|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
SEC Seeks Disclosure Of Accounting Info
Staff Writer
General Financial/ Business News . December 7, 2004
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EXCERPT: The Securities and Exchange Commission is pushing companies to disclose the accounting behind transactions that potentially may be used to obscure bad news. These "structured transactions" are so-named because they are based on multiple, carefully orchestrated terms. The transactions may include arrangements such as equipment leases, which may be used to keep billions in obligations out of plain sight. "If you really believe that it's a good idea to structure things around the accounting or disclosure guidance, you shouldn't be embarrassed to tell readers of your reports that that's what you've done," said Scott Taub, deputy chief accountant in the SEC's Office of the Chief Accountant, at a speech Monday before the American Institute of Certified Public Accountants. Structuring transactions to make the most of accounting standards doesn't necessarily violate securities regulations. Still, regulators are scrutinizing financial arrangements and punishing companies when it decides their actions cross the line. "These types of arrangements work sometimes, and other than requiring proper disclosure, there isn't much I can do to dissuade them," Taub said. "But I don't have much sympathy for a company that attempts to design a transaction around the literature and fails." |
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