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• Proposed PCAOB Accounting Standard No. 2: An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements ( April 2004 )
  

  The SEC recently published for comment a proposed rule prepared by the Public Company Accounting Oversight Board relating to the standards that apply when an auditor is engaged to audit both a financial statement and management's assessment of the effectiveness of internal control over financial reporting (Release 34-49544). The following is a list of points which may be of general interest to business lawyers with respect to the proposed rule.

• Corporate Governance Redefined: The Sarbanes-Oxley Act of 2002 and Related Rulemaking ( October 2003 )
  

  The Sarbanes-Oxley Act of 2002 (the "Act") responds to weaknesses in the U.S. capital markets revealed by the quickening pace of financial restatements and bankruptcies of several large, well-known public companies. Although most requirements by their terms apply only to public companies, many observers believe that the accounting and governance practices of private companies, and perhaps even nonprofits, will be influenced as well.

• Management's Discussion and Analysis of Financial Condition and Results of Operations or "MD&A" ( October 2003 )
  

  The recent scandals involving Enron, Global Crossing and Worldcom, together with various well-publicized investigations into the accounting policies and disclosure practices of a number of other prominent companies, have triggered an unprecedented scrutiny of corporate disclosure. The SEC has promised that it will review more Form 10-Ks than it ever has before. During the last recession, the SEC brought numerous enforcement actions against public companies and their chief executive and financial officers for allegedly failing to properly fulfill their MD&A disclosure requirements. As such, in this environment, companies need to carefully review their procedures for preparing MD&A. What you did last year may not be enough.

• Regulation G and Item 10(e) of regulation S-K: Conditions for Use of Non-GAAP Financial Measures ( October 2003 )
  

  On January 22, 2003 the Securities and Exchange Commission published Release No. 34-47226 promulgating final rules regarding the use of non-GAAP financial measures in any public disclosure. This article discusses the release and some frequently asked questions.

• Sarbanes-Oxley Act of 2002: What You Need to Know Now ( August 2003 )
  

  Sarbanes-Oxley creates a significant, new oversight and regulatory regime over the public accounting industry and imposes many important and potentially far-reaching reforms in public company governance and disclosure requirements. It also dramatically increases criminal penalties for federal mail, wire and securities fraud, creates new criminal penalties for document and record destruction in connection with federal investigations and lengthens the statute of limitations for private securities claims.

• Sarbanes-Oxley Update: SEC Mandates Management Report on Internal Controls and Modifies Officer Certification Requirements ( July 2003 )
  

  The SEC significantly extended the transition period for compliance with the new Sarbanes-Oxley rules for management reports on internal controls.  Accelerated filers (generally, U.S. companies with a market capitalization exceeding $75 million) must comply with the new internal control report requirements for fiscal years ending on or after June 15, 2004.

• Use of FFO in SEC Filings after Recent Rulemaking on Non-GAAP Financial Information ( May 2003 )
  

  Funds from Operations (FFO) has been a key metric for real estate investment trusts (REITs) since the National Association of Real Estate Investment Trusts (NAREIT) first adopted a definition of FFO in 1991. The SEC's recently-adopted rules governing disclosure of non-GAAP financial measures provides welcome clarification of the use of FFO and other non-GAAP financial measures.

• SEC Adopts Final Rules for the Use of Non-GAAP Financial Measures and the Furnishing of Earnings Releases on Form 8-K ( February 2003 )
  

  The Securities and Exchange Commission adopted rules on January 15, 2002 addressing the disclosure of financial information that is prepared other than in accordance with generally accepted accounting principles. The Final Rules cover the requirements of Section 401(b) of the Sarbanes-Oxley Act of 2002 and become effective on March 28, 2003.