Key Issues in Global Reporting


Patricia McConnell, CPA, senior managing director,
Bear Stearns & Co., New York, speaking at the
AICPA Business & Industry Financial Executive Forum,
October 27, 2005.

Section 404 of Sarbanes-Oxley really has no teeth itself. The bite, if a company is noncompliant, is the market reaction caused by the disclosure of noncompliance. In my view the markets have acted very generously to companies that were noncompliant, basically taking a ‘give them time’ attitude. It remains to be seen how patient investors will be.

Of all of the provisions in the Sarbanes-Oxley Act, section 404 is the one with the highest likelihood of making real and lasting improvements to earnings quality. Good internal controls are by far the best safeguard against the kind of earnings manipulation we saw at Enron, WorldCom and others. However, even section 404 compliant controls are not 100% scoundrel proof. If management is without integrity, they will find a way to beat any system.

I am very enthusiastic and optimistic about international convergence. I believe that it is well within reach…. For the capital markets to function with high efficiency and provide companies with capital at the lowest cost, not only must there be one set of high-quality transparent global financial reporting standards, but management, auditors and regulators must see to it that these standards are interpreted and applied consistently and with integrity in all jurisdictions.


6 key areas of change for accountants and auditors

New accounting standards on revenue recognition, leases, and credit losses present implementation challenges. This independently-written report identifies the hurdles that accounting professionals face and provides tips for overcoming the challenges.


How tax reform will impact individual taxpayers

Amy Wang, a CPA who is a senior technical manager for tax advocacy at the AICPA, answers to some of the most common questions on how the new tax reform law will impact individual taxpayers.