Many Happy Returns

This past January, when officials at the Internal Revenue Service announced they wanted many corporations to begin filing their returns electronically for the 2005 tax year, critics howled. After all, few companies appeared ready to go smokeless. In 2004 — when businesses were allowed to voluntar...

By Craig Schneider • Nov. 7, 2005

Ex-Andersen Auditors of Enron Cited

The Texas accounting board is trying to take disciplinary action against seven former Arthur Andersen accountants for their role in Enron’s collapse, according to The Houston Chronicle.In a complaint filed Thursday with the state’s Office of Administrative Hearings, the Texas State Board of Publi...

By Stephen Taub • Nov. 4, 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

Ex-CFO Settles SEC Fraud Charges

David G. Zilli, the former chief financial officer of Bon Secours Cottage Health Services, has settled Securities and Exchange Commission charges that he engaged in a fraudulent accounting scheme. A parallel criminal action was filed in U.S. District Court for the District of Maryland.Zilli was t...

By Stephen Taub • Nov. 3, 2005

SEC Charges Seven in Ahold Fraud

The Securities and Exchange Commission has filed enforcement actions against seven individuals stemming from the massive financial fraud at the U.S. Foodservice Inc. subsidiary of Royal Ahold.The individuals worked as independent food brokers, sales directors, and, in one case, as the owner of a ...

By Stephen Taub • Nov. 3, 2005

KPMG Deal Gets Preliminary OK

A federal judge gave preliminary approval to a $225 million settlement by KPMG LLP stemming from its tax-shelter abuses, according to published reports.The proposed agreement covers that tax shelters known as BLIPS (bond linked issue premium structure, FLIP (foreign leveraged investment program),...

By Stephen Taub • Nov. 1, 2005

Qwest to Settle Claims for $400 Million

Qwest Communications International Inc. announced that it would pay certain former investors $400 million to settle charges stemming from the company’s accounting scandal.The settlement covers investors who purchased Qwest securities between May 24, 1999 and July 28, 2002. Under the agreement, Qw...

By Stephen Taub • Nov. 1, 2005

Stock Options, Meet Pro Forma

An emerging trend in pro forma reporting is making some securities analysts cringe.Under Statement 123R, the Financial Accounting Standards Board’s revised rule on stock-option expensing, the costs of issuing stock options must be included on the income statement rather than hidden in footnotes. ...

By Craig Schneider • Oct. 31, 2005

Revenue Recognition a Top Concern

For the fourth consecutive year, revenue recognition was considered the top issue that should be addressed by the Financial Accounting Standards Board, according to a survey of members of FASB’s advisory group.The Financial Accounting Standards Advisory Council — established in 1973 concurrent wi...

By Craig Schneider • Oct. 31, 2005

Deloitte, Others Oppose Accelerated Filing

Several companies, including Deloitte & Touche LLP, oppose the Securities and Exchange Commission’s proposal to accelerate the deadline for filing quarterly and annual reports, according to Bloomberg.The wire service noted that the Big Four accounting firm, as well as URS Corp., Southwest Gas...

By Stephen Taub • Oct. 28, 2005

IRS Must Pay Berkshire $23.1 Million

The Internal Revenue Service has been ordered to pay Warren Buffett’s Berkshire Hathaway Inc. more than $23.1 million as a result of a ruling on a tax dispute, according to published reports.On Friday, Judge Lyle Strom of U.S. District Court in Nebraska ruled against the IRS for not allowing the ...

By Stephen Taub • Oct. 28, 2005

Royal Dutch to Shed KPMG, Keep PwC

Dropping its dual-auditor approach, Royal Dutch Shell plc will dispense with KPMG and retain only PricewaterhouseCoopers to check its books.PwC will perform the audit and audit-related services of the worldwide operations of Royal Dutch Shell plc, provide the audit opinion on the financial statem...

By Stephen Taub • Oct. 27, 2005

SEC Steps Up Probe of GM’s Accounting

Officials at General Motors Corp. said the Securities and Exchange Commission is investigating pension and other postemployment benefits, as well as certain transactions between the auto giant and Delphi Corp., the bankrupt parts maker that was once part of GM.In a regulatory filing, GM noted tha...

By Stephen Taub • Oct. 27, 2005

Bausch & Lomb Brazilian Unit Probed

Bausch & Lomb disclosed that it may delay filing its third-quarter report and may restate prior results as a result of alleged improper conduct by its Brazilian subsidiary, BL Industria Otica Ltda. and assessments against BLIO by Brazilian tax authorities.The maker of eye-care products also r...

By Stephen Taub • Oct. 26, 2005

Ameritrade May Restate Results

Ameritrade Holding Corp. disclosed that it may restate its results for the past three fiscal years because of its accounting for certain hedging deals.The securities brokerage stated that it is discussing with the Securities and Exchange Commission the accounting for and disclosure of prepaid var...

By Stephen Taub • Oct. 25, 2005

Visteon to Restate Financials

Embattled auto-parts maker Visteon Corp. announced that it will restate its financials for three years because it incorrectly recorded certain costs.The revisions are the result of an independent review after the board’s audit committee earlier determined that certain expenses for freight, raw ma...

By Stephen Taub • Oct. 24, 2005

APIC Pool Drained of Biases

The Financial Accounting Standards Board gave companies something to cheer about last Wednesday when it decided to tweak a proposed shortcut for calculating the tax benefits of stock-option grants in favor of a more profit-friendly approach.The board’s discussion on FASB staff position 123R-c, wh...

By Craig Schneider • Oct. 24, 2005

Risk and Section 965 Repatriation

The new section 965 of the Internal Revenue Code, enacted as part of the American Jobs Creation Act of 2004, offers companies a one-time opportunity to repatriate profits earned overseas with greatly reduced tax consequences. But the saving — in many instances, the effective tax rate on repatriat...

By 10Rule • Oct. 20, 2005

Computer Associates to Restate

Computer Associates International Inc. announced that it will restate three years of revenue due to incorrect revenue recognition policies. However, none of the revisions are substantial.The restatement reflects adjustments to revenue as a result of the company’s review of its revenue recognition...

By Stephen Taub • Oct. 20, 2005

Coming Soon: Tax-free Foreign Profits?

Doing away with taxes on the foreign profits of U.S. companies is expected to be recommended by a presidential advisory group, reported the Financial Times.The panel — appointed in January by President Bush to propose changes in the U.S. tax system — is expected to issue its final report to the D...

By Stephen Taub • Oct. 19, 2005

Dana Details Restatement, Cuts Dividend

Dana Corp. announced that it will restate net income downward by between $25 million and $45 million after tax.The embattled auto-parts maker disclosed earlier this month that it had not properly accounted for certain items during 2004 and the first and second quarters of 2005. The restatements a...

By Stephen Taub • Oct. 19, 2005

Ex-CFO of KPMG among 10 Newly Indicted

Former chief financial officer Richard Rosenthal was among 10 additional individuals indicted in the widening tax-shelter scandal at KMPG.“This was an orchestrated case of deliberate tax evasion, and not legitimate tax planning,” said Michael Garcia, U.S. attorney for the Southern District of New...

By Stephen Taub • Oct. 18, 2005

Slow Going for Principles-based Accounting

Proponents of principles-based accounting may want to avert their eyes from the Financial Accounting Standards Board’s soon-to-be-released guidance on stock options.Last week, the board agreed to finalize its FASB staff position (FSP) on applying the grant-date provisions of Statement 123R, the b...

By Craig Schneider • Oct. 17, 2005

The Auditor-Investor ”Expectation Gap”

Investors may have unrealistically high expectations from auditors, said William Parrett, chief executive officer of Deloitte Touche Tohmatsu, in an interview with the Toronto Globe and Mail.Parrett acknowledged that his industry must do a better job of performing audits and avoiding potential co...

By Stephen Taub • Oct. 17, 2005

Google to Report Pro-Forma Results

When Google reports its quarterly earnings on October 20, the search-engine giant plans to serve up an extra set of numbers.It will include a so-called pro-forma, or non-GAAP, diluted earnings per share (EPS) number as a supplement to its GAAP EPS number so that it can add back such things as cha...

By Stephen Taub • Oct. 14, 2005

KPMG Found Using a Tax Shelter It Sold

KPMG itself used a tax shelter it pedaled to corporations and that the IRS later found to be an abusive tax-avoidance transaction, according to The Wall Street Journal.The newspaper reported that the Big Four accounting firm used the shelter — dubbed the 401(k) Deduction Acceleration Strategy, or...

By Stephen Taub • Oct. 14, 2005