Week in review: Sweet and sour Apple

Apple earnings wow Wall Street, and the company's board stands behind Jobs despite stock options allegations.

Apple impressed Wall Street with its quarterly earnings, but those results came under the cloud of another accounting issue.

Apple surprised analysts by reporting that revenue for the second quarter was up 21 percent and profit was up almost 88 percent , or 87 cents per share, compared with the same quarter last year. Analysts had been expecting earnings per share of 64 cents. Investors welcomed the news by sending Apple's share price up several dollars.

But before revealing its financial performance, Apple's board of directors issued a statement confirming its support for Jobs in the wake of allegations made by Fred Anderson, the former chief financial officer at Apple.

Anderson issued a statement the day before claiming that he advised Apple CEO Steve Jobs of the accounting implications of backdating in January 2001, contrary to Apple's previous statements that Jobs had no idea of the ramifications.

Anderson's statement came just after the Securities and Exchange Commission filed a lawsuit against Nancy Heinen, the former general counsel at Apple, saying her actions led to "fraudulent" stock options backdating at the company. A similar lawsuit against Anderson was filed but simultaneously settled. The SEC said it doesn't plan to file any actions against Apple as a company.

While many CNET News.com readers discussed Jobs' culpability and possible punishments, some readers came to his defense, noting some of the contributions he and Apple have made to the tech community.

"Steve Jobs is one of the driving forces of innovation these days, whether anyone wants to believe it or not," wrote one reader to News.com's TalkBack forum. "Computers wouldn't be what they are now without his influence and vision."

Apple is also paving the way for free enhancements to the iPhone and Apple TV by making its accounting methods clear from the start. The company will gradually recognize a portion of the revenue from each sale of those products as new features are delivered.

This accounting method prevents Apple from having to endure a backlash similar to the one it faced over its $1.99 fee for activating the 802.11n Wi-Fi chip in MacBook Pros earlier this year. Because the famously secretive Apple kept the existence of this 802.11n chip under wraps, and because it recognized all of the revenue from the sale of those notebooks at the time they were sold, accounting experts said Apple had to charge a fee to satisfy accounting regulations that require companies to establish a value for product upgrades.

On the Hill
A White House task force wants Congress to enact a variety of new laws designed to punish identity fraud , even though it is already illegal.

The new national strategy calls for rewriting existing criminal laws to penalize use of malicious spyware and keyloggers, expand mandatory minimum prison sentences for certain levels of electronic data theft and allow identity theft victims to receive monetary compensation not only for their direct financial losses, but also for the time they spent piecing their lives back together.

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