Do you think that Hyundai will accrue a contingent liability for the false mileage claim? Why or why not? Assuming they do, what would the “journal entry” be? How do you think investors will react to the false claim?
What are some implications of federal tax policy and the allocation of capital? What suggestions would you have for politicians?
There was tension and controversy about whether the FASB should also be given the task of standard setting for private companies, in addition to public companies. Do you believe the processes and players, just put in place, will be responsive to private companies’ concerns?
Is it necessary to converge US GAAP and IASB? Why or why not? Is it necessary for the two standard setters to have a good working relationship? Why or why not? Your best guess: where will we be in 5 years? Where we are now? Converged? Other?
Why do you think it was “necessary” for the IFRS supporters to “push back” against the SEC report on IFRS? How did the push-back address the issue of the cost of conversion?
Can you identify at least five differences between “model” U.S. GAAP financial statements and “model” IFRS financial statements? Would any of these differences affect your assessment of a firm?
What’s the threshold that banks need their ROE to hit? Why do analysts and investors claim this is “the magic number”? What are ways to hit this magic number? Do banks have incentives to do so?
The CEO of Citi suddenly resigned. Is there sufficient evidence to conclude that boards are “taking charge”? Is it desirable for boards to be more assertive? Why or why not?
How do you think releases of loan loss reserves would affect banks’ stock prices? That is, do you think investors consider these releases to increase the value of the firm? Why or why not? If so, how?
Why do firms (sometimes) blow the whistle on themselves? How can a firm in one country be assured that firms in other countries would investigate their own breaches of the FCPA?
U.S. multi nationals often leave foreign profits overseas to avoid U.S. taxes. Should those profits and cash flows be identified by firms? Since these are “permanently reinvested” overseas, would you change your opinion of the firm’s value? Why or why not?
Should sustainability standards be promulgated and should firms be required to adopt them? Should they be audited? Who benefits from such disclosures? Would these disclosures affect decisions you make about a firm? How?
Do managers of firms have a fiduciary responsibility to shareholders to minimize the tax burden? Why or why not? Do you agree with Senator Levin that the tax avoidance efforts of Microsoft and other firms are “shenanigans”? If so, who is to blame, the firm or those who write tax law?
Firms can choose to mark to market their own debt. However, the resulting gains and losses were counterintuitive. Does the new rule that re-labels gains and losses as “other comprehensive income” help users? If so, how? If not, why not?
What financial evidence is used to argue that H.P. is struggling? What advice would you give Whitman? How would your advice manifest itself in improved financial results?
Name several of the variables that have contributed to the $1 trillion underfunded public pension plans. If you had the power to “dictate” a solution, what would it be?
How do carbon-emission credits control pollution if a firm is able to buy unlimited credits to pollute? Who ultimately pays for these credits? Is it possible for California to prevent the pollution emitted in surrounding states? What do you think the journal entry would be for the purchase of carbon credits?
Should at least 40% of members of boards of directors be women? Why or why not? Should companies be forced to appoint more women directors? Why or why not?
An activist investment fund has increased its ownership of Office Depot to just over 13%. Is this sufficient to exert significant influence? Control? Why would the fund focus on cutting expenses to increase profitability? How might this strategy affect future sales and profitability?
