More CFOs are getting booted out of the hot seat these days.

In the past month, chief financial officers have resigned from locally based 99 Cents Only Stores Inc. and Countrywide Financial Corp. after the companies disclosed earnings restatements with the Securities and Exchange Commission.

Last week, Nara Bancorp reassigned its CFO to a non-accounting position after the bank discovered that a $600,000 payment to its former president and chief executive for car expenses and country club dues was not accounted for properly.

The rash of resignations can be attributed at least partly to federal regulations passed in 2002 to weed out accounting problems at public companies. Many say new requirements are creating a sea change in the accounting profession, whose reputation took a beating after high-profile scandals at Enron Corp. and WorldCom Inc.

“CFOs are spending less time running the business and more time on compliance and controls,” said Rodney Carter, senior vice president and chief financial officer at Petco Animal Supplies Inc. in San Diego. “Some people are saying life is too short and others are trying to do the right thing. I think everyone is trying to understand the risks and rewards, and what the trade-offs are.”

The central issue involves compliance with Section 404 of the Sarbanes-Oxley Act, which was designed to hold executives accountable for financial fraud.

The new SEC rules were created so companies themselves would catch material weaknesses in their own accounting practices. The piles of paperwork and hours required to meet the new requirements have created upheaval among the CFO ranks, essentially making the job far less appealing and more difficult. By some estimates, turnover among CFOs has jumped dramatically in the past two years.

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The full version of this story

is available in the April 4 edition of the Los Angeles Business Journal.