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| Friday, November 20, 2009 |
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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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February 27, 2008 1:59 PM ET
A number of auditing experts took aim at a recent Securities and Exchange Commission advisory committee proposal on non-GAAP accounting judgments, saying regulators should push for tougher guidance and issue a formal standard. During a meeting of the Public Company Accounting Oversight Board’s standard advisory group today, several members said the proposed framework is too loose and doesn’t offer anything new. In addition, it could move accounting standards further into the principles-based realm and give companies a large safe harbor from which to issue questionable accounting judgments, some advisory group members said. The proposal, published earlier this month by the Committee on Improvements to Financial Reporting, which was established by the SEC, calls for the SEC and PCAOB to set up frameworks for both the use of and evaluation of professional judgments. Professional judgments are reasonable deviations from generally accepted accounting principles. The proposal also said investors could benefit more from principles-based accounting standards, like those used by the International Accounting Standards Board, rather than rules-based standards. Lynn Turner, former chief accountant at the SEC and a member of the PCAOB advisory board, said the proposed framework is “like the Ten Commandments, and we know how well people follow those.” He added that much of what’s in the framework already exists in current auditing standards, and that the real need is increased disclosure for investors on how auditors and companies come to their professional judgments. Other advisory group members, such as Howard Johnson, former chairman of the board at the Institute of Internal Auditors, said any framework should be adopted into a formal standard and not left as a set of best practices. “You can’t audit against mush,” Mr. Johnson said. The advisory group also debated whether a safe harbor for some judgments should be allowed, with a few group members saying such a safe harbor could allow for greater potential accounting abuses. “This is a process that would be very easy to manipulate by the next Andy Fastow,” said investor advocate Barbara Roper, who described the proposed framework as “hopelessly naïve.” Another member of the advisory group, Ernie Baugh, national director of professional standards at Mayer Hoffman, praised the proposal, saying that while much of it is based on existing standards, “a lot of people don’t have common sense.”
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