Former MCA Finance Exec Pleads Guilty

A former finance executive of a defunct mortgage lender pleaded guilty for the role he played in a scheme that eventually led to Michigan’s largest securities fraud, according to several published reports.John O’Leary, the former senior vice president for corporate finance at MCA Financial Corp.,...

By Stephen Taub • Aug. 2, 2005

Cox, Sarbox, and FAS 123R

At last week’s confirmation hearing before the Senate Banking Committee, Securities and Exchange Commission chairman-to-be Christopher Cox called vigorous enforcement of securities laws his “top priority” and affirmed his support for a new rule requiring that stock options be expensed.Yet in the ...

By Ed Zwirn • Aug. 1, 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

H&R Block Fumbles Its Financials

H&R Block Inc., which prepares tax returns on behalf of millions of Americans, has reportedly made a number of accounting errors of its own. The errors caused the company to overstate earnings for the 2003 and 2004 fiscal years by $91.1 million, according to Bloomberg.As a result, Block must ...

By Stephen Taub • Aug. 1, 2005

Reliant, Deloitte Settle with Investors

Reliant Energy and Deloitte & Touche have agreed to pay $75 million to settle a class-action lawsuit stemming from the energy company’s so-called round-trip trading activities from 1999 to 2001.Reliant will pay $68 million under the settlement, of which $61.5 million is covered by its directo...

By Stephen Taub • Aug. 1, 2005

IRS to Audit More S Corporations

The Internal Revenue Service will boost the number of audits it performs of Subchapter S corporations, according to the Associated Press.The IRS plans to examine later this year 5,000 randomly selected S corporation returns from the 2003 and 2004 tax years, the wire service reported. The agency e...

By Craig Schneider • July 29, 2005

GAO to SEC: Improve Your Controls

The Government Accountability Office has issued a follow-up report to the Securities and Exchange Commission detailing 18 suggestions the GAO believes would repair “material” weaknesses in the SEC’s financial internal controls.On Wednesday the GAO made recommendations covering the commission’s in...

By Craig Schneider • July 28, 2005

Former Qwest Exec to Pay $2.1 Million

Gregory Casey, a former executive vice president of wholesale business for Qwest Communications International Inc., has agreed to pay $2.1 million to settle civil charges concerning his participation in a $3 billion accounting fraud, reported the Associated Press.In March, the Securities and Exch...

By Craig Schneider • July 27, 2005

E&Y to Resign as Selectica Auditor

Ernst & Young will resign as the external auditor of E-commerce software provider Selectica Inc., according to a filing with the Securities and Exchange Commission. The San Jose-based company also identified material weaknesses in its internal controls in five accounting areas.First, accounts...

By Craig Schneider • July 26, 2005

PCAOB Toughens Independence Rules

The Public Company Accounting Oversight Board, which oversees the auditing profession, has unanimously adopted a rule proposed last December that would ban auditors from providing certain tax-shelter advice to their clients.“This will keep auditors out of aggressive tax work that has so damaged i...

By Craig Schneider • July 26, 2005

Judge May Lighten Cendant Prison Term

A federal judge is considering a prison sentence of 10 to 13 years for former Cendant Corp. vice chairman E. Kirk Shelton, according to reports. Prosecutors had requested a term of 12 to 15 years.U.S. District Judge Alvin Thompson made the announcement during a sentencing hearing in a Hartford co...

By Craig Schneider • July 26, 2005

Sallie Mae Fires Divisional CFO

SLM Corp., better-known as educational funding provider Sallie Mae, has fired the chief financial officer of one of its debt-collection subsidiaries and demoted another manager, according to a filing with the Securities and Exchange Commission. The two managers, whom the company did not identify,...

By Craig Schneider • July 25, 2005

BriteSmile Auditor Resigns

There are few happy faces at BriteSmile Inc. these days. The teeth-whitening technology company announced Monday in a regulatory filing that Deloitte & Touche LLP resigned as its independent auditor on July 18 following concerns over BriteSmile’s internal controls.The announcement comes less ...

By Craig Schneider • July 25, 2005

ACE Restates over Finite-Risk Accounting

ACE Ltd. announced that it will restate more than five years of results to correct the accounting treatment for eight transactions related to its finite risk insurance.The restatements — which cover the five years ending in 2004, as well as each of the quarters in 2003 and 2004 and the first quar...

By Stephen Taub • July 21, 2005

Other Invoices, Other Rooms

Mention intercompany transactions to finance managers, and most get a peculiar look on their faces — a look most readily compared to the soulless expression seen on prospective root-canal patients just before they disappear down the long hallway and into the dentist’s lair.Admittedly, this may be...

By Esther Shein • July 20, 2005

Ex-HealthSouth COO Has Charges Dropped

Federal prosecutors moved to dismiss the indictment of former HealthSouth Corp. president and chief operating officer James P. Bennett for his role in the company’s $2.7 billion accounting scandal, according to press reports.The one-sentence motion did not provide a reason for the request, accord...

By Stephen Taub • July 20, 2005

Sun Communities Receives Wells Notice

Sun Communities Inc. disclosed that the company and two of its finance executives have received a Wells notice from the Securities and Exchange Commission regarding Sun’s accounting for its SunChamp LLC investment.Sun, a real estate investment trust that owns and operates 136 manufactured-housing...

By Stephen Taub • July 19, 2005

‘Business Combo’ Proposal Creating Rifts

One of the most ambitious proposals in the “convergence” agenda of the Financial Accounting Standards Board and the International Accounting Standards Board would replace the existing requirements of FASB Statement No. 141, Business Combinations, and IFRS 3.The proposals retain the fundamental re...

By Ed Zwirn • July 18, 2005

Material-Weakness Reports Skyrocket

A total of 586 companies reported material weaknesses through early May of this year, compared with 313 for all of 2004, according to shareholder-advisory firm Glass, Lewis & Co.The new analysis by the independent research firm is another confirmation that audit firms have increased their scr...

By Helen Shaw • July 18, 2005

KPMG Sanctioned for Discovery Abuse

KPMG LLP has been sanctioned by a California judge for hiding critical documents in an accounting-malpractice lawsuit brought by Targus Group International Inc., according to the Associated Press.Orange County Superior Court Judge Geoffrey Glass ordered KPMG to pay $30,000 for “its abuse of the d...

By Stephen Taub • July 18, 2005

KPMG Fined $100 Million by Oslo Court

More troubles for KPMG. The Norwegian branch of the Big Four firm was ordered to pay $100 million in damages stemming from the 2003 bankruptcy of Finance Credit, according to the Associated Press.An Oslo court found the firm negligent in auditing the books of Finance Credit, a collection agency t...

By Stephen Taub • July 15, 2005

United Rentals CFO on 30-Day Notice

United Rentals Inc. announced that president and CFO John Milne failed to perform his duties and would be fired if he does not remedy matters within the “30-day cure period” under his employment agreement.A special committee of United’s board of directors recommended the measure after Milne said ...

By Stephen Taub • July 14, 2005

Ex-CFO of Qwest Enters Guilty Plea

Robin Szeliga, a former chief financial officer of Qwest Communications International Inc., has pleaded guilty to one count of insider trading, reported the Associated Press. U.S. District Judge Walker D. Miller delayed formal acceptance of the plea until a November 4 hearing, according to the AP...

By Stephen Taub • July 14, 2005

At Home with RFID

Despite reports to the contrary, things do occasionally work out for the best. Consider the case of radio frequency identification (RFID), or, more specifically, the June 2003 edict from Wal-Mart regarding RFID. In that pronouncement, the planet’s largest retailer indicated that it wanted all its...

By John Edwards • July 13, 2005

Ebbers Sentenced to 25 Years

Bernard Ebbers, 63, was sentenced to 25 years in prison for his role as the “instigator of the fraud” — in the words of the judge — that led to the largest accounting scandal and bankruptcy in U.S. history. The $11 billion fraud at WorldCom Inc. caused shareholders to lose $2.2 billion.Jurors, wh...

By Stephen Taub • July 13, 2005

SEC Probing Harley Statements

Harley-Davidson Inc. announced that the Securities and Exchange Commission has launched an investigation into claims recently made in shareholder lawsuits against the motorcycle maker.The Milwaukee-based company, which claimed that the lawsuits “are without merit,” also stated that it is cooperat...

By Stephen Taub • July 13, 2005