Key Senator Speaks Up for FASB

The chairman of the Senate Banking Committee lashed out at Congress for undermining efforts by the accounting standard setter to require that companies expense the value of stock options.Richard Shelby (R-Ala.) said that the Financial Accounting Standards Board “is the proper agency to deal with ...

By Stephen Taub • June 21, 2004

More Consulting for Ernst & Young?

Big Four accounting firm Ernst & Young is planning a return to the consultancy business in 2005, according to Accountancy Age.When it sold its consultancy to Capgemini in 2000, Ernst & Young signed a five-year noncompete agreement. And as recently as last week, reported the Accountancy Ag...

By Stephen Taub • June 21, 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

SEC OKs Auditor Role for Section 404

The Securities and Exchange Commission approved a new audit standard proposed by the Public Company Accounting Oversight Board for implementing Section 404 of the Sarbanes-Oxley Act.On June 5, 2003, the SEC amended its rules to require that annual reports must include an assessment by management ...

By Stephen Taub • June 21, 2004

Charges for Ex-CFO of Network Associates

Former Network Associates Inc. chief financial officer Prabhat Goyal was indicted in San Francisco federal court for orchestrating a scheme to inflate the company’s sales and earnings from 1998 through 2000, according to the Associated Press. In addition, the Securities and Exchange Commission fi...

By Stephen Taub • June 18, 2004

KPMG Tax-Shelter Clients Identified

Many of the largest companies in the United States used a controversial KPMG tax shelter that the Internal Revenue Service subsequently ruled was abusive.In the past, the IRS publicly stated that the shelters generated at least $1.7 billion in tax savings for several dozen companies.The shelters ...

By Stephen Taub • June 17, 2004

CA Restates Again, Reveals CFO’s Pay

In a regulatory filing, Computer Associates International Inc. announced that the company’s new chief financial officer, Jeff Clarke, will receive an annual base salary of $650,000 with the possibility of a $650,000 bonus. His package also includes long-term incentive compensation of $2.7 million...

By Stephen Taub • June 16, 2004

New Tax Break Would End Trade Sanctions

The House Ways and Means Committee approved a bill that would end European Union trade sanctions against American manufacturers and farmers and provide $143 billion worth of corporate tax breaks over the next 10 years, according to published reports.The full chamber will probably vote on the bill...

By Stephen Taub • June 16, 2004

House Committee Limits Expensing Options

The Financial Services Committee of the House of Representatives voted 45-13 Tuesday to restrict an option-expensing standard recently proposed by the Financial Accounting Standards Board.H.R. 3574, the Stock Option Accounting Reform Act — which was approved last month in subcommittee — would dem...

By Dave Cook • June 16, 2004

Shaw Group M&A Accounting Probed

The Securities and Exchange Commission has launched an informal inquiry of The Shaw Group Inc., according to the company.Although the commission hasn’t reported the reason for the inquiry or its scope, an SEC request for information from the company seems mainly to concern the purchase method of ...

By Stephen Taub • June 15, 2004

Veritas Restates, Reports Controls ”Weakness”

Veritas Software Corp. restated its results for the past three years and the first quarter of this one and said its auditor identified “material weakness” in its internal controls.For 2003, the data-storage software maker lowered previously reported revenue by $24 million, to $1.75 billion, but r...

By Stephen Taub • June 15, 2004

Pricing New Products

How much should you charge for a new product? Charge too much and it won’t sell — a problem that can be fixed relatively easily by reducing the price. Charging too little is far more dangerous: a company not only forgoes significant revenues and profits but also fixes the product’s market value p...

By The McKinsey Quarterly • June 15, 2004

Martha Stewart Company Asked about Tax Fees

Institutional Shareholder Services (ISS) asked Martha Stewart Living Omnimedia Inc. to supply added information about tax fees the company paid to its independent auditors, Ernst & Young LLP, according to an 8-K filed by the Stewart company.The embattled media company reported that it paid ou...

By Stephen Taub • June 14, 2004

SEC Warns Auditors on Contingency Fees

The Securities and Exchange Commission’s chief accountant warned the major accounting firms to stop charging contingency fees for handling the tax work of companies they audit or else face enforcement action, according to Bloomberg.The wire service said SEC Chief Accountant Donald Nicolaisen rece...

By Stephen Taub • June 14, 2004

SEC, Software Firm Settle Accounting Charges

Software maker i2 Technologies Inc. agreed to pay $10 million to settle Securities and Exchange Commission charges. Over a nearly five-year period ending in 2002, the company allegedly misstated about $1 billion of license revenues, including over $125 million it should never have recognized.Had ...

By Stephen Taub • June 11, 2004

GASB Boosts Statistics for Government Reports

The Governmental Accounting Standards Board (GASB) has enhanced and updated the statistical section that accompanies a state or local government’s basic financial statements.The move, made via “Statement No. 44, Economic Condition Reporting: The Statistical Section,” is intended to reflect change...

By Stephen Taub • June 10, 2004

Investors Punish OmniVision for Restatement

OmniVision Technologies, Inc. stunned investors Wednesday when it announced that it may restate its results for certain quarters of fiscal 2004 and, possibly, fiscal 2003, following an internal review and an independent investigation.As a result, it will delay the release of its fiscal 2004 fourt...

By Stephen Taub • June 10, 2004

PCAOB Approves Rules for Foreign Auditors

The agency charged with overseeing U.S. public accounting firms unanimously approved new rules that would allow it to oversee and inspect auditors based outside the United States.The Public Company Accounting Oversight Board’s (PCAOB) controversial rules now must be approved by the Securities and...

By Stephen Taub • June 10, 2004

KPMG Named in MCI Case

KPMG could be facing trouble again as a result of its tax-shelter business.The Securities and Exchange Commission is investigating state tax shelters that KPMG designed for MCI, Reuters reported. The commission has asked for information about a shelter designed by the Big Four accounting firm tha...

By Stephen Taub • June 9, 2004

More Questions on E&Y Independence

Executive search firm Korn/Ferry International announced in a regulatory filing that the Securities and Exchange Commission is conducting an informal inquiry into certain independence issues arising out of payments made by Ernst & Young, Korn/Ferry’s independent auditor, to a company affiliat...

By Stephen Taub • June 8, 2004

Kumar Leaves Computer Associates

Computer Associates International Inc., which is being investigated for its past accounting practices, announced that chief software architect and former chairman and chief executive officer Sanjay Kumar is leaving the company.Kumar will cease all involvement with the company’s business effective...

By Stephen Taub • June 7, 2004

Symbol Settles Probes for $138 Million

Symbol Technologies Inc. is close to putting its years-long accounting scandal behind it. The world’s largest seller of barcode scanners agreed to shell out $138 million to settle criminal and civil investigations as well as shareholder lawsuits.Matters are far from over, however, for former gene...

By Stephen Taub • June 4, 2004

No Restatement for Adecco

Adecco will not restate its results after all.The world’s largest temporary-staffing company announced that after a detailed audit by Ernst & Young and an independent investigation by the law firm Paul, Weiss, Rifkind, Wharton and Garrison LLP, it will not need to revise any of its 2003 finan...

By Stephen Taub • June 3, 2004

PwC Probed on Auditor Independence

The Securities and Exchange Commission is investigating PricewaterhouseCoopers for a possible violation of auditor independence rules.In a press release announcing its quarterly results, the Royal Bank of Canada said it has received a subpoena from the U.S. securities regulator regarding PwC, whi...

By Stephen Taub • June 2, 2004

Former HealthSouth Exec Avoids Prison

A former HealthSouth Corp. finance executive has been sentenced to five years’ probation for his part in the company’s accounting scandal, reported Reuters.Kenneth Livesay, who had been an assistant controller and chief information officer at HealthSouth, received the light sentence as a reward f...

By Stephen Taub • June 2, 2004

Break Up the Big Four?

Companies that are dissatisfied with their current auditor don’t have much choice when it comes to picking another. In fact, for the next few months, they may have only one alternative. In April, the Securities and Exchange Commission barred Ernst & Young from accepting new audit clients for ...

By Joseph McCafferty • June 2, 2004