Judgment Day

www.enterpriseeconomy.com ^ | 08-14-02 | charles oliver

[john bell hood]

After almost a year of accounting scandals, plummeting stocks and disgraced corporate executives comes what many hope, and some fear, will be a day of reckoning.

By Aug. 14, the chief executive officers and chief financial officers of almost a thousand of America's largest corporations must swear to the accuracy of their company's books to the Securities and Exchange Commission. If all goes as planned, those declarations should reveal the true state of corporate finances and, at the very least, remove some of the uncertainty that has spooked the stock markets.

But some analysts fear that the new requirements won't result in a more accurate picture of corporate finances. In fact, they fear that this mandate, and other requirements recently approved by Congress, could just increase the uncertainty faced by big corporations and those who invest in them.

Excerpt. Rest of article.

[john bell hood]

I agree that what the market needs is accurate information. But the fraud bill passed recently does little to guarantee more accurate information. In fact, it may just create incentives for new types of "inaccuracies."

[Tauzero]

"remove some of the uncertainty that has spooked the stock markets"

Uncertainty doesn't spook markets. Losses do.

Nobody is interested in investments that suffer a long series of consistent, stable, negative returns.