|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
Where's That Quarterly Report?
Staff Writer
Business Week. December 13, 2004
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EXCERPT: If medicine sometimes has to taste bad to be good, then the bitter tonic companies are swallowing as they clean up their financial reporting ought to work wonders. Rigorous new examinations prescribed by the Sarbanes-Oxley Act are making it hard for executives to close their books and report their financial results to the Securities & Exchange Commission on time. In just one week in early November, 61 companies with a market cap of $100 million or more announced they would be late with their filings, including info-tech giant Electronic Data Systems, General Motors, and Suntrust Banks. That was up 25% from the same period a year ago, according to Glass, Lewis & Co., an independent researcher. There has been no letup in the trend. Since then, mortgage giant Fannie Mae filed notice that it would be late as well. The problem isn't confined to big companies, either. Smaller outfits, such as restaurant chain Benihana Inc., have found themselves in the same boat. More problems are likely to surface in the weeks leading up to Mar. 15. That's the first deadline for executives of large companies with calendar fiscal years to certify that they've checked and found their internal financial controls are working. Outside auditors also will have to issue their own certification. Before the next year is out, says Dennis M. Nally, chairman and senior partner of PricewaterhouseCoopers, 10% to 20% of all U.S. companies may uncover weaknesses in their controls. Some of them will have to delay their reports while they work out whether the weaknesses have created big errors in their numbers. |
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