Financial Reporting

PCAOB Now Accepting Registration Information From Firms

The Public Company Accounting Oversight Board (PCAOB) is now accepting registration information from public accounting firms that plan to continue auditing publicly held companies. Domestic companies have until October 22, 2003 to register, with international firms getting an additional six months.The PCAOB website announced that "Section 102 of the Sarbanes-Oxley Act of 2002 prohibits accounting firms that are not registered with the Board from preparing or issuing audit reports on U.S.

SEC Seeks Transparency in Corporate Board Nominations, Communications

So who are the people who sit on corporate boards of directors? How are they chosen? How do shareholders communicate with directors?

Strengthening The Financial Reporting Process - an International View

The International Federation of Accountants (IFAC) has released a report with recommendations for strengthening corporate governance, improving audit effectiveness, and raising the standard of regulation of issuers."Rebuilding Public Confidence in Financial Reporting: An International Perspective," is a multinational effort, with input from representatives from Australia, Canada, France, Japan, the United Kingdom, and the United States.The Task Force had three critical goals to address:
Community News

PCAOB Begins Collecting Fees to Fund Its Operations

The bill is in the mail. The Public Company Accounting Oversight Board (PCAOB) has begun mailing invoices to the nation’s 5,200 publicly held companies as well as another 3,300 investment firms and issuers of equity, all of whom will foot the bill for the board’s $68 million operating budget.Created by the Sarbanes-Oxley Act of 2002, the PCAOB was created to oversee the audits of publicly traded companies.
Practice Management

'Subcertification' Becomes Widespread Practice

One year after the Sarbanes-Oxley Act required CFOs and CEOs to certify their company's financial statements, a new survey by the Association for Financial Professionals (AFP) reveals that public companies are asking other corporate financial professionals to vouch for reported information as well.

FEI Launches Financial Services Registry to Help With Sarbanes Compliance

One of the provisions of the Sarbanes-Oxley Act implemented last year requires public companies to identify a "financial expert" on their Boards of Directors. To assist in compliance with this requirement, the Financial Executives Institute (FEI) has created a registry of financial executives with extensive experience available to serve as independent directors on the audit committees of public companies.Participation in the FEI's Financial Experts/Audit Committee Directors Registry is open to FEI members.

One Year Later: Execs Less Favorable Towards Sarbanes-Oxley

A survey released by PricewaterhouseCoopers this week indicates that senior executives are less favorable towards Sarbanes-Oxley today than they were in October of last year.

SEC Chairman Sees Progress One Year After Sarbanes-Oxley

Securities and Exchange Commission (SEC) Chairman William Donaldson marked this week’s first anniversary of the landmark Sarbanes-Oxley Act by noting the progress made in cleaning up corporate America and outlining a list of reforms still ahead. The legislation has fostered "the spirit of integrity and renewal of confidence that goes well beyond the letter of the law," Donaldson said at a news conference.

Citibank and J.P. Morgan Chase Agree to Multi Million Dollar Enron Settlement

The demise of energy giant Enron continues to ricochet through financial circles with Citicorp and J.P. Morgan Chase agreeing this week to pay a combined $308 million to settle Enron-related charges. The settlement ends a $8.3 billion probe into in questionable loans made to Enron by Citibank, the nation’s largest bank (by assets), and J.P. Morgan Chase, the second largest.
Practice Management

SEC Issues Study on Principles-Based Accounting System

The Securities and Exchange Commission (SEC) has released a staff study recommending the adoption by the U.S. financial reporting system of a principles-based accounting system. Congress' intent in requesting the study was to have the staff consider whether a different standard-setting paradigm from the one that exists today would be beneficial to U.S.

Executives Less Favorable to Sarbanes-Oxley One Year Later

As the one-year anniversary of the Sarbanes-Oxley corporate reform legislation approaches next week, cost and complexity seem to be standing in the way of a favorable opinion from executives. PricewaterhouseCooper’s (PwC)’s "Management Barometer" reported that just 30 percent of the executives surveyed would give Sarbanes-Oxley a favorable rating, which is down from 42 percent in October.

Report Places Freddie Mac Blame on Ousted Executives

Former Freddie Mac chief executive Leland Brendsel and former Vice Chairman David Glenn deliberately allowed questionable accounting practices, said an independent report released on Wednesday.

Video Game Industry Facing SEC Probe

Activision Inc., THQ Inc., Acclaim Entertainment Inc. and Midway Games Inc. have disclosed that the SEC has requested information from each of them, indicating a wide-scale investigation may be under way into accounting practices in the video-game software publishing sector.No one is commenting on what the investigation is covering but one industry analyst speculated to UPI that the SEC might be looking at whether the industry has been understating revenue so it can artificially inflate earnings later.
A&A

Full Text FASB Statements Now Available For Free

The Financial Accounting Standards Board has brought a midsummer's gift to the accounting profession. The status, summary, and full text of all statements are now available online, and free of charge.For years, practitioners, educators and students have grumbled about the lack of free access to the rules and regulations governing the profession they are serving. FASB has responded accordingly. All statements are presented in PDF format, requiring the reader to have Adobe Acrobat 5.0 or higher installed on his or her computer.
Practice Management

CEOs Organize Forum to Share Best Practices

The rules and regulations are coming from all quarters, but U.S. executives are taking it a step further by creating their own group to monitor corporate performance and accountability.In the post-Enron corporate world, it has never been a more challenging time to lead a major U.S. corporation. The 2002 Sarbanes-Oxley Act put more responsibility on the shoulders of CEOs to ensure accurate financial reporting and accounting.

Freddie Mac, Fannie Mae Hearings Cancelled

Calling the hearings premature, Fannie Mae officials declined to testify before a house committee looking into alleged mismanagement at the nation’s top two mortgage guarantee enterprises. Rep. Richard Baker (R-LA), sponsor of one of two bills pending in Congress that would reconfigure the oversight of the two bodies, issued a statement Thursday calling off the hearings because of a “lack of cooperation” from the two companies, which between them, own or guarantee 42 percent of the $7 trillion in U.S. mortgage business.

Coca-Cola Denies Claims of Fraud

Coca-Cola Company has added the U.S. Justice Department to its list of organizations conducting investigations into accounting fraud. The Securities and Exchange Commission is also investigating the beverage giant after two lawsuits were filed by a former Coke employee who raised the issue of improper and fraudulent accounting.The Justice Department investigation is related to the same issue. "The company will cooperate with the inquiry," said Coca-Cola in a statement.

Morgan Stanley Investigated by Massachusetts and New York

Morgan Stanley is under investigation by Massachusetts and New York for allegedly pushing its in-house mutual funds and not disclosing to investors that brokers made better commissions when they sold the house funds.The practice of pushing house funds is not illegal, but full disclosure to investors about commissions is required. Massachusetts Secretary of the Commonwealth William Galvin filed a complaint on Monday, and long with New York Attorney General Eliot Spitzer, plans to look into whether other investment firms improperly tied bonuses and commissions to sales of house funds.

Accounting Watchdog Agency Has Bookkeeping Problems of Its Own

The Securities and Exchange Commission, that venerable agency charged with ensuring that publicly held companies are accountable for their own bookkeeping correctness, now has to address some bookkeeping problems of its own. In an internal audit of the SEC for the fiscal year that ended September 30, 2002, it was found that the agency did not live up to expected accounting standards when it came to recording employee-related costs.
Community News

First Freddie Mac, Now Fannie Mae in the Hot Seat?

Just two weeks after a shake up at Freddie Mac led to the ouster of three executives in the nation’s No. 2 mortgage company, the No. 1 company, Fannie Mae, now finds itself under the microscope.The New York Times is reporting that industry insiders are asking about profits reported by Fannie Mae. They claim that Fannie Mae’s letter-of-the-law reporting may have shielded substantial losses last year, a statement Fannie Mae hotly contests.

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