Scott Leibs, CFO Magazine
June 1, 2008

adding to the prior comment

Not only is it the fault of the rule maker if the rules are followed and the product makes no sense, it is also the fault of the rule maker if the rules are so complex that they can't be understood and followed with reasonable effort.

If a person makes a reasonable effort to compute revenue according to the rules, but doesn't, it is likely the fault of the rule maker for having complex rules.

Posted by Roland Cycan | Jun 27, 2008 9:51 AM ET

the fault of the rule maker

GAAP long ago drove preparers out of the mindset of preparing meaningful financial statements. Now the preparers just try to follow, or in some circumstances, to game, a complex set of rules, with more focus on following the rules than on whether the product makes sense. In this circumstance, the responsibility for whether the product makes sense is defaulted to the writer of the rules. If the rules are followed and the product is meaningless, it is the fault of the rule maker.

Posted by Roland Cycan | Jun 27, 2008 9:48 AM ET

Question Authority

How does one go about questioning the decisions of internal leaders who may have reason to make the financial statements look better under IFRS?

The Federal Government through OSHA is unable to enforce Sarbanes-Oxley laws as it is now. Whistleblowers will be crucified under IFRS even more so than they are today.

Posted by Joe Jefferis | Jun 9, 2008 11:10 AM ET

Who said they should?

The fundamental rule is that financial reports should be readable by people who are prepared to put the effort in to understanding them and who have a basic knowledge of business ... I am paraphrasing.

Hence, financial reports are not for everyone and if you are an investor and don't follow what you read, there are many finance web sites now where virtually every single financial report is taken apart and put back together again.

You might also need a financial advisor to help!

Duncan

Posted by Duncan Williamson | Jun 3, 2008 7:16 AM ET