Options Bill Could Face Vote Today

A bill aimed at blocking provisions of a Financial Accounting Standards Board (FASB) proposal, which would require companies to expense employee stock options, may come to a vote in the House of Representatives as early as Tuesday, according to TheDeal.com.H.R. 3574, the Stock Option Accounting R...

By Stephen Taub • July 20, 2004

Sales Practices under Scrutiny at Myers

Myers Industries Inc. announced that its believes the company’s international tire-products distribution business has violated U.S. and possibly foreign laws.The Akron-based company reported the matter to the Department of Justice and the Securities and Exchange Commission following a preliminary...

By Stephen Taub • July 20, 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

Eleventh Hour for Foreign Auditors

A number of foreign auditing firms are scrambling to meet a deadline for registering with the Public Company Accounting Oversight Board.By today, July 19, all such firms that audit companies with shares listed on U.S. exchanges must be registered with the U.S.-based overseer.About a week ago, six...

By Stephen Taub • July 19, 2004

Options Lead to Handleman Restatement

Music and video distributor Handleman Co. has restated its financials for the past three years to reflect a change in its accounting method for stock options.The company announced that in accordance with FIN 44, it will record compensation expense based upon the excess of the market price over th...

By Stephen Taub • July 19, 2004

Take the Lead, Says SEC to PCAOB

Donald Nicolaisen, chief accountant of the Securities and Exchange Commission, is looking forward to the day when the Public Company Accounting Oversight Board becomes “the primary standard-setter and the primary source of advice and guidance” on auditor independence rules.He pointed out that the...

By Stephen Taub • July 16, 2004

Suit Against E&Y Is Ruled Meritless

Finally, some good news for Ernst & Young.A three-judge panel in Chicago ruled that a federal lawsuit against the Big Four accounting firm, related to the failure of a Chicago savings and loan in 2001, is without merit, according to the Associated Press.The Federal Deposit Insurance Corp. had...

By Stephen Taub • July 15, 2004

Red Hat Restates after CFO Resigns

Red Hat Inc., which provides support services for Linux software, announced that it will restate its financials for the prior three fiscal years and the first fiscal quarter of 2004 to correct the way it recognizes revenues for certain subscription agreements. The restatement is expected to resul...

By Stephen Taub • July 15, 2004

Amid Scandal, SEC Bars Audit Firm

The Securities and Exchange Commission has barred Denver accountancy Levine, Hughes, and Mithuen Inc. (LHM) from auditing public companies, based on the firm’s role in an accounting scandal at one of its former clients.The SEC asserted that while serving as auditor for Sport-Haley Inc. from 1998 ...

By Stephen Taub • July 14, 2004

Vital Signs Settles with Former CFO

Medical-equipment maker Vital Signs Inc. announced that it has settled a lawsuit filed by former chief financial officer Joseph Bourgart. The New Jersey-based company, which did not disclose terms, pointed out that settlement funds will be paid by Vital Signs’ insurance carrier and will be immate...

By Stephen Taub • July 13, 2004

BDO Seidman Wins Shelter Ruling

Federal District Court Judge James F. Holderman ruled recently that Chicago-based accounting firm BDO Seidman does not have to turn over confidential documents while it defends government charges that it sold abusive tax shelters, according to The New York Times.According to Judge Holderman’s dec...

By Stephen Taub • July 12, 2004

Newmont to Restate Cash Flow

Newmont Mining Corp. announced that it will restate its cash flow for 2002, 2003, and the first quarter of 2004 after discovering an error.The error appeared in the line item “effect of exchange rate changes on cash” in the cash-flow statements, the company said.Newmont stressed that the restatem...

By Stephen Taub • July 12, 2004

Tougher OBS Scrutiny by Moody’s

Moody’s Investors Service has published a report that for the first time details its broad framework for assessing off-balance-sheet (OBS) exposures as part of the ratings process.“Our purpose is to provide greater analytical transparency for issuers, investors, and analysts,” said the author of ...

By Stephen Taub • July 8, 2004

Audit Firms Focusing on Audit Fees

As auditor independence faces heightened scrutiny, the largest accounting firms are focusing more on their core business.According to an analysis by the Investor Responsibility Research Center, audit fees now account for an average of about 58 percent of total fees charged by accounting firms. Fe...

By Stephen Taub • July 7, 2004

SEC Probing Telecoms’ Accounting

The Securities and Exchange Commission is investigating how some of the largest telephone and cable companies count their subscribers, according to published reports.The commission has reportedly sent a letter to about 20 companies, including giants AT&T Corp. and Comcast Corp., to determine ...

By Stephen Taub • July 6, 2004

SEC Intensifies Sonus Probe

Sonus Networks, a provider of voice Internet products, said the Securities and Exchange Commission has upgraded an informal investigation to a formal probe.On February 11, the company announced the launch of its own independent investigation following a delay in reporting its fourth-quarter and f...

By Stephen Taub • July 1, 2004

KPMG Can Audit MCI, Judge Rules

A U.S. Bankruptcy Court judge gave KPMG the go-ahead to continue auditing MCI Inc. and to collect about $150 million in fees from the embattled telecom, according to Reuters.The judge’s decision reportedly overrode the objections of 14 state governments, which had accused KPMG of creating an ille...

By Stephen Taub • July 1, 2004

Private Co. Restates Seven Years of Earnings

Restatements are not restricted to public companies. Land O’Lakes, a farmer-owned cooperative, has announced that it will restate the net income it earned from 1997 through March 2004 by about $19 million.The co-op, which reports sales of over $6 billion, says the purpose of the restatement is to...

By Stephen Taub • June 30, 2004

Gemstar Slapped with $10 Million Fine

The Securities and Exchange Commission fined Gemstar-TV Guide International Inc. $10 million as part of a settlement stemming from charges that the company overstated its revenues by nearly $250 million.Part of the fine is based on Gemstar’s initial failure to cooperate in the commission’s invest...

By Stephen Taub • June 28, 2004

PCAOB Hands Big Four ”a Little Fear”

The Public Company Accounting Oversight Board (PCAOB) has unearthed “significant audit and accounting issues” in audits conducted by the Big Four accounting firms, PCAOB Chairman William McDonough reportedly told a House subcommittee last week.The head of the federal auditor-watchdog group told l...

By Stephen Taub • June 28, 2004

FASB Proposes Changes in Measuring Fair Value

The Financial Accounting Standards Board (FASB) has proposed rules for measuring fair value that would change its current guidance and expand disclosure requirements.FASB’s exposure draft, “Fair Value Measurements,” aims to set up a framework for measuring fair value that would apply broadly to f...

By Stephen Taub • June 25, 2004

PCAOB Targets 650 Audits

The Public Company Accounting Oversight Board (PCAOB) plans to review about 650 audits of public companies this year.The watchdog of public-company-auditing forms will look at auditor independence and such non-audit help as tax services, “in the post-Sarbanes-Oxley environment,” PCAOB Chairman Wi...

By Stephen Taub • June 25, 2004

The Harder Hard Sell

It may have been Lord Leverhulme, the British soap pioneer, Frank Woolworth, America’s first discount-retailer, or John Wanamaker, the father of the department store; all are said to have complained that they knew half of their advertising budget was wasted, but didn’t know which half. As adverti...

By Economist Staff • June 24, 2004

Audit Your Technology Infrastructure

These days, audits are rarely a source of solace, but finance executives who find IT daunting may actually be relieved to know that IT audits are suddenly in vogue, and provide exactly the sort of big-picture view that most CFOs need. IT audits are not, as you may have guessed, a matter of pure a...

By Bob Violino • June 23, 2004

Tech Giant Dismisses Longtime Auditor

The audit committee of the board of directors of Applied Materials Inc. has dismissed PricewaterhouseCoopers LLP as its auditor, ending a 33-year relationship, and hired KPMG LLP.About three months ago, according to Reuters, Applied Materials and PwC were engaged in a dispute over the auditor’s i...

By Stephen Taub • June 22, 2004

New Rules Could Cut Retiree Benefits

A new accounting standard could reduce benefits promised to retirees of state and local governments.The rules, developed by the Governmental Accounting Standards Board, require employers to measure and report the long-term costs of retiree health benefits while employees are still working, explai...

By Stephen Taub • June 22, 2004