Former Congressman Addresses Accounting Society
Former Congressman Joseph J. DioGuardi (NY-20), the first practicing Certified Public Accountant (CPA) elected to Congress, spoke to the YU Accounting Society last week about accounting and the federal government. During his talk, DioGuardi specifically focused on the ever-expanding national debt, the subject of his life’s work. DioGuardi served in Congress for two terms for a total four years; his most significant legislative accomplishment was authoring the Chief Financial Officers Act, which reformed the way the federal government manages its money.
About thirty-five students showed up to hear from DioGuardi who also distributed free copies of his book, Unaccountable Congress: It Doesn’t Add Up, to event attendees. DioGuardi schmoozed with students before he spoke and expressed his thanks for the invitation to share his thoughts. DioGuardi began by playing an audio clip from a radio interview he had done the previous week, discussing the current state of the national debt, in light of President Obama’s recent $4 trillion budget proposal. DioGuardi also showed a flash video that he wrote and produced, simplifying the national debt crisis for those without a background in the issue. “It’s an absolute lie when you use the cash basis,” DioGuardi said. Very simply, the difference between cash and accrual accounting is that under the cash basis, income and expenses are recognized when cash changes hands, while under the accrual basis, revenues and expenses are recognized as soon as they happen, regardless of when cash changes hands.
DioGuardi went on to explain his thesis that the federal government should switch over to accrual basis accounting, which is required by the SEC for all publicly traded corporations, rather than the cash basis accounting the government currently uses. The national debt is currently about $18 trillion, but DioGuardi asserts that the true national debt is really almost triple that, or about $72 trillion, when converted to the accrual basis. “Most people are not conditioned to believe that the government would impose a debt so onerous,” DioGuardi said. DioGuardi is certainly in a position to know about government accounting, having been a partner at Arthur Andersen, the prestigious accounting firm that collapsed in the Enron scandal in the previous decade. While at Arthur Andersen, he was on a committee of five partners that produced the first ever financial statements for New York City. “We have a big problem…we can’t count straight in government,” DioGuardi said regarding the general financial reporting environment. DioGuardi had well crafted slides that complemented his message. He also fielded many questions from students unfamiliar with the system.
On the whole, students enjoyed the event and had a positive reaction. Syms junior and Accounting Society board member Aharon Shevach told The Commentator that hearing from the congressman was an “incredible honor.” Shevach went on to say “his speech was thought-provoking and eye-opening in regards to the government and who should be accounting for Washington. I learned a tremendous amount from him and am very grateful to the Accounting Society for putting together such a fantastic event." Syms senior Yale Jasphy described the event as “informative” and the congressman as “extremely interactive”.
“ DioGuardi was on a committee of five partners that produced the first ever financial statements for New York City. “We have a big problem…we can’t count straight in government,” DioGuardi said about the general financial reporting environment.”