Internal Audit’s Sarbox Role

The Institute of Internal Auditors (IIA) has trotted out a position paper recommending the role internal auditors should play in a corporation’s compliance with Sections 302 and 404 of the Sarbanes-Oxley Act.While Sarbox spells out the roles of management, audit committees, and external auditors,...

By Stephen Taub • Aug. 6, 2004

Grant Thornton Fined $1.5 Million

The Securities and Exchange Commission has fined Grant Thornton $1.5 million as part of a settlement with accounting firm Doeren Mayhew & Co. P.C. and three members of the firms. The action stemmed from the audit of MCA Financial Corp. The companies and the individuals agreed to the findings ...

By Stephen Taub • Aug. 6, 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

Accounting Issues Drive Securities Lawsuits

From the point of view of corporate finance, the good news about private securities class-action lawsuits is that their numbers have been declining. On the negative side, however, is the recent finding that accounting issues have continued to dominate the overall number of cases.Last year, there ...

By Stephen Taub • Aug. 4, 2004

OM Group Blames Past Employees for Accounting Problems

Citing accounting irregularities caused by former employees, OM Group, a chemical manufacturer, will restate its financials for the past five years. The company’s investigation concluded “that there was no wrongdoing by current employees.”Earlier this year, the company announced it would delay fi...

By Stephen Taub • Aug. 4, 2004

The Newest Associate

Thirty-five days hath September, April, June, and November. That, at least, was how Computer Associates International Inc. (CA), the world’s fourth-largest independent software manufacturer, used to view its sales calendar. And a rosy view it was — if you were among the executives who received mi...

By Laton McCartney • Aug. 4, 2004

SEC Settles with Charter Communications

The Securities and Exchange Commission settled an investigation of Charter Communications Inc., the nation’s third-largest cable company, which the SEC had accused of inflating its subscriber numbers “to meet analysts’ expectations for subscriber growth and depict itself as a growing company.”In ...

By Stephen Taub • Aug. 3, 2004

Charitable Misgivings

Add charities to the roster of organizations on the hot seat. In June, the Senate Finance Committee held a wide-ranging hearing into the abuses of tax-exempt status. (Some 3 million U.S. organizations are tax-exempt, including 1 million charitable organizations.) In his opening statements, rankin...

By Tim Reason • Aug. 3, 2004

Parmalat Sues Citigroup for $10 Billion

Italian food group Parmalat Finanziaria — which only last Wednesday settled a civil case brought by the Securities and Exchange Commission, which had alleged that the company defrauded U.S. institutional investors — has filed a $10 billion lawsuit against Citigroup.Parmalat asserted in the lawsui...

By Ed Zwirn • Aug. 2, 2004

Tax Reform Hold Up

In an election year, congressional tax bills tend to be padded with lawmakers’ pet interests, otherwise known as pork. This year is no different — except that this year, the sheer extent and diversity of the larding may actually sink the legislation to which it is attached.In May and June, the Ho...

By Joseph McCafferty • Aug. 2, 2004

The Enforcer

William J. McDonough has a particularly tough job: as chairman of the Public Company Accounting Oversight Board (PCAOB), he is charged with policing an industry unused to outside regulation and under fire as never before.But judging from his first year on the beat, McDonough won’t hesitate to cra...

By CFO Editorial Staff • Aug. 2, 2004

Reforms but No Fines for Parmalat

The Securities and Exchange Commission announced Wednesday that it had settled its civil case against Italian food group Parmalat Finanziaria, according to wire-service reports.The SEC had alleged that Parmalat defrauded U.S. institutional investors when it sold them more than $1 billion in debt ...

By Ed Zwirn • July 30, 2004

”Not Guilty” Pleas at U.S. Foodservice

Federal regulators and prosecutors are lowering the boom on four executives of U.S. Foodservice, a unit of Dutch supermarket conglomerate Royal Ahold NV. Michael Resnick, the former chief financial officer of the U.S. food distribution company, and Mark Kaiser, a former marketing executive, have ...

By Ed Zwirn • July 29, 2004

IRS Cites Firms on Tax-Avoidance Plan

The Internal Revenue Service announced that its “eight-figure” settlement with two financial firms should warn others that the agency is getting tough on “aggressive” tax-avoidance strategies. The announcement noted that the agency’s efforts “are directed not just at listed tax shelter transactio...

By Ed Zwirn • July 28, 2004

Chemical Maker Reports Overstatement

Chemical maker Ferro Corp. announced that its second-quarter earnings will be less than one-third of analysts’ estimates — in part because the company overstated its earnings.Investors pounded its stock, sending it down as much as 25 percent during Friday morning’s trading, according to Reuters, ...

By Stephen Taub • July 26, 2004

BroadVision Receives Wells Notice

The Securities and Exchange Commission is likely to bring charges against BroadVision Inc., stemming from the company’s restatement of its financials for the third and fourth quarters of 2001.The provider of self-service web applications announced that it has received a Wells notice, which indica...

By Stephen Taub • July 26, 2004

Where Have All the Audits Gone?

First the Securities and Exchange Commission got Congress to beef up its enforcement budget to stem the tide of corporate fraud. Now it looks like the Internal Revenue Service will be asking for similar consideration.Back in 1998, Congress ordered the IRS to focus more on customer service and les...

By Kate O'Sullivan • July 26, 2004

Baxter to Restate Three Years of Results

Health-care company Baxter International announced it will restate its results for the last three years as well as the first quarter of 2004. The revisions are primarily the result of incorrect revenue recognition and inadequate provisions for bad debts in its Brazil operation, according to the c...

By Stephen Taub • July 23, 2004

GM: Co-Co Proposal Would Reduce Earnings

Earlier this week the Financial Accounting Standards Board proposed including a certain type of convertible security in dilutive earnings-per-share calculations. The proposal would require that companies treat this relatively new security similarly to traditional convertible securities.In respons...

By Stephen Taub • July 23, 2004

Postponement Urged for 60-Day Filing

James Quigley, chief executive officer of Deloitte & Touche LLP, called on the Securities and Exchange Commission to postpone its requirement that annual reports be filed with the SEC within 60 days of the end of a company’s fiscal year.In testimony before the House Committee on Financial Ser...

By Stephen Taub • July 23, 2004

Senators Pledge Support for FASB

Stock-option expensing is heating up on Capitol Hill.On the same day that the House of Representatives passed H.R. 3574 — a bill aimed at blocking provisions of a Financial Accounting Standards Board proposal that would require companies to expense employee stock options — a bipartisan group of s...

By Stephen Taub • July 22, 2004

Ernst & Young Fined $1.5 Million

Ernst & Young has agreed to pay the U.S. government $1.5 million to settle claims that it provided bad advice to nine hospitals that wound up submitting false claims to Medicare, according to the U.S. Attorney’s office in Philadelphia.Prosecutors had alleged that E&Y’s health-care consult...

By Stephen Taub • July 22, 2004

A Matter of Emphasis

When the Securities and Exchange Commission issued Regulation G in January 2003, some people thought the death knell had been sounded for the abuse of pro forma numbers.From that date on, any non-GAAP number used in an earnings release had to be accompanied by — and reconciled to — the “most dire...

By Alix Stuart • July 22, 2004

Revenue Timing Prompts Sonus Restatement

Sonus Networks Inc., which makes equipment for Internet phone services, announced that it will restate its results for fiscal 2001 and 2002 and the first three quarters of 2003, primarily to adjust the timing of revenue recognition and other financial-statement accounts.The principal adjustments ...

By Stephen Taub • July 21, 2004

2003 Tax Fees: $1.1 Billion and Counting

The nation’s largest companies shelled out at least $1.1 billion to their accounting firms last year for tax services, reported Dow Jones, citing figures from the Investor Responsibility Research Center.That’s not a final total; according to the report, the IRRC pulled these numbers from the prox...

By Stephen Taub • July 21, 2004

Accounting Issues Delay Ceridian Results

Ceridian Corp., a provider of payroll processing and human-resource services, postponed its second-quarter earnings release to review certain accounting issues.Chairman, president, and chief executive officer Ronald L. Turner said that when a concern was raised internally regarding capitalization...

By Stephen Taub • July 21, 2004