Financial Reporting

Anonymous Tip Leads to Kmart Accounting Probe

With the Enron implosion still very fresh in the minds of American business, Kmart, which filed for bankruptcy last week, announced that it was beginning an investigation of its internal accounting practices. The investigation was triggered by an "anonymous letter," reportedly by company employees, expressing concern regarding unspecified accounting matters.

Bush Appoints Two SEC Commissioners, Calls For Reforms

President Bush has appointed two SEC Commissioners, one Republican and one Democrat. The newly-appointed Commissioners are Cynthia Glassman, a Republican and principal at Ernst & Young, and Isaac C. Hunt Jr., a Democrat who was appointed to the SEC by former President Clinton in 1996 and whose term recently expired. Both Commissioners were appointed by the President under special authority that allows him to do so without ratification by Congress while Congress is not in session.
Practice Management

SEC Releases MD&A Guidance for 2001 Reports

Responding to a petition by the Big Five accounting firms, the Securities & Exchange Commission (SEC) issued a statement entitled Commission Statement about Management’s Discussion and Analysis of Financial Condition and Results of Operations.The SEC's statement contains suggested steps that public companies should take when preparing disclosures.
Practice Management

Deloitte Reveals Best Boardroom Strategies for CFOs

An informal survey by Financial Executives International Research Foundation indicates chief financial officers (CFOs) expect tough boardroom sessions this year. Senior audit partners for Deloitte & Touche (D&T) offered practical advice during a teleconference co-sponsored by the Foundation on January 17, 2002.

Help For Audit Committees In The Post-Enron Era

An article in the January 21, 2002 issue of Business Week entitled How Governance Rules Failed at Enron questions the effectiveness of today’s audit committees.

First Pro Forma Case: SEC Faults ‘Positive Spin’

Trump Hotels & Casino Resorts has the dubious distinction of being the

SEC Continues Crackdown on Illegal Payments

On January 15, 2002, the Securities and Exchange Commission (SEC) settled a case against BellSouth Corporation involving alleged violations of the Foreign Corrupt Practices Act (FCPA).

'Cookie Jar’ Accounting Case Heartens Lawyers

On January 8, 2002, the Securities and Exchange Commission (SEC) filed suit in the United States District Court for the District of Nebraska against the former chief financial officer and the assistant controller of Omaha-based InaCom Corporation. InaCom was in the business of purchasing computers, customizing them and reselling them to businesses. Like many other dot-coms, it ran into financial difficulties and filed for bankruptcy in 2000.
A&A

Goodwill Write-offs: Paper Losses or Squandered Money?

First quarter earnings announcements of many companies bring news of huge one-time write-offs under the Financial Accounting Standards Board’s Statement No. 142, Goodwill and Other Intangible Assets. This is leading to controversy and changing performance measures.Huge write-offs and controversyFor media giant AOL-Time Warner Inc., the projected write-down for first quarter 2002 amounts to a breath-taking $40 to $60 billion.

Levitt Warns of New Accounting Regulation, Investor Caution

Recent allegations about potential fraud, cover ups, document shredding and criminal investigations in the Enron scandal have once again given former SEC Chairman Arthur Levitt a platform to speak out against the status quo in the accounting profession.Responding to Andersen's disclosure last week about destroying documents, Mr. Levitt told the Wall Street Journal that it is time for outside auditors to accept tough oversight through a new government-sponsored self-regulatory organization.Mr.

Free Toolkit For Related Party Transactions

The American Institute of Certified Public Accountants (AICPA) has issued guidance on the timely subject of related parties and related-party transactions. The guidance was written with the counsel of the eight largest U.S. accounting firms: Andersen, BDO Seidman, Deloitte and Touche, Ernst & Young, Grant Thornton, KPMG, McGladrey & Pullen, and PriceWaterhouseCoopers.
A&A

New Considerations For Financial Statement Prep This Year

The recessionary economy. Recent business failures. The events of September 11. All of these economic influences converged in 2001 to create one of the most turbulent financial reporting environments in recent memory, requiring the extra care and attention of financial statement preparers to ensure that the public has a clear picture on the health and welfare of American businesses.The Big Five accounting firms, in cooperation with the American Institute of CPAs, has issued a detailed list of risk factors to consider when preparing and communicating financial results for 2001.

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