Euro Corporate scandal

[Azeron]

I can across this link
http://biz.yahoo.com/ap/020821/germany_ ... ing_1.html

Bascially whats going is that Euro Compaines are crying over new US accounting regs which say that the CFO (Chief Finanical Officer) and the CEO (Cheif Executive Officer) must Swear to the accuracey of thier books.

Now as someone who has actually done auditing, this picks up my interest. When you get statements like

Porsche boss Wendelin Wiediking "sees no reason why a CEO should swears to the accounts," company spokesman Manfred Ayasse said. "Hundreds of people are involved in preparing the reports."

and this

"It's not a priority for us now," Ayasse said. "We've got new cars to launch."

Eleven German companies already listed in the United States argue that German laws are sufficient and expressed their unease in a letter to the SEC last week, according to the Federation of German Industry.

The signatories, which include insurer Allianz and drug maker Bayer, argue that the U.S. regulations could result in legal confusion because of the different structure of German management.

This will make SEC auditors ears pick up and converge on our headquarters like a pack of hounds. I wouldn't be surprised if thier current auidting firms disengaged after hearing such a "glowing" statement of confidence in the intergrity of the accounting books by a companies CEO.

for honest CEO's who put forward a sense of decency, honesty, and hard work to his/her fellow employees, beign able to put down your signature is a matter of pride in thier leadership and would not shrink away from it.

Now to speak, this is not a new accounting rule, this is law as in requiring public comapines' filings with the SEC. the only way they are affected by it, is if they want access to our capital market. So no, we aren't forcing euros to do anything.

After reading about this, I would be wary about investing in these compaines. Looks like the next wave of coproate scandels might be these mighty euro compaines.

[Crazy_Vasey]

Pah all big business' are the same American, German, English whatever they'll do anything to increase the bottom line and up the share price legal or not as long as they think they can get away with it.

[RedImperator]

Just for the record, I DON'T think the European CEO's are cheating the way some American ones were. In America, somebody got the bright idea that we'll let a give a pack of MBA's with no useful skills control over how their performance is measured and their compensation determined (stock price). Then everybody acts surprised when the same MBA's are found to have manipulated stock prices to increase the value of their stock options and socialists gloat about the coming collapse of capitalism (ignoring that Communist officials worldwide for years inflated production and income figures to hide the fact that socialism doesn't work, and got bitch slapped by the cold hard hand of reality when the money finally ran out, just like crooked executives). Of course, if European companies are using the same compensation models that American companies are (or were) using, then all bets are off.

[NecronLord]

You ignore the fact that The European Union already has tighter regulations than tha USA.

ENRON, ENRON, ENRON

[Azeron]

well I aggeee that European regulations are a great deal more restrictive than US regs overall, but thats on the productivity side, not the reporting side. US accounting regulations are the toughest on the planet, with euros being a distant 2nd. I could spend hours trashing Euro accounting practices, many practices which have been outlawed in the states for decades. European Capital markets are about 30 - 40 years behind strignet US reporting requirments.

You talk about Enron, but having Enrons is a good thing. In any system there are going to be crooks, catching the big ones that can pay off politictions and enforcement authorities with huge sums of money, is a vindication of our system. Looking at Europe with its lack of scandels, and poor reporting requirements, makes you think that something big is brewing under the surface. well time will tell. You can;t hide things like this forever.

granted Euro companines gennerally don;t have the same incentive to raise stock prices through misreporting, but they are gennerally more valued based upon thier size rather than profit production. So the problem in Europe is under reporting of debts , overvaluation of assets, net worth, market share, etc.....

eaxy way to undrerstand,
US = lean ane mean
Euro = size matters

both have upsides, but I perfer the US valuation model is superior.