cfo.com

Print this article | Return to Article | Return to CFO.com

The Measure of a Man

Letters from readers about recent stories in CFO magazine.
CFO Readers, CFO Magazine
December 1, 2011

CFO welcomes your letters. Send them to: The Editor, CFO, 51 Sleeper St., Boston, MA 02210

E-mail us at ScottLeibs@cfo.com, or contact a specific author by clicking on his or her byline. You can also post a comment directly on CFO.com by clicking on the appropriate link at the end of any article.

Please include your full name, title, company name, address, and telephone number. Letters are subject to editing for clarity and length.

 


 

There is a significant body of work in supply-chain optimization, marketing, and other disciplines that uses advanced analytics to optimize investments ("Power from the People," November). Read Tom Davenport's book Competing on Analytics if you want to understand more on the subject. This science is now beginning to be used in human-resource investments, with predictive analytics being applied to workforce planning and the evaluation of training events, to name a few.

Human-capital investments can now be measured (and optimized). Eventually, CFOs will understand their power and get on board.

Gene Pease
Via E-mail

 


 

Having It Both Ways

"What a Corporate Tax Cut Might Mean" (November) bemoans the current corporate tax rate, but doesn't mention the effective U.S. tax rate on corporations. It's my understanding that the effective rate is actually low compared with most developed nations. The effective rate is [determined] by all sorts of "benefits" in the Internal Revenue Code. So, are corporations really willing to forsake all the various benefits in favor of lower rates? My guess is, they want to have their cake and eat it, too. Meanwhile, we starve the government (and, really, ourselves) some more. The "Occupy" movement may just keep growing.

Van Baldwin
Attorney/CPA
Berkeley, California

Editor's Note: See "CFOs Prefer a Simpler Tax Code, Even If They Don't Save" (October) for an analysis of finance chiefs' views on tax reform.

 


 

Avoiding the Risk of Risk

"Very Big, Yet Hard to See" (November) is an excellent article, and I hope it raises awareness. But it shows that risk managers are put in a very difficult situation when monitoring these types of risks. By raising concerns, they are effectively saying "my top management team is not very good" — a career-limiting statement, so they tend to avoid saying anything. Executives can avoid this by involving the risk team at the early planning stage, which takes out any confrontation with already-developed plans. But how many companies do that?

David Millar
Via E-mail

 


 

The Future of XBRL

"What Ever Happened to the Virtual Close?" (November) is an excellent article. Thank you for a thoughtful, thorough, current review.

One consideration regarding XBRL: for many companies, the close process has been extended by compliance with XBRL reporting requirements because they have either outsourced the process after their original publication process or they have added an additional tagging step at the end of that process. In the close process of the future, XBRL functionality will be baked into financial accounting systems and will act as an enabler for collaboration and document sharing. This functionality will support the type of financial-close portal you describe and myriad other business information exchanges (think credit risk management and so on). As Sandra Hartman-Holbrook of Dow Chemical said in the article, "It takes a lot of collaboration to get all the dependencies and timing of different tasks down to a science."

Patrick Slattery
Managing Director
Canopach
New York

 


 

Prevention Beats Detection

As a former embezzler, I'm all for greater vigilance on the part of auditors and audit committees ("Making Audits More Audible," October).

As I mentioned, my area of interest is embezzlement, so I can't speak to fabricated earnings or other misbehavior by management. In the area of embezzlement, however, I'll suggest that it's not the place of external auditors to detect theft of assets by employees, officers, or vendors. To the extent they find it, after all, all that will do is discover a crime that has already been committed. Auditors should instead spend more time with an honest and realistic examination of their clients' control environments, leading to specific recommendations and possibly disclosures in Notes or D&A.

Time and treasure spent on prevention will always cost less than time and treasure spent on prosecuting and replacing offenders (and there will be fewer PR problems). Not only that — but assets never stolen never have to be recovered.


Tom Hughes
Via E-mail

 

It would seem that matters concerning corporate financial reporting and the integrity of audited financial statements should be considered more holistically. I suggest that current audit-committee rules and practices be reformed.

Audit-committee service by any one individual for more than five years presents a similar risk to having long-term, uninterrupted service by a CPA firm. We'd like to think that "familiarity breeds contempt," but, unfortunately, we have witnessed the opposite effect, with disastrous results. Also, requiring just one "finance expert" on the audit committee seems insufficient given the focus of audit-committee work on finance, accounting, and internal-control issues.

Jonathan B. Schiff, Ph.D.
Professor of Accounting
Fairleigh Dickinson University
Teaneck, New Jersey

 


 

Don't Cast Aside the Employer-Employee Contract

Regarding "An Eroding Compact?" your Letter from the Editor in the October issue: for those of us over 50, the compact between American workers, their companies, and the federal government once included employment for as long as you wanted to work (provided you didn't screw up) and a retirement that was due you for your years of service. Those things have fallen away, but a compact described as "a decent salary and good benefits [and] maybe a raise once in a while" has to still be a part of CFO/leadership decision-making.

At issue are the modifiers: "decent," "good," and "once in a while" are defined differently now. Clear and consistent communication of expectations for those modifiers is the key to an effective compact with all employees at all levels, but the benefits don't have to be lavish to exist and make the compact real. Any organization that truly casts these concepts and the compact aside in favor of "disposable employees" may not be around for long. But if that is our future, I worry for it.

Bill Rohrer
Vice President and Chief Operating Officer
Red Magasin Inc.
Oshkosh, Wisconsin

 

CFOs are to capitalism as bus drivers are to buses. Steer, brake, accelerate, open/close doors. Please allow me to take exception to your cavalier exclusion of finance chiefs from accountability for the triumph of the few over the many.

As members of the business ruling class "few," CFOs have the responsibility to move not just a select few on the bus of capitalism safely and efficiently, but to move everyone on the bus safely and efficiently to their destination. Moving the few while throwing the rest under the bus is bad for capitalism and for our republic, as we're now discovering.

CFOs have to man-up to their part in capitalism's failures and the triumph of the few over the many, which is making a mockery of our constitutional democracy.

John Demma
Via E-mail




CFO Publishing Corporation 2009. All rights reserved.