With accounting reforms not moving in Congress, 7 state legislatures are taking reform steps that are quite different from the bills pending on the Hill. For example, the California Assembly is considering a bill that would limit the consulting services that accounting firms can provide to their audit clients – and the New York state legislature is considering one that would require companies to rotate their audit firms every five years. These legislative efforts are in addition to the Texas State Board of Public Accountancy’s attempt to revoke Arthur Andersen LLP’s license to do business in that state.
For a Washington Post article on the Sarbanes bill and state efforts, see http://www.washingtonpost.com/wp-dyn/articles/A18198-2002May27.html.
EDGAR has gone live! Have you been to “Search for Company Filings” on the SEC’s EDGAR web site recently? Even if you last visited the site as recently as yesterday, you are in for a pleasant surprise. The SEC introduced improvements today to its EDGAR filings database (http://www.sec.gov/edgar/searchedgar/webusers.htm).
The EDGAR Company Search options are dramatically improved (http://www.sec.gov/edgar/searchedgar/companysearch.html).
To obtain EDGAR filings in “real time” click on Show Latest Filings (http://www.sec.gov/cgi-bin/browse-edgar?action=getcurrent). Here you’ll find the most recent filings our EDGAR system has received – from all SEC filers, including individuals and companies, paper filers and electronic filers. This page features real-time filings for the current official filing date (including filings made after the 5:30 p.m. (Eastern) deadline on the previous filing day).
The controversy over Chairman Pitt’s meetings has begun to boil again after new revelations that the Chairman met with Xerox executives last December – before the SEC reached its record settlement with Xerox – and against the wishes of some SEC staffers. Although there are no allegations of law violations, critics don’t like the “optics” of the Chairman’s meetings.
See the May 18th article in the Washington Post at http://www.washingtonpost.com/wp-dyn/articles/A35653-2002May17.html.
The SEC finally has posted its proposal release on Critical Accounting Policies – its at
The controversy over Chairman Pitt’s meeting with the new KMPG chair may subside as Senator Tauzin has publicly stated that – after his own meeting with Chairman Pitt – he believes that nothing inappropriate was said to the KMPG chair. The end result of this controversy likely will be limited access to Chairman Pitt, not a desirable result for most groups with a viewpoint during this heavy rulemaking period.
Senator Sarbanes (D-Md.), the head of the Senate Banking Committee, has circulated a draft bill regarding accounting reform. The bill is more strict than the bill that Senators Dodd and Corzine introduced a few weeks ago, which has languished. And certainly more restrictive than the House bill sponsored by Rep. Oxley that passed the House Financial Services Committee last month. Senator Sarbanes seeks his committee to approve the bill by Memorial Day.
Today, the SEC agreed to adopt new rules mandating the use of EDGAR for international filers. The SEC rules mandate the use of EDGAR for all international filers starting 4th November 2002. Below is a summary what transpired at the SEC open meeting:
- Beginning 4th November 2002, filing via EDGAR will be mandatory (subject to exceptions noted below).
- Forms exempt from electronic EDGAR filings are (1) glossy annual reports and (2) 6k’s for which the content has not been the subject of a press release; not distributed to security holders and not the subject of any new information. In these instances, the issuer may choose to file electronically or on paper.
- An English language summary of foreign language documents will still be permitted – rather than complete translation as initially proposed The SEC staff will soon issue guidelines for English summaries.
- The SEC decided that they will not require a certification by a corporate officer regarding the accuracy of translations. Rather, the SEC believes that sufficient United States securities law liabilities already apply to the translations – so that a certification does not serve any real benefit.
- The SEC stated that it did not anticipate that the adoption of these new rules would impede or discourage non-US companies from listing in the United States.
- The final rules will be made publicly available during the next week
The SEC EDGAR filing hours will remain the same for now. However, the SEC did express an interest in gradually expanding these hours by opening earlier. It is unknown when – or if – this initiative will take place.
Chairman Pitt has come under more scrutiny for a meeting he recently held with the new Chairman of KMPG. According to the Washington Post, both Chairmans dispute what was discussed – the KMPG Chairman apparently had sent out a memo after the meeting noting that the SEC’s recent settlement with Xerox was discussed. Chairman Pitt denies that any investigation was mentioned. Chairman Pitt continues to come under more scrutiny than any SEC official in memory – and such scrutiny is likely to continue as the fallout from the dot.com boom comes under his watch…see http://www.washingtonpost.com/wp-dyn/articles/A42922-2002May6.html.
With great sadness, I note that former Commissioner Norman Johnson recently passed away. Commissioner Johnson served on the Commission from 1996 to 2000. His funeral will be Thursday at noon in Salt Lake City.
This is the start of my grand Blog experiment. I hope through this Blog to provide more timely information about developments in corporate and securities law – as well as practical anecodotes about how people appear to be reacting to these developments. Tune in to determine whether Blogs are worth the hype…