< Intro >

– Today we have a special episode
of Count Me In called IMA Life.

We're going to start talking

to different management accountants,
from IMA, and hear their journey.

Today we sat down with Norman Strauss,
a veteran in the accounting profession,

with over 60 years of experience.

We chat about Norm's beginnings.

Sharing stories from his
early days in accounting.

Navigating the challenges posed
by technological advancements,

and the significant role
mentors have played in his career.

Norm provides insights in his
involvement with various committees,

and sheds light on the complex process

of setting accounting standards.

With a dash of humor
and a plethora of wisdom,

Norm shares valuable insights
in his impressive journey.

So tune in, for an episode

brimming with decades of
experience and invaluable insights.

< Music >

– Well, Norm, I'm really excited

to have you on the podcast,
on our new IMA Life series,

and you've had quite the career.

And could you start, maybe, by sharing
a memorable story of your early days,

in your career.

Maybe some challenges that you had,
as you just got started in accounting?

– Well, thanks for having me,
and it has been a long career.

I was 36 years with the Financial
Reporting Committee, of the IMA,

and I also was in public
accounting for many years.

And if you add it all up,

it's about 60 years' worth of doing
things in the accounting profession,

which I've always felt is
a tremendous profession.

And I think there's lots and lots
of opportunities for people

that are getting into accounting.

You start at a beginning position.

You work your way up,
if you keep working hard,

you get challenges
throughout your whole career

and tremendous opportunities
to continue with dancing.

So I'm very pleased that
I went into accounting,

even though it's a long time ago.

And I've finally gotten
to the end of my career

with the Financial Teporting
Committee, after those 36 years.

So it is nice to keep going, and it's a
pleasure to be here today with you.

– Well, I can imagine just the things

you've seen in a 60-year career.

That's some people's lifetimes
and more than their lifetimes.

And just thinking about
everything you've seen

how do you think accountants
are handling the changes?

Because in the last ten years alone,

the amount of technology changes
that have happened across the world,

the industries, has just been remarkable.

And I'm sure the first part of your career,

the technology was changing but
not as rapidly as it's happening today.

– It is a real challenge
for people in the field, now.

In my day, we didn't have computers; and
it was nice, and slow, and worksheets,

and you did everything in pencil.

And now with all the technology, it's
a terrific opportunity to get involved

with all of these different things.

So depending upon where you're working,

hopefully, as you're moving
along in your career path,

the company that you're in will
give you a lot of background,

but a lot of training,

and a lot of people that you'll be
ble to learn these things from.

And that's one good thing about
the profession, it's not stagnant.

You have these changes.

So there's always something new,

and always something that's
interesting that's happening

Now, I go all the way
back in the beginning,

and one thing I always felt
that helped my career was luck.

It was always nice when
good things happened to you.

So I started at Baruch College and
I was going for my master's degree,

and I took a course on
contemporary accounting topics,

with a professor by the
name of Abraham Briloff,

and I'd never heard of him before.

But as it turns out, I found out that he's
one of the most famous professors,

at the time, and he was a tremendous
critic of the accounting profession.

So I went into the first day of
class and he said, who am I?

And I said, "I'm Norman Strauss."

And he said, "You go sit in the front row,"

rather, and that's where he pointed.

But I didn't want to sit in the front row.

So when he wasn't looking, I went all
the way to the back of the classroom.

And then he started talking, and I'd
never heard a professor like this before.

I mean, he was using big words,

complicated accounting theories
that he's imposing on everybody.

He was even so interesting that he
was making quotes to accounting,

in the Bible, which was not easy to do.

So I was amazed, and he was really
critical of the accounting profession.

And, all of a sudden, the student

who was sitting where I was supposed
to sit, up front said, "Professor Briloff,

I have to object to your criticism
of the accounting profession."

And then this young fella,
articulately, explained

why the accounting
profession is really good,

and basically disagreed with the
discussion that he was giving us.

So Professor Briloff said, "That was
a wonderful explanation, Strauss."

So he thought that I was still upfront,
that he had my name mixed up.

And the next week I got there
very early and I sat in that seat,

and it worked out very nicely.

The rest of the semester he kept
smiling at me, so that's kind of luck.

But then getting into public accounting,

when you start at the very
beginning, in the old days,

you had the interesting
title of a junior accountant.

And that, of course, was
not particularly complementary.

But after a while, if you worked hard,

you became what was then
called a semi senior accountant,

which was even worse,

and eventually you
made senior accountant.

And I remember in those days, when
I started as a junior accountant,

you really had to worry that you'd
get fired after the busy season.

I know cycles come and go.

Now, we read a lot about
firms letting go off people,

but that's the nature of the profession.

Everybody needs accountants
in business, and therefore

the opportunities are unlimited.

So, anyway, I was worrying about
getting let go right after the tax season.

And I confided with a semi senior,

who I was reporting to, and, to me,
he was so smart, he knew everything.

And I told him, "I'm really worried
that I think I'm going to be let go."

And he said, "Norm, don't
worry, you're really doing fine."

And then the next day, I went to work
and I found out that he got fired.

So that was an interesting challenge.

But if you keep doing your thing, learning
from the people that you work with,

you could keep advancing up the ladder.

– I think that's some great advice.

As I've read about your story

and chatted with you, mentors have
held an important part of your career.

Maybe you can talk a little bit about
the different mentors you've had

and how they've helped you move along,
as you've moved forward in your career.

– Well, after being in auditing
for quite a number of years,

I became involved in what I
would call accounting theory.

There's lots of rules that
affect financial reporting,

and people make those rules,
they're not scientific, necessarily,

people decide, and there's a
lot of judgment, it's subjective,

and to keep on top of
those rules is no easy thing.

But I kept doing more and more
of that while I was an auditor,

but also people started to recognize

that I seemed to be pretty
good at these technical matters.

In fact, another, you might call it luck,

I'm not sure, turning point for me
was when I was a young auditor,

we used to do what we
called analytical review.

We probably still call it the same thing,

but now it's all on the computers.

In those days we had
a 14-column worksheet,

and what we did was we analyzed
changes in the financial results,

that the company had
gone through for the year.

And where there were significant
differences, you had to investigate those

because those were the red flags.

So I prepared this 14-column worksheet.

One column said "This Year's Expense"

and the second column
said "Last Year's Expense",

and the third column said, "Difference".

And when the difference was big,

you had to find out why.

So I had looked at the payroll

and it went way down, and
I went into the controller,

and I said, "Why did
payroll go down, this year?"

And he gave me a very articulate answer,

and I was very proud of myself how
well I had written the explanation

on my 14-column worksheet.

And right before I was going to
give it to my supervisor to review,

I looked, and payroll did not go
down that year, it really went up.

And I'd put the numbers in the wrong
column, last year's on this year.

So, in fact, I then looked,

and I had to quickly erase the numbers
that I had put on my worksheet

and then go back to the controller
and ask him why the payroll went up.

And he gave me another brilliant
explanation, which I put on my worksheet.

And it was just around that
time that someone said,

"Maybe we ought to take
Norman off the auditing staff,

and put him into the technical
accounting theory end of things."

So maybe it was luck
that I made that mistake.

But I ended up going
into a technical group,

where we were involved in
reviewing financial statements

that my accounting firm had audited.

And that led me to be able to go up,
in the end, where I was, eventually,

the guru of the firm, and following all
of the technical material that kept coming

from the group that says Accounting
Standards in the United States,

which is the FASB, the Financial
Accounting Standards Board.

And also following a lot of the SEC
requirements, of which public companies

have many things that
they have to comply with.

Now, one thing in moving up
the ladder that's also lucky,

if you have a good mentor that
can help you in learning a lot

and moving up in the organization.

I was fortunate, in my
years at Ernst & Young,

which is one of the major accounting
firms, my boss was Denny Beresford.

he was a long-time member of
the Financial Reporting Committee,

of the Institute of
Management Accountants.

And he was the person that I reported to,

as we worked through all of the
different accounting requirements

that were being established
by the standard setters.

Now, another lucky thing for me was
that he became chairman of the FASB.

He was an Ernst & Young national
director of accounting partner,

and a tremendous accomplishment

to be selected in this very important
position, in the accounting world.

And once he went there,

I was with him, as an aside,
at the time that he was named

to be the chairman of the FASB, and I
thought at first he was going to faint.

He was so excited about the opportunity.

And once he became chairman,

he, of course, had to leave his
partner position at Ernst & Young,

and he also resigned from the
Financial Reporting Committee

of the Institute of
Management Accountants,

since you can't do all of those things.

So once he went to the FASB, I was
fortunate in being named his successor

to be a member of the
Financial Reporting Committee,

well, that was in 1989 or something,
and I've been there ever since,

up until just about a month ago.

So he went on and did a great job at
the FASB, as chairman, for ten years.

And I worked many years with
the Financial Reporting Committee.

– Mh-hmm, well, maybe we
could talk a little bit about

being a part of the Financial
Reporting Committee.

Because not everybody knows the ins and
outs of being a part of such a committee,

on the board for an organization like IMA.

Maybe you could talk a little bit about
your experience, being a part of the FRC,

and then also maybe some challenges

that you faced as you navigated
those waters for many years.

– The Financial Reporting
Committee plays an essential role

in the standard setting process.

Backing up the Financial
Accounting Standards Board

establishes the accounting
standards, in the United States.

A very complex process
that takes something

from the beginning of a project,

until all the corporations, in the United
States, have to follow the new rules.

The FASB wants input from
lots of outside organizations,

which help them evaluate whether the
standards are operational, practical,

and the best possible answer for the
particular problem that's being addressed.

Well, many people respond to the FASB,

and one significant committee
that does that is the FRC.

The FRC is the separate committee of
the Institute of Management Accountants,

whose main objective is to be
responsive to standard setters,

particularly the FASB,
but also the SEC as well.

And this committee has members that are
experts in accounting reporting matters.

And what the committee did, which
I was participating for many years,

is to get involved with
a particular proposal.

The FASB, when they're trying to see
what people think, first, issues a proposal,

and people can comment on it.

And the important role that the FRC
plays is to give a response to the FASB,

which they think is going
to be helpful for them.

And the FASB is very appreciative of the
role that the FRC plays, in this process.

And my role was to work with
the members of the committee

who, as I say, are very
smart accounting experts.

We also have people that were
involved with the user view.

They use the financial statements and
want to know what the best answer is.

Not from the accountant's point of view,

but the people who actually use
the product, the financial statements,

and academics were on the committee.

So we'd all, in an interesting
process of reading the proposal,

we were to make the choice
of method A or method B.

To be having a dialogue about which
the committee thinks is the best,

and to work that through until
you have a thoughtful response

that will go to the standard setters.

And, then, hopefully, we'd always feel that

they would first appreciate that we did it.

And, on occasion, they even agreed with
us and changed their proposal to meet

the suggestions that we had made.

– That's great, to be able
to have that connection

to such an organization
that sets the standards,

and to be able to have that
input, that's really important.

And you've held a number of
roles in different committees,

whether FRC or AICPA, or even
the IASB, advisory council.

Maybe you can talk a little bit
about what that means as a leader,

and a thought leader, in the industry.

To be able to be a part of those
committees and share your insights

that you've learned over the years.

– Well, I was fortunate in working on
the technical matters in Ernst & Young,

and also getting all the background

from participating with the
Financial Reporting Committee

to move up the ranks, so to speak,
in the accounting standards process.

In addition to the FASB, as
examples of the other committees

that are involved in these different things.

There are international
accounting standards

as well as United States standards.

There's an organization called the
International Accounting Standards Board,

and they have an advisory council,
and the FASB has an advisory council.

So that they have lots of experts
to provide them with advice.

So I was on both; I was on the FASB's
advisory council and the international one.

The international one was fun,
going around to different countries

to meet with accountants
from all over the world.

In fact, as an aside, years ago,
there was a thought that

the way we were doing this really
didn't make the most sense.

Why have an International
Accounting Standards Board

and a Financial Accounting
Standards Board in the United States?

Why not just have one and
have one set of standards,

that the whole world would have to follow

when they issue financial statements?

Well, everybody thought we would have to,

perhaps, throw away all our
United States accounting books,

and adopt the international standards.

But what really happened, in the end,

was the two organizations couldn't
really agree on what the right answer is

for these judgmental accounting issues.

And therefore they decided
to have each go their own way

and try to have standards that are
compatible as much as possible.

So if you have an international company,

they have to potentially be
following international standards

as well as U.S. standards.

But in addition to the process of having
the standards setters, themselves,

there used to be several
other committees

that I was fortunate to participate on.

One was called the Accounting Standards

Executive Committee, or the
AcSEC, as it was referred to as.

And that was a committee
that dealt with projects

that the FASB itself, the senior standards
setter, did not really have the energy,

or time, or resources to work on,

but felt that the AcSEC committee
could handle it, and that was nice.

When I was on the committee,

I chaired it, and we worked
on several pronouncements

that actually are still part of
the accounting literate today,

even though it was many years ago.

And, so, we were a standard setter.

One example, we issued
an accounting rule on risks

and uncertainties, that corporations

still are following today, and
it was very controversial.

So we issued proposals also
and got many comment letters,

as an aside, on that particular
one that we issued for comments.

We got 200 comment letters,

199 of them opposed
what we wanted to do.

The only one who supported it,
I think, at the time, was my mother.

But we did end up finalizing it
and it's in the literature, today.

Another committee that I served
on, for about 10 years, was called,

and still exists, only it's not
quite as active, as in my day,

is the Emerging Issues Task Force.

And that's a task force of the FASB,

referred to as the EITF,
and they too would work

on things that are similar to what
the name implies, emerging issues.

The FASB issues proposals,
they work on it, sometimes,

for many years, and finally they finalize it.

If you have an emerging issue,
corporations couldn't wait

until the EITF actually finalized it,
and we used to work on those things.

One quick example, in 1999, you may
remember, everyone was worried

that the computers wouldn't work on
December 31st because of the change.

That they really weren't set to
handle the new numbers of digits,

to go into the pronouncements.

And everybody was afraid
the computers would stop,

planes would stop flying,
and it would be a disaster.

Well, the accounting
end of this thing, obviously,

less important than the planes flying,

was that what should companies do
with all the costs that they had to incur,

to make the change from
the old computer system

to the new computer system, to
e able to go into the year 2000?

And the EITF came out with the answer.

And, therefore, the thousands of
accountants, all over the country,

that were worried about when
you incur the expenditures,

should you treat that as an asset or
should you treat it as an expense?

So instead of everybody
trying to individually figure it out,

the EITF said expense it.

Everybody had to expense it, and
we solved a big emerging problem.

It was controversial,

many of us felt it should
be shown as an asset.

Well, there was a lot
of money, all those costs.

And, in fact, I think I was at first
leaning towards it being an asset,

and I thought you should
put it on the balance sheet,

and then amortize it over
the next thousand years.

But no one thought that
was a particular good idea,

so that's how the EITF works.

So between the different organizations
that are involved in standard setting,

new standards continue
to keep coming out.

And some of the standards that come out

are similar to ones that we
worked on 10 or 15 years ago,

they're still working on it.

For example, revenue recognition,

how companies record
revenue, was a complex project

that the FASB spent years working on.

And the IMA, FRC committee

provided lots of input to help the
FASB make it the best accounting

[Indistinct] since that they could.

We had other things.

We had segment reporting,
which they're dealing with now,

but we dealt with that about
20 years ago or 30 years ago.

I remember one big issue
then was when you report

your separate segments of a business,

they had a concept that you should
take to determine the segments.

What is reported to the company's

chief operating decision
maker and people—Who is that?

Is it the CEO?

Is it someone else?

In my own household, it's my wife who's
the chief operating decision maker.

But they're still working on the same
issues, they're working on over the years,

trying to deal with what
should be done with goodwill,

and every few years
they revisit the project.

So the standard-setting
process goes on and on.

Accountants for corporations,
and obviously auditors, as well,

have to follow this
process, understand it well.

See that companies are complying

with these requirements in
their financial reporting,

and that process is a continuum.

If you're in accounting, there's lots of
stuff that you have to stay on top of.

New pronouncements are coming
out all the time, and it's not easy

to stay up with all this information.

Another common problem

that has been going on, over the
years, is what basically do you do

with the overload of information?

With all these pronouncements;

they often say what do you have
to put in your financial report

to disclose a lot of information about it.

And the financial statements get more

and more complex to read,
getting longer and longer.

So those are the ongoing process

that accountants are
continuously involved in.

– Mh-hmm, I think that's
an amazing experience,

that you've been able to be a part of,

those standard settings
and those standards

that thousands of
companies need to follow.

And I can imagine the
weight that that held,

which is why it takes
so long to set standards.

But it also can be frustrating
because as new things are emerging,

which is why you said there's
that emerging issues committee,

that can help make decisions faster.

But it can be hard waiting
for decisions from committees,

and from standards boards,
because things are constantly changing.

Especially, now it feels like things
are moving faster and faster.

How do the standards board
committees take that in,

as change is happening
quicker and quicker?

– Well, they have a whole infrastructure.

The Financial Accounting Standards Board

has the people who are on the board,

but they also have an excellent
staff that follow all the problems.

People in industry and people in public
accounting often write to the FASB

and say, "Here's a new
problem that we have to address."

The digital age has brought in
a lot of accounting problems.

When we had a big influx of more
and more companies using derivatives,

how should they be accounted for?

And the way it works is public accounting

is each of the firms have their Norm
Strauss-type person that's trying

to follow all these accounting
rules, and make some sense at it,

and then providing information to
help the staff follow all these rules.

So we, at the Financial Reporting
Committee, have a good relationship

with the Financial Accounting
Standards Board.

We meet with them periodically,

have direct input on some
of the projects of the day.

And, again, always with the goal
of improving financial reporting

whenever we can provide that
type of input for doing that.

– That's great, I mean, it's great
that they have such a structure

because I can imagine
how overwhelming it can be.

So you need that structure in place

to make sure everything's
done efficiently, I'm sure.

– One thing that the involvement with
the Financial Reporting Committee

helped me with is after I
retired from Ernst & Young,

I went right back to work, and I
went to Baruch College to teach.

I was giving back to the school
because that's what gave me the tools.

That's one good thing,
as an aside, about accounting.

When I said it was a good
field to be involved in,

what you learn in school is
actually what you do on the job.

So when you learn
accounting, it's not esoteric,

and then you don't see any relationship.

So learning the accounting
rules gives you the foundation

and the tools to be able
to have a good career.

So when I retired, I wanted to
continue to be professionally involved.

And I went back to Baruch, and they
hired me to teach a graduate course

on contemporary accounting topics,
which is, coincidentally, is the same name

of the course that I had
Professor Briloff with,

many years before that.

And, again, I was on the IMA
committee discussing the issues,

and in my contemporary accounting
topics course, we did the same thing.

We talked about, in my class,
the issues of the day.

So it was always a direct
benefit for me, personally,

to have all that involvement, over
the years, with the committee.

But teaching students about accounting

and telling them why I thought it
was a good field was very rewarding.

The other people teaching, they
all had PhDs, and this and that,

but I had the actual experience
of doing what they were going over

in the classroom.

And I think the students
got a lot out of that thing.

I was teaching over many years, and
at the beginning of every semester,

I told the class that I'm giving back,

and I'm a Baruch alumni.

And I told them that I went to
Baruch College so long ago,

that they only had debits at that time.

So my problem was the students
looked at me like it must have been true.

But, anyway, I would always try to
add a little humor to the discussion,

in fact, as an example, to
try to keep them laughing.

Otherwise, accounting can sometimes

make your eyes a little heavy, if you
don't add a little bit of humor to it.

So I told them that one of
my problems, as a teacher,

is that I'm not very good anymore of
remembering names, as you get older,

it gets harder and harder.

And I told them, this story is in the
context of some accountant subject

I was talking about.

I told them about the two
couples kind of my age

who were in the car together,

the two men in the front and
the two ladies in the back.

And the fellow in the front
said to the other guy, he said,

"What a great restaurant
we went to last night."

And the other fellow said, "Oh,
what was the name of it?"

And like many of us older
accountants tend to say,

"The name of the restaurant was um..."

And, so, he said, finally, help me out,

"What's the name of a flower
with thorns on the side,

and the top of the flower is red?"

And the other guy says, "A rose?"

He says, thank you, and then turns back

to the back seat and says, "Rose,
what was the name of the restaurant

we went to last night."

The students laughed,
and then we went back

to whatever topic I was
discussing at the time.

But the students at the college recognize,

because Baruch college is,
kind of not where if your parents

had a lot of money, that
would be your first choice.

You'd go to a much bigger type of school,

but you won't get a
better accounting education.

And, therefore, the students were very
attuned to really trying to learn this stuff.

Because this gave them a shot

that they had, maybe, they'd be the
first generation accounting students,

first generation college graduates,

and they'd be able to get
into the accounting profession

and have a chance of making it.

And that's the thing, again,
for people in accounting,

you can make it on your own.

You don't have to know anybody.

You just have to work hard,

learn the stuff, be willing to
put in the necessary hours.

And another thing that
helps is staying power,

to be able to stay in there for a
lot of years and work yourself up.

People that do that, the rewards are great.

– Well, Norm, thank you so
much for the wonderful insights.

It was great to hear your story and just
a little bit about the things you've done.

And I'm sure that we could talk for
hours, just telling about your story.

But I really appreciate the insight you've
shared, and just thank you so much

for all that you've given
to IMA, as an organization,

and to all the other organizations

you've connected with.

And it's great knowing you,

and it's great hearing more
about your story and sharing

with our audience today.

– And being with the IMA was
a great opportunity for me.

< Outro >

– This has been Count Me In,

IMA's podcast, providing you with the
latest perspectives of thought leaders,

from the accounting
and finance profession.

If you like what you heard,
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visit IMA's website at www.imanet.org.