Corporate responsibility regulations debated

August 15,2002 - With the recently discussed corporate governance rules, many Southern Nevada investors are left to wonder how the new laws will affect businesses here.

Brian Gordon, principal with Applied Analysis, Las Vegas' gaming industry, small to medium-sized businesses and accounting firms will feel the deepest impact of the enhanced laws.

"Obviously, the idea behind the new laws is to end the current public perception of dishonest accounting practices among publicly traded companies," said Gordon. "There is a also a hope that they will restore the public's confidence in Wall Street."

According to Gordon, the new regulations make it easier to prosecute corporate fraud and provide for harsher penalties for fraud crimes, including longer prison terms and increased fines. These policies are also intended to deter various forms of obstruction of just criminal acts.

The legislation, aimed at curbing a rash of corporate accounting scams, will hit publicly traded companies and accounting firms the hardest. For Southern Nevada, this means casinos, gaming companies and local accounting firms will be required to alter some business practices to comply.

Under the new regulations, Las Vegas executives must vouch for the accuracy of financial statements for filing with the Securities and Exchange Commission. Earlier this month, the SEC required top executives of four of the State's largest casino corporations to submit sworn written statements verifying the completeness and accuracy of financial records.

"Executive verification is more of a cosmetic solution than a real cure to the recent problems," Gordon said.

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