Reprieve Granted on Sarbox 404

The Securities and Exchange Commission has given a large number of companies an additional 45 days to meet a number of the requirements of Section 404 of the Sarbanes-Oxley Act, which guides how auditors report on companies’ assessments of their internal controls.On November 15, Section 404 becam...

By Stephen Taub • Dec. 2, 2004

American Express Fires Ernst & Young

Officials at American Express Co. have dismissed outside auditor Ernst & Young (E&Y) in favor of PricewaterhouseCoopers (PwC), thus ending an audit relationship dating back to 1975.“The audit committee’s decision to replace the current auditors was made after a robust proposal process tha...

By Stephen Taub • Nov. 30, 2004

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

A Fairwell to History

The countdown is on. The deadline for all EU-listed companies to adopt International Financial Reporting Standards (IFRS) — including controversial IAS 39 — is just around the corner. For the investor community seeking comparability of financial reports, that’s good news. But for many CFOs that w...

By Justin Wood • Nov. 29, 2004

Ohio Attorney General Sues Fannie Mae

Ohio Attorney General Jim Petro on Friday filed a securities fraud class-action lawsuit in federal court on behalf of his state and all other shareholders in Fannie Mae, alleging that the mortgage buyer manipulated its earnings to artificially inflate the price of its common stock. Petro filed h...

By Stephen Taub • Nov. 23, 2004

BearingPoint Restates, CFO Retires

Robert Falcone, the CFO of BearingPoint will reportedly retire at the end of November, making him the second top executive to leave the KPMG technology-consulting spinoff this month. The firm also said it found a $92.9 million accounting error. BearingPoint spokesman John Schneidawind told the W...

By Stephen Taub • Nov. 22, 2004

Accelerated-Filing Deadlines Postponed

The Securities and Exchange Commission has told Corporate America it can take its foot off the accelerator.On Thursday, the regulator postponed by one year what would have been a new, earlier deadline for most companies to file their annual and quarterly reports. Bowing to widespread calls for a ...

By Stephen Taub • Nov. 19, 2004

How a Material Weakness Can Cost You

When a company reports a material weakness in its internal controls, chances are that the chief financial officer will pay a heavy price.According to analysis conducted by Netherlands-based research firm A.R.C. Morgan, at companies that disclosure a material weakness, nearly 62 percent of chief f...

By Stephen Taub • Nov. 19, 2004

KPMG Won’t Sign Off on Fannie Mae

Mortgage giant Fannie Mae, which is currently embroiled in an accounting scandal, missed its second deadline for filing its quarterly financials after its outside auditor, KPMG LLP, would not sign off on the report.The nation’s largest mortgage company also stated that if it does not qualify for ...

By Stephen Taub • Nov. 17, 2004

Molex Execs Stay on, Deloitte Leaves

Molex Inc. announced that Deloitte & Touche LLP has resigned as its auditor because the company would not dismiss its chief executive officer and chief financial officer.Last week, Molex — a manufacturer of electronic and electrical components based in Lisle, Illinois — announced that it woul...

By Stephen Taub • Nov. 16, 2004

Steering Customers to the Right Channels

A single channel used to be all that companies needed to deliver products or services to their customers. But now companies, responding to customer demand for ever more channel choice, reach out through many routes. Multichannel customers spend 20 to 30 percent more money, on average, than single...

By The McKinsey Quarterly • Nov. 16, 2004

Adelphia Supplier’s CFO Is Sued

A group of Adelphia investors who lost close to $50 million after the cable company filed for bankruptcy is suing two of the company’s suppliers, as well as a pair of finance executives at one of them.The suit, filed on Oct. 25 against the set-top, cable-box manufacturers Scientific-Atlanta and M...

By Stephen Taub • Nov. 15, 2004

FASB Clarifies Rules for Tax Relief

FASB agreed yesterday to issue new guidelines requiring companies to book income tax benefits as a “special deduction” under a recently enacted federal tax law. The board’s interpretation will reduce corporate taxable income over time rather than as a one-time benefit.On Wednesday, the Financial ...

By Craig Schneider • Nov. 11, 2004

SunTrust Fires Three Finance Executives

Officials at SunTrust Banks Inc. fired three finance executives and reassigned the company controller after concluding that there were “numerous errors” in the loan loss-allowance calculations for the first two quarters.Executives at the banking giant said the company would also restate earnings ...

By Stephen Taub • Nov. 11, 2004

Inventory Foul-up for Bar-Code Company

Symbol Technologies Inc. announced on Monday that it will delay the filing of its September quarterly report and that it may restate its results for 2004.The world’s largest seller of barcode scanners has already restated five years of financials, and earlier this year it settled charges with the...

By Stephen Taub • Nov. 9, 2004

Tommy, EDS Lead Quarterly Filing Delays

Tommy Hilfiger Corp. and Electronic Data Systems are two of what are sure to be a growing number of companies to delay the release of their financial reports. The current period for filing quarterly results ends November 9.Clothing company Tommy Hilfiger announced that it is delaying the release ...

By Stephen Taub • Nov. 5, 2004

IRS Loses Third Tax Shelter Case

The Internal Revenue Service has lost a third court case within two weeks in its battle against what it deems questionable tax shelters.The latest one involves TIFD III-E Inc., a subsidiary of GE Capital Corp., a unit of General Electric. Judge Stefan Underhill of U.S. District Court in Connectic...

By Stephen Taub • Nov. 5, 2004

Back to the Present

On the way to its first profitable year since the 1990s, Lucent Technologies may soon reap a windfall from a loss.In September, the telecom-equipment maker said the Internal Revenue Service had tentatively agreed to a net operating loss (NOL) carryback yielding a whopping $816 million tax refund....

By Ilan Mochari • Nov. 4, 2004

AOL Accounting, Time Warner Restatement

Time Warner Inc. announced that it has set aside $500 million in legal reserves in connection with a government probe and that it will restate its financial results for 2000, 2001, and possibly 2002.The actions stem from an investigation by the Securities and Exchange Commission into a series of ...

By Stephen Taub • Nov. 4, 2004

Former CA Execs Settle Civil Charges

The Securities and Exchange Commission settled civil charges against two former finance executives at Computer Associates International Inc., stemming from their roles in the software giant’s accounting scandal.The SEC filed its complaints in April, alleging that David Rivard, former vice preside...

By Stephen Taub • Nov. 4, 2004

Corporate Tax Audits Decline, Says Study

The Internal Revenue Service is conducting fewer corporate audits this year and recommending that audited companies pay less in additional taxes, according to IRS data examined by Syracuse University’s Transactional Records Access Clearinghouse (TRAC).TRAC maintained that despite public statement...

By Stephen Taub and Dave Cook • Nov. 3, 2004

Auditor Pleads on Document Cover-up

A former Ernst & Young audit partner pleaded guilty late last week to impeding a federal probe into the collapse of NextCard Inc., according to the U.S. Attorney’s Office for the Northern District of California. Thomas Trauger admitted that he knowingly altered, destroyed, and falsified recor...

By Stephen Taub • Nov. 2, 2004

SEC Probes DaimlerChrysler Bribe Charge

The Securities and Exchange Commission is investigating charges made by a former employee in Daimler Chrysler’s audit department that the auto maker used secret bank accounts to bribe government officials, according to the Associated Press.The SEC notified the company in August that it had opened...

By Stephen Taub • Nov. 1, 2004

Shelter Fallout

Leona Helmsley would have made a colorful spokeswoman for the tax-shelter industry. “Only the little people pay taxes,” she cheerfully asserted in 1989, shortly before her conviction for tax evasion.Of course, Helmsley’s wrongdoing — which amounted to about $1 million in unpaid federal taxes thro...

By Don Durfee • Nov. 1, 2004

Nortel: Once More, with Filing

After having promised to file its revisions by the end of October, Nortel Networks Corp. said it would delay its long-awaited restatement for the second time. The embattled telecom-equipment maker had first promised to release its revised financials for 2003 and the first and second quarters of 2...

By Stephen Taub • Oct. 28, 2004

AstraZeneca Tries on Global Standards

Call AstraZeneca the guinea pig. The Anglo-Swedish pharmaceutical giant on Monday paved the way for other European companies when it became the first big corporation to restate its financials from 2003 using international standards, according to the Financial Times. Altogether, about 7,000 compan...

By Stephen Taub • Oct. 27, 2004