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WASHINGTON -
Investors jarred by a wave of accounting scandals were jostled by smaller ripples Wednesday, as several big companies restated their finances against a deadline to swear to the accuracy of financial reports.
After waiting until the last minute, scores of major corporations -- including nine based in the Baltimore area -- rushed to comply with a new government order holding top executives' feet to the fire by requiring them to vouch in writing for the veracity of recent financial reports.
The unprecedented requirement was designed to restore confidence in corporate America that was shattered by the scandals at Enron Corp., WorldCom Inc., Global Crossing Ltd. and many big other companies, and brought down accounting giant Arthur Andersen LLP.
In a major revision Wednesday, Household International Inc., the nation's No. 2 consumer-finance concern, disclosed that it earned $386 million less than previously reported over the past nine years.
Investors were unperturbed, boosting Household's stock by 29 cents, to $38.09, on the New York Stock Exchange.
The company, which issues MasterCard and Visa credit cards and makes home-equity and car loans, said the restatement came after its new auditors reviewed its accounting for "complex" credit-card contracts.
The market was unruffled, however, by the restatements _ fewer than a dozen companies made them as of Wednesday afternoon _ and staged a late-day rally sending the Dow Jones industrials up about 260 points.
Analysts suggested many investors may have gained confidence from the flood of certifications by company executives coming into the Securities and Exchange Commission.
Still, all the results weren't in, since there was a time lag between companies submitting statements to the SEC and their posting on the agency's Web site.
Companies can get an automatic five-day extension.
CEOs and chief financial officers who falsely certify their company reports could be prosecuted and imprisoned. The SEC order does not spell out, however, what would happen to companies that miss either the deadline or the five-day extension.
The leaders of 695 corporations were required to file the sworn statements by 5 p.m. today, and more than 300 companies -- from Ace Hardware Co. to Yum Brands Inc. -- had done so more than an hour before the deadline.
Seven of the nine Baltimore-area companies affected by the new SEC rule had filed by the deadline.
They are Allegheny Energy Inc., Black & Decker Corp., Constellation Energy Group, Legg Mason Inc., Lockheed Martin Corp., Magellan Health Services Inc. and W.R. Grace & Co.
Two other corporations -- Ciena Corp., the telecommunications firm based in Linthicum, and the spice maker McCormick & Co. -- have until the fall to certify their results.
Those companies report earnings on a different schedule than most companies.
In response to the accounting scandals of recent months, the SEC in late June ordered 947 companies -- all with annual revenues exceeding $1.2 billion -- to submit the sworn statements.
About 250 of them have deadlines later this year because they operate on a fiscal year rather than a calendar year.
No longer can CEOs blame the company's auditors or say they were unfamiliar with its finances, as former Enron chief executive Jeffrey Skilling did in testimony to Congress earlier this year.
"Honesty in business is the new patriotism," Treasury Secretary Paul O'Neill said in a speech Wednesday in Portland, Ore. "There is nothing better business leaders can do for this country right now than restore faith in the system that has made it great."
After waiting until the last minute, scores of major corporations -- including nine based in the Baltimore area -- rushed to comply with a new government order holding top executives' feet to the fire by requiring them to vouch in writing for the veracity of recent financial reports.
The unprecedented requirement was designed to restore confidence in corporate America that was shattered by the scandals at Enron Corp., WorldCom Inc., Global Crossing Ltd. and many big other companies, and brought down accounting giant Arthur Andersen LLP.
In a major revision Wednesday, Household International Inc., the nation's No. 2 consumer-finance concern, disclosed that it earned $386 million less than previously reported over the past nine years.
Investors were unperturbed, boosting Household's stock by 29 cents, to $38.09, on the New York Stock Exchange.
The company, which issues MasterCard and Visa credit cards and makes home-equity and car loans, said the restatement came after its new auditors reviewed its accounting for "complex" credit-card contracts.
The market was unruffled, however, by the restatements _ fewer than a dozen companies made them as of Wednesday afternoon _ and staged a late-day rally sending the Dow Jones industrials up about 260 points.
Analysts suggested many investors may have gained confidence from the flood of certifications by company executives coming into the Securities and Exchange Commission.
Still, all the results weren't in, since there was a time lag between companies submitting statements to the SEC and their posting on the agency's Web site.
Companies can get an automatic five-day extension.
CEOs and chief financial officers who falsely certify their company reports could be prosecuted and imprisoned. The SEC order does not spell out, however, what would happen to companies that miss either the deadline or the five-day extension.
The leaders of 695 corporations were required to file the sworn statements by 5 p.m. today, and more than 300 companies -- from Ace Hardware Co. to Yum Brands Inc. -- had done so more than an hour before the deadline.
Seven of the nine Baltimore-area companies affected by the new SEC rule had filed by the deadline.
They are Allegheny Energy Inc., Black & Decker Corp., Constellation Energy Group, Legg Mason Inc., Lockheed Martin Corp., Magellan Health Services Inc. and W.R. Grace & Co.
Two other corporations -- Ciena Corp., the telecommunications firm based in Linthicum, and the spice maker McCormick & Co. -- have until the fall to certify their results.
Those companies report earnings on a different schedule than most companies.
In response to the accounting scandals of recent months, the SEC in late June ordered 947 companies -- all with annual revenues exceeding $1.2 billion -- to submit the sworn statements.
About 250 of them have deadlines later this year because they operate on a fiscal year rather than a calendar year.
No longer can CEOs blame the company's auditors or say they were unfamiliar with its finances, as former Enron chief executive Jeffrey Skilling did in testimony to Congress earlier this year.
"Honesty in business is the new patriotism," Treasury Secretary Paul O'Neill said in a speech Wednesday in Portland, Ore. "There is nothing better business leaders can do for this country right now than restore faith in the system that has made it great."
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