Could the Lawyers Kill the Auditors?

With public-company auditing firms facing a rash of lawsuits with the potential to bankrupt them, the Center for Audit Quality is urging the U.S. Treasury Department to help out the accountancies by improving the government’s handling of catastrophic risks and costly litigation.According to a let...

By Alan Rappeport • July 2, 2008

PCAOB Cites “Deficiencies” at PwC

In its latest evaluation of PricewaterhouseCoopers, the Public Company Accounting Oversight Board scolded the firmfor various “deficiencies” that typically included failing to get enough information to support its opinions about the financial statements of its clients, who in the PCAOB’s lexicon...

By Alan Rappeport • July 1, 2008

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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 New Accounting Rules for Three Years?

Although the Securities and Exchange Commission has yet to suggest a date by which U.S. companies might be required to adopt International Financial Reporting Standards, the actual mechanics of such a massive switch are beginning to dominate accounting discussions. IFRS adoption was a recurring t...

By Tim Reason • June 30, 2008

CFO, CEO Squeezed by Berry Company

Following a six-month investigation, the audit committee of a natural-products and organic-foods company has recommended that the board oust the current CEO and CFO. As a result, CEO Steve Bromley and finance chief John Dietrich of SunOpta Inc. will leave the company by the end of the year.Bromle...

By Stephen Taub • June 27, 2008

Global Audit Oversight: A Matter of Trust

Globalization may be making its way to the world of auditing and, as with the convergence of accounting standards, frayed nerves can be found everywhere. A panel of regulators, accounting firms, and investors convened Wednesday for a debate that at times grew testy over whether audit inspectors ...

By Alan Rappeport • June 26, 2008

FASB Agenda Takes on Global Spin

A mid-year update of the Financial Accounting Standards Board’s agenda left no doubt that the group that writes U.S. accounting rules is now actively planning for U.S. GAAP to be replaced by International Financial Reporting Standards, possibly as soon as 2011.In a webcast hosted by FASB on Monda...

By Tim Reason • June 25, 2008

Are Break-up Fees Lost Profits?

Breaking up is hard to do, especially when termination fees are imposed on the deal. Earlier this year, the Internal Revenue Service addressed the often-encountered, but surprisingly elusive, question of how “break-up” or termination fees are properly taxed (See Letter 2008823012, issued on Marc...

By Robert Willens • June 24, 2008

Costly Chemistry: Dow Hikes Prices 25 Percent

A broad price increase announced by Dow Chemical, raising the price of its products by as much as an additional 25 percent in July, is the latest pass-through blow to companies. Dow said the rises are an effort to offset “the continuing relentless rise” in the cost of energy and hydrocarbon feeds...

By Stephen Taub • June 24, 2008

Companies Cozying Up to IFRS

After years of resistance to a global accounting overhaul, American companies are rapidly coming around to the idea of adopting international financial reporting standards, a new Deloitte survey of finance executives suggests.Polling executives at 200 companies, Deloitte found that 30 percent of ...

By Alan Rappeport • June 24, 2008

Small Co. Reprieve: Sarbox Deadline Delayed

The Securities and Exchange Commission has granted small companies a one-year reprieve with regard to complying with the auditor-attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. When it approved the extension on Friday afternoon, the SEC said it wants to study the cost burden...

By Stephen Taub • June 20, 2008

Tax-Free Quick Step for Auto Duo

With an eye to minimizing taxes, O’Reilly Automotive Inc. and CSK Auto Corp. are taking measured steps to implement an agreement reached in April. If they can secure status as a reorganization, highly appreciated O’Reilly assets can move to CSK without tax consequences and related securities can ...

By Robert Willens • June 20, 2008

Latest Grade for Government Financials? F-plus

A new Government Accountability Office report on material weaknesses in federal-agency internal controls notes such persistent deficiencies as failure to use proper accounting standards, although the GAO acknowledges some improvement since the last in a series of criticisms the watchdog group has...

By Kate Plourd • June 19, 2008

NEC, Hit by Revenue-accounting Woes, Settles with SEC

NEC Corp., the Japanese electronics giant mired in revenue-recognition accounting problems and wracked by fraud, agreed to a Securities and Exchange Commission revocation of NEC’s securities registration in the U.S.In the SEC’s settlement with NEC, which did not admit to or deny the SEC’s finding...

By Stephen Taub • June 18, 2008

Wallflowers Wonder: When Will GAAP Merge with IFRS?

Like geeky high school sophomores trying to screw up the courage to ask the homecoming queen to the prom, participants at yesterday’s accounting forum at Baruch College couldn’t quite bring themselves to ask for what they wanted: a date.Despite the presence of Securities and Exchange Commission o...

By Marie Leone • June 17, 2008

Dying for a Date

If the United States moves to adopt international accounting standards, who will teach them? What books will they use? And who will write the licensing tests for CPAs?Although accounting standard setters and regulators are planning the move and companies and auditors are preparing to make the swi...

By Marie Leone • June 16, 2008

McGladrey Converges on IFRS Education

Talk to auditors these days and you hear the machinery of a nascent industry whirring: the business of international financial reporting standards and the revolution it will bring.While most client eyes are on the Big Four for their role in convergence, of course, the second tier is immersed as w...

By Roy Harris • June 13, 2008

Rule Makes Execs Think Twice About Dealmaking

Just six months after the Financial Accounting Standards Board issued its revised rule on business combinations, corporate executives are saying the technical pronouncement will change the way they do business.In a recent survey, 40 percent of 1,850 executives said FAS 141(R), Business Combinatio...

By Marie Leone • June 13, 2008

Why Preferred Treatment Might Hurt

Two months ago, when Lehman Brothers bolstered its capital with an oversubscribed issuance of convertible preferred stock, then-CFO Erin Callan boasted that response to the deal “demonstrates the confidence that investors have in Lehman Brothers.” The deal didn’t help Callan herself: she was oust...

By S.L. Mintz • June 12, 2008

Nabbing Tax Credits Like the Big Boys

The research and development tax credit has made more comebacks than sitcom stars of the 1970s. And it’s about to happen again.The research credit expired on December 31, 2007, but the Senate Finance Committee pushed through proposed legislation on Tuesday to extend the tax break for the 13th tim...

By Marie Leone • June 12, 2008

Lease Ruling Unlocks Troubles at KeyCorp

KeyCorp said an unfavorable tax ruling is leading it to actions that include raising $1.5 billion in capital and halving its dividend. The goal is to preserve about $200 million of capital annually, the company noted in a regulatory filing. The embattled financial institution also said it will re...

By Stephen Taub • June 12, 2008

IRS, Heal Thyself

In response to last fall’s Government Accountability Office criticism of the weak internal controls it found at the Internal Revenue Service, the tax agency has admitted some faults and detailed plans to address them. The GAO called on the IRS last November to fix a slew of problems related to t...

By Kate Plourd • June 11, 2008

Hedge Accounting: Caging the 800-page Gorilla

Trying to simplify perhaps the most notorious example of the complexity of U.S. financial reporting, the Financial Accounting Standards Board is proposing sweeping changes in hedge accounting.In an exposure draft issued last week, FASB proposed amending Accounting for Derivative Instruments and H...

By David Katz • June 11, 2008

But Who’ll Audit the Auditors’ Reports?

The Public Company Accounting Oversight Board adopted a framework that requires the 1,800 registered public accounting firms to file their own annual reports, as well as special reports on such events as disciplinary actions against the firm or key individuals.The PCAOB sees the new reporting rul...

By Kate Plourd • June 10, 2008

Broadcom CFO Indicted

The former CFO and CEO of Broadcom Corporation have been indicted by a federal grand jury in California on securities fraud and conspiracy charges related to backdating stock options that caused the company to take a $2.2 billion write-down in 2007. The restatement is reported to be the largest a...

By Marie Leone • June 9, 2008

It’s Your Loss. (Maybe.) Now Explain It.

The Financial Accounting Standards Board has proposed substantially increasing the amount of information that companies are required to provide to investors about potential future losses. The new rule could have a dramatic impact on how companies disclose potential liabilities in their financial ...

By Tim Reason • June 9, 2008