SEC

SEC Looking to Streamline Auditor-Independence Rules

The Securities and Exchange Commission (SEC) is looking into simplifying its auditor-independence rules without weakening them.Advertisement

Judge: Private Suits Not Allowed Under Section 304 of SOX

A federal judge has ruled that private shareholders cannot file derivative lawsuits under Section 304 of the Sarbanes-Oxley Act.Under Section 304, corporate executives can be forced to give back profits and bonuses gained in alleged accounting scandals. U.S.
A&A

FASB Launches Investor Task Force (ITF)

The Financial Accounting Standards Board (FASB) last week announced the launch of its Investor Task Force (ITF), an advisory Resource that will provide the Board with sector specific insight and expertise from the professional investment community on relevant accounting issues. The first ITF research session will probably be held this month.The ITF represents the latest in a series of steps designed to enhance participation of investors and other users of financial information in the standard setting process.
Community News

PCAOB Chairman McDonough To Resign

William J. McDonough, Chairman of the Public Company Accounting Oversight Board (PCAOB) on Friday announce he will resign his position on November 30 or earlier, if his successor is in place. McDonough’s departure, along with that of Securities and Exchange Commission (SEC) Chief Accountant Donaldson, leaves SEC Chairman Cox with two major personnel decisions in as many months.“I came to the PCAOB in June 2003 to help it fulfill the great responsibilities assigned to it by the Sarbanes-Oxley Act to protect investors in U.S.
Technology

AICPA Offers Members Professional and Commercial Benefits

Membership in professional associations, both national and a state organizations, brings a host of benefits to the CPA, according to CareerBank.com. The American Institute of Certified Public Accountants (AICPA or the Institute), the premier accounting professional association in the US, with links to state societies, counts 345,000 CPAs as members.

Cisco's Plan Rejected but SEC Leaves Door Open to New Approaches

Donald Nicolaisen, the departing chief accountant of the U.S. Securities and Exchange Commission (SEC), said on Friday that based on the SEC’s staff review of Cisco Systems’ plan to value stock options by selling similar securities to investors, he had “significant doubts” that the method would produce an estimate of fair value, Reuters reports. In a separate statement, however, SEC Chairman Christopher Cox said that the staff’s conclusions were “tentative and subject to ongoing assessment,” according to the New York Times.
Community News

Chief Accountant Nicolaisen Returning to Private Sector

The Securities and Exchange Commission (SEC) announced on Wednesday, September 7, 2005, that Chief Accountant Donald T. Nicolaisen will be leaving the Commission in October 2005 to return to the private sector.A former senior partner with PricewaterhouseCooper, Nicolaisen joined the SEC in September of 2003. As Chief Accountant, he forged close working relationships with the Public Company Accounting Oversight Board (PCAOB) and the Financial Accounting Standards Board (FASB) to fully implement sections of the Sarbanes-Oxley Act.

The Banking Industry Struggles with SFAS 133

The Federal Home Loan Bank of Dallas (FHLB Dallas) and the Federal Home Loan Bank of Atlanta (FHLB Atlanta) announced plans Monday to restate their financial statements for the years 2001 through 2004 and the first quarter of 2005. The Federal Home Loan Bank of Indianapolis (FHLBI) had announced its intention to issue restatements for the same periods on Friday.
Technology

Mark Your Calendar: XBRL & the Future of Corporate Reporting

XBRL-US is hosting free informational breakfasts in four cities across the country during September.
Tax

SEC Settles With College Savings Plan

The Securities and Exchange Commission (SEC) has settled a cease-and-desist lawsuit against the Utah Educational Savings Plan Trust (UESP). The UESP administers Utah’s educational savings plan. The settlement resolves the first ever charges against a Section 529 savings plan. The charges stem from an investigation of the plan’s former director, Dale C. Hatch. Flaws were found in the savings plan’s operations and internal accounting controls. Investigators found that the savings plan failed to fully allocate investor gains and losses to investor accounts.
Community News

Berkshire Hathaway Reveals Additional Inquiry

Regulators are probing the accounting methods used by Warren Buffett's Berkshire Hathaway Inc., expanding an investigation that started with its connection to American International Group Inc.Since January, authorities have been looking at whether Berkshire Hathaway's General Reinsurance Corp. unit helped AIG misstate financial results.
Community News

Greenspan Swears Christopher Cox in as SEC Chairman

The 28th Chairman of the Securities and Exchange Commission (SEC), Christopher Cox, was sworn in by Federal Reserve Chairman Alan Greenspan on Wednesday, August 3. Chairman Cox will officially begin his duties on Thursday, August 4.“It is an honor to lead the Securities and Exchange Commission, and to be sworn in by so wise and able a champion of America’s capital markets,” said Chairman Cox after he was sworn in.

SEC Looking for Ways to Improve Regulatory System for Smaller Companies

The Securities and Exchange Commission’s (SEC) Advisory Committee on Smaller Public Companies on Tuesday, August 2, published a series of questions developed to help solicit input from the public, including investors and companies, on ways to improve the current regulatory system for smaller companies and to examine the impact of the Sarbanes-Oxley Act of 2002.“The Committee has done an outstanding job identifying vital areas for discussion and potential enhancement of the regulatory framework for smaller public companies,” SEC Acting Chairman Cynthia A. Glassman.
Community News

The New Big Five Accounting Firms

What better way to draw attention away from earnings restatements than by becoming the newest member of the Big Five accounting firms, filling the spot haunted by Arthur Andersen’s fall from grace? On Monday, August 1, 2005, H&R Block, Inc. announced it will buy the tax and business services division of American Express in a $220 million deal.
A&A

Analysts Ignoring Cost of Stock Options

Some Wall Street analysts are failing to figure the cost of stock options in their reports to investors, at least so far.Public companies last month were required for the first time to account for stock options as expenses, lowering their bottom line. For some companies, those new figures will be reflected in regulatory reports due soon, but stock analysts are not following suit, the Wall Street Journal reported.Analysts are leaving out the information in earnings-per-share figures included in reports to investors. For example, Microsoft Corp.
Tax

Implications of a KPMG Indictment

The number of the Big Four may be changing as the Justice Department considers the penalties for KPMG. The firm may be indicted for allegedly selling tax shelters later deemed to be abusive. The full enforcement of the law could mean a full collapse of the firm; very similar to what happened at Arthur Anderson after it was convicted of obstruction of justice connected with its Enron audits. “Its an awkward spot,” Jack Ciesielski, publisher of the industry newsletter, the Analyst’s Accounting Observer, told TheStreet.com. There are two sides to an indictment scenario.
Community News

Investors Applaud Oracle’s Non-GAAP Earnings

The Sarbanes-Oxley (SOX) Act of 2002 was supposed to protect investors by stopping the artificial inflation of financial statements by public companies in the U.S. Why then are investors cheering Oracle Corp.’s fourth-quarter results, which were artificially inflated by the acquisition of rival PeopleSoft?“We love Oracle as a company,” Mark Hillman, president of Hillman Capital Management of Annapolis, MD, is quoted in MarketWatch.

SEC Again Passes Independence Rule for Mutual Fund Boards

The Securities and Exchange Commission on Wednesday reapproved a contentious rule requiring mutual fund boards to hire independent chairmen.Adding new details to the independence rule was one of the last actions for Chairman William Donaldson, a champion of the rule who steps down today. Donaldson, apparently determined to go out with a bang, pushed for the rule over the objections of three former SEC commissioners and eight Republican members of the Senate Banking Committee, USA Today reported.The action, which was approved on a 3-2 vote, was taken in response to a U.S.
A&A

SEC Staff Report on SOX Section 401(c) Includes FASB Comments

The Securities and Exchange Commission (SEC) on Tuesday released a staff Report and Recommendations Pursuant to Section 401(c) of the Sarbanes-Oxley (SOX) Act of 2002 On Arrangements with Off-Balance Sheet Implications, Special Purpose Entities and Transparency of Filings by Issuers. The report include several recommendations from the Financial Accounting Standards Board (FASB).“We provided input to and have discussed the content of the report with the SEC staff.
Community News

KPMG, Justice Negotiating on Tax Shelter Case

Justice Department officials are mulling whether to seek a criminal indictment against KPMG for obstruction of justice and the sale of abusive tax shelters, the Wall Street Journal reported Thursday.Talks between federal prosecutors and KPMG could determine the fate of the Big Four accounting firm, the Journal reported, citing lawyers briefed on the case.If the firm is indicted, KPMG could suffer the fate of now-defunct Arthur Andersen, which could not withstand a Justice Department obstruction of justice indictment and its association with scandal-ridden Enron Corp."In light of the A

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