Several companies, including Deloitte & Touche LLP, oppose the Securities and Exchange Commission’s proposal to accelerate the deadline for filing quarterly and annual reports, according to Bloomberg.
The wire service noted that the Big Four accounting firm, as well as URS Corp., Southwest Gas Corp., and Williams-Sonoma Inc., have called on the regulator to delay or eliminate its acceleration plan, in part because corporate accountants already have their hands full meeting the requirements of the Sarbanes-Oxley Act.
Last month, the SEC put out for comment its recommendations for new deadlines for filing quarterly and annual reports, which were based on the size of companies. Under its proposal, the SEC plans to create a new category called “large accelerated filers,” which would include companies with a market capitalization of $700 million or more, and redefine “accelerated filers” as companies with a market cap between $75 million and $700 million.
Beginning in 2006, large accelerated filers would be required to file their annual report within 60 days of their year-end, and quarterly reports within 40 days. Accelerated filers would retain their current deadlines of 75 days and 40 days, respectively, according to the plan.
“We believe the commission’s current focus on providing quality disclosures demanded by the market and investors is paramount and should not be sacrificed for accelerated timing,” wrote Deloitte chief executive James Quigley, noted Bloomberg.
“The concept that better and higher-quality financial filings will result from the compression of the time available to prepare them is illogical,” wrote Reed N. Brimhall, chief accounting officer of design and engineering company URS, reported Bloomberg.
Likewise, Roy Centrella, chief accounting officer of natural-gas distributor Southwest Gas, speculated whether companies seeking to meet the new deadlines might have to draft annual reports ahead of time. The new deadline rush could result in more errors as well as boilerplate or poorly written disclosures, Centrella reportedly added.
The New York City Bar Association’s committee on financial reporting also opposes the proposed shortened deadline for annual reports, said Bloomberg.
The 30-day comment period ends October 31, but so far the SEC has not scheduled a final vote on the proposed rule.