Financial Reporting

A&A

FASB Defers Date For Accounting Guidance on Variable Interest Entities

At its Board meeting on October 8, the FASB decided to defer to the fourth quarter from the third quarter the implementation date for Interpretation No. 46, Consolidation of Variable Interest Entities, issued earlier this year. This deferral only applies to variable interest entities that existed prior to February 1, 2003.
Education & Careers

Arthur Levitt to Chair Academic 'Think Tank'

Morgan Stanley, IBM Corp. and General Electric Co.’s GE Foundation will join forces and resources with Columbia University’s business school to create an academic think tank to take the lead in improving accounting standards and stock research.Called the Center for Excellence in Accounting and Security Analysis, the center will be chaired by Arthur Levitt, former chairman of the Securities and Exchange Commission.
A&A

SEC Exempts Two Reports From CEO & CFO Certification

With the threat of criminal prosecution, millions in fines and possible jail time facing them for signing off on corporate reports they know to be false, CEOs and CFOs have been leaving nothing to chance. They can breathe a little easier now that two reports have been taken off the list of those requiring their certification.The Securities and Exchange Commission staff announced last week at a corporate lawyer’s conference that employee benefit plan reports and reports known as 8-Ks will be exempt from certification by top corporate officers.

Faulty Accounting Forces Resignation of Three at CA

Computer Associates International Inc.’s chief financial officer and two other top officials were compelled to resign when questionable accounting practices came to light via a board investigation. Chief Financial Officer Ira Zar, resigned Wednesday after 21 years with the company. Also resigning were Lloyd Silverstein, senior vice president for finance; and David Rivard, vice president for finance.

Ex-Enron Accountant Cooperates, Settles With Feds

Wesley H. Cowell, the former chief accounting officer of Enron North America, has agreed to pay a $500,000 fine for his role in fraudulently manipulating the earnings of the bankrupt company's trading arm.According to the SEC notice, Colwell has agreed to be barred from acting as an officer or director of a public company, and will pay $300,000 in disgorgement and prejudgment interest and a civil penalty of $200,000.
Community News

PCAOB Proposes Auditing Standards For Internal Control Over Financial Reporting

On Tuesday, October 7, the Public Company Accounting Oversight Board unanimously voted to propose and issue for public comment a standard on an audit of internal control over financial reporting. The Board also unanimously voted to propose and issue for public comment a rule which clearly defines terms used in auditing to assist firms in complying with the standards.
Community News

Sun CEO Apologizes For 'Wacko' Remarks

Last week, Sun Microsystems CEO Scott McNealy lashed out at accounting standards, the SEC, Sarbanes Oxley and the "absolutely wacko" rulemakers and standard setters in the accounting profession.
Community News

Sun CEO: Accountants Gone 'Wacko', Investors Should 'Go Nuts'

Scott McNealy, the Sun Microsystems CEO who is known in the industry as being rather colorful and blunt, reappeared on the stage of controversy by lamenting about 'wacko' accountants and calling for a return to simplicity in financial reporting."The FASB, SEC and accountants have gone absolutely wacko on us. I'm a Stanford MBA, I went to most of my classes. I took accounting. I can't read annual reports, income statements and SEC filings any more.
Practice

Corporate America Must Take Leadership in the New Economy

Guest Article, submitted by Werner ReisacherThere are as many opinions about the reasons behind the present economic crisis as there are personal interest groups. However, the factors leading up to the present economic situation go beyond opinions and personal interests. They are by far more complex and can be traced back to the 1990’s. During those years, cost reduction exercises were routine. The legacy software systems in place could not support these activities and provide the integrated solutions needed to improve productivity.
Practice Management

Five Ways Small Businesses Can Avoid Ethics Problems

Loren G. Carlson, founder and chairman of CEO Roundtable, LLC suggests five techniques CEOs of small businesses can use to avoid ethics problems.The five ways:Recognize there is no difference between "business ethics" and "personal ethics." There is no way to justify doing something in business that you would not do in personal life.Establish a corporate culture that rewards ethical decisions and practices.
Community News

CFOs Name Top Sarbanes-Oxley Challenges

The Sarbanes-Oxley Act is presenting chief financial officers (CFOs) with significant challenges beyond the well-publicized executive certification and internal control requirements, according to a study released by Protiviti Inc., a leading internal audit and business and technology risk consulting firm.
A&A

CFOs Measuring Cost of Sarbanes-Oxley Implementation

A recent survey of corporate chief financial officers by CFO magazine found that most of corporate America’s top finance officers believe the Sarbanes-Oxley Act regulations have been a boon for attorneys and auditors and have caused "sticker shock" for companies.Many of the CFOs surveyed said they think Congress acted too hastily in response to the corporate meltdowns of Enron, Tyco, WorldCom and others.

Ontario Issues New Accounting Licensing Rules

The Ontario government is changing the way it licenses public accountants by restructuring the role of the Public Accountants Council (PAC), which will no longer license accountants, but will oversee the bodies that do. The self-regulatory system will open the public accounting profession to qualified chartered accountants, certified management accountants and certified general accountants who meet the new higher standards.

BearingPoint Restates Earnings, Faces Legal Action

At least six lawsuits have been filed against BearingPoint, the former consulting arm of Big Four firm KPMG, after the firm recently restated earnings.BearingPoint lowered its earnings by $10.8 million for the first three quarters of fiscal year 2003 in a Form 8-K filed with the Securities and Exchange Commission last month.
Community News

Freddie Mac Executives to be Replaced, Again

The "white knight" who rose from the ranks internally earlier this summer to step into the role of CEO to help steer a troubled Freddie Mac back onto the right path, turns out to be not quite the right person to lead the organization. Greg Parseghian, 42, who was elevated to his current role of CEO and President in June, will be replaced at the behest of the federal agency that oversees Freddie Mac and Fannie Mae, the Office of Federal Housing Enterprise Oversight, which ordered Freddie Mac's board to make the move last week.

North Carolina: Balancing 'Doing The Right Thing' With Increased CPA Risk

CPAs around the country are wrestling with an ethical question: Now that Sarbanes-Oxley protects CPAs who expose a public company's shoddy accounting practices, should the same standard of disclosure be used for the private companies they audit?The North Carolina State Board of CPA Examiners says "no," at least for now.In North Carolina, CPAs who are retained by privately held companies are still bound by "no-disclosure" rules, and the Board of Examiners thinks that is a good thing."You don't want your CPA to go in and spread information that they may or may not know is true," said Ro

SEC's Next Target: 'Reckless' Board Members

The next group to be targeted in the SEC's ramped up effort to stop corporate fraud will be corporate directors who do not exercise their fiduciary responsibility to the investing public, according to the SEC's top enforcement official.Since the Enron collapse, the SEC has brought enforcement proceedings against a variety of groups, including accounting firms, management, auditors, and investment banks.
Community News

PwC Lead Auditors Barred From Auditing Public Companies

The Securities and Exchange Commission has settled two high-profile cases involving PricewaterhouseCoopers in the last few days, resulting in individual auditors being barred from public company audits, but no sanctions against the firm.MicroStrategy, Inc.For more than three years, the Securities and Exchange Commission has been investigating PricewaterhouseCoopers and its role in accounting irregularities at MicroStrategy, Inc., once a high-flying player in the heyday of the Dot-com era.Last week, the SEC ended its investigation of PwC, resulting in no enforcement actions agai
A&A

First CEO, CFO Fines Levied Under Sarbanes-Oxley

The first fines have been levied under the Sarbanes-Oxley Act on Chief Executive Officers who sign off on financial statements knowing they are not accurate. Poultry firm Rica Foods Inc., and its top two officers settled federal charges this week. Chief Executive Calixto Chaves and Chief Financial Officer Gina Sequeira settled the charges, with Chaves agreeing to pay a $25,000 fine. Sequeira cooperated with the SEC and will not be required to pay a fine.
Community News

R.J. Reynolds Refuses to Turn Over Documents to SEC

In today’s world of reform and oversight, few publicly held companies would be brazen enough to say "no" to the U.S. Securities and Exchange Commission, but that is exactly what R.J. Reynolds Tobacco Holdings Inc. has done. Reynolds has refused to hand over documents requested in a July 3 SEC subpoena claiming the documents contain confidential information that would harm the company if it fell into the hands of its competitors or the U.S. Department of Justice.

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