Blackberry (Research in Motion) has lost almost $33 billion in market capitalization in just over one year. What are some of the ramifications of a decline of this magnitude? What are some of its causes? What would you do if you were CEO?
Municipal unions are fighting the reduction of assumed rate of returns on pension plan assets. Why? Is “using 7 percent in a 3 percent world” equivalent to hiding debt from the balance sheet? What are solutions to the problem?
Can you map out a plan using accruals that will fool the markets? If you think you can, are the markets “efficient”? And, if you implement the plan, would you have committed fraud?
Operating leases are already disclosed in the notes. So, how will capitalizing leases affect a firm’s credit rating when the credit rating agencies already consider operating leases in their credit ratings?
What factors did Morgan Stanley consider to set the Facebook IPO price of $38? Why were they concerned about the opening day’s price closing “too HIGH” (an opening day pop of not more that 20 percent)?
Why do you suppose that it is “news” that CEO pay is more closely aligned with firm performance? Haven’t pay packages always been designed to do precisely that? What factors have prevented this alignment of pay with performance up until now?
Describe the various points of view expressed on auditor rotation, private company accounting standards, international accounting standards, and integrated reporting. Who are the persons taking the various points of view, and what constituencies do they represent?
FIN 48 requires firms to accrue a liability for tax positions (such as deductions, timing of tax payments, etc.) that stand a “50/50 chance” of not being upheld on an audit. Why do firms “revile” the rule? Why did the FAF get involved in the review? How would you challenge the FAF’s conclusion that the information is useful for investors?
What is the Volcker Rule? Why is there no “schadenfreude” over the JP Morgan loss? Take one side of the argument and defend it: banks should (should not) be allowed to invest their own money.
Earnings conference calls often are filled with compliments from analysts, if not sometimes obsequious exchanges. Not this one. Why not?
Do you understand Skullcandy’s earnings announcement? What is the difference between GAAP income and adjusted income? Why did SG&A increase so much YOY? Why was the effective tax rate so low?
Here is Apple’s response to the below article about Apple’s taxation. Maybe this will help you think about your answers to the below questions.
Did Apple do anything “wrong” by “sidestepping” taxes? Regardless, should anything be changed with respect to taxation, and if so, why? And what exactly?
You’re the CFO. Where do you put your cash in light of near zero rates? What matters more: return on investment or return of investment?
Why do you think firms may be inclined to “over-disclose” in their notes to the financial statements?
Ok, let’s assume that you will fully support the professor’s position essentially to stop giving students exams, or at least “traditional” exams. So, students, should you be assessed at all? Why or why not? If so, how? Describe how the assessment would be implemented.
Why is so-called principles-based accounting (IFRS) problematic for the U.S. in light of its perceived litigiousness?
