From the editor.

Reading a recently published book, Seeing What's Next, prompted us to reach out to the authors for an article on corporate strategy. Indeed, one of the authors, Harvard Business School Prof. Clayton Christensen, has gained international attention and acclaim for his writing about innovation. The resulting article, written by a research partner, Scott D. Anthony, with Christensen, details how executives can use the "disruptive innovation" theory to spot early signals of industry change, predict how those signals will unfold and react appropriately.

Among its many provisions, The Sarbanes-Oxley Act has required companies to establish effective procedures for would-be whistleblowers to report ethical problems or fraud. Writer Paul Sweeney found attorneys, consultants and others with a lot of good advice for such programs--and support for the idea that a whistleblower hotline can help improve organizational behavior and performance.

Following a year (2004) in which a record number of earnings restatements were made, the Financial Executives Research Foundation (FERF) and several outside academics reviewed recent restatements and reached some interesting findings. For instance, they conclude, a restatement can create situations where some revenues, expenses or net assets will never pass through a current-period earnings statement or the balance sheet--or do so twice.

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Can privacy policies be strategic? Dr. Alan Westin, a prominent privacy expert, thinks they can--but that few companies have embraced that vision. He spoke to Managing Editor Ellen M. Heffes about a variety of trends in corporate privacy, and attorney Martin Abrams offers a global perspective on privacy notice policies.

Virtually everyone in the U.S. multinational business community has been watching and talking about the slide of the dollar, especially against the euro, and its implications. One set of implications involves international mergers and acquisitions, which two attorneys at Hogan & Hartson say can be facilitated in this weak-dollar period to the advantage of U.S. companies.

XBRL (eXtensible Business Reporting Language) initiatives are going great guns overseas, with a long list of government agencies sanctioning the technology--and sometimes insisting on it. But writer Glenn Cheney finds that only a small percentage of U.S. companies have really jumped on the bandwagon, though the advantages are clear and the case for adoption is compelling.

How should audit committees operate, and how should they interact with finance? Former FEI President Philip Livingston offers a comprehensive overview of today's audit committee environment from his perspective as the chairman of two such committees.

Companies looking to relocate or expand have more choices than ever, and more localities entreating them. Tax breaks, job-creation incentives and other goodies are being pushed almost everywhere, and whether or not finance departments are central players in the site decision, they will be documenting the potential savings.

We've added to our lineup of columns to devote more coverage to issues we sense are of major interest to readers. The Treasury column, which has been an occasional entry in recent years, will become much more regular. Also, in this issue we launch a new column on private companies (see page 18) in which we will solicit different contributors to write about important issues for privately held firms, whose executives comprise almost half of FEI's membership.