SEC

AICPA Issues Amendments to Independence Rules

The auditor independence quality controls sought and established last year by the Securities and Exchange Commission have resulted in an amendment to the auditor independence rules by the SEC Practice Section (SECPS) of the American Institute of Certified Public Accountants.This amendment is effective January 1, 2002. The SECPS has updated its "Independence" training course to take into account the SEC's new rules.
Community News

Andersen Faces SEC Sanctions over Enron Reporting

Enron, the natural gas and energy services giant, has been in the headlines in recent months regarding a massive restatement of shareholder equity that caused a shudder on Wall Street.

SEC Complains of 'Smoke and Mirrors' Reporting

SEC Commissioner Isaac Hunt, speaking last Friday before the Schools of Accountancy at its annual meeting in Arlington, Virginia, complained that federal regulators continue to see companies engaging in what he called smoke-and-mirror accounting practices that inflate earnings and stock prices.The SEC "has recently noticed certain worrisome trends relating to the integrity of financial information," stated Mr. Hunt.

SEC Chairman Wants to Shift Focus

The new Securities and Exchange Commission chairman, Harvey Pitt, is intent on shifting the focus of the SEC from prosecuting corporate financial fraud to improving financial disclosure. "I believe violations of law, if they occurred, have to be pursued with vigor," said Mr. Pitt," but I'm more concerned about protecting investors before violations occur."Mr.
Technology

SEC Launches New Investment Info Web Site

The Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) have announced the launch of a new Web site designed to provide information about money managers, financial planners, and other investment advisors.Visitors to the Investment Adviser Public Disclosure Web site (IAPD) will be able to access registration documents filed by the 7,500 SEC-registered investment advisors and more than 1,700 state-registered advisors.

SEC Names New Chief Accountant

The Securities and Exchange Commission has named Robert Herdman as the new chief accountant, replacing Lynn Turner who left the job in August.Previously, Mr. Herdman was a senior technical partner with Big Five firm Ernst & Young. Mr. Herdman is a member of the board of directors of the American Institute of Certified Public Accountants (AICPA) as well as a member of the AICPA's SEC practice division.

SEC Eases Auditor Independence Rules

The Securities and Exchange Commission, in an effort to promote a calm and orderly return to stock market trading, has agreed to ease several rules.In particular, SEC chairman Harvey L. Pitt has announced that effective immediately, accounting firms may provide bookkeeping services and aid in the recovery of records for clients with offices in and around the World Trade Center.

AICPA to Set Best Practice for Cheap Stocks

Three years after the project was initiated, the American Institute of Certified Public Accountants is now preparing to develop a report on best practices for addressing the practice of a company issuing cheap stock to its employees in the period just preceding an IPO.The SEC had requested the Institute address this issue, but the guidelines had been delayed due to disagreements among task force members. "The staff had high hopes this could lead to useful guidance addressing issues that preparers, auditors, and regulators face on a daily basis with respect to accounting for cheap stock.
Practice

SEC May Start Curtailing Pro Formas

For years, companies have used pro forma statements as a means of better comparing previously reported financial statements with current statements where circumstances have changed significantly, as in a merger or acquisition.But recently, companies have been using pro forma statements to reflect what they believe to be the "true" financial health and well being of the company, taking into consideration various assets that may not appear on traditional accounting books, such as brand loyalty, market share, patents and other intellectual property.It is through this pro forma reporting pro

SEC Urged to Speed Up Investigations

In an interview reported in the Financial Times today, Jim Copeland, CEO of Deloitte Touche Tohmatsu, urged the SEC to speed up its investigative processes and bring more definitive conclusions to its investigations of audit failures.Mr. Copeland lamented the fact that the credibility of the auditing profession was at stake when investigations drag on for many months or sometimes many years. "You never come to closure on these things," he said.

It's (Un)Official - New SEC Chair Sworn In

The Web site, www.cfo.com, is reporting that Harvey Pitt was sworn in as the new chairman of the Securities and Exchange Commission (SEC) last week in a private ceremony. No official announcement of the swearing in has occurred, and Mr. Pitt is reportedly on vacation and unavailable for comment."We haven't made an announcement on that yet," was the official SEC response from spokesman John Heine, who refused to deny the report of the ceremony.Before leaving town, Mr. Pitt appointed David Levine, former SEC chief of staff, to a return engagement in the same position. Mr.
Community News

SEC Rules Force Sale of PwC's Corporate Value Arm

New SEC rules on auditor independence have forced PricewaterhouseCoopers (PwC) to sell its US corporate value consulting (CVC) arm to Standard & Poor.The CVC unit had revenue of around $100 million last year and employed 400 employees in 13 US offices.
Education & Careers

SEC Looking For a Few Good Accountants

The Office of the Chief Accountant of the Securities and Exchange Commission is accepting applications for four Accounting Fellow positions.

Coopers Partner Charged With Fraud

A partner and two managers from Coopers & Lybrand, LLP (now, PricewaterhouseCoopers, LLP) have been charged with fraud by the Securities & Exchange Commission for their role in the audit of Allegheny Health, Education and Research Foundation (AHERF).William Buettner, Mark Kirstein, and Amy Frazier are alleged to have masked the deteriorating financial condition of AHERF by helping plan fraudulent transfers of reserves and then hiding this in the company's 1997 audit.The defendants issued an unqualified opin

Harvey Pitt Confirmed as SEC Chairman

On Wednesday, the Senate confirmed Harvey Pitt as the next chairman of the Securities and Exchange Commission, replacing previous chairman Arthur Levitt, who left the position in February, and acting chairman Laura S. Unger.Mr. Pitt is a lawyer who served as general counsel to the SEC from 1975 to 1978. It is expected that the tone of the SEC while Mr. Pitt holds the reigns will be one of less government regulation. In addition, Mr.

Senate Panel Chooses Harvey Pitt to Head SEC

The members of the Senate Banking Committee voted unanimously to choose Harvey Pitt as chairman of the SEC. Mr. Pitt is President Bush's selection for the office.The vote now goes to the Senate floor where it is expected that Mr. Pitt will easily win the votes. The date of the Senate vote has not yet been scheduled, but it is expected that the vote will occur prior to Congress's August recess.If Mr.

SEC Chair Would Reexamine Fair Disclosure Rule

Harvey Pitt, President Bush's selection for chairman of the Securities and Exchange commission, has indicated that, if confirmed, he would be willing to address the burdens placed on companies by Regulation Fair Disclosure (Reg FD). Reg FD, one of former SEC chairman Arthur Levitt's pet projects, requires publicly held companies to provide information that could influence the purchase of shares simultaneously to every potential investor.

Independence Standards Board to Shutter its Doors

The Independence Standards Board (ISB) has served its purpose and is ready to disband.

Bush Nominates New SEC Leader

President Bush has nominated Harvey Pitt to be chairman of the Securities & Exchange Commission. Mr. Pitt, a corporate lawyer, was former general counsel to the SEC under President Jimmy Carter.President Bush announced his intention to nominate Mr. Pitt earlier this year. Now the nomination has officially be sent to the Senate Banking Committee. This committee will schedule a confirmation hearing and ultimately Mr.

SEC Takes on Accounting Fraud

Congress may join forces with the Securities and Exchange Commission (SEC) in its investigation of hundreds of companies for possible earnings manipulation.Rep. Richard Baker (R-LA), chairman of the House Financial Services subcommittee on capital markets, has indicated that the House may call for hearings on the problem of accounting fraud in U.S. companies.Rep. John LaFalce, (D-NY), recently noted that executives are increasingly under pressure to meet analysts’ earnings estimates.

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