SEC

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
Tax

SEC Begins Probe of OfficeMax Accounting Problems

The Securities and Exchange Commission has started a formal investigation into accounting irregularities at the third-largest office supplies retailer.OfficeMax Inc., headquartered in Itasca, Ill., had conducted its own investigation after a supplier alleged that OfficeMax employees acted “inappropriately” in requesting payments. Six employees were fired earlier this year.The company revealed that employees had falsified $3.3 million worth of rebates allegedly owed to OfficeMax by suppliers, The Chicago Sun-Times reported.
Technology

Mark Your Calendar: Discuss XBRL & SEC Voluntary Filing

On June 22, a panel will meet in New York City to discuss eXtensible Business Reporting Language (XBRL) and the Securities and Exchange Commission’s (SEC) voluntary filing program. The event, hosted by PR Newswire, will be held at the Penn Club in New York and also be available via webcast at www.videonewswire.com. The event is free.The impact of XBRL on financial reporting and its potential benefits will be among the topics discussed.

Looking for Better Information on Intangibles

Some investors and business experts believe now may be a good time to debate whether intangible assets - such as research and development, brand recognition, software, customer lists and employee training - should be counted the same way as equipment and buildings on corporate balance sheets.Intangible investments, in R&D and advertising, for example, are counted as routine expenses under generally accepted accounting principles, which is set by the Financial Accounting Standards Board (FASB).
Tax

HealthSouth Agrees to $100M Fine; Scrushy Jurors Remain Deadlocked

While jurors remain at an impasse in Richard Scrushy's $2.7 billion corporate fraud trial, the company he founded, HealthSouth Corp., agreed to a $100 million settlement with the Securities and Exchange Commission.Jurors adjourned Wednesday with instructions to resume deliberations Monday. Scrushy is accused of coordinating a scheme to inflate earnings from 1996 through 2003 and faces a 36-count indictment.Also Wednesday, the company settled civil charges with the SEC, which sued the company in 2003, claimed earnings were overstated by at least $1.4 billion.
Community News

Bush Nominates GOP Congressman to Replace SEC's Donaldson

A day after William H. Donaldson announced he would retire as chairman of the Securities and Exchange Commission, President Bush nominated a conservative Congressman as his replacement.Bush on Thursday nominated U.S. Rep. Christopher Cox, R-Calif., a Harvard-trained lawyer who was first elected in 1988.
A&A

Mark Your Calendar: SEC Advisory Committee for Smaller Public Companies

The first public meeting of the Securities and Exchange Commission’s (SEC) Advisory Committee on Smaller Public Companies is scheduled for Thursday, June 16 from 1:00 p.m. to 5:30 p.m. and Friday, June 17 from 9:00 a.m. to 12:30 p.m. at Columbia Law School. The meeting will also be audio webcast on the SEC website . Requests to present oral testimony must be submitted by June 6. Written statements must be received by June 8.
Tax

AIG Restates Income with $3.9B Adjustment

American International Group (AIG), in a long-delayed regulatory filing, said Tuesday that it overstated net income by $3.9 billion for the past five years.The New York-based insurer also said that it cut its net worth by $2.26 billion through the end of 2004. The figure is less than the $2.7 billion that was previously estimated.The report, which was delayed three times, was filed with the Securities and Exchange Commission.

SEC Finds $48M Shortfall On Its Own Books

The Securities and Exchange Commission is cutting costs to make up for a $48 million budget shortfall blamed on real-estate cost overruns.The SEC is in the process of moving to a new Washington headquarters and recently relocated its offices in Boston and New York. Peter Derby, a senior aide to chairman William Donaldson, told the Associated Press that higher-than-expected security and building costs for the new offices could run up to $50 million over the next two-and-a-half years.Derby said employees have been placed on administrative leave or were reprimanded.

PCAOB & SEC Issue Internal Controls Auditing Guidance

The Public Company Accounting Oversight Board (PCAOB) issued additional guidance on the implementation of Auditing Standard No. 2 (AS No. 2) on Monday, May 16, 2005. The new guidance represents the PCAOB’s response to concerns raised during the Roundtable on Implementation of Internal Control Reporting Provisions held on April 13, 2005 and consists of both a Board Policy Statement and a series of staff questions and answers. Both focus on the scope of internal control audits and how much internal control testing is required.
Community News

SEC Taps Thompson for Top Enforcement Job

On Thursday, May 12, 2005, Linda Thompson became the first woman Enforcement Director at the Securities and Exchange Commission (SEC).“I am honored by this appointment and am committed to maintaining the traditions of excellence and fairness that have been the hallmarks of the Commission’s enforcement program,” Thompson said.Thompson, who joined the SEC in 1995 and became deputy enforcement director in 2002, has overseen and supervised numerous investigations including the SEC’s ongoing investigation into Enron.
A&A

Cisco Proposes Option for Options

When the new rules regarding the expensing of options go into effect over the next year, technology firms, like Cisco Systems Inc., will be among the hardest hit. Billions of dollars are stake in Silicon Valley with its high concentration of technology firms.
Technology

SEC Makes Comment Letters/Responses Public

Beginning today (May 12, 2005), the Securities and Exchange Commission (SEC) will begin the process of releasing to the public comment and response letters related to disclosure filings made after August 1, 2004 and reviewed by the Division of Corporation Finance and the Division of Investment Management.Letters will be released individually on a filing-by-filing basis through the EDGAR system at www.sec.gov. The oldest filings will be released first.

Accounting For International Differences

The Committee of European Securities Regulators (CESR) recommends that any public company reporting financial statements under U.S. rules to a regulator in the 25-member European Union (EU) merely disclose the differences between the American and international rules, rather than reconciling the two different standards.The recommendation follows last week’s statement from the Securities and Exchange Commission’s (SEC) that European companies following international accounting standards may be allowed to report those figures without reconciling them to the U.S.
Community News

SEC Names 2 Professional Accounting Fellows

Timothy M. Kviz and Joseph B. Ucuzoglu, have been named preofessional accounting fellows by the Securities and Exchange Commission’s (SEC) Office of the Chief Accountant. Both will serve two year terms beginning in June 2005.“This is an exciting time to join the Securities and Exchange Commission and, in particular, the Office of the Chief Accountant. The candidates went through a highly competitive process, and the quality of the individuals who applied for these positions speaks volumes about the importance of our role as the investor’s advocate.
A&A

SOX and Small Business

The Securities and Exchange Commission (SEC) has created an advisory committee to look at the impact of federal securities laws including Sarbanes-Oxley (SOX) on small businesses. The 21 members of the Committee on Smaller Public Companies is charged with examining the impact of SOX in three key areas:Internal Controls. What financial reporting frameworks are available to smaller companies? How does management assess internal controls and what audit standards exist?Corporate Disclosure, Reporting Requirements, and Governance Requirements.
A&A

SEC Delays Implementation of Accounting Rules

The Securities and Exchange Commission (SEC) announced on Thursday that large public companies won’t have to expense options until the fiscal year beginning after December 15, 2005.The rules, issued by the Financial Standards Accounting Board (FASB), were have gone into effect for large firms in the first quarter starting after June 15, 2005. The deadline for smaller firms has always been the first fiscal after June 15, 2005.

Lease Accounting: Minor Blip or Major Issue?

Retailers, restaurants, and cellular service providers are changing the way they account for leases, according to accounting analyst Jack Ciesielski, publisher of The Analyst’s Accounting Observer. The majority of restatements are coming from the retail industry and most of those have to do with rent holiday issues.The SEC’s February 7 Letter to the AICPA identifies three types of issues that may arise in lease accounting.

SEC May Delay New Accounting Rules for 6 Months

It’s no secret that many US firms are struggling to understand and comply with new rules regarding stock options. The costs of audits and additional staffing to help ensure compliance continue to rise. Businesses are starting to complain.

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