SEC

Practice Management

SEC Won't Let Companies Modify Financials

In light of the new Securities and Exchange Commission (SEC) requirement that corporate executives attest to the validity of their financial statements, there has been a wave of companies coming forward and asking to revise their financials before the August 14 SEC deadline.On June 28, the SEC ordered that corporate officers must personally certify that their most recent reports filed with the Commission are both complete and accurate.
Practice Management

Corporate CEOs, CFOs Voluntarily Certify SEC Filings

As stock prices continue to decline, companies seem to be growing as impatient as investors. Some corporate officers who are not required to comply with the certification order from the Securities and Exchange Commission (SEC) are doing so voluntarily, despite the risk of personal liability for making a false statement.Companies that choose to go this route may also issue press releases to make sure they get recognized by the capital markets.
Practice Management

SEC to Expand Shareholder Voting For Stock Option Plans

On July 15, 2002, as the Senate bickered over but eventually defeated tough stock option reforms, the Securities and Exchange Commission (SEC) agreed to change a key policy involving stock option plans.

SEC Gives Analysts Some Space - On Its Web Site

Recognizing the increasingly important role they play in today's capital markets, the Securities and Exchange Commission (SEC) has now established a separate section on its Web site to provide investor guidance and Commission information about securities analysts.

SEC Widens Its Net to Include 'Channel Stuffing'

On July 11, 2002 Bristol-Myers Squibb, one of the world's largest pharmaceutical companies, confirmed that the Securities and Exchange Commission (SEC) has launched an "informal inquiry" into its sales practices.

New Rules Will Require Investors to Pass Identity Check

The Patriot Act, passed by Congress earlier this year, provides for the Securities and Exchange Commission (SEC) to create rules that will prevent terrorists from using U.S. mutual funds and brokerage accounts as a channel for money laundering. In the spirit of the authority created by this law, the SEC has announced plans to require U.S.
Community News

SEC's Pitt Angered at WorldCom, More Accounting Errors on Horizon

The Securities and Exchange Commission (SEC) ordered WorldCom to produce a statement on Monday, July 1, setting out a detailed timeline of the date of discovery and disclosure of $3.8 billion in expenses that were buried on the balance sheets of 2001 and 2002 financial statements. According to SEC Chairman Harvey Pitt, WorldCom failed to provide the information required by the SEC."WorldCom's statement is wholly inadequate and incomplete," said Mr. Pitt.
Practice Management

SEC Orders Corporate Officers to Certify Financial Statements

Support for tough accounting and audit reforms is growing, provided the reforms also include stiff sanctions and penalties for top-level corporate management of large public companies. As the first major step in this direction, on June 28, 2002, the Securities and Exchange Commission (SEC) ordered corporate officers to personally certify that their most recent reports filed with the Commission are both complete and accurate.
Community News

SEC Fines EY, More Auditor Independence Cases to Come

The U.S. Securities and Exchange Commission (SEC) fined an overseas office of Ernst & Young (EY) $400,000 for lack of independence in the audits of Baan Company, N.V., a business software company headquartered in the Netherlands. An SEC official indicated that other auditor independence cases might soon follow.The SEC charges that joint business relationships between Baan and EY's overseas office resulted in an impairment of auditor independence.

WorldCom Paves The Way For Fast-Action Audit Reforms

On June 25, 2002, barely a week after the U.S. Securities and Exchange Commission (SEC) and the Senate Banking Committee proposed alternate accounting reform bills, WorldCom announced its intention to restate its recent financial statements. The timing is expected to have far-reaching political implications, particularly when taken together with the statement issued by its former auditor Arthur Andersen.

SEC Charges Ex-CEO of Rite Aid With Accounting Fraud

In a case involving the largest-ever corporate restatement, the Securities and Exchange Commission leveled charges against not only the former chief financial officer (CFO) but also the former chief executive officer (CEO) and other members of the management of the Rite Aid Corporation.

SEC Sticks to Auditor Oversight Plan Despite Public Outcry

In an open meeting on June 20, 2002, the Securities and Exchange Commission (SEC) voted to expose for public comment its proposal for a private-sector body to oversee audits of public companies. The proposal met with a public outcry after details were provided to the media. Much of the meeting was devoted to defending the plan against those who don't see it as much of an improvement.

SEC Poised to Release Proposal on Oversight Board

On the eve on the mark-up of the Senate accounting reform bill, the Securities and Exchange Commission (SEC) announced it, too, will take up the issue of oversight of the auditing profession this week. The SEC has scheduled an open meeting on Thursday, June 20, 2002 to consider the issues. It plans to vote at that time on the release of proposed rules that would create the framework for a new private-sector regulatory scheme.

SEC Starts Rule-Making Process For Post-Enron Reforms

On June 12, 2002, the Securities and Exchange Commission (SEC) proposed rules designed to improve corporate reporting and restore investor confidence. The proposed rules would require senior executives to vouch for their company's reports, and they would expand the types of events that must be reported as they occur, rather than weeks or months later. Many of these reforms were discussed and/or announced during post-Enron Congressional hearings.
Practice Management

Blast From Ex-SEC Cop Shows Shift in SEC's Strategy

In a letter to the editor of the Miami Herald, a former attorney of the Miami office of the Securities and Exchange Commission's (SEC's) enforcement division broke ranks with his normally tight-lipped colleagues and publicly criticized the Commission. Some readers were surprised at the way he blamed three former chairmen for leaving a legacy of crises and blasted the current chairman for undermining the region's prosecutors.
Tax

SEC Forum To Probe Problems of Small Businesses

The Securities and Exchange Commission (SEC) has announced that its annual Government-Business Forum on Small Business Capital Formation will be held on September 26 and 27, 2002 in Arlington, Virginia. The Forum is a way for small business owners and their representatives to communicate their views and needs to senior government officials. Items slated for discussion include issues in the areas of taxation and securities regulation.

Microsoft and SEC Settle 'Cookie Jar Accounting' Case

On June 3, 2002, the Securities and Exchange Commission (SEC) announced the settlement of an administrative enforcement action against Microsoft Corporation. The case involves allegations that Microsoft used "cookie jar accounting" to smooth earnings through adjustments to reserves.Commissioner Isaac Hunt explained to Reuters, "It's a cease-and-desist order.
Technology

EDGAR Goes Real-Time with Up-to-the-Minute Filings

Securities and Exchange Commission (SEC) Chairman Harvey Pitt announced on May 30, 2002 that the Commission's Web site will now provide free, real-time access to the filings of companies registered with the SEC. In the past, EDGAR filings were delayed by at least 24 hours on the free site, while some commercial EDGAR service providers supplied up-to-the-minute filings for a fee.
A&A

SEC Talks Tough on Changes in Store for FASB

The media may have called him the "wishy-washiest watchdog since Scooby-Doo," but Securities and Exchange Commission (SEC) Chairman Harvey Pitt is talking tough about reforming accounting standards.
Community News

Court Denies KPMG's Appeal of Charges by SEC

In a decision dated May 14, 2002, a court of appeals denied KPMG's request for a reconsideration of an independence action brought against the firm by the Securities and Exchange Commission (SEC). The court's decision to back the SEC was especially significant because KPMG's position was supported by the American Institute of CPAs (AICPA). The SEC charged that KPMG was not independent when it audited a client who purchased turnaround services from a KPMG affiliate in exchange for contingent fees.

Pages