If companies must continue issuing quarterly earnings guidance, they should at least consider following a standard template to improve transparency and comparability, say two corporate think tanks that have gone through the trouble of drafting a template. The CFA Institute Centre for Financial Market Integrity and the Business Roundtable Institute for Corporate Ethics have jointly […]
Tammy Whitehouse
Posted inAccounting & Auditing
‘Cash Equivalents’ Nixed; PCAOB Visits Asia
In the context of a long-range project to rewrite the rules for business-performance reporting, the Financial Accounting Standards Board has decided the new system it eventually develops will no longer allow a line item for “cash equivalents.” The category has become closely scrutinized in recent years as audit firms questioned whether companies were inappropriately including […]
Posted inAccounting & Auditing
Looking Up: SAB 108 Restatements Boost Earnings
When the Securities and Exchange Commission gave companies a free pass last fall to fix old, accumulated errors without issuing a major restatement, companies lined up to take advantage of the opportunity. And now that the first annual reports following that guidance are starting to appear, it seems that Corporate America had very little to […]
Posted inAccounting & Auditing
Cautiously Optimistic On Fair Value Option
For a rare, brief moment in financial-reporting time, companies will have some new latitude to cherry pick fair-value accounting treatments–reporting this liability at fair value but that one at historical cost–in a way that might cast a blinding spotlight on a picture of fiscal health. But will they do so with only appearances in mind? […]
Posted inAccounting & Auditing
Hedge Accounting; Payments Fraud; More
The Securities and Exchange Commission has given some new–but so far informal–guidance on how it wants companies to assess the effectiveness of hedge transactions to ensure that they qualify for favorable, highly complex derivative accounting treatment. At a recent meeting of the Emerging Issues Task Force of the Financial Accounting Standards Board, Joe McGrath, a […]
Posted inAccounting & Auditing
Backdating, SAB 108, Fair Value Updates
A new study suggests that stock option grant data being used to support allegations of backdating may not necessarily be as incriminating as first believed. A group of consultants with NERA Consulting, an economic analysis firm, has published the third installment of a four-part series analyzing stock grant data to verify assertions that some companies […]
Posted inFrom the Archive
Cash Flows Require A Careful Balancing Act
As regulators, auditors, and investors have focused attention on the accuracy of the cash-flow statement in the past few years, an increasing number of restatements in 2005 and 2006 can be linked to problems with cash-flow reporting. Restatements related to the statement of cash flow numbered in the single digits in 2000, representing only a […]
Posted inFrom the Archive
When Fair Value Rules, Acquisitions Collide
Restatements related to business acquisitions have jumped in steady increments since the early part of the decade, in large part as a result of allocation and valuation issues, experts say. In 2001 and in 2002, restatements resulting from business combinations hovered in the upper 80s, but by 2006 the number of such restatements hit 278, […]
Posted inInternal Controls
Risky Business: Where AS5 May Go
As regulators tell the market and Corporate America to focus more on risk in implementing Sarbanes-Oxley requirements, they have one key mission to fulfill first: Define “risk.” The Securities Exchange Commission has proposed new guidance for corporate managements and the Public Company Accounting Oversight Board has drafted new audit rules intended to direct the market […]
Posted inAccounting & Auditing
U.S., EU Discuss Auditing Oversight; More
As the Securities and Exchange Commission met last week to discuss its continued plans to accept financial statements written in international accounting standards, the Public Company Accounting Oversight Board met with European regulators to discuss similar cooperation in auditing oversight. Olson PCAOB Chairman Mark Olson had a chat with Charlie McCreevy, commissioner of the European […]
