IBM Settles Equipment-leasing Charges

IBM agreed to pay $7 million to settle a Securities and Exchange Commission investigation related to alleged accounting fraud at Dollar General, a customer of the computer giant. In a separate case, IBM also settled its own books and records violations charges.In addition, Kevin B. Collins, an IB...

By Stephen Taub • June 26, 2007

Recognize This: SEC Charges 4 with Fraud

The Securities and Exchange Commission charged four former finance executives at former voice-recognition companies Speechworks International Inc. and Intervoice Inc. with participating in a fraudulent scheme to inflate the financials of the companies.Richard J. Westelman and Steven Forman, the f...

By Stephen Taub • June 25, 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

Ex-CFO of Safety-Kleen Pleads Guilty to Fraud

Paul Humphreys, the former CFO of Safety-Kleen, surrendered to FBI agents and pleaded guilty in federal court on Friday to securities and bank fraud charges stemming from a scheme to overstate earnings from 1998 through 2000, according to Michael Garcia, the U.S. Attorney for the Southern Distric...

By Stephen Taub • June 22, 2007

SEC: Sarbox Smoked Out Biotech’s Misdeeds

The Securities and Exchange Commission has settled charges against Cambrex Corp., a small biotech company, for improperly reconciling intercompany accounts.The SEC charged that Cambrex failed to reconcile the accounts until its executives were faced with the new executive-officer-certification re...

By Stephen Taub • June 22, 2007

SEC Gets Kaman to Break Out Its Aerospace Reporting

Kaman Corp., whose major businesses are in aerospace and musical instruments, said that comments by the Securities and Exchange Commission are leading the company to break up its aerospace segment into four pieces. Kaman also said it will restate its financial reports for the past three years to...

By Stephen Taub • June 21, 2007

Fair Value Stumps Auditors, PCAOB Told

The Public Company Accounting Oversight Board’s advisory group discouraged the board from creating a new auditing standard to deal with companies’ growing use of the fair-value method of accounting.Rather than revise the existing rules, the PCAOB and the audit industry should tackle auditors’ lac...

By Sarah Johnson • June 21, 2007

Congress Seeks Clarity on FAS 140

Members of Congress sent a letter to Christopher Cox, chairman of the Securities and Exchange Commission, last week asking for clarification of an accounting rule that has hindered subprime mortgage borrowers from modifying the terms of their loans.The rule in question is FAS 140, which governs a...

By Alan Rappeport • June 21, 2007

TurboChef Slowed by Backdating Issue

TurboChef Technologies Inc. may be known for its high-speed ovens, but irregularities in stock-option accounting have it falling behind in its required regulatory filings. The company said it must restate prior results “to recognize material non-cash charges for stock-based compensation expense,”...

By Stephen Taub • June 20, 2007

Paulson Not Budging on Small-Company 404 Extension

Pushed by a Congressman to stretch the deadline for small-company compliance with the Sarbanes-Oxley Act’s internal-controls provision, Treasury Secretary Henry Paulson held firm on Wednesday to the current filing date of early 2008.While acknowledging that the burden of Sarbox 404 compliance sho...

By David Katz • June 20, 2007

SEC Nears “Single Set of Global Standards”

The Securities and Exchange Commission has proposed changing its rules to allow foreign firms to file financial statements using international accounting standards. The proposal marks a “significant next step in the road toward a single set of globally accepted accounting standards,” SEC Chairman...

By Sarah Johnson • June 20, 2007

Help Wanted for Convergence: Auditors

Just like the Securities and Exchange Commission, the Financial Accounting Standards Board is thrashing around the notion of the emergence of a single set of accounting standards. On Wednesday—on the same day that the SEC proposed enabling foreign issuers to use international standards when they...

By Cheryl Rosen • June 20, 2007

SEC, PCAOB Pushed to Define Materiality

To some observers, the greatest flaw of the soon-to-be defunct Auditing Standard No. 2 was that it didn’t distinguish between large and small risks. That, critics charged, led auditors to spend countless, expensive hours on picayune controls that, even if not up to par, were unlikely to have a se...

By Sarah Johnson • June 20, 2007

Thor’s Hammer Falls on Unnamed Exec

Thor Industries Inc. said that a former finance executive’s misconduct caused the recreational vehicle and commercial bus-maker to overstate earnings at a subsidiary by about $26 million pretax. Thor said in a regulatory filing that an audit-committee investigation found that from fiscal 2004 to ...

By Stephen Taub • June 20, 2007

FAF to Governor: Veto GAAP Bill

The Financial Accounting Foundation fired off a letter to Connecticut Governor M. Jodi Rell on Friday, urging her to veto a bill that would give the state comptroller the authority to be the key arbiter of accounting standards in the state. FAF’s main concern is that the comptroller — an elected ...

By Marie Leone • June 20, 2007

SEC Sues Irish Pair in Zomax Accounting Scheme

The former financial controller of the Zomax Ireland unit of former U.S. public issuer Zomax Inc., along with another ex-officer, were charged by the Securities and Exchange Commission with making false journal entries to overstate the sales accrual account, capitalizing spare machine parts that ...

By Stephen Taub • June 19, 2007

Will Connecticut Swallow GAAP Whole?

What started out as a plan to cut Connecticut’s budget deficit has turned into a clash between the state comptroller and the Government Accounting Standards Board. The main trigger of the clash occurred on June 6 when the Connecticut legislature passed a bill that put the comptroller, not GASB, i...

By Marie Leone • June 19, 2007

Parmalat Settles With Three Banks

Parmalat SpA announced that it settled civil lawsuits with three major international banks for a total of 72 million euros, or more than $96 million, stemming from the Italian food giant’s collapse in 2003.Merrill Lynch agreed to pay Parmalat 29 million euros, or $39 million. This settles all cla...

By Stephen Taub • June 19, 2007

PCAOB: Deloitte Fails on Fair-value Testing

In its latest evaluation of Deloitte & Touche, the Public Company Accounting Oversight Board takes the firm to task for not properly testing its clients’ fair-value calculations.In four instances during its 2005 audits, Deloitte should have done more to confirm management’s assertions by doin...

By Sarah Johnson • June 18, 2007

Synopsys in the Clear on SAB 108 Probe

Synopsys said Monday that the Securities and Exchange Commission has completed its review of the company’s plans to apply Staff Accounting Bulletin (SAB) 108 to correct errors in share-based compensation and has ” no further comments.”SAB 108 is the method prescribed by the SEC for correcting err...

By Stephen Taub and Tim Reason • June 18, 2007

BDO Found Guilty, But How Guilty?

BDO Seidman could be on the hook for hundreds of millions of dollars after a jury ruled on Friday that the accounting firm was negligent in failing to detect a massive fraud that cost a Portuguese bank $170 million, according to the Associated Press. Banco Espirito Santo sued the fifth largest ac...

By Marie Leone and Stephen Taub • June 18, 2007

‘N Sync, Backstreet Boys, and Cohen & Siegel?

Say what you will about the musical talents of ‘N Sync and Backstreet Boys. At least the boy bands actually existed.That’s more than can be said for Cohen & Siegel, the accounting firm used by Louis Pearlman, creator of both boy bands. That firm apparently never existed, and was allegedly cre...

By Stephen Taub • June 18, 2007

Feds Drop Criminal Complaint Against Bristol

Federal prosecutors are dismissing their deferred prosecution agreement with Bristol-Myers Squibb two years after filing a criminal complaint against the company stemming from an accounting scandal.U.S. Attorney Christopher Christie announced the dismissal would be official on Friday, saying the ...

By Stephen Taub • June 15, 2007

Down the Dial: Radio One Restates Over Options

Radio One has restated its financials, mostly as a result of incorrect stock-option calculations. The company, reportedly the nation’s seventh-largest radio broadcasting company based on 2006 net broadcast revenue, says it reduced earnings by about $10.1 million from 1999 through 2005.The stock-b...

By Stephen Taub • June 15, 2007

New Lease Accounting May Roil Retailers

Lease accounting hasn’t changed in more than 30 years. But with accounting standard setters now looking to rewrite they way companies show leases on their financial statements, a new study takes a look at what the impact might be on retailers, an industry particularly dependent on leasing. The re...

By Alan Rappeport • June 14, 2007

FASB Votes for Quick Repo Change

Changing the way companies account for repurchase financing agreements may generate a sizeable amount of public comment in the coming months. But the Financial Accounting Standards Board’s immediate worry is how to get the word out about the proposed changes while operating on a tight schedule.Th...

By Marie Leone • June 14, 2007