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. The SEC also published a list of 945 companies whose chief executive and chief financial officers are now required to comply with the new order.

The companies are not going to be allowed to modify reports - they must choose either to certify the reports as is or have their company reports classified with others that are not in compliance. "This is black or white, there is no gray," said SEC spokesman John Nester.

Officers will be able to offer explanations as to why they refuse to certify the report and that information will be made public. "Our goal is to supply a very clear picture of who's been in compliance and who has not," said Mr. Nester.

Although companies will not be allowed to modify existing reports, it appears from the statement the corporate officers are asked to sign that they will be able to file additional, corrected reports. The officer is to attest, "based on a review of the covered reports of [company name], and, except as corrected or supplemented in a subsequent covered report...," that his company's report contains no untrue statements of material fact and no omissions that would make the report misleading.

Meanwhile, many smaller companies not included in the original list of 945 are coming forward and voluntarily offering to certify statements and then issuing press releases to make sure investors are aware of their compliance.

Clarification - July 22, 2002: An SEC spokesman told AccountingWEB today that there has been no change regarding modification of financials. Companies can still amend their filings, just as they did prior to the certification order. The covered reports in the certifications include 10Ks, 10Qs, 8Ks, all definitive proxy materials, AND any amendments of these forms.

You may like these other stories...

Accountants without a succession plan are hurting not only themselves but their clients as well. Here are seven ways to see your practice continues after you retire—some of them are better than others.What Are Your...
In my last article, I discussed the model of value pricing and the benefits this billing structure offers you and your clients. However, in order to set up the right value pricing for your client, you need to know what...
Remember the old joke about the devil showing a guy around Hell? There were great parties, swimming pools, and sumptuous food. The guy liked what he saw, lived a bad life and went to Hell when he died. Upon arrival the devil...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.