If you were the CFO of a publicly traded firm, what are some of the considerations you would make in determining whether to disclose non-GAAP, pro forma measures to shareholders and other constituents? Give an example of a non-GAAP measure that you think would be appropriate for, say, a retailer; a manufacturer.
The lease accounting saga continues with no agreement in sight. If you were on the FASB or the IASB, whom would you consider the main constituency for any new rules? Shareholders, analysts? Others? How would this constituency affect your standard setting decisions? What does the analyst community want (according to the article)?
What is your opinion about the legislation to exempt small companies from XBRL? What are the arguments on both sides of the issue? How would you have voted on the bill if you were a member of the U.S. congress? Do you believe the intended effects of the bill will materialize?
Given the diversities and complexities around the globe (cultural, religious, political, among others), how likely is it that a single set of financial standards, used globally, will be successfully achieved?
Radio Shack will close up to 1,100 stores. What are the ratios that may have predicted store closings? What sort of accounting event would require recognition of the cost of the store closings? What future results (on future financial statements) do you think will be affected by the store closings?
Should the Financial Accounting Foundation (the FASB’s parent organization) make the $3 million payment to the IASB? What are some of the ramifications?
What is DuPont doing with the cash that it does not have to use to fund the pension plan assets? If you were the CFO, what would you do if you found yourself with “freed-up” cash? What is the expected effect on pension funded status from the new mortality tables from the Society of Actuaries? What are some other considerations before spending the cash?
Describe some of the ripple effects of changing lease accounting (where operating leases would be capitalized). Should the standard setters take any of these effects into consideration when debating the new lease standards? Why or why not?
Why do you think Exxon has resisted a write-down? Are there other public disclosures that would let investors assess the values on these assets so they could make the adjustments themselves?
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?
