CFOs favor more regulation to stabilize markets

46% favor fair value suspension

CFOs at American companies revealed ever-increasing uneasiness about the current economic crisis and its evident impact on their businesses, according to the most recent survey of CFOs conducted by Financial Executives International (FEI).

Eighty percent of CFOs said the financial sector needs increased regulation and oversight to correct the current market crisis. Almost half (46%) favor suspending fair value accounting, except for publicly traded companies with no liquidity issues.

The CFO Optimism Index for the U.S. economy continued to plummet past last quarter’s all-time low to 41.73 – the 7.19 point plunge being the largest quarterly decline in the survey’s 11-year history.

CFO respondents anticipate credit access to continue tightening, with 67% predicting it will be increasingly difficult for their companies to access credit over the next six months.

Many CFOs are taking precautionary measures to cut back technology spending, capital spending, hiring and inventory over the next 12 months (approximately 1%) – a contrast to the past two years when CFOs consistently planned to increase spending.

Upcoming events

• Hot topic webinar: Determining fair values and related auditing issues
  2 - 3:40 p.m. on Dec. 16
  In this two-hour webinar, Ray Stephens, CPA, DBA, CMA  covers changes in the definition, measurement, and disclosure concerning fair values and auditing issues.
  

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