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Readers write in to say CFOs should stop whining about their jobs, why our Sarbanes cover would make a good dartboard, whether diversity is a laudable goal or reverse racism, and why outsourcing SG&A doesn't work.
CFO Staff, CFO Magazine
August 1, 2007
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Setting up and testing controls is a major part of any CFO's job ("Five Years and Accounting," July). That's why finance chiefs have internal-audit departments, controllers, accounting managers, and, hopefully, the necessary experience to determine when improvements must be made. Instead, they would rather provide information to the CPA audit team and let them determine if there is an error that might be material to the financial statements "taken as a whole."
What about misstatements that are material to management's decisions? What about the CFO's responsibility to management to provide current and accurate information? It's not just the CPAs or the public that rely on the information that the CFO is supposed to be providing. Sarbanes-Oxley just makes it a legal requirement for accounting departments to do their job rather than allow CPA audit teams to allow misstatements due to immateriality [involving] the financial statements taken as a whole — a view that is abused by audit teams.
When CFOs start recognizing their responsibility to verify their companies' financial information for accuracy and compliance, maybe they'll stop whining.
I just got a copy of the July issue of CFO with a picture of former senator Paul Sarbanes on the cover. I wonder how many dartboards this month's cover is destined to be tacked on to?
I was quite disappointed to note the reaction of a significant number of finance chiefs and their bitter criticism of the onerous provisions of Sarbox and the steep costs.
True, there have been excesses. True, costs have far exceeded "perceived" benefits. But what about the overall long-term good that a well-designed and controlled environment could do for an enterprise?
Diverse Voices on Diversity
I graduated with an accounting degree 30 years ago and am currently a CPA and CFE. The same issue that was a problem then is a problem today: the lack of diversity in the workplace ("Gap Analysis," June). For too long, companies have clung to the notion that the pool of viable candidates is too small, so the status quo remains in effect. If diversity were truly a priority, then companies would use every means necessary to reach minorities — through partnerships with historically black colleges and minority business associations, or establishing in-house programs to groom in-house talent. This country has many talented individuals who could contribute to the business community, but the business community has to decide it wants to harvest this talent and make a commitment for the long term for the effort to bear fruit.
Diversity "targets" always translate into "quotas"; therefore, applicants are hired because of a particular race, religion, gender, or national origin. We have forgotten the most important issue: Is this the candidate who can deliver the most toward meeting the organization's objectives? Until we hire employees who are the best potential performers, we will be saddled with the mindless agenda of those who demand diversity for diversity's sake.
I am a Latino (Mexican-American) finance professional who has 10 years of international finance/technology experience, and I can no longer get a job in my field of finance. I have an M.S. in finance, but when I interview here in Denver it seems as though they don't understand how the janitor got in for an interview.
My last assignment overseas was with a boutique investment bank in Jakarta, Indonesia. I sold syndicated debt to banks. I applied for a position at a bank in Denver as a business banker — essentially selling debt to small and midsize businesses. The bank felt that I was more qualified to be a "relationship manager," one step above a bank teller.
The American Dream is open to Latinos — if they want to be the underclass. But if we go to school and attempt to access Corporate America, forget it — get back to mopping floors.
It is commonly understood that "diversity" is a euphemism for affirmative action, which is equivalent to reverse racism. Racism is socially unacceptable whether it goes forward or in reverse.
Most studies show that diversity achieves no competitive edge in the American corporate world. One day Corporate America and our various governments, universities, and other public institutions will realize the damage created by diversity and affirmative-action policies. Until these policies are eliminated from corporate and governmental rhetoric, racial harmony and justice will never be achieved in America.
Glenn Accounting CPA
Using Metrics Effectively
"Measuring Up" (June) cites a Deloitte survey in which managers indicated that they would benefit from higher-quality information regarding employee commitment. I disagree. Employee commitment is the result of effective employees, not the cause. Managers need to measure those qualities in their top-performing employees that predict employee commitment — then hire more who meet the benchmark. Understanding the measurable thinking and behavioral and occupational qualities common to successful, mission-critical employees — that is using metrics effectively.
We read Randy Myers's article "Going Away" (May) with interest. Having completed our own survey on SG&A outsourcing at 35 companies earlier this year (we focused on $500 million–to–$5 billion midmarket companies), we, too, found that a hands-off outsourcing mentality is severely counterproductive.
In our study, 38 percent found their SG&A outsourcing to be either ineffective or less than effective — largely because the outsourcing company hadn't prepared adequately on the inside. In fact, our interviews with CFOs and other senior executives confirmed that for virtually all companies, getting your own internal house in order is not only a prerequisite to successful outsourcing, it's probably the most valuable action you can take.
Suraj Krishnan & Neal Ganguli
Such a Deal!
No matter what the price, or at what age you buy a long-term care policy, all the premiums paid amount to a down payment on one year of care when you adjust for inflation over two or three decades ("Long-term Thinking," May). I'd call that a good deal!