New York Metro Technology, InfoComm & Entertainment Practice

 
Welcome to PwC's NY Metro Technology Practice e-Newsletter.

In this issue:
       •   Event: NY eComm Venture Economy Forum
       •   Ethical Issues in Financial Activities
       •   IS Integration: Your Most Critical M&A Challenge?
       •   ValueReporting: The Earnings Game
       •   Business Cycles and the Global Economy

Ethical Issues in Financial Activities
The public clamor for increased corporate accountability has led to calls for executives -- and their advisors -- to be held liable for the accuracy of their every pronouncement. But investments are, by definition, risky -- and entire economies can be thrown into panic when the markets perform poorly. Can the financial sector meet the same standards as other "service providers," or are existing laws sufficient to punish fraudulent activity?

In order to counter malfeasance, say authors Jean-Michel Bonvin and Paul H. Dembinski, investment professionals -- who understand the implications of their advice in ways their clients clearly do not -- must provide investors with balanced, objective information before any claims of transparency can be made.
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IS Integration: Your Most Critical M&A Challenge?
Mergers have changed -- today, they offer not only the possibility of increased earnings and access to new markets, but also the opportunity to acquire new information systems (IS). But while many hail the efficiencies that new tech talent and resources can offer, others have learned the hard way just how formidable a challenge IS integration can be for the unprepared.

The Journal of Corporate Accounting & Finance explains how companies that plan the IS integration process in advance often see better gross margins and profits than those that wait until after the merger -- or that fail to formulate any plan at all.
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ValueReporting: The Earnings Game Today's investors lead perilous lives. Beyond the inherent pitfalls of the stock market itself, shareholders must piece together information about the underlying performance of the companies in which they are invested from the companies' reported financial results. This data appears in a format that began taking shape a century ago in the early industrial age and, like the early electric bulbs in Thomas Edison's laboratory, sometimes produces more heat than light.

So how can investors uncover the information about corporate strategy, market dynamics, and the nonfinancial value drivers that are the true indicators of a company's future performance? The answer, suggests author Robert Herz, comes in the shape of a new approach to valuation -- ValueReporting.
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Business Cycles and the Global Economy
With business loans from the dot.com era coming due amidst unprecedented accounting scandals and a bear market, a certain wariness regarding interest rate policy has taken root. Some argue that the availability of cheap money in times of prosperity leads to price fluctuations and overinvestment; unsupported by underlying liquidity, this eventually distorts business cycles.

Andy Mullineux explains to Financial Regulation and Compliance how, once banks acknowledge the near-inevitability of post-boom recessions, preventive interest rate policies can dampen the "irrational exuberance" that Alan Greenspan decried in 1996 -- before all those bills came due.
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