Watch for SEC Guidance Affecting 2001 Reports | AccountingWEB

Watch for SEC Guidance Affecting 2001 Reports

The Securities and Exchange Commission (SEC) is mulling over a draft of new guidance that could affect preparation of annual reports for the year just ended. The draft was submitted by the Big 5 firms and the AICPA, all of whom are petitioning SEC to issue speedy guidance in the form of an “interpretive release” applicable to the MD&A (Management Discussion and Analysis) portions of 2001 annual reports on Form 10-K.

The SEC petition is the first in a series of steps planned by the Big 5 in response to the Enron collapse and resulting loss of public confidence in financial reporting. A second step under consideration is a follow-on petition that would urge the Commission to set rules for the minimum disclosure requirements for the three areas addressed in the draft interpretive release:

(1) liquidity and capital resources, including off-balance sheet arrangements,
(2) trading activities involving non-exchange traded contracts, and
(3) related party transactions, including relationships and transactions on terms that would not be available from clearly independent third parties.

SEC Chief Accountant Robert K. Herdman said the SEC staff intends to study the petition on an expedited basis, and it expects to make recommendations for consideration by the Commission. “Whether or not the particular guidance in the petition is adopted by the Commission,” Mr. Herdman cautioned, “public companies will do well to consider the objectives of the disclosure outlined in the petition and the materiality of the matters discussed in the draft guidance."

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.