VideoCrawford and others allegedly tried to hide the improper reporting from the company's auditors and from a special audit-committee investigation. The commission also charged the company's finance chief with making material misrepresentations to the auditors and omitting facts in an attempt to hide his misconduct.
Without admitting or denying the charges, Crawford agreed not to serve as an officer or director of a public company for five years, not to practice as an accountant before the SEC, and to give up $29,000 of his earnings, plus interest, and pay a civil penalty of $30,000.
Intel's Auditor Auction
Intel's audit committee has decided to take the unusual step of putting its 2003 audit business up for bids from the Big Four accounting firms.
The auction, of course, will include Ernst & Young, which has been the semiconductor maker's independent auditor since Intel's incorporation in 1968.
Intel's audit-committee members also say they might invite some smaller firms into the fray. The members think they'll likely take a few months to do the job. In fact, it's possible Intel's decision could end up being for 2004 rather than 2003.
Intel already currently uses all the Big Four for various services. While E&Y serves as the company's outside auditor, the other three provide it with tax and valuation services, financial-information system design and implementation, specialized audit work, and other types of consulting.
In fact, one of the firms was paid more for services rendered in 2002 and 2001 than E&Y received as independent auditor, according to Intel's recently issued proxy. The proxy did not reveal who that other firm was.
In 2002 Intel paid E&Y almost $11 million in fees, up about $1 million from the previous year. The 2002 figures included audit fees ($6 million), "audit-related" fees ($2.5 million), and tax fees ($2 million.)
Why did the company decide to put its 35-year union with E&Y at risk? Intel's audit-committee members say they wanted to do a detailed review of other audit firms and mull the benefits of changing firms. Such a review might increase auditor independence, audit-committee members think.
The committee also wants to take a "fresh look" at Intel's financial accounting and internal controls processes. The decision to put the company's audit business out to bid had nothing at all to do with E&Y's performance, nor is it a way to cut costs, they insist.
Nevertheless, it's got to be hard breaking up a 35-year marriage. Almost as if to show that there are no hard feelings, Intel audit-committee members are asking E&Y to take part in the process of hiring a new auditor.
Critical Operations
To comply with the new, real-time-reporting rules under the Sarbanes-Oxley Act, finance chiefs need to be in close touch with operations managers, experts agree. What's more, increasing numbers of finance chiefs see exposure to operations as a career booster.
Indeed, 46 percent of CFOs responding to a new survey say that an operations background is the best kind of experience for a finance chief.
Next in line in terms of the most desirable kinds of experience were information technology (28 percent), legal (26 percent), and sales and marketing (24 percent).
The survey, which polled 1,400 CFOs from U.S. companies with more than 20 employees, was sponsored by Robert Half Management Resources. The firm supplies senior accounting and finance professionals to companies on a project basis.
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