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Non-Tech : Tyco International Limited (TYC) -- Ignore unavailable to you. Want to Upgrade?

To: Z Analyzer who wrote (3501)	7/11/2002 2:56:21 PM
From: Howard Salwen	Read Replies (1) \| Respond to of 3770

Isn't possible that they just wanted to limit the auditing costs. A forensic analysis of a large corporation's books probably costs $5-10M. Maybe more. Their actions tell me that they want no more surprises but they don't want to waste money. About minor transgressions: How about WCOM. They are getting beaten most recently because they adjusted the reserve levels. No big deal. Reserves for bad debt, obsolete inventory and so forth are adjusted all the time. Accountants tell you what the limits are. Now, WCOM did capitalize things that should have been expensed. But, here again the right thing to do is not clear. GAAP is ambiguous and often illogical. When I ran my own company (no investors, just me) I wanted to expense everything in order to minimize taxes. But the accountants wouldn't let me. It turns out that some of the strangest things, like software development, have to be capitalized rather than expensed. In any event, the WCOM cash flow statements have not been changed since this whole thing started. They look pretty good. The press just doesn't distinguish between cash flow statements and earnings statements and are just trashing WCOM perhaps to death. What a shame.