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Xerox to Pay Record Financial Fraud Penalty, Investigation Turns to KPMG

The SEC has informed representatives of KPMG, and executives of Xerox, about the possibility of leveling charges against them as part of an ongoing investigation into accounting irregularities at Xerox.In a civil complaint filed against Xerox today, the SEC meticulously outlines details of an alleged fraud, accusing Xerox of "relying on what it called 'one-time actions,' 'one-offs,' 'accounting opportunities' and 'accounting tricks'" resulting in an acceleration of the recognition of copier-equipment r

Panel Wants SEC to Lead Accounting into Internet Age

On April 4, 2002, the Securities and Exchange Commission (SEC) hosted a roundtable in Chicago to find out how best to improve financial disclosures. The participants represented key occupations and associations that typically take a back seat in the setting of accounting standards. Their nearly unanimous conclusion: the SEC should take the lead in bringing accounting and financial disclosures into the Internet Age. How to Overcome ObstaclesThe panelists also gave the SEC some advice about how to overcome obstacles to needed reforms:Priority no.
Community News

SEC Seen as Key to Success in DOJ-Andersen Talks

While Andersen employees were still trying to find their way through the political maze, former Securities & Exchange Commission (SEC) Chairman David Ruder took center stage on a televised Lou Dobbs show to explain how the maze got created and how the firm can get through it. A Sound Litigation Strategy Gone AwryAppearing on the April 2, 2002 Moneyline show, Mr.

SEC To Hold Roundtable on Audit Reforms in Chicago

The Securities and Exchange Commission (SEC) has announced that its third roundtable discussion on accounting and audit reforms will be held in Chicago on April 4, 2002. This event follows similar roundtable discussions held in New York and Washington. It will examine proposals to better protect investors by reforming financial disclosure and auditor oversight. The morning session (10:00 a.m.

SEC Sues Former Waste Management Officers for Fraud

The Securities and Exchange Commission has filed suit against the founder and five other former top officers of Waste Management Inc. for massive fraud. The complaint charges the defendants with inflating profits to meet earnings targets.

SEC Chairman Opposes Radical Audit Reforms

Speaking as the final witness before the Senate Banking Committee, Harvey L. Pitt, chairman of the Securities and Exchange Commission (SEC) argued against proposed legislation that would introduce radical reforms for accounting firms, but supported reforms of companies, credit agencies, and accounting standard-setters.

SEC Responds to DOJ Action with Rules, Hotlines

In response to the recent action of the Department of Justice (DOJ) against Arthur Andersen LLP, the Securities and Exchange Commission (SEC) has released guidance, consisting of a package of rules, hotlines and email addresses for use by investors, clients, and other audit firms.

Audit Committees Face Actions by SEC and Investors

Although the Securities and Exchange Commission (SEC) has never in the past brought an enforcement action against an audit committee or a member of an audit committee, recent remarks by SEC Commissioners and staff indicate this may change in the future. The remarks were made at the annual "SEC Speaks" meeting sponsored by the Practicing Law Institute on February 22, 2002 in Washington DC.

Freeze - This is The FBA! Lay Down Your 10-K!

Ohio Rep. Dennis Kucinich has indicated that he will unveil a bill this week proposing that the federal government take over the audits of public companies through the creation of a Federal Bureau of Audits.In the most radical proposal to be discussed so far on auditor reform, Kucinich's proposal would sidestep all public accounting firms and would take over the auditing of all publicly held corporations through a proposed new arm of the SEC."Americans rely on the FBI to protect them from criminals and terrorists. But who protects American shareholders from corporate criminals?

SEC To Host Roundtables on Accounting Reforms

On March 4, 2002, The Securities and Exchange Commission (SEC) will host a roundtable discussion in New York City to examine proposals for improvements in financial disclosure and auditor oversight. A similar roundtable will be held in Washington DC on March 6, 2002. The morning session (10:00 a.m. to noon) of each roundtable will focus on financial disclosure.
Community News

E&Y Subpoenaed in SEC Investigation Into PNC

The Securities and Exchange Commission (SEC) has expanded its investigation into the troubled PNC Financial Services Group and has sent subpoenas to the company's auditor, Big Five firm Ernst & Young.PNC, a Pittsburgh-based financial services group, is under investigation for possible transactions intended to remove bad loans from the company's books.
Practice Management

SEC Seeks More Power to Punish Corporate Wrongdoers

Speaking to the Glasser LegalWorks 20th Annual Federal Securities Institute, Stephen Cutler, director of the Division of Enforcement of the Securities and Exchange Commission (SEC), said the SEC is asking Congress for more power to punish corporate wrongdoers.A push for more powerThe SEC is asking for added authority to impose penalties on officers and directors through administrative cases that do not require federal court proceedings. Specifically, it wants to able to bar executives found to have committed wrongdoing from future service at any public company.

SEC Announces 'Quick-Fix' Disclosure Reforms

As the first step in a comprehensive program of accounting reforms, the Securities and Exchange Commission (SEC) has announced it intends to release proposed rules for expanded disclosures. The proposed rules will: Provide accelerated reporting by companies of transactions by company insiders in company securities, including transactions with the company. Accelerate filing by companies of their quarterly and annual reports.Expand the list of significant events requiring current disclosure on existing Form 8-K.

Former SEC Chairmen Urge Congress to Free FASB

Former chairmen of the Securities and Exchange Commission (SEC) testified before the Senate Committee on Banking, Housing, and Urban Affairs on February 12, 2002 on the issues that have arisen as a result of the Enron collapse. A key topic was their shared frustration with the process for setting accounting principles. They urged Congress to find a way to free the Financial Accounting Standards Board (FASB) from the business pressures of constituencies and funding dilemmas.

Congress Learns How Accountants Can Tag Future Enrons

Many people were surprised by the Enron collapse and lost money as a result. But James Chanos, head of a short-sell investment boutique, was not one of them. His firm profited from anticipating the company's demise. So Congress asked him to testify as to how he knew what no one else did. How to Spot the Early Warning SignsSurprisingly, many of the warning signs were out there in full view to anyone with an understanding of accounting.
Community News

FBI and SEC Will Investigate Global Crossing's Accounting

The Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC) are investigating the accounting practices at Global Crossing, the telecommunications company that filed the fourth largest corporate bankruptcy in U.S. history last month.

Moody's, S&P Ask Companies To Disclose Rating 'Triggers'

Faced with the prospect of increased scrutiny by the Securities and Exchange Commission (SEC), Moody’s Investors Service and Standard & Poor’s said yesterday they have expanded the types of information requested from companies.

Pitt Tells Congress 'Much More Needs To Be Done'

Testifying under oath at Congressional hearings, Harvey Pitt, Chairman of the Securities and Exchange Commission, gave his views on possible legislative actions and responded to a series of pointed questions, including “Are there any more Enron’s out there?” A quick review of the questions and answers will give you a good indication of the types of changes being discussed on Capitol Hill. Should Congress intervene with legislative actions?Chairman Pitt: The SEC h

Global Companies Tackle Auditor Independence and Oversight

In the U.S., the Enron collapse continues to be the subject of investigations by at least ten congressional committees. But the fallout has grown increasingly global in scope, and global companies are taking action to achieve the needed reforms without waiting for U.S. lawmakers.

NASDAQ 100 Turn Big Losses Into Pro Forma Profits

In a study described as a “sad commentary on the state of financial reporting in the United States,” analyzed the earnings (or losses) of the top 100 companies on the technology-heavy NASDAQ Exchange for the first three quarters of 2001. The study found the use of pro forma reporting turned combined losses of $82 billion for these companies under generally accepted accounting principles (GAAP) into combined profits of $19.1 billion.


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