SEC Used Budget to Strong-arm FASB

Speaking at a conference two years ago, Robert Herz, chairman of the Financial Accounting Standards Board, lavishly praised the comments — and personal appearance — of the preceding speaker, Scott Taub, then the Securities and Exchange Commission’s deputy chief accountant. To laughter from the au...

By Marie Leone and Alan Rappeport • April 3, 2007

Auditor Resigns from Subprime Lenders

Grant Thornton has resigned as auditor of at least two subprime lenders, Accredited Home Lenders Holding and Fremont General.In separate regulatory filings, both companies disclosed that Grant Thornton had advised them of the “need to significantly expand the scope of its audit” of their financia...

By Stephen Taub • April 3, 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

SEC Said No to FASB Raises

Proposed raises for the members of the Financial Accounting Standards Board were shot down by the Securities and Exchange Commission last fall, causing a stir at FASB.CFO.com first learned of the FASB raise rejections last Friday while reporting on efforts by the SEC to formalize its role in the ...

By Alan Rappeport and Marie Leone • April 2, 2007

CFO “Retires” Amid $50M Restatement

Medical equipment maker Biomet announced that its chief financial officer and another executive have “retired” and that it will restate 11 years of results — a total of about $50 million — after a special committee found irregularities in its stock-option grants.The two outgoing executives are Gr...

By Stephen Taub • April 2, 2007

Transfer Students

Last September, GlaxoSmithKline settled a 17-year-old dispute with the Internal Revenue Service over transfer pricing. The pharmaceutical giant agreed to pay the government $3.4 billion, the largest tax settlement in IRS history. The payment, which amounts to about 40 percent of the company’s ope...

By Helen Shaw • April 1, 2007

Say Again?

When Mark Blinn became Flowserve Corp.’s finance chief in November 2004 — 10 months after the company uncovered accounting errors and announced that it would restate past results — his first job was to help staffers shake off the negativity. “I didn’t want them to feel tainted,” he says, “or that...

By Roy Harris • April 1, 2007

Is the SEC a Threat to FASB’s Independence?

With the holidays fast approaching at the end of 2001, Harvey Pitt, then chairman of the Securities and Exchange Commission, was presiding over a collapse in investor confidence. That fall Enron had imploded in one of the most spectacular finance scandals in memory, and it looked increasingly as ...

By Marie Leone and Sarah Johnson • March 30, 2007

Dell Finds Accounting Errors, Misconduct

Dell Computer has announced it has identified several accounting errors, evidence of misconduct, and deficiencies in its financial-control environment. The struggling personal-computer maker stressed in a regulatory filing that its audit committee is working with management and its independent au...

By Stephen Taub • March 30, 2007

SEC Slates Meeting to Bridge Gaps on 404

Acknowledging gaps between proposals by the Securities and Exchange Commission and the Public Company Accounting Oversight Board for complying with Section 404 of the Sarbanes Oxley-Act, the SEC will hold an open meeting next Wednesday to talk about how the two regulators can march in lockstep on...

By Sarah Johnson • March 29, 2007

Intel Saves $275M in IRS Deal

Intel disclosed that the Internal Revenue Service has completed its examination of the company’s returns, and that its tax bill will be lower than anticipated.Last month, Intel disclosed in its 10-K that it had appealed an IRS assessment that would have made “certain adjustments to the amounts re...

By Stephen Taub • March 29, 2007

Report: SEC Grabs More Power over FASB

Under an agreement between the Securities and Exchange Commission and the parent foundation of the Financial Accounting Standards Board, the SEC will have more authority over the appointment of members of the private board, The Wall Street Journal reported Wednesday.In a two-page memo sent to the...

By David Katz • March 28, 2007

Inventory Error Eyed at Allied Defense

The Allied Defense Group disclosed that the Securities and Exchange Commission is looking into certain errors in its financial statements for the three-month and nine-month periods ended September 30, 2006.In February, reported the Washington Business Journal, the Vienna, Virginia-based defense a...

By Stephen Taub and Dave Cook • March 27, 2007

Aspen Exec Pleads on Backdated Revenue

David McQuillin, former chief executive officer and president of Aspen Technology, pleaded guilty Monday to securities fraud charges, according to the U.S. Attorney for the Southern District of New York.U.S. Attorney Michael Garcia stated that from January 2001 through September 2002, McQuillin w...

By Stephen Taub • March 27, 2007

Fraud Charges for Reagan Ex-budget Chief

David Stockman — former president, chief executive officer, and chairman of Collins & Aikman, and a budget director under President Reagan — faces criminal and civil charges for allegedly concealing the auto-parts maker’s declining performance from investors and lenders.Michael Garcia, the U....

By Dave Cook and Stephen Taub • March 26, 2007

Japanese Massage

The arrest early last year of Takafumi Horie, the publicity-hungry maverick who ran livedoor, an internet company, gripped a media-obsessed nation. It became the fizziest scandal in Japanese corporate history. His indictment on charges of falsifying profits and creating a false market in livedoor...

By Economist Staff • March 26, 2007

E&Y to Pay $1.6M Audit-independence Fine

Ernst & Young LLP will pay nearly $1.6 million to settle civil charges that it violated auditor independence standards through its work with American International Group and PNC Financial Services Group, according to the Securities and Exchange Commission.The Big Four accounting firm agreed t...

By Stephen Taub and Dave Cook • March 26, 2007

U-Turn on ”New” Accounting Firm

Beverage maker DC Brands International, whose Dickens Energy Cider and Turn Left energy drink are marketed primarily in NASCAR country, has clarified earlier statements about its “new” accounting firm.In a rambling press release, the company stated that “President Richard Pearce’s use of the word...

By Dave Cook and Stephen Taub • March 22, 2007

FASB Moves to Nix “Cash Equivalents”

Accounting standard setters have taken another step toward erasing the term “cash equivalents” from corporate financial statements. In what one board member called a “perfect opportunity” to simplify accounting standards, the Financial Accounting Standards Board approved a staff recommendation on...

By Marie Leone • March 22, 2007

Slow Progress of International Standards

Two years ago, Gilles Zancanaro was feeling bullish about accounting standards. Back then, the corporate director of information systems and finance at Bouygues, the €24 billion French conglomerate involved in construction, telecoms and media, was celebrating the successful completion of a projec...

By Eila Rana • March 21, 2007

Ex-controller Takes Backdating Plea

Steven J. Landmann, former controller of Engineered Support Systems Inc. (ESSI), has pleaded guilty to one count of making false statements to the government regarding backdated stock options, according to U.S. Attorney Michael W. Reap.According to the plea agreement, Landmann backdated stock opt...

By Stephen Taub • March 20, 2007

Blue-plate Special: 14-year Restatement

After an internal review found incorrect measurement dates used for certain stock-option grants, Landry’s Restaurants disclosed that it will restate its results.Although the restatement is not yet complete, Landry’s pegged the total non-cash charges over a 14-year period, through 2001, at between...

By Stephen Taub • March 19, 2007

Big-screen Maker Missed Some Details

Imax Corp. has disclosed it will restate its results over a six-year period after identifying $2.6 million of accounting errors.The biggest maker of big-screen theaters also delayed filing its fiscal 2006 annual report, due March 16, but assured shareholders work would be completed within the 15-...

By Stephen Taub • March 16, 2007

Diagnosis: Restatement

Diagnostic-test maker Cytyc will restate its financials for 1996 to 2006 following an internal review of its practices for granting stock options.The company will take an additional noncash expense of less than $80 million.In a regulatory filing, Cytyc explained that on several occasions from 199...

By Stephen Taub • March 16, 2007

Hard Landing for Former Raytheon Execs

The Securities and Exchange Commission announced that it settled charges against three former Raytheon finance executives for failing to disclose the deteriorating prospects of its commercial aircraft manufacturing subsidiary.Without admitting or denying the allegations, the three finance executi...

By Stephen Taub • March 15, 2007

Stock Options Eyed at Defense Contractor

L-3 Communications Holdings disclosed that the Securities and Exchange Commission has requested certain information regarding its historical practices for granting stock options.The defense contractor, which has a market capitalization of about $10 billion, stated in a regulatory filing that will...

By Stephen Taub • March 15, 2007