Why do you think the direct method for operating cash flows is used so rarely? Should the standard setters force companies to use the direct method? Why or why not? Do you believe investors calculate their own direct method cash flows for firms that use the indirect method?
Should firms not be allowed to use non-GAAP measures, even if they reconcile the non-GAAP measures to GAAP? Why or why not? Do you believe that market participants are confused with disclosures of both GAAP and non-GAAP measures?
What do you think about the proposal to mitigate the conflict of interest that auditors have since they are paid by the firms they audit? Do you think the experiment would transfer to world of auditing financial statements? Why or why not?
What is a red flag that inventory levels are too high? What are some potential consequences of too much inventory on future cash flows and earnings? Can you name any early warning data that could alert you that inventory might grow too fast?
The IASB and FASB have been working on new lease accounting rules since 2006. Why do you think that it is taking so long to change the accounting for leases? Do you believe the new rules would be an improvement in lease accounting? Why or why not? Does it matter if most leases are off-balance sheet under current accounting rules? Why or why not?
Should the income statement be restructured in the way proposed? What are some of the pros and cons of the proposed new structure? What do you think companies would think of having to change their statements in this way?
In your opinion, is it a good idea for the PCAOB to force the lead audit partner to reveal his identity on an audit engagement? Why? Who benefits from this information? How? Who is potentially hurt? What could be some of the consequences on the lead audit partner?
If you were the CEO of Twitter, what is your reaction to the underpricing of your IPO? Why do you think it was underpriced? What could have been done to prevent the underpricing? Is there anything you could do “after-the-fact” to correct it?
Should firms be forced to disclose political contributions? Why or why not? Whom would such disclosures “hurt”? Who would benefit? How would they benefit?
J&J settled with the Dept. of Justice over allegations of marketing drugs for unapproved uses. J&J had accrued a reserve in advance. Does the settlement suggest they need to reserve more? How would you decide if so, and how much more? Does the settlement affect your view of J&J? How?
Deals in the M&A market are increasing. Name as many factors as you can that you think are driving the increase.
Carl Icahn wants Tim Cook (Apple’s CEO) to buyback $150 billion in stock, since Apple has so much liquidity on its balance sheet. Do you agree with Mr. Icahn’s reasoning? If you were Tim Cook, what considerations would you have before agreeing to buy back so much stock?
Are the banks doing anything “wrong” by releasing loan loss reserves? How would you be able to determine if it was wrong? Who might be hurt by such behavior if it is wrong?
If you were the CFO, what factors would you consider in deciding whether to hedge against price changes in commodities, against changes in interest rates, and against changes in foreign currency? Do you think investors assess a firm’s hedging program before making an investment decision?
In your opinion, should governments enact legislation to stop tax inversions and expatriations? Why? What would be some of the negative consequences of such legislation?
Samsung is being criticized by analysts for not being “shareholder friendly” and returning more cash to shareholders. Do you agree? How much cash “should” Samsung return to shareholders? Do you think whether Samsung returns more cash or not will have any affect on the share price?
Do you share the writer’s concern that Wall Street is now less attractive to top graduates? Have you changed your mind about a career in banking? If so, what would make such a career attractive again?
Do you agree with Microsoft’s plans for increasing the dividend and authorizing the share repurchase? What does this indicate about Microsoft’s growth options? Do you believe that the impetus to increase the dividend is to placate “activist shareholders”? How does one become an activist shareholder?
What does it mean to “manufacture” earnings growth via share repurchases? What is your assessment of earnings growth that is denominator driven rather than numerator driven?
