Spending into a Headwind

Through the course of the economic downturn, many finance chiefs have come under pressure to locate as much cash as possible to make up for plummeting sales. For those executives, that’s often meant cutting back on spending for future growth.Yet for some companies, maintaining a certain level of ...

By David Katz • Oct. 29, 2010

Six Days in June: Behind Office Depot’s Reg FD Violation

When Office Depot’s CEO and CFO determined in May 2007 that per-share earnings probably would fall short of analysts’ 48 cent consensus, they devised an unorthodox strategy.Just after CEO Stephen Odland notified the board of the lower projections on May 31, according to a recent Securities and Ex...

By Roy Harris • Oct. 29, 2010

Lessons of the Fall

It may be hard to believe, but there was at least one positive outcome to the financial hardship that befell companies in the wake of the economic crisis that struck in September 2008: a heightened sense among finance chiefs of how to assess and manage unexpected risks.That message could be culle...

By David Katz • Oct. 27, 2010

More Bucks for Boards

A new study by accounting and consulting firm BDO found that director pay at midmarket companies rose 2% last year to an average of $110,500, a small increase reflecting the stagnant state of the economy. Of the 600 companies in eight industries studied, technology firms were the most generous wi...

By Kate O'Sullivan • Oct. 26, 2010

Software Blunders Trip Up Businesses

A gathering plague of glitches in software code that is threatening the financial health of many companies will only worsen as reliance on technology inevitably accelerates.So says Jeff Papows, former CEO of two big software companies that are now IBM business units, Lotus Software and Cognos. In...

By David McCann • Oct. 22, 2010

When in Doubt, Print It Out

For the past six months, Stephen Pedneault has been on a soapbox, decrying technology’s negative effects on the detection, prevention, and resolution of accounting and financial fraud. “When it comes to internal controls, we need to go back to basics,” he proclaims.Not exactly a Luddite, Pedneaul...

By David Katz • Oct. 21, 2010

The SEC: All Together Now?

The five-member Securities and Exchange Commission consists of three Democratic and two Republican appointees, and it operates in a highly politicized environment. During fractious times like these, with bipartisanship a rare commodity on Capitol Hill, pressures mount on the agency’s ability to p...

By Roy Harris • Oct. 6, 2010

Herz Closes the Books on FASB Tenure

The announcement that Robert Herz would retire as chairman of the Financial Accounting Standards Board on October 1, two years before his term expires, came as a shock to many accounting executives. After all, they have been busy planning for the major accounting changes that have been streaming ...

By Sarah Johnson and Alix Stuart • Oct. 1, 2010

Keeping Cool on the Hot Seat

After eight tumultuous years as chairman of the Financial Accounting Standards Board, Robert Herz, 57, stepped down on October 1 (see “Herz Closes the Books on FASB Tenure“). We asked him to reflect on his time at the helm.When comparing U.S. generally accepted accounting principles and internati...

By Marie Leone and Alix Stuart • Oct. 1, 2010

Thinking Outside the Stocks

Alternative investments, such as hedge funds, private equity, and real estate, are slowly gaining sway with corporate pension fund managers. A recent survey by J.P. Morgan Asset Management of about 150 corporate pension plans found that alternative investments constitute about 11% of their assets...

By Alix Stuart • Oct. 1, 2010

The Calm Before Reform

You didn’t think you were going to walk away unscathed, did you?The historic Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is now law. The 2,300-page statute takes aim at the financial-services industry, imposing a raft of new regulations and capital requirements on banks and ...

By Randy Myers • Oct. 1, 2010

“I Hate CFOs Who Always Say No.”

Clothing and gear manufacturer Patagonia has always relished the challenge of a hard climb. Since its founding in 1975 by legendary outdoorsman and environmentalist Yvon Chouinard, the company has pursued a dual mission: to make a profit even as it “uses business to inspire solutions to the envir...

By Marie Leone • Oct. 1, 2010

When Restating Causes a Furor

Like many court opinions hinging on the business judgment rule, last week’s case of California-based Nara Bancorp ended in a simple finding that masks a complex story — and carries potential lessons for future companies facing a tough decision.Reduced to basics, the Los Angeles County state judge...

By Roy Harris • Sept. 30, 2010

From Auditing to Whistle-blowing: A Dodd-Frank Timetable

The Securities and Exchange Commission’s newly released schedule for instituting the multiple reforms of the Dodd-Frank Wall Street Reform and Consumer Protection Act starts this month with interpretive guidance for standards governing audits of brokers and dealers. Then from October through year...

By Roy Harris • Sept. 24, 2010

Short-Term Debt Rule Sheds Light on SEC, Too

When the Securities and Exchange Commission proposed last week to make company reporting of short-term borrowings more transparent, the action reflected more than the seriousness of the economic damage caused by debt patterns being hidden from scrutiny. It also said something about the commission...

By Roy Harris • Sept. 23, 2010

Will New Proxy Rules Pose Board Risks?

Like all rules empowering minority shareholders, the new proxy-access regulations from the Securities and Exchange Commission present some worries for companies. But will the measures — which ease the way for dissidents to nominate board candidates and to bring proposals to a vote — necessitate c...

By Roy Harris • Sept. 22, 2010

They’ll Take Their Chances

Enterprise risk management may be popular in concept, but it is still struggling to gain traction in the real world, especially among smaller companies. According to a recent survey by the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Account...

By Alix Stuart • Sept. 17, 2010

Modeling What Comes Next

While other insurance companies watched their investment portfolios bleed losses during the financial crisis, The Guardian Life Insurance Company of America’s balance sheet came through the period very much intact. The New York-based mutual life insurer had less than 2% of invested assets in asse...

By Vincent Ryan • Sept. 8, 2010

SEC Pushes Companies for More Risk Info

The Securities and Exchange Commission is prodding companies to provide more information about the risks they face.The regulator wants companies to give more details about potential problems in annual and quarterly financial statements, as well as proxies. Among the subjects they’d like to see ad...

By Sarah Johnson • Sept. 1, 2010

Energy Upgrades Bring Cool Savings

United Electric Controls makes temperature sensors for a variety of commercial needs, yet until now it hasn’t had much wherewithal to regulate the climate at its own 100,000 square-foot headquarters in suburban Boston.Maddeningly, the company’s manufacturing machinery, which throws off a lot of h...

By David McCann • Aug. 25, 2010

A Bright Side of the Recession

Grim as the economic downturn has been for many workers, a fair number of them may be alive because of it.In short, the wave of layoffs that started in late 2008 and lasted through 2009 meant that there were fewer workers around to get hurt. Based on preliminary results of its census of fatal wor...

By David Katz • Aug. 24, 2010

A Heightened Demand for Disclosures

The major regulatory reform law signed by President Obama last month will eventually require companies across industries to add a slew of new disclosures to their regulatory filings. Among the changes: companies will need to divulge new calculations comparing employees’ total compensation with th...

By Sarah Johnson • Aug. 18, 2010

Does It Pay to Cooperate with Regulators?

The Securities and Exchange Commission gives credit to accused wrongdoers willing to play nice during its probes. For example, in last month’s settlement agreement with Sunrise Senior Living, which it had accused of financial-reporting fraud between 2003 and 2005, the regulator implied the result...

By Sarah Johnson • Aug. 3, 2010

SEC Pushes Companies for More Risk Information

The Securities and Exchange Commission has been prodding companies in recent reviews of regulatory filings to provide more information about the risks they face.In annual and quarterly financial statements, as well as proxies, the regulator wants companies to give more details about potential pro...

By Sarah Johnson • Aug. 2, 2010

Copiers: How Great Are the Risks?

Digital copiers pose security risks that companies may not appreciate, especially smaller firms without dedicated information-security staff. But what the greatest threat is, and how high the relative risk levels are, are matters of current debate.The issue has received a lot of attention since A...

By David McCann • July 29, 2010