October 2004 Monthly News Update


Sarbanes-Oxley compliance is lagging - Top accountant says companies need to do "vastly more"

10/14/2004 10:48:44 AM, CBS MarketWatch via NewsEdge Corporation : WASHINGTON (CBS.MW) - U.S. companies must do much more to implement the requirements of the Sarbanes Oxley Act, a top accounting regulator said Thursday.

I do not see the private sector in this country dignifying itself by a heroic response to this challenge, said William J. McDonough, chairman of the Public Company Accounting Oversight Board.

Some companies are doing the right thing and some business groups are saying the right things. Vastly more needs to be done -- and soon, McDonough said in a speech in New York.

Congress passed the law in 2002 after a wave of corporate accounting scandals shook public confidence in companies' governance.

But McDonough said citizens continue to press Congress about excessive executive pay and questionable financial reporting.

Corporations have grappled with the implementation of Sarbanes-Oxley, which requires tougher auditing. Corporate pleas for additional time haven't gone unheard. Recognizing corporations' burdens, the Financial Accounting Standards Board postponed for six months Wednesday a rule that would require companies to treat stock options as expenses.

The nonprofit PCAOB was created by the Sarbanes-Oxley Act to oversee the auditors of public companies.

Any accounting firm that audits a company whose securities trade in U.S. markets must register with the board. The Securities and Exchange Commission won't allow a public company to submit a financial statement that is audited by an accounting firm not registered with the PCAOB.

McDonough didn't single out any companies in his speech.

<<CBS MarketWatch -- 10/14/04>>