PwC Ignored Warnings on AIG: Report

American International Group’s outside auditor, PricewaterhouseCoopers LLP, overlooked disclaimers from the insurance giant’s audit committee stating that the committee couldn’t vouch for AIG’s accounting, according to The Washington Post. In 2001 and 2002, the five-member committee of outside di...

By Stephen Taub • May 26, 2005

Maxtor Restates Results in its Favor

Maxtor Corp. said it will restate its results for the quarter ending April 2—for the better. The restatement will push a previously reported loss downward, according to the data-storage provider. The reason for the move was that the company’s accounting and finance staff discovered a data-entry...

By Stephen Taub • May 25, 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

PCAOB Brings First Action

The Public Company Accounting Oversight Board took action against a public accounting firm for the first time since the PCAOB was created in 2003.The accounting sheriff revoked the registration of New York-based Goldstein and Morris CPAs P.C. and barred its managing partner, Edward B. Morris, fro...

By Stephen Taub • May 25, 2005

Auditor Changes Accompany Controls Woes

Companies reporting internal-controls glitches in their financial reporting under the Sarbanes-Oxley Act are likely to be changing auditors, a study by Financial Executives International suggests. And the change is likely to be from one of the Big Four to a smaller audit firm.About 44 percent of...

By Stephen Taub • May 24, 2005

FASB Simplifies Option-Expensing Rule

By a narrow 4-to-3 vote, the Financial Accounting Standards Board has decided to smooth out a major options-expensing wrinkle.FASB’s revised rule on stock-option expensing, Statement 123R, requires most public companies to expense options beginning with their first fiscal year starting after June...

By Ed Zwirn • May 23, 2005

BearingPoint Auditing Its Contracts

BearingPoint announced that the consulting firm and its auditor, PricewaterhouseCoopers, will review all the firm’s contracts to ensure that revenue has been booked properly, reported ComputerWire, a London-based company that covers the IT industry.According to the news service, BearingPoint chai...

By Stephen Taub • May 20, 2005

Quarterly Filing Delays for 77 Companies

Are companies having more trouble getting their quarterly filings out on time?According to shareholder-advisory firm Glass, Lewis, for the quarter ended March 31, 77 companies whose market caps exceed $100 million filed for an extension — more than double the 36 companies that sought more time on...

By Stephen Taub • May 19, 2005

Brocade Options Lead to Restatement

Networking storage company Brocade Communications Systems Inc. announced that it will restate its financials by between $31 million and $52 million for fiscal years 2001 through 2004 because it understated charges related to stock-option expenses.The San Jose, California-based company also disclo...

By Stephen Taub • May 18, 2005

Former AIG Comptroller May Go

Former comptroller Michael Castelli is one of as many as eight employees — most of them finance executives — who may get the boot from American International Group Inc. during the next few weeks, according to The Wall Street Journal,citing a person familiar with the matter.Castelli, who served as...

By Stephen Taub • May 17, 2005

PCAOB, SEC: 404 Costs Too High

The Public Company Accounting Oversight Board and the Securities and Exchange Commission have acknowledged that the costs of implementing Section 404 of the Sarbanes-Oxley Act may be higher than they should be.“It is clear to us that the internal control assessment and audit process has the poten...

By Stephen Taub and Dave Cook • May 17, 2005

Making Waves

Has any technology in recent memory been so hyped and, at the same time, so controversial as radio-frequency identification (RFID)? One moment it’s a miracle cure that will streamline the supply chain, eliminate theft and waste, and essentially solve every logistics problem known to man. But at t...

By John McPartlin • May 17, 2005

Making a Market for Stock Options

The Securities and Exchange Commission seems to find itself in FASB territory once again, at least on the matter of expensing options.Last month the commission pushed back the effective date (for some companies) of Statement 123R, the Financial Accounting Standards Board’s revised rule on stock-o...

By Ed Zwirn • May 16, 2005

Scrushy Case to Go to Jury

Richard Scrushy’s fate could be decided this week.Last Thursday in a federal court in Birmingham, Alabama, the defense rested without calling HealthSouth Corp.’s founder and former chief executive officer to the stand. U.S. District Judge Karon Bowdre is preparing her instructions to the jury and...

By Stephen Taub • May 16, 2005

Visteon Cites Finance Employee for Delay

A former finance employee is apparently at the center of the decision by auto-parts maker Visteon Corp. to delay the filing of its March 31 quarterly report.An internal review, explained the company in a press release, raised “allegations of potential improper conduct by a former senior finance e...

By Stephen Taub • May 12, 2005

Restatements for Bristol-Myers, Veritas

Bristol-Myers Squibb Co. announced that it will reduce its first-quarter pre-tax earnings by $110 million to reflect litigation reserves for previously disclosed wholesaler-inventory issues, as well as other accounting issues. The company had already taken a $30 million reserve for these matters,...

By Stephen Taub • May 11, 2005

MCI Settles an Old State Tax Bill

MCI Inc. is still paying for the deeds of the executives who ran the company when it was called WorldCom.The telecom has agreed to pay $100 million to Mississippi to settle what public officials alleged was a scheme by WorldCom to defraud the state of taxes, according to an announcement from stat...

By Stephen Taub • May 10, 2005

Finance-Team Fallout at Saks

Saks Inc. announced that it has asked for the resignations of three senior executives, including its chief accounting officer, stemming from its investigation of improperly collected vendor markdown allowances in one of Saks Fifth Avenue’s merchandising divisions.In March, the Securities and Exch...

By Stephen Taub • May 10, 2005

Should FAS 133 Be ”Marked to Market”?

Just how all-knowing are the financial markets? Look for debate to center around this question if the Financial Accounting Standards Board reopens discussion this summer on whether derivatives should be marked to market.Financial Accounting Standard 133 — Accounting for Derivative Instruments and...

By Ed Zwirn • May 9, 2005

GE to Restate, Faces Informal Probe

General Electric Co. announced that it will restate its financial results dating back to 2001 due to its accounting for derivatives. The revision will result in a non-cash earnings increase of $381 million from 2001 through the first quarter of 2005, less than 0.6 percent of GE’s earnings over th...

By Stephen Taub • May 9, 2005

Fines for Former Chesapeake Executives

The Securities and Exchange Commission has settled financial fraud charges with Chesapeake Corp. — a Richmond, Virginia-based supplier of packaging materials — and four former finance executives.The individuals are former chief financial officer William T. Tolley; former corporate controller Carl...

By Stephen Taub • May 6, 2005

FBI Probing Insurance Industry

The Federal Bureau of Investigation has launched a probe of accounting practices in the insurance industry that could extend to other financial-services businesses, according to The Wall Street Journal.Citing people familiar with the matter, the paper reported that FBI investigators are meeting i...

By Stephen Taub • May 5, 2005

CNA to Restate Three Years of Results

Insurance giant CNA Financial Corp. announced that it will restate its financial results for the past three years to correct its accounting for several reinsurance contracts, primarily with a former affiliate, and its equity accounting for that affiliate.The seventh-largest commercial insurance w...

By Stephen Taub • May 5, 2005

Controls Circumvented at AIG?

American International Group Inc.’s ousted chief executive officer Maurice R. “Hank” Greenberg and former chief financial officer Howard I. Smith may have directed the insurance giant’s accounting improprieties, according to an internal review conducted by the insurer and first reported by The Wa...

By Stephen Taub • May 3, 2005

European Group Seeks Accounting Changes

The Committee of European Securities Regulators has concluded in a recent report that generally accepted accounting principles in the United States, Canada, and Japan are mostly equivalent to International Financial Reporting Standards.CESR’s conclusion came in the context of moves in the United ...

By Stephen Taub • May 2, 2005

Securities Blocks and Fair Value

In what one staff member said was the “longest discussion on any single topic” that she could remember, the Financial Accounting Standards Board spent more than three hours last Wednesday deliberating a proposed statement, Fair Value Measurements. Much of the discussion concerned the fair value o...

By Ed Zwirn • May 2, 2005