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Biotech / Medical : Elan Corporation, plc (ELN)
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To: Adelantado who wrote (1629)2/12/2002 8:18:43 AM
From: tom pope  Read Replies (1) of 10345
 
This, excerpted from the WSJ, seems to signal a new posture on the part of the SEC and may explain the decision to open an ELN inquiry - conformity to GAAP will not shield a company from the SEC if material facts are not presented with adequate clarity.

Signaling a tough stance on accounting irregularities, a top securities regulator warned that corporations strictly following accounting rules still could be accused of securities fraud if the filings don't accurately reflect a company's underlying economic condition.

"One can violate the SEC laws and still comply with" generally accepted accounting principles, said Charles Niemeier, chief accountant for the Securities and Exchange Commission's enforcement division, in an interview.

Mr. Niemeier declined to discuss Enron Corp., which is under investigation by both the SEC and the Justice Department. His comments come as the accounting industry, regulators and Congress struggle to understand what has gone wrong with the accounting system and how to fix it.

Among suspects that have emerged: accounting standards and industry practices. Auditors who issue clean bills of health are required to certify that a company's financial statements fairly represent the client company's financial performance. But critics of the accounting profession today say that over the past three decades the standard setters have moved away from establishing broad accounting principles aimed at ensuring that companies' financial statements are fairly presented.

Instead, they have moved toward drafting voluminous rules that may shield auditors and companies from legal liability if technically followed in check-box fashion. That can result in companies creating complex structures that technically comply with GAAP but hide billions of dollars of debt or other corporate obligations.
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