Delayed in the USA

Editor’s Note (August 2, 2007): In the wake of yesterday’s tragic collapse of the I-35W bridge in Minneapolis, CFO.com has decided to republish John Goff’s article, which less than one year ago warned of increasingly serious problems with the nation’s crumbling transport system.June 2005. Things ...

By John Goff • Sept. 1, 2006

Progress Report

Judging from the complaints in the press about the compliance burden facing companies, you’d think that finance executives would be up in arms over regulation.Not so, according to a CFO survey of 213 finance executives. Most respondents have a relatively benign view of the efforts of regulatory b...

By Ronald Fink and Don Durfee • Sept. 1, 2006

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

Numbers Crunch

Five years after Enron, corporate financial reporting stands at a crossroads.One route leads deep into the lightly charted terrain of “principles-based” reporting, where thousands of rules and regulations would be replaced by a relative handful of guiding precepts. The norm in Europe, this would ...

By Ronald Fink • Sept. 1, 2006

Will Fair Value Fly?

Editor’s Note: On Friday, The Financial Accounting Standards Board issued additional guidance to help corporations and accounting firms measure assets and liabilities using the fair value method of accounting. The new rule, known as FAS No. 157, affects over 40 existing accounting standards—inc...

By Ronald Fink • Sept. 1, 2006

The Case for Clarity

The cost estimates bandied about by critics of the Sarbanes-Oxley Act are truly staggering. By the end of the year, U.S. companies will have spent $20 billion to comply with the law since it was passed in 2002, according to AMR Research. One study from the University of Rochester attributes a $1....

By Kate O'Sullivan • Sept. 1, 2006

Days in Court

Ask those on either side of the securities-litigation fence about principles-based accounting and you get two different views.If there were no hard and fast rules, it would make it harder to bring accounting cases, since “most of them turn on what was the rule and did they follow it or not,” says...

By Alix Stuart • Sept. 1, 2006

Merge Cites Controls Problems

Software maker Merge Technologies disclosed yesterday that material weaknesses in several areas of internal controls resulted in a $1.9 million overstatement in net income for the three month period ending March 21, 2005, and a $7.8 million balance sheet hit.The company, which does business as Me...

By Marie Leone • Aug. 31, 2006

What to Expect from the IRS

Wondering whether the Internal Revenue Service will change withholding rules governing poker tournaments? Or perhaps you are more concerned about when new guidance on vendor allowances will be issued? In either case, you won’t have to wait long for an answer, says the IRS.On August 15, the Depart...

By Marie Leone • Aug. 29, 2006

Fair-Value Champion Leaves FASB

It may be a little early, but it’s hardly a surprise. Edward W. Trott officially gave notice Thursday that he will be retiring from the Financial Accounting Standards Board in June 2007.Trott had told FASB he might reassess his ability to serve when he accepted his second five-year stint in 2004....

By Cheryl Rosen • Aug. 25, 2006

Can We Fix It? The IRS Says Yes

The Internal Revenue Service has proposed regulations that could simplify taxpayers’ decisions regarding whether to deduct maintenance costs against current taxes or capitalize and depreciate them over time. The regulations would affect any company with property to repair and maintain, and thus w...

By Helen Shaw • Aug. 25, 2006

IRS Audits PwC

PricewaterhouseCoopers LLP is being audited by the Internal Revenue Service, according to Bloomberg, citing IRS and company documents. The wire service says the IRS is evaluating the timing of tax deductions, PwC’s pension plan, and how the firm moved profits between international units.Bloomberg...

By Stephen Taub • Aug. 25, 2006

Backdating Causes Late Filings to Soar

Forget Sarbanes-Oxley 404. A record number of companies filed their recent quarterly reports late, and the most commonly cited reason was the rapidly growing option backdating scandal.According to shareholder advisory firm Glass, Lewis & Co., 138 companies with market capitalizations of at le...

By Stephen Taub • Aug. 24, 2006

Feds Won’t Charge Fannie

The government is not bringing a criminal case against Fannie Mae for its massive accounting scandal.The mortgage giant Thursday announced that the United States Attorney’s Office for the District of Columbia is discontinuing its investigation and does not plan to file charges against the company...

By Stephen Taub • Aug. 24, 2006

Comverse Backdating Fugitive Found

The fugitive former chief executive of Comverse Technology Inc., has been caught in Sri Lanka, according to published reports crediting Ma’ariv, the Israeli daily.Jacob “Kobi” Alexander was hunted down by a private Israeli investigator after he made a one-minute phone call through Skype, an inter...

By Stephen Taub • Aug. 24, 2006

First Data Restates Over Derivatives

First Data Corp. said it will restate results for 2005 and for the first two quarters of 2006 after “extensive interaction” with the Securities and Exchange Commission regarding its accounting treatment for certain derivative instruments.The credit-card and payment-processing giant said the deriv...

By Stephen Taub • Aug. 23, 2006

Time Warner Restates

Time Warner has said it will restate its financials going back more than six years to reflect changes in the accounting for certain transactions. The restatement was announced following the completion of a review by an independent examiner as part of the company’s prior settlement with the Securi...

By Stephen Taub • Aug. 18, 2006

Problems of the Pioneer

Most executives would blanch when a high-profile figure with whom their company has a close association is arrested on suspicion of insider trading. Shunsuke Takeda, CFO at Orix Corporation, Japan’s largest non-bank financial-services firm with revenues of 947.8 bn yen (US$8.13 bn), was no except...

By David Line • Aug. 17, 2006

Former Body Armor CFO Accused of Fraud

The Securities and Exchange Commission filed securities fraud charges on Thursday against the former CFO and former chief operating officer of DHB Industries, a major supplier of body armor to the United States military and law enforcement agencies. The charges alleged that an accounting scheme o...

By Marie Leone • Aug. 17, 2006

New Transfer Pricing Regs a Catch-22

New IRS and Treasury Department regulations on transfer pricing include a regulation that could create conflict between the IRS and multinational companies over shared service centers and other arrangements where the level of payment depends upon performance.The IRS has long set transfer pricing ...

By Helen Shaw • Aug. 14, 2006

SEC Charges Former Endocare CFO

The Securities and Exchange Commission has filed civil fraud charges against the former chief financial officer and former chief executive officer of medical-device company Endocare, asserting they “significantly overstated” income, according to Bloomberg.John V. Cracchiolo, the former finance ex...

By Stephen Taub • Aug. 11, 2006

Up on Cripple Creek, a New Kind of Gold

Along the western slopes of Pike’s Peak in Colorado sits the legendary gold rush town of Cripple Creek, which spawned 500 mines and 21 million ounces of gold — more of the precious metal than was produced in the California and Alaska rushes combined. One of the five original ore-processing plants...

By Marie Leone • Aug. 11, 2006

Fannie Mae: No More Errors

Fannie Mae reported that an internal review has identified all the errors that spurred its massive restatement. As a result, the mortgage company will be able to file its long-anticipated 2004 annual report by the end of this year. The restatement will provide better news than have previous compa...

By Stephen Taub • Aug. 9, 2006

Warnaco Finds Accounting Errors at Chaps

Officials at Warnaco Group said the company will restate its results for 2005, and first fiscal quarter of 2006, due to “irregularities and errors” related to the accounting for certain returns and vendor allowances at its Chaps menswear division.The company also said it needs to correct an error...

By Stephen Taub • Aug. 9, 2006

Caught in the Estate Tax Fight

For about a week, it looked as though small businesses owners would be able to breathe a little easier after they died — so to speak.On July 23, The New York Times broke a story about a plan by the Internal Revenue Service to cut 157 of its 345 estate tax attorneys, a 54 percent decrease in lawye...

By Marie Leone • Aug. 9, 2006

Options Prompt Cablevision Restatement

Cablevision Systems Corp. Tuesday morning said it would delay the release of its second-quarter results because it plans to restate all of its financials dating back to 1997 stemming from a review of its stock options practices.The cable television giant added it had told the Securities and Excha...

By Stephen Taub • Aug. 8, 2006