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

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Economy and Credit Cards - Games Banks Play

May 19, 2009

Analysis of:Credit Card Industry Aims to Profit From Sterling Payers | www.nytimes.com

The referred article speaks of the banks - with their backs against the wall - thinking of evolving new rules for the good customers. The concept seems to be to create new rules so that bank earnings increase at the cost of the customer. To my mind this will only make the sterling customer disappear. Also from an accounting point of view it will create unnecessary complications. In this analysis I look at these two aspects.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Forensic Accounting - Fraud - A Perspective

May 18, 2009

Analysis of:In House Fraud Cases Surge | www.ft.com

The referred article speaks of the increased levels of fraud by insiders in organizations across countries - especially those that are hit by recession. In this analysis I take a look at how this will impact forensic accounting and indepth audits. The role of the accountant and auditor will gain emphasis and management will have to take increased care to safeguard assets - the stewardship function.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Internal Audit - The Changing Face and Stimulus

May 15, 2009

Analysis of:Internal Auditors: Mission Unaccomplished? | www.cfo.com

The face and scope of internal audit is changing. With time processes have always taken precedence over actual verification - except when a major fraud was discovered. The referred article speaks of the change now that the newness of Sarbannes Oxley is over and business is back to normal - atleast in terms of reduced major frauds. The article is however misleading because it relies to an excessive extent on statistics presented in a verbose form (which misleads) as compared to a tabular format (which is easier to read). In my analysis below I look at how and why internal audit is becoming increasingly relevant and all aspects are equally important.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Price of Financial Innovation - Pitfalls in the Road

April 30, 2009

Analysis of:Fed Chief Warns Against Stifling New Ideas | www.ft.com

The price of financial innovation can be like the ends of a pendulum. I would compare it to say research in medicine - except that there are no clinical trials for financial products. Just as thalidomide created major deaths/deformaties  relating to the birth of children in the 1960's so CDO's without adequate testing have created mayhem in the first years of this century. I draw the parallel between thalidomide and CDO's because in both cases there was said to be great innovation without adequate backup research and testing. Bernanke in the referred article speaks of the good of financial innovation. I agree - but then clinical and proper testing of financial products is equally necessary for financial products. This is the emphasis of my analysis below.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Accounting - The Congruence - The Stumbles - A Look At Accounting Standards Development

April 23, 2009

Analysis of:CFO's on IFRS: Forget About It | www.cfo.com

The present economic downturn has now got pundits and others saying that Accounting Standards are going to stumble - their will be no congruence on convergence of accounting standards. I would compare the present debate to that which took place when efforts were being made to salvage the gold standard in the first half of the last century. Then the intent was to keep the gold standard intact - it failed. The effort today is to keep national accounting standards in compartments - deny the concept of fair value - and  generally keep accounting so complex that it is as difficult to understand as all the languages of the world - spoken simultaneously. In this analysis I look at why the development of accounting standards is going to continue and not going to be effected by the unnecessary arguments being floated in this context.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Hedge Fund Conundrum - Gold - Risk vs. Safety and Return

March 19, 2009

Analysis of:Hedge Funds Turn To Gold | www.ft.com

Hedge funds are in a quandary. Their sine qua non for existence is the noticeably high returns that are expected to consistently deliver compared to the rest of the market. This obviously means that their investments have a higher beta compared to the market. These same funds are now trying to shift to bullion where gold is considered a safe investment. The problem here is however that anything that is safe will obviously give stable but not extraordinary returns. We can therefore expect a dichotomy in the aims of hedge funds which will reflect on their performance. These are the aspects I attempt to analyze below.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Investments, Hedge Funds and the Future Outlook

March 16, 2009

Analysis of:Hedge Funds to Cut 20,000 Jobs in 2009 | economictimes.indiatimes.com

The hedge fund outlook is changing fast and the glory of the past is giving way to the gloom of the present. In an era of disappearing jobs and declining economies the money available for hedge investments is on a downswing. In this emerging situation I look at where this new trend may lead to.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Accounting Jugglery With Foreign Exchange Losses and Hedges

March 10, 2009

Analysis of:Cos Grapple With Forward Contract Losses | epaper.timesofindia.com

Foreign exchange accounting and accounting for hedges have always been major problem areas. These also give immense scope for manipulation of corporate results. The spot vs. forward contract vs. hedge accounting syndrome are complex and can give rise to misleading and inaccurate results if not properly applied. In this analysis I take a look at IAS 39, Indian AS 30 and SFAS 133 as amended and how these are impacting corporate results in the present scenario.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Gold Hedging - Derivatives Valuation - The Coming Problem Areas

March 9, 2009

Analysis of:Gold Rises Ahead of Vital US Employment Data | www.ft.com

The referred article draws attention to the expected increase in the price of commodities like gold which act as a safe haven in troubled times. In this analysis I look at the effects this perceived demand and the price spiral will have on the valuation of derivatives based on these commodities and some of the problems which can be expected in the realm of valuation of derivatives including embedded derivatives and other aspects of the equation.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Second Great Depression - Accounting - Finance - Economics - A Personal View

March 9, 2009

Analysis of:Blue Chip Stocks, Economic Metrics Headed for Ground Zero | economictimes.indiatimes.com

The second great depression is on. It is effecting accounting, finance, economics and the way of life in every way possible. The paper investments are losing favor and commodities - especially gold and silver - are in favor. In this analysis I look at where accounting may head and the sea change we can expect in the way Institutions of economics - especially those involved with the distribution of wealth and the growth of economies are administered and viewed.

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