By making false statements and omissions to external auditors, which resulted in the improper recognition of $3.6 million in revenue related to a contract with a large public-sector client, ex-WageWorks CEO Joseph Jackson and former CEO Colm Callan had to pay their way out of the SEC’s doghouse. According to the SEC: In March 2016, […]
Some of you grinding away in public accounting might have “champagne wishes and caviar dreams” of being a CFO one day. So, let’s see how well that job pays these days, courtesy of three accounting and finance salary guides that have been released in the past six months. Randstad Randstad organizes executive titles in its […]
As far back as I can remember, we have been discussing talent shortages within the accounting industry. My former esteemed colleague Colin (RIP bro) once referred to it as Groundhog Day, in that it felt like every other morning we woke up and wrote a story about it. I even put a considerable amount of […]
When my daughters, ages 10 and 8, are asked what they want to be when they grow up, my oldest says a professional basketball player, and my youngest wants to be a chef. Both good choices. No kid in their right mind would say accountant, journalist, or chief financial officer. As children, Bill Brundage had […]
Okay, some big news. Going Concern’s been at this for the better part of a decade, and one of our big goals for awhile now has been to produce more content for our readers who leave public accounting for industry. Which, let’s face it, most of you are going to do. You hear about us […]
Don’t you hate it when you start a new job and then, seemingly out of nowhere, another company comes along to buy your employer, likely eliminating the need for your position? And don’t you hate it when that all goes down and you pull in a few million for your trouble? That’s what Whole Foods […]
Have you considered changing your career track or expanding your skills profile? Please enjoy this sponsored content from Georgetown University about their Masters of Finance program. If you’re an ambitious accounting professional, you might have the title of CFO on your career bucket list. Chief financial officers are quickly becoming the most indispensable and sought […]
Here's a Wall Street Journal story about Rolls-Royce's future CFO, Stephen Daintith. He's joining the company in 2017 from Daily Mail & General Trust PLC, the publisher, so you might be wondering, "Why does a manufacturer want some dude who's been working at a publisher?" Good question! Especially considering that the company's accounting is a […]
I like this CFO article on finance chiefs who prefer startups. Had I not bailed on my accounting and finance career for the glamorous world of writing on the internet, I think I would've pursued this route. The reasons for preferring smaller companies offered by the CFOs in the article are what you would expect: […]
An embezzling CFO, a tax-evading princess, and a money-laundering Vatican accountant walk into a bar. Oh, sorry, I meant a court room, to answer for their respective white collar crimes. This may sound like another GC witticism -– we think we’re hilarious over here -– but this time, I didn’t make anything up. As it turns out, these individuals are an actual bunch of white collar scofflaws. True story.
A Robert Half survey of U.S. CFOs found that the “greatest challenge” for finance personnel “when working with other departments,” is the interaction “with a variety of personalities.” Probably explains why so many accountants end up marrying other accountants. [CGMA]
At the Wall Street Journal's CFO Network event yesterday, a nameless CFO asked SEC Division of Corporate Finance, Keith Higgins, “What gives with the PCAOB? Do they really mean to be slow and not transparent?” Although Mr. Higgins acknowledged that, "We've heard that concern," the correct answer is, "Yep! That's how audit firm lobbyists designed it!" […]
Ex-Dewey & LeBoeuf CFO Joel Sanders is on trial along with ex-Chairman Steven Davis and former executive director Stephen DiCarmineis for cooking the books at their law firm that went bankrupt in 2012. Opening statements in the case were made yesterday but today, Mr. Sanders's attorney Andrew Frisch had his turn and he can explain […]
Accounting Principals Senior Vice President Jodi Chavez told Accounting Today that middle management is making a comeback within some finance departments. Man, CFOs can be impatient. [AT]
CFO published a couple of Q&As with Michael Barton, the CFO of global law firm Goodwin Procter this week and they provide an insider perspective on professional services firms that most of us never hear about. Prior to joining Goodwin, Barton was the CFO of Rothstein Kass for about two years; he turned down an offer […]
Back in August of 2013, the PCAOB floated a few new auditing standards that would bring major changes to audit reports: The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, which would supersede portions of AU sec. 508, Reports on Audited Financial Statements, and The Auditor's Responsibilities Regarding […]
[Jay] Rasulo was asked if he’d rather have five minutes with Federal Reserve Board chairman Janet Yellen or a five-year-old kid who’d just gone to a Disney park for the first time. “That’s an easy one — way too easy,” he said. “I’ve had a million of those conversations with kids and they’re all great. […]
It's really helpful that we have all these survey results to count on otherwise we'd have no idea what the heck is going on. Here's the scoop from CGMA Mag: Job candidates appear to have brushed up on their résumé skills, but they’re still struggling to come off as polished in a job interview. That’s […]
Colin already got to this L&L Energy LOLery in ANR but in case you missed it, here's just a teaser from the SEC: The SEC’s Enforcement Division alleges that L&L Energy Inc., which has all of its operations in China and Taiwan, created the false appearance that the company had a professional management team in […]
Cornell Batie, CFO at Mack Avenue Records, as he appeared in Hour Detroit's 2013 Best Dressed List:
“If the managers, the C-level and board have good demonstrative behavior, everybody down the line will mimic that,” said Yigal Rechtman, senior manager of forensics and litigation at Grassi & Co., an accounting and business consulting service, at a New York State Society of CPAs’ forensic accounting conference yesterday. “People need to operate by example,” […]
In an unexpected revelation, an Accountemps survey found that CFOs plan to offer more money and better benefits to attract professionals with "in-demand skills." Of the 2,100 finance chiefs surveyed, 46% are improving benefits and 45% are boosting compensation. In an earlier survey, Accountemps found that CFOs are on the lookout for professionals with "[g]eneral […]
Jean-Marc Huet, the company's chief financial officer, said: "Our business is very large in scale and reach, with operations in over a hundred countries. "The challenge that this poses for our auditors has been successfully met by PricewaterhouseCoopers over many years and we have always been impressed with the rigour and quality of their audit. "However, given […]
Andy Bishop is the chief financial officer of Hallador Energy, a publicly traded coal company. Like many CFOs, he did a little bit of time at a large accounting firm, so he knows a thing or two about auditing and pays attention to the haps in that space. So when he heard that the PCAOB […]
An Ontario judged dismissed a case against three former Nortel Networks Corp. executives who were charged with accounting fraud at what was once North America’s largest telephone-equipment maker before its collapse in 2009. Judge Frank Marrocco said the burden of proof was not met in fraud charges against former Chief Executive Officer Frank Dunn, former Chief […]
With apologies to Crazy Eddie's Sam Antar, Andrew Fastow might be the most notorious CFO in the history of financial reporting fiction. Mr. Fastow, as you're probably aware, was the Chief off-balance sheet-SPE web-builder at Enron. In other words, he's one of the guys you should probably be thanking for your jobs. Fastow was released […]
Last week was not a good one for the imaginary farm/mafia/faux-Scrabble™ merchants at Zynga. After their much ballyhooed CFO Dave Wehner jumped ship for Facebook, its Treasurer, Mike Gupta, decided that he'd found greener pastures at Twitter: Zynga Inc. (ZNGA) Treasurer Mike Gupta is departing to take a similar role at Twitter Inc. as the largest […]
Take it away, Robert Half! In the latest survey, 5% of executives said they plan to add personnel and 6% said they expect job cuts in accounting and finance. In other words, everyone's just sitting around like boobs. What else is going on? Finding the right people is hard! Finding qualified talent remains a problem […]
On Wednesday, a bunch of people stood in stupidly long lines to eat unhealthy food to demonstrate appreciation for a company whose president expressed a personal opinion about gay marriage. Some idiots took this personal opinion and extrapolated it to the employees of a company, some of whom, no doubt disagree with Chick-fil-A president Dan […]
Before she became CFO of AES (and now Gannett), Victoria Harker had the distinct pleasure of mopping the floor at WorldCom after the company imploded in 2002 and, yeah, it was pretty awful: What has been your worst day on the job?The WorldCom meltdown was likely the worst day on the job. I knew only how little […]
Yep! And he allegedly stole about $380,000 from the band. King County prosecutors say that Ricky Goodrich swiped the funds from 2007 to 2010, spending it on "lavish family vacations, spa treatments, life insurance and pricey California wines." Luckily for PJ, an accountant discovered the missing money and finally the jig was up. The Seattle […]
As CFO, I’m in a unique position within the organization, at the absolute center of the universe. The only other executive besides me that has that same presence at the center is the CEO. ~ Bruce Bensanko, CFO OfficeMax [E&Y]
According to an intrepid survey by Accountemps that investigated what stresses out CFOs, balancing work and life responsibilities was listed as the biggest drag. This beat out office politics, keeping up with accounting and finance regulations, higher workloads, and a "challenging commute." Maybe all these men and women wouldn't be so stressed if more of them […]
As many of you continue striving towards your career goals to occupy the CFO chair, we thought you might like to know a little information on how well that dream job pays. According to a recent Grant Thornton/Financial Executives Research Foundation survey, public company CFOs saw their average base salaries climb from to $286,500 to from […]
Mark Oleksik, CFO of Talos Partners has enthusiams: On April 30, Oleksik was in a business meeting with the CEO of Talos Partners, and a member of the board of directors at the company’s office at 175 South Main St., according to court records. Oleksik didn’t like the way the conversation was going between him and […]
Yesterday morning we linked to a little story about Francesca Holdings Corp. CFO Gene Morphis getting fired for "improperly communicat[ing] company information through social media." The Journal picked it up later in the day with details on some of this social media activity that we thought we'd share with you Board meeting.Good numbers=Happy Board. — […]
Last week we learned that the CFO/comptroller/treasurer for the city of Dixon, Illinois, Rita Crundwell, was arrested for allegedly stealing $30,236,503 and 51¢. She also stands accused, in the court of public opinion, of having awful taste in automobiles, as federal agents seized a Ford Thunderbird upon her arrest. Regardless, these allegations came as a surprise […]
On Tuesday, we jumped on the bandwagon with a few others that have suggested Groupon CFO Jason Child find something else to do with his time. You see, things haven't panned out so well for the company as far as financial reporting goes. Their original S-1 filing got a hearty laugh from everyone and then, […]
Last Friday, Groupon announced that some of their numbers weren't exactly up to snuff. This didn't come as much of a surprise to the likes of Grumpy Old Accountants and others (read: everyone) who weren't exactly sold on metrics such as Adjusted Consolidated Segment Operating Income ("Adjusted COSI"). There have been questions about Groupon's financials […]
Henri Steenkamp will not be going down for this: MF Global Holdings Ltd. […] Chief Financial Officer Henri Steenkamp plans to tell a House panel he had "limited knowledge" of money transfers during the securities firm's final days that led to an estimated $1.6 billion shortfall in customer funds. Mr. Steenkamp was "taken up with other […]
The Department of Justice trumpeted the guilty plea of Delton de Armas, the former CFO of Taylor, Bean, & Whitaker Mortgage Corp. today, marking the 8th conviction in the TBW fraud case. Assistant Attorney General Lanny Breuer seemed pleased in the DOJ press release: “As TBW’s chief financial officer, Mr. de Armas concealed a massive […]
Jeff Lasher brushes that dirt right off: It remains true that there is a subculture of Crocs haters, who are put off by the shoes’ colorful appearance and minimalist construction. For example, there’s a Facebook page called, “I don’t care how comfortable Crocs are you look like a dumbass.” It has two million “likes.” Offers Lasher, […]
Our favorite accounting fusspots, Tony Catanach and Ed Ketz have responded to the response of Groupon's CFO Jason Child who refuted the Grumpies' claims that the company's 4th quarter numbers weren't worth the paper they were printed on. Staying true to form, Tony and Ed pick apart Child's arguments against their arguments (without actually stating […]
James Li and David Chow used to run a shop called Syntax-Brillian Company as the CEO and Chief Procurement Officer respectively. They sold high-def, LCD TVs under the Olevia brand in China. Problem was, they didn’t really sell TVs under the Olevia brand in China. According to the SEC:
[F]rom at least June 2006 through April 2008, Li and Chow engaged in a complex scheme to overstate Syntax’s financial results by publicly reporting significant sales of LCD televisions in China, when in fact the vast majority of these sales never occurred. Li and Chow initially concealed the scheme through the use of fake shipping and sales documents.
Of course, they couldn’t do it alone. They needed a CFO. A CFO who would backdate things when asked and ignore obvious signs of bogus revenue. That man was Wayne Pratt who, from the sounds of it, wasn’t too concerned about ANYTHING:
The SEC alleges that Wayne Pratt, Syntax’s Chief Financial Officer, ignored red flags of improper revenue recognition and participated in preparing backdated documentation that was provided to Syntax’s auditors to support fictitious fiscal 2006 year-end sales. Pratt also ignored indications of impaired assets, agency sales, and potential collectability issues.
So, budding criminals, get on the look out for a guy/gal who is accustomed to shrugging their shoulders and responding “Meh. Whatever.” to your demands. Should work out well for you.
Especially if you’re the jealous type.
According to accounting firm BDO, middle market CFOs typically earn 55% to 60% of their CEO’s pay, but in 2010 they earned just 40%, on average.
In a study of 600 public companies with annual revenues ranging from $25 million to $1 billion, BDO found that CFOs earned an average of $927,743 in 2010, a 19% increase from 2010, while CEOs earned an average of $2.34 million, representing a 25% increase from the previous year.
Apple Insider reported yesterday that when Apple CFO Peter Oppenheimer was asked about Google’s acquisition of Motorola he reportedly said, “$12.5 billion is a lot of money.” Now, I don’t know anyone that would say, “$12.5 billion is pocket change,” or “I piss on $12.5 billion.” Not even the most ostentatious Russian oligarch would be so bold to laugh in the face of that sum of money.
Having said that, it appears the Wall St. Journal seems to think that Oppenheimer’s statement are akin to fighting words, as illustrated by the headline: “Apple CFO Snipes at Google’s Motorola Bid” which included the following:
Peter Oppenheimer, Apple’s CFO, took a shot at Google when asked about the company’s $12.5 billion bid for Motorola Mobility Holdings during a conference call with investors hosted by Gleacher & Company. Oppenheimer said that companies should invent their own technology rather than buy it from the outside, adding that “$12.5 billion is a lot of money,” according to a report from Apple Insider.
First of all, to look at Peter Oppenheimer you wouldn’t think he’s capable of “sniping.” Secondly, “snipe” is defined as “To make malicious, underhand remarks or attacks” according to Wiktionary. For example, if Oppenheimer had said something like, “Larry Page couldn’t get laid in a monkey whorehouse with a bag of bananas” or “Androids are the Yugos of the smartphone world,” those would qualify as snipes. They are malicious, underhanded and are attacks.
Conversely, “$12.5 billion is a lot of money” is not a snipe. It is a statement of a fact-ish. It is a lot of money. You could argue that it is Oppenheimer’s opinion but as posited above, very few would argue that it isn’t a lot of money. Is Google overpaying for Motorola? That’s the question Michael Hickins ultimately asks in his article but somehow the hook for this was that Apple’s CFO brings the same level of snark as the CEO.
Goldman Sachs Group Inc. […] Chief Financial Officer David Viniar said the investment bank could layoff 1,000 employees globally as part of $1.2 billion in cost cuts.
During a conference call with analysts, Viniar said the potential headcount reduction is “as we sit here now and, of course, things can change,” adding that such layoffs would “come over the course of this year.” Viniar said the cuts could be “some senior, some junior people,” but “it’s really more dollar focused than head focused.” [MW]
As far as embezzlements go, Gary Williams did all right for himself. As the CFO of Marian Gardens Tree Farm, he allegedly walked away with $15 million or so before he was convicted of tax evasion and mail fraud related to said allegations. He was pretty good at disposing of the money, as the Orlando Sentinel reports, “[he] spent $1,800 at John Craig Clothiers in Winter Park, treated himself to nearly $9,000 in Prada luggage and leather goods, and indulged in $15,000 in services at an exclusive resort in Montego Bay, Jamaica.” Obviously this leaves $14 mil or so to throw around and it doesn’t appear that this was a problem:
[Prosecutor Mark] Simpson said Gary Williams, who had blamed cocaine addiction for influencing his behavior, drew a six-figure salary from his employers from 2002 through 2007 while he was embezzling millions, destroying business records and encumbering farm equipment for secret loans for personal use.
He made large withdrawals from company accounts, telling bank officials that it was for “employee bonuses.”
Simpson said Williams, who divorced his wife of 35 years and became estranged from his two children, lavished younger men with jewelry, luxury automobiles, Caribbean vacations and gifts that could not be recovered. “This was not just theft,” Simpson said. “This was financial rape.”
Drugs! Phony bonuses! Hot men in hot cars in hot locations probably having hot sex! This is the stuff that straight-to-DVD movies are made of! But unfortunately the victims in this case aren’t doing as well as they have seen a dime of the money that disappeared:
The Hillary family, which owns the farm and employed Williams for two decades, has yet to receive any restitution from its portly former chief financial officer. According to court documents and interviews with prosecutors, Williams blew hundreds of thousands of dollars at lavish resorts in San Francisco, Rio de Janeiro, the Bahamas, Jamaica and the West Indies. He flew friends on chartered jets and helicopters; dined at five-star restaurants; hired a private chef; and partied at marquee nightclubs.
He explained frequent work absences by falsely claiming to have pancreatic cancer. His employers say they thought he was undergoing experimental treatments.
Williams did lose 100 pounds — but from gastric-bypass surgery, a farm executive said.
For whatever reason, the Sentinel felt it necessary to drag Williams’ big-bonededness into this story as it isn’t clear whether or not some of the loot was used to fund the surgery. At the very least, Williams, who is serving 12 years, can hopefully keep his figure in prison.
Jet-setting CFO gets dual terms for embezzling $15M at tree farm [Orlando Sentinel]
Time was, a CFO functioned as the main consiliere to the CEO. Finance issues? The CFO is on it. Accounting irregularities? Done. Taking the flak from analysts on the earnings calls? It’s not all glitz and glam, now is it? Nowadays, after some not so solid decisions were made in the recent past, another member of the C-suite has successfully curried favor with the boss. Someone who would ordinarily be fetching the CFO’s 3 pm pick-me-up. That is, the Chief Risk Officer:
Citigroup Inc. (C), American International Group Inc. (AIG) and UBS AG (UBSN) are among other companies raising the profile of risk executives. The derivatives meltdown that sparked the 2008 Lehman Brothers Holdings Inc. collapse and an 18-month recession catapulted the role from obscurity to contention for future chief executive officers. “The person sitting in the risk chair now is reporting to the CEO so the caliber has to be higher,” said Neil Hindle, who runs the CRO search practice at Egon Zehnder International in New York. “There has been a real increase in power over the last two years.” That’s evident in the compensation, which can reach $10 million at large financial institutions now, compared with $500,000 as recently as 2001, Hindle said. Five years ago, a CRO typically reported no higher than the CFO, he said.
Granted, if you’re someone like Dave Viniar, you’ve got very little to worry about since you’re irreplaceable. But if you’re slightly lower on the intellectual scale, you best watch for that CRO buzzing right by you on the meeting that you weren’t invited to. Next thing you know, CFOs will be picking up their shirts and dry cleaning.
Chief Risk Officer Rises to $10 Million Job [Bloomberg]
Last month we told you about Patrice Lataillade, the former Marc Jacobs CFO who was fired, he claims, because he complained about all the porn floating around the office, mandatory pole dances forced upon employees and various other things. Lataillade has sued the company saying that after he complained about the rampant lewdness, he was later told that his services were no longer needed.
The company disputes this, saying that Lataillade was actually doing a little double-entry magic for about $20 million or so in order to earn himself a nicer bonus. Lataillade has now pulled a Chinese stunt of sorts, claiming that Deloitte said everything was hunky dory and that should convince anyone that doubts his CFO prowess:
Lataillade and his lawyers said that the company, which fired Lataillade last September, never had any trouble with his monitoring of its finances in his long tenure at Marc Jacobs International. His work was checked and rechecked not only by accountants for LVMH, the French luxury conglomerate that owns Marc Jacobs International, but also by the company’s accounting firm Deloitte and Touch [sic]. Lataillade claims he never heard a complaint about his performance, and that he was really fired for speaking out against sexual discrimination at work.
If W. Anderson Bishop wanted to sound like a person who is refusing to adopt a different system of measurement because A) it was developed outside the United States B) doing things the easy way is dumb or C) he’s a crusty old fart, he has succeed admirably.
“We didn’t join the metric system when everybody else did,” says W. Anderson Bishop, [Hallador Energy Co.’s] chief financial officer. U.S. accounting rules are “the gold standard, and why would we want to lower our standards just to make the rest of the world happy?”
Susan McFarland will be the third CFO at FanMa since the company entered conservatorship nearly three years ago.
In case you lost count, the U.S. taxpayer has thrown $86 billion at the company but Suz is still “incredibly excited to join the Fannie Mae team and to help lead the company into the future.” Mmmmhmmm. [WSJ]
Speaking at The Wall Street Journal’s annual CFO Network meeting in Washington D.C., Schapiro readily admitted that there isn’t a big push from either multinationals or shareholders to move to international financial reporting standards.
In response to a question from Bank of America’s CFO, Chuck Noski, Schapiro said, “We have not heard from a lot of shareholders that we have to go (to IFRS). We’ve heard the contrary… ‘Why would we take this step toward international accounting standards?’” [CFOJ]
Marc Jacobs International claims that its former COO and CFO, Patrice Lataillade, got a little fancy with the company’s numbers in order to give himself “hundreds of thousands of dollars” in bonuses. The Post reports that court documents state that audits revealed “false and inflated entries” for about $20 million or so. The company says Lataillade was fired from his job for all this financial hocus pocus,
This all came out because Lataillade sued the company alleging that he was fired for entirely different reason altogether. Apparently MJI co-founder and President Robert Duffy likes to have a little fun around the office that wasn’t appreciated by everyone, namely Mr. Lataillade.
“Examples of Duffy’s conduct which created a hostile work environment include his displaying gay pornography in the office and requiring employees to look at it; his production and dissemination of a book which includes photos of MJI staff in sexual positions or nude; his requirement that an MJI store employee perform a pole dance for him,” the suit said.
Accounting/finance types can be get a little stuffy, that’s a given but seeing co-workers in various compromising positions and/or working a pole at the boss’s behest could make for some awkward looks/conversations later. Not that it excuses running through some bullshit journal entries for your own personal financial benefit but I suppose there may be a legitimate beef in there.
Ron Fink at CFO Journal reports that CFOs that are breaking out in a rash due to auditor rotation anxiety might be having a knee-jerk hypochondriacal reaction.
You see, the company that the media loves to figuratively fellate, Apple, opted to put their audit business out to bid every five years and not only have costs gone down, “it has reported no problems with its financial results as a result of the change.” So now Apple is also more progressive and transparent with their corporate governance processes than your company. And you don’t have the iPad. [CFO Journal]
Reuters reports that David Viniar told an investor conference in California that God’s Shop “take[s] all of the criticisms quite seriously” and “We never at least intentionally take reputational risk.”
Timothy Mask worked at Flint Hydrostatics for 25 years calling the company “a true blessing in my life.” Not an extraordinary statement, considering many people have strong feelings for the companies they serve but it’s possible that Mask felt that Flint was such a “blessing” because he spent the last twelve years allegedly “stealing” $1.2 million.
Things started unraveling when Tim up and resigned on May 5th, leaving his boss a Dear John letter of sorts:
“Effective immediately, I resign from Flint Hydrostatics, Inc.,” said the letter Timothy W. Mask left on the president’s desk.
“Flint has been a true blessing in my life,” wrote Mask, 46, of Corinth, Miss. “I will always cherish friendships that I have built and my fellow employees. It has just come time for me to move on to new endeavors.”
You see, Kevin Fienup, Flint’s director of business development and secretary, as well as the son of the company’s president, started looking into Mask’s old endeavors and found a number of checks that were made out to Mask and the company’s janitor. Allegedly, Mask would have his assistant cut checks to the janitor (or Mask if the janitor wasn’t available) who would cash them and then place the cash in a locked drawer in Mask’s office. According to the Memphis Commercial Appeal, Fineup “left his office door open and had documents on his desk about the irregular transactions the night before Mask resigned.” One might conclude that Tim saw said documents, figured the jig was up and sat down to write his heartfelt letter.
As for his “new endeavors” it appears that Mask may have been trying to make a break for it, as the Appeal also reports that he had a “two-week vacation to Hawaii” scheduled to start yesterday, had recently sent mail to a passport processing center and had started transferring $200,000 from his 401k. But instead he got arrested which probably kinda threw a wrench into his plans.
Virgin Galactic is racing to be the first company to launch a commercial space flight and since these sort of things usually need someone that’s good with numbers, the company is CFO shopping:
Virgin Galactic, a leader in the race to launch commercial space flights, is looking to hire the first CFO in a brand-new industry sector. “It’s a historic thing,” says George Whitesides, the former NASA chief of staff who is the company’s chief executive. “The executives here are thinking back to the early days of aviation, when companies like American Airlines were getting started. For the right person, it would be tremendously exciting.”
Naturally, this particular job isn’t for just any ol’ finance and accounting sage. You need experience in aerospace, raising both private and public money, and a little exuberance might be nice:
The right person will have strong experience in raising funds from private-equity investors and public offerings, ideally some prior experience or relationship with the aerospace industry, and a hint of merriment.
Virgin Galactic wants a CFO who “fits the Virgin brand,” which means someone who is hard-working but also dynamic and able to integrate work and fun, à la company founder and committed thrill-seeker Richard Branson. Yes, this will not only be the first CFO in a new sector, but quite possibly the first one to rocket into space.
So for you buttoned-up types, just keep moving along. Virgin will be needing for someone who won’t be ashamed by wearing adult diapers and projectile vomiting in front of the billionaire boss.
ConocoPhillips CFO Jeff Sheets is warning the U.S. Senate that repealing tax credits for oil companies will make it more difficult for his company and their U.S. counterparts to compete internationally and “higher taxes will mean that oil companies will have less money to reinvest, which could lead to a decline in the supply of hydrocarbons.”
Conoco’s CEO Jim Mulva, who will be testifying before the Senate Finance Committee tomorrow, agreed saying, that these plans are “discriminatory” and “If there is less investment, there is going to be less production and less production means higher prices for consumers.” So, Max Bauchus et al., go right ahead with your plan if you can sleep at night knowing that you’re nothing but a bunch of prejudiced jerks that want to hurt the American people. [WSJ, Reuters]
USANA Health Sciences, Inc. […] today announced that Fred W. Cooper, President and Chief Operating Officer; Jeffrey A. Yates, Chief Financial Officer; and Mark H. Wilson, Executive Vice President of Sales have each stepped down from their respective offices to pursue other business endeavors. […] Continuing on the realignment of the executive team, [CEO Dave] Wentz said “I also want to offer Fred, Jeff, and Mark our sincerest appreciation for their years of service to USANA. We wish them well in their future endeavors.”
Of course it could be that these guys had a foursome at Pebble Beach they weren’t about to reschedule OR they knew there was going to be openings at Novartis. Other theories are welcome. PwC’s Salt Lake City office serves as USANA’s auditor so if you’ve got the scoop or heard something interesting, email us.
We are extremely cautious about pricing. We recognize the consumer environment is still very fragile. We have had a great success over the past year, and in fact 18 months, in building our customer traffic almost against the odds, again despite what is a very difficult consumer environment still. [BBW]
At the company’s shareholders meeting Keith Sherin said “This is the best earnings outlook we’ve had in the last 10 years,” which indicates that tax planning might not be everything. [Reuters]
John Carney points out that Bank of America, JP Morgan and Wells Fargo have all appointed new CFOs recently that are not accountants. It harkens him back to a time when another bank made a similar change.
Of course Carney is talking Lehman Brothers and Erin Callan. Oh and Ian Lowitt too. Both served as Lehman’s CFO prior to the bankruptcy. Funny thing – Francine McKenna wrote a post about the problematic situation of having a CFO with no accounting experience three months before Lehman went bankrupt. But BofA, JPM and Wells aren’t Lehman are they? GAAP is really NBD, right? [CNBC]
Sound good to everyone?
Chief financial officers at large North American companies polled by Deloitte LLP said it would take a 20% surge in revenue before they felt comfortable adding to their payrolls.
The quarterly survey released Thursday found that nearly half of respondents would seriously consider adding employees if revenues rose 20%, but few would be moved by a 5% increase. A 10% bump in revenue would only be a major hiring consideration for 11% of CFOs.
Worse yet, perhaps, actual growth isn’t expected to reach such heights: respondents estimate top line growth at North American companies will be just 8.2% this year. (This is, however, a rosier picture than the fourth quarter when respondents forecast 6.5% for the coming year.)
And don’t bother trying to bait them with tax reform, revisions to the healthcare reform bill or payroll tax incentives because they’re all non-starters.
General Motors Co’s new chief financial officer told analysts the automaker remains committed to the low-debt strategy and discipline on vehicle pricing emphasized by his predecessor. In a dinner meeting with analysts on Thursday, Dan Ammann said GM faced limited impact from the Japan crisis, was increasing its auto credit capabilities, and was reducing its exposure to incentives in the U.S. market, according to research notes from Barclays Capital and J.P. Morgan. “Dan emphasized fundamental continuity around GM’s financial strategy and philosophy with his predecessor,” Barclays analyst Brian Johnson said. “Dan plans to continue the low-debt strategy of his predecessor.” [Reuters]
When is this officially a pattern? Or is it simply a trend? Qiao Xing CFO Jiang Aijun resigned today but have no fear investors! – the company has appointed a financial controller and is on the hunt for a new CFO.
Plus they’re planning to file their fiscal 2010 results a month ahead of schedule. The company’s stock was down 12% for the week prior to today’s announcement and unfortunately, all this fresh news doesn’t seem to have calmed anyone down. [Dow Jones, Earlier, Earlier]
CFOs admit that if technology is implemented correctly it can be pretty damn swell but over half of those surveyed said the biggest barrier to improving the finance department is “out of date and inflexible” IT systems. Also, nearly three-quarters of respondents said that these systems are also to blame for failing to reach objectives. Not good. How can we possibly solve this problem?
According to KPMG’s Steve Lis, “By adopting a unified approach to technology, CFOs and CIOs can transform their organizations to become more proactive, innovative and flexible.” That’s a pretty interesting thought but another possibility not addressed in KPMG’s press release was: spending money. I know, I know. Pretty crazy concept so it’s probably best to just keep things the way they are. [KPMG]
It could be that Stephen Park really is pursuing another professional opportunity but most people (and by that I mean investors) don’t believe that story.
Duoyuan Global Water Inc. (DGW) said Chief Financial Officer Stephen C. Park would resign from the China-based water treatment equipment supplier to pursue another professional opportunity. Park will remain with the company until the completion of a third party review or until June 30, whichever is earlier. Duoyuan said it is in the process of selecting an international search firm to assist in appointing a successor. The company’s American depositary shares slid 7.3% to $3.70 in after-hours trading.
Duoyuan Global Water CFO To Resign [Dow Jones]
Office Depot CFO Mike Newman can’t handle – CAN’T HANDLE – the bad news handed down by the IRS:
“I’m sick about it,” Newman said of the mistake the company and its advisors made in thinking Office Depot could use tax credits of $80 million last year and $63 million this year, calling the mistake his responsibility. Office Depot and its tax advisors believed the company was eligible to use prior losses to get tax credits under the American Recovery and Reinvestment Act of 2009, but the IRS told the company that other tax rules superseded the ones under which Office Depot was using to determine eligibility.
Of course we’d love to know who this “advisor” is that Newman is referring to. Since Deloitte earned over $589k in tax fees for fiscal year ’10 you could conclude that he’s referring to D. It’s certainly possible that it’s someone else so we invite you to come up with some theories.
Warren Buffett’s Berkshire Hathaway Inc. (BRKA, BRKB) took an accounting charge to reflect the declines of three stocks in its investment portfolio after regulators asked about the company’s policy for writing down investment losses. But Berkshire Chief Financial Officer Marc Hamburg complained that the current stock prices don’t reflect the worth of the shares, and predicted in a letter to the U.S. Securities and Exchange Commission that “each security’s market price will grow to at least the intrinsic value that existed” when Berkshire made the investments. [Dow Jones]
Asked about their current use of cloud-computing services, a majority of senior finance executives either have no plans to pursue it in the short term, or are doing so very tentatively. Nearly a third admit that they aren’t even sure what “cloud computing” really means. Yet, when asked how cloud computing might affect their company’s approach to IT longer term, almost half say they believe it will enable a significant restructuring of their entire IT strategy. [CFO]
Jacky Lam’s resignation was effective on Sunday but his letter to the CCME Board was dated Tuesday, making us wonder if he slept on it for 48 hours just be sure he was doing the right thing.
March 15, 2011
The Board of Directors
China MediaExpress Holdings, Inc.
22/F Wuyi Building
33 Dongjie Street
As I informed the Board on Sunday, I have resigned as a Director and as the Chief Financial Officer of China MediaExpress Holding, Inc. (the “Company”), effective as of March 13, 2011. I have resigned because of information that I have learned in the past few days, and because the Chairman and CEO did not respond to these matters in a manner that I believed to be appropriate.
Thank you for your kind attention and I wish the Company success in the future.
Of course the “information that I have learned” could have been Roddy Boyd’s post from last Friday or the video of the sleeping staff posted Sunday or something else entirely. As far as the CEO’s inaction – should he have filled one of the broom closets with Red Bull? Maybe kept more of something else that apparently keeps people awake but otherwise uninterested in other humans? We’re not exactly sure on either of these questions but we’d love to hear theories.
In the wake of Roddy Boyd’s epic post from March 11th, China MediaExpress announced some bad news today – Deloitte resigned as their auditor effective Friday and as a result the company’s CFO, Jacky Lam, quit yesterday:
China’s largest television advertising operator on inter-city and airport express buses, today announced that the Company’s registered independent accounting firm, Deloitte Touche Tohmatsu (“DTT”) has formally resigned its engagement by the Company as of March 11, 2011. Following the receipt of the DTT resignation letter, on March 13, 2011, the Company received notice of the resignation of Jacky Lam from his position as Chief Financial Officer and director of the Company, effective immediately. As a result, CME will delay its fourth quarter earnings release and will not file its Form 10-K for the fiscal year ended December 31, 2010 by March 16, 2011, its original due date.
As you might have already guessed, Deloitte got spooked after all the fraud talk and they also came to the conclusion that management couldn’t be trusted (even if he did say great things about them):
The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT’s letter also stated that these issues may have adverse implications for the prior periods’ financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods’ financial reports are reliable. Upon receipt of the formal DTT resignation letter, the Company requested the suspension of trading in the Company’s common stock on the NASDAQ Global Market to permit full disclosure of DTT’s resignation to be disseminated to the public.
So the company now needs a new auditor and a new CFO. Of course you’ll have to work around forensic accountants and a bunch of lawyers that will be helping the company through this little hiccough but otherwise, this should be a snap.
It boils down to this: if something has less than eight appendages, it’s cool;
greater than eight or more is to be avoided.
“Our business is really pretty simple,” Sloan, 50, said in an interview last week at the bank’s San Francisco headquarters. “When you look at the deal and its structure looks like an octopus or a spider, just don’t do it. That kept us out of a lot of things.”
As the National Football League and the players union continue contract talks, Walt Disney Co. Chief Financial Officer Jay Rasulo was pressed Tuesday to answer questions about how a potential strike or lockout would impact sports juggernaut ESPN. Rasulo expressed confidence that Disney’s lucrative sports network, which has the rights to “Monday Night Football,” could weather the loss of games, telling the audience at Credit Suisse’s Global Media and Communications Convergence Conference that “we’re not that concerned.” [LAT]
We’re not very good at math or statistics so perhaps our numbers are off a bit, but how do 89% of CFOs expect their firms to grow in the second quarter of 2011 while 85% also do not expect to add any new full-time accounting and finance professionals? It doesn’t take a mathlete to figure out what that means for those of you lucky enough to work for these CFOs, so you better get to slacking off now before they come down to your cube and kindly inform you you’ll need to go ahead and come in on Saturday.
Most (85 percent) chief financial officers (CFOs) interviewed for the Robert Half Financial Hiring Index said they expect to make no changes to their current staffing levels during the second quarter of 2011. Seven percent anticipate adding full-time accounting and finance professionals, while another 7 percent plan personnel reductions. The net 0 percent projection is down two points from the first-quarter 2011 forecast.
As businesses navigate the current economy, they remain optimistic about the outlook for their own companies. Eighty-nine percent of CFOs expressed confidence in their firms’ growth potential in the second quarter, up one point from the first-quarter survey.
Looking to relocate? Try the Pacific or Mid-Atlantic regions. Twelve percent of CFOs plan to add full-time accounting and finance professionals and 5 percent foresee cutbacks, a net 7 percent increase.
“Many Pacific-region companies, particularly those in the manufacturing and technology sectors, are rebuilding their teams to meet renewed demand for their products and services,” said Max Messmer, chairman and CEO of Robert Half International. “In particular, firms are looking for skilled financial analysts to help them control costs and prepare for potential growth.”
In the end, a net 0 hiring projection is a lot better than previous recent surveys which were in the negative however we’d be remiss if we did not point out that the last time the survey showed a net 0 projection was for 3rd quarter 2008. And we all know how that particular period of time went.
What does this mean? New grads who are still waiting around for jobs can keep waiting, and more seasoned professionals who have been out of work for quite some time should probably just give up. Thanks for the great news, RH!
WTF WFT CFO Andrew Becnel needs a hug:
Weatherford International Ltd. Chief Financial Officer Andrew Becnel called a $500 million accounting error disclosed by the oilfield-service company late Tuesday an “embarrassment,” the damage of which is “impossible to quantify.”
But you know who’s taking this whole snafu in stride? CEO Bernard Duroc-Danner that’s who! BDD told investors on a conference call today that nothing is fucked and that this will all be yesterday’s news in no time:
Chief Executive Bernard Duroc-Danner said there is no risk of a U.S. government investigation or of any tax penalties or fines related to what he characterized as a mistake in calculating the tax rates on dividends moved from one subsidiary to another.
Geez. Give the SEC some credit wouldja? Just because they missed a few things here and there doesn’t mean they won’t ask any questions about your material weaknesses.
This was sent to me by my 69-year-old landlord who is spending his winter in Florida and we humbly present it to you now for your reading pleasure during this lovely busy season.
At the end of the tax year, the IRS office sent an inspector to audit the books of a local hospital. While the IRS agent was checking the books he turned to the CFO of the hospital and said, “I notice you buy a lot of bandages. What do you do with the end of the roll when there’s too little left to be of any use?”
“Good question,” noted the CFO. “We save them up and send them back to the bandage company and every now and then they send us a free box of bandages.”
“Oh,” replied the auditor, somewhat disappointed that his unusual question had a practical answer. But on he went, in his obnoxious way. “What about all these plaster purchases? What do you do with what’s left over after setting a cast on a patient?”
“Ah, yes,” replied the CFO, realizing that the inspector was trying to trap him with an unanswerable question. “We save it and send it back to the manufacturer, and every now and then they send us a free package of plaster.”
“I see,” replied the auditor, thinking hard about how he could fluster the know-it-all CFO. “Well,” he went on, “What do you do with all the leftover foreskins from the circumcisions you perform?”
“Here, too, we do not waste,” answered the CFO. “What we do is save all the little foreskins and send them to the IRS office, and about once a year they send us a complete dick.”
As we’ve discussed, the sudden departure of Wells Fargo’s now-former CFO, Howard Atkins, has been a bit of a mystery. The bank stated that Howie quit for “personal reasons” but Chris Whalen, for one, wasn’t buying that story and stated that it was an “internal dispute” at the Stagecoach Shop and “public behavior suggests significant problems in the bank’s internal systems and controls as defined by the Sarbanes-Oxley law.”
Then John Carney got all heresay yesterday, reporting:
Others say that the departure stems from a heated argument between Atkins and the CEO of Wells Fargo, John Stumpf. Still others say that there could be even more personal reasons for Atkins leaving.
This is pretty fun because this “heated argument” could have been over something awesome like Atkins’s using Stumpf’s private commode without permission or a spurious challenge in their weekly Scrabble® match. Whatever the reasons for Atkins’s departure, all this speculation got the gang over at The Street wondering that maybe – just maybe – KPMG’s risk management team had soiled themselves over the whole situation and asked the audit team to start drawing up their resignation papers.
KPMG said Friday that it remains Wells Fargo’s […] external auditor, though the firm wouldn’t comment on recent criticism that Wells’ financial disclosures aren’t up to snuff. KPMG spokesman George Ledwith confirmed that the Big Four accounting firm is still working with Wells Fargo, which plans to file its 10-K annual report by the end of the month. Howard Atkins, who had been CFO of Wells Fargo for nearly a decade, resigned unexpectedly last week and won’t be signing off on that report. His replacement, Tim Sloan, will do so instead. “Yes, KPMG LLP is the external auditor for Wells Fargo & Company,” said Ledwith.
So what prompted this brief line of questioning is, in itself, a mystery. KPMG resigning as the auditor of Wells Fargo is about as likely as John Veihmeyer throwing all his copies of Rudy into an incinerator. But then again, maybe The Street knows something we don’t. Was/is/will there be any doubt that KPMG will remain the auditor of Wells Fargo? Rampant speculation and nightmare scenarios are welcome. And if you’re in the know, email us.
Last week, we told you about Wells Fargo’s announcement that their CFO gave himself an early birthday gift by throwing a retirement party for himself. As previously mentioned, Howard Atkins’s departure was a little mysterio and no one had any theories (crackpot or otherwise) on the Atkins’s march in. That all changed yesterday when Christopher Whalen, an analyst at Institutional Risk Analytics issued a report that stated that he, for one, wasn’t buying the “personal issues” story put out by the bank:
“The departure of Atkins, we are led to believe, was not merely the result of personal issues, but reflects an ongoing internal dispute within [Wells Fargo’s] executive suite regarding the bank’s disclosure,” he writes.
Whalen then goes on to argue that Wells Fargo’s “public behavior suggests significant problems in the bank’s internal systems and controls as defined by the Sarbanes-Oxley law. We further understand that some officials of [Wells Fargo], increasingly uncomfortable with the bank’s aggressive public disclosure regime, have reached out to regulators because of concerns regarding accounting issues.”
The Stagecoach Gang, for their part, is sticking to their story citing the “personal reasons” and their spokesman dismissed Whalen’s report with “pfffft” and a wave of the hand, saying, “I haven’t heard anything like that. It’s speculation. I’m not going to comment on it.”
Wells Fargo CFO Exit Tied to Disclosure: Analyst [The Street]
Howard Atkins turns 60 this week but is calling it quits, citing “personal reasons”:
Wells Fargo & Company announced today that Timothy J. Sloan, the company’s current chief administrative officer and a senior executive vice president, has been named its new chief financial officer, effectively immediately. He succeeds Howard I. Atkins, who turns 60 this week and is retiring as CFO and senior EVP for personal reasons. Atkins’ retirement is unrelated to the company’s financial condition or financial reporting.
The retirement is effective in August but Atkins is taking “an unpaid leave of absence he will begin immediately,” according to reports. Maybe this is typical and we’re sure he’s not starving but that still kinda sucks, especially since we don’t see any cake – neither day of birth nor of the retirement variety – in his future. Theories about motives are welcome, especially from any Klynveldians on the audit team or others familiar with the sitch.
Frankly, it’s bad for business:
“The political turmoil in North Africa, especially Egypt, is of course hurting our business,” said Vasant Prabhu, vice chairman and chief financial officer of the hotelier during a post-earnings conference call Thursday. He noted Starwood has 16 hotels across North Africa that generated between $10 million to $12 million in fees last year.
“We expect that our fees will be hit in North Africa,” he added. “It is too early to tell how we will be impacted, but this is clearly a risk that needs to be closely monitored.”
Welcome to the two-out–of-three-groundhogs-can’t-be-wrong edition of Accounting Career Emergencies. In today’s edition, a CPA with nine years experience as a sole practitioner has CFO aspirations but isn’t having any luck landing interviews. Does her near-decade of running her own shop hurt her desire to rejoin the corporate ranks?