Why do you think the FASB issued a new standard to do away with all current classifications of deferred taxes?
Why do firms try to keep dividend policies stable? If you were on the board of Goodrich, what concerns would you have about cutting the dividend?
“Should” companies be investing more in capex and R&D, rather than buying back stock? Is it really a problem? How would you determine whether it is a problem, and for whom is it one?
Do you agree with the SEC commissioner that certain new disclosure rules do not provide information useful to a reasonable investor, but rather are being required as part of political or social activism? Should the SEC require such rules?
If you were on the board of an oil firm, what factors do you consider in your dividend decision? Would you keep the dividend at the same level, or cut it?
What are some potential negative consequences of demanding that firms report some of the mentioned ESG and sustainability-type measures? Who is requiring these disclosures? Why do you think they are?
Is materiality best defined and “operationalized’ by the accounting profession or by the legal profession? If you had to write a definition of materiality, how would you proceed? What data would you need? What would your definition be?
If you were an employee at a firm who offered you stock options or additional cash as compensation, which would you choose? Why? Would the stock option compensation be, as suggested, getting paid in lottery tickets?
Is there any reason to be surprised that the debt of some major coal companies is in default? What leading accounting-based indicators might there be to have predicted this situation with the debt? Are accounting-based indicators (ratios) all lagging indicators?
If you can buy back stock to save the dividend yield, are you better off if you had to borrow the money to do the buyback? How does the deductibility of interest affect your analysis?
If you were CEO, what options do you now have to improve margins? How long can cost cutting do the trick? How would you determine the point at which cutting costs does more harm than good to grow the firm and improve margins?
If you were in charge of setting the audit fee for a client, what are all the factors you would want to consider? How would you assess the risk of a client, other than considering a weakness in internal controls?
What are some of the disadvantages of debt? What is meant by being too “dependent on increasingly fickle capital markets to alleviate liquidity pressures”? If you were the CFO of one the energy companies, what would you do? How would you try to determine an “optimal capital structure” in this new economic environment?
Passing the CPA exam is obviously doable, but . . . If you are planning on taking it (a good idea!), will you be able to relate to these stories?
Do you think your decisions would be affected and behavior change if you were a CEO that was paid “a lot” in stock options, relative to restricted stock? How? Why? Would it affect your “moral compass”?
If you were a member of the C-suite and you had news (either good or bad) that the market does not expect you to announce on an upcoming 8-K filing, how would you determine if it is “ok” for you to buy or sell your firm’s stock?
What are some of the collateral effects on companies with write-downs? Were these write-downs surprising? Why or why not? What are some of the valuation issues with respect to measuring the impairments?f
If you were targeting a firm in an M&A, how would you assess aggressive accounting practices of the target firm? How could you tell if non-GAAP accounting measures better reflect economic reality, or obfuscate it?
Do you agree that the LCM test under US GAAP is unduly complicated? If so, do you think that the proposed ASU simplifies the accounting? What would be lost, if anything, in the change?
