Senate Mulls Stronger Accounting
The New York Times
April 22, 2002
By THE ASSOCIATED PRESS
Filed at 5:20 p.m. ET
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.
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