From the Business section of the
Washington Post
"Regulators next week will urge auditors to exercise better judgment and increase their reliance on the work of corporate employees as the audit firms pore over the systems companies have in place to prevent fraud."
So what? The Chamber of Commerce and others, including Pfizer, are pressing the SEC to roll back regulations set up to protect investors from another Enron debacle.
More from the article below:---> (and a couple of rants!)
Background:
For months, companies and industry trade groups have resisted rules mandated by the 2002 Sarbanes-Oxley Act. The law requires executives to vouch for the adequacy of financial controls, or checks and balances intended to prevent fraud and accounting errors. By some estimates, the reviews have cost more than $4 million per company -- far more than the SEC predicted. Investor advocates say the reviews help boost public confidence in corporate financial statements.(emphasis added)
Granted the controls are expensive in some cases, and in others esoteric accounting treatments are in the gray zone. From an accountant's perspective some parts of Sarbanes-Oxley could use review. From an investor's perspective rolling back on rules that seek to prevent another round of Raptors, Condors, LJM1-4, etc, doesn't increase confidence.
Why the hurry?
SEC Chairman William H. Donaldson and accounting board Chairman William J. McDonough said they would act quickly after a day-long roundtable discussion last month at which representatives of the New York Stock Exchange and Pfizer Inc., among others, expressed concern about how auditors are carrying out the control reviews. (emphasis added)
What they seem to be more concerned about is the price tag for these reviews? This begs the question: Would a corporation be better served to spend more money on auditing and compliance issues and not have to pay bundles in fines and penalties--and lost investments from jittery investors?
Granted the need for sophisticated accounting for sophisticated deals, but when sophistication becomes "clever" and "clever" becomes obfuscation, then the American public and the funds in which they invest have every right to expect that it is the PERSONAL RESPONSIBILITY of the CEO's of this country is to insure accurate reporting. Anything less will get us right back to Raptors, Condors, and Chewcos.
Let the SEC know that we are not in favor of relaxing those rules designed to prevent another Enron style debacle.