Ronald Kiima, CPA

GLG News by Ronald Kiima, CPA, President

Bush Nominates Two Democrats to SEC: More of the Same is Likely

March 31, 2008

Analysis of:White House to Tap Two Dems to SEC | www.cfo.com

Will President Bush's recent nomination of two Democrats to the SEC make it more investor friendly?  Not likely!

2007 Accounting Error of the Year: Depreciation and Amortization

January 2, 2008

Analysis of:Securities Suits Spike in 2007 | www.cfo.com

The subject article provides some interesting insights into the upward reversal in the number of securities class-action lawsuits filed during 2007.  Given such, I thought it might be fitting to offer my personal insights into what I continue to believe is the most common, yet rarely noticed, accounting error. As in prior years, inappropriate depreciation and amortization methodologies once again gets my nomination for Accounting Error of the Year.  Unfortunately, absent some unforeseeable improvement in oversight by corporate auditors and the SEC, I suspect that I will again be making the same nomination this time next year.      

SEC Schedule II - Visibility into the Integrity of Reported Results

September 11, 2007

Analysis of:SEC Schedule II - Visibility into the Integrity of Reported Results | tinyurl.com

Few other disclosures give as much visibility into the integrity of a company’s reported results like the SEC’s Schedule II – Valuation and Qualifying Accounts. Unfortunately, despite such schedule being required of most public companies, few companies seemingly fully comply. The absence of otherwise required data, or worse, the outright omission of the schedule in its entirety, should raise investor concerns that a company may be engaging in some degree of inappropriate earnings management.

US GAAP: A Foreseeable Death

March 8, 2007

Analysis of:One Accounting Standard for All? | www.cfo.com

This article raises the question as to whether the U.S. Securities and Exchange Commission (“SEC”) will ultimately mandate that domestic public companies report their financial results pursuant to International Financial Reporting Standards (“IFRS”).  I believe, as a former SEC Assistant Chief Accountant who had oversight responsibility for numerous foreign private issuers, that the answer is an unequivocal “yes.” 

Grant Thornton Supports Lease Accounting Overhaul

December 29, 2006

Analysis of:Grant Thornton LLP Supports Review of Lease Accounting Rules as FASB/IASB Working Group is Named | home.businesswire.com

 

If they do not already do so, analysts need to begin proactively adjusting their models to reflect the assets and liabilities underlying “operating” leases onto the books of the companies they follow.  It is no longer a question as to whether many current operating leases will go onto the books, its merely a question of when and how many!

Chinese Alternative to Sarbanes-Oxley: Ready, Aim, Fire!!!

December 29, 2006

Analysis of:Accountant Gets Death Penalty | www.cfo.com

Given the endless belly-aching by Corporate America and its agents about how draconian Sarbanes-Oxley is, even in the midst of a seemingly never-ending stream of accounting scandals, I thought that a little comical perspective may be in order.  With that said, I submit this article which sets forth the Chinese alternative to Sarbanes-Oxley!

SEC: Merry Christmas to Small Public Companies

December 29, 2006

Analysis of:PCAOB Proposes AS2 'Repeal' | www.cfo.com

 

The Public Company Accounting Oversight Board’s recent dismantling of AS2, its guide for auditors in their assessments of corporate internal controls over financial reporting, at the persistent urging of SEC Chairman Christopher Cox is further evidence of President Bush’s underlying agenda to disembowel Sarbanes-Oxley (“SOX”).  Unfortunately, the consequences of such disembowelment will likely be disproportionately borne by investors in smaller public companies.   

Apple: Jobs in Jeopardy?

December 29, 2006

Analysis of:Apple stock on wild ride but Jobs job looks safe | biz.yahoo.com

 

Anonymous but supposedly knowledgeable sources cited in recent news articles assert that premeditated fraud was involved in the granting of certain stock options at Apple.  With such assertions once again comes the speculation as to whether Steve Jobs will survive Apple’s stock option scandal.  As a former Assistant Chief Accountant with the SEC’s Division of Corporation Finance, this posting attempts to provide guidance to those attempting to assess the situation. 

VITESSE vs. KPMG?

December 27, 2006

Analysis of:Vitesse Explains Firing of KPMG | www.cfo.com

Vitesse had previously attributed, without any further elaboration, its termination of KPMG to a “lack of independence” which certainly raised a few eyebrows given the extensive prohibitions of Sarbanes-Oxley. As addressed in this article, Vitesse has now clarified that such “lack of independence” is solely prospective in nature given that it is considering legal action against KPMG apparently for failing to detect the various improprieties underlying its now acknowledged “accounting train wreck.”

AUDIT COMMITTEES: FORM OVER SUBSTANCE

November 30, 2006

Analysis of:Missing: Audit Committee Accountants | www.cfo.com

This article sheds much needed light upon what I believe to be the most pervasive and significant internal control weakness among public companies…that being the absence of current and relevant technical accounting and financial reporting expertise on audit committees. As an audit committee truly serves as the last line of defense to the dissemination of erroneous or fraudulent financial reporting, it is imperative that analysts be more attentive to the technical qualifications of its members.

APPLE: JOBS KNEW ABOUT STOCK OPTION BACK DATING

October 9, 2006

Analysis of:Apple Computer, Inc.'s Form 8-K dated October 4, 2006 | www.sec.gov

Apple Computer today (October 4, 2006) acknowledged that its Founder/CEO Steve Jobs was aware of certain instances of stock option backdating prior to fiscal 2003. While likely to be sanctioned by the SEC, I currently believe, as a former SEC Assistant Chief Accountant, that Jobs will likely be able to retain his director and officer roles.

BARNES & NOBLE – STOCK OPTION BACKDATING INVESTIGATIONS

August 30, 2006

Analysis of:DOJ Subpoenas Barnes & Noble | www.cfo.com

Barnes & Noble acknowledges that it is the subject of civil and criminal investigations of possible stock option backdating violations by the U.S. Securities and Exchange Commission (“SEC”) and U.S. Attorney for the Southern District of New York (“DOJ”), respectively. Any stock analysts that follow Barnes & Noble must hope for the best but prepare for the worst!

KB HOME – STOCK OPTION BACKDATING INVESTIGATION

August 30, 2006

Analysis of:SEC Probing KB Home | www.cfo.com

KB Home acknowledges that it is the subject of a civil investigation of possible stock option backdating violations by the U.S. Securities and Exchange Commission (“SEC”). As with similar stock option backdating investigations of other companies, the SEC’s investigation will likely trigger a corresponding investigation by the U.S. Department of Justice (“DOJ”). Thus, any stock analysts that follow KB Home must hope for the best but prepare for the worst!

MOLEX: Not Again!

August 21, 2006

Analysis of:Molex Executives Agree to Repay Gains on Options | online.wsj.com

Molex’s recent admission to misdated stock options would seem to indicate that its corporate governance and internal controls still leave much to be desired.  Accordingly, stock analysts need to seriously look beyond the metrics! 

SEC BARS MARTHA STEWART FROM BOARD ROOM & CEO ROLE

August 7, 2006

Analysis of:Martha Stewart and Peter Bacanovic Agree to Settle SEC Insider Trading Charges | www.sec.gov

Among other civil sanctions imposed by the SEC, Martha Stewart is barred for five years from serving as a director, CEO or CFO for any public company, including Martha Stewart Living Omnimedia Inc. (NYSE: MSO).

OPERATING CASH FLOW MANIPULATION VIA ACCOUNTS PAYABLE

July 28, 2006

Analysis of:Fast Payments Hurt Tech Firm Cash Flows | www.cfo.com

Accounts payable practices have served as the most commonly used legal means of steering into (i) the cash and cash equivalent balance to be reported in a pending balance sheet and/or (ii) the cash flow provided by (used in) operating activities to be reported in a pending statement of cash flows. Analysts must be attentive to this long-standing practice of “window dressing” and adjust for it accordingly in their respective models.

SEC LIKELY TO PASS ON PAST INCIDENTS OF STOCK OPTION SPRINGLOADING

July 24, 2006

Analysis of:Speech by SEC Commissioner Atkins:Remarks Before the International Corporate Governance Network 11th Annual Conference | www.sec.gov

As a former Assistant Chief Accountant in the SEC’s Division of Corporation Finance, I have expressed publicly over the last few months my belief that it is “more likely than not” that the SEC will substantially pass on historical incidents of stock option springloading. The recent public comments of SEC Commissioners Glassman and Atkins seemingly validate my suspicion that they will align with Chairman Cox, as a Republican majority voting block, and opt for a prospective remedy to springloading.

MANY “OPERATING” LEASES TO GO ON THE BOOKS…ITS ABOUT TIME!

July 20, 2006

Analysis of:Up for Overhaul: Lease Accounting | online.wsj.com

If they do not already do so, analysts need to begin proactively adjusting their models to reflect the assets and liabilities underlying “operating” leases onto the books of the companies they follow. It is no longer a question as to whether many current operating leases will go onto the books, its merely a question of when and how many!

Directors' Wallets Increasingly At Risk!

July 7, 2006

Analysis of:Mercury Gets Warning of Possible Charges | online.wsj.com

As a former Assistant Chief Accountant in the SEC’s Division of Corporation Finance, I believe that members of the boards of directors of U.S. public companies have always been potentially at risk for civil sanctions. The real news is that beginning with Enron the SEC has increasingly insisted as part of any settlements with directors that they agree not to request indemnification from the company or its insurers for part or all of the imposed civil monetary sanctions.

Long Overdue Tightening Down on Loss Contingency Recognition

May 9, 2006

Analysis of:More Lawsuits May Go on the Books | www.cfo.com

Should the FASB ultimately adopt either of the two cited approaches aimed at obtaining more timely and forthright financial statement recognition of loss contingencies, numerous public companies will finally be required to remove their rose-colored glasses and provide a more realistic and transparent accounting for their various loss contingencies (e.g., lawsuits, environmental remediation exposures, etc.). And, for certain companies operating in higher-risk industries (e.g., chemical, mining, medical, tobacco, etc.), the implications may be comparable to having to fully recognize their pension liabilities.

Page : 1 2 Next1 to 20 of 22