PCAOB: Auditor, Audit Thyself

The Public Company Accounting Oversight Board has proposed a new standard that could stave off some of the audit deficiencies found during its inspections of accounting firms.The new standard would tell firms how to conduct internal evaluations, known as “engagement quality reviews.” These review...

By Sarah Johnson • Feb. 26, 2008

A Triple Play of Restatements

Three companies announced restatements on Friday or Monday: Conseco, Michael Baker Corp., and Alaska Communications Systems. Conseco said it will correct errors identified while it was trying to cure material weaknesses in its internal controls disclosed in its 2006 annual report. The insurer ex...

By Stephen Taub • Feb. 25, 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

Telling Auditors How to Audit Themselves

The Public Company Accounting Oversight Board could soon move forward on one of its long-standing projects: how the audit firms should conduct their internal reviews.Under the Sarbanes-Oxley Act, which led to the creation of the PCAOB, the audit firm overseer is required to set a standard for the...

By Sarah Johnson • Feb. 22, 2008

What You Don’t Know About Importing

U.S. Customs laws are fairly straightforward. But that hasn’t helped the myriad companies that have run afoul of U.S. Customs requirements — and wind up paying millions of dollars in fines and sometimes losing trade privileges as a result — says a new report by JPMorgan Global Trade Services, the...

By Marie Leone • Feb. 22, 2008

Deloitte Nears End of Delphi Ride

A federal judge will consider on April 28 whether a $38 million settlement offer by Deloitte & Touche to end a class-action lawsuit by Delphi Corp.’s shareholders is fair. Earlier this month, Judge Gerald Rosen of the U.S. District Court in the Eastern District of Detroit gave his preliminary...

By Sarah Johnson • Feb. 21, 2008

What’s the Difference? Liquidation vs. Dissolution

A fine line exists between definitions of a corporate liquidation and dissolution. But for tax purposes, the defining line can make a big difference. Witness the situation described in recent letter from the Internal Revenue Service (LTR 200806006, November 7, 2007), which addresses a seeming ano...

By Robert Willens • Feb. 20, 2008

Inventory Error Spurs Restatement

After finding errors in the valuation of inventory consigned to one of its contract manufacturers, Opnext, which makes data-receiving devices for the communications industry, reported it will restate its results for the past two fiscal years.The errors were uncovered in the course of preparing it...

By Stephen Taub • Feb. 15, 2008

FASB’s Fee Hike Falls Short

The Securities and Exchange Commission approved a five percent fee hike to fund the Financial Accounting Standards Board. The securities regulator voted in favor of a $23.7 million fee on public companies to help fund the accounting standard setter for 2008, according to Dow Jones.Even so, this f...

By Stephen Taub • Feb. 14, 2008

Canada Begins Countdown to Global Standards

Most of Canada’s publicly-held companies will be required to use International Financial Reporting Standards beginning in 2011. The Canadian Accounting Standards Board (CASB) announced the change this week, noting that IFRS will replace Canada’s current generally accepted accounting principles fo...

By Stephen Taub • Feb. 14, 2008

FASB Seeks the Full Monty on Pension Plan Assets

Accounting rulemakers want companies to fully disclose the kinds of alternative investments they hold in pension and other post-retirement plans. And a revision of the Financial Accounting Standards Board’s FAS 132, Employers’ Disclosure about Pension and Other Post-retirement Benefits, is their ...

By Marie Leone • Feb. 13, 2008

Mi Casa Es Su Casa? Maybe Not

Puerto Rico’s second-largest mortgage loan originator for single-family residences has settled civil financial fraud charges for allegedly overstating earnings by about $180 million. The alleged fraud involved improper accounting for billions of dollars worth of mortgage-related transactions from...

By Stephen Taub • Feb. 13, 2008

Nonprofits: How to Survive the Downturn

Unlike their corporate compatriots, nonprofit CFOs generally don’t have the luxury of a rainy day fund to keep their organizations running during tough economic times. In fact, many of them are still reeling from the last significant downturn, following the events of September 11, 2001, according...

By Sarah Johnson • Feb. 13, 2008

Deloitte Goes Pro Bono

Wondering how you can cut back on your auditing costs? If you work for a nonprofit, you may be in luck. Deloitte & Touche will give away $50 million worth of its services for free over the next three years. The catch: the pro bono work is for nonprofits only. James Quigley, CEO of Deloitte To...

By Sarah Johnson • Feb. 13, 2008

Financials Lack Transparency, Senator Says

A prominent politician is calling on the heads of the U.S. and international accounting standard setters to make off-balance-sheet liabilities more transparent. In a letter to Robert Herz of the Financial Accounting Standards Board and Sir David Tweedie of the International Accounting Standards ...

By Stephen Taub • Feb. 13, 2008

One Way to Meet Targets: Invent Revenues

The former CFO of a Louisiana medical services firm agreed to pay more than $100,000 in settling Securities and Exchange Commission civil fraud charges that he had created about $71 million of fictitious revenue between 1998 and 2001. Bartholomew F. Palmisano Jr., former chief financial officer o...

By Stephen Taub • Feb. 12, 2008

Accountant Stole School Funds to Buy Guns, Feds Charge

Federal prosecutors charged a former Oregon Department of Education accountant with diverting $925,000 of U.S. funds intended for charter schools and school-based anti-drug and health programs, and using it for his online guns and ammunition business and personal purchases. Brent Crosson was accu...

By Stephen Taub • Feb. 12, 2008

M&A Triggers Accounting Issues at Three Firms

Merge-and-acquisition activity led three companies to announce accounting adjustments, and in one case a restatement. Alliance One International Inc. said it would revise its financial statements for the quarter ended last Sept. 30 to reflect $6.9 million of restructuring and asset-impairment cha...

By Stephen Taub • Feb. 12, 2008

SEC: How Ex-PwC Auditor Missed Fraud

A former PricewaterhouseCoopers audit partner for Take-Two Interactive Software Inc. settled civil charges related to the accounting fraud at the publisher of the blockbuster “Grand Theft Auto” video-game series.In a Securities and Exchange Commission order, Robert A. Fish agreed to be barred fro...

By Stephen Taub • Feb. 12, 2008

Hat Pin Accounting Woes Prick Two Top Execs

UK-based global search firm Hat Pin plc said that it discovered accounting errors at one of its subsidiaries, and that its finance director and its CEO have resigned.Hat Pin said the accounting errors are likely to cause the 2007 results to be materially worse than previously indicated. But it ad...

By Stephen Taub • Feb. 11, 2008

AIG Has a Swap-Related Weakness: PwC

American International Group Inc. said that PricewaterhouseCoopers LLC has concluded that the insurance giant had a material weakness at year-end, related to how it values the super senior credit default swap portfolio of two AIG units’ multi-sector collateralized debt obligations (CDOs).The two ...

By Stephen Taub • Feb. 11, 2008

Spare FASB from the Ax, Alums Say

A proposal to reduce the number of people sitting on the Financial Accounting Standards Board has hit a nerve with its alumni and other accounting experts.The writers of most of the letters sent to the Financial Accounting Foundation, FASB’s parent organization, don’t believe that cutting the boa...

By Sarah Johnson • Feb. 8, 2008

IFRS: No Longer If, but When

Securities and Exchange Commission chairman Christopher Cox, in a speech last week, quashed any doubts that the regulator will one day allow U.S. companies to use international financial reporting standards rather than GAAP. The SEC is working on a road map for transitioning U.S. companies to the...

By Sarah Johnson • Feb. 8, 2008

Regulators: Account for Accounting Carve-outs

The International Organization of Securities Commissions (IOSCO) has fired off a detailed statement urging publicly traded companies to provide investors with clear and accurate information on the accounting standards they use to prepare financial statements.Michel Prada, chairman of the IOSCO Te...

By Stephen Taub • Feb. 7, 2008

Texas Roadkill: $1.1 Billion Accounting Error

The Texas Department of Transportation (TxDOT) has admitted to making a $1.1 billion accounting error. During a Texas Senate hearing, the agency disclosed that it erroneously counted some proceeds from bond sales twice, according to the San Antonio Business Journal,.The upshot is that the TxDOT ...

By Stephen Taub • Feb. 7, 2008

GOP Candidates Nix Consultant

Four Republican Congressional campaigns have severed ties with their treasurer after allegations surfaced that the FBI is investigating financial irregularities that transpired while he served at the National Republican Congressional Committee.One of the four candidates, Rep. Rodney Alexander (R-...

By David M. Drucker and Paul Singer • Feb. 7, 2008