April 14, 2005
63,000 Internal Control Problems and Counting
During yesterday’s SEC 404 Roundtable, PwC said a study of 225 clients identified nearly 63,000 control problems or about 275 per company, most of which were fixed by the end of the review process.
The upshot of the Roundtable is that the PCAOB will likely issue staff guidance within 30 to 45 days to help clarify some aspects of Auditing Standard No. 2. And SEC Chairman Donaldson said that he will instruct his staff to present recommendations for change soon.
More on Majority Vote Movement
Haven’t heard yet whether the Council of Institutional Investors voted to back the majority vote movement (which CalPERS and ISS already have) during their meeting yesterday – but SEC Commissioner Harvey Goldscmid gave a speech there during which he vowed that the shareholder access proposal is not yet dead.
During the CII meeting, ISS released this 30-page white paper on the majority vote movement. Also posted is a transcript from a webcast they conducted recently on the topic (and I had already blogged about their new policy on this topic).
By the way, for the first time ever, the CII now has a majority of its 16 board members coming from unions – so we should expect a more activist agenda from CII in the near term…
SEC Changes Form 20-F for Transitional International Reporting Relief
To take into account the new international financial reporting standards – and encourage their use – the SEC adopted amendments yesterday to Form 20-F in order to permit those non-US issuers that adopt the new standards before 2007 to file just two years of income statements, changes in shareholders’ equity and cash flow rather than three years worth of those financials. No changes to US GAAP reconciliation were made.