Auditors: Nearly 25% of Companies May Not Be Going Concerns

The auditors of nearly one-quarter of companies feel that the companies may not live out the year.Auditors have become increasingly doubtful about their clients’ ability to continue as going concerns, according to the most recent report on the subject by Audit Analytics, which has tracked the num...

By Sarah Johnson • April 22, 2009

Freddie Mac CFO Dead in Apparent Suicide

The acting CFO of Freddie Mac was found dead in his Fairfax, Virginia home this morning, apparently from suicide.David Kellermann, 41, was the acting CFO of embattled Freddie Mac, and had been with the company since 1992. The former corporate controller and principal accounting officer, Kellerman...

By Tim Reason • April 22, 2009

Explore the Trendline➔

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

Can PCAOB Fair-Value Guidance Calm Jittery Auditors?

Now that accounting rulemakers have weighed in on how to measure fair value in illiquid markets and how to deal with other than temporary impairments, the Public Company Accounting Oversight Board is advising auditors on how to assess their client’s mark-to-market assessments. Time will tell, but...

By David Katz • April 22, 2009

Deloitte to PCAOB: Don’t Second-Guess Us

In response to the seventh annual review of Deloitte & Touche LLP’s audits by the Public Company Accounting Oversight Board found audit deficiencies at seven of the firm’s clients, including one that restated its financials in light of the PCAOB’s findings, Deloitte shot back that the board s...

By Sarah Johnson • April 21, 2009

Herz: No Convergence for 10-15 Years

With 30 people around the table, and more participating by phone, it was sometimes difficult to follow the proceedings of the Financial Crisis Advisory Group (FCAG) in London today. The body, assembled by the International Accounting Standards Board and the Financial Accounting Standards Board la...

By Jason Karaian • April 20, 2009

Former E&Y Partners Cannot Defer Capgemini Income

Several years ago, the consulting partners of Ernst & Young received shares in Capgemini, S.A., in exchange for their partnership interests. The shares received in the transaction were restricted for almost five years: If a partner quit, was fired for cause, or went into competition with Capg...

By Robert Willens • April 20, 2009

CFOs on IFRS: Forget about It

When the U.S. economy went into a tailspin last September after big financial institutions faltered and the credit markets seized up, many a project was put on the back burner. One was the Securities and Exchange Commission’s proposal to move all publicly traded U.S. companies to international fi...

By Sarah Johnson and Marie Leone • April 17, 2009

Don’t Get Caught in an Overseas Tax Trap

Now that the annual tax season has closed for most smaller businesses, it’s probably a good idea to consider how to extract some benefit out of the 2009 tax year.One component of tax management that companies with less than $1 billion in revenue often overlook is international tax. Yet mismanagin...

By Marie Leone • April 17, 2009

Former Freddie Mac CFO Named PCAOB’s Chief Auditor

The Public Company Accounting Oversight Board announced late on Wednesday that Martin F. Baumann, who was the CFO of Freddie Mac from 2003 to 2006 when the mortgage-finance company was attempting to emerge from an accounting scandal, was named chief auditor and director of professional standards ...

By David Katz • April 15, 2009

The Fair Value Litany

The Financial Accounting Standards Board (FASB) recently issued a document that purports to clarify the circumstances under which a market is properly regarded as “inactive” and when transactions occurring on that market are not “orderly.” The document retreats, to some extent, from the liberalit...

By Robert Willens • April 13, 2009

Study: Bonus Depreciation Boosts Cash Flows

The temporary boost to operating cash spurred by the bonus depreciation deduction enacted  last year just starting to show up on corporate financial statements. Some companies are benefiting mightily, according to a new study by RiskMetrics Group.At least for now. The temporary bump in cash flow ...

By Marie Leone • April 13, 2009

Messenger, Shot

In public, bankers have been blaming themselves for their troubles. Behind the scenes, they have been taking aim at someone else: the accounting standard-setters. Their rules, moan the banks, have forced them to report enormous losses, and it’s just not fair. These rules say they must value some ...

By Economist Staff • April 10, 2009

SEC Chairman Mum on Accounting Issues

With just two weeks left for the public to comment on the Securities and Exchange Commission’s proposed roadmap for adopting International Financial Reporting Standards, SEC chairman Mary Schapiro’s own views on the topic, as well as some other prominent accounting issues, remain largely a matter...

By Tim Reason • April 7, 2009

Regulators Eye “Going Concern” Concerns

In the midst of an increase in the number of going-concern qualms stamped on company financials, standard-setters are working on changing how managers and auditors determine whether a business will stay viable in the foreseeable future.It’s the one area of financial reporting where auditors are r...

By Sarah Johnson • April 6, 2009

Behind the Eight Ball, Brunswick Scratches on Tax Case

If your company is still dealing with a Section 338 tax election from years past, you may want to double check on how the Internal Revenue Service is likely to view the expected depreciation deductions. In some cases, the tax rule may have triggered some unexpected consequences, as was the case i...

By Robert Willens • April 6, 2009

Why Didn’t FASB Just Say So?

Rarely in history has accounting received such public and media attention as it has in recent months, as debate swirls around the question of whether mark-to-market, or fair-value accounting has exacerbated the difficulties of the financial industry. Last week, the Financial Accounting Standards ...

By Tim Reason • April 6, 2009

Rule Change Lets Banks Reinvent the Past

In a three-to-two vote Thursday, the Financial Accounting Standards Board approved an accounting-rule change that allows banks with impaired financial securities to move billions of dollars in losses off of their income statements, which will benefit their regulatory capital calculations.“Banks g...

By Marie Leone • April 3, 2009

Ball of Confusion: FASB Affirms Fair-Value Principles

Straining to overcome the confusion that resulted from its recently issued fair-value proposals, the Financial Accounting Standard Board this morning approved an altered version of its proposed guidance on how to determine whether a financial market is inactive and an asset sale isn’t distressed....

By David Katz • April 2, 2009

Breakdown

A sizeable share of finance chiefs are worried that supply chains are in danger of breaking down. In a poll of more than 200 senior finance executives in Europe, one-fifth have already seen at least one of their suppliers go bust. (See “Business Outlook Survey“.) More than half of the CFOs polled...

By Jason Karaian • April 2, 2009

Subprime Suit Accuses KPMG of Negligence

Two complaints filed in federal courts yesterday claim that KPMG auditors were complicit in allowing “aggressive accounting” to occur under their watch at New Century Financial, the mortgage lender that collapsed two years ago at the beginning of the subprime-mortgage mess.The plaintiff, a New Ce...

By Sarah Johnson • April 2, 2009

Investors: Stem the Anti-Fair Value Tide

Investor advocates are hoping the Financial Accounting Standards Board has been playing some cruel April Fool’s Day joke that will unravel on Thursday morning.Chances are, though, that FASB will move ahead with two speedily crafted proposals that would change some of the ways companies apply fair...

By Sarah Johnson • April 1, 2009

Ready for Anything

John O’Connor doesn’t mind surprises — as long as he knows about them before everybody else. Whether it’s a power outage in Wichita or an earthquake in Chengdu, “if I hear about it for the first time on the news, something has gone wrong,” says O’Connor, director of supply-chain risk management a...

By Josh Hyatt • April 1, 2009

Income-tax Accounting: Same Difference?

The International Accounting Standards Board has proposed changes to simplify its income-tax accounting guidelines. The feedback the standard-setter gets could influence the final changes that are made to the equivalent rule in U.S. generally accepted accounting principles—or even result in the r...

By Sarah Johnson • March 31, 2009

Guessing the Costs of IFRS Conversion

U.S. executives expect to pay more than their European counterparts did to convert to International Financial Reporting Standards. Depending on company size, they estimate they’ll spend between 0.1% and 0.7% of annual revenue to move from U.S. GAAP to the global rules, an endeavor publicly traded...

By Sarah Johnson • March 30, 2009

U.S. Shareholders Grab Foreign Merger Tax Benefit

Last week, the nearly century-old Suncor Energy Inc. and the relatively new Petro-Canada (not quite 35 years old yet) agreed to merge in a deal that would bring the two Canadian oil companies together. The companies plan to complete a so-called “plan of agreement” under the Canadian Business Corp...

By Robert Willens • March 30, 2009