Corporate Board articles from September 2002

Corporate Board archives from September 2002

Finally, a time for audit reform.
September 1, 2002... The close relationship between a "crisis" and an "opportunity" is highly apparent from the wave of scandals now sweeping corporate America, says former Federal Reserve Chairman Paul Volcker. This moment of public, investor, and government...

Second thoughts on board independence.
September 1, 2002... Corporate scandals have stirred widespread outrage and finger pointing, but everyone agrees on one response--corporate directors need to become more independent of management. James Westphal presents some solid research to suggest that director...

Protect your deals with M&A insurance.(mergers and acquisitions)
September 1, 2002... Despite economic uncertainty, mergers and acquisitions continue to advance. However, the risks involved, from hidden liabilities, to tax treatment, to valuation surprises, make M&A increasingly dangerous. Remember though, many risks can be...

What if stock options are expensed?
September 1, 2002... Perhaps the most divisive of corporate reforms now being debated is the push to treat stock options as an accounting expense. There are persuasive voices on both sides of the issue, one camp saying that expensing options is just common sense,...

Risk management and the audit committee.
September 1, 2002... Where does the board's audit committee fit in when it comes to assessing financial risks facing the company? Right in the middle of things, if the SEC has its way. New proposals from the Commission would give the audit committee a key role in...

IFAC [International Federation of Accountants] releases study on levels of assurance. .
September 1, 2002... As the demand for assurance services continues to increase, accountants worldwide face the dual challenges of determining the appropriate level of assurance needed and the best method for reporting on these engagements. A study by the...

FASB proposes treatment of Special Purpose Entities. (Recent Notes & Events: Audit).(Financial Accounting Standards Board)(Brief Article)
September 1, 2002... The Financial Accounting Standards Board (FASB) has approved an exposure draft that establishes accounting guidance for consolidation of special-purpose entities (SPEs). The proposed Interpretation, Consolidation of Certain Special-Purpose...

The NYSE releases its recommendations to help restore investor confidence. (Recent Notes & Events: Disclosure).
September 1, 2002... The New York Stock Exchange in June released recommendations from its Corporate Accountability and Listing Standards Committee, which proposes new standards and changes in corporate governance and disclosure practices of NYSE companies. Based...

Nasdaq approves rule changes to modify its corporate governance standards. (Recent Notes & Events: Disclosure).
September 1, 2002... The Nasdaq Stock Market in June announced modifications to several important corporate governance standards. The rule changes will: * Require shareholder approval for stock option plans that include executive officers or directors. *...

Auditors give clean bill of health to 94 percent of companies with accounting problems. (Recent Notes & Events: Strategy & Finance).
September 1, 2002... Auditing firms almost universally failed to warn of accounting irregularities, according to a study issued by Weiss Ratings, Inc. The study determined that auditing firms gave a clean bill of health to 93.9 percent of the public companies that...

Revenue issues are the leading cause of financial restatements. (Recent Notes & Events: Strategy & Finance).(Brief Article)
September 1, 2002... A study by Huron Consulting Group finds that errors in revenue recognition are the leading cause for all financial restatements filed with the U.S. Securities and Exchange Commission over the past five years. Of the approximately 990...

Ten years ago. (Retrospectives).
September 1, 2002... Here is a sad but telling fact: In the Congress of the United States there are only three Certified Public Accountants. Most of those in Congress are lawyers and, in my experience, lawyers use numbers the way a drunk uses a lamppost--for...

Five years ago. (Retrospectives).
September 1, 2002... There are many boards that are models of effective governance--that do the job they are intended to do. Unlike the failures, which attract widespread public attention, good boards function quietly and efficiently, serving their...

Books received.(Book Review)
September 1, 2002... Leading on the Edge of Chaos. By Emmett C. Murphy and Mark A. Murphy. Prentice Hall Press. $26. An anecdote-rich review of how to effectively lead businesses in turbulent times and markets. Some of the points made are less than innovative...

Articles & Speeches. (Spoken & Written).
September 1, 2002... At their best, audit committees are like a Little League coach--friendly but strict and unrelenting. They can help improve any company's financial reporting system by keeping after both the chief financial officer and the outside audit team to...

Recent board elections. (Directors' Register).
September 1, 2002... Acuity Brands, Inc. has elected to its board Earnest W. Deavenport, former chairman and chief executive officer of Eastman Chemical Company, and Julia B. North, former chairman and chief executive officer of VSI Enterprises, Inc. Air...

Senator Carl Levin: legislating governance reform. (Conversations).(Interview)
September 1, 2002... This year's governance scandals have been so fundamental as to set the agenda on Washington's Capital Hill, and one of the most power agenda setters has been Senator Carl Levin. Levin, a four-term Michigan Democrat, chairs the Senate Armed...