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Fear or Pity?
Regarding your article “Whistle-blower Woes”, I appreciate the wishful thinking that drives the author of the article to argue that “whistle-blowers are more to be pitied than feared.”
The Sarbanes-Oxley Act of 2002 changed the rules by allowing individuals to sue, and sue for big money. Attorneys, consultants, and labor specialists will be there to guide these individuals through this maze, which resembles the popular litigious process of “slip-and-fall” accidents, where individuals basically gamble their chances to win big money from a deep-pocket corporation. Regardless of the possibility of actual conviction, the litigation process is bound to make a dent in the income statement and tarnish the company’s image.
We must recognize that whistle blowers are not simple-minded employees. They usually have the training to identify accounting or fraud activity. Such individuals may have had suspicions for years, even decades. All the while, they collect information and document what they believe strengthens their case. They are also likely to know about the provisions of Sarbanes-Oxley and what may or may not constitute a “reasonable belief” of irregularities. Accordingly, in regard to Sarbanes-Oxley, I believe whistle-blowers are more to be feared than pitied.
Person & Co., CPAs
I don’t know exactly how Ford Motor Co. will use revenue management to the advantage of its customers (“The Right Price,” October), but I have lots of experience with the airlines’ use of revenue management to extract very large amounts of money from customers. It created a huge reservoir of bad will and anger, and customers finally rebelled, in a very big way. So I can see only bad things resulting for Ford. Couple this with the company’s other bad judgments over the past few years, and I can’t imagine Ford’s customers benefiting.
I was somewhat intrigued by Dominick Furlano’s letter (October) responding to the article “Roads Less Traveled” (Your Move, August), on the placement of nontraditional CFOs. I have an accounting degree, and also received an MBA with a concentration in organization and human behavior (kind of like being a veterinarian and a taxidermist at the same time).
I spent the first half of my career in the primary automotive business, including stints in production management, and as an industrial-engineering manager (along with many of the traditional finance roles). In my current position at a high-tech, privately held organization, a pure CPA, banker, or treasurer would be hard-pressed to become the business partner, mentor, coach, and change agent that I am.
I know of several success stories going both to and from the accounting bench and the operations/manufacturing/sales genre. To say that such an approach is viable only in the context of a larger organization is shortsighted, and doesn’t take into account the environment and dynamics smaller businesses can provide.
Kurt J. Andrews
Chief Financial Officer
X-Ray Industries Inc.
Looking in the Mirror
In a day when the New York Stock Exchange can pay its CEO $140 million and the average salary of a Fortune 500 CEO is $20 million, please do not complain about the cost of compliance with the Sarbanes-Oxley Act (“Sticker Shock,” September).
How sad that the excesses of Tyco, Enron, and WorldCom require a board of directors to act independently and not be a rubber stamp for management. How sad that CFOs must comply with honesty statements, vouch for the validity of financial statements, and actually have internal-control procedures. Instead of thinking outside the box and pushing the envelope of generally accepted accounting principles, Sarbanes-Oxley is forcing executives to do the right thing. Doing the right thing has a cost. Not doing the right thing costs the shareholders.
The benefits that management cannot see aid the shareholders of the company. Let’s not delude ourselves into believing that what happened at Enron, Tyco, and WorldCom were isolated incidents. Corporate executives should be looking over their shoulders. In the end, don’t blame Congress: look in the mirror.
Joseph M. Galante
Accounting Program Manager
Charlotte, North Carolina