CFO, The Magazine for Senior Financial Executives articles from May 2002

CFO, The Magazine for Senior Financial Executives archives from May 2002

What's a reputation worth? (From the Editor).(Brief Article)
May 1, 2002... JUNIOR HIGH SCHOOL TEACHES US THE HARSH LESSON that reputations are hard-earned, and, once lost, never regained. In adult life, the rules only seem more relaxed. Arthur Andersen has discovered this in the most painful way possible, losing its...

Conflict of interest. (Letters to the Editor).(Brief Article)
May 1, 2002... AUDIT CLIENT: WHAT AN OXYMORON! ("What Must Be Done," April) Years ago, I worked as a consultant at a Big Eight accounting firm. A few doors down, a young audit partner spent half the day preparing the annual audit bill for his major client. He...

Still buggy after all these years. (Letters to the Editor).(Brief Article)
May 1, 2002... IN "SHOW ME THE SAVINGS" (April), writer Andrew Osterland mentions that acceptance of EBPP (electronic bill presentment and payment) by consumers has fallen short of expectations. Here are some reasons why: Many banks charge a minimum for...

Out of temptation's way. (Letters to the Editor).(Brief Article)
May 1, 2002... IN YOUR APRIL ISSUE, THERE WAS A brief article on fraud and the use of invisible ink ("Bad Sign," Newswatch). The article stated that eyeing bank statements is a standard internal-control procedure. This internal control will detect fraud only...

Depreciation blues. (Letters to the Editor).(Brief Article)
May 1, 2002... REGARDING THE ISSUES RAISED in the sidebar "Appreciating Depreciation" ("Federal offenses," March): state and municipal finance officers are all going through the "mind-set" change. Thanks to a new standard for us, we now have to depreciate...

Wanted: Visionaries. (Letters to the Editor).(Brief Article)
May 1, 2002... I ENJOYED YOUR RECENT article on desktop PCs ("Deskbound for Glory," March), particularly the illuminating look at how desktop portals are being used to in-crease employee efficiency and boost productivity. As the article suggests,...

The importance of focus. (Letters to the Editor).(Brief Article)
May 1, 2002... I READ SCOTT LEIBS'S ARTICLE "Core Values" (February) with great interest. While ERP applications are important to all companies, what's designed for a telecommunications provider may not be right for an electronics manufacturer. Leibs hit it...

Correction.(Brief Article)(Statistical Data Included)
May 1, 2002... In last month's Buyer's Guide to full service 401(k) providers, American Express Asset Management reported incorrect figures regarding the number of new 401(k) plans it converted last year and its total number of full-service 401(k) plans in...

Material whirl. (Newswatch).(Brief Article)
May 1, 2002... Despite the 1999 Securities and Exchange Commission guidance on materiality (SAB No. 99), companies continue to run afoul of the SEC disclosure rule by using an arbitrary threshold--usually 5 percent of revenues--as the basis for hiding...

Coming clean. (Crime and Punishment).(Brief Article)
May 1, 2002... ARTHUR ANDERSEN LLP'S punishment will hardly matter if it is found guilty in its obstruction of justice trial, scheduled to begin this month. A guilty verdict would deny Andersen, already hemorrhaging clients, the right to audit public...

Particulate matters. (Asbestos Litigation).(Brief Article)
May 1, 2002... A COMMON JOKE among moviegoers in the 1920s was to insist that "asbestos"--the word printed in large letters on the theaters' fireproof curtains--was Latin for "welcome." For many companies today, however, asbestos just means curtains. ...

Capitalizing on the chains that bind. (Auditor Independence).(Brief Article)
May 1, 2002... Talk about turning lemons into lemonade. As regulators and shareholders probe Arthur Andersen LLP for suspect profits gained from violating Securities and Exchange Commission auditor independence rules, there's at least one accounting services...

Corporate Bonds.(Brief Article)
May 1, 2002... CORPORATE BONDS can yield strong returns, despite a rise in bankruptcies, if yield spreads narrow as they did in 1991, says Moody's.

Who's keeping the Dogs in? (SEC Shakeup).(Brief Article)
May 1, 2002... THE RECENT REASSIGNMENT of a top Securities and Exchange Commission official has some SEC insiders wondering if the commission is putting a muzzle on its own members. And it seems one lawmaker may have similar questions about the abrupt...

Corporate Giants.(Brief Article)
May 1, 2002... CORPORATE GIANTS-including Intel and Microsoft-are rallying to fight legislation that would require stock options to be expansed.

A matter of trust. (Stock Transfer Fraud).(MindArrow Systems Inc., RTT Transfers Inc.; securities transfer fraud investigation)(Brief Article)
May 1, 2002... CFOs WILL HAVE TO MONITOR the activities of stock transfer agents more closely if a recent case of fraud proves to be a harbinger. Transfer agents normally issue and store paper certificates that represent the stock holdings of investors. But...

Turning the screws. (Credit Squeeze).(banks, short-term credit; survey)(Brief Article)
May 1, 2002... Here's empirical evidence to support what every financial executive already knows but won't discuss openly: banks pressure short-term credit customers to buy other products and services in exchange for a loan commitment or attractive terms. And...

Financial institution.
May 1, 2002... A NEW ANTI-MONEY-LAUNDERING law expands the "financial institution" definition to include investment firms, says Cooley & Godward.

Follow the crumbs. (Earnings Management).(earnings management; research)(Brief Article)
May 1, 2002... THE "COOKIE JAR" RESERVES approach to earnings management may crumble if new research penned by a triad of accounting professors gets the attention of regulators. The study, conducted by Mark W. Nelson and John A. Elliott of Cornell's Johnson...

Hard assets for hard times. (Real Options).(corporations; tangible assets)(Brief Article)
May 1, 2002... As the appeal of asset-light balance sheets fades in the wake of accounting scams, many executives are heading for the cover of tangible assets. "Hard assets are really all that matters when valuing a company," argues Stephen Wright, an...

A new stimulus law.
May 1, 2002... A NEW STIMULUS LAW encourages investment in equipment by increasing the proportion of an asset that can be immediately expensed.

Class struggle: E-learning technology may be poised to go mainstream. (Techwatch).(University of Toyota, web-based training and development)
May 1, 2002... LIKE COLLEGE DEANS EVERYWHERE, Rick Taniguchi knows a thing or two about the high cost of education and the need to balance student expectations against administrative realities. Having lobbied for a $4 million expansion to his "campus," his...

Brain gain. (Software).(Mindjet L.L.C.; computer software technology)(Brief Article)
May 1, 2002... "WHAT A WASTE it is to lose one's mind," Dan Quayle once famously intoned. He meant to say, "A mind is a terrible thing to waste," and in botching the quote actually proved his point. But could he have communicated his idea more effectively?...

Taking things personally: Northrop's bid for TRW is dubbed "opportunistic." But if one company knows another very well, is that so bad? (New Deals).(Northrop Grumman's acquisition bid for TRW Inc.)(Brief Article)
May 1, 2002... FEW TAKEOVER BATTLES focus on personalities as much as Northrop Grumman's bid for fellow defense contractor TRW. The $5.9 billion stock offer was occasioned by the sudden departure of TRW CEO David Cote in February-to take on a bigger job...

Microsofter or not? As Microsoft's growth slows down, CFO John Connors tries to keep its profits up. (Cover Story).(chief financial officer)(Statistical Data Included)
May 1, 2002... WHEN JOHN CONNORS BECAME CHIEF financial office of Microsoft Corp. in January 2000, the job was still a pretty sweet gig: sweep up the mountains of revenue generated by Windows and Office software, report fabulous earnings growth every quarter,...

Full disclosure: Edmund Jenkins reflects on his leadership of FASB through difficult times. (A CFO Interview).
May 1, 2002... Whoever follows Edmund Jenkins as Financial Accounting Standards Board chairman faces a daunting task. With some blame for Enron's failure being laid at FASB's door, calls are coming for a severe restructuring of the board--or even its...

A lesson before buying; University executive-education programs tackle one of the business world's toughest jobs: Teaching M&A.("Mergers and Acquisitions" class)
May 1, 2002... You feel the question taking shape in the opening lecture of Robert Holthausen's "Mergers and Acquisitions" class. As the Wharton professor recounts the problems with deal-making today, ticking off two dozen reasons why mergers fail--from...

Disconnect: The problem with wireless; As the "third generation" of wireless technology approaches, why isn't there more excitement? (Tech Report Wireless).
May 1, 2002... WILL THIS BE the technological Summer of Love? The wireless division of telecom company Sprint certainly hopes so. The company has unleashed a massive marketing campaign designed to educate and excite consumers and businesspeople about the...

Shopping a la carte: Increasingly, companies wonder if they should put all their 401(k) eggs in one basket. (CFO Buyer's Guide 401(k) Providers Part 2).
May 1, 2002... TO BUNDLE OR NOT TO BUNDLE? That's a question more companies are asking themselves these days. Is it better to tap a full-service provider for the many administrative, investment, and other aspects of a defined contribution plan, or choose...

On the same page: U.S. and international standard setters are coordinating their efforts to craft a common language for business. (Accounting).
May 1, 2002... COMPARING INTERNATIONAL ACCOUNTING STAN-dards (IAS) and U.S. generally accepted accounting principles (GAALP) brings to mind the old lyric about tomatoes and to-mah-toes. On paper they look almost the same, thanks to diligent efforts by...

Reining in SPEs: New rules for special-purpose entities may result in bigger corporate balance sheets. (Finance).
May 1, 2002... GOT SPECIAL-PURPOSE ENTITIES? GET COVER. The off-balance-sheet structures that Enron 1 executives apparently used to deceive share holders and enrich themselves have become a scarlet letter in the capital markets. Just ask Adelphia...

By the book.(Bob Williamson, chief financial officer of vFinance Inc.; book author)(Brief Article)
May 1, 2002... When vFinance Inc. CFO Bob Williamson fiddles with the books, it's a good thing. That's because when he's not working at the investment and brokerage firm, he's a novelist with one murder mystery, The Seriously Pink V, published last August,...

Grapevine.(Brief Article)
May 1, 2002... TESTING, 1, 2, 3 . . . Michael Saltzman must have passed inspection: he's the new CFO at Underwriters Laboratories Inc. Saltzman replaced Larry Newman, who retired from the Northbrook, Ill.-based product tester. * Motorola Inc. called...

Yellow light special. (Turnaround Teamwork).(Kmart Corp.'s new CFO, Albert Koch faces major challenges)(Brief Article)
May 1, 2002... Kmart Corp.'s new CFO, Albert Koch, will need to proceed with caution. The U-turn specialist from turnaround firm Jay Alix & Associates has a bumpy road ahead of him. In March, Koch became the company's fourth CFO in a year--just a few days...