Scanty List of Auditors Disciplined in the Years Since Enron Inspired New Rules for Accounting (LINK)

Cloaked Disciplinary Hearings for Accounting Auditors

May Break Open to Media, Public

Once hailed as the legislation that was supposed to expose creative-accounting misdoings to the disinfectant powers of daylight, Sarbanes-Oxley (sometimes shortened to "SOX" or "SarbOx"), has had some pretty outstanding holes in it, which have gone relatively unnoticed for almost a decade.

One of the most negligent of those "oversights" is the SarbOx language that--pun intended,--keeps oversight proceedings--proceedings meant to ensure honesty and accuracy in the accounting offices of America's publicly traded corporations--cloaked in secrecy.

However, changes may soon come that would put a public eye on auditors whose conduct is under examination by the congressionally appointed board whose job it is to ferret out wrongdoing on behalf of shareholders and anyone who has an interest in honest accounting.

This from a press release sent to journalists today by the Public Company Accounting Oversight Board:

Under current law, firms and auditors litigating with the PCAOB have little incentive to consent to public proceedings and can prevent proceedings from becoming public for long after the information would be most relevant to investors, other auditors, and interested parties.

“No other auditor, investor, audit committee, or member of the media is entitled to know what the PCAOB considers to merit discipline, whom it has charged, what issues are being litigated, or whether the PCAOB staff has prevailed or not,” said Acting Chairman [Daniel L.] Goelzer. “The public is in the dark about how the Board uses its enforcement authority until there is a settlement or an SEC decision on the Board’s sanctions.”

PCAOB's Daniel Goelzer has assigned to his staff the task of writing new language to present to congress, which would allow disciplinary hearings to be open to the press and the public without consent of all parties, and without needing extraordinary merit for public scrutiny to be allowed, as is now the case.

Michelle Bachman: The Once and Future Dunce

Michele explains it all.

You've got to feel sorry for Rep. Michele Bachmann (R-Minnesota): All the pieces are there for her to be a sort of ready-for-prime-time, mainstream version of the ghastly Ann Coulter.

Congresswoman Bachmann doesn't frighten little children--so far as we know. She's extremely telegenic (with the TV on mute). She's an elected official, whereas Coulter is just a shock-schlock "author" who's usually peddling a book at the same time she's damning everyone from Democratic presidential candidates for their "French manicures" to the wives of 9/11 victims for supposedly exploiting their "exquisite grief."

Yes, Coulter knows how to pick her victims to make her look savage and screechy. But when Michele Bachmann tries to pull a Coulter, she just looks oafish and petty.

Take for instance her recent interview on a conservative video-news website. She sounds logical in presenting her partisan case until she starts talking about energy and the swine flu crisis. That's when the congresswoman completely melts down, yet again rolling out the aging anti-science of the last eight years, which denies the significance of human activity on global warming .

Then she bends reality, actually saying that, somehow, by not agreeing to the tougher emissions standards of the Kyoto Treaty, the U.S. has lowered its carbon emissions during the past year. Worse, she goes on to credit our nation's recent prosperity (huh?) for lower emissions.

I'm no expert, but if there were an economy-based reason for lower emissions in the U.S., maybe it's that industrial production has diminished during the Great Recession. In fact, an Apr. 9 USA Today article confirms that a slower economy has helped cut some emissions worldwide.

"...and it's because of our prosperity," Bachmann explains to the interviewer. "Prosperity has enabled our country to have cleaner factories, cleaner coal plants. When you have prosperity and you can have the new and the latest technology, then you have the best chance of being able to have a cleaner environment, and that's really a good direction to go."

Okay, so because business is so great (ahem) kindly utility companies decided to install expensive clean-air technology? WRONG! Can you say regulation Rep. Bachmann?

But the Ann Coulter-light comparison comes in when Michele Bachman is asked about swine flu. I need not spoil the fun. See how she twirls the issue like an unpracticed majorette (do we still call them that?) fumbling her baton at the phalanx of a high school marching band. Click on the image above for a link to the interview.

Mark to Market: Other Big Financial News

FASBE, the rule-making body for the accounting industry (think of it as the lawyers' bar, except for CPAs), has bowed to political pressure and approved "more flexibility," i.e., more generosity, in the valuing of legacy, i.e., toxic, assets. The bottom line? Better-looking bottom lines for banks and other financial institutions. But is this just institutionalizing the kind of willy-nilly analysis that was the problem way back with Enron, and during the current crisis on Wall Street? Or, is it a necessary evil to grease the gears of the U.S. and world economies? I'll try to get some answers from leading accounting firms later at the Business Journal's website: sfvbj.com. (Maybe accounting is not such a bad beat for this reporter after all). Meantime, here's Reuters U.K.'s take on the so-called mark to market issue: http://uk.reuters.com/article/regulatoryNewsFinancialServicesAndRealEstate/idUKN0226528020090402