SEC

SEC Selects Accounting Fellows

The Securities and Exchange Commission's Office of the Chief Accountant has selected four professional accounting fellows for two-year terms beginning this summer. At the SEC, the newly selected professional accounting fellows will be involved in the study and development of rule proposals under the federal securities laws, liaison with the professional accounting and auditing standards-setting bodies, and consultation with registrants on accounting and reporting matters.Robert B.
Community News

SEC Sanctions Ernst & Young

Federal regulators censured Ernst & Young LLP on Monday and ordered the accounting firm to pay $1.6 million to settle charges of compromising its independence and contributing to faulty accounting by a client in 2001.Advertisement
Technology

SEC Will Not Require XBRL Data Audits

Securities and Exchange Commission Chairman Christopher Cox announced that companies adopting eXtensible Business Reporting Language (XBRL) for regulatory filings will not need an additional audit of the conversion of their data, reported Reuters. As part of an XBRL roundtable discussion Monday, Cox said requiring an audit on converted financial data could result in "crib death" for the XBRL project.Currently, only about two dozen companies, including Comcast Corp. and General Electrics Co., are participating in the SEC's voluntary XBRL pilot program.

GM to Reorganize 'Ineffective' Tax Dept.

General Motors said it would address recent accounting deficiencies by reorganizing its tax department, hiring more accounting personnel able to deal with its complex corporate structure and requiring more thorough reviews at the end of each quarter.GM issued a warning to investors that its performance was threatened by “ineffective” controls over financial reporting, including inadequately trained personnel and failure to obtain management’s approval for some transactions.The disclosure was made in GM’s annual report filed with federal regulators after a six-week delay.The an
Community News

Crowe Chizek Ranks Among Top 10 SEC Firms

Crowe Chizek and Company is one of the Top 10 Securities and Exchange Commission (SEC) accounting and consulting firms, according to Public Accounting Report (PAR). PAR, a widely circulated independent publication covering the public accounting profession, ranked Crowe seventh in the 2006 survey based on U.S. SEC net revenue. For fiscal year 2006, which ended March 31, 2006, PAR reported Crowe’s net SEC revenue of $83.1 million up 42 percent since the prior fiscal year. “It’s an honor to be ranked among the nation’s top 10 SEC firms,” said Mark Hildebrand, Crowe CEO.
Technology

Accounting Software Provider Acquires Digital Insight Corp.

Intuit Inc., a leading provider of business and financial management solutions for small and mid-sized businesses, financial institutions, consumers and accounting professionals, has completed its acquisition of Digital Insight Corp. Intuit believes the acquisition of Digital Insight, a leading technology provider in online banking, will help redefine the relationship between financial institutions and their small business and consumer customers.

New SEC Regulations on Pay and Perk Disclosures Go Into Effect

In mid-December of 2006, new Securities and Exchange Commission (SEC) rules became effective that require more information to investors by public companies in their filings about the pay packages and perks of executives. At a time of widespread backdating of options and the ever-widening divide between salaries of employees and executives, the changes are aimed at increasing corporate transparency. The new requirements will be added to existing disclosure tables found in the SEC filings.

3 Former Fannie Mae Execs Face Lawsuit

Fannie Mae’s regulator contends in a civil lawsuit that three former executives overstated profits by $6.3 billion to meet earnings targets and boost their bonuses.The regulator, The Office of Federal Housing Enterprise Oversight (OFHEO), filed a complaint with an administrative law judge on Monday, seeking $215 million from ousted Chief Executive (CEO) Franklin Raines, former Chief Financial Officer (CFO) Timothy Howard and former Controller Leanne Spencer.
A&A

Restatements Rise for Companies Bypassing SOX's 404 Provision

In what may be a cautionary notice to auditors of small public companies, recent research shows that financial report restatements are increasing at small businesses that have been exempt from the onerous 404 provision of the Sarbanes-Oxley (SOX) accounting reform act, but dropping for companies that do follow 404.The number of restatements filed by public companies to correct accounting errors during the first nine months of this year versus the same period in 2005, rose 45 percent for small “micro-cap” companies, that have been exempt from 404, according to a recent report.
A&A

SEC Proposes Risk-Based Analysis of Financial Controls

The Securities and Exchange Commission (SEC) voted unanimously on Wednesday to allow public companies subject to the requirements of Sarbanes-Oxley (SOX) to evaluate the design of only those financial controls that might carry the risk of having a material impact on financial statements.
Community News

KPMG Plans Counter Suit of Fannie Mae

KPMG fired back at former audit client Fannie Mae this week, saying it would counter the mortgage giant’s $2 billion negligence and breach of contract lawsuit.KPMG “will pursue our own claims against Fannie Mae” in the U.S. District Court in Washington, D.C., spokesman Tom Fitzgerald told reporters Tuesday. Fannie Mae filed its lawsuit Tuesday in the Superior Court of the District of Columbia.Fitzgerald said the issues raised in Fannie Mae's lawsuit “are already pending" in shareholder lawsuits before the federal district court.
A&A

SEC and PCAOB Still Working on Sarbanes-Oxley Changes

Christopher Cox, the Securities and Exchange Commission (SEC) Chairman, said Monday that regulators were still working on revisions to its rule requiring companies to adopt internal controls and procedures for financial reporting but said he was “confident” that the result would “improve the reliability of public company financial statements and better protect investors,” the Washington Post reports. The SEC will issue its proposed revision on December 13.
Community News

PCAOB Budget Projects Staff Increase of 39

The Public Company Accounting Oversight Board (PCAOB) submitted a 2007 budget proposal of $136.4 million, which would be an increase of $5.5 million or about a half a percent over the current budget.Advertisement
Community News

BearingPoint Faces Delisting From NYSE

BearingPoint, the tech and management consulting firm forced to split off from parent KPMG by the Sarbenes-Oxley Act (SOX), could be dropped from the New York Stock Exchange (NYSE), the company’s 2005 annual report said.Advertisement
A&A

SEC, PCAOB Chairmen Differ Over SOX 404 Changes

Securities and Exchange Commission (SEC) Chairman Christopher Cox and the Public Accounting Oversight Board’s (PCAOB) Chairman Mark Olson were reported to be planning to meet, possibly as early as Sunday, to discuss differences in their approaches to revising Section 404 of the Sarbanes-Oxley Act (SOX), Reuters reports. Early in November the PCAOB sent a draft audit revision to the SEC that did not win SEC approval because it did not meet the concerns of small businesses, unnamed sources told Reuters.

SEC Enforcement Actions are Down While Penalties Are Up

The Securities and Exchange Commission (SEC) has announced that the number of their new enforcement actions in the last fiscal year have fallen by some 9 percent, according to DealBreaker.com. The first reaction might be pride in enacting Sarbanes-Oxley (SOX) back in 2002. It makes corporate executives more responsible for the actions of their organizations. SOX also increased the transparency of corporate financial reporting for the benefit of investors and regulators alike.
Tax

Corporate America Fighting Back Against Lawsuits, Regulations

Two influential industry groups are developing proposals that would make it more difficult for investors to file civil suits against companies and accounting firms, while also strengthening protections from criminal cases brought by government prosecutors.The groups, which have close ties to the Bush administration, hope to limit the liability of accounting firms for the work they do for clients so that individuals are targeted for wrongdoing, not entire companies, the New York Times reported.One of the groups drafting proposals is the U.S.

Amendments to AS2 Aim To Rethink Auditor’s Role

The Public Company Accounting Oversight Board (PCAOB) submitted a draft of changes for its Auditing Standard 2 (AS2) to the Securities and Exchange Commission (SEC) back in September. AS2 has been criticized for its conservative use by auditors, according to CFO.com.

Skilling Sentenced; Worldcom Investors to Receive Payments

Former Enron Chief Executive Officer (CEO) Jeffrey Skilling was sentenced last Monday to 24 years and four months in prison for his role in the corporate accounting scandal that gave its name to an era. The Securities and Exchange Commission (SEC) announced that it would begin distributions to WorldCom investors from the Fair Fund. And while the Enron and WorldCom corporate accounting scandals set the stage for congressional action and passage of the Sarbanes-Oxley Act (SOX) in 2004, criminal prosecutions in these cases have not lessened the SEC’s work load.

The SOX Roadmap: A Dead-End for America <i>by Paul Sharman</i>

Imagine you’ve been told you must go on a business trip every year or there will be severe personal consequences. You give the destination and dates to your travel planner and he provides you with an agenda, trip cost estimates and maps. Your planner tells you the first year’s trip should cost no more than $910, and assures you the trip shouldn’t be too onerous. Just before leaving he explains that although you’re not going to the destination you picked yourself, you will enjoy it once you understand the many “good things” his destination offers.

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