Private company forum, Chicago.
Christine DiFabio, Director of Technical Activities for FEI, who serves as liaison to FEI's Committee on Corporate Reporting (CCR), touched briefly on a long list of standards, noting the CCR and FEI positions. Among those were: Financial Instruments--Liabilities and Equity Project, Uncertain Tax Positions, Amendments to FAS 140, Invitation to Comment: Selected Issues Relating to Assets and Liabilities with Uncertainties, Business Combinations, Conceptual Framework, Fair Value, Reporting Financial Performance, Revenue Recognition, etc.
Arthur V. Neis, Vice President, Treasurer and CFO of Life Care Services, who represents FEI on the American Institute of Certified Public Accountants (AICPA) Private Company Task Force, shared his perspectives on private-company generally accepted accounting principles (GAAP). He outlined private-company standard development worldwide, indicating a gap in definitions, and argued that financial reporting should focus on users.
In the session "Look Before You Leap: What to Know About Mergers and Acquisitions," J. Fentress Seagroves Jr., a partner in the Mergers & Acquisitions Services division of PricewaterhouseCoopers, stressed the importance of being proactive, not reactive, and becoming an "always on" company in order to be ready for opportunities.
In "Recruiting and Retention: How to do it Well," Michael Shapow, Branch Manager, Consulting Services for Robert Half Management Resources, suggested choosing consultants carefully and working with them wisely in order to get the best employer/employee fit, by aligning candidates who fit with the company culture. The main reasons employees leave, he said, is due to lack of advancement or issues with management.
Nick Bridges, Training Consultant, Development Dimensions International Inc., highlighted "motivational fit." He said we frequently try to identify people who seem to have the qualifications of a "good" person for the job. What you want is someone who meets the criteria but also feels challenged.
--Ellen M. Heffes
In "Adapting to SOX: Governance and Compliance in Private Companies," Howard E. Berkenlit from Sullivan & Worcester addressed the applicability of Sarbanes-Oxley to private companies. He discussed several provisions, among them: 1) Retaliation against whistleblowers could result in fines (and imprisonment); 2) Document destruction with the intent to impede federal agency or bankruptcy case could result in fines (and imprisonment); 3) Retirement plan administrators must provide a 30-day advance notice for ERISA Plan Blackout Periods with an explanation of reasons, effects and duration.
Berkenlit said that evolving developments impacting private companies include areas such as M & A, investors and pre-initial public offering (IPO) planning, lending and insurance. Specifically, with regard to M & A and IPOs, public acquirors are scrutinizing private targets' disclosure controls and internal control procedures.
He advised private companies to establish a formal code of ethics and whistleblower policies. Another best practice is to implement and periodically update a document retention/destruction policy and make sure employees understand both the policy and the consequences for not following it.
Another session examined "XBRL: What is it and Why Should you Care?" It was presented by Liv Watson, vice president of XBRL Strategies for Edgar Online Inc. and Dan Roberts of Grant Thornton, who serves as the chair of XBRL U.S. Roberts labeled XBRL "Google for your business." He said that XBRL will eventually allow financial statement users to search financial reports the same way an individual uses online search engines to surf the Internet. Also, with XBRL, private companies would be able to provide bankers more timely information that may reduce the risk assessed to their debt.
--Cheryl de Mesa Graziano
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|Title Annotation:||Financial Executives International|
|Author:||de Mesa Graziano, Cheryl|
|Date:||Dec 1, 2005|
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