The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

<b>A prescription that may weaken the patient</b>

    Headline: A prescription that may weaken the patient
Source: Euromoney
Date: April 2000
Author: Mark Kessel

The Securities & Exchange Commission wants to impose new responsibilities on audit committees, but the potential liability might put off the highly qualified people companies need to attract.

After a year-long campaign against accounting abuses that inflate earnings, the US Securities & Exchange Commission (SEC) has issued its long-awaited directives concerning these "earnings management" practices. Companies may now feel these decrees provide them with guidelines to avoid the kind of SEC prosecutions that have earned brand-name companies unwanted publicity - not to mention attacks from the plaintiff bar.

They may be wrong.

One of the "hot buttons" for SEC chairman Arthur Levitt has been a company's audit committee, which is responsible for policing financial statements. Examples abound, he charges, of committees whose members hardly ever meet, lack expertise in the basic principles of financial reporting or don't have a mandate to really probe for problems. "Qualified, committed, independent and tough-minded audit committees," he said, "represent the most reliable guardians of the public interest."










You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree