Monthly Archives: April 2014

Apr 22

Livescribe: Note Taking Magic for CPAs

By Charles Hall | Accounting and Auditing , Technology

Have you ever interviewed a client, feverishly taking notes, and straight away forgot critical facts (that you did not have time to write down)? You wish you had a recording of the conversation. Better yet, you wish you could magically touch a particular word in your notes and hear the words that were being spoken at that moment. What if I told you, you can?

Livescribe: Note Taking Magic for CPAsThink about what you could record:

  • CPE class lectures
  • Walkthroughs of transaction cycles
  • Board or committee or partnership meetings
  • Fraud interviews

How? Livescribe.

What is Livescribe? It’s an electronic pen/recorder. As you write on special coded paper, you simultaneously record the conversation (the recorder is built into the pen). Once done, you touch a particular letter in a word (with the pen) and you will hear, from the pen, the conversation that was occurring at that moment. No more forgetting and not being able to retrieve what was said. And it’s efficient since you can go to any particular part of the conversation using your notes as signposts.

To start a recording, you press the tip of the pen to the “record” icon at the bottom of the page.


To stop the recording you press the “stop” icon above.

Once the recording is complete, you simply touch the tip of the pen to any letter and the audio recording will start playing–from the pen–at that point.


You can upload the pen notes and the audio to your computer desktop Livescribe software using a USB cord that connects to the pen. (Yes, you can play back notes from your uploaded desktop copy just as you can with your pen; click a letter with your mouse and the recording will play.)

IMG_0003I was surprised at the clarity of the sound from the pen and at the amount of audio that the pen will hold–200 hours (for the Echo version that you see above).

There are different versions of the pen; I bought the Echo version due to price–only $115. You can review the available pens on Amazon. I also bought additional Livescribe notebooks (they come in packs of four) and a portfolio (binder) to hold the notebook and pen.

Another Option 

If you have an iPad, you can buy the Notability app for $2.99 and record conversations with your notes (which play back similar to Livescribe); this is a new feature that Ginger Labs (maker of Notability) just added. You will need a stylus to take notes since you will write on your iPad screen.

One More Thought

If you are performing a walkthrough of a complex transaction cycle, consider using your phone to take pictures of what you are seeing (e.g., computer screens, documents). Between your notes (with audio) and your pictures, you will have an excellent understanding of what you have seen and heard.

Steal Like a Boss
Apr 07

Steal Like a Boss

By Charles Hall | Accounting and Auditing , Fraud , Local Governments

Can you steal like a boss? White collar crime takes special skills and thoughts. Do you have what it takes? Here’s my tongue-in-cheek look at how I would steal.

Steal Like a Boss

Picture Courtesy of

To steal, I need to:

  1. Be Believable
  2. Have a Cause
  3. Calm My Conscience
  4. Develop My Plan
  5. Execute My Plan
  6. If Caught, Settle Out of Court

1. Be Believable

I must be seen as trustworthy. The more age, experience, and education I have, the better. The longer I work for the organization, the more I will be trusted.

And while I’m at it, I’ll do what I can to move to positions of higher authority which will provide me with greater opportunities. Being the boss will enable me to steal like a boss.

If possible, I will gain the ability to authorize or initiate purchases. Kickbacks (paid to those who authorize payments) are difficult to detect, even by professional fraud examiners, and the dollars can be significant. Like stealing candy from a baby.

2. Have a Cause

Any financial pressure will do–a gambling or drug habit, an affair, medical bills, or maybe I just want to appear more successful than I am. If I don’t have a need, I will create one. I am my own cause.

My unshareable need (cause) must not be known by others lest they suspect my need for cash.

3. Calm My Conscience

I hate when that little voice starts talking: “Charles, you can’t do this. Your grandmother would be so ashamed.” It takes skill and fortitude, but I must calm my conscience. All the more reason to have a cause (see point 2.). The more noble I can make my cause, the better. Something like, “I’ve earned this. The company should realize my greatness and provide me with appropriate compensation. I have three kids in college, and they need this. You know I really want to be good provider for my family.” I may need to start stealing borrowing or compensating myself in small amounts and then build up. This will make it easier for my conscience to adjust.

I need to think correctly. When that little voice speaks, I will reword those thoughts. I know I am right.

4. Develop My Plan

I will pay attention to control weaknesses.

Our auditors have told us for years that we lack appropriate segregation of duties. Opportunity awaits.

If I am going to steal be compensated appropriately, I need to make it worth my while. Be bold. Think big. I have noticed that one of our key vendors has been very kind to me, a free week-long trip to Vegas for the last three years. And a key contract renewal is coming up. I think cash would be better this year. Besides, I know the CFO received an even sweeter trip than I did last year. And bribes gifts don’t hurt anyone; the vendor pays for them (though I have noticed the vendor’s pricing seems to be increasing…actually, exploding).

5. Execute My Plan

Take Compensate myself in a steady under-the-radar kind of way. Most folks get greedy. I must be diligent to work in a measured way, not taking receiving more than would be noticed. Greed is my enemy, the element that lands good guys like me in the newspapers.

Also, I think I can consistently steal borrow money from the receipts cycle since I am in charge of daily deposits and all related accounting duties. This might cost me my vacation though. I need to be on the job to continue to hide perform my duties. But if the funds taken compensation is enough, I can forgo the Vegas trip.

6. If I Get Caught, Settle Out of Court

If I am discovered someone notices that I have borrowed funds, then I may have to beg for forgiveness and promise to pay it back. And, of course, I need to make sure the company understands my concern for its reputation; news like this does not coalesce well with the company’s mission statement: Honesty and Compassion for Those We Serve.

I don’t need a criminal record, especially if I need to steal borrow funds from my next employer.

More Fraud Information

You’ll find more information about fraud prevention in my book: The Little Book of Local Government Fraud Prevention.

Goodwill amortization for private companies
Apr 02

Goodwill Amortization For Private Companies

By Charles Hall | Accounting and Auditing

Thanks to a new FASB standard, another albatross has been lifted from the necks of private companies. You can now amortize goodwill of a private company (defined as “all entities except for public business entities and not-for-profit entities…and employee benefit plans”).

Goodwill amortization for private comapnies

The new FASB standard (ASU 2014–02; Intangibles – Goodwill and Other) has two main points:

  1. You can amortize goodwill over its useful life, not to exceed ten years
  2. You can test for impairment at the entity level or at the reporting unit level

Amortization of Goodwill 

Goodwill should be amortized on a straight-line basis over its useful life not to exceed ten years. If–at later date–you need to revise the original amortization period, do so prospectively on a straight-line basis over the remaining useful life.

Impairment Testing

If a triggering event occurs–an event or conditions that appear to impair goodwill–you should test goodwill for impairment.

Once the triggering event occurs:

Qualitative factors can be assessed to see if impairment has occurred. The qualitative factors are used to determine whether there is more than a 50% chance that goodwill is impaired. If there is (and only if), then compute fair value.

You have the option to bypass the qualitative test and perform a quantitative test for impairment.

The calculation–whether you bypass the qualitative test or not–is compared to the carrying value of goodwill. If the computed amount is less than carrying amount, then you will decrease the carrying amount to fair value–the calculated amount.

To use the alternative standard, an accounting policy election must be made to test for impairment at the entity level or the reporting unit level.


Goodwill should be shown as a separate line on the balance sheet, net of amortization.

The amortization or impairment expense should be recognized in continuing operations, unless such expenses are related to a discontinuance of operations–then recognize those expenses within discontinued operations.


Below are a few of the required disclosures (there are others not listed; see the standard for all required disclosures).

The following information shall be disclosed in the financial statements or the notes to the financial statements for each period for which a statement of financial position is presented:

  1. The gross carrying amounts of goodwill, accumulated amortization, and accumulated impairment loss
  2. The aggregate amortization expense for the period

For each goodwill impairment loss recognized, the following information shall be disclosed in the notes to the financial statements that include the period in which the impairment loss is recognized:

  1. A description of the facts and circumstances leading to the impairment
  2. The amount of the impairment loss and the method of determining the fair value of the entity or the reporting unit (whether based on prices of comparable businesses, a present value or other valuation technique, or a combination of those methods)
  3. The caption in the income statement in which the impairment loss is included

Effective Date

The accounting alternative, if elected, should be applied prospectively to goodwill existing as of the beginning of the period of adoption and new goodwill recognized in annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. 

Early application is permitted, including application to any period for which the entity’s annual or interim financial statements have not yet been made available for issuance.

The picture above is courtesy of istockphoto.