Quote of the Week: You Graduate, but High School Never Leaves You


Birdcage"High school is closer to the core of the American experience then anything else I can think of."

                                    Kurt Vonnegut Jr.

                                          1922 – 2007

The Frustrated CFO Commentary:

This famous Vonnegut's little pearl of wisdom also makes an appearance in Jennifer Senior's article for New York Magazine Why You Truly Never Leave High School.  I have to say that, for a cover piece of a popular periodical, it has a substantial amount of scientific references, citing deeply rooted correlation between our adolescence experiences and our personal as well as professional track records.  I highly recommend it to everyone.  To spike your interest, let me tease you with another quote – this time from the article itself:

"Why is it that in most public high schools across America, a girl who plays the cello or a boy who plays in the marching bank is a loser?  And even more fundamentally:  Why was it such a liability to be smart?  …High-school values aren't all that different from adult values.  Most adults don't like cello or marching bands, either.  Most Americans are suspicious of intellectuals.  Cellists, trumpet players, and geeks may find their homes somewhere in the adult world, and even status and esteem.  But only in places that draw their own kind."

By the way, in case you didn't know, the birdcage with an opened door was the last Kurt Vonnegut's drawing.  He had it ready on the day he died.  Underneath he wrote his name and the years of his life – just like I did under the quote above.  Apparently, the man who wasn't afraid to break the literary canons was prepared to finally graduate from this high school of Life and fly away.

The Frustrated CFO’s Means of Self-Therapy


Alt-J at Terminal 5 03/24/2013, photo by MZI was standing there at Terminal 5 yesterday, listening to Alt-J performing their 2012 Mercury Prize winning album An Awesome Wave live, cheering with the rest of the audience at the first notes of each song in recognition of their sublime quality.  And once again a familiar notion formed inside my head.  It happens to me every time I experience something that momentarily separates my  being from all the negative garbage in my life.  I think, "If I didn't keep on, I wouldn't have received this gift, I wouldn't have come to know these songs, I wouldn't be bobbing in rhythm right now."

I claw my way through the long stretches of hard life, full of frustration and disappointments, from one moment like this to another.  This is what forces me to continue – the hope that there is another wonder ahead.  And when they come, I use them as my self-therapy: I imprint the intimacy of the experience in my memory and let it carry me over the next hurdle. 

It's like mantra:  If I didn't endure I wouldn't have exited the Bullet train onto the platform of Shuzenji station and felt my rusty armor melting away; I wouldn't have seen that astonishing photo my daughter took a few months ago; I wouldn't have watched Radiohead, The Mars Volta, Tool do their on-stage magic;  I wouldn't have heard Andrew Bird's heavenly sounds in the Guggenheim and in the Riverside Church; I wouldn't have read new Egan, Carson, Cunningham; I wouldn't have stood in the middle of the Red Forest breathing the ancient clarity…  And I wouldn't have been at Terminal 5 yesterday.

So, here is my personal tip for everyone who, like me, is overwhelmed with frustration and prone to desperation: find something powerful that can make you forget about the dread, look for opportunities to experience it whenever you can, and hold on to the sensory memory of each occasion for as long as the shittiness of this life allows you.  And let's hope that the gaps between the moments of joy will not get any longer then they already are.

Acknowledgements:

I would like to thank my daughter for treating her mother as an equal and sharing all kinds of awesomeness.  And thank you very much, the dude from Bumblefuck, IL.

 

2013 Audit Season: Joke #3


Cartoon-Confusion-Question-Mark-300x300A bank's field examiner (read my previous
joke if you don't know who that is) comes to review books and records of a company in the NYC's Financial District.

The company leases space in one of those pre-furnished/pre-wired office suites setups with reception services, heavy-duty business equipment, and highly presentable conference rooms shared by various renters.

(Educational  Side Note:
It's a very profitable business. I believe Regus, headquartered in Luxembourg,
is the largest player in the world. Started only in 1989, today it has presence
in 99 countries, operating over 1400 centers. During my career I have dealt with Regus in Amsterdam, London, Moscow, Frankfurt, and New York.)

Those who have never been in such places don't realize that owners try very hard to maximize the rentable footage and fit into the space as many offices as they can without violating occupancy regulations. There could be, like, 120 companies, some of them consisting of a single employee, on one floor. And, therefore, during business hours it never feels empty or quiet. People are coming, going, walking by. The noise level is much higher than in a conventional business space: at any given moment one can hear at least three phone conversations and virtually participate in two neighboring meetings – one with a real estate attorney and another with an advertisement outfit specializing in cosmetics. It's pretty much your garden-variety beehive that sometimes gives an impression of being even more populous than it actually is.

One of the specific aspects of the office suites is the absence of companies' signs and name plaques – just the numbers on the doors. Yet, if you give the name of the company you are visiting to the doormen, they will direct you to the right floor. There, receptionists will not act surprise when you ask for a particular person and will call him or her up right away. (I mean, there is a reason why these businesses are doing
well.)

This is how the field examiner found her way to the company's CFO, with whom she was in contact after the assignment was scheduled.  The auditor was set up in a separate room next to the CFO's office.  Most of the electronic communications and data exchanges transpired between the two of them.  The supporting documentation was provided by the CFO's staff.  But in the hallways, reception areas,  at the coffee station in the kitchen, through the open doors of multiple offices – everywhere the visiting woman saw, to put it mildly, quite a few people.

Please keep in mind, this is a little story about a person of numbers. Moreover, one of the key requirements of qualified auditors is their ability to gage the validity of the data in front of them. The examiners cannot possibly look at every recorded transaction – they make representative selections for documentary proofs; they construct trends; they look at schedules and statements; and they must apply analytical scrutiny and critical thinking to every number to make sure that it makes sense in the context of the examination's scope.

For example, it is expected of an auditor, who already studied a company's Profit & Loss statement, to understand the physical reality of annual rent expense of $85,000 (especially in NYC's Financial District) and annual payroll of $1 million. Call me crazy,
but I don't think one needs to have a business degree and a CPA to interpret these numbers. I mean, any logical person can effortlessly come to the correct conclusion, right?  One can only hope.

The field work was going very smoothly; the company's finance and accounting staff was well prepared and accommodating; the books were clean and the paper trail was flawlessly coherent. Yet, at the very end, when the auditor was reviewing prior exams'
statistical questionnaires to see if anything required an update, all of a sudden she hit a stumbling block…

She walks over to the CFO with the papers in her hand, looking genuinely puzzled. She points out to a section in the questionnaire, "It says here that the total number of
employees is 10." Now, it's CFO's turn to be baffled as she doesn't understand
why this is so surprising, "Yes, that's correct. Ten total."

The field examiner looks into the CFO's face, still confused, "But I thought this whole floor was you…"

2013 Audit Season: Joke #2


StimpyA lender's field examiner is sent to conduct a periodic review of a borrower's books and records. 

These exercises are regular occurrences in, what I call, the balance sheet financing: a company pledges its assets, receivables and inventories foremost, against a line of credit.  It's only natural that the financial institutions want to make sure, from time to time, that the collateral securing the loans, letters of credits, bank guarantees, etc. actually exists and is properly valued. 

The banks used to be somewhat lax about it and satisfied themselves with quarterly internal financial statements and annual audit reports.  Most of them would ask a client to undergo a field exam (it's always at the client's expense, by the way) only when the issue of a credit line's increase came up.  However, the neverending tittering on the verge between recession and depression has changed things.  The banks got burned by failing companies and defaulted mortgages.  Those that couldn't recover their losses got acquired for peanuts.  The remaining institutions got smarter and stricter.  Nowadays, many lenders demand 2-3 field exams a year.  

Most of these engagements are outsourced to specialized accounting firms, the rest are conducted by the banks' auditing departments.  Either way, the examiners are constantly rotated – every time it's a new team, which is very prudent as far as the auditing standards go, but a pain in the ass for CFO's and Controllers of the companies being reviewed: you feel like a fucking parrot, delivering a summary of the company's business, its operating processes, and accounting procedures over and over again.

Many companies with significant receivables and inventories to pledge against credit lines of $10 million and up are, obviously, international businesses.  The commercial globalization affects both the procurement of resources and the distribution of products.  The ancient golden rule of market success still holds true: people try to buy where the prices are the lowest and sell where the prices are the highest.    

Now, let me remind you, boys and girls, that the United States of America is a solitary customary-measurement island in the global ocean of the metric system.  (Of course, it will cost billions to convert the entire American existence into the world-wide standard. Yet, I always thought that this clinging to the 18th century  units is primarily a manifestation of our country's fundamentally puritan conservatism.  But that's another joke altogether). 

So, back to our examiner.  On the second day of the assignment she comes to her designated point person – the borrower's CFO (the best practice to avoid someone saying something stupid, especially a CEO, is to restrict auditors' access to one person) and shows her an item on the inventory breakdown.  "It says here that the cost is $1.05 per pound, but the supplier's invoice states $2,315 per em tee," she says, actually spelling the stated weight unit – mt.

Reportedly, at this moment the CFO felt like making a joke: "…You know what they call a Quarter Pounder with Cheese in Paris?/They don't call it a Quarter Pounder with Cheese?/No, they got the metric system there, they wouldn't know what the fuck a Quarter Pounder is." 

But looking at the shellac-stiff blond hairdo of this Western PA resident, she changed her mind.  The examiner looked utterly perplexed.  So, instead, the CFO said, "This product is distributed here, in the States, and we keep the inventory records in pounds to match the sales units. However, it was purchased in Korea, so all of the supplier's documentation is in the metric system.  'MT' stands for 'metric ton,' which contains 2,204.62 pounds.  So, if you divide the cost of one metric ton ($2,315) by 2,204.62, you will successfully convert it into the cost per pound ($1.05)."  She writes everything down as she speaks, so that she doesn't have to repeat it again; at least not to this woman. 

The examiner is extremely relieved and very grateful for the little lesson.  The CFO (obviously in humorous mood that day) says, "Wait until you get to our liquid products.  They are bought in metric tons, stored in gallons, and sold in pounds."  "Oh, my God," the auditor looks mortified. 

This is not an isolated anecdote.  It's remarkable how frequently this happens.  I personally never met an auditor who didn't require a tutorial on US vs. metric units conversion.  I'm used to the appalling ignorance. The question is: why is it Ok to come with your tail between your legs and your tongue out, asking these stupid questions?  Haven't these people ever heard about Google?       

Quote of the Week: Mad World


Carl-jung-3"Show me a sane man and I will cure him for you."

                C.G. Jung

The Frustrated CFO's comment:

My mother, a doctor, always told me that one should be wary of psychiatrists, because they are just as crazy as their patients.  I don't know about all psychiatrists, but it's definitely applies to Jung.  I own his Red Book – going through it is a trip like no other.  Then again, I think today it would be virtually impossible to find a truly sane subject for Jung's reformation.  look around you – everyone runs in circles.  It's a mad world.