That didn’t go over well but the testing was good and the results stood. I’m not so sure that the FBI and certain others can withstand the pressure placed on them to yield results beneficial to the desires of the politicians. My point is simply that Andersen apparently was decentralized to point it was not as effective as it was supposed to be.  But, does that mean that those who were effective have to lose their jobs because they are associated with Andersen.  Okay, so be it.  The public has the right to choose.  But why should any CPA be held in any higher esteem than those of Andersen.  For the most part, CPAs went to the same schools, the same ethics, the same friends, etc.  What happened at Andersen has very likely happened in varying degrees at big and small CPA firms throughout this country.  The holier than thou business just doesn’t fly — if you blame all of Andersen then you need to blame everyone.  As we all know, control systems are just as good as the people in the positions— and I suggest to you that Andersen’s people, overall, were just as good. Sorry a bit rambling, okay a lot. Tippy BTW, look at the FBI, the screwed up so badly with Hansen…but who is being held accountable….nobody but Hansen.  They had zip controls over access to classified and sensitive information…according to our media friends.

– Hide quoted text — Show quoted text – I take it you are an Andersen employee or associate.  You seem to be blaming DOJ and the media for Andersen’s screw ups.  So let me see what should be done here. Should everyone just turn a blind eye to this fiasco in which YOUR firm was involved?  Muzzle the media?  And the Department of Justice should give preferential treatment to Andersen and not investigate and prosecute if there were wrong doings or fraud?  It is regrettable that you are losing customers and I understand that you had nothing to do with the fiasco, but your anger is directed at the wrong people.  The DOJ and media are doing their jobs.  Your anger needs to be directed at the top Andersen Brass, they are responsible for your plight, not the media.  By not investigating and reporting on this the DOJ and media would be doing a disservice to all American and some foreigners as some Enron stock was held by foreigners.  So what you are saying is your interests should be protected at the expense of everybody else’s.  I’m sorry, that’s not equitable. As for your customers bailing out on you I do sympathize, if you gave them unparalleled service for many years it seems unfair.  But it’s a free country and you have to understand that some customers are nervous and they don’t want the additional stress of being unsure about their accounting firm.  Business is hard enough without headaches that one doesn’t need or have any control over, so they are acting with prudence and due care.  They are protecting their interests.  If the whole thing really blows right apart why should they be unwitting victims? They really have nothing to do with this, they are not Andersen employees or associates, they are customers.  In business if one of your suppliers is about to go bankrupt or get sued you have to take measures to ensure uninterrupted supplies and continuance of your affairs as smoothly as possible.  You cannot expect anything else, not doing so would be poor business practice. This whole thing is somewhat comparable to the Ford Explorer debacle. When Firestone tires were flying apart and Explorers were flying head first in ditches a lot of people who were not directly responsible suffered.  There was only 2 line of Firestone tires that were at issue, yet sale of all Firestone tires suffered, even wheelbarrow tires.  People who had never even seen a Ford Explorer were affected.  Employees of Bridgestone Tires, which owns Firestone, lost their jobs even though there was nothing wrong with their products.  And Ford employees who weren’t in anyway even closely working on Explorers lost their jobs, not to mention Ford suppliers, dealers and contractor.  What should have been done then? No congressional investigation and muzzle the media?  Just be thankful you’re not a 75 year old widow who has lost all of her life savings on Enron stock. John The client I probably spent 25% of my time on left us and went to another firm this week.  It was completely caused by the indictment and had nothing to do with our quality of service or dedication to the job.  They had stuck by us through all of the bad press, but were worried that the public might perceive our opinion as being "tainted". Thanks DOJ and media.  Hopefully, you will be in the same position that we are someday.  Guilt by association is a wonderful thing. Chris

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Therein lies the problem.  It should be crossing your mind every day.

Hopefully he meant he has never had to compromise his ethics *AND* that his ethics are not warped to begin with. But, as you note, the real question is whether you’ve ever had to make a decision that took money out of your pocket in order to sustain an ethical position.  My guess is that, with 3 1/2 years experience, he may actually not have faced such a decision.  But it will come–and when you make that decision, it tells a lot about you. As you note, when you have your own practice these types of decisions occur quite often.  And, in many cases, the ethical choice is one that is going to take money directly out of my pocket in the short term.  And, if the problem is never uncovered (and in most cases it’s highly unlikely that it will be), the decision takes money out of your pocket over the long term.

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Thanks Jim, and earlier, Ed Zollars.  I emphatically agree. I never cheated.  I paid heavily for the privilege.  Many of us have watched other managers and partners make money cheating. And said nothing, while getting paychecks out of the revenue they made for our firm. Now Chris, don’t tell me in a firm full of auditors, some of the smartest and most experienced auditors on earth, none of the other managers or partners knew what was going on.  So, choose your colleagues wisely, Todd Boyle CPA Kirkland WA The client I probably spent 25% of my time on left us and went to another firm this week.  It was completely caused by the indictment and had nothing to do with our quality of service or dedication to the job.   Thanks DOJ and media.  Hopefully, you will be in the same position that we are someday.  Guilt by association is a wonderful thing. Chris

[...] – Hide quoted text — Show quoted text – Personal experience here.  As I’ve mentioned before, I was involved in a decision that lead to the loss of a client that made up nearly 10% of firm revenues for a local firm–and which we knew would lead to the loss of that client when we made the decision.  I know how difficult it is to make decisions in that context–and what temptation exists to find some way to prevent that loss of revenue from occurring.  And that temptation exists for all professional staff on the engagement–from the partner level all the way down to the staffer who is likely going to be laid off if the revenue can’t be replaced.  At the time, the economy in Phoenix was bad enough that it was highly unlikely that revenue replacement would occur AND it was going to be very difficult for any laid off staff to find a new position. In the case in question had we decided to simply do what the client wanted, we would have retained the fees, the partners would have not had to skip being paid for a while and at least one layoff would have been avoided. We decided, however, that we couldn’t live with that decision from a moral or professional standpoint. Been there; done that; numerous times. On at least one very notable occasion, the largest one, I’m fairly sure I could have "gotten away with" doing otherwise, and knew it at the time.   There was substantial fraud involved, and I wasn’t willing to turn a blind eye.  A larger, more "prestigious" firm from a nearby city was more than happy to accept a bit of agreed "myopia", no doubt in exchange for a very nice fee. — end copy / paste — The crybaby stuff gets exactly nowhere with me.   You no doubt have a good education.  Go get another job.

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Arthur Anderson? The client I probably spent 25% of my time on left us and went to another firm this week.  It was completely caused by the indictment and had nothing to do with our quality of service or dedication to the job.  They had stuck by us through all of the bad press, but were worried that the public might perceive our opinion as being "tainted". Thanks DOJ and media.  Hopefully, you will be in the same position that we are someday.  Guilt by association is a wonderful thing.

"It’s God’s job to sort out what to do with terrorists.    It’s our job to deliver them to God. " I’m allergic to spam. Remove "No Spam" from my e-mail address to respond. —–= Posted via Newsfeeds.Com, Uncensored Usenet News =—– http://www.newsfeeds.com – The #1 Newsgroup Service in the World! —–==  Over 80,000 Newsgroups – 16 Different Servers! =—–

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The client I probably spent 25% of my time on left us and went to another firm this week.  It was completely caused by the indictment and had nothing to do with our quality of service or dedication to the job.  They had stuck by us through all of the bad press, but were worried that the public might perceive our opinion as being "tainted". Thanks DOJ and media.  Hopefully, you will be in the same position that we are someday.  Guilt by association is a wonderful thing.

Let me be as clear as I can. If people perceive you and your office’s audit opinion as being tainted it is because of the behavior of your associates in Houston and Chicago. That is where you should direct your "thanks," not to DOJ and the media. I’m sorry for your troubles. I’m more sorry for the troubles now being experienced by the financial markets; all auditors’ opinions are now tainted, not just yours. I’m more sorry for the lowered regard in which all CPAs are now held. I put the primary blame for these bad things where it belongs, with Andersen’s decision makers in Houston and Chicago. Good luck to you and the rest of us as well.

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The client I probably spent 25% of my time on left us and went to another firm this week.  It was completely caused by the indictment and had nothing to do with our quality of service or dedication to the job.  They had stuck by us through all of the bad press, but were worried that the public might perceive our opinion as being "tainted". Thanks DOJ and media.  Hopefully, you will be in the same position that we are someday.  Guilt by association is a wonderful thing. Chris

— copy / paste from another thread — – Hide quoted text — Show quoted text – Personal experience here.  As I’ve mentioned before, I was involved in a decision that lead to the loss of a client that made up nearly 10% of firm revenues for a local firm–and which we knew would lead to the loss of that client when we made the decision.  I know how difficult it is to make decisions in that context–and what temptation exists to find some way to prevent that loss of revenue from occurring.  And that temptation exists for all professional staff on the engagement–from the partner level all the way down to the staffer who is likely going to be laid off if the revenue can’t be replaced.  At the time, the economy in Phoenix was bad enough that it was highly unlikely that revenue replacement would occur AND it was going to be very difficult for any laid off staff to find a new position. In the case in question had we decided to simply do what the client wanted, we would have retained the fees, the partners would have not had to skip being paid for a while and at least one layoff would have been avoided. We decided, however, that we couldn’t live with that decision from a moral or professional standpoint.

Been there; done that; numerous times. On at least one very notable occasion, the largest one, I’m fairly sure I could have "gotten away with" doing otherwise, and knew it at the time.   There was substantial fraud involved, and I wasn’t willing to turn a blind eye.  A larger, more "prestigious" firm from a nearby city was more than happy to accept a bit of agreed "myopia", no doubt in exchange for a very nice fee. — end copy / paste — The crybaby stuff gets exactly nowhere with me.   You no doubt have a good education.  Go get another job. — Jim Hudspeth, CFE, CPA   http://survivalworks.com

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Question:

Our client, a privately held $25 million transportation service firm, seeks ACCOUNTING MANAGER to be responsible for accounting department and company finances.  Career opportunity with 60-year-old profitable company with young, progressive management team. This position offers salary to $70,000 plus excellent benefits. Convenient Bergen County, New Jersey location. 3

Question:

Looking for accounting S/W for Hardwood lumber distributor.  Inventory module must be able to handle board feet U/M  and items with random lengths and widths. Company does Wholesale and Retail sales.  POS capability and credit card intereface a plus. Any Ideas?? Ron.

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SBT’s Pro Series has a strong Inventory module + inherent Unit of Measure capacity.  Board feet not specifically supported, but the source code is available to "tweak" the UOM to do so.  A fine Add in package handles POS and credit card transactions (plus barcode printing and scanning).  You can contact SBT at 800.944.1000. Ask for a local Reseller or their PreSales division. – Hide quoted text — Show quoted text – Looking for accounting S/W for Hardwood lumber distributor.  Inventory module must be able to handle board feet U/M  and items with random lengths and widths. Company does Wholesale and Retail sales.  POS capability and credit card intereface a plus. Any Ideas?? Ron.

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Question:

I have a name and address file in an in-house accounting system that I am attempting to import into the EMP, CUST, VEND and OTHERNAME databases in that order.  I am finding some of the records corrupted with the data partially replaced by IIF fieldnames.  Quickbooks doesn’t report any errors and only one or two of two hundred records are affected.  The worst is the last CUST record which contains part of the header record of the VEND section which immediately follows.  Some data in the CUST record is replaced by field names in the following VEND header and other fields are OK.  Has anyone seen this type of corruption and dealt with it? Dennis Rakestraw

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Found it myself.  My file was corrupted by a quotation mark.  I wrote a routine to eliminate all TAB, CRLF, double quotes and in keyfields, colons from fields before they go into the IIF file. – Hide quoted text — Show quoted text – I have a name and address file in an in-house accounting system that I am attempting to import into the EMP, CUST, VEND and OTHERNAME databases in that order.  I am finding some of the records corrupted with the data partially replaced by IIF fieldnames.  Quickbooks doesn’t report any errors and only one or two of two hundred records are affected.  The worst is the last CUST record which contains part of the header record of the VEND section which immediately follows.  Some data in the CUST record is replaced by field names in the following VEND header and other fields are OK.  Has anyone seen this type of corruption and dealt with it? Dennis Rakestraw

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Question:

- Hide quoted text — Show quoted text – Help, ex is supposed to pay half of our 17 yr old’s car insurance until he is out of college. Well, this was the first year of this arrangement and its been 10 mos and my ex still won’t pay up his half ($1100). He also refused to pay half of the school clothes bills for both our children (the other is 13). He just shrugs and says no. He’s currently not paying child support bec I stupidly had a lawyer who let him slide as long as he was paying half the mortgage on a house we are selling. The house has been on the market for over 18 mos now and he hasn’t had to pay *any* child support! I can’t understand why he won’t at least pay for their clothes. He makes nearly 15K more than I do. He’s showing up with Oakley sunglasses (two pairs at over $150 each),  a whole new wardrobe, bought himself a digital camara and a laptop this year—he’s giving to himself while he doesn’t have to pay child support! Oh yeah, he just bought himself playoff tickets for football. Nice to have all that extra expendible income, isn’t it? I feel he’s laughing all the way to the bank. Do I have to take him to court to make him pay the car insurance and clothes bills? I’m barely making ends meet and he’s living the high life. I can’t really afford another lawyer’s fees! HELP!

It isn’t fair that he pays nothing, that’s for sure.  Maybe he’s angry, though, and thinking that what you are buying for the kids is unnecessary.  No 17 year old needs to drive his own car – especially when his insurance is $2200/year. That’s insane!  How on earth did he get such a ridiculous insurance rate?  Get rid of the car and have him take the bus until he’s finished school and can afford to pay for his own auto expenses.  As for the clothes – where are you shopping?  If you are expecting Dad to pay for Gap and Club Monaco, I don’t blame him for copping out. Are you budgeting fairly?  Buying only necessary clothes, on sale?  Is Dad allowed any say in the matter?  Can he take the kids clothes shopping or do you just do it all and then present him with a bill that he might not agree with?  Maybe if you ASK Dad to take the kids shopping and tell him what they need (jeans, sweat shirts, etc. etc.) he might be more willing to do it.   Many dads who aren’t paying child support would be more than willing to pay a reasonable amount to support their kids IF the expenses were reasonable and fair and if they are involved in the decisions made. Instead of demanding that dad hand over cash for already-purchased clothes, ask him to take the boys out shopping.  If HE is allowed to make some choices in what the kids wear he might be more willing to pay for it. As for the car, I can’t say it enough. A 17 year old paying $2200/year in insurance rates is just beyond belief.  The boy can take the bus for two more years until he can pay for his own car.  If I was Dad I wouldn’t be paying for this expense either.  It’s way beyond what is fair and reasonable.

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buses in rural NJ? nope…he needs the car to get back and forth to work, and next yr to commute to college. Its a 10 yr old car, by the way. NJ has the *highest* car insurance in the nation. We have high deductibles but he’s a boy and considered high risk. as for the other aspects, I only bought essentials for the kids this year, 4 jeans each, several tops, each a pair of sneakers and bookbags and I went to outlets.. I don’t consider this extravagent. Their dad never took them shopping while we were married, and he’s certainly not going to start now. A nonhands-on father doesn’t change simply bec he is now a divorced father. Anyway, child support is supposed to help with these expenses. If I had chosen to buy them expensive, designer clothes, I would have paid my share above the c.s. a number of my friends have exs who contribute to the support of their children and don’t monitor purchases such as you’ve suggested, but it was an interesting suggestion nonetheless.

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Do I have to take him to court to make him pay the car insurance and clothes bills? I’m barely making ends meet and he’s living the high life. I can’t really afford another lawyer’s fees! HELP!

You definitely need to get legal assistance.  There aren’t any courts I know of that will waive child support.  Complaining about it won’t do any good, you need to take action. "We have no more right to consume happiness without producing it than to consume wealth without producing it…"

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Take a look at your divorce judgment and make sure that you have done what you are supposed to do to get him to pay his share or to reimburse you for his share if you have paid the full amount. Then put together an accounting of all the things he has not complied with. For example, if he was supposed to pay for 1/2 the car insurance. Get copies of the insurance bill, a copy of your canceled check for what you paid (if you didn’t pay for the entire bill, get a statement showing what has been paid and what is still owed) and a copy of any correspondence you have sent to your ex requesting payment of the bill or reimbursement for his share that you paid. Include any correspondence that he has sent to you. Do the same thing for each thing he hasn’t complied with or refuses to pay. The divorce judgment is your baseline guide. By the way, save all records about payments you make and receive per the divorce decree. And, if you have to do something in cash, get a receipt. If he was supposed to pay you a certain amount of child support each month, but, per the divorce decree, it was abated or suspended during the time that he was making a share of the mortgage payment, put together an accounting of the mortgage payments so that you know where you stand. If he was not given an abatement, credit or suspension then put together an accounting of each payment of support you are owed. (Who gets to claim the mortgage interest and tax deduction on the income tax returns?) Once you have everything put together, prepare a cover sheet that is a summary of all your "exhibits". Then try sending your ex a copy of everything with a pleasant, nonaccusatory letter asking for the money you believe you are owed and telling him, that if he disagrees with any of your claims, to let you know what items he specifically does not agree upon. Then ask him to pay or reimburse you for the items that are not in disagreement and try to work on the items that are still at issue. If he ignores you or tells you to forget it, then you may not have any other choice except to take him back to court and probably hire a lawyer. If you do, your exhibits will make good evidence to attach to any initial pleading that the lawyer files with the court or during a hearing. Laura Johnson Author, Divorce Strategy: Tactics for a Civil Financial Divorce http://www.bookzone.com/feature/divorce.html

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Help, ex is supposed to pay half of our 17 yr old’s car insurance until he is out of college. Well, this was the first year of this arrangement and its been 10 mos and my ex still won’t pay up his half ($1100). He also refused to pay half of the school clothes bills for both our children (the other is 13). He just shrugs and says no. He’s currently not paying child support bec I stupidly had a lawyer who let him slide as long as he was paying half the mortgage on a house we are selling. The house has been on the market for over 18 mos now and he hasn’t had to pay *any* child support! I can’t understand why he won’t at least pay for their clothes. He makes nearly 15K more than I do. He’s showing up with Oakley sunglasses (two pairs at over $150 each),  a whole new wardrobe, bought himself a digital camara and a laptop this year—he’s giving to himself while he doesn’t have to pay child support! Oh yeah, he just bought himself playoff tickets for football. Nice to have all that extra expendible income, isn’t it? I feel he’s laughing all the way to the bank. Do I have to take him to court to make him pay the car insurance and clothes bills? I’m barely making ends meet and he’s living the high life. I can’t really afford another lawyer’s fees! HELP!

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Question:

Dear All Greyhound Air (Canada)  has announced that it will cease operations on Sept 21. Canadian Airlines have agreed to take on passengers booked after that date. This should improve the bottom line for CP and AC in their regional performance. Anyone closer to home know anything more about why they’ve folded. I gather that Laidlaw (who have just taken over the entire Greyhound Corp) want to focus on ground transportation only. How much was Greyhound Air losing? — Martin Phillipson   Faculty of Law/Australian Centre For Environmental Law Australian National University Canberra ACT 0200 AUSTRALIA Tel:            +61 (6) 249-3516 Fax:           +61 (6) 249-4899 Web:    http://law.anu.edu.au/centres/acel        

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Greyhound Air (Canada)  has announced that it will cease operations on Sept 21. Canadian Airlines have agreed to take on passengers booked after that date. This should improve the bottom line for CP and AC in their regional performance. Anyone closer to home know anything more about why they’ve folded. I gather that Laidlaw (who have just taken over the entire Greyhound Corp) want to focus on ground transportation only. How much was Greyhound Air losing?

Another thread in rec.travel.air suggested $30 million (US$ or Can$?) in the first year, about half of which was start-up costs. Regards, Martin WWW:    http://www.omg.unb.ca/~mleese/ Want to know how Ambisonics can improve the sound of your LPs and CDs? Read the Ambisonic Surround Sound FAQ. Version 2.7 now on my WWW page.

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This should improve the bottom line for CP and AC in their regional performance. Anyone closer to home know anything more about why they’ve folded. I gather that Laidlaw (who have just taken over the entire Greyhound Corp) want to focus on ground transportation only.

Reports I heard said that Greyhound had less than a 10% market share on the few routes it flew. So I am not sure its folding will really make such a big difference for CP and AC. Reports said that it had a $30 million loss for its forst year, although it was pointed out that about $15 million of that loss was due to startup costs. It also had 91% load factors which should have made it possible for it to operate profitably if it had more efficient aircraft.

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Greyhound Air (Canada)  has announced that it will cease operations on Sept 21. Canadian Airlines have agreed to take on passengers booked after that date. This should improve the bottom line for CP and AC in their regional performance. Anyone closer to home know anything more about why they’ve folded. I gather that Laidlaw (who have just taken over the entire Greyhound Corp) want to focus on ground transportation only. How much was Greyhound Air losing?

Greyhound had a nine month operating loss of $20.9 million and a one year to date loss of $28 million, despite a strong summer season.  Planes were 82 percent full in July and 91 percent full in August. Canuck

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Reports said that it had a $30 million loss for its forst year, although it was pointed out that about $15 million of that loss was due to startup costs. It also had 91% load factors which should have made it possible for it to operate profitably if it had more efficient aircraft.

If it had this great a load factor and still lost that much money, then it seems to me that: a) their accountants need some more basic math so they can determine what a break even fare ought to be; b) Greyhound was under-pricing its service to establish market share (which means that the fares were unrealistically low and no one should be complaining about higher fares on the remaining services and that even if Greyhound had survived fares would have to go up); c) Greyhound did not have a good handle on its expenses (perhaps because they were trying to save money through a too lean administration).

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Question:

I agree with this. I woodshed with a ‘92 Mexi-Strat except for the night before a gig and the gig itself, where I use my Am Std Tele. I use the same gauge strings and more or less the same action. The Strat is also the back up axe, in addition to being the pickup test bed. About the best $250 I ever spent. Barry Choice 2 – Dont play the guitar or get a second junker to practice on. I used to take lessons from Bill Connors as well as build his guitars, he never used to practice on his main guitars, a junker would make him work harder and he would save the abuse on his favorite instruments — John Suhr/Fender Custom Shop I’m here on my own dime. My opinions are not always the opinions of Fender.

Sorry for the spam block, but it is getting bad.

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I currently own a Fender Strat Plus, and I recently took it in to have a setup done and the guy said that the 1,2,3, and 4th frets were really really worn down and had to be replaced.  I suppose I should have taken the guitar in every 6-12 months and have it checked out, but is there an easier way to prevent fret wear down?  It gets expensive ya know.

Does anybody make a stainless steel or real tough alloy with say titanium frets to replace the stock frets on a strat?  My 5 month old sig. strat is already showing a lot of wear.  I do love to play it several hours a day. I know that there is a brand of guitar that has similar non/less wearing frets.   Joe S.

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If you put steel freets in your guitar it will sound bad, with too much high frequencies. The secret to a warm and round sound passes through the freets: they can’t be made in a too hard material, so they don’t last forever. If you want them to last, play on all the fingerboard, not only in some zones.

this guy is trying to say…damn….<snicker but seriously, the only way to keep your frets from being worn is to not play your guitar…a worn fret is like a badge of honor…"Look everyone I practice enough to have worn frets!!!"  Just practice those fret right off your guitar…a refret is only about $100 US and if your guitar cost less Thats the fun answer — Mark A. Boughter

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If you put steel freets in your guitar it will sound bad, with too much high frequencies. The secret to a warm and round sound passes through the freets: they can’t be made in a too hard material, so they don’t last forever. If you want them to last, play on all the fingerboard, not only in some zones.

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If you put steel freets in your guitar it will sound bad, with too much high frequencies. The secret to a warm and round sound passes through the freets: they can’t be made in a too hard material, so they don’t last forever. If you want them to last, play on all the fingerboard, not only in some zones.

Parker Fly has steel frets though. That’s why they can be glued on the fretboard or vice versa: they have to be made from steel, because they’re glued. Erwin

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- Hide quoted text — Show quoted text – I currently own a Fender Strat Plus, and I recently took it in to have a setup done and the guy said that the 1,2,3, and 4th frets were really really worn down and had to be replaced.  I suppose I should have taken the guitar in every 6-12 months and have it checked out, but is there an easier way to prevent fret wear down?  It gets expensive ya know. Choice 1 – Dont have grind and polishes done just play it till they are unplayable and have it refretted (usually about 2-5 years) Choice 2 – Dont play the guitar or get a second junker to practice on. I used to take lessons from Bill Connors as well as build his guitars, he never used to practice on his main guitars, a junker would make him work harder and he would save the abuse on his favorite instruments — John Suhr/Fender Custom Shop I’m here on my own dime. My opinions are not always the opinions of Fender.

      Most excellent advice-thats exactly what I have done over the years and it really extends the life of your favorite instruments. My, uh-hum, Fender strat is my scratch and dent practice instrument, while my PRSs’ are for recording and the "good" gigs in respectable places.

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I currently own a Fender Strat Plus, and I recently took it in to have a setup done and the guy said that the 1,2,3, and 4th frets were really really worn down and had to be replaced.  I suppose I should have taken the guitar in every 6-12 months and have it checked out, but is there an easier way to prevent fret wear down?  It gets expensive ya know.

What kind of strings do you use?  Those strings that have a reputation of lasting longer than others do so by wearing at your frets instead of the strings.  << << << << << << << <<  << << << << << << << <<

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I currently own a Fender Strat Plus, and I recently took it in to have a setup done and the guy said that the 1,2,3, and 4th frets were really really worn down and had to be replaced.  I suppose I should have taken the guitar in every 6-12 months and have it checked out, but is there an easier way to prevent fret wear down?  It gets expensive ya know.

Response:

I currently own a Fender Strat Plus, and I recently took it in to have a setup done and the guy said that the 1,2,3, and 4th frets were really really worn down and had to be replaced.  I suppose I should have taken the guitar in every 6-12 months and have it checked out, but is there an easier way to prevent fret wear down?  It gets expensive ya know.

Choice 1 – Dont have grind and polishes done just play it till they are unplayable and have it refretted (usually about 2-5 years) Choice 2 – Dont play the guitar or get a second junker to practice on. I used to take lessons from Bill Connors as well as build his guitars, he never used to practice on his main guitars, a junker would make him work harder and he would save the abuse on his favorite instruments — John Suhr/Fender Custom Shop I’m here on my own dime. My opinions are not always the opinions of Fender.

Response:

- Hide quoted text — Show quoted text – the guitar in every 6-12 months and have it checked out, but is there an easier way to prevent fret wear down?  It gets expensive ya know. Choice 1 – Dont have grind and polishes done just play it till they are unplayable and have it refretted (usually about 2-5 years) Choice 2 – Dont play the guitar or get a second junker to practice on. I used to take lessons from Bill Connors as well as build his guitars, he never used to practice on his main guitars, a junker would make him work harder and he would save the abuse on his favorite instruments — John Suhr/Fender Custom Shop I’m here on my own dime. My opinions are not always the opinions of Fender.       Most excellent advice-thats exactly what I have done over the years and it really extends the life of your favorite instruments. My, uh-hum, Fender strat is my scratch and dent practice instrument, while my PRSs’ are for recording and the "good" gigs in respectable places.

just kidding — John Suhr/Fender Custom Shop I’m here on my own dime. My opinions are not always the opinions of Fender.

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Question:

Rowe) writes:

# # The new _Technology Review_ mentions a study by Paul Joskow and # Donald Marron, which claims that efforts to reduce electrical # consumption cost (or can cost) more than the cost of building # additional generating capacity. In contrast to Amory Lovins, # who put the cost of _saving_ a kwh at 0.6 cents, and the EPRI, which # estimated 2.6 cents, Joskow claims the "real" costs range from # 0.6 to 181 cents per kwh saved. #   Has anyone who has seen the splease # provide a citation (and perhaps a comment)?. Firstly, how much electricity are they saying is saved at this high cost? Lovins claim is that 75% of all US electricity use could be saved at a cost of 0.6 cents/kWh. saved He says the price falls to virtually nil when you reduce the amount saved to 50%. The point I make is that the price does vary depending on how much you want to save. For example, you actually get a negative cost if you save electricity by using energy efficient light bulbs(this is a large contribution to the 0.6 cents/kWh quote from Lovins). The range of costs you quote is something I could believe but it could still fit in with Lovins quotes and EPRI’s quotes. I’ll need to get more details on how much electricity can be saved at what price from this report before I can comment further. James — *  James Hammerton               *  If Pascal is equivalent to the     * *                                *  car where steering is done         * *                                *  recursively using the gearstick.   *

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Firstly, how much electricity are they saying is saved at this high cost? Lovins claim is that 75% of all US electricity use could be saved at a cost of 0.6 cents/kWh.

Less than a cent for _all_ of those kWh?  Are you sure?  I thought that was the cost for the initial savings.  I’ll have to look at his cost vs savings graph again. James — *  James Hammerton               *  If Pascal is equivalent to the     * *                                *  car where steering is done         * *                                *  recursively using the gearstick.   *

–

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Firstly, how much electricity are they saying is saved at this high cost? Lovins claim is that 75% of all US electricity use could be saved at a cost of 0.6 cents/kWh. Less than a cent for _all_ of those kWh?  Are you sure?  I thought that was the cost for the initial savings.  I’ll have to look at his cost vs savings graph again.

From another posting, I surmise that the ‘leger de main’ being used here is this:  I buy a CF bulb that has payback in 6 months, but a 4 year life span.  I then project it’s ‘cost’ over the life of the bulb and get a negative cost.  I then take this negative cost and average it in with some other, high cost, conversion to get an ‘average’ of 0.6/kWh. If this is, in fact, what was done; then Lovins has studied how to lie with statistics… — ‘Whatever you can do, or dream you can, begin it.  Boldness has  genius, power and magic in it.’  -  Goethe I am not responsible nor is anyone else.  Everything is disclaimed.

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It would have behooved everyone if they had actually gone and read the piece in Technology Review before posting. The study that disputed Lovins was not about the bottom-up engineering cost of saving energy, but rather about the cost of utility programs. Typically, these programs offer rebates or subsidies for installation of certain energy saving technologies.  There are all sorts of extra costs here: administration, advertising, "free riders", and so on. An example: I know the local utility runs rebates on CF bulbs, so I tend to wait buying them until the next rebate program.  If there was no rebate program I would buy them anyway.  I am a "free rider", and the utility saves less net energy than they think they will.  The utility doesn’t really care, as they can charge the ratepayers anyway.         Paul F. Dietz

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Firstly, how much electricity are they saying is saved at this high cost? Lovins claim is that 75% of all US electricity use could be saved at a cost of 0.6 cents/kWh. Less than a cent for _all_ of those kWh?  Are you sure?  I thought that was the cost for the initial savings.  I’ll have to look at his cost vs savings graph again.

Oops, should have said an average of 0.6 cents/kWh saved, this figure including the -ve cents/kWh of lighting plus some more expensive stuff. James — *  James Hammerton               *  If Pascal is equivalent to the     * *                                *  car where steering is done         * *                                *  recursively using the gearstick.   *

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- Hide quoted text — Show quoted text – It would have behooved everyone if they had actually gone and read the piece in Technology Review before posting. The study that disputed Lovins was not about the bottom-up engineering cost of saving energy, but rather about the cost of utility programs. Typically, these programs offer rebates or subsidies for installation of certain energy saving technologies.  There are all sorts of extra costs here: administration, advertising, "free riders", and so on. An example: I know the local utility runs rebates on CF bulbs, so I tend to wait buying them until the next rebate program.  If there was no rebate program I would buy them anyway.  I am a "free rider", and the utility saves less net energy than they think they will.  The utility doesn’t really care, as they can charge the ratepayers anyway.    Paul F. Dietz

But the total energy saved due to efficiency is still the same.  All this means is that it gets shifted to the DSM category from the "naturally occurring" category.  And while it does change some cost accounting for the utility (which may have been the whole point of the Tech Review piece), it doesn’t change the effect on the need to build new capacity. The EPRI study, with which I am more familiar, split these two components into separate categories.  I am not sure whether their naturally occurring component assumed active DSM, though I think that it did not. BTW, my local utility also has a rebate program for CF bulbs, but I have never gotten the offer (its only offered to certain customers).  Probably because my usage is already so low —

Response:

(E. Michael Smith) writes:

writes: Hammerton) writes:

# # Firstly, how much electricity are they saying is saved at this high cost? # Lovins claim is that 75% of all US electricity use could be saved at a # cost of 0.6 cents/kWh. # # Less than a cent for _all_ of those kWh?  Are you sure?  I thought that # was the cost for the initial savings.  I’ll have to look at his cost vs # savings graph again. # # From another posting, I surmise that the ‘leger de main’ being used here # is this:  I buy a CF bulb that has payback in 6 months, but a 4 year # life span.  I then project it’s ‘cost’ over the life of the bulb and # get a negative cost.  I then take this negative cost and average it # in with some other, high cost, conversion to get an ‘average’ of 0.6/kWh. # # If this is, in fact, what was done; then Lovins has studied how to lie # with statistics… How about this then. This is what I think he’s done. He’s taken the relative costs of normal lighting and CF lighting and finds the latter considerably cheaper. He then suggests that the cost of saving electricity by using the CF lights instead of the normal ones is the cost of using them as opposed to continuing to use the others(I don’t find this unreasonable), in other words the cost of using CF light bulbs minus the cost of continuing to use the normal lights, which being considerably larger than the former, leads to a negative result.The point is that he is advocating replacing inefficient technologies with efficient ones, and therefore the costs associated with doing so depend on the cost of the new technology set against the cost of staying with the current technology. I don’t consider this to be lying.(The point is that the negative cost arises as the avoided that would otherwise arise from not changing). James — *  James Hammerton               *  If Pascal is equivalent to the     * *                                *  car where steering is done         * *                                *  recursively using the gearstick.   *

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Letters Editor _Technology Review_ FAX 617-258-7264, voice 253-8284 27 January 1993 To the Editor: Professor Paul Joskow’s and Mr. Donald Marron’s paper (February/March) does not, as they and your "Reporter" state, "contradict" the costs of saving electricity calculated or observed by me, EPRI, DOE, or anyone else, because none of these costs are comparable to Joskow and Marron’s, and theirs are meaningless.  They are simply the highly aggregated, poorly characterized, opaquely recalculated costs of savings delivered by a small group of anecdotally chosen utility programs, wildly divergent in content and method, dubiously representative, and often inferior in design or execution to modern industry norms.  (Anyone who saves electricity for $1.81/kW-h should be fired, and probably was.)  Most of their costs are at or near the literature’s high end: their mean commercial/industrial savings, for example, cost 4-6 times the typical medians reported in a New York State-sponsored review of over 200 programs by 58 utilities through 1988, and many costs have fallen since then. Rocky Mountain Institute’s analyses aren’t comparable, let alone "contradicted," because they show the net internal social cost of buying, installing, and maintaining *optimized* packages of *modern* electricity-saving technologies in *all* uses and sectors.  What your reporter called the "simple calculations" underlying these "estimates" exceed 2,000 dense pages; rest on *empirical* *measurements* cited in 4,000+ sourcenotes; are used by over 100 utilities and 150 other organizations in 35 countries; are consistent with a huge body of utility experience; are undisputed; and weren’t read by Joskow and Marron. Everyone who examines utilities’ field results — many now rigorously evaluated — finds a huge range of costs.  Joskow and Marron concluded from its high end that negawatts must be costly; but even one cheap program disproves that.  The correct conclusion is that programs’ quality varies widely, dozens do deliver extremely cheap negawatts, and the rest should emulate them.  This is what actually happens.  Vigilant regulators and intervenors ensure that utilities don’t waste customers’ money.  In the best jurisdictions, utilities’ profits even depend *directly* on how much they prove they saved how cheaply.  Programs that aren’t proven cost-effective get stopped or changed.  Unfortunately, Joskow and Marron’s paper is an obstacle, not a contribution, to this learning process. Ours and others’ analyses explicitly count marketing, administrative, measurement, and other overhead costs separately, because they’re program-specific and raise good programs’ total delivered costs only slightly.  (Southern California Edison in 1984, for example, reported them to total 0.065 cents/kW-h in residential and 0.031 cents/kW-h in other sectors — less than 1% of electricity tariffs.)  The other "hidden" costs all unimportant, and often fallacious. Joskow and Marron’s paper does not cite, describe, present, or analyze data in a way anyone can scrutinize or reproduce.  The limited and unscientific data it does include do not even support its conclusions.  A year ago, as I told your reporter, I sent Professor Joskow a polite but devastating 12-page private review of the draft paper, explaining all this in detail, and concluding it would be "difficult to get . . . published in a journal refereed by people familiar with the subject" unless rewritten from scratch.  He published it essentially unchanged.  Now your article, by parroting its false claims, puts me in the embarrassing position of having to state publicly, in the interest of good science and ethical journalism, my astonishment that an economist and a University of such stature have produced and publicized such sophomoric work.  They should be ashamed of themselves. Sincerely, Amory B. Lovins, Vice President and Director of Research Rocky Mountain Institute

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writes: # I looked at the graph of costs vs electricity saved and it may be # that the average cost, however he calculated it, is less than a # cent/kWh.  I don’t know whether Lovins actually said that 75% # could be saved at .6 cents/kWh or not, but it would seem obvious # that there is a curve involved, so as long as it is represented # as an average, it should not be a problem. He makes precisely that claim in his essay for Global Warming: The Greenpeace Report, along with a claim that 50% could be saved at no overall cost! He did provide a graph and some references for this, and mentions that the cost performance data used was empirical. Further details of these calculations would presumably be in the references he gave. James — *  James Hammerton               *  If Pascal is equivalent to the     * *                                *  car where steering is done         * *                                *  recursively using the gearstick.   *

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The new _Technology Review_ mentions a study by Paul Joskow and Donald Marron, which claims that efforts to reu duce electrical consumption cost (or can cost) more than the cost of building additional generating capacity. In contrast to Amory Lovins, who put the cost of _saving_ a kwh at 0.6 cents, and the EPRI, which estimated 2.6 cents, Joskow claims the "real" costs range from 0.6 to 181 cents per kwh saved.  Has anyone who has seen the study      please provide a citation (and perhaps a comment?)  )?.

I don’t think a fixed cost can be assigned.  The law of diminishing returns applies here.  Saving the first 5% is easy, cheap (even free, such as getting into the habit of turning out lights when not needed).  The next 5% is more difficult and expensive, such as upgrading to CF bulbs, timers, etc.  The next 5% is more difficult, and so on, until the last 5%, where if eliminated puts us back into the 1800s technology, with no electricity. -Mike

Response:

The new _Technology Review_ mentions a study by Paul Joskow and Donald Marron, which claims that efforts to reu duce electrical consumption cost (or can cost) more than the cost of building additional generating capacity. In contrast to Amory Lovins, who put the cost of _saving_ a kwh at 0.6 cents, and the EPRI, which

estimated 2.6 cents, Joskow claims the "real" costs range from 0.6 to 181 cents per kwh saved.  Has anyone who has seen the study      please provide a citation (and perhaps a comment?)  )?.

I don’t see any disagreement here.  Lovins says the cost of saving a kWh is 0.6 at present.  Joskow claims it ranges from the low of 0.6 (where I presume we are today, since little has been done) up to 181 for some really hard to do stuff. Lovins says it is cheap to start, Joskow is pointing out that it gets more expensive after you’ve done the cheap stuff. I don’t think a fixed cost can be assigned.  The law of diminishing returns applies here.  Saving the first 5% is easy, cheap (even free, such as getting into the habit of turning out lights when not needed).  The next 5% is more difficult and expensive, such as upgrading to CF bulbs, timers, etc.  The next 5% is more difficult, and so on, until the last 5%, where if eliminated puts us back into the 1800s technology, with no electricity.

I attended a PG&E seminar series on energy savings (DSM).  The lighting section pointed out that THE single most effective thing to do was to give people a light switch and train them to turn off the lights when not in the room!  AFTER that, came all the motion sensors, CFs, time-of-day automated controls, conversion from t-12 to t-8 lights, etc. (BTW, I’ll post more tidbits from this as time permits…. but just a brief note: It didn’t matter if it was lights, or AC or what, there was plenty of technology available to cut energy consumption…) — ‘Whatever you can do, or dream you can, begin it.  Boldness has  genius, power and magic in it.’  -  Goethe I am not responsible nor is anyone else.  Everything is disclaimed.

Response:

The new _Technology Review_ mentions a study by Paul Joskow and Donald Marron, which claims that efforts to reu duce electrical consumption cost (or can cost) more than the cost of building additional generating capacity. In contrast to Amory Lovins, who put the cost of _saving_ a kwh at 0.6 cents, and the EPRI, which estimated 2.6 cents, Joskow claims the "real" costs range from 0.6 to 181 cents per kwh saved.   Has anyone who has seen the study      please provide a citation (and perhaps a comment?)  )?.

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