2004 Max Block Award Winners Recognized

Best Article in the Area of Technical Analysis: “Accounting for Special Purpose Entities Revised: FASB interpretation 46(R),” by Jalal Soroosh and Jack T. Ciesielski (July 2004). Soroosh is KPMG Faculty Fellow and a professor of accounting at Loyola College, Baltimore, Md. Ciesielski is president of R.G. Associates, Inc., Baltimore, Md.

Editorial Board member Steven Lilien found the article to be of interest to both the user and the preparers of financial statements: “For the user, it sheds important light on issues surrounding control of entities, and also on transparency of financial arrangements involving off–balance sheet transactions. The authors go beyond simply listing the rules, but also review the judgments confronting the preparer and auditor. The article provides useful exhibits covering transactions that may result in variable interests, computation of expected losses after fair value of expected outcomes is determined, and computation of expected residual returns. I commend the authors for good professional writing.” Lilien is a professor at the Stan Ross Department of Accountancy, Zicklin School of Business, City University of New York.

Editorial Board member Dennis Beresford said, “Accounting for special purpose entities is one of the most complicated areas of accounting in recent years. This article does a great job of explaining the business purpose of these entities in relatively easy-to-understand wording. It also summarizes the accounting requirements in a way that practitioners should be able to quickly determine whether their company or clients are affected. In my view, being relevant to practitioners and being quite readable are the most important tests of professional writing, and this article has both.” Beresford won the Max Block Award in 1982, in addition to winning again this year.

Mark Mycio, a senior manager with American Express Tax and Business Services and chair of the NYSSCPA’s Auditing Standards and Procedures Committee, said, “The article provides a rare blend of broad comprehensive overview and historical background. It efficiently presented cleanly written technical guidance that effectively reduces the complexity in a very complex subject. The charts and exhibits clarify the text, rather than distract from it.”

Paul Warner, Editorial Board member as well as chair and professor of accounting and business law at Hofstra University, said, “The authors clearly describe the varied aspects and structures of special purpose entities, and use this background as a basis for the discussion of FASB Interpretation 46(R). The discussion contains extensive detail and uses clear examples.”

Best Article in the Area of Informed Comment: “Can We Go Back to the Good Old Days?” by Dennis R. Beresford (December 2004). Beresford is the Ernst & Young Executive Professor of Accounting at the J.M. Tull School of Accounting at the University of Georgia, Terry College of Business, Athens, Ga. He was the 2005 recipient of the AICPA’s Gold Medal for Distinguished Service.

Editorial Board member Bruce H. Nearon, director of IT security auditing services at J.H. Cohn LLP, said: “What I found most useful was that Beresford has brought to the forefront with insightful commentary what are to me some of the most vexing issues facing the accounting profession: standards overload, the related difficulty in reading and understanding annual report footnotes, the near impossibility of applying and deciphering some of the new standards, and the shift to fair-value accounting. The most interesting comment was his remark about clicking mindlessly through the 150 cable channels and landing in Andy Griffith’s Mayberry, which I often find myself doing at the end of day after giving up on trying to keep from drowning in the daily onslaught of e-mail. The most enlightening was the sanity check in finding out that I’m not alone in my thinking regarding the four issues noted above, and pining for the good old days, but knowing we can’t go back.”

Mary Ellen Oliverio, an Editorial Board member and professor of accounting at Pace University, said, “Professor Beresford is his typically candid, insightful self in this article. He is wise and thoughtful in this provocative assessment of critical accounting issues. I hope it has encouraged innovative thinking among readers about next steps. It would be a treat to read his suggestions for resolutions. His exceptional thinking, combined with his wide vision of the field, is always refreshing and enriching.”

Elliot Hendler, a principal of Friedman LLP, is a member of the Editorial Board and of the NYSSCPA’s Accounting and Auditing Oversight Committee and SEC Practice Committee. He described Beresford’s article as “a clear, no-nonsense enunciation by the FASB’s former chairman of the complexities in current and proposed accounting standards that have left tens of thousands of accountants across the country struggling to understand and implement. His observation that standards such as those on derivatives and variable-interest entities are almost impossible to understand, and his comments on proposed fair value and revenue recognition standards, are must reading, especially for the standards setters.”

Best Article in the Area of Public Policy: “Audit Standards in Transition: An Interview with PCAOB Chief Auditor Douglas R. Carmichael” (September 2004). Carmichael is the first chief auditor and director of professional standards for the Public Company Accounting Oversight Board (PCAOB). Carmichael is a member of the CPA Journal Editorial Board, and an article that he coauthored with Dan M. Guy and then–Editor-in-Chief James L. Craig, Jr., won the Max Block award in 2000.

Rona L. Cherno, a member of the New York State Board for Public Accountancy, past chair of the NYSSCPA’s Professional Ethics Committee, and former AICPA Trial Board member, said, “Carmichael appropriately reemphasizes openness, fairness, and transparency in auditing. A key point is the encouragement of all organizations with an interest in the work of the PCOAB to initiate proposals. Our profession needs to continue to restore investor confidence, by improving the quality of audit work and financial reporting. Accountants will work with management to lead in promoting corporate responsibility.”

Editorial Board member Julie Floch said, “Bob Colson’s interview with Carmichael provides a wonderful glimpse into the continuing development of the PCAOB, from the viewpoint of both its current focus and its future goals. We get a sense of the complexity of the process of creating this new organization, from the most basic ‘how to staff it’ concerns to the most complex ‘how will the standards-setting process ultimately function’ issues. The article is easy to read and fascinating to follow, and it leaves the reader wanting to know ‘how it all works out.’ I hope that a Part 2 will follow shortly.” Floch is partner and director of Eisner LLP’s Not-for-Profit Industry Practice, past chair of the NYSSCPA’s Not-for-Profit Organizations Committee, adjunct lecturer at Baruch College and the New School University, and a member of the IRS’s Advisory Committee for Tax Exempt and Governmental Entities.

The editors thank the following Max Block Award voters who, in addition to members of The CPA Journal Editorial Board, provided invaluable input by judging the nominated articles: Cynthia E. Bolt, Rona Cherno, Mark Hettler, Mark Mycio, John J. O’Leary, Dwight Owsen, Allan Rabinowitz, Frederick Rothman, Barry Seidel, and Charles Spector.

About Max Block

Max Block (1902–1988), a founding partner of Anchin, Block & Anchin LLP, is described by many who knew him as a visionary whose ideas have formed the basis for many reporting and practice management concepts in use today. Block was managing editor of the NYSSCPA’s Journal (now The CPA Journal) from 1958 to 1972. Each year since 1975, The CPA Journal has recognized his contributions and achievements by bestowing the Max Block Distinguished Article Award on the most outstanding articles. Although judging and selection procedures have evolved over the years, the criteria remain: “An innovative and stimulating article which is of current significance and which is likely to be of lasting value.”

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