David Kirkpatrick

November 24, 2009

Is the Sarbanes-Oxley Act on its last legs?

Looks like it. In this topsy-turvy political world Sarbox was ushered in by a GOP-controlled Congress and is being systematically gutted by a Democratic Congress. Of course one the unintended consequences of Sarbox was an untenable burden on small business. Wall Street was going to motor along, accounting firms were going to bank and Main Street was going to take it on the chin once again.

From the link:

The House Financial Services Committee has approved an amendment to the Investor Protection Act of 2009 to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional companies as well.

Some veterans of past reform efforts were left sputtering with rage. “That the Democratic Party is the vehicle for overturning the most pro-investor legislation in the past 25 years is deeply disturbing,” said Arthur Levitt, a Democrat who was chairman of the Securities and Exchange Commission under former President Clinton. “Anyone who votes for this will bear the investors’ mark of Cain.”

Those who favored the amendment saw it differently. They were simply out to help small businesses, which would be burdened by having to report on whether they maintained acceptable financial controls, and to have auditors check on whether those controls worked.

There are other threats to Sarbanes-Oxley as well.

November 5, 2009

No more Sarb-Ox for small business?

This should be welcome news.

From the link:

Small businesses would be granted a permanent reprieve from complying with part of the Sarbanes-Oxley corporate reform laws, under a draft U.S. House of Representatives bill discussed on Tuesday.

Small companies have not had to comply fully with the rules since the Sarbanes-Oxley law was approved in 2002 in response to the Enron and WorldCom corporate scandals.

Companies with a market capitalization below $75 million have argued that they faced disproportionately higher costs compared with larger companies and have convinced regulators to delay compliance at least five times.

The Securities and Exchange Commission is now requiring small companies to report on the effectiveness of their internal controls as of June 15, 2010.

But Republicans, hoping to thwart this SEC requirement, introduced an amendment on Tuesday to a House Financial Services Committee draft bill to do just that.

January 5, 2009

SEC changes oil and gas company reporting requirements

Filed under: Business, Politics — Tags: , , — David Kirkpatrick @ 9:29 pm

A release from the Securities and Exchange Commission:

SEC Modernizes Oil and Gas Company Reporting Requirements to Provide Investors With More Meaningful and Comprehensive Disclosure


Washington, D.C., Dec. 29, 2008 — The Securities and Exchange Commission today announced that it has unanimously approved revisions to modernize its oil and gas company reporting requirements to help investors evaluate the value of their investments in these companies.

“In the more than a quarter century since the SEC last reviewed its rules in this area, there have been significant changes in technology that have increasingly limited the usefulness of current disclosures to the market and investors,” said SEC Chairman Christopher Cox. “These updates to the SEC rules will help ensure more meaningful and comprehensive disclosure of information that, even though it does not appear on a company’s balance sheet, is of significance to investors in making informed investment decisions.”

John W. White, the Director of the SEC’s Division of Corporation Finance, added, “The Commission’s adoption of these rule amendments is the final phase of a key, long-term initiative of the Division of Corporation Finance and the Office of the Chief Accountant. These updated rules consider the significant changes that have taken place in the oil and gas industry since the adoption of the original reporting requirements more than 25 years ago.”

The Commission staff first recommended the issuance of a Concept Release for public comment. Those public comments were used to formulate the rule amendments that the Commission proposed earlier this year.

The new disclosure requirements approved by the Commission include provisions that permit the use of new technologies to determine proved reserves if those technologies have been demonstrated empirically to lead to reliable conclusions about reserves volumes. The new requirements also will allow companies to disclose their probable and possible reserves to investors. Currently, the Commission’s rules limit disclosure to only proved reserves.

The new disclosure requirements also require companies to report the independence and qualifications of a reserves preparer or auditor; file reports when a third party is relied upon to prepare reserves estimates or conducts a reserves audit; and report oil and gas reserves using an average price based upon the prior 12-month period rather than year-end prices. The use of the average price will maximize the comparability of reserves estimates among companies and mitigate the distortion of the estimates that arises when using a single pricing date.

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The full text of the adopting release concerning these amendments will be posted to the SEC Web site as soon as possible.

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October 16, 2008

Google’s profit up over 25%

Filed under: Business — Tags: , , , — David Kirkpatrick @ 4:16 pm

Big Q3 numbers for Google.

From the WSJ link:

Google Inc.’s quarterly profit rose 26% as revenue jumped with strong demand for online search advertising despite the turbulent U.S. economy.

The Mountain View., Calif., search giant Thursday posted third-quarter net income of $1.35 billion, or $4.24 a share, up from $1.07 billion, or $3.38 a share, in the same period last year.

Revenue jumped 31% from a year earlier to $5.54 billion. Excluding traffic acquisition costs, or commissions paid to marketing partners, the search giant’s revenue rose 34% to $4.04 billion.

Google’s U.S. paid clicks–which includes clicks related to ads served on Google’s site as well as partner sites–grew 18% from a year earlier.

July 11, 2008

New 10-K “executive summary” requirement coming

As the title to this link puts it, “Is There an “Elevator Speech” in Your 10-K’s Future?”

Here’s the lede:

The Securities and Exchange Commission’s advisory Committee on Improvements to Financial Reporting (CIFR) voted unanimously on Friday to move forward with its proposal to require a new “executive summary” in annual and quarterly reports filed with the SEC.

As proposed, the executive summary would be a plain-English description of a reporting company’s business, financial condition, and operations. It would take a “layered approach” that stresses the most important information but then cross-references the location of fuller discussions elsewhere in a 10-Q or 10-K.