Every company has an accounting problem. It's part of doing business. You can't run a business without an accountant. And there are always problems. Look at how difficult it is for the average American to do their income taxes! Someone told me the estimated time is 26 hours for a couple who has investments.
I don't believe CSCO accounting problems would be any easier.
that perfection may not be the actual state of affairs looking ahead.
Nothing is perfect! Successful companies identify, eliminate or make improvements. And naturally, a public company will take advantage of legal tax loopholes because the company wants the public to view it in a favorable light.You think shareholders would be happy if CSCO willingly gave away their profits to the government?
JDN said the Barrron'sarticle went on and on about pooling of interests, but to his knowledge CSCO had only used this a few times and would not use it in the future,in his opinion. Perhaps it will be illegal to do so.
The SEC has put new accounting rules in place. These rules will have an impact on all companies. If you want to discuss the pooling of interests you might chat with JDN when he returns from his trip.
Also, if CSCO's accounting problems were serious, the SEC would conduct a formal investigation.
CSCO SHAREHOLDERS. I don't believe we buy CSCO shares because of the reputation of its accounting department or even, the reputation of its public relations department, which is also important because it releases the news items that we read about the company.
We buy CSCO because it is a great company. Management executes well. Earnings and revenues have been very good. Someone also noted that the return on equity has been very good as well. Still, there are always ways companies can improve their products, cut costs, etc.
In company annual reports, the CEO and CFO note what they have done to make improvements in their company, and comment on potential future problems. I've never read an annual report where the officers say that the company is perfect.
I believe every firm, like most individuals, must struggle to interpret government rules and regulations when it comes time to account for your profits and losses.
Personally, I think Barrons needed a sensational story to sell their newspaper since the only imminent news is that everyone waits for Greenspan to raise rates. And most people have heard enough about that already.
Sincerely,
Mephisto |
