Suggestions for "SEC holds Meetings II" word version

Highly recommended reading: updated August 13, 2001

  1. "THE NUMBERS GAME" a speech by SEC Chairman Levitt: http://www.sec.gov/news/speeches/spch220.txt and a press release by the AICPA in response to the speech - sorry, the speech (press release) link does not work anymore. Try the AICP web site and see if you can find it. also:
  2. Remarks by Lynn Turner: Towards Higher Values in Financial Reporting, Chief Accountant, U.S. Securities and Exchange Commission At the Financial Executives Institute 1998 Annual Conference, October 22, 1998: http://www.sec.gov/news/speech/speecharchive/1998/spch231.htm

  3. Behind the Numbers of the SEC's Recent Financial Fraud Cases: Richard H. Walker, Director, Division of Enforcement, U.S. Securities & Exchange Commission. (http://www.sec.gov/news/speech/speecharchive/1999/spch334.htm) 27th Annual National AICPA Conference on Current SEC Developments, December 7, 1999.

  4. Earth to Dot.Coms (on Microstrategy)

  5. The Right Way to Recognize Revenue: Phillips, T.J.Jr, Luehlfing, M.S, Daily, C.M. Journal of Accountancy, June 2001, p. 39 - 46

  6. SAB 101 and frequently asked questions about SAB 101 and more detail from the SEC on related issues: Current Accounting and Disclosure Issues (SEC Staff, 5/25/2001) and The Times, They Are a-Changing, Lynn Turner, SEC Chief Accountant, (5/18/2001)

What you should do:

  1. Briefly describe the company: who is it, what do they do?
  2. Identify the accounting issue(s) that caused the controversy/charges
  3. Determine as closely as possible the impact of the issue(s) on the firm's financial statements (i.e., if restatements have been made, show the amount, if you find this information somewhere else, disclose it.
  4. In some cases it may be appropriate to provide a time line (problem first mentioned in the press, escalation, resolution, etc. This can be used to illustrate the difficulties in identifying accounting problems and/or fraud
  5. Examine the issue(s) identified above in view of what you have learned o date. E.g., briefly describe the rules (if any) giving proper references (text book, FAS, etc.)
  6. Provide examples (with numbers either made up or from the actual company)
  7. Discuss if the problem is due to a clear violation of rules (or just plain fraud) or if it is a matter of interpretation.
  8. Examine the issue in view of the conceptual framework . E.g., does the conceptual framework provide guidance that might have eliminated the problem.
  9. Reexamine the issues raised in the original article. Was there a need for hearings? What changes, if any should the SEC and/or FASB require to avoid such problems? Be specific.
  10. Make sure your report includes the following:
    11.
    1. Page numbers and an index, perhaps an appendix
    2. An abstract (summary of the content of your report, no more than 100 words)
    3. Proper references and citations, bibliography. If you are citing web pages, make sure to include the complete URL to a specific item from a specific page. I.e., if you are citing something from the solution page for Accounting 351 it would not be sufficient to give the URL as http://www.csun.edu. It would still not be sufficient to give: http://www.csun.edu/~hfact004 instead, you need to provide the complete URL: http://www.csun.edu/~hfact004/351solution.html Remember, if I can't find it, it doesn't exist, it is an F paper.
    4. Proper quotations, if quotations exceed about 30 words they should be indented and single spaced. Quotation marks are eliminated in that case.
    5. If in doubt: consult the "Effective Writing Handbook" or one of the sites linked on the Accounting 351com page

I hope these suggestions will help.