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

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

After the scandal.(Featured In October)
October 1, 2003... Stuffed channels. Phony revenues. Unauthorized bonuses. Secret payoffs. Sell-dealing. Cash-flow sleight-of-hand. The litany of corporate accounting scandals is wide-ranging, even ingenious--and efforts to repair the damage must be even more so....

Overblown.(from the editor)(Brief Article)(Editorial)
October 1, 2003... THE CANONIZATION OF ENRON'S SHERRON WATKINS has fostered some serious misconceptions about what blowing the whistle means in the wake of the Sarbanes-Oxley Act. Employees believe that now they can report financial fraud without fear of...

Quit whining.(Letter to the Editor)
October 1, 2003... AFTER READING YOUR SEPTEMBER article regarding the Sarbanes-Oxley Act of 2002 ("Sticker Shock"), my only comment is: what an incredible bunch of whiners. Somebody needs to remind these financial executives that this is what they should have...

Can nontraditional CFOs succeed?(Letter to the Editor)
October 1, 2003... WHILE IT MIGHT BE EFFICACIOUS to think outside the box when considering a CFO candidate who does not have a traditional accounting and finance background (Your Move, "Roads Less Traveled," August), I think it's important to note that this...

Disagreement over the options debate.(Letter to the Editor)
October 1, 2003... YOUR AUGUST COVER STORY ("WHO Rules Accounting?") presented a one-sided and misleading account of the current debate over expensing employee stock options. The reporter failed to mention that expensing could destroy many broad-based...

Corrections.(letters to the editor)(Correction Notice)
October 1, 2003... The 2003 Working Capital Survey (September) included 20 companies whose days working capital numbers were marked with the symbols (l) or (d), the meaning of which we failed to explain. They indicate an improvement (l) or a deterioration (d) for...

The big, bad big four.(Auditing)(consolidation resulting in higher fees)
October 1, 2003... AUDIT-FIRM CONSOLIDATION and--in the case of Arthur Andersen--extinction will result in higher fees, along with less competition, says a recent study by the General Accounting Office. But midsize companies, according to some finance executives,...

Spin-off insurance?(newswatch)(Brief Article)
October 1, 2003... In early August, the Internal Revenue Service officially stopped issuing private letter rulings (PLRs) for tax-free transactions. It's a dramatic shift, The yearlong pilot program, which could become permanent, may lead companies to scuttle any...

Time flies.(Air Travel)(buying prepaid flight time)(Brief Article)
October 1, 2003... TIRED OF COMMERCIAL FLIGHTS but unwilling to shell out big bucks for fractional jet ownership? There's an alternative: Marquis Jet Partners Inc., Sentient, Delta AirElite, and others let members pay a flat rate for a set number of flight hours...

Those mysterious SEC investigations.(Regulation)(securities violations)
October 1, 2003... This summer, companies ranging from MetLife Inc. and the American Stock Exchange to video-game makers Activision Inc. and THQ Inc. announced they were part of "formal" investigations by the Securities and Exchange Commission into possible...

Got juice?(Energy)(backup power )
October 1, 2003... IN THE WAKE OF THE BLACKOUT that paralyzed customers in eight states and Ontario this past August, businesses that spent a few days in the dark--and even some that were spared--are rethinking their need for backup power systems. Some CFOs,...

Why deregulation failed.(Utilities)
October 1, 2003... Relatively few CFOs consider electricity a major expense, but all of them care when the lights go out. So none should be pleased with deregulation, which has thus far failed to produce lower prices for many commercial customers, yet has led to...

Little hope for shareholders.(Polaroid Update)
October 1, 2003... IT WASN'T THE NEWS Polaroid Corp. shareholders were hoping for. A court-appointed examiner assigned to look into Polaroid's financials has alleged that the now-bankrupt company manipulated its accounting to make it look more financially sound...

IRS faulted for lax pursuit of tax offenders.(Tax)
October 1, 2003... The Internal Revenue Service, known for aggressively hunting down tax offenders, is taking heat for its laggard pursuit of perpetrators of a common corporate tax-avoidance scheme. Although a number of offenders have been identified, the IRS has...

Into their own hands.(Corporate Governance)(shareholder activism)
October 1, 2003... ONE COMPANY'S SHAREHOLDERS are taking a novel approach to dealing with directors who, they allege, bilked the company out of millions of dollars. They are demanding it back. Shareholders of Ullico Inc., a union-owned company that provides...

Cash balance unsteadied.(Pension Plans)
October 1, 2003... Two court decisions could have a devastating impact on a class of pensions that, according to Federal Reserve economists, made up 11 percent of all defined benefit plans in 1998 and contained 30 percent of their assets. A decision by...

Services pending: could vendor wrangling delay--or even kill--Web services?(techwatch)
October 1, 2003... IN JULY, executives at Hewlett-Packard Co. announced that the company had submitted its framework for the development of Web-services management. HP submitted its proposal to the Organization for the Advancement of Structured Information...

The last bastion of hope.(Middle-market IT)
October 1, 2003... WHILE RESEARCH FIRMS continue to trumpet a rebound in big-ticket tech purchases, the latest offerings from tech vendors seem to paint a slightly different picture. Recently, IBM rolled out a new suite of products and services developed and...

Deal breakers: buyers are giving themselves more outs by expanding material adverse change clauses.(new deals)
October 1, 2003... MERGERS AND ACQUISITIONS MAY BE COMING BACK in style, but contracts signed in the past 12 months suggest it is very much a buyer's market. Among the common features of M&A contracts is a material adverse change (MAC) clause, which gives the...

Above board: regulators and shareholders want compensation committees to explain why CEOs make so much.(Spotlight: compensation)
October 1, 2003... ANY DOUBTS that compensation committees would come under fire were erased this past September, when New York Stock Exchange chairman Dick Grasso was forced to resign over his controversial deferred compensation package of close to $140 million....

Whistle-blower woes: many companies think the whistle-blower provisions of Sarbanes-Oxley will spark nuisance suits by disgruntled employees. The truth is far more complex.(Cover Story)
October 1, 2003... WHEN MATTHEW WHITLEY WAS LAID OFF FROM HIS job last March as a finance manager at The Coca-Cola Co., along with about 1,000 other employees, he didn't take it lying down. Two months later, Whitley approached his former employer seeking a...

The right price: Ford has an ambitious revenue-management strategy, but can it save the company?(Company Profile)
October 1, 2003... Ninety years after Henry Ford decreed that all Model T's would be painted black, most automobile buyers still wait months for a custom order. Today, Ford Motor Co. is working hard to shorten that wait. The goal is not just to make customers...

The China syndrome: U.S. companies are beginning to outsource technology R&D to India and China. Will a meltdown in tech jobs follow?
October 1, 2003... MIKE SOPHIE has good reason to smile these days. In a year that's been rough for almost every business sector, the CFO and vice president of finance at Alameda, California-based UTStarcom is expecting an 86 percent jump in revenue, from $982...

Proceed with caution: economist Philip Arestis warns that recent signs of revival are largely illusory.(A CFO Interview)(Interview)
October 1, 2003... AFTER A NUMBER OF FALSE STARTS, the U.S. economy seemed to be gathering steam tiffs summer. Consumer confidence was up. Home sales remained robust. Business conditions were improving. And while joblessness continued to spread, the unemployment...

Longer paper routes: banks have gone to greater lengths to keep assets off their balance sheets. That means higher prices for commercial paper.(banking)(restructuring conduit assets)
October 1, 2003... ONCE UPON A TIME, EVERYONE IN THE ASSET-BACKED commercial paper (ABCP) market was happy. Companies got access to cheap financing and bankers reaped lucrative fee income. The recipe? A company sells trade receivables or other high-quality...

The CEO-CFO dialogue: strategy to synergy: partnership between corporate leaders: an event presented jointly by Economist Conference and CFO.(Economist Conferences)(Calendar)
October 1, 2003... An event presented jointly by Economist Conferences and CFO November 5th 2003 * The Metropolitan Club * New York City Trust, value, growth: three qualities desired above all by the leaders of corporate America. Listing them is easy;...

The attorney's dilemma: will the SEC's new and proposed rules to turn lawyers into whistle-blowers strain relations between finance executives and corporate counsel?(law)
October 1, 2003... THESE DAYS, EXECUTIVES HAVE plenty of reasons to seek out the sage advice of corporate counsel. But whether or not they will feel comfortable enough to actually ask for that advice is another matter. Indeed, some experts insist that the...

Board-ing school.(Director Training)
October 1, 2003... WHEN IT CAME TO SELECTING A TRAINING PROGRAM FOR corporate directors last February, Phoebe Wood moved right to the head of the class. The executive vice president and CFO of Louisville-based Brown-Forman Corp chose a course called...

Nike USA.(CFOs On The Move)(Brief Article)
October 1, 2003... Tom Amdorfer has been named VP and CFO of Nike USA. He was formerly controller of the global footwear unit of Nike Inc.

Linda Huber was appointed CFO of U.S. Trust Corp.(CFOs On The Move)(Brief Article)
October 1, 2003... Linda Huber was appointed CFO of U.S. Trust Corp. The former managing director of Freeman & Co. succeeds Evelyn Dilsaver, who is now SVP of marketing, asset-management products and services, at Charles Schwab & Co.

Boston Beer Co.(CFOs On The Move)(Brief Article)
October 1, 2003... Boston Beer Co., distributor of Samuel Adams beer, has tapped William Urich as CFO. The former CFO of Acirca, an organic food and beverage company, succeeds Richard Lindsay, who resigned in March.

When the Saints come marching in.(grapevine)
October 1, 2003... AS THEY ATTEMPT to rise from the ashes of their recent fraud debacles, several companies are lining up squeaky-clean new board members in hopes of regaining investors' trust. For example, Dennis Beresford, former Financial Accounting...

Safety in numbers.(grapevine)(Brief Article)
October 1, 2003... Never a company to do things o a small scale, Microsoft Corp. recently finished putting together a roster of nine new CFOs--one for each of its seven newly formed business units and two at the corporate level. Uber-CFO John Connors explained in...

Assets & liabilities: a mismatch not made in heaven.
October 1, 2003... If interest rates and stock market returns remain low--and the question is how low--there's a big problem looming for the global economy. Without resorting to melodrama, this apparently prosaic issue could represent one of the biggest policy...