PRESIDENT GEORGE W. BUSH Message Board

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Politics : PRESIDENT GEORGE W. BUSH

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To: Zoltan! who wrote (226757)	2/13/2002 12:46:25 PM
From: DMaA	Read Replies (1) of 769670

MSFT's "investment" in Washington politics really isn't paying off. Now the SEC is attacking them for trying to hide profits: Continuing SEC Probe of Microsoft Seeks Details on Understated Results By REBECCA BUCKMAN Staff Reporter of THE WALL STREET JOURNAL While Enron Corp. gets raked over the coals for allegedly inflating profit, federal securities regulators continue to investigate a very different accounting question about Microsoft Corp.: Did the software company improperly hoard cash in some quarters during the 1990s, making profits appear smaller than they actually were in those periods? The continuing Securities and Exchange Commission examination of Microsoft's accounting was first disclosed by the company two and a half years ago, and many industry analysts say they aren't concerned about it, even with the recent publicity surrounding Enron. The issue at Microsoft "was one of really being too conservative" in accounting for certain revenue, said Rick Sherlund, who follows Microsoft for Goldman Sachs Group Inc. "It's the opposite we're concerned about -- companies that are too aggressive in revenue recognition." But the SEC is still concerned that Microsoft may have set up an accounting system that held back revenue in the form of certain cash reserves during some quarters, and then applied the reserves to future quarters to smooth out earnings, people familiar with the matter say. That practice could be construed as misleading to investors. Although the case is extremely nuanced and has been going on for years -- leading some to speculate that it could be difficult for the SEC to bring charges -- the investigation is active, a person close to the matter said. . . . online.wsj.com

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