Engaging chat over breakfast on audits

Anyone who's slogged though a 10-K annual report or a 10-Q quarterly report knows the feeling: The two or three key pieces of data you need are buried in pages of incomprehensible legalese. Why, you ask, can't there be a clear, simple way to convey critical corporate info?

That, in fact, was the theme of a breakfast-time panel last month in downtown Seattle sponsored by the Center for Audit Quality, which proved unexpectedly fascinating. (And yes, we're aware that the words "breakfast" "audit" and "fascinating" may never have appeared in the same sentence before.)

The center, an affiliate of the American Institute of Certified Public Accountants, is holding a series of forums around the country to discuss ways to improve how corporate financial results are reported and audited — and how to give the investing public enough information to ferret out incompetent or corrupt companies without unduly burdening the honest, competent ones.

Even though companies are disclosing more and more-accurate information about themselves more quickly than ever before, that hasn't made it easier for ordinary investors to figure out what's going on.

"We don't, in my estimation, need more information," said new Weyerhaeuser CFO Patricia Bedient, who was in the audience. "Many of the things that are required, I don't know that investors understand why they're included in the financial statements."

But state Attorney General Rob McKenna, one of the panelists, compared the financial reports to menus, with every stakeholder and interest group working to make sure the reports include at least one tasty morsel of data to their liking.

"That pension footnote is very important to somebody, even if it's not important to the average investor," McKenna said.

Potlatch director and former Safeco exec Boh Dickey, another attendee, noted that much of the information on Enron's infamous off-balance-sheet arrangements was in its 10-K: "Problem was it was on page 572, which nobody got to."

Rather than require still more information in financial reports (customer-satisfaction indices? climate-change analyses?), Dickey said, boards should be held more accountable for the company's doings.

But that led to this comment from panelist Keith Grinstein, a partner at Second Avenue Partners who sits on three public-company boards: "You can't inundate [directors] with liability, or else they'll just flee."

— Drew DeSilver

Hard science, meet hard cider

It's so Seattle, we can barely stand it: combining high-level science talks with a pint (or two) of a fine microbrew.

On the last Monday of each month, science and beer aficionados meet at the pub in Third Place Books' Ravenna location to listen to and discuss science and technology topics. The event — known as "Science on Tap" — is Seattle's own version of Cafe Scientifique, a British-born movement to promote public discussion of the sciences.

The events are an unorthodox departure from the conventions of scientific debate. "I've never given a talk in a pub before," University of Washington engineering professor Blake Hannaford said during his talk about biorobotics last month. (A video of his June 25 lecture is available at the organization's Web site, www.scienceontap.org.)

Previous subjects have included nanotechnology, the risks posed by global trade of infectious-disease spread, and "Metamaterials & Cloaking Devices: Bringing Star Trek Technology to Life," by Minas Tanielian of Boeing Phantom Works.

This month's session, to be held July 30, will be led by Eddie Bernard, the Seattle-based director of the Pacific Marine Environmental Laboratory at the National Oceanic and Atmospheric Administration. His topic: "Three things you need to know about tsunamis."

Bernard has done a lot of public speaking over the years but said he's not quite sure what to expect" from his pub performance: "I don't know if the beer is going to take over."

He called the occasion an "interesting venue" for scientists to reach out to the public outside the hallowed halls of academia, something they should do more often. The idea, he said, is "trying to make science more understandable and relevant. You need to understand it because it can save your life."

— Ángel González

Wade Cook update,

Part XLVIII

One of the last pieces of leftover business from the 1990s' stock-market boom is close to resolution.

Back in February, erstwhile investment guru Wade Cook was convicted on seven counts of tax fraud for not reporting $8.9 million in profits from his once-ubiquitous books, tapes and seminars. His wife, Laura, later pleaded guilty to a single count of obstructing the IRS in its administration of the tax laws.

Cook originally was supposed to be sentenced June 22, and a reader recently wrote to ask what happened. Both Cooks are now set to be sentenced on Aug. 2.

— Drew DeSilver