Herbalife misstated a pro forma measure that it created. In your opinion, should such disclosures (pro forma metrics) be regulated or audited?
EBBS, or earnings before the bad stuff, was cumulatively + $45 billion in energy sector in 2015. On a GAAP basis, earnings totaled a loss of $48 billion. Which reflects “reality”? Why? What should be done about this disparity, if anything?
Do you think allowing multinationals to report in IFRS would weaken or strengthen financial disclosures? How would you test your hypothesis?
GE’s CEO missed a performance target and therefore did not receive all of his performance compensation, which was in the form of stock awards. In your opinion, should the pay have been in the form of stock options, instead of stock awards (restricted stock)? Why or why not?
Moody’s downgraded Anglo American’s debt to “junk.” Is there an obligation for firms to give prospective disclosures that would be an advance warning to such potential actions by rating agencies? If not, in your opinion, should there be? Are there indicators in the financial statements? If so, what are they?
Why do you think Boeing’s accounting is being “probed” if the accounting complies with GAAP? Have you heard of “program accounting” before this case? Could you explain it? Should firms be investigated if good faith estimates prove to be, in hindsight, inaccurate?
Western Union’s earnings were impacted by the strong dollar. If you were on a job interview, and were asked, could you explain how FX translation affects revenue?
In your opinion, are capex budgets leading indicators of firm (and economy-wide) performance? Are they required disclosures for public firms, and if so, do you know where they are disclosed in the SEC filings?
If you were CEO of a small, community bank, what would you tell Russ Golden and Tom Curry re: the proposed accounting standard that would require you to book expected loan losses over the life of a loan on the day you make the loan? Why is this accounting standard being proposed?
If you were CFO, how much control do you think you have over you own cost of capital? What would you try to do to lower it?
The IASB has passed a new rule that will require most leases to be capitalized. If investors are “reasonable” and if markets are efficient, who cares where the lease information appears? In your opinion, does the new rule call into question these assumed attributes of investors and markets?
What would you do as CEO if you have “large” cash holdings? What besides investment opportunities would affect the decision? What role does the tax code play?
Banks have to record the change in fair value of their own debt in income, under the fair value option. Why is this a “headache”? Does it matter if the change is recorded in income or other comprehensive income? Why or why not?
Many firms have the cash but CFOs are reluctant to spend it on maintaining or upgrading infrastructure. Why? If they don’t spend it, what pressures will they get from competing interests? If you were CFO of one of these companies, what would you do?
Bed Bath and Beyond’s results show the strain of competing with on-line platforms, such as Amazon. Does this surprise you? If you were the CFO of BBBY, would you “warn” via a press release if you anticipate that the results would “disappoint”? Why or why not?
Under what circumstances would VW accrue a liability for the emissions issue? How would the firm measure the amount of the contingent liability, if it were to accrue one?
Shell has lowered its planned capex by $2 billion to $33 billion. Is this a material amount? Do you think the stock market reacts to such disclosures when they are made?
If you were a the lead audit partner in charge of a corporate audit, would you mind being named as such in a new disclosure form from the PCAOB? Why or why not? Does is make any difference that this disclosure is not made part of a regulatory filing with the SEC?
Would you want to serve on a board of directors? Why or why not? Do you know how much board members are paid? Do you know how you could find out? (Hint: Def 14A)
