Title: The role of corporate boards in improving governance through effective disclosures
Description: Corporate managers are increasingly being faulted for what Chairman Levitt of the SEC calls "accounting hocus pocus." Concerns regarding corporate reporting practices include out-and-out accounting fraud; abuse of accounting discretion, such as excessive restructuring charges and arbitrary write-offs of acquired R&D assets; and questionable accounting choices, such as recognition of barter revenues by some internet companies. There is also concern that companies are manipulating investor expectations through "whisper forecasts," or "managing" their reported earnings to meet unrealistic Wall Street expectations. To remedy these problems, corporate governance advocates are challenging boards of directors to play a more prominent role in overseeing the quality of their firm's financial reporting and communication with shareholders.