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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: AK2004 who wrote (168997)	8/3/2002 2:13:09 AM
From: BelowTheCrowd	Read Replies (3) \| Respond to of 186894

I don't think there's anything in this that suggests Intel in particular has any accounting issues. I do think that as a matter of corporate culture, they are much more reluctant to discuss internal procedures and processes than other companies are. This is just one expression of Andy Grove's famous paranoia, but it is also reflective of the fact that Intel does a lot of things VERY differently from other companies and prefers not to give out too much information about how they do them. A good example is product costing. Intel has a cost estimation and control mechanism that is second to none in the industry but is also completely unique. I am quite familiar with the systems and methodology and understand why they would prefer to keep them at least somewhat secret. Their cost system gives them a much better real-time view of product costs than anybody else in the industry has, and is a part of the reason they are one of the most efficient (if not the most efficient) manufacturers out there. It is not surprising that they might be reluctant to discuss in great detail how they arrive at the Cost of Goods Sold, and how the number might have changed had they used some other methodology. I think most of the opposition to this comes from companies who simply prefer not to discuss how they came up with their estimates for pension liability, or what specific methodology they were using to estimate liability for returns, future warranty costs, and even simple stuff like how they accrued vacation pay (XRX got bitten hard when they played around with that particular reserve account). Many would prefer to continue living in a world where they could fill in any number they wanted and have to show very little to justify it. I suspect that Intel's primary objection is due to the "proprietary process" issue, not due to the other stuff. Seems a long stretch to assume that there is necessarily fraud going on. mg