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SEC Enforcement Actions Plummet

CFO Magazine - 16 November 2017
The Securities and Exchange Commission filed 62 enforcement actions against public companies and their subsidiaries in the government’s 2017 fiscal year, a 33% drop from a year earlier. The cause of the drop was a paltry 17 cases filed in the second half of the year (April 1 to September 30), a period when the number of SEC actions usually increases. Total monetary settlements against public company defendants also fell from the first half of fiscal 2017 to the second half, declining to $196 million from $1 billion.

How Tax Departments Can Take On Evildoers

CFO Magazine - 14 November 2017
Liam Neeson pretty much set the standard for swagger in dealing with terrorist finance in the movie “Taken“ when he unleashed his famous monologue: “I don’t know who you are. I don’t know what you want. If you are looking for ransom, I can tell you I don’t have money, but what I do have are a very particular set of skills. Skills I have acquired over a very long career. Skills that make me a nightmare for people like you. If you let my daughter go now, that’ll be the end of it. I will not look for you, I will not pursue you. But if you don’t, I will look for you, I will find you, and I will kill you.”

Metric of the Month: Annual Budget Cycle Times

CFO Magazine - 10 November 2017
It’s budget season again. How long will your budgeting process take this year, compared to last? If you don’t know the answer, there may be room for improvement in the cycle time to complete your organization’s annual budget. Let’s be honest: When you ask most CFOs and business unit managers about their favorite time of year, it’s unlikely they’ll answer “budgeting season.” At some companies, the budgeting process can start in June — or earlier, for shared-service units — and drag on for months. Meanwhile, others start in November and have their next-year budgets wrapped up and tied with a bow well before the holidays. November’s metric of the month, which is calculated based on 2,617 organizations’ responses to questions, makes it clear that some companies take much longer than others to push out a budget in time to greet the New Year.
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Apple Buys Image Sensor Startup InVisage

CFO Magazine - 10 November 2017
Apple has acquired startup InVisage Technologies, the developer of image sensor technology that could improve the quality of iPhone camera images. InVisage’s key product is called QuantumFilm, which, according to TechCrunch, combines software technology and material science to create smaller imaging technology that is better at taking high quality pictures in a variety of non-optimal lighting conditions.
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OPEC Sees Minimal EV Impact on Oil Demand

CFO Magazine - 8 November 2017
Even if one in four passenger vehicles is electric by 2040, up from less than 0.2% last year, OPEC does not expect global oil demand will drop “meaningfully” over the next 23 years. In its 2017 World Oil Outlook, OPEC predicts consumption will rise from 95.4 million barrels per day in 2016 to 111.1m bpd by 2040. That forecast assumes the number of electric vehicles will reach 235 million in 2040 , representing 12% of the expected global passenger car fleet.
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FP&A: Let the Fun Begin

CFO Magazine - 6 November 2017
For those involved in financial planning and analysis, the bad news is that the work can be boring much of the time. The good news: It’s quickly getting more interesting. As with many corporate processes, technology is driving fundamental changes in FP&A. Thanks to a new generation of tools, the drudgery factor is lessening and practitioners are spending more of their time doing actual planning and analysis. And that’s a fortunate development, not just for FP&A professionals, but also for the companies they work for. In almost every industry, today’s souped-up business environment drives a concomitant need for heightened strategic input.
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The Weight of Water

CFO Magazine - 6 November 2017
The United States suffered from hugely destructive hurricanes before August 2017. As recently as 2012, Superstorm Sandy placed large swaths of New York City under water, and the devastating effects of Hurricane Katrina in 2005 still haunt New Orleans. In 1992 the massive wreckage caused by Hurricane Andrew spurred Florida to upgrade its ability to avert comparable damage from Hurricane Irma last September.
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Location Lures

CFO Magazine - 6 November 2017
There seems to be no limit these days to what U.S. states and cities will do to lure businesses to their communities. Incentives recently dangled in front of companies include the $3 billion in tax breaks — amounting to $15,000 to $19,000 per job annually — that Wisconsin’s governor has offered Foxconn to build a flat-screen plant in the Badger State. Suitors competing to be the host of a $5 billion second headquarters for Amazon have created elaborate videos, enlisted the help of CEOs of other major companies, and of course, offered huge tax incentives to attract the attention of the e-commerce giant.
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Banking Survey: A Question of Trust

CFO Magazine - 6 November 2017
When one of an industry’s largest, reputable providers is found to have deceived — indeed, scammed — its customers, the whole industry suffers. Commercial banking has had character issues in the wake of the financial crisis, but in 2017 the issue of trust arose once more with the Wells Fargo fake account scandal. The bank’s salespeople opened as many as 3.5 million fake bank and credit card accounts, slapping customers with unnecessary fees. The scandal, which goes back years, aroused skepticism about banks and whether they could be trusted: once again, a financial institution had showed disdain for those it purported to serve.
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Tax Reform, As It Was

CFO Magazine - 6 November 2017
In discussions of the likelihood that federal tax reform will be enacted this year or in 2018, it’s often pointed out that it has been 31 years since the last reform effort became law. While the Tax Reform Act of 1986 is viewed by some as a starting point for this year’s effort, the times have changed considerably. What do you recall about the 1986 act?
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America's Got Talent, But Where Is It?

CFO Magazine - 6 November 2017
As it turns out, predictions that the economic recovery would inevitably draw companies into a fierce tug-of-war for talent were off-base. As far as finance executives are concerned, the hiring process now more closely resembles a scavenger hunt. That insight into labor market dynamics emerged from the third-quarter results of the Duke University/CFO Magazine Global Business Outlook Survey, which drew responses from 850 CFOs.
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Meeting Directors' Demands for Information

CFO Magazine - 6 November 2017
Investors, consumers, regulatory bodies, and the media are putting heavy pressure on boards of directors. They are being held accountable for a whole range of strategic missteps, risk management errors, and security flaws. One survey of board members in 2016 found that directors see a disconnect between these high expectations and what they can realistically accomplish in their positions.
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Thinking Thin

CFO Magazine - 3 November 2017
The idea of lean started with Sakichi Toyoda, a Japanese inventor and industrialist who pioneered the idea of “autonomation,” otherwise known as “intelligent automation” or “automation with a human touch,” according to Wikipedia.
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Enemy Cyber Campaigns Target Private Sector

CFO Magazine - 2 November 2017
To say that the planning of the D-Day invasion by U.S., British, and other Allied forces was a complex endeavor would be an understatement, to say the least. Male Soldier Staring Out Of BunkerA U.S. army pamphlet on the Normandy invasion sketches the results of the planning succinctly: “A great invasion force stood off the Normandy coast of France as dawn broke on 6 June 1944: 9 battleships, 23 cruisers, 104 destroyers, and 71 large landing craft of various descriptions as well as troop transports, mine sweepers, and merchantmen — in all, nearly 5,000 ships of every type, the largest armada ever assembled.”
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Fund Adviser Accused of $229K Expenses Fraud

CFO Magazine - 25 October 2017
A former senior partner at Apollo Management has been charged with defrauding private-equity fund clients he advised by billing them for about $290,000 in personal expenses, including family vacations and visits to a hair salon. The U.S. Securities and Exchange Commission said Mohammed Ali Rashid, 41, fraudulently charged more than 1,000 personal items and services to clients from at least January 2010 to June 2013 and persisted in his misconduct even after being told by Apollo’s CFO to stop.
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Companies Lose Ground to Cyber Criminals

CFO Magazine - 25 October 2017
In the battle between organizations and cyber criminals, the bad guys are winning. The financial consequences of hacks have again shot up by 23% this year, equaling the increase seen in 2016, according to new research. Ponemon Institute conducted a benchmark study of 254 organizations, all with more than 1,000 “enterprise seats,” or direct connections to the entity’s network and enterprise systems. The results underscore the reality that cyber crime is a pervasive nemesis, far beyond the occasional mega-hacks — against Equifax, Target, Yahoo — that make big news.
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Cisco Adds HCS Capability With BroadSoft Buy

CFO Magazine - 23 October 2017
Cisco Systems said Monday it will acquire software company BroadSoft for $1.9 billion, giving it tools for the enterprise collaboration and communications market that supplement its WebEx and Spark offerings. Cisco currently offers HCS (Hosted Collaboration Solutions) on premise, meaning the software is installed on devices. In BroadSoft, it acquires an HCS company that delivers its products over the cloud.
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How to Protect Unvested Pay Upon Termination

CFO Magazine - 23 October 2017
Like other top executives, many CFOs have employment agreements that provide for severance and/or notice pay if they are terminated without cause or if they leave with good reason. But such agreements and related deferred or equity plans do not necessarily protect unvested deferred or equity compensation. In the context of either type of termination, unvested amounts may be forfeited at the time of separation.
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What to Expect as a Portfolio-Firm CFO Candidate

CFO Magazine - 20 October 2017
An experienced CFO can join a middle-market private equity-backed portfolio company with a base salary between $250,000 to $350,000 plus bonuses and equity. Altogether, with equity, a high-performing CFO could make millions of dollars and then do it again with another firm.
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Six Ways to Reduce Days Sales Outstanding

CFO Magazine - 19 October 2017
Cash flow is the lifeblood of any business. And a key measure to track for a healthy cash flow is Days Sales Outstanding (DSO). DSO represents the number of days it takes for a company to convert its accounts receivable into cash. The sooner the company gets that cash, the stronger its cash flow and financial position is likely to be.
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Directors' Experience Doesn't Always Pay Off

CFO Magazine - 19 October 2017
It may seem obvious that shareholders stand to benefit when outside directors on a company’s board have experience in the industry the company operates in. However, a forthcoming research paper contends, that doesn’t hold true in the case of highly diversified companies, where directors tend to “play favorites” by influencing over-investment in the industries they’re most familiar with.
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Be Cautious About 'Sweating your Assets'

CFO Magazine - 16 October 2017
Although there are countless operating initiatives we can pursue to create value in business they all can be characterized in one of three ways. First, we can make investments that deliver a return over the life of the investment above the required return on capital. Second, we can improve the profitability of existing activities by some combination of price and cost management. Third, we can improve asset productivity and deliver more profit or cash flow per dollar of assets.
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Hurricanes to Cut $44M From Jet Blue Revenue

CFO Magazine - 11 October 2017
The recent string of hurricanes created some turbulence for JetBlue Airways, which said Wednesday that revenue and profit for the second half of the year would be hit by the weather. The airline said that on a preliminary basis, the hurricanes negatively impacted third-quarter revenue by about $44 million and operating income by $30 million to $35 million, or 6 to 7 cents per share.
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What Wildfires, Hurricanes Can Teach About Risk Reduction

CFO Magazine - 11 October 2017
The Northern California wildfires. Harvey. Irma. Maria. We shudder at the thought of the devastation these natural disasters have inflicted. And such high-cost disasters aren’t just happening in the United States. In Mexico, strong earthquakes have left hundreds of people dead. Across South Asia, more than 1,200 people were killed and millions more displaced in severe monsoons in August.
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Dell to Invest $1 Billion in 'Internet of Things'

CFO Magazine - 11 October 2017
After pivoting from personal computers to data center hardware and software, Dell Technologies is now charting a course toward the next state of its evolution — providing “distributed” computing through the Internet of Things. The company said Tuesday it will invest $1 billion in new IoT products, research and partnerships over the next three years and named Ray O’Farrell, the chief technology officer of its Vmware subsidiary, to lead a new IoT Solutions Division that will combine internally developed technologies with products from its partner ecosystem and investments.
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'Nudge' Theorist Wins Nobel Economics Prize

CFO Magazine - 9 October 2017
U.S. economist Richard Thaler, whose pioneering work has integrated economics with psychology and who popularized the concept of “behavioral economics” in the best-selling book “Nudge,” has been awarded the Nobel Prize for economics. According to the Nobel committee, the University of Chicago professor has expanded economic analysis by showing how three psychological traits — limited rationality, perceptions about fairness, and lack of self-control — influence economic decisions.

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