June 28, 2007
Wake up Call for the US
This blog has written many times about the mess that Sarbanes-Oxley has become and how much "ink" has been used to talk about it. We have repeatedly spoken about "just get on with it" and quit talking about it. While we whine too much about regulation in the US, developing countries are going to eat our lunch.
This interview by the Wharton Fellows with David Marshall, a prominent real estate developer from Philadelphia. Mr. Marshall recently had a chance to visit Shanghai while hosting a session that Wharton (University of Pennsylvania) sponsored in Shanghai.
While his comparisons talk somewhat about Philadelphia, he has some interesting comments about the comparison of Britain during the time of the rise of the US. Additionally, he speaks about the problems in the US of being bogged down in getting small and large projects moving either through stubbornness or lack of knowledge about what is happening in the rest of the world.
An excerpt is here:
"In the last 10 years, not the last 22 years, Shanghai has built 2,000 high-rise buildings between 20 and 108 stories high -- one more spectacular than the next. We stayed on the fifty-ninth floor of the JW Marriott, which was the headquarters for our Wharton Fellows Conference. You can look in four directions as far as the eye can see and you see nothing but spectacular high-rises. At night it looks like Las Vegas: All the buildings are lit up, they look like rocket ships going off. It looks like the Fourth of July. It is absolutely incredible what they have accomplished.
And we, on the other hand, are arguing over Sarbanes-Oxley, stem cell research, an archaic tax code, social security and health care -- and I could go on and on. They're all very important issues, but we are paralyzed by these issues and we are not growing. It is reminiscent to me of what probably took place with Great Britain not watching the United States -- when the United States went flying by Great Britain. [China is] going to go flying by us and we're going to wake up one day and say, "Oh my God, look what we missed." That was my take away from China."
He goes on to make a recommendation for US politicians:
"I think that it should be mandatory for every politician in federal government to go over there and see what's going on. I've talked to a number of them who have not seen it. It is incredible for me to see a country growing as fast as [China] -- which holds, at last count, $1.3 trillion of [U.S.] Treasury bonds -- where we are making decisions on how we're going to relate to them without having been there.
It should be a mission that they all [are required to go on].... It could be done in a few days. I'm interested in having them see the progress that's being made over there. I think that it's very naïve for us to have our congressmen arguing about how we're going to punish China for not letting the Yuan float; and how we're going to punish China for intellectual property rights. When [China is] sitting there with $1.3 trillion of our Treasury bonds, you're not going to punish anybody.
What you've got to do is try and work with them. We had a conversation with a bank, and we asked a question about intellectual property rights. The indication was very clear that they really don't care about intellectual property rights.... Their goals are to get one billion, 300-500 million people educated, clothed, housed and fed. Intellectual property rights are not on their radar screen and [won't] be.
We're trying to play a basketball game with a basketball, and they're trying to play a basketball game with a football. It's a different set of rules. We better realize that it's a different set of rules and that they're not going to play by our set of rules. They're holding a lot of the chips right now and they're holding more and more of the chips every day. "
He does concede that the way China gets things done runs trully rough shod over its people and does not endorse that. An excerpt shows this as well:
" I certainly do not subscribe to us adopting their political system.... We had a guide who took us through the old city of Shanghai. The people who were living in the old city are given two choices when the city wants to build something: one is terrible, and the second choice is worse.
He explained it briefly by saying that if [the city] decides that they want you out of there, your first choice is that they will give you a new home 35 minutes out of down town, because you can't afford anything within the downtown area. You don't want to do that, because you're currently walking to work from your house and you're very happy. Well then, fine -- [the city will] appraise your house, and your house is worth about $700; they'll give you $700, and you'll fend for yourself. "
So we are left with decisions to make. None of us in North America want to adopt the sometimes brutal ways in which China treats people. That is totally against our values. We love democracy.
But there has to be a wake up call.
If you are going to make progress do not make every regulatory process so onerous that nothing gets done. It may give you short term gains, but overall it puts a lethergy into the society and holds it back.
It is not Sarbanes-Oxley that is a problem for US business, it is the danger of thinking you are entitled to success because you had it in the past. You must be better today than you were yesterday to compete successfully. Further, you must learn what is going on in the rest of the world. It will wake you up when you see how smart and hard working other countries are.
This interview by the Wharton Fellows with David Marshall, a prominent real estate developer from Philadelphia. Mr. Marshall recently had a chance to visit Shanghai while hosting a session that Wharton (University of Pennsylvania) sponsored in Shanghai.
While his comparisons talk somewhat about Philadelphia, he has some interesting comments about the comparison of Britain during the time of the rise of the US. Additionally, he speaks about the problems in the US of being bogged down in getting small and large projects moving either through stubbornness or lack of knowledge about what is happening in the rest of the world.
An excerpt is here:
"In the last 10 years, not the last 22 years, Shanghai has built 2,000 high-rise buildings between 20 and 108 stories high -- one more spectacular than the next. We stayed on the fifty-ninth floor of the JW Marriott, which was the headquarters for our Wharton Fellows Conference. You can look in four directions as far as the eye can see and you see nothing but spectacular high-rises. At night it looks like Las Vegas: All the buildings are lit up, they look like rocket ships going off. It looks like the Fourth of July. It is absolutely incredible what they have accomplished.
And we, on the other hand, are arguing over Sarbanes-Oxley, stem cell research, an archaic tax code, social security and health care -- and I could go on and on. They're all very important issues, but we are paralyzed by these issues and we are not growing. It is reminiscent to me of what probably took place with Great Britain not watching the United States -- when the United States went flying by Great Britain. [China is] going to go flying by us and we're going to wake up one day and say, "Oh my God, look what we missed." That was my take away from China."
He goes on to make a recommendation for US politicians:
"I think that it should be mandatory for every politician in federal government to go over there and see what's going on. I've talked to a number of them who have not seen it. It is incredible for me to see a country growing as fast as [China] -- which holds, at last count, $1.3 trillion of [U.S.] Treasury bonds -- where we are making decisions on how we're going to relate to them without having been there.
It should be a mission that they all [are required to go on].... It could be done in a few days. I'm interested in having them see the progress that's being made over there. I think that it's very naïve for us to have our congressmen arguing about how we're going to punish China for not letting the Yuan float; and how we're going to punish China for intellectual property rights. When [China is] sitting there with $1.3 trillion of our Treasury bonds, you're not going to punish anybody.
What you've got to do is try and work with them. We had a conversation with a bank, and we asked a question about intellectual property rights. The indication was very clear that they really don't care about intellectual property rights.... Their goals are to get one billion, 300-500 million people educated, clothed, housed and fed. Intellectual property rights are not on their radar screen and [won't] be.
We're trying to play a basketball game with a basketball, and they're trying to play a basketball game with a football. It's a different set of rules. We better realize that it's a different set of rules and that they're not going to play by our set of rules. They're holding a lot of the chips right now and they're holding more and more of the chips every day. "
He does concede that the way China gets things done runs trully rough shod over its people and does not endorse that. An excerpt shows this as well:
" I certainly do not subscribe to us adopting their political system.... We had a guide who took us through the old city of Shanghai. The people who were living in the old city are given two choices when the city wants to build something: one is terrible, and the second choice is worse.
He explained it briefly by saying that if [the city] decides that they want you out of there, your first choice is that they will give you a new home 35 minutes out of down town, because you can't afford anything within the downtown area. You don't want to do that, because you're currently walking to work from your house and you're very happy. Well then, fine -- [the city will] appraise your house, and your house is worth about $700; they'll give you $700, and you'll fend for yourself. "
So we are left with decisions to make. None of us in North America want to adopt the sometimes brutal ways in which China treats people. That is totally against our values. We love democracy.
But there has to be a wake up call.
If you are going to make progress do not make every regulatory process so onerous that nothing gets done. It may give you short term gains, but overall it puts a lethergy into the society and holds it back.
It is not Sarbanes-Oxley that is a problem for US business, it is the danger of thinking you are entitled to success because you had it in the past. You must be better today than you were yesterday to compete successfully. Further, you must learn what is going on in the rest of the world. It will wake you up when you see how smart and hard working other countries are.
June 21, 2007
IFRS more of an option for SEC Filers
In recognition of a global business world, the SEC is taking yet another move towards real recognition that US GAAP is not the only standard for accounting that should be used on US financial statements. Foreign companies have been able to use IFRS (International Financial Reporting Standards) for about a year, but few foreign filers have taken advantage. This is probably because companies still had to reconcile between the two standards.
Now the SEC is proposing that IFRS be adopted for 2008 financial statements with no reconciliation. Now that is real recognition of global markets. This is a good move and should cut a great deal of unnecessary busy work for public companies.
Excerpt from the article from cbc.ca is here:
"U.S. securities regulators on Wednesday tentatively agreed to ease an accounting requirement for foreign companies that trade on U.S. exchanges.
The action by the Securities and Exchange Commission paves the way for a related change that would allow public companies, when reporting financial results, to choose between international and U.S. accounting standards.
The first step taken by the SEC on Wednesday would eliminate a requirement for foreign companies to "reconcile" their financial results with U.S. standards called generally accepted accounting principles, or GAAP. Foreign companies, which already adhere to international financial reporting standards, or IFRS, say the SEC mandate is burdensome and costly..."
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson
Now the SEC is proposing that IFRS be adopted for 2008 financial statements with no reconciliation. Now that is real recognition of global markets. This is a good move and should cut a great deal of unnecessary busy work for public companies.
Excerpt from the article from cbc.ca is here:
"U.S. securities regulators on Wednesday tentatively agreed to ease an accounting requirement for foreign companies that trade on U.S. exchanges.
The action by the Securities and Exchange Commission paves the way for a related change that would allow public companies, when reporting financial results, to choose between international and U.S. accounting standards.
The first step taken by the SEC on Wednesday would eliminate a requirement for foreign companies to "reconcile" their financial results with U.S. standards called generally accepted accounting principles, or GAAP. Foreign companies, which already adhere to international financial reporting standards, or IFRS, say the SEC mandate is burdensome and costly..."
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson
June 12, 2007
Maybe all is not doomsday on Wall Street!
According to Thomson Financial "Venture-Backed IPOs Record Strongest Month Since 2004
Month of May Saw Highest Volume and Dollars Raised; Further Momentum Could Be Sign of Recovery"
Or maybe all the ruckus about regulation is just a lot of noise about US markets being challenged only because of SOX. Maybe if you do a good job in raising money for IPO's you get the business.
Here are the facts:
Source: Thomson Financial and National Venture Capital Association
"Mark Heesen, president of the NVCA was cautiously optimistic about the recent activity.
"The venture-backed IPO volume in May and the market performance of those companies that went public thus far this year is very favorable compared to the last several years. These companies have successfully run the gauntlet, having weathered the technology bubble burst and Sarbanes Oxley compliance costs. They are likely the strongest batch of newly public companies in some time. However, we will need to see consecutive double digit monthly IPO volume for the rest of 2007 to declare any sort of recovery. Meaningful Sarbanes Oxley reform will go a long way towards helping other promising venture-backed companies reach their IPO goals.
May's strong performance, coupled with a stable first quarter, boosted the number of venture-backed IPOs for the first five months of 2007 to 33, the highest level since 2000. Furthermore, the average offer amount from January through May broke all-time records to reach $156.7 million per issue. Adding to this trend, the three month period from March-May 2007 marked the first consecutive stretch for $1 billion plus monthly volume - the first time this has occurred since 2000's nine month stretch."
Very interesting. SOX is a fact so now the market can react without wondering what the future brings. Standards are good and trustworthy markets can raise lots of money and and shares will appreciate more than in markets with no standards.
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell
Month of May Saw Highest Volume and Dollars Raised; Further Momentum Could Be Sign of Recovery"
Or maybe all the ruckus about regulation is just a lot of noise about US markets being challenged only because of SOX. Maybe if you do a good job in raising money for IPO's you get the business.
Here are the facts:
Source: Thomson Financial and National Venture Capital Association
"Mark Heesen, president of the NVCA was cautiously optimistic about the recent activity.
"The venture-backed IPO volume in May and the market performance of those companies that went public thus far this year is very favorable compared to the last several years. These companies have successfully run the gauntlet, having weathered the technology bubble burst and Sarbanes Oxley compliance costs. They are likely the strongest batch of newly public companies in some time. However, we will need to see consecutive double digit monthly IPO volume for the rest of 2007 to declare any sort of recovery. Meaningful Sarbanes Oxley reform will go a long way towards helping other promising venture-backed companies reach their IPO goals.
May's strong performance, coupled with a stable first quarter, boosted the number of venture-backed IPOs for the first five months of 2007 to 33, the highest level since 2000. Furthermore, the average offer amount from January through May broke all-time records to reach $156.7 million per issue. Adding to this trend, the three month period from March-May 2007 marked the first consecutive stretch for $1 billion plus monthly volume - the first time this has occurred since 2000's nine month stretch."
Very interesting. SOX is a fact so now the market can react without wondering what the future brings. Standards are good and trustworthy markets can raise lots of money and and shares will appreciate more than in markets with no standards.
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell
June 06, 2007
Just get on with SOX!
Even with the most recent guidance by the SEC for Management and updates to the PCAOB AS#5, there still seem to be many calls for delays for SOX 404 filings for companies $75 million market cap and under.
Much of the rest of the world has adopted parts of SOX 404 legislation, Canadian NI 52-109 and IFRS international accounting standard. So while the storm rages in the US, the rest of the world had adopted the portions of SOX 404 they like and deleting those parts they do not.
Let's just get on with it! The external auditor attestation is still the portion of the legislation that causes the angst. With this in place and litigation for audit firms being what it is, the legislation and audit standards can be rewritten again and again and the result will be the same:conservative practices by audit firms due to liability fears.
So let's just do it or delete the auditor attestation! But this legislation does not justify the amount of print and words it gets. The real problem for competitiveness in the US markets is litigation fears and high Wall Street fees. Possibly in third place is SOX 404.
The world is achanging! Let's get on with it.
For complete article: Click here.
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell
Much of the rest of the world has adopted parts of SOX 404 legislation, Canadian NI 52-109 and IFRS international accounting standard. So while the storm rages in the US, the rest of the world had adopted the portions of SOX 404 they like and deleting those parts they do not.
Let's just get on with it! The external auditor attestation is still the portion of the legislation that causes the angst. With this in place and litigation for audit firms being what it is, the legislation and audit standards can be rewritten again and again and the result will be the same:conservative practices by audit firms due to liability fears.
So let's just do it or delete the auditor attestation! But this legislation does not justify the amount of print and words it gets. The real problem for competitiveness in the US markets is litigation fears and high Wall Street fees. Possibly in third place is SOX 404.
The world is achanging! Let's get on with it.
For complete article: Click here.
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell
