SEC

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.

Scrutinizing Accounting in the Retail Industry

The ever-changing world of vendor accounting is particularly susceptible to abuse. It is no surprise that under the increased scrutiny of the Sarbanes-Oxley era, problems with vendor accounting are affecting the retail industry as demonstrated by a probe by the Securities and Exchange Commission (SEC) into retail giant Saks, Inc.Saks announced in March that the SEC was probing vendor markdown allowances and the adequacy of Saks internal investigation into the matter at one of six merchandising divisions of it Saks Fifth Avenue stores.

Improper Accounting for Leases Triggers New Restatements

Changes in how companies account for real estate leases is forcing a wave of corrections in earnings reports.Accounting for leases came under scrutiny as part of the tough reforms of the 2002 Sarbanes-Oxley Act.
Practice Management

Donaldson Champions Controversial SEC Best Price Rule

In a hotly contested decision that's seen as a big win for the New York Stock Exchange, Securities and Exchange Commission Chairman William Donaldson has pushed through a new rule that would require investor orders to buy or sell stock be filled at the best price, as long as the order can be executed immediately, the Wall Street Journal reported.Known as the order-protection rule, it will apply to all marketplaces, including the Nasdaq Stock Market and will require markets to get investors the best price, even if that means going to a competing market to fill the order, the Journal reported
Community News

Highlights from the SEC Chairman's Remarks in Financial Services Roundtable

On April 1, 2005, William H. Donaldson, Chairman of the Securities and Exchange Commission spoke before the Financial Services Roundtable in Palm Beach, Florida. Participants in the roundtable represented a wide cross-section of the financial services industry in the United States. Mr. Donaldson used the opportunity to discuss his ideas on how the SEC and financial services industry can work together to improve financial markets and keep them a source of prosperity. Mr. Donaldson was careful to qualify his remarks as his own and not representing those of the SEC or SEC staff.
A&A

SEC's Office of the Chief Accountant Release Staff Accounting Bulletin on Share-Based Payments

The Securities and Exchange Commission’s Office of the Chief Accountant and its Division of Corporation Finance announced on Tuesday announced the release of a Staff Accounting Bulletin relating to the Financial Accounting Standard’s Board (FASB) accounting standard for stock options and other share-based payments. Staff Accounting Bulletin No.

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