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From The Radio In The News My Two Cents PSA

Know When to Hold Them

I am the absolute worst gambler. Several years ago, I headed out to Las Vegas to celebrate a friend’s 30th birthday, spent a lot of time in the casinos, and very little time gambling. My friend discovered that if she was sitting in front of a slot machine, occasionally pushing the button, she got drinks for free. Sitting next to her, I benefitted from this perk. Thus, we spent a lot of the long weekend chatting and sipping on drinks, while hanging out near a slot machine. It was a lot more fun than it generally has been when I lose my money in a casino. I am sure there are may strategies and techniques that people employ when gambling, but I don’t even know the theories, so I tend to essentially throw my money at a machine or croupier and hope for the best.

When it comes to some financial terms that are being bandied about in discussions about GameStop, I can at least try to explain what the terms mean. I find that what is going on in the stock market right now involves many short words that may be more complicated than they sound. Hopefully, clarifying them will help us all get a better idea of what is going on. I am going to speak about shares (because that is what is at play with GameStop) but these financial terms apply to all kinds of securities. Securities are financial instruments that are tradable and fungible, or mutually interchangeable. The fungible characteristic is what makes securities so easily tradable. Securities being fungible means that they are for all practical purposes, considered to be identical and can be exchanged for one another. You can exchange one $20 bill for two $10 bills. In contrast, though they are both seats one does not consider a front row seat to be the same as a back row seat, especially if everyone in front of you is way taller, so these seats are non-fungible.

I shall start out by talking about buying on margin. In the stock market, when you buy on margin, it means that you are buying securities using only a percentage of your own money. For example, say you want to buy a share for $100 but only have $10 to your name. You approach your local broker and that broker agrees to lend you $90 to get you to the $100 to buy that share. Because just about nothing in life is free, the broker charges you 10% interest on the $90. In a year, you decide to sell that share. When you do that, you will need to repay the broker $90 plus $9 in interest. If you skipped over those sentences because you saw numbers and didn’t want to to math, buying on margin means you only need to use a fraction of the money needed to buy shares and you can borrow the rest, paying interest. If you are able to sell the shares for more than what you paid to buy it, that’s great. You can use your profit to pay back your loan (plus interest) and happily take the rest home with you to do with as you please. However, if the price of the shares goes down, you will lose your money and may have to find money elsewhere to repay your loan. In the United States, the Financial Industry Regulatory Authority (FINRA) generally requires that a customer use 50% of their own money for their first time or initial purchase of securities. People who want to short sell securities, also need margin accounts.

For all the people who are optimistic about share prices and financial markets, there are those who look at securities and believe that the value of the securities will go down. Some may call these people pessimists, and these people may call themselves realists. Po-tay-to or Po-tah-to, these folks seek to benefit from their price downturn point of view by doing what is called short selling (or shorting) the security, and this is how shorting works. Pessireal (as we shall call them) goes to their broker and says, “I would like to borrow one $100 share of Tulip stock. Everyone is all about Tulip these days, but I just don’t see that ending well.” The broker will then sell a $100 share of Tulip stock, and give the $100 to Pessireal, less any transaction fees (again, nothing for free). Pessireal will then sit back, wait, and watch the market. If Pessireal’s gut is correct about Tulip and that the value of the share goes down to $50, Pessireal will take $50 of the $100 and buy a share of Tulip stock which they will give to the broker to, as they say, close the short position. So, Pessireal is giving back the borrowed share and has made $50 (less fees) while they’re at it.

Suppose, however, that Pessireal is wrong about Tulip, it becomes the best thing since sliced bread, and nothing can keep its price down. Pessireal may realize the error of their ways and decide to cut their losses when the share price is $200. In addition to the $100 they got from their borrowed share, Pessireal will have to spend an additional $100 of their own money to buy the share they need to return to the broker. Although this is rare, sometimes it is the broker who may decide that they want their share back. It could be because the broker has been watching Tulip’s share price going up and when it gets to $300 a share, they start to fear that Pessireal won’t be able to pay them back. So they call Pessireal up and, despite’s Pessireal’s attempts to assure them that Tulip’s demise is on the horizon, they demand their share be returned. This means, whether they like it or not, Pessireal will have to find an additional $200 to bring the $100 from the borrowed share up to the $300 needed in order to buy a share of Tulip and return it to the broker.

With the regular trading of securities, the worst that can happen is that the value of your investment can go down to zero. That hurts but at least you know that the most you can lose is what you put in. The best that can happen is pretty much infinite. Your gain is whatever the price of the security goes up to be, over what you put in. Short selling is the opposite. You can calculate the most you can earn on a security – the lower the price goes, the more you make, up until the security is worthless. On the very scary flip side, the most you can lose is pretty much as high as the share price soars, which could be, as GameStop short sellers are finding out, can be pretty darn high. Brook Gladstone, the host of On The Media, shared that she spent almost $1,000 on 42 shares of GameStop stock in 1999 and by April 2020, that investment was worth $3.50 a share – $147. She sold her shares when they were at $100 a share. Most of last year, GameStop’s stock was valued at $250 million. The stock has exploded to a point where GameStop’s stock value is around $20 billion! If you are a short seller, that hurts.

The last thing I will mention here is the short squeeze. Say, Pessireal was not alone in thinking that Tulip’s share price was going to crash, and that many had decided to short Tulip but, instead, that price was soaring. Some short sellers may take a look at the soaring price and at their sources of funds and decide that they were ready to cut their losses. If there were enough of these short sellers looking to buy Tulip shares so that they could return them to their brokers, and close the short position, this higher demand could push the share price even higher. Right now, with GameStop (and other stocks) there are a lot more people looking to buy shares than are looking to sell. The trusty supply and demand chart comes in to show how the increased demand will increase the price. The short sellers, looking to cut their losses and repay their borrowed stock, are, in turn, squeezing that price up too.

I can’t say when and how this will end; I am no good at the Vegas game. Heck, I can’t even let what happened in Vegas stay there. I do, however, hope that as you read or listen to stories that are throwing out financial terms, you will nod along and think – I get it.

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Inspiration My Two Cents

Living the Dream

“The soft-minded man always fears change. He feels security in the status quo, and he has an almost morbid fear of the new. For him, the greatest pain is the pain of a new idea.” As we celebrate Martin Luther King Junior’s birthday and legacy, I pulled up some of his quotes. His Dream Speech is one we know and hear but, as is the case with people, he was a lot more than one moment. Dr. King’s commitment to service and justice are examples to live by.

When Dr. King was alive, he was not always popular but he kept on because, as he said, “When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. ” Doing what he felt was right was often very hard for Dr. King. When I say hard, I don’t mean hard like when someone, like me, who is not a morning person, wakes up before the chickens in order to get my morning run in before my workday. I mean hard like if you decide to stand up for what is just, it may lead to the imprisonment, harm, or death of you and maybe even some of your loved ones. Dr. King, and those who he worked with, made unimaginable sacrifices in the service of others.

Sometimes, the thought of action can be so overwhelming that it keeps you in the thinking (and maybe watching videos about it) phase. When I first started running long distances, the furthest I had run was around four miles and I was spent at the end of those miles. Even though I watched New York Marathoners run past my block and they looked like regular folk, I believed they must be exceptional beings because, as far as I was concerned, regular folk couldn’t possibly run further than five miles without collapsing. I met a woman who urged me to start with trying to complete a 10k race and see how that went. Then she suggested a half marathon. You should have seen me at the end of that half marathon! You’d think I had found the answer to all life’s problems, that’s how elated I was. I then decided to tackle the marathon. As I had conquered each mile, I believed more and more that regular old me could be one of those running down Fourth Avenue in Brooklyn, on my way to completing the New York Marathon. It took the little things to get to the greatness of the marathon. To get to that though, I had to inch from under the massive shadow of intimidation and inch slowly to 26.2 miles. It wasn’t always steps forward; I have lost count of how many times injury and illness have taken me back to mile one. However, I do know now that not even trying is so much worse.

Dr. King knew that service is not an easy thing to dive into and often we are so overwhelmed by all that needs to be done that we end up doing nothing. We don’t have to save the world all on our own. If we all do what we can, together we can do amazing things. In the words of Dr. King, “Everybody can be great … because anybody can serve… You only need a heart full of grace. A soul generated by love.” Even during this pandemic, there are opportunities every day to serve and you don’t even have to figure it all out on your own. Organizations such as Americorps can help link you up with opportunities and there is an incredible range of ways in which you can serve, from sending card and letters to those who feel alone, to donating to food and clothing drives. You can also welcome and encourage service in others. When someone does something good for you, even if you don’t need it, show your appreciation and resolve to pay it forward. When someone holds a door open for you, it’s not because they think you don’t know how to open a door, it is a way of showing, in a small way, that they see you and want to do a nice thing for you. That a great thing. Don’t limit yourself to just the one day. May the National Day of Service be a reminder of the value of serving every day. Each of our small acts will bring positive change.

There are books, films, a podcasts about Martin Luther King Jr. I wouldn’t know where to start in recommendations. What I can say is that each time read, watch, or listen to something on Dr. King, I learn something new. I learn more about him, about the Civil Rights movement, and about those around him. Part of the Civil Rights movement is path to a place where more voices are heard and valued, and one marvelous gift that comes with hearing more voices is that we get to see and learn history through different sets of eyes. There is the parable of the blind men and the elephant. Each blind man felt a different part of the elephant and came away believing that they knew what an elephant was. They argued with each other, each believing that they knew the elephant. Yet, the full picture of the elephant could only come through their collective knowledge. So take the time to find a new facet of the life and times of Martin Luther King Jr. and understand not only the impact of the good he did but also the remarkable challenges he faced throughout his life to his early passing. Celebrate Dr. King’s legacy and “Never, never be afraid to do what’s right”.

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My Two Cents PSA

Taking It to the Bank

Image by Megan Rexazin from Pixabay

For a while now, I have been passionate about the need for us all to gain Financial Literacy as early in life as possible. In 2019, I spent a few days on a houseboat with family. On our first night, we got into a very animated conversation about financial literacy that stretched into the wee hours of the morning. I am sure the fact that two of my aunts and one uncle are all economists, and those of us who are not in finance are the offspring of financial folk, was a factor in the amount of time we spent talking about financial literacy. We talked about what it was, how people can gain literacy, and what kind of access people might have to it. To ensure adequate sleep during the rest of the trip, we had to agree to table financial literacy and perhaps talk about what fish was caught or wildlife spotted.

In April 2015 (April is financial literacy month) volunteering through the the New York State Society of CPAs (NYSSCPA), I was invited to be part of a project at the Office of the New York City Comptroller. The group included people from various community nonprofits, someone from the New York Public Library, and a few people who worked in the Comptroller’s Office. We started out with a blank slate and were asked to consider ways to contribute to financial literacy. Having come from different spaces, each of us saw unique challenges in our communities and organizations. As we talked, we came closer and closer to a unified thought. We started by talking about some of the common conversation pieces of financial literacy, like saving, investing, and financial planning. But then questions kept popping up – do we all have access to resources that make it easy to do these things? Some of the people in our group doing community work, talked about how many of their clients do not have bank accounts and may not know how to open one, have reservations about how safe their money might be in a bank account, or might face other barriers (such as language) when seeking to open an account.

I was surprised to learn that a significant percentage of New York City residents are either unbanked or underbanked. In 2017, 11.2% of households had no bank account and another 21.8 were underbanked. That is a third of the city without adequate access to a bank account who have to find alternate methods to navigate our world of money. Being unbanked can be a dangerous proposition – keeping significant amounts of cash in your home can make you a target for theft. Being unbanked can be an expensive proposition – the fees paid to cash pay checks, buy money orders to pay bills, and perform other financial tasks can add up quickly. At the same time often having a bank account with a small balance can attract hefty monthly fees.

A key aspect of financial literacy is access to information. During these meetings, we learnt that, in 1994, New York State enacted a law that required banks to offer lower cost banking services. The accounts, commonly known as Lifeline accounts are to have the following characteristics:

  • You can open an account with a deposit of $25
  • To keep the account open, you only need to have one penny as a minimum balance
  • The financial institution cannot charge you more than $3 a month to maintain your account
  • You can make at least 8 withdrawals a month at no charge
  • There are no restrictions or penalties regarding deposits. You can make as few or as many as you like.

These accounts existed at many banks (as required) but the banks were not required to advertise them. So many were not included in bank brochures and sometimes employees did not appear to know they existed. So, if we knew that there were banks around New York City that offered these lower cost banking services, how did we get the word out about them and help those who wanted them open an account? We had several meetings and then left the Comptroller’s office staff to work on a way to put our thoughts into a resource. We came back to, at least for me, a very impressive solution. A website called Take It to the Bank, where people could use various criteria to a banking option that worked for them. They could search within their zip code, they could search for a bank that provided language assistance (from Albanian to Yoruba), or they could search for a bank that was open on evenings and weekends. The Comptroller’s office also printed up pamphlets in various languages to be distributed in the City, to raise awareness. Once a person filtered for their criteria, they could print up the bank information and, as the website proclaimed, take it to the bank.

In June 2015, the website was up and good to go. From a discussion, a group of us from diverse spaces, considered our goals and purpose and tried to think out the challenges. First of all, New York City residents had a website that they could filter through based on their particular needs and desires. Community nonprofits could sit with those they serve, discuss needs and help their clients find a bank. The information could be printed up and presented to the bank. With the information in the printout, the bank staff could assist the client open a bank account. I was impressed and proud about my small contribution.

Literacy is often about what one has access to. When I was a kid, it was an exciting day when my mother took me to open my first savings account. The lessons that my parents shared with me about things like saving were lessons someone else had taught them. Financial literacy is not something that we are born with and it is not something that is magically granted to us when we become adults. The ability for all of us to manage our financial resources depends on the knowledge we can get access to. Every little bit counts and, with this resource, New Yorkers will know more about how to take their resources to the bank. It’s kinda cool!

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Inspiration My Two Cents What's Going On?

What’s Up 2021? My Three Words

Image by Gerd Altmann from Pixabay

The last time I set my 3 words was in 2018, picking Imagine, Innovate, and Act. Led to Chris Brogan by Tom Hood, I was first inspired to do this in 2013. I appreciated the process of thinking about the year I had gone through and then considering the year ahead, and I liked the idea of having a theme song to guide my year. I am a runner and hills are my nemesis. Many years ago, I read that repeating a mantra such as “I love hills” as I soldiered up those slopes (and sometimes almost cliffs) would change my mindset and make things easier. I did find that coming to the hills with a predetermined script kept my mind and mouth from going to soliloquies that included, “When will this end?”, “My legs are dying”, and “Why doesn’t this get easier?” and throwing in a thumping rhythm did get me up and over those hills (it seems that mantra has set itself in my mindset. I talked about them in 2018 as well). If that works with the hills, I am finding that having my three words, putting them where I can see them, and referring to them often helps me reset and refocus. The title of my 2018 post about my three words included “We’ve Got This”, words in some form that I have whispered, muttered, and yelled to myself over the past couple of years and words that friends and family have encouraged me with often during that time. I love to dance and I am ready for my 2021 theme!

Gratitude: It is very easy to be grateful when you are at mile 10, on a hot day, and someone presents you with clean, cool water to drink. You don’t even have to think about the gratitude, your desiccated self defaults to waves of intense thankfulness. On cold, dark, rainy days when that alarm goes off and you have to drag yourself out of bed, finding a reason to be grateful is a challenge. Last year, I put a piece of paper on our fridge, with the heading “3 Good Things”. Every morning (that is the goal) my husband and I each write down 3 things that we are grateful for. Some days it is definitely more challenging to find those things but it is on those days that the 3 things are so vital.

The past year has been one filled with meditations on gratitude. Many of us have had to make unexpected, unplanned, and painful adjustments and it has been easy to lose sight of the silver linings. When gratitude hits me, it can touch me so deeply that it brings tears or it can excite and exhilarate me, like a shot of adrenaline. I intend to continue in prioritizing gratitude not only because of the many studies that tell us how important it is, but mostly because it reminds me of how amazing my life is due to the people, experiences, and things I am grateful for.

Purpose: This word danced its way into my 2021 brain. Purpose here is a many-layered word. I am constantly seeking purpose at the macro level, be it with my life or with my work. I am also thinking about purpose at the micro level. I have been practicing meditation for a bit now (and I have to remind myself it is a practice and a journey) and in addition to seeking a more mindful existence, I also seek purpose. Very little happens without purpose and intention and even more happens with it. So, not only am I asking myself, what is my purpose, I am also asking when I speak, think, or act, what is the purpose of this? I ask myself, what is the goal that I am trying to achieve here? When I get on my bike, I have a default happy flat places gear that it tends to be in. However, when things change – maybe I’m going up a hill, or maybe I want to accelerate – that default gear does not cut it, it takes me to a place full of effort and devoid of happiness. Pausing to think and adjust gets me to efficiently get back to my happy place. I am a person who always has a to do list longer than my arm, I am always trying to get things done and not be overwhelmed. I need that reminder to pause and find that purpose.

Evolve: I am all about evolution, even when I am dragged there, kicking and screaming. When I think about evolution, I imagine adjusting and growing to be better for now and the future. As inevitable as change is, generally humans are not very good at embracing it. I know I am not always good at it because, right now, I can hear my mother’s voice chastising me, “Rumbi, you have to be more open-minded”. But because there are so many wonderful things that have come out of my embrace of change, because there are also things that I now know are not for me because I embraced change and because, like it or not, everything is changing, I am looking to not just change but evolve. This evolution can be of my profession, of our workspaces, or of our relationships. At some point if you are not evolving, you are becoming a dinosaur and they didn’t live to tell the tale. Evolution is ultimately about being better, stronger, and all around more awesome. I’m in.

What were my words before?

2013 – Change, Discover & Motivate
2014 – Transform, Pursue & Collaborate
2015 – Receptive, Synergy & Service
2016 – Learn Fear & Community
2017 – Embrace, Persevere & Monchu
2018 – Imagine, Innovate, & Act

I hope that each of those themes are part of my evolution and journey.

Right now, I am grateful, and I am embracing evolution in my purpose. The sun is out. I made my first vision board. I have written my second blog post of 2021.

What are your 3 words? What are your gratitudes?

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Inspiration My Two Cents

Changing Things Up

Photo by Mark König on Unsplash

In March 2018, I was knocked to my knees when Linda, my closest friend, passed away suddenly, while heading home from a vacation. Eleven months later, in February 2019, I was flattened when my little sister, Veneka, passed away, equally unexpectedly. You know how it feels when you are knocked to the ground, and that monster is still sitting on your chest, and someone yells to you to get up. The struggle to standing can take all the energy that you have. You push that monster off of you and, even as you stand, that monster still lurks beside you, trying often to knock you over again. What energy I had left I focused on the functional necessities but I did not have energy for much else. My writing did not fare well. Often I would think about things but, as I do not yet possess the ability to have my thoughts magically transform into writing on a page, there have been many blank pages in my life these last few years.

Though my fingers have been less active, I have had no shortage of thoughts and, when I think, it is about a lot more than financial forensics. When I talk, it is about more than financial forensics. When I act, I do more than financial forensics. So, now when I write, I want to write about more than financial forensics. I have found that, at the core of my thoughts, my conversations, and my actions are the same principles. I want to keep doing that in this space, so we can explore how things like accountability, ethics, and systems are important in various parts of our lives and our work.

I believe that this sharing and these conversations we have, in our small spaces and in our small ways, can indeed alter the face of the world. I am getting out of my head a little bit to share the wisdom I find and to hear the wisdom from you. In this small space of a site, this is a big change so I am, as is human, nervous. However, to quote Babe Ruth, “Never let the fear of striking out keep you from coming up to bat.” And this is where my baseball analogies will stop before I am outed as someone who grew up on rounders and then cricket, before baseball.

I’m up to bat!

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Inspiration My Two Cents PSA

It’s All Good

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I have written before about the importance of whistleblowers as a prime tool for detecting and discovering fraud. The ACFE’s 2018 Report to the Nations states that 40% of frauds were discovered through a tip from a whistleblower. This is, by far, the most common way in which fraud is uncovered. At 15%, internal audit came in a distant second. That’s huge. It is important to note that, in a business, a whistleblower can report wrongdoing in many areas – dangerous weaknesses in the design of a product, dishonest marketing and anything else going awry in an organization.

The history of the whistleblower in America dates back to the late 1700s when ten members of his crew and 2 citizens reported Esek Hopkins, the nation’s first commodore, for torturing British prisoners of war among several allegations. Hopkins was suspended and, in turn, retaliated by having the whistleblowers arrested. These whistleblowers appealed to the congress claiming that they were “arrested for doing what they believed and still believe was nothing but their duty”.  Congress responded by creating the country’s first whistleblower protection law. I love this story because it covers the entire whistleblower cycle. First, we have people seeing behavior that they believe is wrong and then taking steps to report this. We then have authorities taking action on the reported wrongdoing. We see the ugly side of things when Hopkins retaliates, something that, unfortunately, happens too often when whistleblower complaints are filed. Finally, we have whistleblower protections, as lawmakers recognize that it is important to have a system in place that protects those who call out what is wrong.

Sadly, this was not the moment when the world realized the importance of the whistleblower, holding the role in an esteemed position, where whistleblowers would be lauded and admired for all time. Instead, over time, in all spaces, including the movies, whistleblowers were given a bad rep and uncomplimentary labels like “snitch”, “informer” or “rat”. Instead of being admired for uncovering wrongdoing, whistleblowing was viewed as violating a sacred code of silence. We were being told that it was better to be a criminal, stealing money, jeopardizing people’s livelihoods and sometimes even their lives, than to be the person shining the light on all of this. We found ourselves in a space where, yes it’s terrible if someone runs off with your money or turns a blind eye to safety in a product, in pursuit of profits, but it is so much worse if someone tells us about it.

In 1971, Ralph Nader, the famous consumer activist, made it his mission to remove the tarnish from whistleblowing. He described whistleblowing as “An act of a man or woman who, believing that the public interest overrides the interest of the organization he serves, blows the whistle that the organization is involved in corrupt, illegal, fraudulent, or harmful activity.” He worked tirelessly to put a positive spin on the word whistleblower and as people view the role more favorably, whistleblowers can be better protected from retaliation.

We should recognize that it is not easy to be a whistleblower. Most people have a level of loyalty, if not to their job, then definitely to their colleagues. When they see fraud or other wrongdoing happening, they are torn and conflicted and often hope that they are wrong. Most of us like the people we work with and may know about their families and may even socialize with them. The second last thing we want is to find out that a coworker is perpetrating a fraud, only because the last thing we want is to be the person reporting this. At times, people will leave a job before they report a fraud. Other times, a person will keep quiet, hoping that someone else takes on the burden of reporting the fraud. It is a heavy emotional burden.

This is all before a whistleblower has to consider possible retaliation for reporting that wrongdoing. Many people fear losing their job or being ostracized after blowing the whistle on fraud. Unfortunately, sometimes these people are correct. At times the retaliation will not be overt but can happen in insidious ways where those retaliating try to find loopholes and legal ways in which to push a whistleblower out. When this happens, any other potential whistleblowers can be scared into silence. We tend to find out about this retaliation when a fraud is uncovered and we discover that, perhaps for years, others had tried to report the fraud but were fired, ostracized as people who were not team players, or treated as though they were insane for suggesting such a thing.

With these things in mind, it is paramount to business leaders and all others to act to hold whistleblowing as a positive action and to encourage and protect whistleblowers. Unless you are a leader perpetrating a fraud at your organization, why wouldn’t you want a whistleblower in your midst? Here are a few steps you can take to make this happen:

  • Your onboarding process should include information to employees encouraging whistleblowing and giving them clear and easy ways in which they can make reports.
  • Provide employees with an anonymous way in which they can share a tip. Also provide various places or a third party, in case the whistleblower does not feel that the option provided is one that is safe and one that will act on the tip.
  • Have zero tolerance for retaliation. This should not only be communicated to employees but be an active part of your company’s culture.
  • Show clearly that you have acted on a tip and that such actions are encouraged and appreciated in your organization.
  • Keep information on reporting whistleblowing prominent in your firm and remind employees regularly.

We are in the midst of football season and many fans are very upset with referees right now because it seems they are not making calls that they should, and they are letting players get away with things that lead to what fans view as unjust outcomes. If we feel this strongly about referees blowing the whistle on bad plays, shouldn’t we be bringing at least the same level of passion to blowing the whistle on wrongdoing in businesses and other organizations?

 

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My Two Cents PSA Travel Tales

Just In Case

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I’m that person. Next to you on the plane. Pulling out that safety booklet and reading it, from beginning to end. I’m that person. Listening attentively while the flight attendants go through their entire routine, from how to buckle and unbuckle your seatbelt, to the reminder to not inflate your lifejacket until you are outside the plane. Every time, I’m that person. I look around for the nearest exit and sometimes do a mental calculation of my best route there. I check in the booklet to see where my lifejacket is supposed to be and I sometimes feel about to make sure that the booklet is correct. As often as I have flown, I take the time to go through the process and remind myself of what I know and to see if there is something I have missed in the past or a new instruction that may have been added.

Sometimes I wonder if it’s a bit much. However, recently when a plane in New York City made an emergency landing, video taken by a passenger showed that many people on that plan had no idea how to operate the lifejackets and way too many of them had inflated their lifejackets while still inside the plane. This may have been related to panic during a stressful situation but, from looking around me during the pre-flight safety instruction session, it seems the bigger issue is that most passengers just don’t pay attention. There are more interesting or pressing matters that command our attention and, specifically for those who fly often, we are likely lulled into an arrogance of the familiar. We have done this many times before, we must know exactly what’s up at this point. It may be only on that rare occasion of an emergency that we realize that it is ha been so long since we paid attention to the instructions that we now have a very vague idea of what to do.

Many businesses will have a company policy, code of conduct and operations manual and include training. When a new employee starts with a company there is often some kind of onboarding process that includes either training sessions or handing over a policies and procedures manual or a combination of the two. In addition to sharing with the employee how the employee should go about doing their job, the training and manuals should also include what should be done when things go awry. These instructions should be clear, and employees must know not only what to do but also who to go to for guidance when things are not right. Employees must also know who to inform and the various levels of leadership that this information should go through. If there is no protocol, an employee will not know who to take a problem to and those who are told may not know what to do with the information. You don’t want to be that company in the news admitting that people noticed an issue early on but that the information did not make its way to the right people to manage it.

In addition to the initial training, companies should remind employees often. This can be performed in-person, in an online session or through other messaging, like posters around the company. It is dangerous and foolish to believe that employees will remember their week of training or the contents of a manual years into employment, especially during the first week at a company an employee is not yet familiar with the day to day workings of that company. When a crisis hits, you don’t want to be the person being told, “You should have known what to do. We told you during your initial training, ten years ago.” You especially don’t want to be the person asking a coworker why they can’t remember that old training – honestly, what do you remember from ten years ago?

Thinking about your business, take steps to:

  • Include in your training, what a person should do when something is wrong, who they should report to and options for anonymous reporting, in case the matter is sensitive, and an employee might fear retaliation for reporting.
  • Make sure that your training is clear and easy to understand and follow up with employees to make sure that they have understood and retained the training.
  • Have a non-retaliation policy at your company, for people who report wrongdoing and errors. This policy must be something your business takes seriously.
  • Have a disaster recovery policy that you revisit and update regularly. Make sure your employees are familiar with the policy so they know what they are responsible for doing.
  • Have important policy information displayed around the office, to remind employees what is expected of them.
  • Perform regular training updates of your employees so that you are not relying on ten-year-old memories.

It takes me only a couple of minutes to get through the safety brochure and some airlines put time and energy into creating engaging and fun pre-flight safety videos that are actually fun to watch. I hope I am never in a flight emergency situation, but I go forward knowing that if that should happen, I shall at least remember to not inflate my lifejacket while still on the plane.

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AICPA In The News My Two Cents PSA

Taking Over…

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Last year, I visited Atlanta Airport seeking an incident report. The airport is a massive place and, after I found a very helpful airport employee, I wound up outside the emergency services offices. Fortunately, the staff was both friendly and helpful and, within minutes, the gentleman I was speaking with was asking his colleague to look up the incident in question in order to provide me with the information I needed for the next steps forward. It all seemed very easy until it wasn’t. His colleague looked at his screen and then stated that something seemed to be going on and his computer was not responding. After trying a few things without success, I was given a phone number to call and follow up. I was to get what I was looking for within the next couple of days.

I left and heard nothing for almost a month, which actually worked out for me because I was traveling a lot and would not have been able to do much with the information. When my call was finally returned, I learned that the reason it had taken so long was that the city of Atlanta had been taken down by a Ransomware attack. The day I was at the airport, was when the attack was happening! Imagine that, I was in the midst of a lot of drama and excitement and had no idea. The only story I have to tell is that I saw a blue screen of death and then it took three weeks for my call to be returned.

I will say this: if anyone is affected by a ransomware attack, my story is probably the best outcome to have. A couple of years ago I shared a story about my friend whose clients were victims of ransomware attacks where $300 to $600 was demanded of them. In that time, ransomware attacks have become more sophisticated and a lot more frequent. Cryptocurrencies have also contributed to the boom because it makes the attackers more difficult to track down. As I wrote in a piece on ransomware, the first known ransomware attack happened in 1989, where the attacker sent floppy disks to attendees at a conference. A program on that disk locked the computer on its 90th restart, demanding $189 of the user for a resolution. The Atlanta ransomware attackers demanded $52,000 (and it took over $2.5 million for the city to recover from the attack). The attackers may ask for what may seem as relatively small amounts when they attack but it adds up. In 2016, ransomware attackers made over $1 billion and that amount climbs every year. In addition to the upfront cost of the ransomware demand, often a victim has to spend a lot of time and money recovering from the attack. I mentioned before that Atlanta spent over $2.5 million and they are not alone. Ransomware damages are predicted to reach $11.5 billion this year.

As you can see from my friend’s experience and that of Atlanta, there is no victim too large or too small for an attack and so it is imperative for all of us to take steps to protect ourselves and do what we can to mitigate any damages should we be attacked.

  • The first easy step is backup, backup and then backup offline. Because I have had backups fail on me, I try to have two backups of information and itis important to make sure that your backup is separate from your computer. In this way, should your computer be attacked, your backup will be someplace else.
  • Then try to use two-factor authentication for your logins. Many applications and websites already insist on this but try to make it a habit for yourself, whether or not someone else is doing it.
  • Update your passwords regularly – yes, it’s a schlep but especially with very regular news about companies being hacked, companies that house your sensitive information and logins, it makes sense to keep changing these.
  • Be careful about opening up emails and clicking on attachments or links in those emails. I know we live in a world with way too many emails and way too little time, but think before you click. If you receive an email you are not expecting, check to make sure that it is a valid email. Just last week, I received an email from a fellow CPA and when I checked with her, it turned out that her email was hacked and was sending out malicious links. If the tone and language of the email are vague or don’t sound like the voice of the person you have dealt with in the past, double-check with the person. It doesn’t take long and can save a lot of pain.
  • Update your software. A lot of ransomware takes advantage of vulnerabilities in software and taking advantage of the fact that many people do not regularly update their software. Set your machine to update automatically, then you don’t even have to think about it.
  • If, unfortunately, you are a victim of a ransomware attack, think on it before you pay. You are dealing with criminals. Although it seems that more often ransomware attackers do restore machines after attacks (it’s better for business, apparently) it is not assured. Often people find that they have no option because they do not have a recovery plan. If you have the option of recovery, it is easier to make the decision on whether or not to take the chance of paying.

Ransomware is on the rise and so it seems that more of us are at risk than before. It is smart to take a few protective steps if only to keep you from taking weeks to return a call.

 

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My Two Cents PSA Running

Keep Rolling

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When I first started running, I was out training, and my knee suddenly buckled in pain. I thought I had broken something, but it turned out that I had IT band syndrome. I tried several approaches to get better. Among these, I would change up my routes so that I was balancing out which leg was favored, I worked to improve my gait and I started foam rolling. No one warned me about that rolling. I think tears sprung to my eyes that first day I foam rolled. I know for sure that I yelped in pain, several times (thankfully I was alone). I couldn’t believe that I was supposed to do this every day, but I had to roll through the pain because I had a race on my schedule and I needed my knee to start working again.

After rolling consistently, I was amazed by how much better everything worked. I was also incredibly relieved that the rolling didn’t hurt so much anymore. I was a foam rolling disciple and whenever anyone told me they were contemplating taking up running, I urged them to also contemplate taking up foam rolling. At a point, I actually found joy in foam rolling. I could get through a rolling session with nary a yelp. It was glorious.

Recently, foam rolling slipped out of my life. After a fall apparently chipped a piece of my knee into non-existence, I could not run at all and I was, instead, focused on weight training to strengthen my knees. At the end of a week of working out, the trainer advised a foam rolling session. I didn’t even think twice; I hadn’t been running, how bad could things be? Painfully terrible, it turns out.

Managing controls in a business works in a similar manner. Sometimes, when a company sets up or has an auditor highlight weaknesses in its control systems, the company will go about creating policies and procedures that address risks and institute controls. At times, with that company, new hires will be given these manuals to read and, if they are lucky, these new employees will receive training. This training will teach the employees about the culture of the company and how to follow policies and procedures, in order to minimize risk within that company. However, how often will that company review its policies and procedures to see if they are relevant to technological advances and new risks that have arisen?

  • How often will the company’s leadership review policies and procedures with existing staff, to ensure that people have not slacked off and are still, for instance, getting the approvals that they are supposed to obtain for transactions?
  • Is anyone checking that reconciliations are occurring monthly (or at whatever frequency has been established) and, once performed, that those reconciliations are being reviewed by the relevant staff?
  • If there is a policy for checks over a certain amount to be signed by two signatories, is anyone reviewing to make sure this is the case?
  • When employees have left the company, have their access to the company’s system been suspended? Once suspended, have their accounts been deleted so that no one else in the company can use them? If they were signatories for bank accounts, has the bank been informed and has the bank removed them from the signatory list?
  • Have the company’s staff received training in how to reduce the risk of phishing?
  • Has the company’s leadership received any training themselves to update them on current risks and to remind them what the policies and procedures of the company are?

These are just a few examples of the many ways in which a company should be regularly checking in and exercising its control muscles. If all you are doing is handing over a manual on day one and assuming that your staff knows what and how they need to do things, you are only setting yourself up for possible pain in the future.

  • Can you be surprised if one of your staff members gets phished and hackers gain access to your company? Think about the pain of finding out that someone pretending to be the CEO sent an email that instructed accounts payable to wire a sizeable amount of money to an offshore account and that accounts payable fell for the scam?
  • If no one is regularly reconciling accounts, can you really be shocked when you discover that an employee has taken advantage of this lack of oversight and embezzled money?
  • If accounts of former employees are not properly suspended and deleted, how will you figure out who has been using them since the former employee left? How will you be able to trace unauthorized transactions?
  • If your company’s leadership is not up to date on policies and procedures, how can they enforce them? At that point, everyone will be just guessing and hoping for the best. Being unprepared and hoping for the best tends to only work out well in the movies.

Maintaining and updating policies and procedures should be a proactive and continuous activity. Speak with a forensic CPA about how to create, institute and regularly review your control systems to reduce risk in your company. It may seem like schlep in the beginning, but having the systems serves a deterrent to those contemplating wrongdoing, it also keeps your staff more educated about how, for instance, they can recognize errors or attempts to suck them into a scam. This can also mean that when something is going awry, it is spotted earlier, minimizing possible losses.

You should be doing this to avoid or, at the very least, minimize any future pain. You don’t want to be like me where incredible pain leads to you even more pain, on the eventual path to healing. Take it from my IT band, proactive is so much better than reactive.

 

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AICPA Inspiration My Two Cents NYSSCPA Running Uncategorized

Three Words for 2018? We Got This!

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Over the last week, I have been thinking about 2018. I don’t know about you, but 2018 snuck up on me. One moment I was caught up in the day-to-day of 2017 and the next moment 2018 was just a couple of weeks away! After my initial panic, I thought – well, it’s great because I get to think of my three words. Three words? Well, if you haven’t been on this journey with me before, I shall explain. In 2012, I met and was inspired by Tom Hood and he introduced me to the Three Words approach, which came from Chris Brogan. At the start of every year, now, I sit and think about what three words I would like to guide me through that year. During the year, I come back to those words, to help center, direct and motivate me. Over the last few days, I have thought about how to make this work better for me, and I determined that I must display these words to remind me, even when I am not thinking about being reminded, to move me when I feel stuck and to hold me accountable. I say this in part because, 2017 was a challenging year for me and I found that I often lost track of my guiding lights. Involved in, and sometimes overwhelmed by, the moment, I often forgot to even look for my words. Putting the words everywhere, will go a long way to keeping me mindful of that.

Last year, I started looking back over my year and I have found this to be a great way to assess how things went and to help me set my intentions for 2018. My three words:

Imagine. This is the first word that came to me. During 2017, in part through work and volunteering with the New York State Society of CPAs and the AICPA, I have had some truly new experiences. I have learnt how to play poker and how poker skills can benefit me in the workplace; I have worked with a team to consciously inch towards better health – physically, emotionally, and spiritually – and that has included laughing more and skating in Byrant Park; I have collaborated with incredible people and presented in various spaces, from a national conferences to a college campus. During the year, I have been involved in conversations that have opened my eyes, that have ventured into spaces that are often afraid to even tiptoe into, that have renewed my hope when things have seemed bleak. I have often reminded myself to listen and to hear because that is when I find the moments that hit me hard and that get me to imagine and those moments are incredible. When we imagine, and step outside of what we know, we can find brilliance, we can find understanding and, just as important, we can also see and revise the not so great. In 2018, I want to imagine without fear of where my imagination will lead me. I want to imagine and be okay with when what I imagine doesn’t always work out. I also want to make sure that I make the time and space for my imagination. Back in 2015, I tried to create space for me to be bored, which is a big part of creating the space for imagination and, as the exercise stated, brilliance. It did free my mind in great ways and, looking back and looking at now, I know I need a lot more boredom in my life. And I still haven’t finished my Starry Night jigsaw puzzle!

Innovate. During 2017, I listened and took part in conversations about change. The conversations were about artificial intelligence (AI) about blockchain (and cryptocurrencies, like Bitcoin) and about cybersecurity. Other conversations were about what diversity, inclusion, and belonging mean and if and why it is important. We had conversations about what to do about all the change happening in our professions, in our world and in our lives. We talked about how we react to it and how we can embrace, be ahead of and even create greatness out of all the change. Beyond the conversations, we brainstormed and tried new things. We looked at the new approaches other took and ran with them. I spend a lot of time looking at challenges and how, sometimes, people take the same approach to resolving them and see minuscule results. As much as we tout how “change is good”, it is a human thing to resist changing the status quo. During this year, I want to innovate. I want to collaborate and brainstorm and determine to try something new. I want to embrace the difficult conversations, appreciate and improve upon feedback and, on my part, provide truly constructive feedback. I want to remember the power of synergy and never forget that the best innovations come through a community of people sharing, listening and taking risks.

Act. My third word came to me after I wrote and thought about my 2017 look back. When it comes to training, I have established and go with what gets me to success. If I have a race, I print up a daily timetable that includes rest days, cross training days and exactly what I shall do on each day (distance, goals, tempos if needed). The night before every training, I put out exactly what I am going to wear on the day and I determine my route. I think about and take away all my excuses so that, when I wake up, I just do exactly as planned and that gets me a step closer to where I need to go. I keep my schedule on the wall and tick off each day as I go along. During 2017, I often did not apply this approach. As a result, especially where I felt the stakes were high, I became adept at getting cold feet, at second-guessing myself and at putting things off until I decided it was too late to do them. There are many reasons why this happened but knowing the reasons and doing nothing about them is not helpful. I am going to do more acting in 2018. To help me do this, I am going to find the ways to take away my excuses, and I am also going to be more realistic about what I can get done, so that I don’t end up doing many things in a mediocre manner that only serves to disappoint me and others. I also must remember to be kinder to myself when I act and to see the power in action. I must remember that it is through action that I can bring value and have impact.

Before diving into 2018, I want to take a moment and meditate upon my previous three words:

2013 – Change, Discover & Motivate
2014 – Transform, Pursue & Collaborate
2015 – Receptive, Synergy & Service
2016 – Learn Fear & Community
2017 – Embrace, Persevere & Monchu

Several years ago, I went to Hawaii with friends and decided to take surfing lessons. I was a couple of months out of surgery and hesitated before I went out – I wasn’t at full strength, everyone else was going on a fun outing and I would be doing this solo, as no one else was interested. But, I had been thinking about taking a surfing lesson and I had told my surfing neighbor (who ultimately became my husband) that I was going to take a lesson and that made me feel accountable. During the lesson, I fell countless times, I scraped my knee and sometimes even got to the point where I was able to ride a wave while kneeling on the board. Then, I stood, and rode, and didn’t fall off. It was glorious and totally worth every fall, and the skin missing from my leg. When I finally fell off the board, I rose out of the water with a victorious yell! It is this that I must remember – it is a journey but it can only happen if I Imagine, Innovate AND Act.

Happy and wordy 2018 to you! Please share with me – what are your words for 2018?