Judge Finds That PwC Withheld Data

A federal judge “considered, but cannot recommend, any lesser sanction than the entry of default judgment” against PricewaterhouseCoopers for failing to turn over evidence in a lawsuit against a former audit client, reported The New York Times.In 1998, shareholders of Telxon Corp. sued the maker ...

By Stephen Taub • Jan. 13, 2005

Six Indictments in AOL-PurchasePro Deals

Four former executives of PurchasePro and two former executives of America Online Inc. were indicted on federal criminal securities violations stemming from deals between the two companies just as the Internet bubble was popping.The six individuals were accused of engaging in a scheme to artifici...

By Stephen Taub • Jan. 12, 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

Start with Demand

A holiday weekend was fast approaching, and in Lima, Ohio, managers at the Procter & Gamble factory were shutting things down early. The move seemed to make sense. Analysis of purchase orders and historical sales trends indicated that the factory had already cranked out enough cases of Liquid...

By John Goff • Jan. 11, 2005

The Top 25 Supply Chains

Accounting rules treat inventory as assets. But as revealed by the top 25 supply chains compiled by Boston-based consultancy AMR Research, most demand-driven companies maximize sales while minimizing safety stock. The secret of their success? Replacing inventory with information from customers an...

By John Goff • Jan. 11, 2005

Andersen Appeal Reaches Supreme Court

The Supreme Court announced on Friday that it will review a lower-court ruling that upheld Andersen’s June 2002 conviction for destroying and altering documents related to its work with Enron Corp., according to the Associated Press.The former Big Five accounting firm was charged with obstruction...

By Stephen Taub • Jan. 10, 2005

Why Federal Agencies Fumble Audits

When it comes to improving the quality of financial reporting by federal government agencies, speed doesn’t seem to be of the essence.To be sure, federal agencies reported their financials faster last year in order to comply with a new schedule put forth by the Office of Management and Budget. Th...

By Craig Schneider • Jan. 10, 2005

Best Buy Parts with Ernst & Young

Best Buy Co. Inc. dismissed Ernst &Young as its independent auditor, stemming from conflict-of-interest issues regarding a former director at the electronics retailer.E&Y will stay on to conclude its audit of Best Buy’s February 26, 2005, fiscal year. The company has not yet named a new i...

By Stephen Taub • Jan. 5, 2005

Measure Performance with the Right Data

Understanding working capital starts with data. Korn/Ferry International, the executive recruiting firm, used an SAP database to build a capability “to look every day at how much new business is booked across the world,” says COO and CFO Gary Burnison. “We’ve also got an online analytical system ...

By Eric Laursen • Dec. 29, 2004

SEC May Charge MetLife

MetLife Inc. announced that the Securities and Exchange Commission may file charges against the New England Life Insurance Co., one of its subsidiaries, after the unit received a Wells notice stemming from a previously disclosed investigation.A Wells notice indicates that the SEC staff has made a...

By Stephen Taub • Dec. 22, 2004

BearingPoint Warns on Controls

A month after the departure of its chief financial officer, BearingPoint Inc. said in a regulatory filing that it may be unable to complete all of the work necessary to present its report on internal controls required by Section 404 of the Sarbanes-Oxley Act or to conclude that its internal contr...

By Stephen Taub • Dec. 21, 2004

Hercules Settles IRS Tax Dispute

Chemical company Hercules Inc. has agreed to pay at least $36 million to settle a tax-shelter dispute with the Internal Revenue Service.The dispute stemmed from a contingent liability transaction designed to shelter capital gains. The IRS, which acknowledged that it has suffered lower-court losse...

By Stephen Taub • Dec. 21, 2004

KPMG Audits of FNMA Probed: Report

The Public Company Accounting Oversight Board (PCAOB) is investigating KPMG’s audit of the Federal National Mortgage Association (FNMA, or Fannie Mae), whose accounting practices have been questioned by the Securities and Exchange Commission and the Department of Justice, according to the Financi...

By Stephen Taub • Dec. 21, 2004

Is Fair Value Flawed?

Through a series of tentative decisions, the Financial Accounting Standards Board recently showed that it wants to require even more fair-value accounting in the merger-and-acquisition process. The proposed changes — which would extend elements of FAS 141, the July 2001 standard that ended most a...

By Kris Frieswick • Dec. 20, 2004

Darden Restaurants Restates Eight Years

The company best-known for its Olive Garden and Red Lobster restaurants will restate its financials all the way back to 1996 to correct the way it calculates rent.Orlando, Florida-based Darden Restaurants Inc. announced that after consulting with its accounting firm, KPMG, the company determined ...

By Stephen Taub • Dec. 20, 2004

SEC Orders Fannie Mae to Restate

Securities and Exchange Commission chief accountant Donald Nicolaisen has called on the Federal National Mortgage Association (Fannie Mae) to restate its financials from 2001 through mid-2004 to eliminate the use of hedge accounting.“Our review indicates that during the period Fannie Mae’s accoun...

By Stephen Taub • Dec. 17, 2004

FASB Issues Final Stock Option Rule

The Financial Accounting Standards Board has finally published Statement 123R, a revised standard that requires most companies to recognize the cost of stock options on their books by the middle of next year.Under FASB’s original standard, published in 1995, companies were allowed to keep the cos...

By Craig Schneider • Dec. 17, 2004

Ceridian Probed; Finance Execs Retire

Ceridian Corp., an information services company that is restating five-plus years of results, announced that the Securities and Exchange Commission has issued a formal order of investigation. The company added that the probe is a nonpublic, fact-finding inquiry and that the SEC has not concluded ...

By Stephen Taub • Dec. 17, 2004

Capital Ideas: The Leaseback Effect

Last December, casual-dining chain O’Charley’s Inc. sold six restaurant properties to an unrelated entity, CNL Restaurant Capital LLC, and then leased them back under a 20-year operating-lease agreement. The Nashville-based company recognized a gain of about $17 million on the transaction and, fo...

By Marie Leone • Dec. 16, 2004

SEC Enters the Fray in Iraq

The Securities and Exchange Commission has requested documents from “numerous” companies as part of a probe into the United Nations Oil for Food Program in Iraq during the 1990s, reported The Wall Street Journal, citing people with knowledge of the inquiry.On Tuesday, Tyco International Ltd. anno...

By Stephen Taub • Dec. 16, 2004

E&Y Confirms Probe Related to PNC

The Securities and Exchange Commission is questioning Ernst & Young (E&Y) about the audit firm’s involment in designing and auditing financial products for PNC Financial Services Group that the bank allegedly used to inflate profits, noted a Bloomberg report.Officials at the Big Four acco...

By Stephen Taub • Dec. 13, 2004

IRS Takes Aim at Tax ‘Opinion Letters’

The Internal Revenue Service and the U.S. Treasury department have declared war on the widely used “opinion letters” in their bid to clean up abusive tax shelters.The two agencies soon plan to trot out Circular 230, containing revised standards that will include detailed requirements for tax opin...

By Stephen Taub • Dec. 9, 2004

Big Four Moves Away from Smaller Clients

Some companies are feeling like they’ve just been through a difficult divorce. That’s because Big Four auditors have dropped them — in some cases after years of service.In the first nine months of 2004, Big Four accounting firms resigned from 157 accounts. While some of those resignations followe...

By Kate O'Sullivan • Dec. 9, 2004

Former HealthSouth CFO Singles Out Scrushy

Blame Scrushy. That’s what former HealthSouth Corp. chief financial officer William Owens told investigators probing the company’s massive accounting scandal, according to the Associated Press, which cited an affidavit unsealed Monday.Owens, who is expected to be a key government witness at the u...

By Stephen Taub • Dec. 8, 2004

Lawyer May Be Charged over Client Probe

The Securities and Exchange Commission may bring charges against a lawyer hired by medical-device maker Endocare Inc. to help with an internal accounting probe, according to Bloomberg, citing people familiar with the matter.According to the report, the SEC notified former Brobeck, Phleger & H...

By Stephen Taub • Dec. 7, 2004

TIAA-CREF’s Governance Under Fire

The Teachers Insurance and Annuity Association-College Retirement Equities Fund is one of the largest private pension systems in the world, and it has long raised corporate governance and ethical issues at some of the nation’s largest corporations. But now TIAA-CREF finds itself being questioned ...

By Stephen Taub • Dec. 7, 2004