Summary: This report reviews the Securities and Exchange Commission's (SEC) resolution of accounting issues submitted by companies that have or are contemplating publicly traded securities. Companies are required by law to register their securities with SEC by filing a registration statement. This statement must contain financial and other information on the securities and the issuer. SEC's Office of the Chief Accountant (OCA) is responsible for providing guidance to companies to ensure that they comply with the reporting requirements of the law. Generally, registrants submit issues to OCA for which there is no authoritative guidance. These issues tend to involve unusual, complex, or innovative transactions. Some of the accounting issues frequently reviewed include business mergers and issues surrounding revenue recognition and financial instruments. Representatives of registrants and the accounting profession have had both positive and negative experiences with SEC's handling of accounting issues. Several representatives expressed concerns over the transparency of SEC's decision making process and SEC's use of accounting sources outside of generally accepted accounting procedures.
