The Wrong Class of Cash

Things just seem to get worse for General Motors.The company announced Tuesday that its financial statements from 2002 to 2004, as well as the first three quarters of 2005, “should no longer be relied upon” because the company misclassified cash flows from ResCap, a residential mortgage subsidiar...

By Stephen Taub • March 29, 2006

Goodyear in the Clear

Officials at the Goodyear Tire and Rubber Co. announced that the Securities and Exchange Commission has ended its investigation into accounting matters stemming from 2003 restatements, and will not take enforcement action against the company.In addition, the SEC has closed the investigations into...

By Stephen Taub • March 29, 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

Case Closed

KPMG LLP settled a multi-million dollar lawsuit Tuesday, a move that likely helped the Big Four firm close the door on similar litigation going forward.Officials at KPMG agreed to pay $22.5 million to computer-case maker Targus Group International Inc., according to several published reports. The...

By Stephen Taub • March 29, 2006

Derivatives Woes for AIG Unit

A unit of American International Group that provides consumer loans and credit insurance disclosed that it will restate its financials for three quarters to correct accounting treatments for certain derivatives transactions under FAS 133.The adjustments at American General Finance Corp., which af...

By Stephen Taub • March 28, 2006

Raytheon Ex-Exec to Settle with SEC

Former Raytheon Co. chairman and chief executive officer Daniel P. Burnham has agreed to settle charges by the Securities and Exchange that a unit of the company improperly accounted for losses in 2000 and 2001, according to Bloomberg.The tentative settlement was disclosed in the proxy of First D...

By Stephen Taub • March 27, 2006

Dishonest Opinion

Former KPMG LLP partner David Rivkin has pleaded guilty to conspiring to defraud the government and to tax evasion, according to Bloomberg.“I signed opinion letters knowing them to be false, in order to mislead the IRS,” Rivkin said Monday in a New York federal court, according to the report. Fro...

By Stephen Taub • March 27, 2006

Loss at Sea

Sea Containers Ltd. says it will restate its results for the first three quarters of 2005 as a result of an accounting error and will take a $500 million impairment charge, mostly related to a decision to withdraw from its ferry business.The impairment charge will reduce the Bermuda-based shippin...

By Stephen Taub • March 24, 2006

Halliburton Ex-CFO May Return to Court

Unable to hammer out a deal with securities regulators, a former Halliburton Co. CFO accused of accounting violations will probably go to trial, according to The Houston Chronicle.In August 2004, the Securities and Exchange Commission brought charges against the energy-services company, its forme...

By Stephen Taub • March 24, 2006

Judge Lets Air out of Goodyear Lawsuit

Sometimes a restatement is simply due to a screw-up.This, apparently, is what a judge believes happened at Goodyear Tire & Rubber Co. The tire maker announced that U.S. District Court Judge John Adams dismissed a class action lawsuit alleging that securities fraud was committed by the company...

By Stephen Taub • March 23, 2006

False Advertising?

More woes for the Interpublic Group of Cos. Inc.The advertising giant disclosed that it will restate results for the first three quarters of 2005 and that controller and chief accounting officer Nicholas S. Cyprus has resigned.Interpublic elaborated that the restatements, which will reduce earnin...

By Stephen Taub • March 22, 2006

Squeezed by the SEC

A former Qwest Communications accountant claims that federal regulators filed “sensational” and “insupportable” fraud charges against him because he did not “spill the beans” on his one-time boss, former Chief Executive Officer Joseph Nacchio, and Qwest’s former CFOs, according to several publish...

By Stephen Taub • March 21, 2006

Accounting Details Blurry at Bausch

Bausch & Lomb Inc. announced that it will delay the filing of its 2005 annual report by about six weeks because it has discovered a number of revenue recognition issues at several of its foreign subsidiaries.The contact lens maker also found additional accounting problems.In October, Bausch &...

By Stephen Taub • March 20, 2006

Act Now, and Avoid a Restatement

In an unusual move, the Securities and Exchange Commission issued a staff position allowing companies with certain cash-flow statement problems to fix their mistakes without classifying the adjustment as a restatement. Companies that take advantage of the SEC’s largess must do so before their nex...

By Marie Leone • March 20, 2006

Bush Inks Anti-Knockoff Measure

President Bush signed a law Thursday that will toughen many measures against counterfeit goods that pervade industries including apparel, fashion accessories, electronics — even pharmaceuticals and auto partsIndeed, the Stop Counterfeiting in Manufactured Goods Act was sponsored by Rep. Joe Knoll...

By Stephen Taub • March 17, 2006

GM to Restate; Also Adds $2B of Red Ink

General Motors Corp. has veered off its already bumpy road.The embattled auto giant has announced that it will restate financials for the five years ended 2004 due to an accounting issue at ResCap, a residential mortgage unit that is a subsidiary of General Motors Acceptance Corp. For certain mor...

By Stephen Taub • March 17, 2006

Altria to Record $1 Billion Tax Benefit

Altria Group Inc. announced that it will record about $1 billion in tax benefits in the first quarter of 2006 after the Internal Revenue Service finished reviewing its tax returns from 1996 through 1999.The tax benefits, which result from the reversal of tax reserves, will have no impact on the c...

By Stephen Taub • March 16, 2006

Wynn Restates over Derivatives

Wynn Resorts Ltd., which owns and operates the Wynn Las Vegas hotel and casino, disclosed a restatement for 2003, 2004, and the first three quarters of 2005 to adjust accounting for interest-rate swap arrangements under Financial Accounting Standard 133, Accounting for Derivative Instruments and ...

By Stephen Taub • March 16, 2006

CVS Finance Execs Resign amid SEC Probe

The Securities and Exchange Commission has launched an informal inquiry into how CVS Corp. it accounted for a transaction in 2000, the company announced yesterday evening.The drug store chain also reported that both the treasurer and the controller and principal accounting officer have resigned. ...

By Stephen Taub • March 15, 2006

The Trouble with COSO

Well, it seemed like a good idea at the time.Last year, the nonprofit Institute of Management Accountants (IMA) announced plans to host a conference in December. Apparently, the IMA wanted to preview a fledgling internal-controls framework — one aimed at helping publicly traded companies cope wit...

By Helen Shaw • March 15, 2006

Fannie Finds More Accounting Errors

The Federal National Mortgage Association (FNMA, or Fannie Mae) announced that it has uncovered new accounting errors and that it will not file its annual report on time for the second straight year.The company stated that in addition to delaying its 2005 report, it does not expect to complete it...

By Stephen Taub • March 13, 2006

Lear Receives Subpoena in GM Probe

Officials at Lear Corp. reported that the company received a subpoena from the Securities and Exchange Commission related to the regulator’s investigation of General Motors Corp. The auto-parts maker disclosed in its annual report filed with the SEC that the investigation is tied to a previously ...

By Stephen Taub • March 10, 2006

Serial Restaters: Nortel Finds Errors

Just when you thought it was safe to declare Nortel Networks to be over its accounting scandal, it stuns Wall Street with yet another restatement.Officials at the telecom-equipment maker said the company will revise its results for 2003, 2004, and the first nine months of 2005, and adjust its fin...

By Stephen Taub • March 10, 2006

Blockbuster to Restate Results

Officials at Blockbuster Inc. said the company will restate its financial results for 2003 and 2004, and for each of the first three quarters of 2004 and 2005. The restatements stem from discussions company executives have had with the Securities and Exchange Commission regarding accounting pract...

By Stephen Taub • March 9, 2006

Loews, CNA Restate Cash Flows Again

For Loews Corp. and its CNA Financial Corp. property/casualty insurance affiliate, the number three isn’t much of a charm.To correct what both companies call “classification errors” stemming from activities at CNA, they will restate their cash flows for 2003 and 2004 and the first three quarters ...

By Stephen Taub • March 9, 2006

FASB Calls for a Cultural Change

The Financial Accounting Standards Board is conceding that its push for a principles-based accounting system could run smack into some powerfully entrenched interests.FASB laid out the challenges it faces in a February 16 reply to a Securities and Exchange Commission report on improving the trans...

By Marie Leone • March 7, 2006