24-7 Accounting
Forbes (10/30/00) Vol. 166, No. 12 p.146; Seligman, Dan
Lately, Wall Street has been hit repeatedly by earnings
announcements by corporations that come in below analysts'
projections, and the problem will likely only be magnified by a
new Securities and Exchange Commission rule forbidding companies
to give private information to analysts ahead of time. One
controversial new idea for overcoming the problem is real-time
financial reporting, which will put updated earnings and revenue
figures online every day; this would keep surprise earnings
announcements from causing sudden, precipitous drops in stock
prices. The idea may be a hard sell to executives accustomed to
the older ways of doing things, and few companies currently have
the means to close the books so rapidly. It took eight years for
Cisco Systems to put together a system for doing so, and other
companies using Cisco's experience as a starting point will
probably still take years. However, proponents of real-time
accounting believe the switch to real-time accounting is
inevitable and companies will have to find a way to deal with it.