Enron’s Causey Reports to Prison

Onetime Enron chief accountant Richard Causey reported on Wednesday to the Bastrop Federal Correctional Institution, about 30 miles southeast of Austin, Texas, according to published accounts.Causey’s sentence at the low-security prison — five-and-a-half years — is exceeded among former Enron exe...

By Stephen Taub • Jan. 3, 2007

The New 19th Hole

In an advertisement featuring a photo of a golfer sinking a putt, the Public Company Accounting Oversight Board issued an appeal in Tuesday’s Wall Street Journal for recently retired accounting firm partners to join the regulator as inspectors.The ad — unusually playful coming from a regulator, m...

By Stephen Taub • Jan. 2, 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

Strength in Number Crunchers

Accounting firms unite! A group of midsize firms is forging a formal alliance in an attempt to offer an alternative to the Big Four.In October, 22 accounting firms announced they will conduct business under the name Baker Tilly USA, a wholly-owned subsidiary of UK-based Baker Tilly International,...

By Laura DeMars • Dec. 29, 2006

When Accountants Go to War

Accountants make up one of the largest functional constituencies—professional representation in the legislature—in Hong Kong. At 26,000 members, though, it has, like the other constituencies, one representative. That Legislative Council (Legco) representative is elected, and the election that put...

By Jennifer Lee • Dec. 27, 2006

SEC Launches Formal Probe of CSK Auto

CSK Auto said the Securities and Exchange Commission has informed the company that the regulator’s probe of CSK’s accounting practices is now a formal investigation.The auto parts maker earlier announced it will restate its financial statements for 2003 and 2004, selected consolidated financial d...

By Stephen Taub • Dec. 27, 2006

AIG Sues Former Accounting Exec

American International Group sued a former accounting executive, alleging extortion and theft of company equipment and confidential information, according to the Associated Press.The insurance company alleged the individual, Dong “Dee” Chung, a U.S. citizen who is believed to be living in Hong Ko...

By Stephen Taub • Dec. 26, 2006

Biz Combo Rule Trips Up Bassett

Bassett Furniture Industries said it will restate its financial statement for the fiscal year ended November 26, 2005 and amend its quarterly financial information for 2005 and 2006 in the 2006 Annual Report.The company said the Securities and Exchange Commission had recommended Basset change the...

By Stephen Taub • Dec. 26, 2006

Vitesse Explains Firing of KPMG

Vitesse Semiconductor fired off a brief press release late Friday afternoon before the long holiday weekend clarifying its announcement earlier in the week that it had dismissed KPMG LLP as its auditor “based on its lack of independence.”KPMG’s lack of independence, according to the company, is n...

By Stephen Taub • Dec. 26, 2006

SEC Charges Three Ex-Tyco Finance Execs

The Securities and Exchange Commission has charged two former Tyco International finance executives with fraud, and settled charges with a third.The regulator says it filed a civil injunctive action in the U.S. District Court for the Southern District of New York against Richard D. Power, a forme...

By Stephen Taub • Dec. 22, 2006

A Private-Company GAAP for 2007?

When the fallout from the Enron scandal first heightened the scrutiny on corporate accounting, few observers realized that private-company CFOs were feeling the heat too. Indeed, private-company finance chiefs have publicly said that preparing financial statements to satisfy the needs of lenders ...

By Sarah Johnson • Dec. 22, 2006

Vitesse’s Mess

In one of the most sweeping mea culpas since the options backdating scandal broke, Vitesse Semiconductor said former members of its senior management team “backdated and manipulated” the grant dates of stock options issued over several years, used improper accounting practices—primarily related t...

By Stephen Taub • Dec. 20, 2006

Best of 2006: Accounting

The most common causes of financial restatements are “simple misapplications of GAAP” and bad bookeeping. At least, that’s what Scott Taub, then the deputy chief accountant of the Securities and Exchange Commission, said in a speech this fall.Perhaps. But keeping up with GAAP is far from “simple”...

By CFO Editorial Staff • Dec. 20, 2006

PCAOB Proposes AS2 ‘Repeal’

The Public Company Accounting Oversight Board on Tuesday proposed a complete rewrite of Accounting Standard No.2, its guide for auditors in their assessments of corporate internal controls over finance.In a move characterized by Securities and Exchange Commission Chairman Christopher Cox as the “...

By Sarah Johnson • Dec. 19, 2006

PCAOB Finds Audit Deficiencies at PwC

During a review of the 2004 audits performed by PricewaterhouseCoopers, the Public Company Accounting Oversight Board found audit deficiencies at nine of the accounting firm’s clients.The PCAOB said the deficiencies included failures by the firm to identify or appropriately address errors in the ...

By Stephen Taub • Dec. 18, 2006

Feds Charge Three Ex-Fannie Mae Execs

The U.S. Office of Federal Housing Enterprise Oversight has filed a notice of charges against three former Fannie Mae executives, accusing them of misconduct and recklessness. Former chairman and CEO Franklin Raines, former vice chairman and CFO J. Timothy Howard, and former senior vice president...

By Sarah Johnson • Dec. 18, 2006

SEC Extends 404 Deadline for Small Biz

Small companies received a gift from the Securities and Exchange Commission on Friday — albeit it wasn’t a surprise. As expected, the regulator extended the compliance deadline for small public companies that are required to complete a management assessment of internal controls as prescribed by S...

By Sarah Johnson • Dec. 15, 2006

Tax Charges Dropped Against Kozlowski

Former Tyco International chief executive officer Dennis Kozlowski is off the hook for some of the charges he faced several years ago.On Friday a New York judge dismissed charges against the ex-Tyco chief that claimed he avoided paying state and city sales taxes on artwork in 2001 after he agreed...

By Stephen Taub • Dec. 15, 2006

Hampshire Restates Due to ex-CEO’s Fraud

Hampshire Group said it will restate its results for the years 2003 through 2005, as well as for the fiscal quarter ended April 1, 2006, to make certain adjustments related to a former executive’s fraud. The company, known for its Geoffrey Beene, Dockers, and Levi’s brands, had previously announc...

By Stephen Taub • Dec. 14, 2006

SEC Says Materiality Should Drive 404

The Securities and Exchange Commission proposed on Wednesday to make rule changes to encourage financial managers to focus their internal controls assessments on “those controls that are needed to prevent or detect material misstatement in the financial statements.”By injecting the notion of mate...

By David Katz • Dec. 14, 2006

Financial Statements of the Future

A major overhaul of financial statements is underway, but standard setters on both sides of the Atlantic are not providing a firm timeline for what is certain to be a long-term project. Members of the Financial Accounting Standards Board met Wednesday morning to discuss staff recommendations on n...

By Marie Leone • Dec. 13, 2006

Did Sarbox Make Companies Cleaner?

On the eve of a highly anticipated Securities and Exchange Commission meeting that could bring about looser regulations for small businesses that have yet to comply with the Sarbanes-Oxley Act, a new study credits the 2002 law with cleaning up larger companies’ internal controls and reducing the ...

By Sarah Johnson • Dec. 13, 2006

Congress Extends R&D Tax Credit

In the wee hours of the morning last Saturday, just before the 109th Congress ended, legislators extended the research and experimentation tax credit. They also changed the rules so the credit will apply to more companies. That’s the good news. The bad news: the last-minute passage means that com...

By Helen Shaw • Dec. 12, 2006

Fannie Mae Sues KPMG

Fannie Mae has sued its former auditor, KPMG, for negligence and breach of contract.Filed Tuesday with the Superior Court of the District of Columbia, the complaint accuses the Big Four accounting firm of failing to serve its role as an independent watchdog and prevent $6.3 billion in accounting ...

By Stephen Taub • Dec. 12, 2006

Former PNC Finance Exec, Auditor Settle

A former finance executive of PNC Financial Services Group and the company’s former auditor both settled Securities and Exchange Commission charges stemming from an arrangement with American International Group that enabled PNC to keep $762 million in liabilities off its balance sheet.The SEC had...

By Stephen Taub • Dec. 12, 2006

Bank Regulator Fines Grant Thornton $300K

In a rare move, the Office of the Comptroller of the Currency has fined Grant Thornton LLP $300,000 for what it called the firm’s “reckless conduct” in performing its audit of First National Bank of Keystone’s 1998 financial statements.Keystone’s collapse in 1999 was one of the largest U.S. bank ...

By Stephen Taub • Dec. 8, 2006