No Prison Time after Ahold Convictions

Three former executives of Dutch food giant Royal Ahold were convicted Monday for their roles in the company’s $1 billion accounting scandal, according to published reports.Former chief executive officer Cees van der Hoeven and former chief financial officer Michiel Meurs each received a nine-mon...

By Stephen Taub • May 22, 2006

Binomial Creep

When CFOs willingly take on a heavier workload, something’s up.Between 1995 and 2004, a grand total of just 68 companies that offered stock options to their employees switched from the traditional Black-Scholes model to a more complicated binomial valuation method. Black-Scholes is still far more...

By Marie Leone • May 19, 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

Options Probes Eye Two More Targets

On Friday, American Tower — an owner and operator of wireless and broadcast communications sites in the United States, Mexico, and Brazil — disclosed that the Securities and Exchange Commission has opened an informal inquiry and is requesting documents related to its stock options.The company, wh...

By Stephen Taub • May 19, 2006

Three Depart amid Vitesse Options Probe

Vitesse Semiconductor has fired the three top executives it put on administrative leave just a month ago due to “issues related to the integrity of documents relating to Vitesse’s stock option grant process,” according to the company.The individuals are chief executive officer Louis Tomasetta; ex...

By Stephen Taub • May 18, 2006

International Rectifier to Restate

International Rectifier disclosed that it will restate results for the first two quarters of fiscal 2006 to correct its cash flow statements regarding the classification of excess tax benefits generated from the exercise of stock options.The power management technology company stated that it had ...

By Stephen Taub • May 16, 2006

SEC Review Delays Cognos Filing

Ottawa-based software developer Cognos disclosed that it would delay the filing of its annual report for the fiscal year ended February 28 because of “an ongoing review” by the Securities and Exchange Commission of the company’s revenue recognition practices.According to the company, the SEC’s Di...

By Stephen Taub • May 16, 2006

Kozlowski to Settle Tax Charges for $21 Million

Former Tyco International chairman and chief executive officer Dennis Kozlowski, now serving prison time for stealing hundreds of millions of dollars from the conglomerate, has agreed to pay $21.2 million as part of a deal to avoid prosecution on New York State tax charges, according to published...

By Stephen Taub • May 12, 2006

Another Restatement for Bausch & Lomb

Bausch & Lomb disclosed that it would delay the filing of its March quarterly report to complete restatements at several foreign subsidiaries.The embattled maker of eye-care products announced that it would reduce reported sales at its BL Korea operation for the first two quarters of 2005 by ...

By Stephen Taub • May 12, 2006

SEC Eyes Diebold Revenue Recognition

Editor’s Note: Exactly one year to the day after the SEC launched the informal inquiry described below, the commission sent a subpoena to Diebold seeking more information, an indication that the inquiry has become a formal investigation. Read the 2007 story here.Voting-machine maker Diebold discl...

By Stephen Taub • May 11, 2006

Panelist: SEC Deserves Failing Grade

See our special report on “The 404 Debate.”A wide range of positions in the Section 404 debate were represented in the final panel of the Securities and Exchange Commission’s second roundtable on 404, and the panelists made their differences known with some testy exchanges and criticisms.In a par...

By Tim Reason • May 10, 2006

More Errors from Fannie Mae

In a regulatory filing, the Federal National Mortgage Association (FNMA, or Fannie Mae) disclosed still more accounting errors on Tuesday. The newly discovered problems concern how Fannie Mae accounts for certain securitization transactions and how it recognizes guarantee fees for mortgage-backed...

By Stephen Taub • May 9, 2006

GAO Eyes ‘Targeted, Limited’ 404 Relief

Smaller companies are indeed paying disproportionately higher auditing costs to implement the Sarbanes-Oxley Act, according to a new report by the Government Accountability Office. The GAO added, however, that any relief granted by the Securities and Exchange Commission should be “targeted and li...

By Helen Shaw • May 9, 2006

Zale Puts CFO on Ice

Jewelry retailer Zale Corp. announced that until further notice, it has put senior vice president and chief financial officer Mark Lenz on administrative leave due to his failure to timely disclose a delay in payments to vendors.The payments, scheduled for the last two weeks of the July 2005 fisc...

By Stephen Taub • May 8, 2006

Lost in the Maze

It has been almost six years since companies began complying with FAS 133, the standard that governs the accounting treatment of derivatives. Yet judging from the growing number of restatements due to FAS 133 errors, many are still wrestling with these rules. Last year, 57 companies restated thei...

By Linda Corman • May 8, 2006

Party of Three

File this one under “B” for best-laid plans.In March 2005, external auditors from PricewaterhouseCoopers began arriving at the Louisville headquarters of lighting fixture and controls maker Genlyte Group Inc. The engagement partners were there to review Genlyte’s inaugural round of internal-contr...

By Russ Banham • May 8, 2006

Under Fire: Auditing Standard Number Two

While the focus of the upcoming May 10 roundtable to be jointly held by the Securities and Exchange Commission and the Public Company Accounting Oversight Board will be Section 404 of the Sarbanes-Oxley Act, the finger-pointing amid complaints of cost burdens might lead some to rethink the PCAOB’...

By Helen Shaw • May 8, 2006

More Lawsuits May Go on the Books

Companies might need to put more liabilities on their balance sheets if the Financial Accounting Standards Board lowers the threshold for recognizing potential loss from pending litigation.That’s one of the options suggested in comment letters to FASB, noted FASB board member Leslie Seidman at th...

By Helen Shaw • May 5, 2006

SEC’s Taub Warns On Structured Transactions

Acting SEC chief accountant Scott Taub was as tough on issues involving off-balance-sheet financing and other types of “structured” transactions as he was on internal controls at yesterday’s financial reporting conference at Baruch College. Taub said the SEC continued to take a hard line on “acco...

By Ronald Fink • May 5, 2006

Accountant Embezzled to Pay Dominatrix

A former accountant for a heart-disease research foundation was sentenced to two to six years in prison for embezzling more than $237,000 to pay for such things as the services of a dominatrix, according to press reports. Abraham Alexander, of East Meadow, N.Y. had earlier pleaded guilty to embez...

By Stephen Taub • May 4, 2006

Gloomy Skies for Sunterra

Sunterra Corp. will restate results going back more than four years. The vacation ownership company made the announcement after determining that it underpaid taxes withheld in Spain on wages paid to employees of Sunterra Europe.The shortfall was discovered during an internal review after a former...

By Stephen Taub • May 3, 2006

PCAOB: Auditor Judgment Under Scrutiny

Did audit firms use more judgment and fewer checklists when auditing internal controls last year? And were audits cheaper as a result? The Public Company Accounting Oversight Board announced Monday that inspections of public accounting firms, which begin in May, will focus on whether firms paid a...

By Tim Reason • May 3, 2006

Big Companies Go Black-Scholes Route

Early evidence suggests that large companies prefer using the straight-forward options-valuation model known as Black-Scholes, rather than alternative methods. The findings are detailed in a new study released by Compliance Week that examined the annual reports of 50 companies that award stock op...

By Marie Leone • May 3, 2006

Krispy Kreme Finally Fills in the Holes

On Friday evening, Krispy Kreme Doughnuts Inc. restated its financials for fiscal 2003 and 2004, as well as for all quarters of fiscal 2004 and the first three quarters of fiscal 2005. The troubled doughnut maker also filed its annual report for the fiscal year ended January 30, 2005.Had it not f...

By Stephen Taub • May 1, 2006

SEC Approves New Auditor Rules

The Securities and Exchange Commission has approved Public Company Accounting Oversight Board rules on independence, tax services, and contingent fees, some of which became effective on April 29.The rules require accounting firms and anyone connected with the firm’s employees to be independent of...

By Helen Shaw • April 28, 2006

Vitesse Restates, Names Acting CFO

Vitesse Semiconductor Corp. said it will restate its results going back more than three years and named a new acting chief financial officer as a result of an internal investigation relating to past stock option grants and other accounting and documentation issues.It also said that the management...

By Stephen Taub • April 27, 2006