Wage and Hour Violations

Posted by & filed under All Articles, Intermediate Accounting.

On December 9, 2009, Wal-Mart disclosed that it had settled a long-running wage and hour dispute in Massachusetts for $40 million. According to the Boston Globe, this was the largest wage and hour settlement in the state of Massachusetts. Interestingly, it was just a year ago at the end of 2008 that Wal-Mart reported that… Read more »

The Worst Footnote Disclosures of 2009

Posted by & filed under All Articles, Intermediate Accounting.

Every year, Michelle Leder at www.footnoted.org, takes a look at the worst footnote disclosures that companies try to bury in their routine SEC filings. As her website states, the financial footnotes are important for all users, including professional money managers and analysts, accountants, and individual investors. According to her article, there are a lot of… Read more »

Japan’s Big Accounting Move

Posted by & filed under All Articles, Financial Accounting, IFRS, Intermediate Accounting, International Accounting.

During the week of December 7, 2009, Japan’s Financial Services Agency (FSA) announced that it is moving to the formal adoption of International Accounting Standard (IAS) reporting by 2015. Up until now, the FSA has allowed Japanese companies to file consolidated statements using U.S. GAAP, but in 2015 this may end. The agency will make… Read more »

Health Reform and Payments to Doctors

Posted by & filed under All Articles, Financial Reporting and Analysis, Financial Statement Analysis.

In September 2009, Merck & Co. Inc. announced that they will be the largest drug company to publish details of payments to doctors. The prescription drug industry has met with growing criticism about its lack of disclosure regarding payments that may influence drug prescribing. As the second-largest U.S. drug company, the company vowed to begin… Read more »

The Fraudulent World of Hurricane Restoration

Posted by & filed under Accounting Principles, All Articles, Fraud Accounting.

Home Solutions of America, Inc., a hurricane restoration company, is charged by the SEC with recording millions of dollars in bogus revenues and issuing misinformation to fraudulently inflate its stock price. The scheme was compounded by transactions that occurred between Home Solutions and Fireline Restoration Inc., its largest subsidiary. All of this alleged activity happened… Read more »

Is the SEC Going to Get Tough On Compliance with Executive Pay Disclosures?

Posted by & filed under All Articles, Financial Reporting and Analysis, Financial Statement Analysis.

The SEC revised its disclosure guidelines for executive pay in late 2006. Since that time the regulator has been sending out letters to violator companies with insufficient disclosures, but has seen little compliance. Now the commission indicates that reviews will be tighter and there’s no room for a “Mister Nice Guy” approach. In fact, its… Read more »

Evidence that Internal Control Reviews Reduce Restatements

Posted by & filed under All Articles, Auditing.

According to a new study from the research firm, Audit Analytics, smaller companies that have not had auditors review their internal-control reports are more likely to have restatements than larger companies, despite their claims of effective controls. This is bad news for those small publicly traded companies who have argued that they should be exempt… Read more »

Recessionary Cost-Cutting Revisited

Posted by & filed under All Articles, Cost Accounting, Managerial Accounting.

In an effort to keep their heads above water in recessionary times, many companies ignored their traditional strategic plans. They grabbed at any transactions that were above variable costs in efforts to cover fixed costs. Moving away from value-based pricing, they relied on cost-plus pricing. Unfortunately, as this article mentions, cost-cutting can only go so… Read more »

Times are Tough for Everyone – Including the PCAOB!

Posted by & filed under All Articles, Auditing.

Just a week before the Supreme Court hears oral arguments about constitutionality of the Public Company Accounting Oversight Board (PCAOB) and why it should be dissolved, the members of the Board asked for a 16% in the overseer’s 2010 budget. This amounts to an additional $25.7 million to hire 60 more employees, for international inspections,… Read more »