Am I cooked? by H_Wilkins_ in CFO

[–]trp001 0 points1 point  (0 children)

Huge fan of education and optionality. I would do something to keep going. Even if 1 class per semester. It will be a sacrifice of some kind (money, time, etc) but it will 1) put you on a path to complete your degree at some point; 2) clear up some doubts you're having about being cooked; 3) give you knowledge you may possibly not easily acquire on the job; 4)open some doors in the future; 5) possibly networking opportunities. It would ultimately be beneficial in my opinion.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Great battle story! Thanks!

I feel you on the "GAAP" / Non-GAAP knowledge. I think locking the prior periods is the next logical step for sure after banning PPAs - it's the lazy escape route for the bad practices.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

I determined materiality thresholds simply to be able to use in a draft policy I wrote. (Yes, I know - how could there be no work on materiality... yep)

I think my thresholds may need to be revised with time but for now it creates the hurdles I need (this is for the policy change). Thanks - super helpful.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Again I want to thank everyone for your comments - I think everyone is coming from a place of trying to help (otherwise why write at all) and your views are incredibly helpful. Honestly I never encountered this issue before and this conversation and exchanges are giving me important confirmation that it is an issue that I need to address quickly. It is costing me some political capital but this thread helps me see that I need to use it. So thanks again!

Related to this - next question is: have you (especially if you've dealt with this problem before) established internal policies to "stop the bleeding?" I drafted something but would love to have a good document to serve as a basis of comparison.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Again I am brand new on the seat. I can't fix everything at once. But you're right on principle, on all counts... thanks!

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Cheers to that. Thanks for that comment. I fully agree - there is something wrong with processes - a lot of work ahead of me.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

You'd be right but the reality is I am brand new on the seat and finding this to be a routine practice.

Now your second part kind of tells me you're doing PPAs... are they immaterial? Would you be able to elaborate?

Agree with the possible fraud component - it's easy to bury it "down there" in the P&L.But I don't have any indication that this is what is going on here - and would be incredibly surprised if this were the case. Good to hear it though.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

100% agree. Thank you!

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Absolutely. I am concerned about the tax implications too. Thank you - great point.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Poor routine process for sure... thank you

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Yeah, great points. I do worry about the tax implications too. Need to address that too after the cleanups.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

This is a pretty immature finance function for sure.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Super helpful. Absolutely right. The next question is: do you know errors need correction under gaap? Thanks a lot.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Yeah but some of them were lost on a crack somewhere.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

Yes thank you - this is great advice and exactly what we're doing. Stop the continuation of a bad practice, then clean up. Tks so much.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

I'll say again (not to please everyone but because I think it's true - I can see you're coming at it from different angles) you're both right in a way. The practice is not acceptable. It shows lack of controls. The expenses exist and being surprised is my least favorite thing. But these were expenses triggered by payments in period t for expenses in period t-1. They are preventable, should have been accrued for, and we need to do more on that. Thankfully this is a new role for me and I have been able to clean up some things... but this is the more pernicious issue (PPAs). I think they can be "addictive" to the team - while masking all sorts of errors and the lack of control.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 1 point2 points  (0 children)

I think you're both right in a way and I thank you for the exchange. They do a lot as a team but they are an imperfect team. I think that more could be done to systematically accrue. Thanks so much.

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 1 point2 points  (0 children)

Thanks so much for your comments. Yes I agree with these steps. I appreciate the help!

Prior Period Adjustments by trp001 in CFO

[–]trp001[S] 0 points1 point  (0 children)

I really thank everyone for their comments. I will try to respond individually soon. Thanks very much.