SEC

PCAOB Places Limits on Controversial Decision

Last week, AccountingWEB reported on a growing controversy facing the PCAOB - the decision to allow PCAOB Chief Auditor Douglas Carmichael to continue the work he began on a number of court cases as an expert witness. Over the Memorial Day weekend, the Board placed significant restrictions on their decision, and will still allow Carmichael to testify but only if subpoenaed.At issue are five court cases where Mr. Carmichael has been hired as an expert witness.

SEC to Require Stricter Internal Controls

As part of its ongoing attempts to show the buck stops in the CEO’s office, the SEC voted this week to approve strict new internal control requirements — requiring CEOs to sign off that the rules are in place and being followed.The new requirements would apply to public companies under the jurisdiction of the Securities and Exchange Commission and is widely applauded by industry groups, including the American Institute of Certified Public Accountants.The SEC voted to adopt rules concerning management's report on internal control over financial reporting and certification of disclosur

SEC Under Scrutiny For Settling Fraud Cases

What’s more important in disposing of corporate fraud cases — speedy settlements or lengthy jury trials? The SEC, which settled cases this week with WorldCom and PricewaterhouseCoopers, is under fire for brokering speedy settlements over the more drawn out jury trial option. "The SEC should be enforcing the law to its fullest extent," not negotiating compromises, said Mitch Marcus, a former WorldCom manager who founded BoycottMCI.com to lobby for stiff punishment.
Community News

SEC Fines PricewaterhouseCoopers $1 Million

On Thursday the Securities and Exchange Commission announced a settlement with Big Four firm PricewaterhouseCoopers regarding the firm's 1997 audit of SmarTalk Teleservices Inc. PwC is accused of engaging in improper professional conduct in its audit of the now bankrupt SmarTalk.The SEC claims PwC failed to accurately report a $25 million restructuring reserve for SmarTalk and did not properly audit amounts that were charged against the reserve.
Community News

It's Official - McDonough Confirmed as Head of PCAOB

On Wednesday, members of the Securities and Exchange Commission announced that they have unanimously approved the appointment of William McDonough as head of the Public Company Accounting Oversight Board (PCAOB). Mr. McDonough was chosen in April to head the organization.
Community News

Yet Another Controversy Hits PCAOB

It seems like the organization charged with oversight of the audits of public companies just can’t stay away from controversy. First it was Harvey Pitt’s approach to naming a PCAOB head – then it was William Webster’s resignation due to undisclosed ties to a company under investigation – then SEC chief accountant Robert Herdman stepped down for his role in the Webster nomination.

MCI/WorldCom Agrees to Record Settlement With SEC

Telecommunications giant MCI, formerly known as WorldCom, agreed on Monday to pay a record $500 million fine to the Securities and Exchange Commission, the latest step in the company's road to recovery from the largest corporate bankruptcy in U.S. history.The $500 million fine makes mincemeat out of the puny $10 million fine the SEC levied against Xerox last year for accounting irregularities. At the time, $10 million was the largest fine ever charged by the SEC against a non broker-dealer.

Senate Panel Scrutinizes Wall Street Settlement

United States Senators have expressed skepticism and have questioned whether the recent $1.4 billion Wall Street settlement against large investment banks would lead to meaningful reform and help the average investor. The comments came during a Senate Banking Committee hearing about the recent settlement between federal and state regulators and 10 investment banks over conflict of interest charges.
Community News

Two E&Y Partners Suspended by SEC For Failure to Catch Fraud

Two Ernst & Young partners settled a civil lawsuit filed by the Securities and Exchange Commission (SEC) by agreeing to a suspension from auditing public companies for at least four years. The suit alleged that Kenneth Wilchort and Marc Rabinowitz, who both work in E&Y’s Stamford, CT office, failed to detect accounting fraud at Cendant Corporation and its predecessor, CUC International. In 1977 CUC International merged with HFS Inc.
Community News

SEC Settles $1.4 Billion Suit With Wall Street Firms

Ten of Wall Streets biggest firms will pay a total of $1.4 billion to settle civil conflict of interest claims, the Securities and Exchange Commission announced this week. SEC Chairman William H. Donaldson and New York State Attorney General Eliot L. Spitzer announced the settlement to several ongoing investigations in federal court.The settlement restructures the brokerage business by putting barriers between analysts and investment bankers who work for the same firm.
Community News

Why AOL’s Accounting Woes Continue

Last summer, media giant AOL Time Warner certified its financial statements but warned that there could be restatements. It didn’t take long for those words to come true. In October, the company restated $190 million in revenue, mostly for advertising deals before and after its merger in 2001 with Time Warner.
A&A

SEC Formally Reaffirms FASB, Approves PCAOB

Responding to a requirement of the Sarbanes-Oxley Act, The Securities and Exchange Commission has reaffirmed that the Financial Accounting Standards Board has met the criteria needed to continue to be recognized as the accounting standard setting body.FASB Chairman Robert Herz said, "We appreciate the continued confidence and support of the SEC and look forward to working closely and effectively with the Commission and its staff, as well as with the new Public Company Accounting Oversight Board in ensuring quality fi

SEC Stops Executives From Quietly Selling Stock

The days of top executives dumping their company stock to protect their own wealth — while encouraging stockholders to keep investing — appear to be over. Beginning June 30, corporate insiders have two days to electronically report their transactions to the Securities and Exchange Commission Web site and to post the actions on their company Web site.This replaces the old paper reporting system, which required regulators and the media to dig through mountains of paper at SEC headquarters to uncover fraudulent transactions.
Community News

William McDonough Selected to Head PCAOB

The wait is over to find out who will lead the accounting reform charge at the Public Company Accounting Oversight Board.William McDonough, President of the New York Federal Reserve Bank, was named today to the position of Chairman of the Public Company Accounting Oversight Board. He will start at the $556,000 a year position after being fully vetted and voted on by the SEC Board.Mr.

ABA President Objects to Proposed SEC Rule

The American Bar Association (ABA) is lobbying hard to stop the adoption of a new SEC rule that would require lawyers to make a "noisy withdrawal" - essentially requiring that they become whistleblowers - if their clients are involved in wrongdoing. On April 4, Alfred P. Carlton, president of the ABA, wrote a comment letter to the Securities and Exchange Commission, voicing his objections to the proposed procedure.

SEC Files Insider Trading Charges Against Former HealthSouth Chief

Richard Scrushy, former head of HealthSouth Corp., joins his two former chief financial officers, William Owens and Weston Smith, in

SEC Sets New Rules For Audit Committees

The Securities and Exchange Commission has voted to adopt new corporate governance rules aimed at further protecting investors by placing new restrictions and new requirements on company audit committees.The new rules, set to take effect no later than October 31, 2004 (July 31, 2005 for foreign issuers), prohibit stock exchanges from allowing a company to be listed if the company does not comply with the new procedures, which require that:Each member of the audit committee of the issuer must be independent according to the specified criteria in Sarbanes-Oxley. The au
Community News

PCAOB Hires Public Affairs Director

As part of its efforts to be fully “up and running” by the April 26 deadline, The Public Company Accounting Oversight Board has added a Public Affairs Director to its growing staff.Christi Harlan will join the PCAOB effective April 14, 2003, and is well versed in the activities she is about to embark upon. Ms. Harlan has held the position of Public Affairs Director for the Securities and Exchange Commission since January 2002, where she has dealt with many of the issues regarding Sarbanes-Oxley. Prior to joining the SEC, Ms.
Community News

SEC's Top Accountant to Leave Agency

Jackson M. Day, the acting Chief Accountant for the Securities and Exchange Commission, has resigned his position and will be returning to the private sector.Mr. Day joined the SEC in 2000 and took over the position of the Chief Accountant when Robert Herdman stepped down amid controversy surrounding the selection of William Webster as head of the SEC's Public Company Accounting Oversight Board.Prior to joining the Commission, Mr.

SEC Rebukes AICPA on Standards-Setting Posture

The SEC wants the AICPA - and its members - to know, in no uncertain terms, who's in charge of standard setting. Last week AccountingWEB reported that the American Institute of CPAs had issued an Exposure Draft on Internal Control Reporting in an effort to help auditors understand and implement Section 404 of the Sarbanes-Oxley Act - "Management Assessment of Internal Controls".

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