Scramble Is On to Certify Results
Today is C-day--as in certification day--for executives of America’s largest companies.
By 5:30 p.m. EDT, chief executives and chief financial officers of 695 big U.S. companies must file sworn statements with the Securities and Exchange Commission certifying that their latest quarterly and annual financial reports are accurate.
The deadline is likely to bring a scramble this afternoon as scores of companies file last-minute certifications.
As of late Tuesday, more than 300 companies had filed declarations, according to a tally the SEC maintains on its Web site. The agency’s calculations are not up to the minute and understate the actual number of companies that have submitted forms. Still, as many as half or more of the certifications are expected to be submitted today.
The deadline has weighed on the stock market in recent weeks amid concerns that the process of certifying financial results could produce a flood of new revelations from companies about accounting problems.
For the most part, that has not happened and no executives have told the SEC that they can’t certify their results, SEC spokesman John Nester said.
Still, investors may not be able to breathe a sigh of relief any time soon because uncertainty will remain after the deadline passes, experts said.
Although the SEC will work late tonight to update its Web tally, it may take a day or two to officially declare which companies filed by the deadline and which did not. Also, some companies could ask for an automatic five-day extension, which would expire at the end of the day Monday.
Finally, it won’t be known until next week whether companies filed in the correct format. The SEC required the declarations to have specific wording, but some attorneys have sought to make changes.
“Just because we get through Aug. 14 doesn’t mean we have moved a magic wand over the market and lifted all vestiges of corrupt accounting,” said Tobias Levkovich, strategist at Salomon Smith Barney.
Investors who want to see whether specific companies have filed should first check the SEC list on its Web site at www.sec.gov.
If a company is not shown to have filed, investors then should check EDGAR, an SEC-run database of corporate financial filings, which can be accessed from the SEC’s home page on the Web. Investors should look for so-called 8K forms or 10Qs.
The SEC order requires all U.S. companies with more than $1.2 billion in annual revenue to certify their most recent quarterly and annual financial results. That’s 942 companies, but many don’t have to file their certifications until later this year because they operate on different fiscal years.
Today’s filing deadline has become even more hectic because of the landmark accounting reform legislation signed by President Bush on July 30. The law, known as the Sarbanes-Oxley Act, requires executives of virtually all public companies to file a separate certification beyond that required by the SEC, according to securities attorneys. The certifications for many companies are due today.
“We’re in certification overload,” said Karl Groskaufmanis, a partner at Fried Frank Harris Shriver & Jacobson in Washington.
The second certifications caused a headache for smaller firms, which had only about two weeks to comply with the rule. Unlike larger firms, which were long aware of the SEC plan, smaller firms were caught off guard about the rule applying to them and had to scramble to comply, experts said.
“It has caused a large measure of confusion among public companies,” said Steve Crimmins, a partner at Pepper Hamilton in Washington.
