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US CEO's Race to Meet Deadline to Certify Accounts - 2002-08-14

Wednesday is the deadline for chief executives of some 700 of the largest American companies to certify the accuracy of their quarterly financial statements. The increased regulation is part of anti-fraud legislation recently passed by Congress and signed by the president.

The new law holds chief executives and financial officers personally responsible for the accuracy of their firm's financial statements. If there is misrepresentation or omission of significant data that could affect the stock price, the chief executives are liable to prosecution and prison terms of up to 20 years.

A string of accounting scandals has soured the investing public on the stock market, brought companies like Enron and WorldCom to bankruptcy, and robbed employees of their retirement savings.

President Bush, speaking at a political rally in Wisconsin, said his administration is determined to fight corporate fraud.

"Today, chief executive officers of major corporate America are putting their names on the line to certify that the numbers on their balance sheets are real. And that's positive," said Mr. Bush. "By far the vast majority of those who run corporate America are good, honorable people."

Experts are not convinced that the certification deadline will remedy the accounting fraud that has discredited American financial markets. Most CEO's have complied with the new regulation but a few have waited for the Wednesday night deadline.