PwC to Pay $10M over 1996 Merger

A Georgia jury has returned a $10 million judgment against PricewaterhouseCoopers for “negligent misrepresentation” regarding the 1996 merger of nursing-home companies Convalescent Services and Mariner Health Group, according to published accounts.The accounting firm was cleared on charges of civ...

By Stephen Taub and Dave Cook • Feb. 7, 2007

SEC Asks Adobe for More Options Info

Adobe Systems disclosed in a regulatory filing that the Securities and Exchange Commission has requested more information about the company’s stock-option practices.In October, Adobe — best known for its Acrobat software — disclosed that a special committee found that adjustments had been made to...

By Stephen Taub • Feb. 7, 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

SEC Approves Deal with RenaissanceRe

The Securities and Exchange Commission announced that it has approved an agreement with RenaissanceRe Holdings in which the company agreed to pay $15 million to settle civil securities fraud charges stemming from a sham reinsurance transaction.The SEC maintained that the transaction had no econom...

By Dave Cook and Stephen Taub • Feb. 6, 2007

Dollar Thrifty Restates over FAS 133

Dollar Thrifty Automotive Group disclosed that it will restate its financials from fiscal year 2001 through the third quarter of fiscal 2006 to correct its accounting for certain derivative transactions.The company added that it identified a material weakness “relating to its assessment of the ab...

By Stephen Taub • Feb. 5, 2007

Employees Whistle, IRS Listens

The Internal Revenue Service has named Stephen A. Whitlock, who previously directed several programs designed to dig out Defense Department fraud, waste, and abuse, as director of its new Whistleblower Office.“This is an important new office at the IRS, and Steve brings a strong background in eth...

By Dave Cook and Stephen Taub • Feb. 5, 2007

Former Enterasys Exec Settles with SEC

Anthony L. Hurley, former assistant controller of Enterasys Networks, has agreed to settle civil fraud charges in connection with improper revenue recognition at the company, according to the Securities and Exchange Commission.Hurley agreed to pay about $32,000, according to the SEC. The commissi...

By Stephen Taub • Feb. 2, 2007

Native American Facts and Fiction

CFO welcomes your letters. Send them to: The Editor, CFO, 253 Summer St., Boston, MA 02210E-mail us at [email protected], or contact a specific author by clicking on his or her byline. You can also post a comment directly on CFO.com by clicking on the appropriate link at the end of any article.P...

By CFO Editorial Staff • Feb. 1, 2007

Financing the Chain

With thousands of suppliers shipping everything from furniture to toys to its 1,400 stores, Big Lots Inc. has long prided itself on its supply-chain management. But until recently, the closeout retailer had a few weak links in what might be called its financial supply chain — the flow of money th...

By Kate O'Sullivan • Feb. 1, 2007

Maxim CFO Resigns amid Options Probe

Maxim Integrated Products announced two departures from its executive ranks in connection with an internal probe of prior stock option grants and practices.Chief financial officer Carl Jasper has resigned, and former chief executive officer John F. Gifford, who stepped down for health reasons in ...

By Stephen Taub • Feb. 1, 2007

Eddie Bauer: No Restatement Needed

Eddie Bauer Holdings announced that following a review with its independent auditor, BDO Seidman, the retailer won’t restate prior results as a result of previously disclosed tax accounting errors.Last week, Eddie Bauer disclosed that it had identified errors for 2005 and prior years.The retailer...

By Stephen Taub • Feb. 1, 2007

AICPA, Big Four Launch New Group

A new group dedicated to “improve audit quality” and backed by the largest accounting firms will seek to rebuild the image of the profession after a series of high-profile scandals.The Center for Audit Quality was launched Tuesday by the American Institute of Certified Public Accountants (AICPA) ...

By Stephen Taub • Jan. 31, 2007

SEC Approves Market-based Options Model

Zions Bancorporation announced that it has received approval from the Securities and Exchange Commission to value employee stock option grants using a market-based approach.“We strongly believe that among the several available methods for option valuation, a fair and open public auction of an app...

By Stephen Taub and Dave Cook • Jan. 30, 2007

Thor Probes Accounting Issues

Thor Industries — which manufactures recreational vehicles and buses under numerous brand names, including Airstream — disclosed that it may need to restate prior results due to accounting issues at one of its subsidiaries.The company’s audit committee, assisted by independent outside advisors, i...

By Stephen Taub • Jan. 30, 2007

Ex-Cendant CFO Avoids Prison

The final major figure to be sentenced in the Cendant accounting scandal will spend no time behind bars.Former chief financial officer Cosmo Corigliano will serve three years of probation, including six months of home confinement with electronic monitoring, and 300 hours of community service, rep...

By Stephen Taub • Jan. 30, 2007

Cardinal Health Founder May Face Charges

Cardinal Health disclosed that founder and chairman Robert D. Walter may face civil charges brought by the Securities and Exchange Commission over a previously disclosed accounting and financial reporting matter.In a regulatory filing, Cardinal stated that Walter and four unnamed former officers ...

By Stephen Taub • Jan. 29, 2007

Former Cendant Controller Gets Probation

Two more participants in the Cendant accounting scandal were sentenced Monday, and both avoided prison time.Anne Pember, a former controller with CUC International, which merged with HFS Inc. to form Cendant in December 1997, was sentenced to two years of probation and 200 hours of community serv...

By Stephen Taub • Jan. 29, 2007

SEC’s Hewitt: Indemnify the Big Four

The chief accountant of the Securities and Exchange Commission wants the major accounting firms to be shielded from legal liability if their audit clients become embroiled in accounting-related scandals. Speaking at a Northwestern University legal conference in San Diego on Thursday, SEC chief ac...

By Stephen Taub • Jan. 26, 2007

Q&A: The PCAOB’s Charles Niemeier

As the audit firms’ watchdog, the Public Company Accounting Oversight Board is required to release publicly what it finds during its inspections process. But how much to reveal?The sometimes conflicting demands of effective correction of auditor missteps and the public’s right to know creates a “...

By Sarah Johnson • Jan. 26, 2007

Why the Big Four Are Still a Big Mystery

For the second round of official inspection reports on the Big Four audit firms, the Public Company Accounting Oversight Board’s findings led to a handful of negative headlines: “Audit Watchdog Report Raps Ernst, KPMG,” “Deloitte Criticized by Board,” and “Failing Grades for E&Y, KPMG.” Accor...

By Sarah Johnson • Jan. 26, 2007

KPMG Hangs On to Its License in Texas

A settlement between KPMG and Texas accounting regulators in a case involving fraudulent tax shelters has enabled the Big Four firm to continue practicing in the Lone Star State.Under the agreement, KPMG was charged a fine of $96,000 — the maximum permitted in Texas at the time of the firm’s admi...

By Stephen Taub and David Katz • Jan. 26, 2007

GM to Restate Earnings Back to 2002

General Motors will restate its financial statements after 2001, primarily due to pre-2002 tax accounting adjustments. The auto giant will also delay filing its results for 2006 as well as for the fourth quarter. GM said its deferred tax liabilities were overstated because of accounting errors th...

By Stephen Taub • Jan. 26, 2007

Eddie Bauer Finds Tax Errors

Eddie Bauer Holdings has identified errors related to its tax accounting for 2005 and prior years. As a result, the retailer decided to postpone a key meeting on Thursday, when stakeholders were scheduled to vote on selling the company to buyout firms Sun Capital Partners and Golden Gate Capital ...

By Stephen Taub • Jan. 25, 2007

Broadcom Records Largest Options Charge

Semiconductor maker Broadcom has taken a massive $2.259 billion charge to correct for improperly recorded stock options.In July, the company had anticipated a charge of $750 million; in September, it upped that figure to about $1.5 billion. The current charge is by far the largest in the widespre...

By Stephen Taub • Jan. 24, 2007

FASB Reappoints Herz

Robert Herz has been reappointed to a second five-year term as chairman of the Financial Accounting Standards board. His second term takes effect on July 1.Over the past five years, Herz has pushed the accounting standard setter faster and farther than many believed possible. He joined FASB in Ju...

By Marie Leone and Tim Reason • Jan. 23, 2007

Yuen Must Pay Gemstar, Arbitrators Rule

Gemstar-TV Guide International announced that arbitrators have ruled in its favor in a wrongful termination dispute with former chairman and chief executive officer Henry C. Yuen.According to the media company, the arbitrators determined that Yuen must pay the company $93.6 million, plus attorney...

By Stephen Taub • Jan. 23, 2007