Jinn of Quality and Risk (2003-Jan-12)

Jinn?

According to critics, an eavesdropper, constantly striving to go behind the curtains of heaven in order to steal divine secrets. May grant wishes.

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Projects

Travel, around the world. Sleep, less. Profit, more. Eat, deliciously. Find, a new home.

Bio?

Species: featherless biped, chocolate addict
Roots: born in Sweden — lived also in Switzerland, USA, UK — mixed up genes from Sweden, Norway, India, Germany
Languages: French, English, Swedish, German, Portuguese, Latin, Ada, Perl, Java, assembly languages, Pascal, C/C++, etc.
Roles: entrepreneur, programme manager, methodology lead, quality and risk manager, writer, director of technology, project lead, solutions architect — as well as gardener, factory worker, farmhand, supermarket cleaner, programmer, student, teacher, language lawyer, traveller, soldier, lecturer, software engineer, philosopher, consultant

2003-Jan-12

Expensing options is necessary but not sufficient

William Sahlman (Harvard Business School): The real accounting scandal at Enron had nothing to do with the failure to expense options. Rather, it related to a failure to disclose something else entirely on both the income statement and the balance sheet. Enron had taken advantage of some very liberal (and economically nonsensical) accounting rules that allowed the company to transfer assets and liabilities to certain so-called special purpose entities. ...much fuller disclosure would not have saved Enron or, for that matter, WorldCom or Adelphia. The failures at those companies were more likely caused by a combination of fraud committed by individuals, inadequate control and governance systems that tolerated clear conflicts of interest, and a frothy market in which analysts failed to do even the simplest reality checks on reported cash flows. Let's remember that some analysts knew perfectly well that they were lying and misleading investors.

What is measured by a thermometer?

John Lienhard: Temperature is a measure of intensity. The higher the temperature of anything, the greater that intensity is, and the more heat it will drive into colder bodies. Temperature can really be thought of as a measure of the ability to drive a flow of heat.

Rotting science by pronouncement

Reason: Having examined the complaints against Lomborg, the Committees placed the Wig of Judiciousness on its head and lit the straw at the Danish statistician's feet. ... It's interesting to observe how impressively Denmark resolves issues of science that arise within its borders: by pronouncement. This saves a lot of time that is otherwise wasted on observation, experiment, analysis, and debate.

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