Delovely, Demarvelous, Defer

It’s that time of the year again.By midnight on Monday, all 2001 income tax returns — or extensions to file said returns — should be in the hands of the IRS or the U.S. postal service. While the witching hour is only days away, tax experts say it’s not too late for chief financial officers, and o...

By Craig Schneider • April 11, 2002

When Accountants Switch Sides

Following the collapse of Enron in October, scores of lawmakers and regulators started looking into the tangled relationship between Enron and the company’s lead audit team from accountancy Arthur Andersen. In a number of cases, the inquiries have focused on Andersen’s role as both independent au...

By Craig Schneider • April 3, 2002

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

Tools of the Trade: Auditing Audit Software

It’s not surprising that Anton Bouwer, Brussels-based consulting manager of ACL Europe, says the collapse of Enron has been good for business. ACL, which started as a small Canadian software house in the 1970s, has become the world’s largest provider of software applications for corporate auditin...

By Adam Lincoln • April 1, 2002

Audit Committee Recruiting a Tough Sell

The accounting snafus of Enron and other corporations have turned up the pressure on corporate audit committees. As a result, one of the biggest challenges corporate officers will face this year is convincing qualified executives to accept directorships and audit-committee nominations, says Bob W...

By Marie Leone • April 1, 2002

Accountants Now on the Hook?

If a recent court case in Georgia serves as precedent elsewhere, it could lower the bar on seeking damages based on what company insiders are expected to know and, as a result, pull more third-party auditors into lawsuits.In January, the Georgia Court of Appeals reinstated a $44 million verdict a...

By Marie Leone • April 1, 2002

Lies, Damn Lies, and Pro Forma

This past January, the Securities and Exchange Commission administered its first spanking of a company for abusing pro forma earnings figures. The culprit: Trump Hotels & Casino Resorts Inc. The sin: a “materially misleading” quarterly earnings release dating from 1999. The punishment: Go and...

By Edward Teach and Tim Reason • April 1, 2002

Diamonds in the Rough

Matt White, CFO of the Pawtucket Red Sox, began his career in baseball as a college student, flipping burgers all summer at McCoy Stadium. “I just loved the place,” says White, who returned to work in the ticket office after graduation. What’s not to love? Minor league baseball is the great Ameri...

By Tim Reason • April 1, 2002

Bad Sign

Fraud comes in all sizes. In late February, a former Bear, Stearns & Co. secretary pleaded guilty to using disappearing ink to make more than $800,000 fade from her boss’s bank accounts, according to an Associated Press report. Anamarie Giambrone used the trick pen to write checks for senior ...

By Marie Leone • April 1, 2002

Tax Shelters: Will They Stand Up?

Remember the war on tax shelters? During the Clinton Administration, then- Treasury Secretary Lawrence Summers called abusive tax shelters “one of the most serious compliance problems in the U.S. tax system.”He backed up his words with new regulations on tax-shelter promoters, greater disclosure ...

By Andrew Osterland • March 26, 2002

The Big Five, By the Numbers (Updated)

Given the recent travails at Arthur Anderson, several Big Five accountancies have made inquiries into buying part or all of the Chicago-based firm. The question to be answered: what’s the right fit, and for whom? AA may be in deep trouble, but as the following chart shows, both its domestic tax a...

By John Goff • March 22, 2002

Trade Sanctions Could Trigger Tax Changes

In January, the Geneva-based World Trade Organization (WTO) ended a two-year trade subsidy dispute by striking down a U.S. appeal and crowning the European Union the victor. The potentially arduous impact of the decision is that under WTO rules, the EU has the right to choose which U.S. industrie...

By Marie Leone • March 20, 2002

Show Us Your Options

The Securities and Exchange Commission’s 2001 end-of-year meeting gave investors an unexpected bonus — and corporate finance departments additional work. The SEC ruled that starting in April, companies must include tables in their 10-K reports disclosing information about all employee stock optio...

By Tim Reason • March 20, 2002

It’s U.S. Corporates vs. The IASB

It’s back. The battle over stock-option accounting is rearing its ugly head again. This time it’s a transatlantic showdown between U.S. companies–including General Electric, Compaq, Sun Microsystems, and Oracle–and the London-based International Accounting Standards Board (IASB), the organization...

By Andrew Osterland • March 20, 2002

SEC Releases Orders and Rules for AA Clients

Yesterday, the Securities and Exchange Commission released its orders and rules for clients of indicted accounting firm Arthur Andersen. The Commission’s goal: To reassure investors and calm the U.S. capital markets.“We are committed to ensuring that investors continue to receive the timely finan...

By Stephen Taub • March 19, 2002

Don’t Purchase Consulting Services from Auditor, Say Money Managers

Generally speaking, surveys put out by special interest groups tend to be more self-serving than instructive. A few weeks ago, for example, CFO.com was sent the results of a poll showing conclusively that corporate executives felt a return to proper business attire would make their companies more...

By John Goff • March 18, 2002

Who Goes Up if Andersen Goes Down?

Just when you thought it couldn’t get any worse for Arthur Andersen.Late on Thursday, the Department of Justice (DOJ) charged the besieged accountancy with obstruction-of-justice. The charge stems from the firm’s apparent wholesale destruction of documents related to its audit of Enron Corp. Earl...

By John Goff • March 15, 2002

10 X 5: The Big Five’s Ten Biggest Clients

Here are the top ten clients of the Big Five accounting firms, as of 12/31/01. Numbers in parenthesis are 2001 annual sales for each company (in billions of dollars). Arthur Andersen1. Merck & Co.* ($40.3)2. Enron Corp.* ($40.1)3. Costco Companies ($32.2)4. Dynergy Inc. ($29.4)5. UtiliCorp Un...

By John Goff • March 15, 2002

AA’s Top Ten Clients

As of December 2001, these were Arthur Andersen’s ten biggest public clients. Merck & Co. *Enron Corp. *Costco CompaniesDynegy Inc.UtiliCorp UnitedFreddie Mac *International PaperGeorgia PacificWalgreen Co.UnitedHealth Group * Terminated audit relationship with AA after 12/31/01 Source: Bowma...

By CFO Editorial Staff • March 11, 2002

POB Out, PAB In

In the wake of Enron Corp.’s bankruptcy, Securities and Exchange Commission chairman Harvey Pitt is under mounting pressure to restore confidence in the U.S. accounting industry. His initial response, announced in January, is to replace the Public Oversight Board (POB), created in 1977 by the SEC...

By Marie Leone • March 8, 2002

Nexus Vexes

Trying to decide whether your company should participate in an upcoming trade show? Here’s one more factor to consider: some states require companies to collect sales or use tax on items sold at the show and/or to pay state income tax on the sales. What’s more, if a connection, or nexus, with the...

By Joan Urdang • March 8, 2002

Federal Offenses

We the people of the United States have a hard time keeping our finances in order. Our corporations may practice the world’s most rigorous financial reporting (some recent debacles notwithstanding), but our government does not. Agencies with such lofty responsibilities as establishing justice, en...

By Tim Reason • March 6, 2002

For Smaller Companies, It’s No Longer Accrual World

In an effort to simplify tax accounting for many smaller businesses, the Internal Revenue Service has extended the use of cash-based accounting to certain companies with annual gross revenue of up to $10 million, replacing the previous $1 million ceiling. The change, applying to tax years ending ...

By Alix Stuart • March 4, 2002

Low and Away

Epilogue:It was a glorious season, a season of 73 home runs and 20 straight starts without a loss and 116 wins. It was the season of Ichiro and Barry and the Big Unit. For much of the 162-game schedule, it was the Seattle Mariners’ season. And in the end, it was the season of a remarkable, nail-b...

By Stephen Taub • Feb. 14, 2002

Fields and Streams

In his appearance before Congress on December 6, Major League Baseball Commissioner Bud Selig painted a bleak picture of the economic health of the game. Selig said league debt tops $3 billion. Add deferred compensation and future guaranteed obligations to players, noted the commissioner, and tha...

By Stephen Taub • Feb. 14, 2002

Money Changes Everything

In his December 6 testimony before the House Judiciary Committee, Major League Baseball Commissioner Bud Selig made a startling concession for the head of a professional sports league. In his testimony, Selig acknowledged that major-league baseball is becoming a very one-sided affair.According to...

By Stephen Taub • Feb. 14, 2002