SEC Questions Fortune 500 Reports
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NEW YORK (AP) _ A ``substantial majority″ of Fortune 500 companies’ financial statements reviewed by the Securities and Exchange Commission have raised questions, the director of the SEC’s corporation finance division said Friday.
Alan Beller said the SEC, which is completing its Fortune 500 review that began last December, has sent out comment letters to those companies.
``Less than a substantial majority″ of the companies have replied, he said during a question-and-answer session at a Securities regulation conference sponsored by the Practising Law Institute.
Most of the questions in the comment letters concern companies’ accounting and MD&A, or management discussion and analysis, he said.
``When the shortcomings are significant, we may ask for amendments,″ said Beller, who took his post in January. For some companies, it is enough for them to fix their future quarterly and annual reports, he added.
The agency will not neglect smaller companies that make up a large portion of the roughly 15,000 publicly traded companies in the U.S., he added.
Among the key objectives of the SEC are to use technology to be more efficient and to get more resources _ in particular, more accountants, he said.
When asked about the negative impact of the far-reaching Sarbanes-Oxley legislation on small businesses, Beller acknowledged that a ``one-size-fits-all policy″ may not in the best interest of small businesses, and probably best suits the largest companies.
The cost of complying with Sarbanes-Oxley, which became law over the summer, could be onerous enough to drive some small businesses out of the public markets altogether, he said.
Beller, who noted he was not speaking on behalf of the SEC, said he would be open to better accommodating small businesses after the initial round of rules are in place in 2003.