CFO Snapshot: Sweating in Front of the Board

Name: Meryl ZausnerTitle: CFOCompany: Novartis Corp.When did you know you wanted to be a CFO?At the age of 27, by default I found myself standing in front of the board of directors of the Colgate-Palmolive Co. presenting a divestiture strategy for one of our businesses. It was also the last time ...

By Kate O'Sullivan • July 27, 2012

Has Sarbanes-Oxley Done Its Job?

On the occasion of the 10th anniversary of the Sarbanes-Oxley (SOX) Act, professors, CEOs, and financial executives told a congressional hearing today that while the law took effect in qualitative goals like restoring investor confidence, measuring its success a decade later requires a bit more q...

By Kathy Hoffelder • July 26, 2012

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Tax policy shifts: What CFOs need to know to stay ahead

Discover how evolving tax policies are creating new opportunities and challenges for CFOs.

By CFO.com staff

No-Fuss Audit Rotation Alternatives Floated

Almost 10 years after the U.S. General Accounting Office (GAO) first studied whether to require mandatory audit rotation, the idea is still causing corporate executives’ blood to boil. But new approaches and a revised look at some old alternatives just might calm their nerves.Instead of having a ...

By Kathy Hoffelder • July 25, 2012

Two Blows Against Accounting Convergence

The mission to create a single set of global financial-reporting standards received two blows in recent days as the International Accounting Standards Board engaged in tussles with the Securities and Exchange Commission and the Financial Accounting Standards Board.On July 13, the SEC published a ...

By Andrew Sawers • July 25, 2012

Countries, Culture, and Working Capital

Spanish and Italian companies are the worst at paying their bills. But that doesn’t seem to matter much: they’re also the worst at collecting on their invoices. So what goes around (or doesn’t) comes around (or doesn’t).Those truths are supported by the findings of a working capital survey compar...

By Andrew Sawers • July 24, 2012

Big Working Capital Opportunity Seen in Europe

European companies could improve their working capital by almost €900 billion in aggregate through better management of their receivables, payables, and inventory, a consultancy specializing in working capital management has calculated.REL, part of the Miami-based Hackett Group, has analyzed the ...

By Andrew Sawers • July 24, 2012

Managerial Accountants Want Their Own Kind of Costing

Managerial accountants, who work with much of the information that a company routinely leaves out of its financial reports, could soon have a valuable supplement to generally accepted accounting principles (GAAP).The Institute of Management Accountants (IMA) penned an exposure draft last week to ...

By Kathy Hoffelder • July 20, 2012

SEC Fines Former Huron CFO, Controller

The Securities and Exchange Commission announced Friday that it had charged Huron Consulting Group as well as its former finance chief and controller with accounting violations related to overstatements of pretax income from 2005 to 2009. The commission ordered the executives to pay fines and pen...

By Vincent Ryan • July 20, 2012

Everything Must Earn an ROI

Strategic investments only become “strategic” if they actually deliver an adequate return compared with what would have happened if one did not make the investment.  Too often executives describe an investment in the future by saying, “it’s not financial, it’s strategic.” Such statements come wit...

By Gregory V. Milano • July 19, 2012

Equipment Leasing Plan Could Make Lessees Losers

Since 2010, when the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) first published an exposure draft on lease accounting, the boards have been trying to come to an agreement on how to take two very different kinds of leases — equipment and ren...

By Kathy Hoffelder • July 17, 2012

You Can’t Cut Your Way to Success

There are quite a few companies who have tried to cut their way to IT success over the past five years and are starting to regret it.  The economic crisis and subsequent lackluster recovery has IT spending at significantly lower levels than 2008.  Companies that have delayed investments — in peop...

By Susan Cramm • July 17, 2012

SEC Staff Pulls Back on Accounting Convergence

Last Friday the final report from staff members of the Securities and Exchange Commission on whether to incorporate global accounting standards into U.S. accounting methods seemed to put the concept of global convergence further back on the shelf.The 137-page report did attempt to consider all po...

By Kathy Hoffelder • July 16, 2012

Why Tax Directors’ Heads Should Be in the Cloud

A company’s tax director shouldn’t feel like the uninvited guest at the next cloud meeting. Indeed, not having the tax leader at a company’s cloud discussions early on can be costly, experts say.In many organizations, the tax department isn’t kept up to speed on what a company’s plans are to ente...

By Kathy Hoffelder • July 11, 2012

Forecast: Growth in Equipment Leasing Slowing Down

Projected growth in investment in equipment and software for 2012 has slowed to 6.4% entering the third quarter of the year, down from a second-quarter projection of 6.9%, according to an Equipment Leasing and Finance Foundation report released today.Worries about “the European debt crisis, U.S. ...

By CFO Editorial Staff • July 10, 2012

Operating Profit: a Springboard to Growth

It goes without saying that companies with some kind of financial cushion have a better springboard to growth than companies operating on slender margins. For business-services companies, that rings especially true.Those business-services firms with a larger amount of operating cushion often also...

By Kathy Hoffelder • July 9, 2012

How to Gauge the Cost of Corporate Risk

With earthquakes in Japan and New Zealand, floods in Australia and Thailand, and tornadoes in the United States causing large insured losses last year, it’s no shock that the total cost of risk (TCOR) — a widely used metric of corporate expense for insuring and managing risks — rose in 2011, acco...

By Caroline McDonald • July 5, 2012

Why to Choose Growth Over Buybacks

The next time the leadership and board of a business-services company convene to discuss the merits of a share-repurchase program, they need to realize they would better serve their shareholders by dusting off their acquisition-strategy playbook.Our capital-market research has found that those bu...

By Gregory V. Milano and John R. Cryan • July 3, 2012

FASB Seeks More Tables in Financial Reports

Accountants will not be the only ones relying on tables to explain financial data, if the Financial Accounting Standards Board’s (FASB) liquidity disclosure proposal moves forward. CFOs and CEOs of nonfinancial companies will have to use more of them in their company’s financial reporting.FASB as...

By Kathy Hoffelder • July 2, 2012

Supreme Court Upholds Bulk of Health-Care Law

The U.S. Supreme Court this morning upheld the constitutionality of the individual mandate, and therefore, in effect, virtually the entire Patient Protection and Affordable Care Act. The court ruled that the law’s provision requiring all U.S. citizens to buy health coverage if they don’t have it ...

By Vincent Ryan • June 28, 2012

CEOs, CFOs Should Oversee Risk Management: Survey

Organizational risks are increasingly on the radar of top executives, and it’s chief financial officers and CEOs — not chief risk officers — who should ultimately bear the responsibility for risk management, according to a survey released Wednesday.“Aftershock: Adjusting to the new world of risk ...

By Caroline McDonald • June 28, 2012

Suddenly, Audit Reports Get Sexy

The auditor’s report is usually the most boring page in any company’s annual financial statements — and that’s saying something. But now, in what could be the most important development in global financial reporting since Europe decided in 2002 to adopt international financial reporting standards...

By Andrew Sawers • June 27, 2012

Why Inefficiency Is a Balance Sheet Asset

CFOs and the accounting profession know well how to do an upbeat financial report on the performance of any efficiently-run organization. But how can you turn inefficiency into a profit or an asset?Well, why would you want to? Professor Ian Goldin knows why. He’s the director of the Oxford Martin...

By Andrew Sawers • June 27, 2012

Other Comprehensive Income: The Burden that Won’t Go Away

Despite regulators granting relief to corporations from having to fully disclose additional revenue and expenses on income statements, CFOs and other senior executives might still be tripped up by future income-reporting requirements.Other comprehensive income (OCI), or the expenses, revenue, or ...

By Kristine Brands • June 20, 2012

The Imprecise World of Accounting

Today, Hans Hoogervorst, chairman of the International Accounting Standards Board, addressed the International Association for Accounting Education & Research conference in Amsterdam on the challenges of setting accounting policy. An edited excerpt of his remarks follows.Accounting should be ...

By CFO Editorial Staff • June 20, 2012

The Unhealthy Fear of Risk

In last month’s Capital Ideas column, “Why Isn’t the Stock Market Higher?” I illustrated how the stock market has lost a third of its price to earnings valuation multiples since 2007 despite consensus estimates of 40% higher net income in 2012.One important reason the valuation multiples are so l...

By Gregory V. Milano • June 18, 2012