Accounting & Tax

Postponement Urged for 60-Day Filing

Deloitte's CEO points out that accelerating the filing requirements was planned before Sarbanes-Oxley Section 404 was enacted.
Stephen TaubJuly 23, 2004

James Quigley, chief executive officer of Deloitte & Touche LLP, called on the Securities and Exchange Commission to postpone its requirement that annual reports be filed with the SEC within 60 days of the end of a company’s fiscal year.

In testimony before the House Committee on Financial Services regarding the Sarbanes-Oxley Act, Quigley praised the landmark legislation and its effect on corporate governance in general. However, he pointed out that “this plan for acceleration of the filing requirements was conceived before [Sarbanes-Oxley] Section 404 was enacted.”

For 2003 annual reporting, the SEC shortened the time between fiscal year-end and filing from 90 days to 75 days. For 2004 reporting, this time is to be reduced to 60 days.

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“Shortening the filing period serves to provide more timely information to investors,” explained Quigley, “but further shortening the deadline this year places pressure on public company management, legal counsel, financial reporting staff, and audit committees, in addition to the time constraints placed on the independent auditor.”

“Having to address both of these new and significant requirements [accelerated filing and Section 404] in the same year is very challenging,” he added. “Although it certainly would not be intended, it is possible that the shortened filing time, coupled with the initial internal control requirements, could negatively impact the quality of financial reporting, audit, and internal control assessments and attestations, and may further increase the costs of accomplishing these new requirements.”

Quigley said he plans to fire off a letter next week asking the SEC to make its 60-day filing requirement applicable for fiscal years ending after December 15, 2005.

“This would allow companies and auditors an additional two weeks this year to focus on the significant new internal control reporting and attestation requirements of the act,” he added, referring to Section 404.