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

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

Lifting the fog. (From the Editor).(changes in perception of accounting and auditing practices may stem corporate fraud)(Brief Article)(Editorial)
July 1, 2003... IN A RECENT ISSUE OF THE NEW YORKER, A CARTOON shows three shirt-sleeved employees approaching the boss, seated behind his desk. Says one employee: "Sorry, sir--we seem to have lost five million dollars in the fog of accounting." To anyone...

Readers respond to Levitt. (Letters to the Editor).(Letter to the Editor)
July 1, 2003... A HEARTY CHEER FOR THE JOURnalistic courage in printing Arthur Levitt's true assessment of the state of corporate affairs ("You Are the Guardians," May). And resounding applause to Mr. Levitt for stating the truth and for speaking up about the...

Supermodel. (Letters to the Editor).(Letter to the Editor)
July 1, 2003... LET'S NOT THROW THE BABY OUT with the bath water ("Corrective Lenses" May). Scrapping the capital asset pricing model (CAPM) over difficulties with beta is akin to scrapping an option pricing model over difficulties with volatility. Whatever...

Collection or correction? (Letters to the Editor).(Letter to the Editor)
July 1, 2003... I READ WITH GREAT INTEREST "TEN Signs Your Finance Department Is Second Rate" (Newswatch, May). I pretty much agreed with all that was said, except for point number 3, which stated, "An increase in DSO often stems from a lapse in accounts...

A case for cases. (Letters to the Editor).(Letter to the Editor)
July 1, 2003... I FOUND YOUR ARTICLE "THE CASE Against Cases" (April) useful and provocative. You may be interested to know that here at the John F. Kennedy School of Government, we do not give the public and nonprofit executives we interview the right "to...

Fear of outsourcing. (Letters to the Editor).(Letter to the Editor)
July 1, 2003... I WAS INTRIGUED BY YOUR PIECE ON cost management ("The Big Squeeze," February), but respectfully disagree with the underlying premise that companies have "wrung out" all the unnecessary costs from their expenses. Having spent many years in the...

Quality financial reporting. (Letters to the Editor).(Letter to the Editor)
July 1, 2003... A LITTLE OVER FIVE YEARS AGO, CEO magazine described my new idea of "quality financial reporting." I couldn't resist getting back in touch after reading your outstanding article about [FASB chairman] Bob Herz and market values ("Questions of...

Introduce sales & marketing to production without having to wait for the company picnic.(Advertisement)
July 1, 2003... To succeed today, your enterprise has to undergo a rapid transformation from a series of functionally driven silos connected by a common mailroom to a whole whose sum is greater, and more profitable, than its parts. It's called...

Correction.(Correction Notice)
July 1, 2003... The photo of David Odell on page 21 of the April issue of CFO should have been credited to Richard Morgenstein.

Deja vu. (News Watch).(Brief Article)
July 1, 2003... There they go again. A bill that would temporarily stop the Financial Accounting Standards Board from requiring companies to expense stock options got a hearing before a House subcommittee on June 3. Along with requiring greater disclosure of...

Bush's big gamble. (Tax).
July 1, 2003... THE BUSH ADMINISTRATION is hoping that the third-largest tax cut in U.S. history, signed into law in May, will charm the economy out of its current funk. The Jobs and Growth Tax Relief Reconciliation Act of 2003 will slice taxes by $330 billion...

Return from senders. (E-Mail).
July 1, 2003... LOOKING FOR LEADERS--Or slackers--in your finance organization? Check your E-mail. Using an algorithm originally developed to identify groups of genes with related functions, researchers at HewlettPackard Labs analyzed the addresses of...

New rules for IPO deal-makers. (Securities Markets).
July 1, 2003... Can public confidence in the process of taking a company public be restored? That is the hope of the IPO Advisory Committee, a group formed last October by the New York Stock Exchange and the National Association of Securities Dealers. The...

Your own private electric co. (Utilities).(American DG Inc. offers on-site cogenerated power for businesses)
July 1, 2003... ELECTRIC GRIDS provide power supplies and prices that may prove erratic and untrustworthy; the blackouts in California two years ago underscored the dangers of such dependency. So now companies, especially those that rely on power for their...

Nexus and the 'net. (Tax).(states urge Congress to pass Internet sales tax)
July 1, 2003... Should businesses have to collect sales taxes for states in which they have no physical presence? Riding the coattails of interest surrounding the soon-to-expire Internet Tax Non-discrimination Act, a growing number of cash-strapped states are...

Sars: a preview of things to come? (Business-Continuity Planning).(Severe Acute Respiratory Syndrome management tips)
July 1, 2003... BACK WHEN COMPANIES actually feared Y2K, Convergys Corp. put in place a business-continuity plan that designated "incident commanders" at each of its more than 40 sites to handle emergencies. Now those same commanders are tackling anew, and...

Everywhere a sign. (Forecasting).(Arizona Chemcial Co. CFO Charles Nelson shares business forecasting tips)
July 1, 2003... CHARLES NELSON keeps his eye on China's weather, but not because the CFO of Arizona Chemical Co. is planning a trip there. Rather, he's looking for signs that products that compete with his company's adhesives could flood the market. When the...

Looking for a new benchmark. (Pension Accounting).(alternatives to 30-year Treasury bonds)
July 1, 2003... So what will replace the now-defunct 30-year Treasury bond as the benchmark for measuring pension obligations? It's a question that's getting a lot of attention on Capitol Hill and from the business lobby, especially since the current...

A more perfect union? IT "governance" may enable companies to drive technology strategy, not just steer it. (Tech Watch).
July 1, 2003... LAST YEAR, when the state of California sought to remedy a massive technology headache--canceling a $95 million contract with Oracle Corp. when projected savings, bidding procedures, and even campaign contributions raised red flags--four state...

The tax man vs. hedonists: financial software. (Tech Watch).(Liquid Engines Inc. plans launch of new financial performance software based on hedonics)
July 1, 2003... A new company called Liquid Engines Inc. can't do much about death, but corporate taxes are another matter. At a time when technology start-ups are rare and technological innovation even rarer, this Sunnyvale, Calif.-based company plans to...

Total Retirement Management: time for an integrated approach. (Advertising Supplement).
July 1, 2003... Trends in the U.S. retirement environment are giving companies an opportunity to rethink how they manage retirement benefits. Fidelity employer services company is leading the way in this new and effective integrated approach. The...

Goodwill to all pieces: are companies properly valuing and assigning acquired intangibles to business units? (New Deals).
July 1, 2003... TWO YEARS AGO, the Financial Accounting Standards Board seemed to hand a rare gift to companies when it eliminated the amortization of goodwill. No longer would the premium paid for acquiring a company chip away at earnings for...

Pigging out? Special retirement plans for top executives are becoming a target for other stakeholders. (Spotlight: Compensation).(Delta Airlines)
July 1, 2003... THINK SOCIAL security sets up intergenerational conflict? Try deferred compensation for top corporate managers. At financially strapped Delta Air Lines, in fact, a much-publicized dispute over the funding of special retirement plans for highly...

How audits must change: auditors face more pressure to find fraud. (Cover Story).(Cover Story)
July 1, 2003... Auditors have been on the defensive since Arthur Andersen LLP was shut down in the wake of the Enron scandal. But by this point, with the massive accounting fraud revealed at healthcare behemoth HealthSouth Corp., all the remaining Big Four...

What price security? Companies have been slow to make costly antiterrorism investments. But their low-key moves may be making them less vulnerable.
July 1, 2003... When it comes to thwarting terrorism, only a handful of companies have had to worry about controversial big-ticket items like intrusion-detection equipment for chemical plants or antimissile defenses for airliners, which some lawmakers want to...

MVPs of MVA: measuring how much market value companies created. Text by Stephen Taub charts. Stern Stewart & co. (The 2003 MVA Rankings).(market value added)(Illustration)
July 1, 2003... Like the wicked queen in the tale of Snow White, analysts are forever trying to identify the fairest of them all-the strongest, most innovative, and fastest-growing companies. Finance executives, in turn, are constantly seeking a metric that...

Buyer be aware: overbuying and elusive ROI measures plague CRM, yet customers continue to sign on. (Special Report: CRM).(return on investment, customer relationship management)
July 1, 2003... Because it's nearly impossible to draw precise boundary lines around technology categories, companies that sell software are often free to ride the wave of whatever three-letter acronym happens to be hot at the moment. As a result, a panoply of...

Will real options take root? Why companies have been slow to adopt the valuation technique. (Capital Budgets).
July 1, 2003... THIRTY YEARS AFTER THE DEBUT OF THE FAMOUS Black-Scholes formula, and 26 years after MIT professor Stewart C. Myers coined the term, real options has yet to catch on at most companies. Recent evidence, in fact, suggests the valuation technique...

Lasting advice: what your parents taught you. (Your Move).(professional influences on CFOs)
July 1, 2003... THE CHIEF INFLUENCE ON CLAYTON DALEY'S CAREER was his dad. During evening walks as a teenager, Daley Jr. got an earful about the tribulations of the business world. His father's frustration with the snack-food distributor he worked for--namely,...

CFOs on the move. (Grapevine).(appointments, various companies)(Brief Article)
July 1, 2003... Vaughn Clarke has resigned as CFO of mortgage giant Freddie Mac amid charges of accounting fraud. Martin Bauman, EVP of finance, was elevated to CFO.... Ronald Nelson has joined Cendant Corp. as CFO, after a stint as co-COO at DreamWorks SKG....

Write on. (Grapevine).(Mandalay Resort Group president, CFO Glenn Schaeffer)(Brief Article)
July 1, 2003... GLENN SCHAEFFER, president and CFO of Mandalay Resort Group, came to corporate finance only after testing his fiction-writing skills in the MFA program at the University of Iowa's Writers' Workshop in 1976. But in a class with such budding...

Power struggles? (Grapevine).(DPL Inc. promotes Caroline E. Muhlenkamp to CFO)(Brief Article)
July 1, 2003... In an era when CFOs are fired for even the appearance of impropriety, DPL Inc. is jolting shareholders with a controversial promotion. The Ohio energy company recently named insider Caroline E. Muhlenkamp, who oversees DPL's troubled $1 billion...