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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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August 27, 2007 12:01 AM ET
Bloomberg
SEC’s John White: Forget about it!
Data are incomplete on how many so-called non-accelerated filers are preparing their management assessments, which are due in 10-Ks filed after mid-December, because many small companies are not audited by the Big Four but by myriad smaller accounting firms. However, anecdotal evidence from several consultants and accounting firms shows that some small companies are acting as if the SEC will extend the compliance deadline one more time. But such thinking may backfire, since all indications are that the SEC will not issue any extensions of SarbOx until after the Dec. 15 compliance deadline, and may only extend compliance for audit assessments, which are due in early 2009. The SEC has already extended compliance for non-accelerated filers several times. In a recent speech before the American Bar Association, John White, director of the SEC’s division of corporation finance, said that further extensions for non-accelerated filers are not planned. He urged small companies to be prepared to include management reports in their 2008 filings in accordance with the current deadline. “It’s like squirrels putting away nuts for the winter,” said Dirk Hobgood, senior vice president of accounting at Accretive Solutions, a consulting company. “If non-accelerated filers don’t get started on compliance soon, it could be a long winter.” Small companies that haven’t begun work on the report may find it difficult to conduct a review if they don’t start before Sept. 30, the end of the fourth quarter for most companies, he said. About one-fourth of all the non-accelerated public companies handled by accounting firm Eisner are unprepared to meet the SarbOx deadline, according to Neil Goldenberg, a partner. Some non-accelerated filers have complex operations and large audit committees and will require more time to review all their controls, he said. However, some companies, such as special-purpose acquisition companies with relatively simple operations, can get away with reviewing their internal controls in just a few weeks. “There’s really not a lot to assess at the end of the day” for those filers, he said. “Whether they pass [regulator scrutiny] is another story.” Investors are not likely to revolt immediately if 10-Ks do not include SarbOx management reports, experts say; more likely is that the SEC may make an example of some tardy companies, especially since the agency eased rules this summer. Doug Krause, a consultant at Definiti Group, said that auditors may push for unnecessary reviews and that companies may be reluctant to assess internal controls because they fear high costs. The recent risk-based approach adopted by the SEC and the Public Company Accounting Oversight Board should cut down on review costs, he said. Definiti is conducting a survey of small public companies in Philadelphia to see how many have begun their management reviews. Lawmakers have pushed for another extension but have focused on the auditing provision. SEC chairman Christopher Cox has said that he wants to collect data on audit costs. That means the SEC will almost assuredly wait until after this December to issue any extensions, if they do so at all.
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