amirnetz said:
Yes, there are different standards, but both are required by law to be accurate (USA law - Sabrens-Oxley). The main difference is that the board, CEO and the CFO are personally responsible for the financial reports accuracy. The company in general is still responsible for any business performance public statement and can be found liable if it is falsely made. |
Sarbanes-Oxley governs the content of formal financial statements, like quarterly and year-end reporting and SEC filings. I do not recall any part of it that regulates press releases in general. i haven't read it in a long time, and dont work in a capacity that requires me to know it so it could be there, but could you tell me what section it is in?
With respect to Enron, they were not busted for anything they said in press releases. They were using mark to market accounting to book potential profit as current profit from deals that hadn't been completed. These were never revised to reflect the actual profit or loss from the transaction once it was complete. They were also hiding losses by masking them with transactions to subsidiary companies. These things made their stock price skyrocket and the officers of the company were selling loads of stock into the inflated price.
They weren't busted for lying in pr statements, they were busted for massive fraud and insider trading.
Also, Arthur Anderson imploded due to their complicity in Enron's fraud and their collapse exposed the fraud going on at WorldCom and ultimately bankrupted WorldCom for similar criminal acts. These events led to the creation of Sarbanes-Oxley.
