What are some of the negative implications of the concentration of audit services in so few audit firms? Should anything be done about it? Why or why not?
Which credentials will you need (CPA, CMA, CFA, CIA, CGMA, etc.)? Is credentialing more important than your degree? Why or why not?
What are some of the reasons so many firms have increased dividends and share repurchases? What are some long term implications of this?
If you were a C-suite exec, would you want your bonus calculated on GAAP results or pro forma results?
Tiffany’s sales were down for the quarter, and management warned that earnings for the current quarter would be worse than previously predicted. Are managers required to give such warnings? What are the consequences of not providing them?
Certain firms have large amounts of cash virtually trapped overseas? Why “can’t” they bring it home (to the U.S.)? How much debt can they reasonably issue in lieu of bringing the cash home? What are some of the consequences of issuing so much debt?
The SEC is (again) planning to crackdown on non-GAAP disclosures. How will they do that? Will firms simply stop using them? Will the SEC give an approved list of non-GAAP disclosures? Is GAAP the “problem”?
If you are interested in a career as a CFO, do you think you can add these dimensions to your resume?
Do you think the proposed goodwill impairment test will result in major changes in the magnitude of goodwill impairment charges? Will it matter to the capital markets if this proposal is passed?
Do you believe the author that capitalism is in crisis? Do you have counter arguments to the “evidence” (such as money spent on share repurchases)? That is, is it reasonable to assert that share buybacks indicate the system is in crisis?
Do you think the proliferation of non-GAAP measures is due to the accounting standards requiring firms to provide meaningless data to investors? In other words, are the accounting standard setters themselves responsible?
Can you explain currency neutral revenues? Are firms required to give effects on revenues of FX changes? If so, where? What can firms do to counter the effects of FX on top line?
Do you think the new revenue recognition standard will open the door to financial shenanigans, given the new focus on judgment and broad principles? How would you be able to tell if this is the case? How will the SEC monitor revenue recognition?
Can you follow Fitbit’s numbers reported in the article and in the 8-K filing? The 8-K Filing is below in the next entry.
Fitbit’s 8-K (click on Ex. 99). Try to follow the numbers mentioned in the above article. What’s driving the reduced profitability?
Most firms give some non-GAAP measures in their 10-Ks. If you are the CFO or Controller or General Counsel, what steps would you take to protect yourself and the firm against an SEC enforcement action re: improper non-GAAP disclosures?
Do you think that P&G’s CEO should have given specifics re: $10 billion in proposed cost savings? What are the benefits of being specific? What are the costs? What are some ratios that might be affected by costs savings? How might the firm’s share price be affected?
The issue of whether firms should be allowed to give non-GAAP (or pro forma) numbers continues. How would you design a disclosure system that would accommodate pro forma numbers so that critics of the practice would be satisfied?
