Recommend 8a 7/7

In the wake of the Enron scandal, the Senate Permanent Subcommittee on Investigations recommends that directors of publicly traded corporations:

Stop accounting practices and transactions that put the company at high risk of not complying with generally accepted accounting principles and resulting in misleading and inaccurate financial statements.

Ban conflict-of-interest arrangements that allow company transactions with a business owned or operated by senior company personnel.

Prohibit off-the-books activity designed to make the company's financial condition appear better than it is.

Prevent stock-based compensation plans that encourage executives to use improper accounting to improperly increase the company stock price.

Strengthen director independence by requiring that a majority of outside directors be free of material financial ties to the company other than their compensation as directors.

Bar the company's outside auditor from providing the company with internal auditing or consulting services and from auditing its own work for the company.

-- AP