Monday, June 23, 2014

Corrupted Communication

Did you know that our communication skills are being corrupted? No, it’s not some foreign government; it’s our teenage children and our education system.

Verbal Communications

We are slowly losing our ability to communicate without the assistance of an electronic device. I was out to dinner recently and noticed two young couples sitting at a table near me with their heads bowed. At first I thought they were saying grace until I noticed that each one of them was using cell phones. There was only limited verbal conversation during the meal.

Or maybe you have seen the commercial where the grandmother gives her grandson a graduation gift? He is standing no more than a couple of feet directly in front of her and he texts her “Thank You” rather than simply saying thank you verbally.

Verbal communication is not the only communication being impacted by the technology revolution.

Written Communications

Written communications are also being attacked. Our society is quickly losing its ability to communicate via cursive writing. For the most part an elementary student today probably can’t write in cursive, much less read it. However, sit one in front of a computer and he is a whiz. More than 40 states no longer require public schools to teach cursive reading and writing but they do emphasize computer skills since this is how tests are administered.

This was brought to light in the murder trial of George Zimmerman. When witness Rachel Jeantel was asked to read a letter in court, she responded, “I don’t read cursive.” She was unable to read the letter because she had never been taught cursive reading and writing.

Texting is replacing the spoken word, and abbreviations are replacing the written word. When my granddaughter sends me a text, I usually have to ask her to decipher the abbreviations sprinkled among the English words. I know a few abbreviations like OMG and LOL, but there are literally hundreds of others.

Before you answer my question at the end of the blog, here are some things you might want to consider:

  •         A recent study showed that many people with cell phones prefer texting over a phone call. This creates a communication divide between the talkers and the texters.
  •         Americans ages 18 to 29 receive an average of 88 text messages per day, compared to only 17 phone calls.
  •         The number of text messages sent each month has sky rocketed from 14 billion in 2000 to 188 billion in 2010, according to a Pew Institute survey.
  •         The Financial Industry Regulatory Authority (FINRA), for the most part, requires a cursive signature on financial documents and will not accept printed signatures.
  •         Cursive writing is usually faster and more efficient than printed writing.
  •         The need to teach both print and cursive writing has been questioned by the teaching community.
  •         Very few adults use cursive as their day-to-day writing.
  •         Most of our communication is done by keyboard or printing.
  •         Experts say that cursive handwriting training for young children may help develop hand-eye coordination, refine motor skills, and other brain memory functions.

Is cursive reading and writing needed in today’s world where smart phones, iPads, and laptops rule the communications world?  Are your communication skills being corrupted? What do you think?

Monday, June 2, 2014

Bitcoin: The New Electronic Money?

Direct TV and Dish TV have just recently announced that they will begin accepting Bitcoins as payment for their TV subscriptions. So just exactly what is a Bitcoin?

Bitcoin is a relatively new electronic payments system described as a decentralized peer-to-peer system. Unlike other electronic payment systems, such as PayPal, it also has its own currency — a virtual denomination also known as Bitcoins. Bitcoins are known by various names including virtual currency, electronic money, or crypto-currency.

The Bitcoin system is driven by a concept called block chain, a public record of all transactions carried out within the Bitcoin network. The transactions are recorded in a public record that is collectively maintained by everyone who uses the currency.

Bitcoins are stored in a digital wallet when they are received. The wallet can be cloud-based or on a local system to maximize security.

For a more detailed discussion of Bitcoin go to:

Who created Bitcoin?  A person calling himself Satoshi Nakamoto, published the rules to the Bitcoin portal in 2008. The network was launched in 2009; however, no one really knows the true identity of Nakamoto.

How to create (earn) Bitcoins. According to Wikipedia, “Bitcoins are created as a reward for payment processing work in which users who offer their computing power, verify and record payments into a public ledger. Called mining, individuals engage in the activity in exchange for transaction fees and newly minted Bitcoins.

Mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions. The ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady.”

Bitcoins can also be obtained in exchange for products, services, or other currencies.

Pros and Cons.

  •         No charge when making payments in Bitcoins, either locally or internationally.
  •         Eliminates credit card fees for processing transactions.
  •         Difficult for anyone to make fraudulent payments using bitcoins.
  •         Has its own currency and is not controlled by any central authority.

  •         Has a volatile valuation. The price of a single Bitcoin has ranged from$13 to $1,000.
  •         Exchanges are a tempting target for hackers.
  •         Can be lost, or destroyed.
  •         Lacks consumer protection.

Audit considerations. From an audit perspective, Bitcoins are basically the same as any other foreign currency. However, teams auditing clients with Bitcoins should include an IT specialist to verify the Bitcoin balances. Verification should include traditional confirmation letters to third-party wallet holders and verifying balances from the block chain.

Once the amount of Bitcoins at the balance sheet date has been determined, the auditor needs to verify that the amount is properly translated into the company’s reporting currency in accordance with FASB ASC-830-20-25. The currency translation from Bitcoins to dollars is accounted for through an adjusting entry that includes the gains and losses reflecting changes in the exchange rate between Bitcoins and dollars. The same translation calculation must be made for receivables and payables that the company expects to settle in bitcoins.

The future.  No one knows exactly what will come of the Bitcoin system but it is probably not going to disappear any time soon. However, there is no doubt that it will have a far-reaching impact on how money is dealt with online.

What do you think?