Simplifying Accounting Is No Simple Task

In an exchange that highlights some of the challenges facing the Financial Accounting Standards Board’s drive to reduce accounting complexity, experts from Standard and Poor’s have said one of FASB’s latest proposals is likely to create more confusion.In January, FASB proposed giving companies th...

By Marie Leone • April 26, 2006

SEC Rolls Up Accounting Fraud

The Securities and Exchange Commission has charged auto-parts maker HLI Operating Co. and four former executives with fraudulent accounting designed to “meet corporate earnings targets and mask declining operating results.”In addition to the company, previously known as Hayes Lemmerz Internationa...

By Stephen Taub • April 26, 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

Kumar Pleads Guilty in CA Fraud

Former Computer Associates International Inc. chief executive officer Sanjay Kumar pleaded guilty Monday afternoon to criminal charges that he led a $2.2 billion accounting fraud at the software giant, according to Bloomberg.The plea before U.S. District Judge I. Leo Glasser, in federal court in ...

By Stephen Taub • April 24, 2006

Uncle Sam Seeks Accounting Break

In the nine years it has been trying, the U.S. government has never received a clean opinion on its consolidated financial statements. Now, in a move whose irony is not likely to be missed by public company CFOs, the government is trying to ease reporting standards in hopes of getting a passing g...

By Stephen Taub • April 24, 2006

PCAOB Censures California Auditor

The Public Company Accounting Oversight Board (PCAOB) has censured a small California accounting firm for failing to take action after one of the firm’s clients issued an annual report that appeared to be, but was not, audited.Reuben E. Price & Co., which has only one office in San Francisco,...

By Stephen Taub • April 24, 2006

Auditors, Clients Square Off over 404 Exemption

A widening schism between auditors and their clients was apparent on Wednesday during a public teleconference of the Securities and Exchange Commission’s Advisory Committee on Smaller Public Companies. In general, said committee co-chairman Herbert Wander, clients favor exempting smaller companie...

By Marie Leone • April 21, 2006

Freddie Mac Settles Suit for $410 Million

Freddie Mac has agreed to pay $410 million and institute governance reforms to settle securities class-action and shareholder-derivative lawsuits stemming from its massive restatement, which covered 2000 through 2002.In a statement, the mortgage-finance company stressed that the settlement does n...

By Stephen Taub • April 21, 2006

PwC Faulted for BCCI Audits

PricewaterhouseCoopers has been ordered to pay nearly £1 million ($1.78 million) in fines and costs by the Joint Disciplinary Scheme (JDS), Britain’s accountancy watchdog, for its work on three audits of Bank of Credit and Commerce International in the late 1980s, according to Accountancy Age.BCC...

By Stephen Taub • April 20, 2006

Execs Put on Leave amid Options Probe

Vitesse Semiconductor has placed three top executives on administrative leave while a special committee of independent directors conducts an internal investigation into the timing, accounting, and documentation relating to past stock option grants.The three individuals are chief executive officer...

By Stephen Taub • April 19, 2006

Tyco to Pay $50 Million to Settle with SEC

Tyco International agreed to pay $50 million to settle civil charges with the Securities and Exchange Commission for engaging in a series of illegal accounting practices that enabled it to overstate profits by at least $1 billion.“This enforcement action shows that, in addition to looting the com...

By Stephen Taub • April 17, 2006

Ex-CFO of Dollar General to Pay $1.2 Million

Brian Burr, a former chief financial officer of discount retailer Dollar General, has agreed to settle Securities and Exchange Commission charges stemming from an accounting scandal dating to the late 1990s.The SEC alleged that in 1999 and 2000, Dollar General’s accounting staff determined that i...

By Stephen Taub • April 14, 2006

U.K. Firm Settles Botched Audit Case

The Securities and Exchange Commission settled civil charges against a U.K. accounting firm and two of its former partners based on their audit of AremisSoft, a Nasdaq-traded company that went bankrupt in 2002.In announcing the settlement, the SEC acknowledged that it was aided in the case by the...

By Stephen Taub • April 13, 2006

Big Four Audits Nearly All of FTSE 350

Virtually every large public company in the United Kingdom uses one of the four largest accounting firms, according to a study published by that country’s Department of Trade and Industry (DTI) in conjunction with the Financial Reporting Council. The research, which was done by Oxera, an independ...

By Stephen Taub • April 13, 2006

Sunterra Whistle-blower Timing Disputed

Timeshare company Sunterra and its former auditor, Grant Thornton, are locked in a dispute over when the auditor learned about a whistle-blower’s accusations.Sunterra, which dismissed Grant Thornton on March 21, disclosed in a Securities and Exchange Commission filing on Monday that on or around ...

By Stephen Taub • April 11, 2006

IRS Eyeing Executive Pay

The Securities and Exchange Commission isn’t the only regulator taking a closer look at executive compensation. The Internal Revenue Service will be scrutinizing executive pay this tax season too, as part of its continuing effort to force more companies to treat fringe benefits as wages for incom...

By Marie Leone • April 10, 2006

Deloitte Fired by 98-year Client Navistar

Navistar International Corp. said it will restate its results for 2002 through 2004 and for the first nine months of fiscal year 2005 as a result of an ongoing review of accounting matters that have prevented the company from filing its 2005 annual report and first quarter 2006 quarterly report o...

By Stephen Taub • April 10, 2006

Nortel Stumbles over Revenue Recognition

Embattled telecom-equipment company Nortel Networks is required to provide a status update to the Ontario Securities Commission every two weeks — with good reason, it seems.Nortel disclosed that as a result of current work on its restatement, announced on March 10, it will restate additional reve...

By Stephen Taub • April 7, 2006

Poll: CFOs Welcome FASB Pension Proposal

Unexpectedly, most companies seem set to embrace a Financial Accounting Standard Board proposal to report the funded status of their defined-benefit pension plans on their balance sheets. Indeed, 87 percent of 122 senior finance executives say that companies should be required to account for pens...

By David Katz • April 5, 2006

Audit Fees Drop, for Some

Audit fees declined for 25 large companies in 2005, the second-year of Sarbanes Oxley Act compliance for accelerated filers. That’s in sharp contrast to first-year experiences for these big companies, which were pummeled by skyrocketing audit fees. In some cases, audit fees rose by 70 percent bet...

By Marie Leone • April 4, 2006

AES Restates Earnings to Correct Errors

Utility company AES restated its financials for 2003 and 2004 to correct several errors. The restatement reduced earnings by $17 million for 2003 and increased them by $6 million for 2004.In January, the company had disclosed that following an internal accounting review, it would restate net inco...

By Stephen Taub • April 4, 2006

FASB: Put Pension Status on the Balance Sheet

The Financial Accounting Standards Board proposed Friday that employers should put the amounts that their retiree-benefit plans are underfunded or overfunded on their balance sheets.FASB also wants to require employers to gauge their retiree-benefit-plan assets and obligations as of the date of t...

By David Katz • March 31, 2006

Ex-KPMG Auditors Settle Tenet Charges

The Securities and Exchange Commission has reached a settlement with three former KPMG auditors on charges they had improperly changed the working papers for their audit of Tenet Healthcare 2002 financials.The SEC had accused two of the auditors of improperly completing the audit and of making “a...

By Stephen Taub • March 31, 2006

Tagged, But Not It Yet

The Securities and Exchange Commission announced Wednesday that 17 companies will file their financial statements in XBRL format in exchange for the commission’s guarantee of speedier reviews of the companies’ registration statements and annual reports. The deal is part of a pilot program meant t...

By Tim Reason • March 31, 2006

Ex-CFO Settles Re: Revenue Recognition

The Securities and Exchange Commission has filed securities law charges against eight former executives of StarMedia Network, a defunct Internet portal directed at Spanish- and Portuguese-speaking communities, stemming from revenue recognition violations.The SEC alleged that in 2000 and the first...

By Stephen Taub • March 30, 2006

Side Deals No Secret at Netopia

The Securities and Exchange Commission has settled charges against Netopia, a maker of broadband networking equipment, as well as CEO Alan Lefkof and former CFO William Baker, regarding side agreements with a customer that fraudulently boosted the company’s revenues, according to the SEC.The comm...

By Stephen Taub • March 30, 2006