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To: Alex who wrote (23194)	11/20/1998 7:00:00 AM
From: long-gone	Respond to of 116836

I found this interesting, concerning the making of the Wall street numbers. Don't believe it has been posted before. REMARKS BY CHAIRMAN ARTHUR LEVITT EARNINGS MANAGEMENT << As you may know, I recently expressed concern that the motivation to satisfy Wall Street earnings expectations may be overriding common sense business practices. In the process, I fear we are witnessing a gradual, but noticeable erosion in the quality of financial reporting.>> << Many of you, I'm sure, are just as frustrated and concerned about this trend as we, at the SEC, are. It's difficult to hold the line on good practices when competitors operate in the gray area between legitimacy and outright fraud. While the problem of earnings management is not new, it has risen in a market unforgiving of companies that miss Wall Street's consensus estimates. For many, this pressure has become all too hard to resist. Sales and income are overstated by recognizing revenue for partially shipped, unshipped or even back ordered equipment. Fiscal years are extended beyond 365 days to record extra sales -- and even sales that the company knows don't conform to what a customer ordered.>> sec.gov rh