Total shot in the dark, hopefully there's finance and accounting people on the board: Do auditors have any professional responsibility to review/audit Earnings Press Releases that companies put out prior to the financials being issued? Is it done in practice anyway? Help me out here...
As far as my understanding goes, auditors have the responsibility to examine any items the company decides to place in their financial reports. Note that in GAAS language speak they do not review or audit these statements, they simply examine them to ensure that there are no material misstatements relating to the audited financial statements. Credentials - Almost a CPA - I have passed all sections of the CPA, have the work experience, and am just waiting to take my ethics exam.
Honestly the way the economy is right now I think the best solution would be for everyone to take their money out of the banks right now at the same time. Clearly the banks can't be trusted and this is the safest method for everyone.
Companies get audited yearly, the annual statements are gone over with a fine toothed comb to make sure everything is kosher. The quarterly statements are run by accountants but they don't actually look at the numbers, just make sure that everything conforms with gaap. And who knows about the interim pr fluff pieces. Credentials: Double major in Econ and finance, minor in accounting from a big accounting school. Currently working as a analyst covering defense contractors.
I'm familiar with the procedures with Annual and Quarterly Reports, unfortunately my case question asks specifically about Earnings Releases related to unaudited numbers. It's the interim PR fluff pieces that I'm actually trying to figure out. Caveman Drew had some great stuff for me via PM, if anyone else has some insight I'd still appreciate it as well.
While companies do get audited yearly, a review of interim financial information is required of public companies before they file a Form 10-Q or 10-QSB. The numbers are reviewed by analytical procedures and inquiries of management. While the numbers do have to conform with GAAP, the review is conducted under GAAS. The PR pieces do contain fluff, but the financial numbers are examined by the auditors to make sure there is no material misstatement in regards to GAAP. Now if we want to discuss the effectiveness of some of these reviews, that's another story.
I'll defer to the accounting gurus. As I said to the OP in a PM, for what I do, it's more important to understand what the numbers mean rather than where they come from.
On another note, does anyone know if Drinking Heavily and the other guys who used to keep the Finance thread lively made the jump?
Not sure, but I think we can get a good start by linking some good finance blogs and perhaps get a discussion going on some of those stories. DH just linked a bunch of stuff, I really enjoyed the analysis by D-Rock and a couple other posters. Here are some financial sites that I read. http://www.calculatedriskblog.com/ Probably the best blog out there during the housing crisis, which seems to either be winding down, or just now front and center right now. I do expect his blog to come back with more expert posts in the upcoming commercial real estate crisis. http://www.zerohedge.com/ This is a pretty good blog, but sometimes borders on conspiracy theory. Nonetheless, pretty good analysis at times. http://ml-implode.com/ This site keeps up to date with bank failures, etc. StarLit, didn't mean to step on any toes and be assured I will probably have econ and finance questions in the future.
By far the best market-focused commentary on the web. Probably the only RSS feed that I read all of, every day. They can be pretty out there, but the data is always interesting even if the analysis seems a little biased. I like Econbrowser for more macro/econ commentary.
I like zerohedge too, or should say that I want to like it. They provide a lot of interesting analysis, but their constant need to claim "conspiracy!" every time Geithner hiccups or GS makes a $ is really starting to get on my nerves. On another note, did anybody else read Marla Singer's(one of the Zero Hedge author's) stuff when she posted as equity private on her own site? She had a lot of interesting stuff on the PE industry. As far as sites go, I'd second all of the above and add: http://brontecapital.blogspot.com/ http://www.hussmanfunds.com/weeklyMarketComment.html http://www.interfluidity.com/ I don't personally agree with everything these people advocate, but they tend to make one think. I tend to not read the quantitatively oriented blogs, as I get enough of the spread sheets and charts at work. Just a personal preference sort of thing. Does anybody know anything about commercial real estate? I keep waiting for that shoe to drop, but so far it seems as if the banks are somehow managing to dodge that bullet. Not sure how though.
I don't know if he'll make the jump here, but Drinking Heavily was a bit out there in most of his theories and macro analysis of the market. D-Rock knew what he was talking about, hopefully he makes it over here. The extreme libertarian economic views and Austrian theories really have no place in modern, accepted economics. We are probably do for a correction given the pace of the market rise over the last seven months, and the dollar is coming into focus more as an issue now than the past 12 months (yes, the money supply increased drastically but given the deflationary spiral we were on the verge of as well as other countries implementing expansionary monetary policy didn't mean the devalue of the dollar that the Schiff worshipers were saying was coming). Here's to hoping we can get some sane people on this board debating macro events in a logical way that leads to good debates about policy prescriptions that are feasible and sensible.
If I'm reading this thread and a lot of it is going over my head or I don't understand some of the terms or theories, where would you suggest I start to educate myself? Sites, books, I'm open to anything.
Investopedia is a searchable database that should help. Also, the economist has a section on their website that covers economic and finance terms. Think it's called the Econ dictionary.
Been reading this site... Long Or Short Capital Finance, without all the seriousness. You do need some knowledge of the economy/markets to get some of the jokes.
For you finance/I-banking guys, you will most likely find this site hilarious, if not eerily true. http://www.leveragedsellout.com I think he might be done posting stories, but the archives are great and he has a book out called "Damn it Feels Good to be a Banker", which I can't recommend enough.
I would be very interested to hear your rationale for the above. If anything the view of Austrian's has increased after the current financial crisis. While I am personally not a class member, stating that they have no place in modern economics is easily disproven by the events of 07-09.
If we've learned anything from Latin America in the last 30 years, this is easily the best strategy we could take. I mean look how well Argentina fared around 2001.
I don't know what your finance background is, but this is like saying that the current economic crisis has increased the view of Ayn Rand and the reading of Atlas Shrugged. If anything, the current economic crisis has shown that our current market economy is in need of more regulation, not less, as too many market players have the ability to destroy the entire system with excessive risk taking and leverage. Every time something doesn't go well with the economy the Austrian players come out talking about how brilliant they are, and then they are consistently told to shut up.