GLG News by Financial Statement Analysts - Leaders, Scholars, and Educators

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Accounting Disclosures - FASB Moves - My Comments

July 29, 2009

Analysis of:FASB Initiates "Disclosure Framework" Project Aimed at More Useful, Organized and Consitent Disclosures | www.fasb.org

 The referred FASB news release speaks of a new FASB project to simplify accounting disclosures and make them more meaningful. In this analysis I look at the relevance of such a major project in the realm of accounting and how this could make financial statements more meaningful.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Serious Frauds and Internal Controls - A Look at Emerging Practices

July 23, 2009

Analysis of:Allegations of massive fraud in the gulf: A $10 billion Saudi Fraud Claim | www.economist.com

Surplus investment cash is always a problem. Loose internal controls and financial practices compound the problem. In the referred article there is an extensive discussion of  how a large and respected Saudi conglomerate defaulted on financial commitments on account of  frauds and lapses perpetrated ostensibly by a family member. In this analysis I look at why and how control practices are and will have to change in response to changing circumstances.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

A Season for Fraud - Possible Effect on Audit Quality and Audit Standards

July 15, 2009

Analysis of:Lawyer Sentenced to 20 Years in $700 Million Fraud | www.nytimes.com

As I read the referred article about a lawyer who was at the top of his profession being sentenced to 20 years for fraud and of other cases like Madoff et. all (including the cases over the last ten years) I  think this is the season for frauds. Major frauds are being announced and uncovered in innovative ways including in two major cases by public announcement (Madoff and Satyam). In this analysis I take a look at how this "season for fraud" is going to impact audit quality, audit standards and also forensic accounting.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Securities, Rating Agencies, Accounting, True Value and Fair Value - A Paradigm Look

July 14, 2009

Analysis of:SEC to Create Group to Check Rating Agencies | www.ft.com

The referred article speaks of the efforts of the SEC to monitor and police credit rating agencies. This is ofcourse a welcome proposal. However, it will also have an effect on accounting and the measurement of true value and fair value of securities. In this analysis I take a look at these aspects and how we can expect the rating business to change and also the manner in which values as associated with securities are measured.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Charles Darwin, Adam Smith, Accounting and Financial Rules

July 13, 2009

Analysis of:The Invisible Hand, Trumped by Darwin | www.nytimes.com

The referred article speaks of Adam Smith and Charles Darwin. While Smith spoke of the invisible hand, Darwin spoke of natural selection and survival of the fittest. The referred article is in terms of economics. I look at the same question from an accounting and financial emphasis.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Fair Value - The Continuing Debate - Why it Never Ends?

July 8, 2009

Analysis of:The Fair Value Deadbeat Debate Returns | www.cfo.com

The referred article speaks of fair value and its impact on credit rating. Fair value is related to a number of  instruments including derivatives, hedging and plain vanilla instruments. I was recently at a conference in Agra, India where the Chairman of the IASB Sir David Tweedy mentioned IAS 39 in passing and said that the IASB was still trying to get to grips with its intricacies. In this analysis I look at why fair value will continue to confuse but is essentially the light in the right direction for understanding corporate financial reports.

Ian WoodPartnerWireless Foundry

Has anyone bid yet?

July 7, 2009

Analysis of:Orange and even O2 may bid against Vodafone for T-Mobile UK | www.rethink-wireless.com

Whilst the UK has two more mobile networks than it needs the big three all know that they would be helping it's closest rivals in removing the two small players. If T-Mobile were to be sold to a rival the actions of the Regulator are not know at this time but some action is expected.  The best case is that the new owner would be expected to return the 3G license and spectrum the worse is that both 2 & 3G spectrum is handed over. Has T-Mobile put the business up for sale?  The present book value for the business is some €3B following the write down at the start of the year.  Since that time T-Mobile has seen a decline in revenues in the UK and a loss of business caused by the fact that they have been working without a CEO or CMO and so have been following the German strategy.  This has further lowered the value of the business.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Fed, The Economy, Accounting and Regulation - Changing Landscape for a New Century

June 24, 2009

Analysis of:US Groups Face Regulatory Revamp | www.ft.com

Banks, Insurance companies, Investment bankers, Hedge funds - they are all up against the wall facing new regulatory pressures. The Alan Greenspan era is over. Alan Greenspan was supposed to have a magic wand with which nothing went wrong. Its like Napoleon asking for a few lucky generals - Greenspan was one such in the financial world of today. Bernanke obviously is not. In this analysis I look at some of the aspects of the changing regulatory landscape.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Accounting and Financial Risk in the Background of Declining Credit Availabilty

June 16, 2009

Analysis of:Liquidity, Crime Woes Shake Up Chief Risk Officers | www.cfo.com

The current situation of non availability of credit is leading to a position where Chief Risk Officers and CFO's will have a difficult time in funds management, meeting profitability targets and running a business. Funds constraints  will make it difficult to extend credit to customers when financial institutions and creditors are making credit vanish. Such a situation may also lead to conditions where accounts may be stage managed simply to keep creditors at bay. In this analysis I look at the peculiar conditions which I expect to come to play in the coming years and suggest that better control systems need to be in place not just in organizations but also in the wide spread global capital village.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Cost of Capital - The Formula Which No Longer Makes Sense In A Changing World

May 27, 2009

Analysis of:A Losing Formula | www.cfo.com

The financial world is changing and undergoing metamorphosis. Companies like GM and Chrysler are insolvent. Stock indices gyrate for no reason. Financial giants regularly go bust these days - so it seems. In this scenario what we have is a situation where the basic formulae for computing the cost of capital and such basics as beta and delta are becoming misleading. It is just not possible to calculate the systematic risk attached to a market or the unsystematic risk of a security. In this analysis I look at where this confusion is heading and how we may soon see a sea change in the way in which financial costs based on accounting statements are calculated.

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