SEC official hints of other disclosure problems besides Enron

By the OGJ Online Staff

HOUSTON, Dec. 12 -- Robert Herdman, chief accountant for the Securities and Exchange Commission, Wednesday told the US House of Representatives Committee on Financial Services there could be more 'Enrons' out there.

The committee questioned Herdman about the SEC's financial disclosure rules in a hearing about Enron Corp.'s sudden financial collapse. Committee Chairman Michael Oxley (R-Ohio) said the purpose of the hearing was to assess the facts and the change the disclosure rules if needed, in order to assure investors that there is real value, credibility, and consequences to those who abuse the market.

Committee members were very concerned that Enron's travails were not unique.

"Are there other Enron's out there?" asked Rep. Paul Kanjorski, (D-Pa.). Herdman answered, "There may be." But he didn't name names.

Kanjorski also asked if there were systemic problems with oversight of publicly traded companies that could have contributed to the Enron bankruptcy. He said the Enron situation raises questions about the US system of financial reporting and confidence in that system.

Herdman told the committee the SEC is revising some of the procedures for financial reporting, including requiring companies report industry trend information on a more current basis rather than quarterly. "We are wanting to improve the disclosures of performance information on a more frequent basis," Herdman said.

He said the "gravity" of the Enron situation needs to be recognized but warned against overreaction or underreaction. "What we should say is the financial reporting is challenged and steps need to be taken to improve it and that should be done quickly," Herdman said.

The SEC opened a formal investigation in October into related party transactions at Enron. The off-balance-sheet transactions and potential liabilities associated with them helped trigger a sell off in Enron's stock. Enron has said it did nothing wrong and is cooperating with the SEC probe into its reporting practices.

Herdman said the SEC will continue to push the Financial Accounting Standards Board for better direction on when special-purpose vehicles like those created by Enron should and should not be consolidated on the balance sheet.

Related Articles

DOE approves LNG exports to non-FTA countries from Oregon project

03/24/2014 The US Department of Energy conditionally approved Jordan Cove Energy Project LP’s application to export LNG through its proposed terminal on Orego...

Watching Government: Alaska's ANWR reminder

03/24/2014 Alaska's state government apparently doesn't want people to forget there's still significant oil and gas potential beneath the Arctic National Wild...

Begich objects to House Democrats' NPR-A comment extension request

03/24/2014 US Sen. Mark Begich (D-Alas.) let three US House Democrats know he did not approve of their request for the US Bureau of Land Management to add 30 ...

EPA lifts post-Macondo contract suspension in agreement with BP

03/24/2014 The US Environmental Protection Agency and BP PLC reached an agreement that will effectively end the bar on new federal contracts imposed on the mu...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected