PCAOB: The 11 Things Auditors Need to Fix

The Public Company Accounting Oversight Board on Monday released a report listing 11 problem areas found during its inspections of smaller audit firms. The PCAOB called on the firms to improve their audit quality by focusing on these issues, which include their reviews of business combinations a...

By Sarah Johnson • Oct. 22, 2007

PwC Disputes Oversight Board’s Report

The Public Company Accounting Oversight Board’s evaluation of PricewaterhouseCoopers faults the firm for not taking the proper steps to support its audit opinion for six of its clients. However, the Big Four audit firm claims the PCAOB is mistaken in its findings. “We have concluded that, in each...

By Sarah Johnson • Oct. 22, 2007

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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

CFO Blamed for MedQuest Restatement

MQ Associates and its former chief financial officer have been cited by the Securities and Exchange Commission for alleged reporting violations that led to a major restatement. As a result, the holding company and its former executive, Thomas C. Gentry, agreed to a cease-and-desist order without ...

By Marie Leone • Oct. 19, 2007

Finance in History: Here’s to the Bean Counters

“Bean counting” has long been an insulting term for what finance professionals and accountants do. Often it’s been used to tar CFOs as transaction processors — a role largely relegated to the back office. What’s more, people like to use the phrase to ratchet up the pedestrian aspects of finance b...

By R.G. Voorhees • Oct. 19, 2007

Money Maker: IRS Wants Poker Players to Ante Up

Poker is hotter than ever, thanks to cable TV coverage of big-money tournaments. However, the allure might fade because of a new rules clarification by the Internal Revenue Service.On Friday the IRS said that casinos and other tournament holders will be required to report most winnings, to both w...

By Stephen Taub • Oct. 19, 2007

Mannatech Fires Grant Thornton

Mannatech Inc. has severed its relationship with Grant Thornton after the accounting firm told it to either remove chairman Sam Caster from all responsibilities or find another auditor. The company hired BDO Seidman as a replacement, effective October 18.Caster, who founded the dietary-supplement...

By Stephen Taub • Oct. 19, 2007

Tax Blooper for Movie Gallery in Rival Buy

Movie Gallery said its auditor has raised tax accounting issues related to its 2005 acquisition of Hollywood Video that could lead to a restatement of financials. Ernst & Young questioned how the company had calculated and recorded its valuation allowance against its deferred tax assets at t...

By Stephen Taub • Oct. 18, 2007

Knockout Punch in SEC Fraud Case

The former top finance executive of a boxing promoter has settled civil charges brought by the Securities and Exchange Commission, which accused him of filing fraudulent financial reports.James DiLorenzo, previously financial and accounting officer of Cedric Kushner Promotions, will pay a $25,000...

By Stephen Taub • Oct. 18, 2007

PCAOB Told to Plan for Global Standards

Members of the Public Company Accounting Oversight Board’s advisory group are split on the question of how hard it would be for the auditing profession to adapt to International Financial Reporting Standards.In light of a recent Securities and Exchange Commission proposal that U.S. companies shou...

By Sarah Johnson • Oct. 18, 2007

Europe Called Threat to Accounting Convergence

The International Accounting Standards Board has warned that if European policymakers try to create their own set of accounting standards, it could jeopardize the push towards a single global standard, the Financial Times reported Thursday.Gerrit Zalm, the IASB’s new chairman of the trustees, tol...

By Alan Rappeport • Oct. 18, 2007

The Negative Side of Goodwill

A proposed accounting rule expected to be finalized later this year may cause short-term problems for companies that have scooped up assets at bargain prices. The proposal on business combinations, a rewrite of FAS 141, changes the way companies book a gain known as negative goodwill.That change ...

By Marie Leone • Oct. 18, 2007

Ready or Not, Here Comes Fair Value

Despite the request of business groups, the Financial Accounting Standards Board has decided not to defer the effective date of its new fair-value rule. On Wednesday, most board members seemed to feel that a “wholesale” deferral of FAS 157 — which provides a framework for marking value estimates ...

By Sarah Johnson • Oct. 17, 2007

Cisco a Target of Brazil Tax Probe

Cisco Systems’ Brazilian offices are being investigated for allegedly engaging in an elaborate tax evasion scheme, according to the Associated Press. Authorities are looking into whether the world’s largest maker of computer network equipment is trying to avoid duties on products shipped from a ...

By Stephen Taub • Oct. 17, 2007

AS5 for the Little Guys

The Public Company Accounting Oversight Board issued new guidance on Wednesday for auditors that count smaller companies as clients.The 52-page document provides information and practical examples about how auditors should apply Auditing Standard 5 to smaller companies. AS5 is the standard that g...

By Marie Leone • Oct. 17, 2007

Post-Sarbox, Are Restatements Relevant?

Critics of the Sarbanes-Oxley Act have blamed the corporate governance law for the flood of restatement announcements streaming out of companies’ investor relations departments in recent years. Some of these clearly have been necessary, as the adjusted numbers would have a material effect on prev...

By Sarah Johnson • Oct. 16, 2007

Internal Controls Snag Inventory Glitch

Provident Energy Trust said internal accounting controls uncovered an overstatement of petroleum inventory related to transactions between two wholly owned subsidiaries. As a result, the company will restate its financials for the first two quarters of this year. In addition to the inventory ov...

By Stephen Taub • Oct. 16, 2007

Hewlett, PwC Near Backdating Settlement

Mercury Interactive Corp. shareholders have reached a tentative agreement with the company, its auditor PricewaterhouseCoopers, and its former executives for a $117.5 million settlement to end their class-action lawsuit alleging the backdating of stock-option grants, according to law firm Labaton...

By Sarah Johnson • Oct. 15, 2007

Is Your Auditor Improving?

As the Public Company Accounting Oversight Board approaches its four-year anniversary, has the auditor watchdog been effective in improving audit quality? The answer is yes, according to a working paper from two accounting academics who say the PCAOB plays a “remedial role” for auditors.However, ...

By Sarah Johnson • Oct. 12, 2007

Leave It to Beazer: Lending Rules Breached

Following a Beazer Homes USA internal probe that found the company’s mortgage-origination unit violated federal lending rules, Beazer said it would restate its 2004 through 2006 financials.The restatements will reportedly affect reporting going as far back as 1999. Employees of the subsidiary, Be...

By Stephen Taub • Oct. 12, 2007

FASB Mulls Fair-Value Delay

On Wednesday the Financial Accounting Standards Board will decide whether to delay the date when companies must start using FASB’s new fair-value standard.FAS 157, which provides a framework for making value estimates based on market value rather than historical cost, is slated to go into effect ...

By Sarah Johnson • Oct. 12, 2007

Errors Put Internal Controls in Limelight

Limelight Networks will restate previous financials to correct a services underbilling and an executive-compensation miscalculation. While the revisions will spawn higher revenue and lower losses for 2006 and the first two quarters of 2007, the company says, the errors revealed two material weakn...

By Stephen Taub • Oct. 12, 2007

Could U.S. Auditors Handle Foreign Standards?

The Public Company Accounting Oversight Board has asked its advisory group how the auditors would react if all companies filing on U.S. exchanges were allowed to use International Financial Reporting Standards. Without a doubt, domestic auditors would have plenty to deal with if they had to opine...

By Sarah Johnson • Oct. 11, 2007

With Children’s Place in Turmoil, Deloitte Quits as Auditor

The Children’s Place Retail Stores is looking for a new auditor after Deloitte & Touche said it will not handle the company’s February 2, 2008 fiscal year. The move comes as Chldren’s Place is preparing a restatement of previously issued financial statements. However, the company said in a ...

By Stephen Taub • Oct. 11, 2007

Symmetry’s UK Accounting Out of Sync

Accounting irregularities at the UK unit of orthopedic-implant maker Symmetry Medical Inc. may require the company to restate prior financials and has caused it to default on its bank debt.Symmetry says employees at its Sheffield operating unit who are believed to be primarily involved in the acc...

By Stephen Taub • Oct. 5, 2007

Ahold Prevails in Clash with Ex-Execs

The former CFO and CEO of Royal Ahold NV, the Amsterdam-based food retailer, have settled their disputes with the company over its massive accounting scandal earlier this decade.Ex-CFO Michiel Meurs agreed to pay Ahold $850,000 and waive $2.8 billion in claims he made against the company in an ar...

By Stephen Taub • Oct. 5, 2007