FEI Telediscussions: Corporate Reporting, Internet Security.

FEI's two most recent teleconferences provided participants with a year-end corporate reporting update and, in light of the burgeoning e-economy, a discussion of Internet security. Both are available as text documents and audio files in the teleconference archive at FEI's web site, www.fei.org.

"No more poolings." That was the short answer regarding the FASB and the anticipated future of business combinations from Norm Strauss, national director of accounting standards with Ernst & Young, during the Jan. 18 conference call on corporate reporting. Strauss, who also is a representative on the FASB Emerging Issues Task Force and a member of the advisory council to the Financial Accounting Standards Forum, went on to synopsize about 25 additional accounting-related topics.

"Natural tension." There's "a natural tension between the inherent nature of the Internet and what we're using it for today, which is to conduct reasonable business with a sound fundamental system control." So said Bruce Murphy, a partner at PricewaterhouseCoopers who oversees PWC's security consulting practice focusing on e-business issues, during the Jan. 20 telediscussions on Internet security (initiated by FEI's Committee on Finance and Information Technology). Major concerns, he added, include ease of access; taking advantage of reduced costs; the speed at which transactions are conducted; ensuring that new environments integrate and interact appropriately with legacy and enterprise-wide applications; verifying that businesses are dealing with legitimate customers (and vice versa); and ensuring data privacy for online users. According to one survey, "E-commerce sites themselves are three times more likely to report a theft of data as opposed to other places in computer environments," Murphy commented. "And companies with supply chain networks are attacked 10 percent more often than others."

Following Murphy's remarks, Howard Schmidt, director of information security for Microsoft, talked about disaster recovery, physical security and developing a comprehensive information assurance program. "Any type of a program should be over-arching," he noted. "It's very, very difficult to manage small segments of security and say, 'This business unit has this piece of security, and [that] business unit is responsible for [that]."

                        What to Do About Poolings?
Eliminate poolings             (27%)
Retain for some transactions
(i.e., true mergers of equals) (44%)
Don't change current rules     (29%)
Source: 121 participants in
Jan. 18 FEI conference call
                              Into the Breach
              Has your company been victim to an information
                  security breach in the last five years?
No  (73%)
Yes (27%)
Source: 200 participants in FEI's Jan. 20
conference call on Internet security