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Final Entry: John Lacey—Funny Man

Final Entry: John Lacey

An interview with CalCPA’s Outstanding Educator Award co-winner John Lacey, who also happens to run a famous comedy and magic club.

John Lacey, CPA, Ph.D., co-winner of CalCPA’s Outstanding Educator Award with Dr. Sara Seyedin, is more than just a teacher. With his brother Mike, he owns the Hermosa Beach Comedy and Magic Club that has seen acts like Jay Leno, Jerry Seinfeld, Rodney Dangerfield  and more. But his day job is professor of accountancy at California State University, Long Beach. California CPA caught up with Lacey to see what tricks and advice he might have up his sleeve.

How did you end up in entertainment?
My brother made me do it! He had the idea of opening a comedy club. I was a doctoral student at UCLA at the time and had no money, but I encouraged him and helped him to find some partners to start the business. A couple of years later I helped him buy out his partners. Several years ago we produced a couple of comedy specials for Showtime. 

Is it hard to keep people laughing in this economic downturn?
No. Laughter is wonderful medicine for all that ails you. Like most businesses, we have seen some downturn, but it’s cathartic to sit in a comedy club and forget about your troubles.

Can magic turn the economy around?
A magician’s business is to fool people. I think we have had enough of that! I often tell people that my job as a teacher is the opposite of that of a magician. A magician tries to make simple things seem complicated so people don’t understand what happened. My job as a teacher is to make complicated things easier for people to understand.

Do your students have good senses of humor, or are they all business?
Most everyone has a sense of humor if they just let go. I teach introductory accounting to 120 sophomores at 8 in the morning, so one of my biggest challenges is to keep them awake. I mix humor with my presentation to keep them involved. I use examples that have humorous premises. I use my students’ sense of humor to help them to learn and remember. As an example, I found that many students were forgetting to include the beginning inventory when computing the weighted average cost of inventory. I concocted a funny story involving days-old clam chowder at the student union and its relation to the computation of weighted average inventory. The exam scores on the inventory question increased, but sales of soup at the student union went down!

What are the biggest challenges students face in becoming a CPA?
Woody Allen said that 90 percent of succeeding is showing up. I think there is an element of that in our educational process. Many students drop out because they encounter some hardship. As a teacher, I share the challenges I faced as a first-generation college student, and I try to encourage them. In terms of the specifics of the accounting curriculum, the literature has become overwhelming. When I started in public accounting 35 years ago, the standards text was about an inch thick. Today, the standards are about 15 inches thick. On top of that, we are also embarking on a change to International Financial Reporting Standards. The adoption of the FASB Accounting Standards Codification will help to bring order to the standards, but it is easy to be overwhelmed by the specifics and lose track of the underlying principles.
 
What about opportunities?
Change brings opportunity and this is a time of tremendous change. IFRS offers a great opportunity. Also, we are reporting more amounts in financial statements based upon fair values. Knowledge of valuation methodologies and techniques will be helpful. XBRL offers yet another specific skill set that is an opportunity.

How has accounting education evolved?
Accounting is still about keeping track of the stuff a business owns and the claims to that stuff. I have a picture of the father of accounting, Luca Pacioli, in my office, and I tell my students that we still do the basic things he talked about more than 500 years ago. We need to give students a strong foundation in ethics and basic accounting principles on which they can build and good learning tools they can use to add the more specific knowledge as they proceed in their careers.

What keeps you teaching?
My students. I love sharing ideas with them every day. In addition to my students at the university, I teach bankers, investment professionals and judges. I enjoy my interactions with all of my students. I tell people that the keys to happiness in life are good health, marrying the right person and finding a job that you love! I’m very lucky.

Is there too much opportunity for sleight of hand in the accounting profession?
There are good and bad professionals in every profession. I am proud to be a member of the accounting profession and to be an active member of CalCPA. Estimation and judgment are an integral part of accounting and the work of accounting professionals. There is always the opportunity for sleight of hand, but I hope that the leaders of our profession will help us focus on our responsibilities as professionals.

What is the best accounting-related joke you have heard?
I tell “The only funny accounting joke” at the end of some of my speeches, but it involves a visual component. What makes it easy to be funny as an accountant is that no one expects it. I tell people that another good thing about being an accountant is that it is easy to get the chatty person next to you on the airplane to be quiet. I just say, “Would you like to hear about the history of accounting?” I can count on silence until the end of the flight.