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.


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