FASB issues an exposure draft that proposes rescinding Statement no. 4, Reporting Gains and Losses from Extinguishment of Debt. The ED also would rescind an amendment to it—Statement no. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements, as well as Statement no. 44, Accounting for Intangible Assets of Motor Carriers, and make various technical corrections to other authoritative pronouncements. The ED is accessible at the FASB Web site. Comments are due by January 14. ( www.fasb.org/news/nr111501.html)
Speaking before the AICPA governing council at its fall meeting, SEC Chairman Harvey L. Pitt bemoans the breakdown, in recent times, of communication between accountants and the SEC. He promises, however, that “those days are ended.” Pitt pledges good-faith cooperation with the profession in fostering full, timely and clear disclosure of corporate performance information. Urgent issues he will focus on include the “staleness” of information contained in periodic disclosures, the frequent inaccuracy of pro forma earnings releases, the use of jargon in many financial reports and the inadequacy of information financial statements provide on intangible assets. ( www.sec.gov/news/speech/spch516.htm )
The SEC issues a report on an inquiry into possible financial statement irregularities in which it identifies four broad measures of a company’s cooperation in an investigation: self-policing prior to discovering misconduct; self-reporting of misconduct; remedial action including dismissing offenders and modifying internal controls and assisting law enforcement authorities. In return for such efforts, the SEC may, among other steps, reduce charges or penalties. ( www.sec.gov/news/press/2001-117.txt )
The AICPA issues a collection of 15 case studies on quality of earnings to shed light on various accounting and internal control issues including relations among managers’ personal incentives—such as bonuses and personal credibility—investor relations programs, earnings management, cost of capital and accounting controversies with auditors and regulators. (ABBREVIATED URL) (www.cpa2biz.com/CS2000/ResourceCenters/Business+Reporting%2c+Audit+and+Attest/Quality+of+Earnings/)