Senate Mulls Stronger Accounting
%mlink(STRY:; PHOTO:; AUDIO:%)
DETROIT (AP) _ Focusing on lessons learned from the Enron collapse, U.S. Sen. Carl Levin outlined his plan to strengthen corporate accounting standards and give shareholders increased rights.
Levin, D-Mich., will introduce a ``Shareholder Bill of Rights″ in the coming weeks aimed at offering more protection for investors. But, he said Monday, legislation is only part of the solution.
``As strongly as I believe in a new role for government in the new economy, government action alone cannot provide most of the answer,″ Levin said in prepared remarks to the Economic Club of Detroit. ``That’s because what happened at Enron wasn’t just a failure of regulations and law, it was a failure of corporate culture, a failure of values, a failure of heart.″
Enron filed for bankruptcy on Dec. 2 amid allegations of accounting abuses.
Levin’s proposals include making the governmental body that issues accounting standards more independent, barring auditing firms from reviewing their own work for a company, and allowing shareholder proposals to remove or replace directors and auditors.
As chairman of the Senate Permanent Subcommittee on Investigations, Levin is among the legislators probing the fall of Enron. The subcommittee plans a May 7 hearing to get testimony from members of Enron’s board of directors.
A spokeswoman with the American Institute of Certified Public Accountants said the industry trade group hadn’t seen details of Levin’s proposal and didn’t have immediate comment.
Under Levin’s plan, much of it would be accomplished through directives to the Securities and Exchange Commission. Although not part of the planned legislation, Levin highlighted the importance of bolstering the SEC, which has a federal mandate to oversee the securities industry.
On the Net: