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Amid ongoing revelations of falsified corporate financial statements, the SEC moved to buttress investor confidence in companies’ reported results. In late June the commission issued order no. 4-460 (www.sec.gov/news/press/2002-96.htm), which requires the CEOs and CFOs of 947 publicly traded companies with $1.2 billion or more in annual revenue to certify under oath that their most recent annual reports and any subsequent updates or amendments are accurate and complete. These retrospective statements are due to the SEC with the first annual or quarterly report a company files on or after August 14. Any CEO or CFO who files a false certification faces personal liability with potential civil and criminal penalties.

The SEC took this step without waiting for the end (August 26) of an announced comment period for rules it proposed earlier in June. Those provisions would require CEOs and CFOs of all publicly traded companies to certify the accuracy and completeness of quarterly and annual reports they make after the rules become final. (See News Digest, JofA, Aug.02, page 17, www.aicpa.org/pubs/jofa/aug2002/news1.htm.)

A commission spokesman said: “Many executives are good corporate citizens but have been tarred with the brush of scandal. The SEC is offering CEOs and CFOs an opportunity to assure the public that they stand by the numbers they’ve given and have left out nothing important. Those not able to make such a statement have to explain why. If there are more restatements coming, it’s better that investors know about them as soon as possible.”

The GAO issues a series of questions and answers (www.gao.gov/govaud/d02870g.pdf) to clarify the revised yellow-book auditor independence standard it released in January. Recognizing the amendment’s broad scope and the time necessary to implement it, the watchdog agency extends its effective date. The new standard applies to all audits of government financial statements, programs and operations for periods beginning on or after January 1, 2003.

GASB issues an exposure draft, Deposit and Investment Risk Disclosures, to give the public better information about risks that could affect a government’s ability to provide services and pay its debts (www.gasb.org/news/nr070102.html). The ED would amend GASB Statement no. 3, Deposits with Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements. The proposed standard is the first step in GASB’s effort to strengthen current disclosure requirements so interested parties have access to risk-related information on state and local governments’ investments, deposit accounts, credit sources and debt obligations. When final, the standard will apply to fiscal years beginning after June 15, 2004. The ED is available from GASB at 800-748-0659. Comments are due September 27.

The International Accounting Standards Board (IASB) publishes an exposure draft (www.iasb.org.uk/cmt/0001.asp?n=67&s=1011265) intended to improve two international accounting standards related to accounting for financial instruments: IAS 32, Financial Instruments: Disclosure and Presentation and IAS 39, Financial Instruments: Recognition and Measurement. Although the IASB’s goal ultimately is to develop a principles-based approach to this area, its immediate aims are to eliminate inconsistencies in existing standards, which are modeled on U.S. GAAP, and to provide implementation guidance. Comments are due October 14.

The IASB also proposes improvements in 12 other international accounting standards: IAS 1, Presentation of Financial Statements; IAS 2, Inventories; IAS 8, Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies; IAS 10, Events After the Balance Sheet Date; IAS 16, Property, Plant and Equipment; IAS 17, Leases; IAS 21, The Effects of Changes in Foreign Exchange Rates; IAS 23, Borrowing Costs; IAS 24, Related Party Disclosures; IAS 27, Consolidated Financial Statements and Accounting for Investments in Subsidiaries; IAS 28, Accounting for Investments in Associates; and IAS 33, Earnings Per Share (www.iasb.org.uk/cmt/0001.asp?n=67&s=1011265). The IASB expects that the revisions will help reduce or eliminate ambiguities, redundancies and conflicts in existing standards. Comments are due September 16.

The Financial Reporting Council (FRC), which oversees accounting standard setting in Australia, announces it supports adopting the IASB’s international accounting standards by January 2005 (www.frc.gov.au/content/Bulletins/bull_2002_4.asp). While the FRC does not have the authority to direct Australia’s accounting standards board to develop standards or to veto any the board has formulated or recommended, the move lends credence to the IASB standards and supports the Australian government’s efforts to facilitate foreign investment in the nation’s capital markets—a benefit generally expected from harmonized accounting standards.

Fannie Mae (formerly the Federal National Mortgage Association; www.fanniemae.com) and Freddie Mac (formerly the Federal Home Loan Mortgage Corporation; www.freddiemac.com) voluntarily consent to unprecedented SEC oversight of their financial disclosures. The accord’s immediate practical consequences—registration of the two government-sponsored enterprises’ (GSE) common stock with the SEC—are perhaps less significant than its implications for the future, which include the possibility of SEC registration of the GSEs’ high-profile, mortgage-backed securities. Moreover, by registering their common stock, Fannie Mae and Freddie Mac will be required under the Securities Exchange Act of 1934 to file their annual and quarterly reports and amendments with the SEC beginning in 2003. Also party to the agreement are the Treasury Department and the Office of Federal Housing Enterprise Oversight (www.ofheo.gov), which monitors the GSEs’ capital adequacy and financial safety and soundness.

CPAs score high on Worth’s annual ranking of the nation’s top financial advisers (www.aicpa.org/news/2002/p071002.htm). Of the 250 preeminent professionals that are listed in the magazine’s July/August issue, 59 (24%) are CPAs and 46 (18%) are CPA/PFS practitioners.

The secretary of the Treasury, the director of the Office of Management and Budget and the comptroller general of the United States appoint three new members to the Federal Accounting Standards Advisory Board (FASAB) (www.fasab.gov/pdf/newmem.pdf), following their January decision to increase the number of public members on the board to 6 from 3, while reducing the number of federal government members to 3 from 6. The new members are Joseph V. Anania Sr., CPA; Claire Gorham Cohen; and Alan H. Schumacher, CPA.

The AICPA releases a marketing tool kit and resource guide (http://citp.aicpa.org) for members holding the certified information technology professional (CITP) designation. The tool kit includes literature CITPs can use to explain their services to their employer, prospective clients or the press; the guide lists books, software and courses useful for earning CPE credit and addressing everyday practice management issues.

Joseph T. Wells, CPA, CFE, of Austin, Texas, receives the American Accounting Association’s 2001–2002 Innovation in Accounting Education Award (http://accounting.rutgers.edu/raw/aaa/awards/wells.htm), presented annually for exceptional achievement in the field. Wells is the founder and chairman of the Association of Certified Fraud Examiners.