NEW YORK — As Washington continues to brace itself for more fallout from the collapse of Enron, the Securities and Exchange Commission on Friday said it will convene two days of roundtable discussions next month to examine proposals for changes in corporate disclosure rules.
The discussions — here on March 4 and in Washington two days later — are the latest effort by the SEC to improve financial reporting by reforming disclosure rules and auditor oversight.
SEC chairman Harvey L. Pitt noted on Friday that, while it can be “difficult, if not impossible” to uncover fraud committed with management collusion, that “does not mean, however, that we cannot, or should not, improve the level and quality of audits.”
Pitt made similar remarks on Tuesday in a presentation before the Winter Bench and Bar Conference of the Federal Bar Council in Puerto Rico. He said initiatives would include a current disclosure system that would require public dissemination of material information in “real time.” Another key initiative would ensure that companies responsible for audits are not subject to conflicts that might confuse or divert them from their auditing responsibilities.
The SEC disclosed earlier this month proposed rules that would provide: accelerated reporting by companies of transactions by insiders in company securities, including transactions with the company; accelerated filings by companies of their quarterly and annual reports; expansion of significant events that would require disclosure, such as rating agency decisions and obligations that are not currently disclosed and a requirement that public companies post their regulatory reports on company Web sites at the same time that they file them with the SEC.
Among the accelerated reporting periods, the annual report would have to be filed within 60 days of the end of the fiscal period, instead of the current 90 days. Quarterly report filing requirements would be changed to 30 days after the end of the first three fiscal quarters, from 45 days.
The commission is evaluating for inclusion in Form 8-K, the disclosure statement for significant events, information concerning defaults and other events that could trigger acceleration of direct or contingent obligations; departure of a company’s chief executive officer, chief financial officer, chief operating officer or president; any loss or gain of a material customer contract; any material write-offs, restructurings or impairments, or any material change in accounting policy or estimate.