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

HealthSouth Sees Net Worth Plunge

HealthSouth said it expects an upcoming restatement of its financials to produce a cut in its shareholders’ equity of $3.8 billion to $4.6 billion.The embattled health services company, whose founder, Richard Scrushy, is currently on trial for the company’s $2.7 billion fraud, warned that it’s cu...

By Stephen Taub • April 29, 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

Deloitte Statement Irks SEC

The Securities and Exchange Commission is reportedly rankled by a statement by a Deloitte and Touche chief executive that the commission regards as a denial of liability involving two recent settlements between the commission and the auditor. In a statement referring to both the Adelphia and the...

By Stephen Taub • April 28, 2005

Spitzer to Probe AIGs’ Workers Comp

More woes for American International Group (AIG).New York State Attorney General Eliot Spitzer said he and state Insurance Superintendent Howard Mills will audit what he calls “years of alleged improper booking” of workers’ compensation premiums at the embattled insurance giant.Spitzer said that ...

By Stephen Taub • April 27, 2005

Deloitte Settles Adelphia Case for $50 Million

Deloitte & Touche LLP will pay $50 million to settle charges stemming from its fiscal 2000 audit of Adelphia Communications Corp., according to the Securities and Exchange Commission.The $50 million will be paid into a fund to compensate victim’s of Adelphia’s fraud. Yesterday the company its...

By Dave Cook • April 27, 2005

$284 Million Ends Safety-Kleen Lawsuit

Institutional bondholders have won a $200 million judgment against the former chief executive officer and chief financial officer of hazardous-waste disposal company Safety-Kleen Corp., reported the Dallas Business Journal. The bondholders also reached a settlement in which PricewaterhouseCoopers...

By Dave Cook • April 27, 2005

Arthur Andersen Settles WorldCom Suit

Arthur Andersen LLP, the last holdout defendant in the WorldCom class-action lawsuit, agreed to settle with investors, according to Bloomberg.The agreement marks the end of a three-year civil battle that stemmed from WorldCom’s 2002, $11-billion collapse, the largest bankruptcy in history. All th...

By Stephen Taub • April 26, 2005

Adelphia, Rigas Family Settle Fraud Case

Adelphia Communications Corp. will pay more than $700 million to settle ”one of the most extensive financial fraud ever to take place at a public company,” according to the Securities and Exchange Commission. The Rigas family, which founded the now-bankrupt cable giant, will forfeit 95 percent of...

By Dave Cook • April 26, 2005

Auction-Rate Securities: Hold That Gavel

Earlier this month, software supplier Comverse Technology Inc. changed the classification of nearly $2 billion worth of auction-rate securities to short-term investments. Previously, the bonds had been slotted as cash or cash equivalents, the more common accounting treatment.Following the same tr...

By Marie Leone • April 25, 2005

SEC Investigating BearingPoint

The Securities and Exchange Commission has launched an informal investigation of BearingPoint, according to the company formerly known as KPMG Consulting.The consultancy stated that the SEC staff had requested documents concerning internal control deficiencies identified on March 18, prior restat...

By Stephen Taub • April 22, 2005

Prosecutors Finally Rest in Scrushy Case

The prosecution finally rested its case against HealthSouth Corp. founder and former chief executive officer Richard Scrushy, whose trial began January 25.“This has been a long time coming. We’ve all been looking forward to this day,” said U.S. District Court Judge Karon Bowdre in the Birmingham,...

By Stephen Taub and Dave Cook • April 21, 2005

Ericsson Ex-CFO Accused of Tax Evasion

A Swedish prosecutor charged six current and former executives of telecommunications-equipment manufacturer Ericsson with tax evasion, reported the Associated Press. Included among them is the company’s former chief financial officer, identified by the AP as Carl Vilhelm Ros.The six individuals a...

By Stephen Taub • April 21, 2005

KPMG Settles Xerox Charges with SEC

KPMG LLP agreed to pay $22.5 million to settle Securities and Exchange Commission charges related to its audits of Xerox Corp. from 1997 through 2000. The firm will relinquish the $9.8 million in fees it received for auditing Xerox’s books during that time, and pay $2.7 million in interest and a ...

By Stephen Taub • April 20, 2005

Dynegy Pays $468M to Settle Suit

Dynegy Inc. will pay $468 million as part of an agreement to settle a class-action lawsuit stemming from its accounting treatment and disclosures associated with a 2001 structured natural gas transaction known as “Project Alpha.”The settlement includes $150 million to be covered by Dynegy’s direc...

By Stephen Taub • April 19, 2005

GM Receives Delphi-Related Subpoena

General Motors has apparently been pulled into the Securities and Exchange Commission’s investigation of the accounting practices at Delphi Corp., the parts company that was formerly part of the auto giant.Citing GM spokeswoman Toni Simonetti, The Wall Street Journal reported that the securities ...

By Stephen Taub • April 15, 2005

SEC Postpones Options-Expensing Rule

The Securities and Exchange Commission will push back the effective date of Statement 123R, the Financial Accounting Standards Board’s revised rule on expensing options, for calendar-year filers.FASB’s previous effective date, which had been pushed back once already, called for most public compan...

By Stephen Taub and Dave Cook • April 15, 2005

SEC Expected to Delay Options Expensing

It appears that most companies will get another six months before they must begin expensing the value of stock options.The Wall Street Journal reported that as early as next week, the Securities and Exchange Commission will push back the effective date of Statement 123R, the Financial Accounting ...

By Stephen Taub • April 14, 2005

PCAOB Chief: Some 404 Audits ‘Excessive’

If you think your outside auditors are going too far when they examine your company’s Section 404 compliance, William McDonough may give you reason to smile.Speaking Wednesday at a roundtable discussion held by the Securities and Exchange Commission, the chairman of the Public Company Accounting ...

By Tim Reason • April 13, 2005

SEC to Host 404 Roundtable Today

A broad range of stakeholders involved with internal-control reporting will join in today’s Securities and Exchange Commission roundtable discussion on Section 404 of the Sarbanes-Oxley Act. (Read live commentary throughout the day from CFO senior writer Tim Reason.)Expected to participate are re...

By Stephen Taub • April 13, 2005

Many Companies Speed Up Options Vesting

At least 102 companies have accelerated the vesting of stock options before a new options-expensing rule takes effect, according to a report by Bear, Stearns. About one-third are technology companies; 12 of the 102 accelerated both in-the-money and out-of-the money options.More than $1 billion of...

By Stephen Taub • April 12, 2005

Former EasyLink CFO Settles Charges

The Securities and Exchange Commission has announced a settlement with EasyLink Services Corp. and its former chief financial officer, Debra L. McClister, for their failure “to apply the appropriate accounting standards” in 2000. During the period in question, SEC Chairman William Donaldson was a...

By Stephen Taub • April 11, 2005

SEC Probing Delphi Inventory Deals

The Securities and Exchange Commission is probing the relationship between Delphi Corp. and turnaround firm BBK Ltd. as part of a wider investigation of Delphi’s accounting practices, according to The Wall Street Journal.Last month Delphi announced that certain prior transactions involving the re...

By Stephen Taub • April 11, 2005

FASB to Examine Insurance Risk Transfer

The Financial Accounting Standards Board has announced that it will study a controversial insurance product that is at the heart of American International Group’s accounting scandal and subsequent federal probes. FASB will look into when contracts that are structured as insurance policies actuall...

By Stephen Taub • April 8, 2005

False Records Said to Be Found at Fannie

Federal authorities examining Fannie Mae’s books have found falsified signatures on journal entries that ultimately enabled the company to meet earnings targets in 1998, reported The Washington Post. Meeting those targets, in turn, led the mortgage company to pay more than $27 million in bonuses...

By Stephen Taub • April 8, 2005

HealthSouth Countersues Ernst & Young

HealthSouth Corp. is suing its former auditor, Ernst & Young, for breach of contract and negligence for failing to uncover the company’s $2.7 billion accounting fraud.The lawsuit, filed in the circuit court of Jefferson County, Alabama, follows a suit filed last month by Ernst & Young, wh...

By Stephen Taub • April 7, 2005