CFO, The Magazine for Senior Financial Executives articles from February 2003

CFO, The Magazine for Senior Financial Executives archives from February 2003

Rule-makers. (From the Editor).(Brief Article)(Editorial)
February 1, 2003... AS THE DUST SLOWLY SETTLES ON LAST YEAR'S accounting scandals, the stage is set for a major shift in accounting practice. With Robert Herz as its chairman, the Financial Accounting Standards Board has a remarkably ambitious program, and a...

True or false? (Letters to the Editor).(Letter to the Editor)
February 1, 2003... YOUR ARTICLE CONCERNING falsifying executive resumes ("Liar, Liar," Grapevine, December 2002) opens the door to several related discussions. The executive retained-search industry has seen a tremendous amount of pressure to verify the...

A Nightmare comes true. (Letters to the Editor).(Letter to the Editor)
February 1, 2003... THE STORY "FAULT LINES" (December 2002) should have been entitled "Carnegie International Corp.: Every CFO's Worst Nightmare." Imagine a firm that goes from selling gym equipment to providing "adult content" phone lines to touting itself...

How ironic. (Letters to the Editor).(Letter to the Editor)
February 1, 2003... YOUR ARTICLE ON COMPENSATION ("Facing the Bear," November 2002) pointed out the difficulty of addressing the current crisis in financial integrity and the potential dangers of trying to solve it too quickly. On page 46, you state that stock...

The benefits debate. (Letters to the Editor).(Letter to the Editor)
February 1, 2003... AS AN ACTUARY, I FELT I HAD TO write in regards to the letter from David Wray as well as to address your article "The Party's Over; Why Plan Like It's 1999?" both in the November 2002 issue. I understand Mr. Wray's defense of 401(k) plans,...

Blame the boss. (Letters to the Editor).(Letter to the Editor)
February 1, 2003... IN RESPONSE TO DANA HERMANSON'S letter in your November 2002 issue ("Conflicting Interests"), while the author's intent is conceptually correct (not allowing stock options for CFOs), it misses the real temptation for fraud and abuse. Having...

Simplicity is all. (Letters to the Editor).(Letter to the Editor)
February 1, 2003... LIKE ALL INFORMATION DEBACLES, [the GAAP/tax-reporting gap] comes back to the simplicity of the systems. We have made the tax systems so complex that we have an army of people who do nothing but make sure the tax system works or is taken...

The importance of integrity. (Letters to the Editor).(Letter to the Editor)
February 1, 2003... A FEW YEARS BACK, WHEN I WAS deciding whether to become a CPA or go to law school, I came to the conclusion that I wanted to enter a "respected" profession. It was clear to me the only choice was to attain my CPA certificate instead of becoming...

Prove it. (Newswatch).(Securities and Exchange Commission warns accountants about new policy)(Brief Article)
February 1, 2003... As if the ex-Andersen partners in its midst weren't enough of a reminder of the accounting profession's woes, the audience at a recent conference of the American Institute of Certified Public Accountants got a stiff warning that the Securities...

Separation anxiety. (Auditor Independence).
February 1, 2003... TAX SERVICES LOOKED TO BE about the only function auditors could safely perform for their audit clients under the Sarbanes-Oxley Act of 2002. But new rules from the Securities and Exchange Commission, along with impending changes in the...

Dividend Payments.(Brief Article)
February 1, 2003... DIVIDEND PAYMENTS by the S&P 500 rise 2.1% in 2002, thanks, in part, to an 11.3% year-to-year gain in December, says S&P.

Multiple-choice problems. (401(k) Plans).
February 1, 2003... IN AN EFFORT TO ENCOURAGE diversification in 401(k) plans, companies are continuing to add investment options to their menus. One-third of companies recently surveyed by Hewitt Associates say they're planning to boost the number of funds they...

Pulling the plug on exorbitant pay. (Executive Compensation).(investment industry focuses on executive pay)(Industry Overview)
February 1, 2003... David FitzPatrick might be a tad nervous these days. The new CFO of Tyco International Inc. landed a $21 million pay package just as shareholder activist groups began promising a crackdown on excessive executive pay. In fact, during the...

M&A Activity.(total of activity for 2002)(Brief Article)
February 1, 2003... M&A ACTIVITY, which is expected to total $430 billion for 2002, is returning to "sustainable levels," says a report by Ernst & Young.

Guess again. (Accounting).(professor Baruch Lev welcomes companies' financial restatements)
February 1, 2003... THE HIGH NUMBER of financial restatements has alarmed investors and analysts recently. But one accounting professor welcomes the announcements. In fact, he suggests that companies revise portions of their financial statements every year. ...

An eye for old collectibles. (Account Receivable).(Marling Holdings buys and brings in long-overdue bills)(Brief Article)(Company Profile)
February 1, 2003... A few years ago, Joel Lewis, then a collection manager for a large utility, found a stunning receivable in a pile of overdue accounts he was in charge of collecting. The utility was owed $800 by a couple named Fido and Fifi de Dog. While...

D&O Liability Settlements.(settles include 20 claims)(Brief Article)
February 1, 2003... D&O LIABILITY SETTLEMENTS include 20 claims that were settled for more than $100 million in the last 3 years, says Wall Street Lawyer.

Cozying up to analysts. (Investor Relations).(discussion of efforts to improve investor relations without breaching Regulation of Fair Disclosure)
February 1, 2003... IN AN ATTEMPT TO PROVIDE a more open line of communication with investors and analysts, many companies are ditching the canned presentation in favor of an informal meeting heavy on question-and-answer periods. Impromptu dialogues--sometimes...

The downside of downsizing. (Budgeting).(a look at recent approaches to cost cutting)(Industry Overview)
February 1, 2003... Companies thought that recent cost cuts would push them out of the doldrums--or at least boost earnings enough to please shareholders. That hasn't happened. Is another round of cuts in order? Lawrence Serven, a principal at...

Activating "Sleep Mode".(sleep mode on PCs)(Brief Article)
February 1, 2003... ACTIVATING "SLEEP MODE" can save $10 to $50 per PC annually, according to Energy Star, a program managed by the EPA.

Dial "0" for outsourcing: why paying someone else to pay your phone bills may make sense. (Techwatch).(Industry Overview)
February 1, 2003... COMPETITION WITHIN EVERY SECTOR of the telecom industry may have driven per-minute prices down substantially, but that doesn't mean you can ignore the phone bill. Companies spend anywhere from $2,000 to $10,000 per year per employee on local,...

Mastering data. (Business Intelligence).(trends in business intelligence software market)(Industry Overview)
February 1, 2003... COGNOS INC's SUCCESSFUL BID for rival Adaytum Inc. last December (see story below) is just one indication that the business-intelligence (BI) software market is heating up. Analysts expect further consolidation as software firms battle in a...

Adaytum an addendum. (Techwatch).(Cognos Inc. offers $160 million for Adaytum Inc.)(Brief Article)
February 1, 2003... Although merger-and-acquisition activity was Light in 2002, the world of finance IT did see one notable deal initiated in late December. Cognos Inc. made a $160 million offer for Adaytum Inc. in a move intended to bolster its corporate...

Banking On U.S. Acquisitions: European financial institutions, their growth stymied at home, are targeting U.S. retail acquisitions. (New Deals).(Industry Overview)
February 1, 2003... IF IT WASN'T ALREADY OBVIOUS, HSBC's $15.4 billion deal for Chicago-based Household International Inc. last November erased all doubt: a new wave of transatlantic banking acquisitions is under way. Of course, it doesn't take much to make...

Bitter medicine: small companies will be forced to make tough decisions if they are to survive another round of health-care cost increases. (Spotlight Health Care).(Industry Overview)
February 1, 2003... COMPANIES ARE SINGING THE HEALTH-care blues again, thanks to another year of double-digit premium increases. This year's hike will be particularly stiff--the average company expects health-care costs to rise 14 percent, according to the...

Questions of value: is fair-value accounting the best way to measure a company? The debate heats up. (The Future of Accounting).(Robert H. Herz, chairman of Financial Accounting Standards Board)
February 1, 2003... Despite 29 years as an accountant in the United States and abroad, Robert H. Herz still considers himself an economist by training and disposition. "I got into accounting to get a job, basically," he says. Which, as casual career plans go,...

Standards bearer: the chairman of the iasc shares some caustic comments on stock options, corporate boards, and the relative merits of gaap. (The Future of Accounting).(Paul Volcker, chairman of the International Accounting Standards Committee)(Interview)
February 1, 2003... Paul volcker's second career is shaping up to be as influential as his first. Unitl recently, his claim to fame rested primarily on his tenure as Federal Reserve Board chairman from 1979 to 1987, when his tight money policy broke the back of...

The big squeeze: companies have wrung out plenty of costs. But it will take time to see the full impact. (The Ninth Annual Cost Management Survey).
February 1, 2003... It's not for lack of truing. Faced with continued economic turmoil and uncertain revenue streams, companies everywhere are scrambling to cut costs as much as they can. But because of the speed and ferocity of this particular downturn...

Tightening up.(leading cost containers in 50 industries)(Illustration)
February 1, 2003... TIGHTENING UP Leading cost containers in 50 industries, 1997-2001. ALL VALUES ARE % OF OPERATING REVENUE 2001 2001 2001 '97-'01 Company COGS SG&A CMI (1) CMI...

How the survey was done. (Methodology Review).(Cost Management Survey of North American publicly traded companies)(Brief Article)
February 1, 2003... For the ninth annual Cost Management Survey, CFO magazine again teamed with Gunn Partners, an Exult company. This year's survey sample is based on North American publicly traded companies that reported at least $750 million in revenue annually...

Will outsourcing still fly? (Special Report: Outsourcing IT).
February 1, 2003... EDS'S FINANCIAL TROUBLES HAVE RAISED QUESTIONS ABOUT OUTSOURCING DEALS, BUT THE ANSWERS ARE MOSTLY UPBEAT. Last fall, the outsourcing industry seemed poised for a tailspin. Drained by soured bets on its won stock, a drop-off in new...

Full speed ahead? (Tech Report: Erp Software).(enterprise resource planning software )
February 1, 2003... NO LONGER A JUGGERNAUT, ERP NONETHELESS SHOWS FEW SIGNS OF SLOWING DOWN. Brilliant as a descriptor of national unity, e pluribus unum isn't a bad rallying cry for IT strategy either. From the many databases and complex software systems...

The five-year itch: for CFOs, the biggest question about doing five-year plans is, why? (Planning).
February 1, 2003... NEXT TO PREPARING THE ANNUAL BUDGET, THE exercise that many CFOs dread most is creating a five-year plan. The document can take months to craft, is impossible to get right, and generally becomes obsolete within six months. Why, then, are...

On your own. (CFO Enterpreneurship).(some chief financial officers take plunge to create own businesses )
February 1, 2003... EVER FANTASIZE ABOUT ditching the corporate establishment to start your own business? Former Vital Link Business Systems CFO Steve Peterson took that leap last September, when an investor-led management reshuffling left him out of work. After...

CFOs on the move. (Grapevine).(Brief Article)
February 1, 2003... International Data Group names 35-year IDG veteran Ted Bloom to the CFO seat.... Jim Daley, CFO of Electronic Data Systems, resigns his position. EDS is the subject of an informal SEC inquiry. Robert Swan, CFO of TRW, is Daley's successor as of...

Canned! (Grapevine).(Charter Communications dismisses Kent Kallwarfs as CFO )
February 1, 2003... AS CFO SACKINGS GO, Kent Kallwarfs firing by Charter Communications was a blindside hit. For months during a grand-jury investigation of Charter's accounting practices, it was the COO, David Barford, who was under the microscope, having...

Got a good job in the citi. (Grapevine).(Citigroup names Deborah Hopkins as head of corporate strategy )(Brief Article)
February 1, 2003... Deborah Hopkins, new head of corporate strategy at Citigroup, will be a key player in the company's attempts to recover from the research-analyst debacle at its Salomon Smith Barney unit--if she sticks around. The peripatetic executive was...