How can the change in the accounting for deferred tax assets (and how they are used in calculating capital ratios) improve the balance sheets of banks in Spain and Italy? Should the accounting be changed? What is the downside?
AT&T has received approval to put $9.5 billion of its preferred stock into its defined benefit pension plan, in lieu of cash. How does this help AT&T? What would be your reaction if you were a pensioner and had worked at AT&T? What would be your reaction if you were an AT&T stockholder?
Do stock repurchases and a stock splits give different signals about a firm’s future? Do either of these change the underlying economics of the firm? If so, how?
If you were Tim Cook (CEO of Apple), how would you respond to Mr. Icahn’s effort to persuade Apple to increase the share repurchase program? How would you assess the usefulness of activist investors, such as Mr. Icahn, in improving the management of firms?
Why do you think Steve Ballmer announced his resignation as CEO of Microsoft? Why do you think Microsoft has agreed to appoint an activist investor to its board of directors? Name a few ways in which these governance changes will be manifested in future financial results (such as earnings, cash flows) and stock price.
Do you think the managers of public pension funds should make investing decisions to further social policies or to maximize returns to the funds? If you were the chief investing manager for a fund, what would guide you in your investing decisions?
Why do you think there has been so much turnover at the SEC? Would such a position as a regulator interest you? What skills do you think you would need to get a job there?
Congress compelled the PCAOB to back off the proposal to require auditor rotation. Why? Do you think Mr. Pozen’s idea of requiring a request for proposal (RFP) every 15 years is a good one? Why or why not? What problem is it supposed to address?
Why do you think the PCAOB wants to change the auditor’s report? Who would benefit from knowledge of the “critical audit matters”? How would they benefit? What are potential downsides to requiring auditors to report such information?
What exactly is the problem with equity research analysts’ involvement with bankers who want to underwrite an IPO? Who gets hurt by this relationship between the analysts and the bankers? What should be done to alleviate the problem?
Why do stock prices jump even when a firm (such as Telsa) reports a loss? What role does “expectation” play in stock prices? Do you think the market reacts more to GAAP results or non-GAAP results? If you think the latter, what does this suggest about the relevance of GAAP?
Do you support the authors’ argument that a federal insurance policy for pensions for bankrupt cities is a good idea? What is your opinion about the potential hazard of cities unloading their pension burdens should such a backstop become a reality?
Would you make an investment decision based on the pay ratio of CEO pay to that of the average worker? Why or why not? Who (else) might find the pay ratio useful? Why?
If you were a mutual fund manager, how would you determine which IPO shares to buy? Why do you think investment banks have the stated rules for allocating IPO shares? Go to retailroadshow.com and critique a road show of a firm that is about to IPO.
Have you ever read an audit opinion letter? If so, did you understand it? Do you know what “present fairly,” “reasonable assurance,” “material misstatements,” and other such phrases really mean? What do you think about re-doing the audit opinion letter in the way proposed? Would the proposal make the letter easier to understand or more useful?
Who do you think is responsible for the unfunded pension liabilities in several major municipalities, like Detroit? What would you propose be done about the unfunded liabilities? Do you believe that accounting measurement and recognition standards have played a part in masking the severity of the problem? In bankruptcy, how would you decide which creditors should be paid?
Do you believe some executives are “overpaid”? How would you measure overpayment? Do you believe that proposed “pay gap” disclosures would lead to beneficial changes in pay practices? How?
What is your opinion about corporate insiders selling their firms’ stock before a bankruptcy filing? Should there be changes in laws governing insider sales?
If they “have it all,” why do execs commit fraud? Do you agree with the arguments presented in the article?
So, the pay for top 200 CEOs climbed by 16% from 2011 to 2012. Why? In your opinion, what should pay packages be linked to that is different from what they are currently? Or, is the current (average) pay/performance linkage acceptable?
