Refco CEO Charged with Securities Fraud

Refco Inc.’s suspended chairman and chief executive officer, Phillip Bennett, was charged with securities fraud in U.S District Court in Manhattan, according to The New York Times. In addition, the Securities and Exchange Commission has opened an informal investigation into the commodities broker...

By Craig Schneider • Oct. 12, 2005

FASB and the Liability-Equity Split

Breaking up is hard to do in love — and in accounting. For the Financial Accounting Standards Board, one of its biggest technical challenges has been a project addressing the separate classification and measurement of a financial instrument that has characteristics of both liability and equity.La...

By Craig Schneider • Oct. 11, 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

Three Charged for American Tissue Audit

The Securities and Exchange Commission filed civil fraud charges against three former executives of Arthur Andersen stemming from their 2000 audit of American Tissue Inc.Two of the individuals, former audit manager John D. Parson and former senior accountant Brendon P. McDonald, agreed to settlew...

By Stephen Taub • Oct. 6, 2005

Delphi Sued over Inventory Deals

Four pension funds have filed a class-action lawsuit against Delphi Corp., alleging in part that the company improperly treated financing transactions as sales, causing it to overstate revenue and earnings. In addition to the Troy, Michigan-based auto-parts supplier, the lawsuit named as defendan...

By Dave Cook • Oct. 5, 2005

SEC Charges Ex-Execs of Vision Company

The Securities and Exchange Commission has settled charges that the former chief financial officer and chief executive officer of Sight Resource Corp. violated of the reporting, record keeping, and internal-controls provisions of the federal securities laws.In addition to those charges, against f...

By Dave Cook • Oct. 5, 2005

MCI Settles $331 Million in Tax Claims

MCI Inc. has agreed to pay a total of $331 million to settle claims made by 16 states and the District of Columbia regarding back taxes, according press reports. The states reportedly maintain that the company used a royalty tax plan to shield billions of dollars from their coffers; in a statemen...

By Dave Cook • Oct. 4, 2005

Surprise Inside

As any collector of Patek Philippe watches or Shelby Cobras will tell you, when it comes to machines, it’s what’s inside that counts.This is also true when it comes to the tax treatment of what’s inside machines.These days, most industrial or office machines — even dishwashers, for that matter — ...

By Russ Banham • Oct. 4, 2005

PwC to Pay $182.9M for Coopers Audit

PricewaterhouseCoopers must shell out $182.9 million for the failures of its predecessor Coopers & Lybrand, according to the Associated Press.In July, a federal jury found that Coopers & Lybrand was negligent in its audit of Ambassador Insurance Co. 20 years ago, reported the AP. The jury...

By Stephen Taub • Oct. 3, 2005

Lattice Finance Exec Settles with SEC

The former controller and director of finance of Lattice Semiconductor Corp. has agreed to a cease-and-desist order stemming from the company’s recent accounting scandal, according to the Securities and Exchange Commission.The SEC asserted that when Ronald Lee Hoyt prepared Lattice’s financial st...

By Stephen Taub • Oct. 3, 2005

Judge Rules Sarbox 304 Reserved for SEC

A federal judge has ruled that shareholders cannot file derivative lawsuits under Section 304 of the Sarbanes-Oxley Act, according to Law.com. Section 304 allows for the disgorgement of profits and bonuses from top corporate executives in alleged accounting scandals.The Website points out that th...

By Stephen Taub • Sept. 30, 2005

PCAOB Finds Hefty KPMG Audit Errors

The Public Company Accounting Oversight Board said it found shortcomings of such significance at 19 KPMG audits it chose to inspect last year that the PCAOB deduced that the firm hadn’t come up with enough evidence to support its opinion on those companies’ financial statements.Inspectors did fie...

By Stephen Taub • Sept. 30, 2005

Deloitte Partners Charged by SEC

The Securities and Exchange Commission instituted administrative proceedings against two former partners of Deloitte & Touche for the role they allegedly played in the accounting fraud scandal at Adelphia Communications.The regulator accused Gregory M. Dearlove and William E. Caswell of engag...

By Stephen Taub • Sept. 30, 2005

New Accounting Questions for Fannie Mae

Investigators examining the books of mortgage giant Fannie Mae have found new and pervasive accounting violations, including evidence that the company may have overvalued assets, underreported credit losses, and misused tax credits, according Dow Jones, which cited unnamed people close to the pro...

By Stephen Taub • Sept. 29, 2005

Supreme Court to Rule on Tax Incentives

The Supreme Court announced yesterday that it will hear an Ohio case that may affect the tax breaks that municipalities offer to companies in exchange for funding major capital projects. In 1998, the city of Toledo and the state of Ohio offered DaimlerChrysler Corp. a $280 million tax break in ex...

By Dave Cook and Stephen Taub • Sept. 28, 2005

Regulators Clueless on Big Four Failure

What would happen if PricewaterhouseCoopers, Ernst & Young, Deloitte & Touche, or KPMG were to collapse?“None of us has a clue what to do if one of the Big Four failed,” maintained William McDonough, chairman of the Public Company Accounting Oversight Board, in public remarks earlier this...

By Stephen Taub • Sept. 28, 2005

Tax Ruling May Cost Tribune $1 Billion

Tribune Co. announced that it could be on the hook for nearly $1 billion in back taxes after the United States Tax Court disallowed the 1998 tax-free reorganization of legal publisher Matthew Bender. The media giant — which publishes the Los Angeles Times, the Chicago Tribune, and nine other dail...

By Stephen Taub • Sept. 28, 2005

Fraud Charges for Five Former Executives

The Securities and Exchange Commission has filed civil charges against five former executives of Cornerstone Propane Partners stemming from an alleged financial fraud.The five individuals are former chief executive officer Keith G. Baxter, former chief financial officer Ronald J. Goedde, former v...

By Stephen Taub • Sept. 27, 2005

New Rules at the APIC Pool

To help companies implement Statement 123R, the Financial Accounting Standards Board’s revised rule on expensing stock options, last week the board proposed an optional method for calculating the tax impact of stock-option grants. Some board members also expressed the thought that this issue shou...

By Craig Schneider • Sept. 26, 2005

GM Looks to Cut Parts Costs

Financially struggling General Motors Corp. has targeted suppliers in its latest bid to cut costs.As part of a two-year program to pare its $85 billion purchasing bill, GM is seeking price reductions on a part-by-part basis, rather than setting a companywide cost-cutting goal, according to The Wa...

By Stephen Taub • Sept. 23, 2005

Supply Chains in Katrina’s Wake

Finance executives working outside the Gulf Coast need only to have been watching television in the aftermath of Hurricane Katrina to be moved by the devastation of human lives and to grasp the catastrophe’s potential effects on energy costs and the environment. But even for companies far from th...

By David Katz • Sept. 22, 2005

Former HealthSouth CFO Gets 27 Months

Former HealthSouth Corp. chief financial officer Weston L. Smith was sentenced Thursday to 27 months in prison for his role in the company’s $2.7 billion accounting fraud, according to Bloomberg. He had pleaded guilty to one count each of conspiracy to commit wire and securities fraud, falsely ce...

By Stephen Taub • Sept. 22, 2005

Former HealthSouth CFO Sentenced to Jail

Former HealthSouth Corp. chief financial officer Mike Martin was sentenced to one week in prison for his role in the company’s $2.7 billion accounting fraud, according to the Associated Press.The resentencing hearings for Martin and former HealthSouth senior vice president Richard Botts were held...

By Stephen Taub • Sept. 21, 2005

Probation, Again, for HealthSouth Exec

Upon further review, the original sentence pronounced on a former HealthSouth Corp. executive remains the same. U.S. District Judge U.W. Clemon again sentenced former senior vice president for tax, Richard Botts, to probation.Botts had pleaded guilty to conspiracy, mail fraud, and falsifying reco...

By Stephen Taub • Sept. 20, 2005

Whens and Wherefores of Stock Grants

Last week the Financial Accounting Standards Board agreed, albeit reluctantly, to further explain just what it means by “grant date” and “mutual understanding.”FASB’s new proposal responds to several inquiries by auditors about Statement 123R, the board’s controversial revised rule on stock-optio...

By Craig Schneider • Sept. 19, 2005

Kozlowski, Swartz Sentenced

Former Tyco International Ltd. chairman and chief executive officer Dennis Kozlowski and former chief financial officer Mark Swartz were each sentenced to eight and one-third to 25 years in state prison for stealing hundreds of millions of dollars from the conglomerate, according to reports.Kozlo...

By Stephen Taub • Sept. 19, 2005