Four Ways Companies Combat Accounting Scandals
Shareholder Value Magazine surveyed top executives of publicly held companies to help assess the prevalence of accounting scandals and the corporate response. Respondents to the survey were primarily investor relations professionals of micro cap, small cap and mid cap companies.
- Approximately half (52.1%) view the current scandals as representative of a few inevitable "bad apples," while a significant minority (38.9%) believe the public distrust is justified and view the scandals as typical of more widespread practices.
- A significant minority (16.7%) say they have been placed in a situation where they were compelled to explain questionable behavior on the part of their company.
- Almost half (42.6%) are doing something differently to improve investor confidence in their company since the scandals emerged. The four most popular remedies: more frequent investor communication (47.3%), updating accounting policies (21.2%), implementing new financial safeguards (19.9%) and modifying investor expectations (16.4%).
Analyzing the survey results, Bill Mahoney, editor of Shareholder Value Magazine, commented, "When public company insiders tell us these problems are widespread, that's a clear wake-up call. A fundamental shift in the way corporations deal with investors is required."
To discuss the survey results, as well as the steps leading companies are taking to restore investor confidence in their companies, Shareholder Value Magazine will host an interactive telephone conference on Aug. 13, 2002. For more information visit www.IRZone.com or call 1-800-531-0007.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.