Hot Times for Accounting Officials

Forget the recession. If you’re a CPA in your fifties, live in the New York area, and know a fair amount about how Generally Accepted Accounting Principles work, you’re sitting pretty.That, at least, is the Securities and Exchange Commission’s new view of the job market for elite accounting rule...

By David Katz • March 11, 2008

Cornerstone Ex-CFO Settles with SEC

A federal judge has signed off on a Securities and Exchange Commission settlement with the former finance chief of Cornerstone Propane Partners LLP, stemming from earlier civil charges that a division of the company fraudulently revised financial statements after a failed attempt to verify accoun...

By Stephen Taub • March 10, 2008

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

Fixing the Financial-Reporting Supply Chain

The world’s accountants are concerned about the usefulness of financial statements, a tendency for over-regulation, and the costs of converging to international standards, according to a new report by the International Federation of Accountants.The IFAC survey , which polled 341 people around the...

By Alan Rappeport • March 6, 2008

Ex-Treasurer of Mortgage Banker Indicted for Fraud

A former finance executive of Puerto Rico-based mortgage banker Doral Financial Corp. was indicted for his role in an alleged scheme to defraud investors and potential investors in his company’s stock.Mario Levis, who also used the name Sammy Levis, formerly Doral’s treasurer and senior executive...

By Stephen Taub • March 6, 2008

Blockbuster Feature: a Major Restatement

Blockbuster Inc. said it will restate its 2005 and 2006 consolidated financial statements, and its quarterly reports for 2006 and 2007, to correct certain errors.As a result of the errors — leading to revisions that will impact income from continuing operations — the company said that it will rep...

By Stephen Taub • March 6, 2008

Can Delta Hang On to a $9 Billion Tax Credit?

Many hurdles will have to be overcome before a business combination of Delta AirLines, Inc. and Northwest Airlines Corp. can take off. Apparently, each carrier’s pilots will have to be assuaged, and there is also the potential for careful scrutiny regarding the anti-trust aspects of the deal.Perh...

By Robert Willens • March 5, 2008

Ex-Broadcom HR VP Settles SEC Backdating Charges

Broadcom Corp.’s former vice president of human resources, Nancy M. Tullos, settled Securities and Exchange Commission charges that she participated in a five-year scheme to backdate stock options granted to Broadcom employees and officers.“Ms. Tullos personally benefited from the stock option b...

By Roy Harris • March 4, 2008

PwC Pays $30M to Settle Claim of Faulty Audit

PricewaterhouseCoopers agreed to pay $30 million to settle claims stemming from its audit of Metropolitan Mortgage & Securities Co., a financial conglomerate that went out of business four years ago. The Big Four accounting firm was accused of helping Metropolian Mortgage disguise its problem...

By Stephen Taub • March 4, 2008

No Protection for Defense Company CFO

The chief financial officer is leaving defense contractor Force Protection Inc. amid a wider management shake-up that follows its announcement of a financial restatement.The Ladson, S.C.-based company said it expects to restate the Sept. 30 quarter and nine-month periods as a result of errors dis...

By Stephen Taub • March 4, 2008

The Shaq Attack on Fair Value

Time has not quashed the backlash over fair value accounting. It’s been 18 months since the Financial Accounting Standards Board issued FAS 157, Fair Value Measurement, to set the stage for using market pricing to value corporate transactions. But opponents of the concept continue to complain ab...

By Marie Leone • March 4, 2008

Bunge Finds a Sales Error: $7B Worth

Bunge Ltd. said it overstated net sales and cost of goods sold in its unaudited 2007 financial reports by $7 billion, which will result in a gut-wrenching restatement.Last month, the agribusiness and food company reported a total of $44.8 billion in net sales for the year. The corrected financial...

By Stephen Taub • March 3, 2008

What Did Brown Do to Itself?

UPS restated its 2007 results after it identified a $65 million state income tax benefit — related to the company’s withdrawal from the Central States multi-employer pension plan — that the company had incorrectly recorded in the fourth quarter.The restatement cut adjusted diluted earnings per sh...

By Stephen Taub • March 3, 2008

Jury: Ex-Applix CFO Broke Securities Laws

Clarification:This story has been updated to reflect that in the case of civil charges, a jury does not find guilt, but rather agrees or disagrees that prosecutors have established liability for law violations.A jury found that the former top financial executive of internet software company Appli...

By Stephen Taub • March 3, 2008

Common Auditing Screw-ups

We recently asked 172 partners at the Big Four firms across Europe for their honest appraisal of their clients’ biggest shortcomings. Fix these problems, auditors say, and audits will go more smoothly, relationships with auditors will improve and, possibly, fees will fall. The best comments are b...

By Janet Kersnar • March 3, 2008

Mending Fences

Shortly after Daniel Bednar clinched a new job as deputy CFO at Bureau Veritas, CFO François Tardan assigned him to a project that would have left other, less hearty finance executives heading for the door. It was 2004 and companies across Europe were facing a veritable mountain of auditing work ...

By Janet Kersnar • March 3, 2008

Waters’s Balance Sheet Is All Wet

Waters Corp. says it will restate unaudited financial statements for the first three quarters of its 2007 fiscal year to reclassify marketable securities on its balance sheet.The company classified as cash and cash equivalents securities that should have been classified as short-term investments,...

By Stephen Taub • Feb. 29, 2008

Unfit Reporting: Bally Settles SEC Fraud Charges

Bally Total Fitness Holding, just out of bankruptcy and under a new private ownership, settled financial fraud charges with the Securities and Exchange Commission stemming from “more than two dozen accounting improprieties” that led to a series of erroneous financial reports. The SEC alleged that...

By Stephen Taub • Feb. 28, 2008

Who’s Your Auditor’s Boss?

The Public Company Accounting Oversight Board is considering whether to bolster its regulations to guide audit-firm reviews of the work that their individual auditors do for client companies. The board also may come up with a new approach to PCAOB policing of auditor abuses.Under its current rule...

By Sarah Johnson • Feb. 28, 2008

The IRS Throws Down the Gauntlet on Executive Comp

A recently-issued private letter ruling (LTR 200804004) signaled a radical change in the Internal Revenue Service’s position regarding the nature of certain compensation paid to executives. The ruling concluded that such compensation was not “qualified performance based compensation.” As a resu...

By Robert Willens • Feb. 27, 2008

Two at Deloitte Settle SEC Delphi Impropriety Charges

Two Deloitte & Touche partners have settled Securities and Exchange Commission charges alleging that they engaged in improper professional conduct during their audits of Delphi Corp. Nicholas Difazio and Duane Higgins, Deloitte’s engagement partners on the 2000 and 2001 audits of the auto par...

By Stephen Taub • Feb. 27, 2008

In Tax Shift, Nortel Takes $1.1B Charge

Embattled Nortel Networks this week dealt with problems for its future, even as its former CFO faces unrelated problems from its past. The Toronto-based company has taken a whopping $1.1 billion noncash charge from changes in its Canadian tax profile.Meanwhile, the Royal Canadian Mounted Police a...

By Stephen Taub • Feb. 27, 2008

Can Bob Herz Make the Trains Run on Time?

By paring the Financial Accounting Standards Board’s membership to five from seven, keeping the voting process streamlined, and giving FASB chairman Bob Herz a whole lot more power, the Financial Accounting Foundation hopes to create a leaner and meaner standard-setting body.By far the most cont...

By Marie Leone • Feb. 27, 2008

Putting Auditor Judgments under a Microscope

Accounting experts could spend days on end debating which is better: a more prescriptive set of rules (like U.S. GAAP) or rules that seem to allow more judgment (international financial reporting standards, or IFRS). What’s indisputable is that standard-setters and regulators — any debate notwith...

By Sarah Johnson • Feb. 27, 2008

FASB Parent: Five Is More than Seven

In a controversial vote, the Financial Accounting Standards Board’s governing body has approved the reduction of FASB from seven to five members as of July 1.In a closed-door session on Tuesday afternoon, at least 11 of the 13 members of the Financial Accounting Foundation’s board of trustees—the...

By Marie Leone • Feb. 26, 2008

Breaking News: FASB Shrinks

The Financial Accounting Standards Board’s governing body has voted to reduce the number of people who serve on FASB.On Tuesday, the Financial Accounting Foundation approved all of its recent proposals for governance changes to FASB, FAF, and the Government Accounting Standards Board during a clo...

By Marie Leone • Feb. 26, 2008