GE Settles Iraq Kickback Case for $23 Million

General Electric has agreed to pay $23.4 million to settle Securities and Exchange Commission charges that it violated Foreign Corrupt Practices Act accounting and internal-controls provisions.Through those violations, GE enabled four of its subsidiaries to bribe Iraqi government officials “to ob...

By David Katz • July 27, 2010

Paid to Whistle

Sure, money talks. But will it persuade witnesses to securities fraud to come forward and talk, even at the risk of losing their job and reputation?Congress hopes the answer is yes. The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama on Wednesday, man...

By Sarah Johnson • July 23, 2010

Have Risk-Management Cuts Gone Too Far?

Among the targets in the wave of cost cutting that hit Corporate America last year were insurance and risk-management expenses. To be sure, buyers of commercial property-casualty and workers’ compensation coverage were aided by a hotly competitive market that drove prices down. Nevertheless, risk...

By David Katz • July 16, 2010

PCAOB Ups Auditors’ Double-Checking Duties

The Public Company Accounting Oversight Board has proposed a rule that could help uncover corporate fraudsters’ common practice of masking the true amounts of accounts, such as receivables or cash balances.The proposal updates a 15-year-old rule that governs audit confirmations — how auditors ver...

By Sarah Johnson • July 16, 2010

Learning Too Much from History?

Odds are good your company won’t make the same risk-management mistake that BP did — if, that is, your company has recently caused a major oil spill. According to a study of 168 senior finance executives from CFO Research Services (in conjunction with Liberty Mutual Group), companies often pay di...

By 10Rule • July 15, 2010

BP’s Spillover Effect

“When you fool with trust, you fool with the capital markets.” So warned Marianne Jennings, a professor of legal and ethical studies at Arizona State University, in a speech at the Institute of Management Accountants’s annual meeting last month. She was referring to the BP oil disaster, but her o...

By Scott Leibs and Kate O'Sullivan • July 15, 2010

To 404(b), or Not to 404(b)?

Dan Crow is one of the few small-company CFOs with an auditor’s stamp on his internal controls. Getting it wasn’t as time-consuming or as costly as it would have been several years ago, when large public companies first began complying with one of the most onerous requirements of the 2002 Sarbane...

By Sarah Johnson • July 12, 2010

Spies Like…Us?

Among the 346 people who attended the CFO Rising Conference in Orlando in March this year was a prodigious networker named Donald Howard Heathfield, a man the FBI now says was a Russian spy operating under a false identity.Heathfield and a woman who claims to be his wife, known as Tracey Lee Ann ...

By Tim Reason • July 7, 2010

Come Together over Cybercrime

“Cybercrime is not a problem that is growing, or coming, or off in the future,” said Greg Schaffer, an assistant secretary at the U.S. Department of Homeland Security who heads up the agency’s Office of Cybersecurity and Communications. “This is a problem right now,” he told an audience of financ...

By Marie Leone • June 29, 2010

Supreme Court: A Sarbox Split

In a ruling against the makeup of the Public Company Accounting Oversight Board, the U.S. Supreme Court has tweaked part of the Sarbanes-Oxley Act but decided that such a change does not open up the entire 2002 law to scrutiny. The ruling also preserves the legitimacy of the PCAOB, which oversees...

By Sarah Johnson • June 28, 2010

More Shareholder Say on Auditors

Shareholders have weighed in on companies’ choices for outside accounting firms in higher numbers this year. The uptick comes after a Securities and Exchange Commission rule went into effect that had nothing to do with how companies pick which audit firms will review their financials every year.R...

By Sarah Johnson • June 25, 2010

Liquidity Worries Haunt Nonprofits

In the early part of the economic downturn, liquidity became a watchword among corporations and their banks. Companies issuing “good-as-cash” investments such as auction-rate securities suddenly couldn’t get to their funds. Debt covenants based on corporate liquidity suddenly looked wobbly. Cash ...

By David Katz • June 24, 2010

Living Like It’s 1931

The calendar says 2010, but Frank Partnoy believes that in certain respects, we’re living like it’s 1931. That was a transitional year between the 1929 stock market crash and the passing of two transformative securities laws, in 1933 and 1934, that established a regulatory body for public compani...

By Sarah Johnson • June 17, 2010

Seven Pillars of Hedging Wisdom

Recent fluctuations in currencies and commodity prices have once again highlighted the importance of hedging expertise. The dollar’s continued rise against the euro, pound sterling, and Australian and Canadian dollars promises to eat into the operating income of companies that earn the bulk of th...

By Vincent Ryan • June 14, 2010

Survey: It’s a Riskier World

Interest-rate risk tops finance executives’ list of concerns in a new global survey of risk-management practices, followed by foreign-exchange risk and credit risk. Threats from all of these areas, as well as geopolitical, commodity, and energy risks, have increased in recent years, say finance c...

By Kate O'Sullivan • June 7, 2010

Google Shakes Up Investor Relations

Google’s recent announcement that it is revamping some of its investor-relations processes may open the way for other companies to streamline their own.One key change: Google will no longer distribute financial news through newswire services, such as Business Wire and PR Newswire, but instead wil...

By Alix Stuart • June 1, 2010

A Big Fat Crisis Averted?

What began as concern regarding Greece’s sovereign debt burden has now mushroomed into fears about other Eurozone nations. Mounting anxiety about the finances of Spain, Portugal, and Italy continued to roil global markets even after an initial rescue package for Greece was announced, prompting Eu...

By Kate O'Sullivan • June 1, 2010

Something Wicked This Way Comes

Odds are good that your company is losing money in the worst possible way — through theft. According to a new biannual study from the Association of Certified Fraud Examiners (ACFE), companies that fell victim to fraud suffered a median loss of $160,000, and 25% of the nearly 2,000 cases examined...

By Marie Leone • June 1, 2010

What Your Board Is Worried About

Ever wonder what your board members are talking about when you’re not in the room? While strategies for dealing with the recession and recovery have topped most board agendas recently, a new study of more than 100 board members conducted by the accounting and business advisory firm Eisner LLP ide...

By Kate O'Sullivan • May 28, 2010

How Much Should Workers Know?

Companies may have to reveal more about their decisions regarding why some workers are given more rights than others under a proposal the Department of Labor is considering.The proposed regulation is just one of many circulating in Washington that aim to get a handle on how companies classify the...

By Sarah Johnson • May 21, 2010

New SEC Finance Chief Will Stress Internal Controls

Kenneth Johnson, the acting finance chief of the Securities and Exchange Commission for much of the past year, has been named CFO of the agency.“My two top priorities will be to ensure strong internal controls and to manage responsibly the agency’s growing budget,” he told CFO in an e-mail. “Not ...

By David Katz • May 21, 2010

Drilling for Answers

It has been nearly a month since the Deepwater Horizon oil rig exploded off the coast of Louisiana, killing 11 people and opening a well that continues to release thousands of barrels of crude oil into the Gulf of Mexico. As BP, the majority owner of the well, desperately tries to stop the leak, ...

By Kate O'Sullivan • May 20, 2010

Forecast Perpetually Sunny, for Analysts

As many companies gear up for growth, CFOs are perhaps more optimistic than they have been in a long time. Few, however, are likely to be as optimistic as Wall Street analysts. A recent study by consulting firm McKinsey & Co. finds that on average, analysts’ forecasts of annual earnings have ...

By Alix Stuart • May 13, 2010

Greek Tragedy Unfolds

With the euro falling to a 14-month low and rioting in Greece claiming three lives this week, the Greek debt crisis seems far from over. Last week’s announcement of a €110 billion rescue package, nearly three times the size of the original bailout proposal, did little to calm fears about Greece’s...

By Kate O'Sullivan • May 7, 2010

You Complete My Audit

The relationship between accounting firms and their corporate clients has been shaky over the past decade, to say the least. In the wake of the Sarbanes-Oxley Act, accounting firms dumped some risky clients, shuttered ancillary consulting arms, and raised fees. That strained the collegial bond be...

By Sarah Johnson • May 1, 2010