Case Studies

Completing Complex Option Restatement Project for S&P 500 Technology Company

Financial Intelligence was engaged by an S&P 500 technology company to assist management with their option restatement. Since the company had changed auditors within the fiscal years included in the current Form 10-K, audit teams from two different Big Four firms were involved in the project. An investigation by the company’s Board of Directors had concluded that there had been extensive option backdating in prior fiscal years. Additionally, forensic accountants and attorneys had reviewed over 40,000 historical grants and had also found widespread instances of creative modification events, many of which had also been backdated.

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Streamlining Financial and Tax Reporting Processes, Completing Accounting Conversion

Our client is an S&P 500 technology company with over 5,000 global equity plan participants. The outstanding grants have varying terms and conditions and vesting. There were extensive issues from a concluded option restatement project that impacted its financial and tax reporting. The client was completing a conversion of its equity compensation administration platform from a commercial platform to a broker’s platform. Additionally, due to nonstandard vesting and its static application of its expected forfeiture rate, the client was unable to accurately forecast expense.

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Designing and Implementing Financial and Tax Reporting for NYSE Spin-off

Our client is an NYSE-listed company that was spun-off as an independent public company. The company has 19,000 employees with global equity compensation participation. Financial Intelligence was initially engaged to complete and reconcile the conversion of assumed grants (over 40,000 options and restricted stock units and awards) and the database for import into a major broker’s administration platform. Included in this project was implementation of all processes for a global grant immediately after the spin-off was completed.

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Resolving Equity Accounting Issues for Global NYSE Company with Multiple Grant Types

Our client is a NYSE-listed global company with equity compensation grants outstanding including stock options, SARs, restricted stock units, and performance awards.Administration of the Plan was outsourced to a third party, and the client was encountering significant accounting issues stemming from the limitations of the administration and accounting platform utilized by the service provider. The company’s auditor noted deficiencies in the equity compensation accounting area, and recommended that the company seek guidance to remedy the shortcomings of the outsourced system.

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