The Practical Corporate & Securities Law Blog

By Broc Romanek

Go to TheCorporateCounsel.net

 
The SEC has pronounced that the new listing standards on shareholder approval of equity compensation plans and broker voting will not go into effect for this proxy season. The current rules will be extended through June.

For TheCorporateCounsel.net subscribers, we have posted an interview with Erin Sweeney of Latham & Watkins on option dilution disclosure at http://www.thecorporatecounsel.net/member/InsideTrack/03_06_03_Sweeney.htm.

posted by broc at 7:34 PM

 
Yesterday, FASB chief Bob Herz testified before Congress on expensing options - and expressed his view that he would resist political pressure in his efforts towards mandating expensing. See the related Washington Post article at http://www.washingtonpost.com/wp-dyn/articles/A42477-2003Mar4.html.

For TheCorporateCounsel.net subscribers, we have posted an interview with Jeff Shulte of Morris, Manning & Martin on Attorney Responsibility Standards at http://www.thecorporatecounsel.net/member/InsideTrack/03_05_03_Schulte.htm.
posted by broc at 6:50 PM

 
Thanks to Mike Holliday - our roving friend and reporter - the following are some of the actions taken by the Public Company Accounting Oversight Board at its meeting today:

1. Approved putting out for comment proposed registration rules and forms for public auditing firms to register. Comments due by 5 p.m. on March 31st. After the comment period, the PCAOB has to approve the rules and forms and submit to the SEC, which will put out the rules for comment. The PCAOB time schedule is to send the rules and forms to the SEC by mid-April, with applications from auditing firms due to be filed by early September and firms registered by the end of October.

2. The PCAOB plans to put out proposals for allocation, assessment and collection of fees from issuers next week, with final rules to the SEC by mid-April. They plan to be able to send bills to issuers in mid-to-late spring.

3. The PCAOB plans to adopt transitional standards on auditing, quality control and independence in mid-April, and to announce standard setting procedures in April.

4. Non-US auditing firms - including non-US firms that play a substantial part in preparing audit reports even if the firm does not issue the report - are not exempt from the registration process.

5. The PCAOB plans to hold a roundtable the week of March 17, they mentioned Friday, March 21, to consider registration of non-US auditing firms and how the PCAOB should exercise its authority over non-US firms. They want to invite participation by US and non- US auditing firms, investors and financial regulatory authorities. There will be a separate release on this with a list of questions attached.

Although most of this regulation directly affects the auditing firms and not public companies, there are a few issues for companies to follow - in addition to the fees public companies will have to pay. The PCAOB will be collecting data, particularly in audit firm investigations, that may include some public company client information.

Also, SOX 105 specifically authorizes the Board to establish rules to request testimony of, and production of any document in the possession of, any other person including any client of an auditing firm, and to seek issuance by the SEC of a subpoena to require the testimony of or production of any document in the possession of any person including any client, with relevancy and materiality standards. Public companies will have an interest in how their confidential and proprietary information will be protected.

The SEC also announced the details of its selection process for head of the PCAOB - it's at http://www.sec.gov/news/press/2003-28.htm.


posted by broc at 6:35 PM

 
More than 100 companies with 12/31 year-ends filed their Form 10-Ks (and some 10-KSBs) within 60 days - meeting what will be the new deadline two years hence.

From these and other filings, for TheCorporateCounsel.net subscribers, we have excerpted sample disclosures related to loans under Section 402 and changes in accountants. We also have sample disclosures regarding audit committee financial experts. These are posted at http://www.thecorporatecounsel.net/member/Disclosure/.

The Public Company Accounting Oversight Board hired away George Diacont from the Nasdaq to be head of registration and inspections. George used to work at the SEC. The Oversight Board has a much anticipated meeting today at 12:30 est - tackling registration of foreign auditng firms among other issues. You can hear the webcast at http://www.connectlive.com/events/pcaob/.
posted by broc at 10:12 AM

 
At "SEC Speaks," no real bombshells were dropped. However, the SEC staff did note that there is some possibility that the upcoming final rules on broker uninstructed votes could still be applied to this proxy season. But the staff did not indicate when the final rules would be adopted - so the likelihood of this appears relatively limited to us. Notes from SEC Speaks will be posted on TheCorporateCounsel.net within a few days.

The Sunday edition of the NY Times included an article on a recent Indiana University study on the impact of CEO Certifications on corporate earnings - we have posted a copy of that survey at http://www.thecorporatecounsel.net/member/alerts/03_03_03_CEO.pdf.
posted by broc at 2:24 PM