If I were to be sarcastic, I would say that the September "Spirit of Accounting" column ("A penny shaved is a trust spurned," page 22) isn't even worth a penny, but I won't; I will leave that to others.
This article is a real stretch of logic. First, as the authors state, "It is preposterous ... to hyperfocus on earnings per share and attribute so much precision to the reported results." Since most numbers are reported to the nearest thousand, we don't know what the exact number really is. Second, I believe that the calculation of EPS is reviewed carefully by both the preparers and auditors, since it is a number that is reported widely throughout the financial system. Third, using this type of statistical analysis doesn't prove anything (3 percent more of the numbers were rounded up). Remember that famous saying by Benjamin Disraeli: "There are three kinds of lies; lies, damned lies, and statistics."
As the authors state, there are a lot of estimates and discretion in many areas of both the P&L and balance sheet that can impact reported earnings much greater than a one-cent rounding. Let's focus on these more important items, rather than "penny ante" issues.
Managing partner and chief risk officer, Omega Options Trading Group
I just finished reading Harry Bose's opinion piece ("A reaction to the Romney tax return," October 2012, page 14). I realize it is his opinion (as if one couldn't tell after learning he contributes to Obama's campaign). Does he think Mitt Romney does his own investing overseas or prepares his own return? Does he think he has a responsibility to invest only in the United States and get pounded on taxes? His article seems to be an indictment of our profession as a whole. Aren't we paid to minimize our clients' taxes? I thought that was why people hired me. Maybe Harry needs to find a new profession -- if Obama gets re-elected he could be appointed Czar of Taxation.
Jay Flinton, CPA
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