SEC

A&A

NYSE Chief’s Pay Package Under SEC Scrutiny

With executive pay packages under increased scrutiny after recent scandals, the Securities and Exchange Commission (SEC) is looking into the compensation of Richard A. Grasso, chairman of the New York Stock Exchange.The NYSE claims it will save about $3.5 million this year by paying out a lump sum of $140 million to Grasso in the form of accrued savings and incentives.

PCAOB Lists Public Accounting Firm Registration Applicants

The Public Company Accounting Oversight Board has published a list of public accounting firms that have applied for registration to perform public company audits.As of August 27 - the date of the first list - fewer than 90 CPA firms of the 850+ who performed public company audits last year have yet applied.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. public companies and from participating in such audits.The PCAOB has given U.S.

SEC's Next Target: 'Reckless' Board Members

The next group to be targeted in the SEC's ramped up effort to stop corporate fraud will be corporate directors who do not exercise their fiduciary responsibility to the investing public, according to the SEC's top enforcement official.Since the Enron collapse, the SEC has brought enforcement proceedings against a variety of groups, including accounting firms, management, auditors, and investment banks.
Community News

PwC Lead Auditors Barred From Auditing Public Companies

The Securities and Exchange Commission has settled two high-profile cases involving PricewaterhouseCoopers in the last few days, resulting in individual auditors being barred from public company audits, but no sanctions against the firm.MicroStrategy, Inc.For more than three years, the Securities and Exchange Commission has been investigating PricewaterhouseCoopers and its role in accounting irregularities at MicroStrategy, Inc., once a high-flying player in the heyday of the Dot-com era.Last week, the SEC ended its investigation of PwC, resulting in no enforcement actions agai

GAO Report Shows SEC Still Lagging in Fine Collection

In the wake of last year’s corporate scandals, the Securities and Exchange Commission (SEC) has rendered hundreds of millions in fines. But will they ever collect on them? A new report from the U.S. General Accounting Office (GAO), the auditing arm of Congress, found that from 1997 and 2002, the SEC collected just $190 million of the $480 million in fines it levied.
Community News

R.J. Reynolds Refuses to Turn Over Documents to SEC

In today’s world of reform and oversight, few publicly held companies would be brazen enough to say "no" to the U.S. Securities and Exchange Commission, but that is exactly what R.J. Reynolds Tobacco Holdings Inc. has done. Reynolds has refused to hand over documents requested in a July 3 SEC subpoena claiming the documents contain confidential information that would harm the company if it fell into the hands of its competitors or the U.S. Department of Justice.
Community News

SEC Names New Chief Accountant

Nine months after SEC Chief Accountant Robert Herdman resigned amid controversy, the Securities and Exchange Commission has announced the appointment of a new Chief Accountant.Donald T. Nicolaisen, 59, is currently a senior partner with PricewaterhouseCoopers LLP where he has served as a member of the international board for nine years, and in a number of management and leadership positions since joining the firm in 1967.

SEC Chief Accountant Clarifies Rules on Auditor Independence

When the SEC issued rules governing auditor independence last January, it left many questions unanswered.

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?
Tax

U.S. Banks Scrutinized for Tax Avoidance

According to a report in Thursday's Wall Street Journal, the SEC has discovered that at least 10 major U.S. banks are responsible for sheltering hundreds of millions of dollars from federal and state income taxes through private investment funds that paid tax-exempt dividends. So far the SEC has indicated that more than $17 billion was held in these funds in recent years, the purpose of the funds being solely to shelter income from taxation.The SEC is pointing to Big Four firm KPMG as being responsible for setting up 10 of 11 such funds.
Community News

SEC Closing in on Choice For Chief Accountant

The Securities and Exchange Commission has indicated that its top choice for the position of chief accountant is Donald T. Nicolaisen, senior partner at Big Four firm PricewaterhouseCoopers.The role of chief accountant was formerly held by Robert Herdman who resigned last November in protest over the appointment of William Webster as chairman of the Public Company Accounting Oversight Board.
A&A

Lawyers Balk at New SEC Rules

New rules established by the Securities and Exchange Commission encourage lawyers to break their client confidentiality compact when clients are suspected of financial fraud.The SEC rules, part of the fallout from the Sarbanes-Oxley Act of 2002, require lawyers to report concerns of violations of securities laws to corporate executives.
Tax

Two More Plead Guilty in HealthSouth Case, IRS Joins Probe

And then there were 14. Two more former HealthSouth officials agreed this week to plead guilty to conspiracy charges as part of what investigators say is a $2.5 billion accounting fraud. Richard Botts, 45, former senior vice president in the tax department, and Will Hicks, 39, former vice president of investments, join 12 of their former colleagues who formerly pled guilty in the case — including the only five people to serve as the company’s chief financial officer.

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 Sets Example by Barring Two Auditors

The Securities and Exchange Commission announced this week that it has barred two auditors for "an egregious refusal to investigate the doubtful and see the obvious" in their audit of California Micro Devices.The auditors, Michael J. Marrie and Brian L.

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.

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.
Community News

SEC Cites ‘Harry Potter Fantasy,’ Presses Forward on Ernst Sanctions

The war of words between the Securities and Exchange Commission and Big Four firm Ernst & Young continues as the SEC has pledged to move forward with banning E&Y from accepting new audit clients for six months.SEC lawyers are pushing for sanctions against E&Y as a result of independence issues related to the CPA firm’s relationship with software developer PeopleSoft in the late 1990s.The SEC is likening E&Y’s defenses to the popular Harry Potter books and calling them "another work of

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