Arthur Levitt

WARREN BUFFETT: Oh, well, the practices are some — (laughter) — the practices are some of the things of the things we’ve said. They relate to accounting charges that are designed to throw, into a given period, a whole lot of things that should’ve been covered in subsequent periods in the earnings account. Or to smooth out or to inflate earnings in future accounts. There’s a lot of that being done. There’s a lot that’s been done. The SEC, under Arthur Levitt, who I admire enormously for his efforts on this, is making a concerted attempt to get corporate America to clean up its act on that. But it’ll only be because somebody hits them over the head. I mean, it has become totally fashionable to play games with the timing of expenses and revenues. And frankly, until the SEC got tougher, in my view, the auditors were not doing enough about it. I think that, in terms of hiding compensation expense and not recording it, in the case of options and all of that, I think — Companies now have the option of recording option costs in the income account.