Aug. 14 certification deadline looms for CEOs
By Leticia Williams, CBS.MarketWatch.com
Last Update: 4:21 AM ET July 27, 2002
WASHINGTON (CBS.MW) -- August 14 could be the day of reckoning for some companies, as the deadline for CEO-certified financial statements draws near.
In a move aimed at bolstering investor confidence in the market, the SEC issued an order last month requiring the top executives of companies that have more than $1.2 billion in annual revenue, to personally swear by their numbers.
But some people are worried that the effort will spark a wave of restatements, flooding the market with more bad news and dampening the confidence of scandal-weary investors even further.
Bear Stearns tax and accounting analyst Pat McConnell, sees three areas of concern.
"We feel there are some groups of companies that certifying might prove problematical [for] and those companies fall into three categories," Bear Stearns analyst, McConnell said Friday.
Companies formerly audited by Andersen, companies that have a CFO or CEO that joined after the last fiscal year-end and companies already in talks with the SEC over their accounting practices may have difficulty filing, she wrote in a research note issued Friday.
"Companies in the first two categories are easy to identify. Companies in the third category less so," she wrote.
Donald Langevoort, a Georgetown University law professor and securities regulations expert, says investors can expect longer, detailed filings and not a flood of restatements on the market.
"That is both good and bad. Good, because information is investors' lifeblood and bad because more information could overload investors," Langevoort said.
"I'm not sure we will have a deluge of restatements," he said.
But overall, most of the 945 companies on the SEC's list are expected to comply with the certification requirement by the required dates.
A spokeswoman for 3M Co. (MMM: news, chart, profile), the second name on the SEC's list of companies, said their executives had no problem swearing by the company's books and will have no problem complying with the certification deadline.
Likewise, Cablevision Systems (CVC: news, chart, profile), also on the list, said that CEO James Dolan and principal financial officer Bill Bell will sign the SEC certification and that it expects no changes to its filings from prior reporting periods.
Varying deadlines
About 80 percent of the companies on the SEC's list end their fiscal year when the calendar year ends on Dec. 31, and those are the companies whose certifications are due on Aug. 15, the same day their report for the quarter ended June 30 must be filed. There are 745 companies that are expected to file on this date.
The certification statement deadlines for the other companies on the list vary depending on when their fiscal year ends and when they are required to file their next quarterly or annual report with the SEC.
Companies with fiscal years that end on June 30 don't have to file their statements until their annual report on Form 10-K is due, on Sept. 30.
A company with a Nov. 30 year end has until Oct.15, the due date of its Aug. 30 Form 10-Q, because that is the next report its required to file after Aug. 14, according to examples provided by Bear Stearns.
The certifications are being processed by the SEC's office of the secretary and will be posted on the agency's Web site as they are received.
Leticia Williams is a reporter for CBS.MarketWatch.com in Washington.
