In an unusual move, regulators have opened a back door to allow companies with erroneous cash flow classifications to sneak into compliance—without restating. What began as a trickle of interest in cash flow classifications is mounting into a full-scale movement to review cash flow statements across capital markets and to take advantage of a limited […]
Tammy Whitehouse
Posted inBoards & Shareholders
How To Raise A Lead Director In Post-Sarbanes Era
The days of the imperial chairman and chief executive officer in American business are waning, as corporate governance practices increasingly separate power over management from power in the boardroom. That division is often embodied in the person of the “lead director,” the chief among independent board directors who can act as a shadow chairman. And, […]
Posted inAccounting & Auditing
PCAOB Has Big Plans In ’06; FASB Wants Simplicity
Accounting regulators predict big developments for 2006, including a new report on audit quality control, a new approach to inspections based on earlier guidance, and new standards on audit quality and communications. Bill Gradison, acting chairman of the Public Company Accounting Oversight Board, told a recent gathering of the Tax Council Policy Institute that the […]
Posted inAccounting & Auditing
New Derivatives Rule; IFRS In China; More
The Financial Accounting Standards Board issued its final standard on certain hybrid financial instruments last week, attempting to simplify accounting for those instruments and also advance the use of fair-value accounting. The new standard, “Statement of Financial Accounting Standard No. 155, Accounting for Certain Hybrid Instruments,” is an amendment of FASB Statements No. 133 and […]
Posted inAccounting & Auditing
Two Regulators Move On Auditor Liability
Banking regulators have finished their advisory to financial institutions warning against agreements to auditor liability, while that debate is now starting to simmer at the Public Company Accounting Oversight Board. The Federal Financial Institutions Examination Council—an interagency body that sets standards for financial institutions—made only one departure from its original position in advising banks and […]
Posted inInternal Controls
COSO: Final Guidance For Small Cos. Likely By April
The long-awaited guidance providing small public companies tips on how to implement an effective internal control framework could be finished by April, according to Larry Rittenberg, chairman of the Committee of Sponsoring Organizations. The task force that issued COSO’s draft document in October is reviewing 30 comment letters and 176 feedback-form submissions to determine which […]
Posted inAccounting & Auditing
FASB Ends Payout Fears; SEC And EU Eye Reconciliation
With no significant changes to its recently proposed guidance, the Financial Accounting Standards Board has finalized its relaxation of the original language in its share-based payment standard on how to account for stock options granted with an embedded cash settlement feature. FASB acted swiftly to finalize the guidance and calm another recent wave of panic […]
Posted inAccounting & Auditing
U.S. Chamber Wants Audit Profession Bolstered; More
The U.S. Chamber of Commerce is calling on regulators and lawmakers to change the playing field for audit firms, protecting both the profession and capital markets in the process. In a recent white paper, “Auditing: A Profession at Risk,” the Chamber asserts that auditors need protection from litigation, a clearer understanding of their role as […]
Posted inAccounting & Auditing
Hedge Accounting Snafus To Pile Up In 2006?
In the great restatement wave of 2005, much attention focused on problems in lease accounting. Now experts say hedge accounting errors deserve at least some blame for the volume of restatements—and more are likely on the way. At least 40 companies with market capitalizations above $100 million restated financial results in 2005 to correct hedge […]
Posted inAccounting & Auditing
FASB Unveils Fair-Value Plan; PCAOB Eyes Liability
The Financial Accounting Standards Board has issued an exposure draft giving companies the choice, but not a mandate, to report certain financial assets and liabilities at fair value. Under the proposed statement, companies could measure financial assets and liabilities at fair value on a contract-by-contract basis, with the effect included in earnings. Assets and liabilities […]