GLG News by FASB 28: Sale-Leaseback Accounting Experts

Ronald KiimaPresident Kiima Incorporated

Zales in Crisis: Initial Thoughts From a Former SEC Accounting Official

April 11, 2006

Analysis of:Zale Faces SEC Accounting Probe Over Service Pacts and Payroll | online.wsj.com

Given that the currently available details into Zale’s accounting crisis are limited and vague, stock analysts need to proceed very cautiously here particularly in light of the recent management departures and ongoing SEC investigation. The subject WSJ article cites three primary areas of accounting currently under scrutiny: extended-service agreements (ESAs), leases and payroll accruals. Although I have not reviewed Zale’s financial statements in detail, I have drawn from my twenty plus years as a corporate auditor, former SEC Assistant Chief Accountant and SEC/Sarbanes-Oxley consultant to set forth below my initial observations, thoughts and concerns.

Ronald KiimaPresident Kiima Incorporated

The SEC's Ongoing Battle Over Cash Flow Manipulations!

April 7, 2006

Analysis of:Closer Look at Blockbuster's Results | online.wsj.com

Given the emphasis placed on cash flow provided by (used in) by operating activities, and certain measures derived there from (e.g., free cash flow, etc.), by the Street, the recent Blockbuster case further evidences the need for stock analysts to truly appreciate the geographical distinctions between operating, investing and financing activities within a statement of cash flows prepared under US GAAP (SFAS No. 95). Appreciating such distinctions is particularly critical when performing comparative analysis among industry peers.

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