Companies should not use reserves as a "cookie jar" to raid during bad times, Securities and Exchange Commission Chairman Arthur Levitt said Tuesday.

In a speech to the American Institute of Certified Public Accountants, the nation's top securities regulator called Wall Street's fixation on short-term results "unforgiving." But he urged CPAs to resist the temptation to let clients fudge earnings.

"When accounting practices are defined more by their gimmickry instead of their representation of underlying business conditions, the public trust is jeopardized," Mr. Levitt said.

If CPAs do not reverse the "gradual but noticeable erosion in the quality of financial reporting," he said, companies may ultimately find it more difficult to raise capital from wary investors.

The SEC chairman's comments came in the wake of a flap involving SunTrust Banks Inc.'s supposed earnings management. SunTrust recently agreed to cut its reserves by $100 million to settle agency concerns that it had stockpiled assets in order to bolster future profits.

Mr. Levitt did not explicitly mention SunTrust or any other company in his speech. Nor did he limit his criticism of earnings management to the misuse of reserves. The SEC chief also condemned such techniques as extending the fiscal year beyond 365 days and counting revenue from back- ordered equipment.

In a speech at the same conference Tuesday, Edmund L. Jenkins, chairman of the Financial Accounting Standards Board, criticized the American Bankers Association for supporting legislation that he said would have let the government set private-sector accounting standards.

Mr. Jenkins said the ABA threw its support behind the Financial Accounting Fairness Act of 1998 because it was upset about FASB's views on the regulation of derivatives.

He said the bill would have stripped FASB of some rule-writing powers, a situation he likened to the thrift crisis of the 1980s. In that case, Mr. Jenkins said, regulators worsened things by letting regulations overrule accounting principles.

Paul V. Salfi, senior financial policy analyst at the ABA, disputed Mr. Jenkins' complaint.

"ABA and others supported the bill because it would increase accountability in the current standard-setting process without increasing government involvement," he said.

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