Novelis to Replace CFO, Controller

Novelis Inc., which announced last month that it would delay filing its quarterly report because of a restatement, is searching for a new chief financial officer and a new controller.The maker of aluminum products credited chief financial officer Geoffrey P. Batt and controller Jo-Ann Longworth f...

By Stephen Taub • Dec. 22, 2005

Prison Time for Former HealthSouth Exec

Jason Brown, a former HealthSouth Corp. vice president of finance, was sentenced to a year and a day in prison and two years of supervised release for his role in the company’s massive accounting scandal, according to published reports. Brown, who pleaded guilty in December 2003 to falsifying Hea...

By Stephen Taub • Dec. 22, 2005

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

Two Fined in Lucent Accounting Scandal

Two former employees of Lucent Technologies Inc. are the subjects of a judgment rendered in U.S. District Court for the District of New Jersey, stemming from the telecommunications equipment maker’s accounting scandal.According to the Securities and Exchange Commission, “fraudulent conduct” by fo...

By Stephen Taub • Dec. 20, 2005

Many Companies Not Ready for E-filing

More than one-third of companies that are required to file their 2005 taxes electronically next year are not ready for e-filing, according to a survey by KPMG LLP.Under the new Internal Revenue Service requirement, all companies that have assets of $50 million or more and that file at least 250 r...

By Stephen Taub • Dec. 20, 2005

Former Symbol Finance Exec Pleads Guilty

Another former finance executive of Symbol Technologies Inc. has pleaded guilty for his role in the bar-code company’s massive accounting fraud.Christopher DeSantis, once the vice president of worldwide sales and finance, pleaded guilty to a single count of intentionally concealing knowledge of a...

By Stephen Taub • Dec. 19, 2005

One Small Step for Pensions

Last Wednesday, the Financial Accounting Standards Board further addressed its widely anticipated project on defined benefit pension and other postretirement plans.The first phase of the two-phase project is intended primarily to improve financial reporting by requiring that the overfunded or und...

By Craig Schneider • Dec. 19, 2005

EU Orders Off-Balance-Sheet Disclosures

The European Union is requiring listed companies to disclose off-balance-sheet transactions and provide more information about their corporate-governance practices, according to The Financial Times.The new rules, proposed by the European Commission in October 2004, are partly in response to accou...

By Stephen Taub • Dec. 16, 2005

Indictments for Medical Manager Execs

The U.S. Attorney for the District of South Carolina has indicted 10 former officers and employees of Medical Manager Health Systems Inc. for allegedly participating in a conspiracy to fraudulently inflate the reported earnings of the company by more than $16.8 million between 1997 and 2001.Medic...

By Stephen Taub • Dec. 16, 2005

CIT to Restate Due to Hedge Accounting

CIT Group Inc. disclosed that it will restate its 2005 financials after learning that it did not qualify for hedge accounting.The commercial and consumer lender — which uses compound derivatives to hedge interest rates and currency-exchange rates related to its debt financing — stated that durin...

By Stephen Taub • Dec. 15, 2005

Lay Will Pin It on CFO

Ken Lay has offered a preview of his defense at his trial. On Tuesday, during a speech in Houston that he titled “Guilty, until Proven Innocent,” the former chairman of Enron Corp. blamed his onetime chief financial officer, Andrew Fastow, and his cohorts for the financial shenanigans that eventu...

By Stephen Taub • Dec. 14, 2005

IRS Probes Another KPMG Shelter

KPMG LLP is embroiled in yet another tax-shelter controversy.The Internal Revenue Service has been looking into a tax shelter called Insureco that was sold by KPMG in the late 1990s, reported The New York Times. The newspaper citing papers filed by the Justice Department in a dispute involving Yu...

By Stephen Taub • Dec. 14, 2005

Big Four Look to Limit Liability

PricewaterhouseCoopers, Ernst & Young, Deloitte & Touche, and KPMG are trying to minimize their exposure to liability lawsuits by requiring companies they audit to limit their right to sue, reported Bloomberg.According to the wire service, waivers of punitive damages and jury-trial rights...

By Stephen Taub • Dec. 13, 2005

Gemstar Ex-CFO Agrees to Settlement

A former chief financial officer of Gemstar-TV Guide International Inc. has agreed to pay $25,000 to settle civil charges stemming from the company’s accounting fraud, according to the Associated Press.The Securities and Exchange Commission alleged that Craig Waggy, the company’s finance chief fr...

By Stephen Taub • Dec. 13, 2005

‘One Statement or Two?’ Tabled by FASB

In a 5-2 vote, the Financial Accounting Standards Board has agreed to scratch a planned proposal on reporting financial performance. The most controversial element of the proposal would have been an amendment to Statement No. 130, Reporting Comprehensive Income, that would require a single statem...

By Craig Schneider • Dec. 12, 2005

Companies Slow to Expense Options

Fully 65 percent of public companies have not begun to comply with Statement 123R, the Financial Accounting Standards Board’s revised rule on stock-option expensing, according to a survey of 386 companies by Thomson Financial.Most public companies are required to expense options for fiscal years ...

By Stephen Taub • Dec. 12, 2005

Giving the Goods Rather than the Cash

Last year, 189 large U.S. companies surveyed by the Conference Board donated a total of $7.87 billion worldwide — 56 percent of it with merchandise rather than money.In 2002, merchandise reportedly accounted for just 35 percent of total corporate contributions, reported The Wall Street Journal. “...

By Stephen Taub • Dec. 12, 2005

Five Years for HealthSouth Ex-CFO Owens

Former HealthSouth chief financial officer William Owens, credited with cooperating with the prosecution in its case against his former boss, Richard Scrushy, was sentenced to five years in prison for his role in the company’s $2.7 billion accounting scandal, according to published reports.His se...

By Stephen Taub • Dec. 9, 2005

Did Complexity Give Rise to Scandal?

Keep it simple.This was a major theme of the message delivered by Securities and Exchange Commission Chairman Christopher Cox in a speech Monday during an AICPA conference in Washington, D.C.Cox stressed the need for greater clarity and transparency, asserting that the recent accounting scandals ...

By Stephen Taub • Dec. 5, 2005

Delphi Investors Seek to Boot Deloitte

A group of large investors in Delphi Corp. are petitioning for a change of auditors.The auto-parts maker, which filed for bankruptcy protection in October, has asked U.S. Bankruptcy Judge Robert D. Drain for permission to retain. Deloitte & Touche LLP, according to The Wall Street Journal. De...

By Stephen Taub • Dec. 5, 2005

Reporting: One Standard Fits All?

The fourth meeting of the Financial Accounting Standards Board’s Small Business Advisory Committee, on November 30, dealt with uncertain tax positions, changes in accounting for postretirement benefit obligations including pensions, and the joint conceptual framework project of FASB and the Inter...

By Lisa Yoon • Dec. 5, 2005

The Narrowing GAAP

Pressed last March to describe the biggest controversy between U.S. and international accounting standards setters, Robert H. Herz replied, “I like one brand of Scotch, and Tweedie likes another.”Herz, the often-droll chairman of the Financial Accounting Standards Board (FASB), was referring to S...

By Tim Reason • Dec. 5, 2005

HealthSouth Filing Raises Intriguing Questions

HealthSouth Corp. finally filed its long-awaited annual report for 2004.The health-care company, trying to emerge from its massive $2.7 billion accounting fraud, announced that it lost $174.5 million — not good, but not as bad as the $434.6 million it lost in 2003. Net operating revenue came in a...

By Stephen Taub • Dec. 2, 2005

PCAOB Revokes Two Registrations

The Public Company Accounting Oversight Board recently revoked the registrations of two small accounting firms and barred their sole shareholders from associating with a public accounting firm for violating the PCAOB’s auditing standards.Clyde Bailey, of San Antonio-based Clyde B. Bailey CPA, agr...

By Stephen Taub • Dec. 2, 2005

PCAOB Cites “Enormous Challenges” of 404

In a detailed report, the Public Company Accounting Oversight Board stated that companies and accounting firms “faced enormous challenges” in their first year of implementing Section 404 of the Sarbanes-Oxley Act, which requires companies to document their internal controls.Among the challenges, ...

By Stephen Taub • Dec. 1, 2005

Bally Restates Four Years of Results

Bally Total Fitness Corp. completed its restatements for the four years through 2003 to reflect “the correction of numerous errors” in its previous financial accounting and reporting.It elaborated that the more than two dozen restatement items included corrections related to the recognition of re...

By Stephen Taub • Dec. 1, 2005