October 22, 2023
Every year, for the past fourteen years, Truth in Accounting has released its Financial State of the States report which examines the financial status of the fifty states. This year our report was released on October 11, 2023. One of the data sets we reviewed is the auditors’ reports. Did the state receive an unmodified report for their Annual Comprehensive Financial Report? Last year I wrote an article for Accounting Today explaining which states did not meet auditing standards for 2021. This is a follow-up to that article.
October 13, 2023
The accounting profession has long been a cornerstone of financial stability and responsibility, but in recent years, a growing number of individuals have been leaving the field. This exodus is prompted by a multitude of challenges, ranging from the stringent 150-hour rule to issues of low compensation and arduous working hours. This first part of this article delves into the intricacies of these issues and how they are transforming the industry. The second part looks at why it is worthwhile to still consider the accounting profession regardless of the challenges.
November 11, 2022
Christine Kuglin, Accounting Today Original Article
For decades, the goal of increased government financial transparency has been widely shared across political parties and stakeholder groups. The Financial Data Transparency Act (S.4295), proposed by Sen. Mark Warner, D-Virginia, and Mike Crapo, R-Idaho, takes a major step toward openness and accessibility by directing seven financial regulators, including the Municipal Securities Rulemaking Board, to develop "machine-readable" data standards that accurately reflect the existing reporting standards. So, it is surprising that this transparency measure has attracted stiff opposition when it has proven so successful in corporate reporting.
The movement to convert documents to machine-readable data that computer applications like spreadsheets can use is not new. The FDIC adopted machine-readable reporting standards for bank call reports in 2005. These required regulatory reports collect the basic financial data of commercial banks in the form of a balance sheet, an income statement and supporting schedules. The Securities and Exchange Commission similarly modernized public company reporting in 2009 by requiring publicly traded companies to report their information in machine-readable data language. The Federal Energy Regulatory Commission did so in 2021. Many other countries also have modernized their financial disclosures. This global trend affirms a recent statement by the U.S. Chamber of Commerce: "Digitization will enable government agencies to cut costs, increase efficiency and reduce waste. Congress must know that digital modernization is a priority for the American people." READ MORE HERE
In recent weeks, several magazines have run stories that Americans are “quiet quitting.” In case you haven’t heard this term, it refers to the idea that workers are doing just enough to get by without getting fired. American workers think they are not paid enough, are not recognized for their efforts, and have been sacrificing other life pursuits to give 100 percent to the company.
This is not just an American phenomenon, it is happening around the globe. Covid taught us to rethink our dedication to our careers. Many of us took a step backwards in the past two years and reflected on life in general. If things get too hard, we should just do enough to get by.
This got me thinking about new government initiatives and my reaction to change. I started this new position at Truth in Accounting last summer. And I won’t lie to you. Starting something completely new has been hard. There were a few times where I wasn’t sure “hard” was worth it. Read More.
Sometimes we are asked why we at Truth in Accounting care so much about total government debt. People suggest government debt is like our mortgages. We only need to worry about making the next month’s payment. If we can pay our bills today, why worry about tomorrow?
Well that is certainly a nice thought. The only problem is, typically, our mortgage is backed by an asset - our house. If we lose our jobs and know we will not have income for the next year, we will have the option to sell our homes to eliminate the debt. The debt is only a debt so long as we are financially responsible for the underlying asset from where the debt originates. Once we sell the house, the debt disappears, and we move forward in whatever manner makes sense.
The total government debt we report is not like our mortgages. Our reports subtract debt that could be paid off with government capital assets before we come to the total debt owed. What debt remains in our reports is more like our credit card debt. It is debt or obligations to pay on expenditures with no financial value that the government or we can sell. Read More.
Sept. 6, 2022
If you are a government employee, have you ever questioned whether your pension is funded? You would assume that as a state employee, you can trust your pension has the funds to pay its retirees. As of 2022, that is often not the case.
At Truth in Accounting, we assess the annual financial statements of all 50 states. This financial report is called an Annual Comprehensive Financial Report (ACFR). We have a staff of seven people who manually review every detail presented by the states. Since these ACFRs are not machine readable (check out our four-part XBRL blog), our staff checks and rechecks the numbers reported on these statements. One type of data we verify concerns the states’ retirement funding levels. We look at the number of retirement plans states oversee, as well as whether the contributions in the plans have a positive or negative balance. If the balance is negative, that means the pension has not received the required contributions from the state government to fund the eventual distributions. Read More
August 30, 2022
Do pension values really change when the stock market rises or falls?
At Truth in Accounting, we analyze government financial statements and aggregate that data into annual reports. One of our most significant concerns when examining these financial documents is the state of pensions. They are often the most considerable debt a government carries. We fear that the valuation of pensions can be distorted for a few reasons. The first is that pension valuations may be up to thirty months old. This is explained in the linked article. A second reason is that the values reported are subject to an accounting concept called “recognized and realized. Read More
A David vs. Goliath Story
August 22, 2022
Part Four or Four
If you read the last three Truth in Accounting blog posts on the functions and importance of XBRL for investors and the SEC, you should not doubt that improving disclosure in governmental financial statements would make it easier for users. Users include citizens, policymakers, and elected officials. The current stagnant pdf documents are cumbersome and take an excessive amount of time to retrieve information. The bottom line is we need information disclosure modernization. We have modernized the computer systems we work on, the GASB regulations we implement, and even the ability to work remotely through cloud infrastructure. What we haven’t modernized in governmental reporting is the types of documents we use to report information. We need to modernize information and transform data into machine-readable documents. Read More
A David vs. Goliath Story
August 15, 2022
Part Three of Four
The previous two blog posts explained that searching governmental financial reporting statements is difficult. We also discussed that after the stock market crash of 1929, the government made financial reporting for publicly traded companies more transparent. It has been an almost 100-year improvement process in public company reporting starting with the rules promulgated through the SEC in 1933 until today. Now the entire information a company reports is searchable through a programming language called Inline XBRL. We know XBRL is a language to report financial data, but how does it work, and how would it help governmental reporting? Read More
A David vs. Goliath Story
August 8, 2022
Part Two of Four
In 1933 and 1934, Congress created two legislative acts to increase reporting and disclosure of publicly traded companies' financial information in order to protect investors. The Securities and Exchange (SEC) Act of 1933 was designed to create transparency in the initial issuance of stock. The SEC Act of 1934 followed with rules governing the secondary or trading market. Information was to be available to investors so they could monitor the financial health of companies openly and transparently. Read More
A David vs. Goliath Story
July 29, 2022
Part One of Four
We at Truth in Accounting (TIA) strive to bring you the most current and accurate data from financial reports that we can. We distribute that information through our State of the States and State of the Cities reports and our Data Z website. What you don’t see from Truth in Accounting is the behind-the-scenes team of people pulling this data from the government financial statements. Read More
August 10, 2022
Employers review our job history, education, references, and credit check to ensure we are someone they can trust. So why should we rely only on credit ratings to assess the financial health of our government? After all, credit ratings are only one tool for taxpayers to evaluate the government's trustworthiness. Read More
August 4, 2022 | Accounting Today
This article first appeared in Accounting Today
You want to refinance your home. The bank requires an appraisal to determine the current value. The appraiser uses data from 2019. Would you feel good about that? Read More
July 29, 2022
Thomas Jefferson and others believe an informed citizenry is necessary for a sound government. But what type of government do you get if the citizens are misinformed? We would argue the state of Illinois. Read More