At Long Last, XBRL Is Set to Lift Off

Mandatory XBRL use moved a step closer to reality with XBRL U.S. Inc.’s handover Friday to the SEC of the final drafts of the computer labels that make financial data interactive and increase its transparency. But that action was just a prelude to the anticipated imminent release of a proposed timetable for implementation of eXtensible Business Reporting Language by U.S. public companies. SEC officials have been hinting that a proposal requiring U.S. public companies to use XBRL could be introduced as soon as next Wednesday (May 14), when the Securities and Exchange Commission next meets to consider the future of XBRL. In a speech at a meeting of the American Bar Association last month, SEC general counsel Brian Cartwright predicted that just such a proposal would be released “in the near future.”

Implementation will likely be phased in over two years. Just last week, SEC chief accountant Conrad Hewitt noted that an advisory group suggested that companies attach computer codes to their financial tables, or "tag" the tables and financial statement footnotes in the first year. In the second year, companies could provide detailed tagging of the footnotes. Another advisory committee has recommended that the 500 largest U.S. public companies tackle XBRL the first year, followed by others after initial results are reviewed.

The SEC has encouraged voluntary XBRL filing since April 2005. And earlier this year, the SEC Advisory Committee on Improvements to Financial Reporting recommended to SEC Chairman Christopher Cox that all U.S. public companies adopt XBRL, following a phased-in transition based on company size and reviews of the program’s progress.

Worldwide acceptance continues apace. On Tuesday, the day before an international XBRL conference was scheduled to begin in the Netherlands, XBRL International Inc. announced the formation of XBRL Europe, a Brussels-based, nonprofit organization designed to coordinate existing XBRL efforts in Europe and help foster additional programs. “Several voluntary and mandatory XBRL filing programs are already under way in the EU and yielding positive results,” says Conor O'Kelly, acting chair of the new XBRL Europe executive committee. “XBRL Europe will help coordinate those efforts, nurture others within the region and coordinate additional adoption efforts that demonstrate the value and power of XBRL.”

Article found in Financial Information Technology, Financial Risk Management, Governance & Accounting

SOX Costs Drop. Overall Audit Costs Rise

The costs of complying with Section 404 of the Sarbanes-Oxley Act (SOX) dropped a dramatic 41% in 2007 from the previous year as confidence in the accuracy and reliability of financial reports grew, according to a Financial Executives International (FEI) survey. Part of that drop was attributed to a 5.4% decline in spending for 404 attestation by outside auditors, FEI said, citing responses from 185 companies, most of which have market caps over $75 million. "As companies continue to find efficiencies in complying with Section 404 and make compliance part of a routine practice, we have seen a continued decline in costs," says Michael Cangemi, FEI president and CEO.

That's not so surprising. What is surprising, however, is that the drop in 404 auditor costs was more than offset by a 5% increase in the average hourly rate (about $210) charged by outside auditors for all audit jobs in 2007, not just SOX-related charges. As a result, overall spending for integrated financial reporting and controls climbed 1.8% to an average $3.6 million for larger companies, FEI said.

Moreover, not all financial executives are prepared to admit SOX is a good thing. While confidence is clearly increasing, sentiment remains split, according to Cangemi. The survey indicates that a little more than half (50.3%) the respondents believe financial reports are more accurate, up from 46% a year earlier; 56% believe that financial reports are more reliable, up from 48% last year--but only 43.6% believe 404 compliance has helped prevent fraud, higher than the 34% reported last year but still less than half the respondents. Almost 70%, however, agree that SOX has accomplished what it set out to do: Increase investor confidence in financial reports, compared with 60% a year earlier.

Article found in Tools, Financial Information Technology, Governance & Accounting

Careers

Qwest Communications International Inc., the $13.8 billion voice, video and data services provider based in Denver, announced that John W. Richardson resigned after one year as executive vice president and CFO. Richardson, 63, joined Qwest five years ago as senior vice president, controller and chief accounting officer. Before joining Qwest, Richardson spent 35 years at The Goodyear Tire & Rubber Co., where he last served as vice president of finance for its North American tire division.

Campbell Soup Co., the $7.9 billion, soup and snack company based in Camden, N.J., announced that Robert A. Schiffner will retire as senior vice president and CFO on Aug. 1, or earlier if his successor is appointed. Schiffner, 58, will stay with the company through January 2009 to facilitate a smooth transition. Schiffner joined the company in February 2001 after 26 years at Nabisco, where most recently he was senior vice president and treasurer of Nabisco Holdings Corp.

E*Trade Financial Corp., the $3.6 billion, New York-based online brokerage, announced after heavy mortgage losses that CFO Robert J. Simmons will resign by May 9. Matthew J. Audette, 33, will become acting CFO while continuing as executive vice president and controller. Simmons, 45, joined the company in April 2001 and became CFO in January 2004. Previously, he held positions in corporate finance at public companies including Bank of America, Oracle Corp. and Iomega Corp.

Kaiser Aluminum Corp., the $1.5 billion producer of fabricated aluminum products based in Foothill Ranch, Calif., promoted Daniel J. Rinkenberger to senior vice president and CFO from vice president and treasurer. Rinkenberger, 49, succeeded Joseph P. Bellino, 58, who resigned as executive vice president and CFO to pursue other interests. Rinkenberger joined the company in 1991, becoming assistant treasurer in 1995, vice president of economic analysis and planning in 2002 and vice president and treasurer in 2005.

Wolverine World Wide Inc., the $1.2 billion shoemaker based in Rockford, Mich., appointed Donald T. Grimes senior vice president, CFO and treasurer. Grimes, 45, replaced Stephen Gulis Jr., 50, who became president of company’s global operations group and remains an executive vice president of the company. Grimes joined Wolverine after one year as executive vice president and CFO of Keystone Automotive Operations Inc. Previously he spent 15 years in senior corporate and divisional finance positions at Brown-Forman Corp.

International Rectifier Corp. named Peter B. Knepper, 59, acting CFO of the $1.2 billion manufacturer of power semiconductors based in El Segundo, Calif. Knepper replaced Linda J. Pahl, 46, who became acting CFO after CFO Michael P. McGee was fired in July 2007. Pahl remains vice president of corporate finance. A member of Tatum LLC, the executive-level services firm, since January 2007, Knepper has been assisting International Rectifier since January 2008.

School Specialty Inc., the $1 billion education company based in Greenville, Wis., appointed David N. Vander Ploeg executive vice president and CFO. Vander Ploeg, 49, succeeded David G. Gomach, who resigned as CFO and treasurer in July 2007 after 13 months with the company. Vander Ploeg joined School Specialty from Dutchland Plastics Corp., where most recently he was COO. Previously he spent 24 years in a number of senior management positions in accounting and finance at Schneider National Inc., before becoming CFO in 2004.

Article found in Careers

Corporates Get a New Access Point to SWIFT

Avatar Partners and Axway Inc. are joining forces to provide an automated global treasury system that lets corporations transact business with their financial services providers around the world, says Marlo Brooke, Avatar president. Users will be able to tap into an integrated SWIFT (Society for Worldwide Interbank Financial Telecommunication) pipeline that provides straight-through processing and statement reconciliation for companies that cannot afford the prohibitive SWIFT costs.

Brooke says Avatar, a leader in financial supply chain integration, and Axway, a provider of collaborative B2B solutions, have been able to slash costs by leveraging existing account and ERP systems, and combining the Axway solution with a SWIFT service bureau model. In addition to configuring the solution in-house, it can be used as a software as a service (SaaS) delivery model that shares expenses across several accounts. “SaaS lets us take companies that are in the Fortune 2000 space and provide a compelling return on investment,” says Brooke.

Corporations that take advantage of the technology, which will be officially launched next week, will have access to dashboards that provide visible, daily updates of cash positions. “The way some of these foreign banking relationships work, a company might not be able to see a statement for a week or more,” explains Brooke. “So the cash would just sit there, not being of any use to the company.” Now, she explains, treasuries can view their balances at a glance, and use available funds in the most efficient manner.

Article found in Supply Chain Management/Trade, Globalization, Accounting/Financial Reporting, Tools

XS Plus Puts a Price on Peace of Mind

Integro Insurance Brokers has introduced XS Plus, an analytical model that quantifies the value of an excess liability insurance program that clients use to minimize their exposure to catastrophic risk. “A lot of our clients are interested in justifying their risk transfer decisions,” explains Ben Fidlow, managing principal and head of Integro’s risk modeling and actuarial practice. XS Plus—short for Program Limit and Underlying Structure—compares a client’s loss history to a database of loss histories of similar companies in similar industries. Based on this comparison, Integro can use actuarial processes to simulate the number of claims and the cost of each claim that the client will likely file under an upcoming contract for excess liability coverage. By combining simulation outcomes with client-specific financial analysis, Integro can assign an explicit dollar value to each layer of a client’s excess liability insurance.

XS Plus is the latest in a series of proprietary tools developed by Integro under its IntegroMetrics operating philosophy. “It’s our philosophy to assist our clients on factual-based analysis of risk, and not use pure benchmarking, which in many cases is not applicable,” says Fidlow. “Every company is different, with different risk exposures and different risk tolerances.”

Article found in Risk Management, Insurance