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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Cactus Jack who wrote (2481)	7/17/2002 5:53:28 PM
From: Sully-	Read Replies (2) \| Respond to of 89467

Perhaps it had to do with the accounting changes & scads of one time charges...... You know, Pro Forma types of one time charges that most companies have EVERY quarter :-\|

To: Cactus Jack who wrote (2481)	7/17/2002 5:54:44 PM
From: Sully-	Respond to of 89467

17:50 ET Siebel Systems (SEBL) 11.74 +0.36: On call, company notes that it will slash headcount by more than 1100 jobs... Goal is to bring total headcount down to 6000... In line with many estimates... Also plans to consolidate excess facilities... Will take charge in Q3 of about $225 mln.

To: Cactus Jack who wrote (2481)	7/17/2002 7:39:55 PM
From: stockman_scott	Respond to of 89467

Corporate Reform Proposals: On the Money Or Off-base? Republicans and Democrats are stumbling over each other to show who can be toughest with corporate wrongdoers. The House and Senate have passed competing legislation calling for everything from longer jail terms and statutes of limitations to new accounting rules and oversight boards. Is this the right approach or are different tactics required? Knowledge@Wharton asked five Wharton professors for their opinions. knowledge.wharton.upenn.edu <<...Gerald R. Faulhaber, professor of management and public policy, considers the current crisis in confidence aimed at corporate America to be “much more serious than a lot of people do. All investments in all capital markets rely on trust … If you don’t have trust, then investing in the capital markets becomes a mug’s game … We all know that if you invest in Third World countries where there are no safeguards, you’re going to get taken to the cleaners.” Two factors have aggravated the situation in the past decade or so, Faulhaber adds: The compensation for CEOs “has gotten obscene” and the tenure of the average CEO has plummeted. The result is an impulse to “take the money and run.” At the same time, he says, accounting firms have come to rely more and more on income from consulting. Many accountants argue that the two roles complement one another. But Faulhaber says that auditors and consultants actually have little to do with one another, that neither group’s work is improved by the involvement of the other. In fact, he suggests, the only way the accounting firm benefits from the dual role is by exploiting the conflict of interest – pulling punches in audits to ensure a continuation of consulting business. “The auditing system in this country has failed,” he says. “It’s systemic failure. It’s one that I think threatens American capitalism.” He supports the idea of banning accounting firms from providing both services to the same clients. “It should have been done years ago. We’re not giving up anything, and we’re potentially gaining a lot.” While he has not worked out the details, Faulhaber also argues that the nature of accounting must change to put less emphasis on following a checklist of rules and more on whether the audit, in its entirety, accurately depicts what is going on within the company. Auditors should be required to be detectives, and should be liable for the accuracy of their reports, he suggests. In addition, companies should be required to change auditors every five years or so. “You get too cozy there. It’s not a good idea.” Faulhaber does not believe that making directors more accountable will prevent failures of corporate governance, as some have suggested. Part-time directors have no choice but to rely on managers for information about the company, and it is easy for managers to conceal or misdirect. Finally, he says, it is less important to establish longer prison sentences for corporate criminals than it is to make sure they are caught and incarcerated for some period, even if short. Powerful executives tend to think they are bulletproof, he notes, and nothing will deter crime better than the real threat of having to don an orange jumpsuit...>>