Accounting & Auditing

Report prepared by the staff of the Securities and Exchange Commission on the adoption by the U.S. of a “principles-based” accounting system, as opposed to its current “rules-based” system.

For U.S. public companies, the legal landscape for the quarterly ritual of publicly announcing and discussing their financial results changed with the adoption by the SEC of Regulation G and the related amendments to Regulation S-K and Form 8-K which became effective on March 28, 2003. Overview Under the new rules, companies that disclose material […]

It’s almost earnings reporting season again. To help companies get ready, this article reviews practices for handling earnings announcements in light of new SEC rules that took effect on March 28, 2003 and recent guidance provided by the staff of the SEC’s Division of Corporation Finance in the form of an FAQ issued on June […]

A survey conducted in last week’s edition of Compliance Week showed that internal or “cascading” certifications are—or will be—in place at over 90 percent of responding companies. The attestations, often called internal representations, have become increasingly common as companies prepare for Section 404 IC certifications. The law firm of Sidley Austin Brown & Wood was […]

O On May 20, the SEC published its adopted rules related to Section 303 of the Sarbanes-Oxley Act of 2002, which prohibit officers and directors from “coercing, manipulating, misleading, or fraudulently influencing” their outside auditor. The original proposal was published Oct. 18th but only differs slightly from the adopted rule. Key components, details, effective dates […]

While many non-audit accounting & tax services are now either banned or require audit committee pre-approval, a new academic study shows little or no correlation between those services and lax GAAP enforcement. Scholz The study of non-audit services, conducted by several academics including Susan Scholz at the University of Kansas and William Kinney at the […]

Over the last six years or so, starting long before the current search for accounting reform, the two of us have gone through the process of changing the way we look at public financial reporting. Mind you, we didn’t just tweak our perspective but completely changed our views on the objectives and methods of financial […]

PART FIVE IN A SERIES Over the last month, we have had the opportunity to describe in these pages the basics of Quality Financial Reporting. QFR is our proposed alternative to management’s current dependence on compliance with generally accepted accounting principles to produce fully informed capital markets. Whereas the status quo paradigm looks for ways […]