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 How
Much Diversification Is Enough?
How
could this happen?” investors ask when they read about
market disasters in the headlines. In fact, without the
gross failure of investment policy or implementation, they
should never happen. Portfolios can be destroyed through
a variety of well-known failures. High up on the list is
the failure to diversify properly. Diversification is the
one free lunch in finance and investment practice, and prudent
diversification is a prime responsibility of fiduciaries
under common law, UPIA, and ERISA. Diversification first
and foremost reduces risk to its lowest possible value.
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Minorities in the Accounting Profession
Congratulations, the accounting profession has gained
ground on the medical and legal communities in minority
recruiting! A number of years ago, according to the then-available
statistics, less than 1% of the CPA profession was African
American, Latino, and Asian. Today it’s 8%, consisting
of 4% Asian/Pacific Islander, 3% Hispanic, and only 1% African
American. Applaud the progress, but more needs to be done,
and the issue is even more important than ever. The U.S.
Census Bureau estimates that, with 100 million ethnic minorities
in the United States, about one in three residents is a
minority.
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 SEA
Performance Reporting
On
the rare occasion that standards setting for governmental
accounting and financial reporting gets broad media attention,
it is generally for two reasons. The first is when the subject
matter is of interest beyond the realms of CPA firms and
governmental finance offices. Governmental Accounting Standards
Board (GASB) Statement 34, Basic Financial Statements—and
Management’s Discussion and Analysis—for State
and Local Governments, which revamped the blueprint
for state and local government financial reports, is a prime
example.
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