Probation for Adelphia’s Michael Rigas

Michael Rigas, a son of Adelphia Communications Corp. founder John Rigas, avoided prison time when he was sentenced last Friday in connection with the cable company’s accounting scandal.The former chief operating officer of the bankrupt cable operator, was sentenced to 10 months of home confineme...

By Stephen Taub • March 6, 2006

Kroger Restates Due to Tax Accounting

Kroger Co. announced that it will restate its financials for the three fiscal years ended January 29, 2005, to adjust errors in its deferred tax account balances.In a regulatory filing, the country’s largest supermarket company added that it will cut 2004 net earnings by $4 million and 2003 net e...

By Stephen Taub • March 6, 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

Restatements Surged in 2005, Says Study

Restatements are busting out all over. The number of revisions of financial reports by publicly traded companies surged to a record 1,295 in 2005, nearly double the previous year’s mark of 650, according to a new study by Glass, Lewis and Co., a corporate-governance research firm. The tally is al...

By Stephen Taub • March 3, 2006

GAO Cites Material Weaknesses

Officials at the U.S. Government Accountability Office (GAO) said that for the ninth straight year it is unable to provide an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated and conform with generally accepted accounting principles (GAAP). The ...

By Stephen Taub • March 3, 2006

Monitoring China Supply-chain Risk

Imagine a supply chain in which one key part could be had only from a single country. That nation is a huge hot spot, threatened by the possibility of war, regulatory shifts, and even sanctions by your home nation against that country’s human-rights abuses. If you’re a senior corporate executive,...

By David Katz • March 2, 2006

Biggest Auto Dealer Restates Cash Flow

Following similar moves by two other auto retailers, AutoNation, Inc. said it will restate its financials for 2003 and 2004 to reclassify cash flows tied to “floorplan financing” arrangements.Indeed, restatements involving such financing—a common practice among auto dealers—has been gaining a hig...

By Stephen Taub • March 1, 2006

Freight Costs Spur Overstock Restatement

Controversial online discount retailer Overstock.com Inc. announced that it will restate its financials for the four years ended 2005 to correct an error related to accounting for freight costs.In a regulatory filing, Overstock disclosed that the misstatements stem from its practice of expensing ...

By Stephen Taub • Feb. 28, 2006

FASB, IASB Issue Convergence ”Roadmap”

The Financial Accounting Standards Board and the International Accounting Standards Board jointly published a roadmap for developing common accounting standards by 2008.The FASB and the IASB stated that their memorandum of understanding, which elaborates on their so-called Norwalk Agreement of Oc...

By Stephen Taub • Feb. 27, 2006

AICPA OKs Risk-Based Audit Standards

Jumping on the current bandwagon promoting greater auditor efficiency, the American Institute of Certified Public Accountants has approved eight new “Risk Assessment Standards” for the audits of private companies and non-profit organizations.The new standards, which the AICPA will make available ...

By David Katz • Feb. 24, 2006

Internal Probe Pins Blame at Fannie Mae

An internal investigation at the Federal National Mortgage Association (FNMA, or Fannie Mae) laid the blame for $11 billion worth of accounting errors, according to published accounts.The exhaustive report, which took 16 months to compile and runs more than 2,600 pages, was assembled by a team he...

By Dave Cook • Feb. 24, 2006

Tax Problems at H&R Block

H&R Block Inc. has announced it will restate earnings for fiscal years 2004 and 2005 because it underestimated its own “state effective income tax rate,” Reuters reported.The Kansas City, Missouri-based company added that it owes another $31.7 million in back taxes, according to MarketWatch (...

By Dave Cook • Feb. 24, 2006

HealthSouth Settles Lawsuits for $445M

HealthSouth Corp. has agreed to pay $445 million to settle investor lawsuits in connection with the company’s $2.7 billion accounting scandal.The Birmingham, Alabama-based health-care services company and its insurers reached the tentative accord following court-ordered mediation, reported Bloomb...

By Dave Cook • Feb. 23, 2006

KPMG Partners Settle Xerox Charges

The Securities and Exchange Commission announced Wednesday that all four remaining defendants in the case against them and KPMG LLP, regarding earnings manipulation at Xerox Corp., have agreed to settle with the commission.Three current or former KPMG partners agreed to permanent injunctions, pay...

By Dave Cook • Feb. 22, 2006

BofA Restates Due to Hedge Accounting

Bank of America Corp. announced that it will restate its financials dating from 2002 to correct its accounting for certain derivative transactions.The Charlotte, North Carolina-based bank holding company, second only to Citigroup Inc. in size, stated that the cumulative impact on net income will ...

By Dave Cook • Feb. 22, 2006

SEC Charges KPMG Auditors in Ahold Scandal

The Securities and Exchange Commission has accused a senior manager and an engagement partner at KPMG of “improper professional conduct” in their audit of U.S. Foodservice Inc. USF’s Dutch parent company, Royal Ahold NV, settled fraud and other charges with the SEC in October 2004.The SEC charges...

By Stephen Taub • Feb. 17, 2006

A Carnaby Street for Taxes

It wasn’t by choice. Nevertheless, tax director Laurie Beaudet erased her auditor, PricewaterhouseCoopers, from a list of possible vendors for a tax project she planned to outsource. “It’s not the end of the world, but we did have to change our thinking about who to put out bids to,” recalls Beau...

By Marie Leone • Feb. 16, 2006

China to Adopt IFRS

Chinese government officials have announced that companies will adopt International Financial Reporting Standards (IFRS) used by nearly 100 countries, including those in the European Union, according to The Financial Times. Lou Jiwei, Beijing’s vice finance minister, said China would adopt “one b...

By Stephen Taub • Feb. 16, 2006

SEC, PCAOB Plan Roundtable on Sec. 404

The Securities and Exchange Commission and the Public Company Accounting Oversight Board (PCAOB) have announced they will co-host a roundtable discussion on May 10 to discuss second-year experiences of implementing the reporting and auditing requirements of Section 404 of the Sarbanes-Oxley Act. ...

By Stephen Taub • Feb. 16, 2006

SEC OKs Internal-Control Audit Standard

The Securities and Exchange Commission approved a Public Company Accounting Oversight Board standard last week telling auditors how to report on whether a client’s previously reported material weakness in internal controls over financial reporting still exists. Since companies already have to rep...

By Helen Shaw • Feb. 13, 2006

Taking the Wind out of Windfall?

Last year was a good year for oil companies — too good, some in Congress seem to think. Proposals for increased taxes on oil companies, passed in the Senate last fall, are currently being debated in the House.A study by the Washington, D.C.-based Tax Foundation suggests there’s no need for such l...

By Lisa Yoon • Feb. 10, 2006

KPMG Shelter Deal May Be Revised

It’s back to the negotiating table for KPMG and its tax-shelter investors.A federal judge postponed approval of a proposed $195 million settlement so the two sides could restructure the deal, according to The New York Times. It seems that officials at KPMG want the deal revised because too many p...

By Stephen Taub • Feb. 9, 2006

A Case for Fatter Supply Chains

Ice-cream loving dieters across the globe laughed with delight, and yogurt-eating weight watchers slathered bagels with butter, on Wednesday morning after hearing that a new $415 million federally funded study concluded that low-fat diets do not cut health risks.The study, conducted by Rockefelle...

By Marie Leone • Feb. 9, 2006

Auditing (Internal) Auditors

Many companies might soon be looking for ways to provide an audit of the inner workings of their internal-audit departments. While the “audit of the (internal) audit” is a service that the Big Four and second-tier accounting firms have offered for some time, it’s likely to be in greater demand be...

By Helen Shaw • Feb. 8, 2006

Nortel Agrees to $2.5B Settlement

Nortel Networks Inc. has agreed to pay nearly $2.5 billion in cash and stock to settle lawsuits stemming from its accounting scandal.Under the terms of the proposed settlement, Nortel would make a cash payment of $575 million and issue 628,667,750 common shares, representing 14.5 percent of its c...

By Stephen Taub • Feb. 8, 2006

Former Gemstar CFO to Pay $1.3 Million

Elsie Leung, the former chief financial officer of Gemstar-TV Guide International Inc., agreed to pay more than $1.3 million to settle civil charges that she participated in a scheme to inflate the company’s licensing and advertising revenues, according to the Securities and Exchange Commission.L...

By Stephen Taub • Feb. 8, 2006