Don't expect Cisco ( CSCO) to sign off on its financial reports any time soon. No, it's not that the networking gearmaker is itching to flout the feds' earnest attempts to restore credibility to corporate America. Rather, because Cisco's fiscal year ends July 28, top executives aren't due to scrawl their John Hancocks on the appropriate blanks until October. That tiny fact was utterly lost Thursday on Wall Street, where investors drove Cisco down 8%. The day's favorite rumor indicated that CFO Larry Carter wouldn't comply with Securities and Exchange Commission edicts requiring executives to provide sworn statements certifying their company's accounting. Additional speculation had Carter, 59, announcing his retirement soon. Cisco says it won't comment on rumors, citing policy, though recent statements attributed to Carter and CEO John Chambers have indicated both execs are on board with the signature process. In any case, it seems a bit early to start pointing fingers on the certification front. So far only 18 of the 947 companies listed on the
SEC Web page have vouched for the accuracy of their books. And there seems no reason to question the overall financial picture at Cisco, which despite a huge downturn in its core business is still a market leader with some $20 billion in cash on hand. But in the market's choppy, scandal-blown trading session Thursday, investors were all too quick to put aside those little truths and focus on the rumors that seem to come out of the woodwork every time the stock falls. Even though some Cisco investors were quick to dismiss the scenarios. "If Larry Carter were to leave, it wouldn't be because of any signature issues," says Cisco bull Doug Whitman of Whitman Capital, a Silicon Valley-based hedge fund. "He spent a great deal of time working with auditors on things like their huge inventory writedown. It's highly unlikely he would just renege on his work." Some Cisco watchers say Carter has been considering retirement for more than a year, but when the market collapsed early last year and the gear spending downturn hit, he was urged by the company to stay on. And a few investors, looking for the best buying opportunity, suggest that if Carter announced his retirement anytime soon, it may be a good indication that Cisco has weathered the worst of it. Said one Boston investor: "His leaving will mark the bottom, if he felt he had guided the company through this."