{"id":1597,"date":"2013-05-15T14:09:05","date_gmt":"2013-05-15T18:09:05","guid":{"rendered":"http:\/\/emu.edu\/now\/crossroads\/?p=1597"},"modified":"2014-01-10T10:19:38","modified_gmt":"2014-01-10T15:19:38","slug":"stoltzfus-accounts-for-the-public-good","status":"publish","type":"post","link":"https:\/\/emu.edu\/now\/crossroads\/2013\/05\/15\/stoltzfus-accounts-for-the-public-good\/","title":{"rendered":"Stoltzfus Accounts for the \u2018Public Good\u2019"},"content":{"rendered":"
\n
\"Ronald

Ronald L. Stoltzfus ’75<\/p><\/div>\n

If you want to understand\u00a0the passion of Ronald L. Stoltzfus for accounting \u2013 notably getting the numbers right, providing complete and transparent information, and putting the public good first \u2013 you need only look as far as the accountant he respects the most in the national arena: Lynn E. Turner.<\/p>\n

As chief accountant for the U.S. Securities and Exchange Commission (SEC) from 1998 to 2001, Turner was a leading advocate of auditor independence rules and international accounting and auditing standards.<\/p>\n

\u201cHe\u2019s one of my heroes,\u201d says Stoltzfus, who heads EMU\u2019s accounting program in the business and economics department. \u201cHe understands that accounting information helps investors, creditors and other users make good decisions. This is why accurate, transparent financial information is a \u2018public good.\u2019\u201d<\/p>\n

Stoltzfus admires the way Turner speaks to accounting conventions, \u201casking the hard questions that need to be asked,\u201c says Stoltzfus. Turner, for example, has publicly questioned why the investigative budget of the SEC was drastically cut in 2007, hamstringing an agency responsible for enforcing the laws regulating the nation\u2019s banks. (This was at a period when JPMorgan Chase, Citicorp, and Bank of America were implicated in the global financial meltdown.)<\/p>\n

Unlike Turner, Stoltzfus is not famous \u2013 at least not beyond certain university circles \u2013 but he shares Turner\u2019s moral outrage at financial reporting practices that harm the public good.<\/p>\n

This is why Stoltzfus is spending his 2012-13 sabbatical examining the way state governments report on the pension benefits they have promised to their employees. \u201cMost state pension plans were fully funded seven years ago,\u201d he says. \u201cNow they aren\u2019t.\u201d<\/p>\n

\u201cInstead of following the recommendations of actuaries, many state legislatures have reduced the percentage of funds set aside for the pensions.\u201d<\/p>\n

In Pennsylvania, for example, Stoltzfus found that the state workers\u2019 pension fund was underfunded by $14.7 billion as of 2011, partly the result of 10 years of sub-par investment returns and partly as a result of the state legislature cutting the set-aside money from 26% to 11% of payroll. (Stoltzfus cites \u201cState Employees Retirement System, Comprehensive Annual Financial Report,\u201d 06\/30\/11, p.72.)<\/p>\n

Unfortunately, many states report similar patterns, he says: \u201cWhy are they [the legislatures] messing with the pension funds? Is this a short-sighted effort to balance the state budget at the expense of state workers?\u201d<\/p>\n

Stoltzfus hopes to publish his findings as soon as he wraps up his research. This is not a dry academic exercise; underfunded pensions funds will impact tens of thousands of public employees in the state of Pennsylvania alone.<\/p>\n

For Stoltzfus, accounting is a high calling \u2013 right up there with being a skilled physician or a wise pastor. \u201cTo run a business, non-profit or a government agency, you must have properly trained people who know how to collect the right data and present it understandably, giving accurate answers to a host of questions.\u201d<\/p>\n

\u201cGood CPAs [Certified Public Accountants] are problem-solvers for their clients,\u201d he enthuses. \u201cAnd auditors are like forensic investigators \u2013 they have to be very bright and very astute. Behind every major business reporting failure, there was an audit failure.\u201d<\/p>\n

Stoltzfus says a flaw in the U.S. audit system is the fact that the auditor is paid by the company being audited. He points to the way Arthur Andersen \u2013 one of the \u201cBig Five\u201d accounting firms until 2002 \u2013 was getting a million dollars a week from Enron at time when it was fraudulently reporting its financial position, deluding its investors. (Enron filed for bankruptcy in 2001.)<\/p>\n

In addition to being a CPA and an EMU alum, Stoltzfus holds a PhD in accounting from Virginia Commonwealth University, a master\u2019s in accounting from James Madison University, and a master of business administration from Shippensburg University.<\/p>\n

\u201cIts very unusual for a university this size to have somebody with a PhD teaching accounting, \u201c says Spencer Cowles<\/strong>, PhD, chair of EMU\u2019s business and economics department. \u201cIt\u2019s also unusual to find someone with a CPA and a PhD in accounting who also has an MBA. Ron doesn\u2019t just have a narrow technical perspective \u2013 he understands how accounting fits into business.\u201d<\/p>\n

PhD-holding scholars of accounting like Stoltzfus are in short supply nationally, according to the American Accounting Association. This may explain the salaries they can command on the academic market. New hires as full professors of accounting received a mean salary of $169,200 in 2009, according to a 2009-2010 salary survey conducted by the Association to Advance Collegiate Schools of Business.<\/p>\n

\u201cThe highest salary you can get as an accounting professor at EMU is probably half what you could get at a major university with a full-fledged graduate program in accounting,\u201d says Cowles. Yet Stoltzfus, long-time treasurer of his Park View Mennonite Church, has stayed put at EMU since arriving here in 1984, after a decade of being a controller in the private sector. His motivations clearly are beyond money.<\/p>\n

\u201cI believe in the mission of EMU. I think we make a difference in young people\u2019s lives,\u201d he says. No accounting student \u201cgets lost here\u2026. I know if you aren\u2019t prepared and if you\u2019re not in class.\u201d<\/p>\n

The exams that Stoltzfus puts his students through are intended to prepare them for the multi-day exam marathons that they will need to endure to pass their CPA exams. In short, EMU\u2019s accounting exams are really tough. But, as dozens of accounting graduates have told Crossroads, the pay-off is success in graduate school and in getting the coveted CPA license with relative ease.<\/p>\n

Stoltzfus also stays put because \u201cI have great colleagues. Our department really values teaching in a liberal arts context where clear thinking and clear writing are very important,\u201d he says. \u201cAnd so are relationships and understanding the broader context of business and society. It\u2019s not just about accounting.\u201d \u2014 Bonnie Price Lofton, MA ’04<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

If you want to understand\u00a0the passion of Ronald L. Stoltzfus for accounting \u2013 notably getting the numbers right, providing complete and transparent information, and putting the public good first \u2013 you need only look as far as the accountant he respects the most in the national arena: Lynn E. Turner. As chief accountant for the […]<\/p>\n","protected":false},"author":73,"featured_media":1598,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[363,314],"class_list":["post-1597","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-magazine","tag-ronald-l-stoltzfus","tag-spencer-cowles","issues-spring-2013"],"_links":{"self":[{"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/posts\/1597","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/users\/73"}],"replies":[{"embeddable":true,"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/comments?post=1597"}],"version-history":[{"count":3,"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/posts\/1597\/revisions"}],"predecessor-version":[{"id":1600,"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/posts\/1597\/revisions\/1600"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/media\/1598"}],"wp:attachment":[{"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/media?parent=1597"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/categories?post=1597"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emu.edu\/now\/crossroads\/wp-json\/wp\/v2\/tags?post=1597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}