Tiffany’s Holiday Gift: LIFO Cost Hikes

Although big jewelry retailers aren’t yet feeling the pain of soaring precious-metal prices, they will reportedly soon experience earnings hits via the last-in, first-out method of accounting for the cost of goods they’ve sold.To be sure, large jewelers like Tiffany & Co. and big retail outle...

By David Katz • Nov. 19, 2007

Is a Restatement a CFO’s Kiss of Death?

Companies that restate earnings change CFOs much more frequently than non-restating companies do, according to a study by two University of Alabama professors. But exactly how much more frequently turns out to be a matter of some confusion.The report, titled “Corporate Governance Consequences of...

By Roy Harris • Nov. 19, 2007

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

PCAOB to Seek 6 Percent Budget Boost

The Public Company Accounting Oversight Board will ask for a $144.6 million budget for 2008, a 6 percent increase over the amount the Securities and Exchange Commission approved last year. But not all the board members are comfortable with it. The PCAOB’s budget is funded by the registration fees...

By Sarah Johnson • Nov. 19, 2007

Oversight Board Bars KPMG Ex-Auditor

The Public Company Accounting Oversight Board has barred a former KPMG auditor from working at a public accounting firm for a year.The PCAOB accused Susan Birkert, who worked at the Big Four firm from 2002 to 2006, of violating its independence rules when she bought $5,000 worth of a KPMG client’...

By Sarah Johnson • Nov. 16, 2007

Fair-Value Holiday: Restrictions Apply

With a Friday deadline looming, companies received a one-year deferral on booking non-recurring, non-financial assets and liabilities at fair value. On Wednesday, the Financial Accounting Standards Board confirmed an earlier decision to reject a blanket deferral of its fair value rule, FAS 157, b...

By Sarah Johnson and Marie Leone • Nov. 15, 2007

SEC Allows Dual Accounting System

Some non-U.S. companies no longer must reconcile their financials with U.S. GAAP, as long as they use International Financial Reporting Standards. The Securities and Exchange Commission voted unanimously on Thursday to eliminate the reconciliation requirement immediately. Those eligible foreign p...

By Sarah Johnson • Nov. 15, 2007

The Sums of All Parts: Redesigning Financials

In another large step towards the most dramatic overhaul of financial statements in decades, the Financial Accounting Standards Board Wednesday laid out a series of subtotal figures that companies would be required to include on their balance sheets, income statements and cash flow statements.The...

By Marie Leone • Nov. 14, 2007

Capital Contrarians

The annual budget ritual is upon us, and it looks as thoughbusinesses will be in for a rough time in 2008. The International Monetary Fund recently announcedthatglobal growth will slow to 4.8 percent and U.S. growth to a glacial 1.9percent. True,to judge from conflicting forecasts, the experts mi...

By Simon Littlewood • Nov. 14, 2007

Build-A-Bear to Fix Fuzzy Financials

The specialty retailer Build-A-Bear Workshop is busily reconstructing financial statements to correct a number of errors.The company said its cash flow statement incorrectly reported depreciation and amortization and purchases of property and equipment for the first half of the current calendar ...

By Stephen Taub • Nov. 14, 2007

Is the Auditor the CFO’s Fool?

In his 1892 manual, Auditing, British accountant Lawrence Dicksee wrote, “The auditor who is able to detect fraud is — other things being equal — a better man than the auditor who cannot.” Amid today’s accounting complexities, despite all the protections installed against fraud, a wide majority o...

By Alan Rappeport • Nov. 14, 2007

Is FASB Fading Away?

In the days leading up to a critical vote by the Securities and Exchange Commission, accounting experts are wondering whether the regulator is rushing to open the floodgates for more widespread use of International Financial Accounting Standards. On Thursday, the SEC will decide whether to elimin...

By Sarah Johnson • Nov. 13, 2007

When Controllers Fear a Loss of Control

Controllers had their day at the annual Financial Executives International conference on financial reporting. And a panel of executives echoed concerns about that key finance position that were both global and domestic.Topping the list of items tackled by the four-person panel, moderated by Eaton...

By Marie Leone • Nov. 13, 2007

Sneak Peek at New Financial Statements

Totals and subtotals will be the main event at Tuesday’s Financial Accounting Standards Board meeting. The FASB staff will be presenting its recommendations for how totals and subtotals should be expressed in the new financial statements, which are set to be released in draft form in a discussion...

By Marie Leone • Nov. 13, 2007

It’s All Happening at the Zoo

Minnesotans should consider themselves lucky that the state’s zoo is better at keeping track of its animals than its finances. The state auditor scolded the zoo in a report last week for a menagerie of foibles, ranging from how it accounts for revenue from its vendors to how it illegally reimburs...

By Alan Rappeport • Nov. 12, 2007

FASB’s Herz Calls for “Choice with a Timetable”

Financial Accounting Standards Board chairman Robert Herz, addressing a group of reporters at the Financial Executives International annual conference, called the way accounting standards have been set in the past “nuts — N-U-T-Z,” as he referred to the excessive guidance and industry-specific ru...

By Marie Leone • Nov. 12, 2007

Office Depot to Restate over Vendor Allowances

Office Depot said Thursday that it will revise some of its financial statements after a whistle-blower complaint sparked an independent review of its vendor-program accounting.The review found that from the third quarter of 2006 until the second quarter of 2007, the company recognized funds due o...

By Alan Rappeport • Nov. 9, 2007

FIN 48 Delay Offers Small Cos. Breathing Room on Taxes

The Financial Accounting Standards Board has decided to allow small nonpublic companies and partnerships to put off compliance with FASB’s disclosure rule on uncertain tax positions. Originally issued in June 2006, the rule, FIN 48, went into effect for public companies last December.FASB’s decis...

By Marie Leone • Nov. 9, 2007

Revenue Timing Trips Up Leap Wireless

Leap Wireless International has begun to restate more than three years’ worth of financials to adjust accounting mistakes. The projected $40 million adjustment will make up for errors made in revenue recognition and classification of its equipment revenue.Currently without a full-time CFO, the wi...

By Sarah Johnson • Nov. 9, 2007

IRS Still Out of Control: GAO

In its latest audit of the Internal Revenue Service, the U.S. Government Accountability Office found problems in the tax collector’s internal controls, an issue that has plagued the agency for years.The IRS has had to put processes in place to make up for its “serious internal control and financi...

By Sarah Johnson • Nov. 9, 2007

Fraud Gets Ex-CFO 70 Months

Paul Humphreys, the former CFO of Safety-Kleen, was sentenced to 70 months in prison after earlier pleading guilty to securities and bank fraud charges. He was indicted in December 2002 for a scheme to manipulate Safety-Kleen’s financial statements in 1998, 1999 and 2000, which included more tha...

By Stephen Taub • Nov. 8, 2007

True Religion Bows to Taxman

True Religion Apparel said it will restate its financials for the 2005 and 2006 fiscal years and the first two quarters of 2007 to correct compensation accounting errors. Income tax expenses recorded for those periods were calculated incorrectly because compensation programs did not fully comply...

By Stephen Taub • Nov. 8, 2007

IASB Looks for a Parent

The trustees for the International Accounting Standards Board have agreed to take steps to create a group that would oversee the standard-setter. The move follows the expanded adoption of IASB’s International Financial Reporting Standards and concerns from European countries about IASB’s growing ...

By Sarah Johnson • Nov. 7, 2007

FAS 157 Could Cause Huge Write-offs

If you think banks are writing off large amounts of assets now, wait until new accounting rules take effect this month.The Royal Bank of Scotland Group estimates that U.S. banks and brokers, already under massive losses caused by the collapse in the subprime credit market, potentially face hundr...

By Stephen Taub • Nov. 7, 2007

Beazer Cuts Jobs, Dividend, 4Q Results

Embattled Beazer Homes has suspended its stock dividend and lopped off a quarter of its headcount. On top of those moves, the embattled homebuilder said it will take a $230 million charge in the fourth quarter to abandon land-option contracts, recognize inventory impairments, and record impairme...

By Stephen Taub • Nov. 6, 2007

A Race to Finish for “Sarbox-lite”

New risk-assessment rules established by the American Institute of Certified Public Accountants are causing the auditors of privately held companies and non-profits to take between 10 percent and 25 percent longer to complete their work, according to an auditor with Kaufman, Rossin & Co., a M...

By Alan Rappeport • Nov. 5, 2007