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SEC

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".
Community News

Nonprofits Without Audit Committees Risk Financial Disaster

By, John R. Owen, III, Esq., Polito & Smock, P.C.In the wake of Enron and other business scandals, the audit committee of a company’s board of directors has resurfaced as a key tool for preventing fraud and ensuring sound financial management. But in the nonprofit world, the boards of many organizations operate without audit committees in the mistaken belief that charities do not need them.Financial improprieties are not limited to for-profit enterprises.

The Search is on For a New PCAOB Chair

Wanted: Impeccably credentialed expert to serve as head of the organization that will oversee accounting firms' audits of public companies. The ideal candidate should have no skeletons in his or her closet, should be independent of any conflicts, and should be respected by accountants, the business community, government, Wall Street, and investors alike. Salary - $556,000 per year plus benefits. Apply by March 14, 2003. Send resume and cover letter to W. Donaldson, Chairman, Securities and Exchange Commission, Washington, DC.

PCAOB Votes to Require Int'l Accounting Firm Registration

The newly formed Public Company Accounting Oversight Board (PCAOB) met yesterday and issued its first order. With a unanimous (4-0) decision, the Board voted to go forward with proposed rules that require U.S. and foreign audit firms to register with the Board if they perform audits of U.S.-listed corporations.The PCAOB will accept public comments through March 31 on the proposed rules. After the public comment period ends, there will be another vote. The rules must be accepted by both the PCAOB and the Securities and Exchange Commission.
Community News

Two Ex-Kmart Executives Charged With Accounting Fraud

Yesterday federal authorities charged two former Kmart executives with committing an accounting fraud that resulted in the bankrupt retailer overstating earnings by $42 million.Separately, the Securities and Exchange Commission (SEC) filed civil and criminal complaints against Enio Montini, a former senior vice president and general manager, and Joseph Hofmeister, a former divisional vice president. According to the SEC, Mr. Montini and Mr. Hofmeister conspired to mislead Kmart accountants about the true nature of a $42 million payment from American Greetings Corp., a Kmart vendor.

SEC Considering Crackdown on Short Sellers

The Securities and Exchange Commission is expected to present its new chairman, William Donaldson, with the opportunity to change the rules governing the trading practice of short-selling. Many companies and politicians have complained that the short-selling techniques have the effect of manipulating stock prices.A short-seller borrows shares of stock from his broker and sells them in the current market, agreeing to purchase the shares at a later date and repay the original loan. The short-seller banks on the hope that the shares will lose money before the loan is due.
A&A

Pitt’s Final Days Reveal Move to Assert More Control Over FASB

An article in the Wall Street Journal ("FASB Recognition Stalled Amid Fight Over Control," February 21, 2003) reveals that in the weeks leading up to his departure, Harvey Pitt pushed for and failed in an attempt to establish greater SEC control over the Financial Accounting Standards Board.Mr. Pitt’s plan was for the SEC to hold tighter control over FASB, the make up of the membership of the Financial Accounting Foundation, the selection of the members of the FASB, and the standard setting agenda of the organization.
Community News

William H. Donaldson is New SEC Chair

The full Senate has voted to approve the nomination of William H. Donaldson as the next chairman of the Securities and Exchange Commission. Mr. Donaldson, 71, is a former investment banker, former chairmen of the New York Stock Exchange, and former chairman and CEO of Aetna.Mr. Donaldson's nomination was presented to the full Senate after he was selected by the Senate Banking Committee last week. Mr. Donaldson has promised to aggressively enforce corporate anti-fraud rules.

Progress at PCAOB; Congress Drops PCAOB Salary Caps

Charles Niemeier, the interim chairman of the Public Company Accounting Oversight Board, responded to an article in Wednesday’s Financial Times that the Board was falling behind its schedule to fully review the Big Four accounting firms by the end of 2003."To fall behind, you have to have something to fall behind from ....

Senate Banking Committee Approves Donaldson For SEC Chair

On Tuesday, The Senate Banking Committee approved the nomination of William H. Donaldson as the next chairman of the Securities and Exchange Commission. The vote now goes to the complete Senate.

SEC Requires Analysts to Certify Reports

Stock analysts will now have to certify the truthfulness of their research reports, under a recent unanimous ruling by federal regulators. On January 6, the Securities and Exchange Commission (SEC) ruled that analysts must certify that the research in their reports and public comments represent their true view. In addition, analysts must certify that haven’t received any payment from the company they are assessing. If they were paid for the report, they must disclose the amount they received and state that the compensation could influence their opinion.

Accounting Oversight Board Holds Second Meeting

The Public Company Accounting Oversight Board held it's second public meeting on February 4 as it begins settling in on its role of overseeing the implementation of several key provisions of the Sarbanes-Oxley Act.Among the discussions at this week's meeting:Acting Chairman Charles Niemeier expressed confidence that the Board will be able to carry out its responsibilities by the April 26, 2003 deadline set by Congress.Roderick M.

Big Firms Test SEC's Tolerance For New Audit Opinions

Last month, several large accounting firms began adding disclaimers to their audit opinions for UK clients in an effort to ward off lawsuits. Observers say these opinions will provide a real test of the tolerance of the U.S. Securities and Exchange Commission for non-U.S. customs and laws.

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