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USA Inc opens up, but fails to keep its date with the taxman
New York, July 21: Corporate America has been disclosing more financial information since being roiled by a series of accounting scandals last year, but in one critical area progress has been slow.
New York, July 21: Corporate America has been disclosing more financial information since being roiled by a series of accounting scandals last year, but in one critical area progress has been slow.
Try to find both a balance sheet and a cash-flow statement on the same day a company issues its earnings press release and you may be out of luck. Investors still often have to wait three or four weeks after the profit and loss table is released for these figures — which eventually have to be released in public filings with the SEC. And this isn’t a trifling matter — some securities analysts argue that cash-flow statements and balance sheets are needed to make sense of the earnings figures.
They can also sometimes provide the earliest clues to accounting shenanigans. Neither is it just obscure penny stock companies that don’t provide all three key tables. Some of the most respected names in American business are failing to make timely disclosures.
For example, Johnson & Johnson, one of the world’s largest health care companies, does not issue a balance sheet or a cash-flow statement with its results announcement. And the conglomerate General Electric issues a press release without the two tables, though it produces a balance sheet and elements of the cash-flow statement in a slide show presentation for analysts and investors. Some accounting experts say tardy disclosure of such information is a red flag that should discourage investment.
“If you are investing on the back of an earnings release with none of that information it is like your eyes are closed,” said Charles W Mulford, an Atlanta-based accounting professor and joint author of a book on deceptive accounting. Mr Mulford argues that many of the accounting scandals of recent years would have surfaced sooner if investors had closely examined cash-flow statements. Bureau Report
They can also sometimes provide the earliest clues to accounting shenanigans. Neither is it just obscure penny stock companies that don’t provide all three key tables. Some of the most respected names in American business are failing to make timely disclosures.
For example, Johnson & Johnson, one of the world’s largest health care companies, does not issue a balance sheet or a cash-flow statement with its results announcement. And the conglomerate General Electric issues a press release without the two tables, though it produces a balance sheet and elements of the cash-flow statement in a slide show presentation for analysts and investors. Some accounting experts say tardy disclosure of such information is a red flag that should discourage investment.
“If you are investing on the back of an earnings release with none of that information it is like your eyes are closed,” said Charles W Mulford, an Atlanta-based accounting professor and joint author of a book on deceptive accounting. Mr Mulford argues that many of the accounting scandals of recent years would have surfaced sooner if investors had closely examined cash-flow statements. Bureau Report