In a long-awaited and sure-to-be controversial move, the Financial Accounting Standards Board ruled yesterday that companies have to begin expensing for stock options given to employees as part of compensation packages. The issuance of Statement 123R represents another important improvement in US generally accepted accounting principles. It will result in more comparable information in financial statements provided to investors, SEC's Donald T. Nicolaisen said in a statement.

Before Sarbanes-Oxley, the law stated that investors who were made aware of fraudulent activities had to file lawsuits against the misbehaving companies within one year of discovering the fraud and within three years of the actual fraudulent activity.

The U.S. Securities and Exchange Commission on Tuesday issued an exemptive order to grant certain accelerated filers up to an additional 45-days to include in their annual reports management’s report on internal control over financial reporting and the related auditor’s report on management’s assessment of internal control over financial reporting. Both internal control reports are required under Commission rules implementing Section 404 of the Sarbanes-Oxley Act of 2002.

The Public Company Accounting Oversight Board on Tuesday adopted a temporary transitional rule relating to PCAOB Auditing Standard No. 2, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements." Section 404 of the Sarbanes-Oxley Act of 2002 and the related implementing rules of the Securities and Exchange Commission require certain companies to include in their annual reports filed with the Commission a report on management’s assessment of the effectiveness of those companies’ internal control over financial reporting.

As public companies strive to meet compliance deadlines for Section 404 of the Sarbanes-Oxley Act, trends related to how companies will implement an efficient and effective process beyond the initial year of compliance are beginning to emerge, according to the results of a new survey released by Ernst & Young.

Eighty percent of U.S. workers and 76 percent of employed investors have never heard of the Sarbanes-Oxley Act of 2002, according to a Hudson survey measuring its impact in the workplace. As the first compliance deadline approaches in December, only nine percent of workers say they have been asked to do something differently in their jobs as a result of the Sarbanes-Oxley Act. Among working investors, defined as owning at least $5,000 in stocks, bonds and mutual funds, only seven percent indicated that Sarbanes-Oxley had increased their confidence as an investor.

Almost every federal agency met a greatly accelerated financial reporting deadline this week by closing out their books 45 days after the end of the fiscal year. "We are pleased that federal agencies are now able to issue financial and performance information in a time frame that is comparable to the private sector," OMB Controller Linda Springer said in a statement, Government Executive magazine reported.OMB has been working toward the Nov.

The Treasury Department and the Internal Revenue Service this week issued interim guidance reflecting changes to the requirements for disclosure of reportable transactions by taxpayers and material advisors made by the newly enacted American Jobs Creation Act of 2004. The American Jobs Creation Act provides rules that require material advisors to file returns disclosing reportable transactions and to maintain investor lists. The Act also imposes new monetary penalties on material advisors who fail to comply with these obligations.

Section 404. Just the words are enough to add to the collective stress level of corporate America, as executives scramble to clear the next hurdle brought about by sweeping reforms. Dow Jones Newswires reported last week that some smaller companies may get an extension on filing internal control documentation-showing they have effective controls in place and have had the controls attested to by an independent auditor.