In the comments a few days ago, Steve asked me about some corporate accounting issues I'd mentioned while speaking in San Diego.
The big guys are trying to repeal the act… and for good reason, I suppose. The Big Three Accounting agencies are forcing companies to get crazy by being over-demanding — a kind of reaction to the previous laxness of the industry.
To give you an example of how crazy it can get, I heard a good anecdote
playing golf in Florida recently. Sometimes when I'm on the road I
have a couple of days in between east coast appointments, and since
it's not enough time to go home and then come back, I just find a cozy
hotel and goof off.
I played golf with an exec from a sizable public company that just got
hammered by S-O. He said that they had to spend $270,000,000 to
comply. This involved the complete restating of the last 4 years of
their accounting. The result was they found they had overstated
revenue by less than $3 million. Amazing. They were forced by their
CPA firm to spend an insane amount of shareholder money to basically do
nothing useful on behalf of those same shareholders. This is, of
What we want to keep are the requirements that public companies provide
zero information to their friends that they don't also provide to all
the rest of us.
So when you write your congressperson, make the distinction. We want
completely transparent info from them, but we don't want them spending
our money to do stupid and unnecessary accounting.
Now go play.
Phil Town is an investment advisor, hedge fund manager, 3x NY Times Best-Selling Author, ex-Grand Canyon river guide, and former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.