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Capital backdating

capital backdating-64

Booth Professor Emeritus Roman Weil, and his co-author Jennifer Milliron, argue in a chapter of the that the financial illiteracy of executives, lawyers, and auditors with regard to stock option accounting and disclosure rules during the period leading up to Lie’s discovery, while regrettable, is understandable.“The courts should not expect anyone to have followed ‘rules’ that the accounting profession failed to clarify.”In a forthcoming research paper, Haresh Sapra, professor of accounting at Chicago Booth, and his colleague Itay Goldstein of the University of Pennsylvania discuss the pros and cons of full disclosure.

“Public disclosure of a bank’s financial condition enables market participants to make informed decisions about the bank and such informed decisions, in turn, discipline the bank’s actions,” Sapra and Goldstein note.According to research firm Audit Analytics, the stock option backdating investigations resulted in 153 restatements of previously issued financial statements by companies during 20 because companies failed to properly disclose this compensation expense.The stock market reacted negatively to these restatements.The June issue of the magazine will have two new longer pieces by me.Look for it online or at the Gleacher Center in downtown Chicago.I speak to students but leave as much time to talk to accounting and business ethics faculty about their work. I often help academics get mentioned in other publications.

For the University of Chicago Booth School of Business, I write for the Capital Ideas magazine and blog.

The obligations to third parties will almost invariably be based on the date that the contract or agreement was fully executed subject to any applicable special circumstances.

It is worth noting that whilst parties signing a contract or agreement may expressly state that the contract or agreement is effective from a date in the past, the parties should not "back-date" the date of execution (for example, sign the contract or agreement today and but insert an earlier date as the date of the document, thereby making it seem as if it was signed on some earlier date).

This could run the risk of civil and/or criminal sanctions in a number of jurisdictions (for example, depending on, among other things, the nature and subject matter of the contract or agreement, false accounting or false statements by directors, or even conspiracy to defraud).

I’ve been writing for the University of Chicago’s Booth School of Business Capital Ideas magazine and blog for more than a year now.

Stating that the contract or agreement will be effective from an earlier "effective date" will, however, only be effective as between or among the parties to the contract or agreement.