SEC HELPING INVESTORS, COMPANIES AFFECTED BY KATRINA: The Securities and Exchange Commission has joined the growing list of companies and agencies mobilizing to provide relief to the victims of Hurricane Katrina.The SEC divisions and offices that oversee publicly traded companies, accountants, mutual funds, brokerage firms and transfer agents, among others, are preparing relief measures, including extensions of filing deadlines and suspension of requirements to deliver documents to hurricane-affected areas.

The relief effort would also enable broker/dealers to provide access to accounts held at offices that are no longer operable. The commission is also working with banking agencies and self-regulatory organizations.

The regulator said that its Division of Enforcement is monitoring for any Katrina-related securities scams that attempt to take advantage of the tragedy by defrauding desperate victims.

The commission has established both telephone and e-mail hotlines to provide immediate responses to questions. They should be directed to (202) 551-3300, or sent via e-mail to

AICPA FINANCIAL LITERACY WORK WINS ANOTHER AWARD: The American Institute of CPAs has won a 2005 Clarion Award from the Association for Women in Communications for its national "360 Degrees of Financial Literacy" program. The Clarion Award recognizes excellence across all communications disciplines, including advertising and marketing, publications, collateral materials, public relations and multi-media. The AICPA campaign won in the public affairs category.

The Clarion is the fourth award that the financial literacy program has won since being launched in May 2004. According to the AICPA, the program, which is supported by state CPA societies, has reached 150 million people. The centerpiece of the campaign is a consumer Web site,, which contains hundreds of articles, tools and frequently asked questions on a number of financial topics.

"The recognition our program has received tells us that the CPA profession was right in identifying the need for financial literacy education in this country," said the chair of the National CPA Financial Literacy Commission, Carl George, in a statement. The AICPA will receive the award at the annual AWC professional conference in October.

STOCK OPTION EXPENSING MOVES FORWARD: New accounting rules from the Financial Accounting Standards Board will require companies to treat stock options and grants as expenses after January 1, although some companies ending their fiscal year in June will start expensing options against income in this quarter.

The Council of Institutional Investors recently submitted a letter to Thomson Financial, asking the company to only provide consensus estimates including option expense (after an initial transition period) as part of Thomson's First Call estimates. Thomson had been considering providing two consensus estimates, one including and one excluding option expenses. How the changes are presented in financial filings to investors is expected to generate some discussion, with the Securities and Exchange Commission overseeing adoption of the principle.

Also, recent studies by Brigham Young University and the University of Minnesota found connections between lucrative stock options and grants paid to chief executives as compensation, and companies that report accounting irregularities, have flawed accounting practices, or engage in risky business strategies. The BYU study found that companies that compensate their executives with large stock packages tend to engage in possibly dangerous business strategies, leading toward larger capital spending or growth by acquisition.

The University of Minnesota study examined companies that restated their financial results between January 1997 and June 2002. The study found that these companies were more likely to report accounting problems or faulty accounting practices that might have led to these irregularities if they were led by chief executives who were highly compensated using stock options or grants.

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