This response includes an update based upon 1998 SEC 10K filings made this week. .
More independent oversight is needed from outside the accounting community.
This is particularly important given that these hedge funds are using technology securities to justify leveraging derivative based investments. This position is based upon the rationale that technology products become rapidly obsolete and that Microsoft's core strength is instead the ability to hire and retain smart, highly motivated, creative and dedicated employees. A key part of this strategy is to liberally issue employee stock options and when the cost of these options is not recorded on the financial books, earnings are overstated and lead to an inflated stock price and the capacity to continually hire this top talent. That alone eliminates more than 50 percent of the entire net income for 1998. By achieving accounting reform in this area, large dominant technology firms including Microsoft and Cisco Systems will most likely be more conservative in issuing stock options which will in turn channel more of these top workers back toward smaller newer firms able to issue stock options more liberally.