DoD Finance: Mission (Not) Accomplished

Can the world’s largest business organization finally approach the transparency and integration of its private-sector brethren?Complicating financial reforms at the Department of Defense, of course, are other challenges the DoD must meet, starting with the Iraq War and encompassing questions abou...

By Kris Frieswick • Oct. 4, 2004

The FASB Express

Once upon a time, you could grow a mighty oak from a seed during the time it took the Financial Accounting Standards Board to make a ruling. But during a CFO conference at the Massachusetts Institute of Technology last November, FASB chairman Robert Herz ticked off the steps he had taken to strea...

By Tim Reason • Oct. 4, 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

Losing Battles

Like a second marriage, each new Department of Defense financial-management reform initiative represents the triumph of hope over experience. The DoD, with more than $1 trillion in assets, 3.3 million employees, and a budget of $417 billion for fiscal year 2005, is the largest single business org...

By Kris Frieswick • Oct. 4, 2004

All in the Family

Early in his tenure as chairman of the Financial Accounting Standards Board, while the Enron scandal was raging, Robert Herz was confronted on Capitol Hill by a senator from the South. As Herz tells it, imitating the lawmaker’s distinctive drawl, the senator demanded to know when FASB was going t...

By Tim Reason • Sept. 30, 2004

Hockey Team’s Accounting Questioned

The Philadelphia Flyers wear orange and black on the ice. But financially, are they in the red or the black? Apparently, it depends on whom you ask.In May, three months after former SEC chairman Arthur Levitt’s report on league finances was issued, Ed Snider, chairman of the Flyers, told reporter...

By Joseph McCafferty • Sept. 29, 2004

Hockey Fight

The sports pages say that the ongoing dispute between players and owners in the National Hockey League, which threatens to put the 2004­2005 season on ice, is about the owners’ desire to install a salary cap. It’s really about accounting.The owners contend that most of the league’s 30 teams incur...

By Joseph McCafferty • Sept. 29, 2004

Cardinal to Delay Filing Annual Report

To give its audit committee more time to finish an internal review, Cardinal Health, Inc. will delay filing its 10-K for the fiscal year ended June 30, according to the embattled pharmaceutical-distribution giant.Cardinal is now shooting for late October for the release of the annual report. As a...

By Stephen Taub • Sept. 28, 2004

California Accounting Body Penalizes E&Y

Ernst & Young is still paying a price for violating the Securities and Exchange Commission’s auditor independence rules. The time the regulators are a number of state accountancy boards.In April, a judge banned the firm from accepting new clients for six months because its violations of SEC r...

By Stephen Taub • Sept. 27, 2004

Dynegy Hikes Impairment by $265 Million

In a move that would add $265 million to a previously stated $242 million impairment charge, Dynegy Inc. will restate its results for 2003 and the first two quarters of 2004.The changes stem from a goodwill impairment charge associated with the pending sale of Illinois Power Company and deferred ...

By Stephen Taub • Sept. 24, 2004

Tax Breaks Don’t Boost Investment: Study

In an ideal world, tax breaks provide an incentive to companies plow large sums of money into new plants, equipment, research, people and other things that could spur growth in their businesses and the economy at large. Alas, it doesn’t work out so neatly. Or so a study of 275 profitable Fortune...

By Stephen Taub • Sept. 24, 2004

Working Capital Improvements Go Global

The end of the financial bubble in Europe was evident last year when a squeeze on balance sheets caused a remarkable 83 percent of European industry sectors to report net declines in working capital. “Europe had a lot of fat, and it was easy to get rid of,” says Marc Loneux, REL Consultancy Group...

By Tim Reason • Sept. 23, 2004

Rule Could Force Early Asset Booking

A recent clarification to a rule proposed by the Financial Accounting Standards Board is likely to force companies to recognize legal liabilities related to factories and other long-lived assets earlier than many are used to booking them.The new interpretation of FAS No. 143 (Accounting for Asset...

By Marie Leone • Sept. 22, 2004

Big Four Seen Shedding Small Clients

Small companies are finding that hiring the services of the four largest accounting firms is becoming increasingly hard. In the past seven weeks alone, Deloitte & Touche LLP, KPMG LLP, and Ernst & Young LLP have dropped at least eight small US audit clients, according to Bloomberg. This t...

By Stephen Taub • Sept. 21, 2004

State Tax Breaks under Attack

It’s been a part of the American political-economic scene for a long time, usually touted as a win-win deal for a local economy and its taxpayers. But state governments are now facing legal challenges, both at home and abroad, to their longtime practice of luring companies with tax breaks.A recen...

By Ed Zwirn • Sept. 20, 2004

Ex-CEO of Enterasys Pleads Guilty

Enrique “Henry” Fiallo, the former chief executive officer of Enterasys Networks, has pleaded guilty to a federal charge of conspiracy to commit securities, mail, and wire fraud, the Associated Press reported.According to prosecutors cited by the AP, Fiallo participated in accounting fraud that w...

By Ed Zwirn • Sept. 17, 2004

Whistle-Blower Forces Bisys Filing Delay

Bisys Group Inc will delay filing its annual report for the fiscal year ended June 30 after a whistle-blower raised questions about its internal controls.The company, which provides business-process-outsourcing services to financial companies, said a current employee of its fund services business...

By Stephen Taub • Sept. 15, 2004

Cardinal to Restate Results

Cardinal Health Inc. will restate its results for 2001, 2002, and 2003 as well as the first three quarters of fiscal 2004. The pharmaceutical-distribution giant’s financial statements ” should no longer be relied upon,” Cardinal reported in an 8-K. The revisions relate to three key areas: bulk de...

By Stephen Taub • Sept. 15, 2004

U.S. Profits Move to Tax Havens: Study

Follow the tax-break. That’s what U.S. multi-national companies appear to have been increasingly doing over the past few years. The profits of foreign subsidiaries of U.S. corporations in 18 tax havens swelled from $88 billion in 1999 to $149 billion in 2002, according to Tax Notes,, which cited ...

By Stephen Taub • Sept. 14, 2004

FASB Delays Bond Accounting Rule

Accounting standard setters have decided to delay the effective date of and provide further implementation guidance for a rule that would require financial institutions to recognize unrealized losses of debt investments from rising interest rates as a hit to earnings.Last Wednesday, the Financial...

By Craig Schneider • Sept. 13, 2004

Silicon Graphics Reveals Controls Fault

Silicon Graphics said in its 2004 annual report that its independent auditors, Ernst & Young LLP, had identified a “material weakness” in the company’s internal controls.E&Y found that the company needs to reassess the resource requirements of its finance organization and take another lo...

By Stephen Taub • Sept. 13, 2004

Reporting on Environmental Liabilities

Not all companies are disclosing their environmental liabilities as fully as they might. At least that’s the contention of many socially responsible investors (SRIs), the institutional investors and mutual fund groups that screen their portfolio companies for several social and environmental crit...

By Marie Leone • Sept. 9, 2004

The Greening of GAAP

On July 21, when New York State Attorney General Eliot Spitzer announced that eight states were filing a law suit against five utilities, Joe Buonaiuto, the senior vice president and controller of American Electric Power Co., was working on his company’s 10-Q.AEP was one of the five power compani...

By Marie Leone • Sept. 9, 2004

More Companies Pick Smaller Audit Firms

When it comes to choosing auditors, the size of the firm doesn’t seem to matter as much as it did in the past.More and more companies are switching fromthe Big Four accounting firms to smaller, boutiquefirms. Last year, of the 510 clients of the Big Four thatswitched auditors, about 280, or 55 pe...

By Stephen Taub • Sept. 8, 2004

AFC Sues Arthur Andersen

The ghost of Arthur Andersen still manages to come tolife every so often. The most recent example: The folks at AFCEnterprises have sued the former accounting giant, twoof its former partners, and a former auditmanager.AFC Enterprises, known its for Popeyes, Chicken & Biscuits, Church’s Chick...

By Stephen Taub • Sept. 8, 2004

Nortel Won’t Meet Restatement Deadline

It’s going to take a little longer for Nortel Networks Corp. to review its books than the company had earlier announced.Nortel, a Toronto-based technology company that has found itself the focus of criminal and regulatory probes in the United States and Canada, announced late last week that it w...

By Ed Zwirn • Sept. 7, 2004