SEC To Act On AS5, IFRS, Proxy Rules, More

There seems to be something for everyone on the agenda for this week’s Securities and Exchange Commission open meeting.

Among other things, the jam-packed July 25 meeting includes consideration of whether to approve the Public Company Accounting Oversight Board’s Auditing Standard No. 5, a related independence rule and conforming amendments, and whether to adopt amendments to define the term “significant deficiency” in the SEC’s rules.

SEC action on those items comes as some companies and lawmakers continue to push the Commission to further extend compliance with Section 404 for non-accelerated filers, who are slated to start complying with the management requirements of the infamous portion of the Sarbanes-Oxley Act for fiscal years ending on or after Dec. 15, 2007.

The SEC has said it won’t further postpone the compliance deadline unless it doesn’t adopt the auditing standard as expected. Meanwhile, the House recently passed an amendment that would stall compliance through 2008. The measure must still pass the Senate.

As promised, the Commission will also consider whether to publish a concept release to solicit comment on allowing U.S issuers to use the English-language version of International Financial Reporting Standards as published by the International Accounting Standards Board to prepare financial statements in compliance with the Commission’s rules. The SEC in June voted to propose a related rule that would allow foreign private issuers to prepare financial statements in IFRS without reconciliation to U.S. Generally Accepted Accounting Principles, as is currently required for companies using anything other than U.S. GAAP.

Finally, the SEC will consider whether to propose amendments to its proxy rules regarding shareholder proposals, disclosure about shareholder proponents, shareholder communications, and related matters. The SEC has promised to deliver rule amendments in the proxy area since last September’s decision in a case involving American International Group, in which an appeals court held that shareholders can submit proposals concerning director nominations for inclusion in a proxy statement. That overturned the SEC’s longstanding interpretation of its rules governing when companies must include shareholder proposals in their proxy statement. The action follows a failed SEC attempt to address shareholder access to the proxy in 2005.

The SEC meeting will be open to the public and Webcast over the Internet. For details on listening to the meeting, please see the related resources in the box, above right.

Compliance Week will provide an update for subscribers after the meeting.