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April 11, 2013

Comments

James Ulvog

Oh, forgot to include in the consequences seeing his name on the front page of the Wall Street Journal and Los Angeles Times, and having every business writer in the country talking about how what a bum he is.

James Ulvog

Here’s what I meant to say before the preceding comment –

If the possibilities of losing your license, losing your job, going to jail, financial destruction, and spending months in depositions and hearings don’t motivate a CPA to doing a good job, seeing your name on the opinion page won’t have any impact at all.

david k waltz

Jim,

I am not sure that the consequences of this event entirely translate to the broader context.

If the market perceives that what has occurred is not indicative of inaccurate financials, then the price response should be muted, even though insider trading rules have been violated, as valuations based on the numbers are not suspect.

If the reports were pulled because they, as well as ones prior, are inaccurate due to auditors being 'in the pocket' of the firms, one is likely to see a more dramatic reaction, as there is no longer confidence in the numbers and consequently any valuation methodology that relies on them.

I was in Asset Based Lending for a number of years, and independent valuations, financials, etc. are highly valued as they provide objective (at least relatively) information which helps to manage what would be very risky loans if this type of insight was not available.

In any "data integrity scenario" independence should be valued, as it provides a different perspective which one can use to "triangulate" or compare to the perspective of the company.

In this case data integrity was not the issue, merely the dissemination of that data.

Note: David -- thanks for this. Assuming your position for the sake of discussion, does it not indicate the dysfunctionality and need for change in an independence structure unable to differentiate explicitly between "data integrity" and other scenarios? And, by the way, might it not be premature based on information disclosed to date under this dysfunctional system, to leap to the inference that "data integrity" is not involved?
Jim

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  • © 2007-2019 James R Peterson Special thanks: Francine McKenna. Always with love: Kat and Julie. In memory: Bob White, Stuart Kadison