Compliance Blog

Sarbanes-Oxley has led to improvement in off balance sheet disclosures but more needs to be done. There is still a tendency to comply with rules instead of the larger spirit of the act. This means the SEC is looking for more improvement around transparency and not just "letter of the law" adherence.

An excerpt from the SEC Staff Report:
"The report identifies several goals for those involved in the financial reporting community, including efforts to:

• discourage transactions and transaction structures motivated primarily and largely by accounting and reporting considerations, rather than economics;
• 
  expand the use of objectives-oriented standards;
• 
  improve the consistency and relevance of disclosures; and
  
• focus financial reporting on communication with investors, rather than just compliance with rules.
  

Donald T. Nicolaisen, SEC Chief Accountant, said "The report identifies improvements that have occurred in financial reporting since passage of the Sarbanes-Oxley Act and, importantly, it offers recommendations for further improvements designed to increase both the transparency and usefulness of the balance sheet. Greater transparency can be achieved in some areas simply by reducing accounting choices and complexity. Since the events leading to passage of the Sarbanes-Oxley Act, we have made progress in improving financial reporting to investors, but more can still be done. I'm hopeful that this report will help focus efforts on further ways to improve transparency." For the complete transcript, click here.

To learn how to effectively manage and simplify your Sarbanes-Oxley Compliance efforts, see www.issuescentral.com to learn more about the Sarbanes-Oxley Compliance Playbook(tm) or call (800) 410-6681 ext 112.