House Panel Approves Bill to Boost SEC

A bill to strengthen the Securities and Exchange Commission’s enforcement powers is one step closer to becoming law. But some critics say the proposal will trample on the power of state regulators.On Thursday, the House Financial Services Capital Markets Subcommittee approved H.R. 2179, the Secur...

By Stephen Taub and Craig Schneider • July 14, 2003

Tax Cut Benefits: Fuzzy

The Bush Administration is hoping that the third- largest tax cut in U.S. history, signed into law in May, will charm the economy out of its current funk. The Jobs and Growth Tax Relief Reconciliation Act of 2003 will slice taxes by $330 billion and provide $20 billion in aid to states.While many...

By Marie Leone and Kris Frieswick • July 7, 2003

Insurers to Blame for Insurance Hikes, Survey Suggests

Memo to CFOs on Independence Day: Think about self-insuring more risk—and giving your insurers the boot.Property-casualty insurers haven’t shown a whole lot of client-centeredness in recent years, that’s for sure. Take the issue of the premium hikes many corporations have been enduring.But financ...

By David Katz • July 3, 2003

What Price Security?

When it comes to thwarting terrorism, only a handful of companies have had to worry about controversial big-ticket items like intrusion-detection equipment for chemical plants or antimissile defenses for airliners, which some lawmakers want to mandate. For the rest of Corporate America, aggressiv...

By Roy Harris • July 1, 2003

Age Discrimination Snags Lurking in Pension Rules

When the Treasury Department and the Internal Revenue Service released proposed regulations last year that would make it easier to convert to cash-balance plans, pension plan sponsors breathed a sigh of relief — until they read the fine print. The new rules, it turns out, could actually make it h...

By Kris Frieswick • June 30, 2003

Learn Ethics in Your Spare Time

The indictment of domestic doyenne and media mogul Martha Stewart” seems to have revitalized boardroom and water cooler debates about insider trading. In fact, there’s anecdotal evidence that board members, executives, and workers have been craving a clear definition of insider trading, as well a...

By Marie Leone • June 23, 2003

File Under ‘Nightmare’

Not long ago, the topics of data retention and records management elicited yawns from senior executives. After all, the storing of old documents and E-mails hardly seemed like a strategic imperative. But if those executives are yawning now, it’s not from boredom but from being up all night worryi...

By Bob Violino • June 16, 2003

DOA: Derivatives Oversight Agency

The shakeup at Freddie Mac” last week underscored a problem that many observers say should have been resolved in 1994: derivatives remain a risky — and unregulated — financial instrument.Certainly, over the past ten years, the U.S. financial landscape has been littered with the broken remains of ...

By Marie Leone • June 16, 2003

Stock Option Standoff

It may be time for FASB to write its own Declaration of Independence — from Congress.Last week, Financial Accounting Standards Board Chairman Robert Herz urged legislators to stop interfering in its independent standard-setting process. That urging came at a House subcommittee hearing on the expe...

By Craig Schneider • June 9, 2003

CFOs: Risk Magnets

A few weeks before every quarterly close, John Adamovich receives 225 representation letters from 75 reporting locations in 30 countries. The letters come to Adamovich, the CFO of Pall Corp., from three sources: in-country general managers and controllers, operations committee members that have o...

By Marie Leone • June 4, 2003

The Price of Terrorism: No Insurance

Remember the fuss the insurance industry made about the need for a federal backup for terrorism risk insurance?It turns out that the Terrorism Risk Insurance Act that insurers managed to wrangle from the government last year hasn’t been much help in making coverage more available or reasonably pr...

By David Katz • June 2, 2003

Congress, FASB in Stock Option Flap

They’re at it again.A bill that would temporarily prohibit regulators from recognizing standards requiring companies to expense employee stock options gets an airing this week — much to the chagrin of members of the Financial Accounting Standards Board.On Tuesday morning, the House Financial Serv...

By Craig Schneider • June 2, 2003

Natural Performers

When it comes to currency risk, companies are going natural. No, that doesn’t mean they’re exposing themselves completely to risk. They are forsaking derivatives for natural hedges — matching revenues and costs for the same currency or offsetting losses in one currency with gains in another.There...

By Ronald Fink • June 1, 2003

Trash-Talk

“There can be no question that we are at war,” Home Depot CFO and executive vice president Carol Tomé told a recent conference of finance executives. The combat, of course, is with Lowe’s — the fastest-growing company in the home-improvement industry, which Home Depot dominates. And Tomé startled...

By Roy Harris • June 1, 2003

Fear Factor

Rick Navarre wanted the audit committee at Peabody Energy to know exactly how he is managing risk at the company. As Peabody’s CFO, Navarre developed a comprehensive methodology for analyzing and quantifying risk, in large part to educate the audit committee about all the risks confronting the $2...

By Russ Banham • June 1, 2003

Exchanges: We Can Meet Our Own Standards

Officials at the major U.S. stock exchanges reported to the SEC last week that corporate governance practices at the bourses themselves were either on a par — or would soon be on a par — with the governance standards required of companies listed on the exchanges.Richard Grasso, New York Stock Exc...

By Craig Schneider • May 19, 2003

FASB Holds Fast on Options

It’s likely going to take a lot more than a roundtable discussion of lawmakers, executives and accounting rulemakers, to reverse an interim decision that requires companies to treat stock options as an expense.Certainly, the Financial Accounting Standards Board showed no signs of making a regulat...

By Craig Schneider • May 12, 2003

Sarbox or Sarboon?

While the Sarbanes-Oxley Act of 2002 has increased the workload — and hazards — for CFOs, the legislation could also be something of a boon to finance chiefs. How’s that?For openers, the added compliance risks that CFOs are now shouldering could make them a more valuable commodity in the job mark...

By Marie Leone • May 9, 2003

Stock Options: How Do You Attribute ‘Em?

(Editor’s note: RegWatch is a new column that will run every Monday on CFO.com. To receive the article by e-mail each week, click here.)It seems there’s plenty of time to keep the debate raging over whether and how to treat employee stock options as an expense.The Financial Accounting Standards B...

By Craig Schneider • May 5, 2003

Misery Loves Another Company

Federal-Mogul Corp. had already recognized a $1.6 billion liability for asbestos-litigation costs when it filed for bankruptcy. But that expenditure got it no closer to ending these liabilities. The nature of asbestos claims is such that companies rarely solve their problem, no matter how much th...

By Kris Frieswick • May 1, 2003

What You Don’t Know about Sarbanes-Oxley

If all goes well, FirstEnergy Corporation just might dodge a major financial reporting bullet. All management needs to do is meet its planned June 1 deadline for overhauling the company’s computer system.That’s because the Securities and Exchange Commission isn’t likely to have gotten around to d...

By David Katz • April 22, 2003

Property Insurance Premiums to Drop: Survey

There’s been a seemingly endless parade of bad news coming from Corporate America. But here’s some rare good news.A new survey by Aon Corp., the world’s second-largest insurance broker, indicates that prices for U.S. commercial-property insurance have begun to steady—and in some cases, even come ...

By Jennifer Caplan • April 8, 2003

War Dance: Will SEC Go Light on DOD Contractors?

It’s been a long time — 18 years, to be exact — since the CFO at a high-profile defense contractor resigned because of a dog. But Peter Stockton remembers it like it was yesterday.In the spring of 1985, Stockton, then chief investigator for the House Energy Commerce Committee’s subcommittee on ov...

By Craig Schneider • April 7, 2003

Holes in the Net?

The scary thing about the demise of Reliance Insurance Co. was the sheer speed of it. As recently as December 1998, the property/casualty company was reporting a $1.7 billion statutory surplus, the biggest in its 181-year history. That same year, Reliance also boosted its profit to $585 million, ...

By David Katz • April 1, 2003

Choosing Suppliers: Vendor Bender

How do companies decide which IT suppliers to do business with? That depends on who’s doing the deciding — and on who’s assessing corporate practices.According to Jupiter Research, non-IT executives tend to favor companies whose products meet business requirements, while IT executives put the emp...

By Scott Leibs • April 1, 2003