Corporate & Securities Law

How mature is your Enterprise Risk Management (ERM) Practice?

Posted on April 28, 2010
I wanted to share what I found to be surprising statistics from their recently published 2010 Report on the Current State of Enterprise Risk Oversight: 2nd Edition" published in February.48.7% of respondents describe the sophistication of their risk oversight processes as immature to minimally mature...

SEC Approves Enhanced Disclosure About Risk, Compensation and Corporate Governance

Posted on April 27, 2010
(12/16/2009)The Securities and Exchange Commission today approved rules to enhance the information provided to shareholders so they are better able to evaluate the leadership of public companies.In particular, the new rules require disclosures in proxy and information statements about:The relationship of a company's compensation policies and practices to risk management...

Control Rationalization - 8 Best Practices

Posted on April 20, 2010
The health of your business requires consideration that a continual over assessment of risks and controls encumbers your resources and leads to unnecessary testing. External auditors need a business case to justify reducing SOX compliance requirements...

SOX Life: Revisiting your Control Environment

Posted on April 13, 2010
I have had too many conversations about "just one more layer for good measure" when it comes to controls in the enterprise.Never enough time" and "too many competing demands" seems to be the recurring theme, as folks complain about staffing being reduced 10% since 2007, and cashflow being as tight as most of us have ever witnessed...

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Amended Custody Rules and SAS 70s

Posted on April 12, 2010
On December 30, 2009, the Securities and Exchange Commission (SEC) finalized theamendments to the custody requirements of Rule 206(4)-2 (the ?Rule?), under theInvestment Advisers Act of 1940. What do you need to do to prepare and complynow that the Rule has gone into effect as of March 12, 2010? See Deloitte's "March 12th Effective Date for Amended Custody Rule" for the three most common concerns facing organizations subject to the Rule.

What Does Madoff's Auditor Say? No Answer

Posted on December 16, 2008
The tiny auditor of Bernard Madoff's Wall Street firm, at the center of an alleged $50-billion Ponzi scheme, is being investigated by the district attorney in a New York City suburb.Friehling & Horowitz had signed off on the annual financial statement for Bernard L...

Proposed ?Emergency Economic Stabilization Act of 2008?

Posted on September 28, 2008
Noteworthy language in the relief regarding market transparency, oversight and audit, and mark-to-market (MTM) FAS157 treatment:Section 114. Market Transparency.48-hour Reporting Requirement: The Secretary is required, within 2 business days of exercising authority under this Act, to publicly disclose the details of any transaction...

Gartner Magic Quadrant - GRC

Posted on August 09, 2008
Free report from Gartner on leading GRC applications, courtesy of MetricStream.

Large-caps set high corporate governance standards, but independence still an issue for some

Posted on May 29, 2008
For those that have felt the corporate governance requirements under SOX were unreasonable, consider these findings in Austrailia regarding corporate governance practices. The themes sound all too familiar.Australia?s largest publicly listed companies generally meet all aspects of best practice guidelines for corporate governance; however full independence still remains a key issue for some major companies...

Lawsuits may expand Sarbanes-Oxley

Posted on May 29, 2008
Two lawsuits filed by former employees against Fidelity Investments may resolve a simmering dispute in the securities industry: Whether mutual fund employees are protected by a whistle-blower law adopted in the wake of corporate accounting scandals.The Sarbanes-Oxley Act does not specifically apply to the Fidelity Investments chairman's firm and other privately held companies...

Harsh internal IMF audit calls for 'major changes'

Posted on May 29, 2008
Internal auditors at the International Monetary Fund released a harshly critical report on governance Wednesday and urged "major changes" to maintain the embattled institution's relevance.The Independent Evaluation Office of the IMF said that effectiveness had been the strongest aspect of the 185-nation institution's governance, "while accountability and voice have been the weakest...

Survey: Enterprise risk management still a blind spot for insurance CFOs

Posted on May 29, 2008
The drumbeat for the use of enterprise risk management processes at major companies is getting louder thanks to the credit crisis.Federal Reserve Chairman Ben Bernanke said yesterdayThursday that the credit crisis has exposed weaknesses in many financial firms? risk-management practices...

Board Adopts New Ethics and Independence Rule Concerning Communications with Audit Committees and an Amendment to its Existing Tax Services Rule

Posted on April 25, 2008
The Board adopted Rule 3526 to enhance communication between audit committees and registered firms regarding the firm's independence. Rule 3526 will require a registered public accounting firm, before accepting an initial engagement pursuant to the standards of the PCAOB, to describe in writing to the audit committee all relationships between the firm or any of its affiliates and the issuer or persons in a financial reporting oversight role at the issuer that may reasonably be thought to bear on the firm's independence...

Crunching the Words

Posted on April 25, 2008
When auditors seek evidence of fraud, they take a careful look at a company's financial statements. Maybe they should examine other statements, such as those uttered by company executives.That's the theory behind new fraud-detection software developed by two professors at Virginia Tech, who say that the story a company crafts around its numbers often says much about whether those number are solid...

SOX Life Blog: Knowledge Management and Corporate Governance

Posted on April 22, 2008
Knowledge Management (KM) is more than a buzz phrase running through organizations, so if you were hoping this discussion was going to abruptly end, think again.With so many organizations facing labor shortages as the baby boomers look toward retirement, it becomes not only a staffing but a very practical governance conversation about addressing this talent gap...

Board to Consider Adopting New Ethics and Independence Rule Concerning Communications with Audit Committees and Amending its Existing Tax Services Rul

Posted on April 17, 2008
The Public Company Accounting Oversight Board has scheduled an open meeting for Tuesday, April 22, at 9:30 a.m. in the Board's open meeting room at 1666 K St. NW, Washington, DC.The Board will consider adopting Rule 3526, Communication with Audit Committees Concerning Independence, which would supersede the Board's interim independence requirement, Independence Standards Board Standard No...

SOX Life Blog: Reader Question - Understanding & Evaluating Segregation of Duties

Posted on April 17, 2008
I appreciate when readers share their challenges in applying issues and concepts, as invariably there are an additional dozen people also struggling with this same topic.One professional writes:I am new at this and need to understand about SOX and SOD, do you have any other resources? I am looking for Purchases Orders to Negotiations for credit terms, to who enters the new vendor and who signs and who does Accounts Payable all the way through to Fixed Assets? Can you help or recommend a book on SOD or an inexpensive software solution?This reader had already come across a few past entries (Explaining Segregation of Duties, SOD Part II), and was still struggling with putting the concept into application...

Segregation of Duties Whitepaper: Minimizing the Cost and Complexity of Sarbanes-Oxley Compliance

Posted on April 16, 2008
Another resource available for those seeking to better understand and manage their SOD risks and issues.Corporate and IT executives continue to feel the pressures of assuringfederal regulators, auditors, boards of directors, and stockholders thatcorporate financial statements are accurate and precise...

Changing Ethics Compliance Rules And Their Potential Impact On Government Contractors And Investors

Posted on April 16, 2008
Recently, the US Government implemented a new rule and proposed yet more rules regarding ethics and corporate compliance programs for government contractors. This marks a continuing shift towards adopting a more aggressive approach in addressing government contractor fraud, which is similar to the protocols applied to other sectors of US industry...

Cox Seeks $1B Boost from Congress

Posted on April 16, 2008
Securities and Exchange Commission chairman Christopher Cox asked Congress to approve his nearly $1 billion budget request for fiscal year 2009.If lawmakers agree the SEC needs its first budget increase in three years, the commission will have realized a roughly 4 percent increase and be able to keep its staff levels the same as fiscal year 2007, Cox testified during an appropriations hearing before a House subcommittee on Wednesday...

The Changing Atmospherics of Corporate Crime Sentencing in the Post Sarbanes-Oxley Act Era

Posted on April 11, 2008
The Sarbanes-Oxley Act of 2002 has been viewed as a watershed event in dealing with corporate fraud. In addition to its extensive provisions dealing with internal controls and corporate accounting procedures, the law adopted new crimes and pushed the United States Sentencing Commission to enhance the Federal Sentencing Guidelines provisions for fraud and related offenses...

SOX Life Blog: Flagging the "SEC's SOX for Small Business Reference"

Posted on April 10, 2008
Dreading your pending SOX initiative? Or the thoughts of IPO? Or how you might refine your implementation?Hopefully, "Sarbanes-Oxley Section 404A Guide for Small Business" from the SEC takes some of the sting out of it. This incorporates much of the thinking and discussion in the last 18 months about "how much is enough" for small business...

How Long Should It Take to Restate?

Posted on April 10, 2008
Sometimes after announcing they need to restate their financials, companies go into shutdown mode. For up to two years, investors won't see a regulatory filing or hear a significant financial peep while a company tidies up its past.The Securities and Exchange Commission's Advisory Committee on Improvements to Financial Reporting (CIFR) hopes to reduce the frequency of these so-called dark periods...

US company restatements soared 1997 to 2006--study

Posted on April 09, 2008
The frequency of financial restatements by U.S. public companies began to increase before the Sarbanes-Oxley corporate reform law was passed in 2002, according to a study commissioned by the U.S. Treasury Department and released on Wednesday.But restatements associated with fraud and revenue declined after 2001, said the report authored by Susan Scholz, a University of Kansas professor of accounting...

Blame for restatements may need a rethinking

Posted on April 09, 2008
The growing number of companies restating their financial results has been cited as a reason to ease U.S. accounting standards by the Securities and Exchange Commission and Treasury Department. But the restatement problem may not be the big bad wolf it was originally thought to be...

In Justice Shift, Corporate Deals Replace Trials

Posted on April 09, 2008
In 2005, federal authorities concluded that a Monsanto consultant had visited the home of an Indonesian official and, with the approval of a senior company executive, handed over an envelope stuffed with hundred-dollar bills. The money was meant as a bribe to win looser environmental regulations for Monsanto?s cotton crops, according to a court document...

Standard and Poor's - Use of ERM in Credit Rating

Posted on April 08, 2008
Maybe so much of the Sarbanes Oxley legistlation has been to simply bring US filers up to par with governance and risk management practices that have been maturing around the globe.Standard and Poor's, one of the leading credit rating agencies for capital markets, has begun their analysis of incorporating enterprise risk management (ERM) practices into credit rating - in Australian and New Zealand companies (with one of the longest lived bodies of risk management practice, dating back to 1995)...

It's time to embrace Risk Management

Posted on April 08, 2008
Since the advent of Sarbanes-Oxley, non-financial corporations have faced increasingly strong regulatory and compliance requirements aimed broadly at increasing transparency in their business practices. Risk management has been addressed at times, but usually as an afterthought...

PCAOB Addresses Emerging Audit Issues In 2008 Forums on Auditing in the Small Business Environment

Posted on April 07, 2008
The Public Company Accounting Oversight Board today announced the 2008 series of its Forums on Auditing in the Small Business Environment. These forums are designed to help share important information with registered public accounting firms and public companies operating in the small business community...

Proposed Restatement Guidelines Draw Investor Alarm

Posted on March 16, 2008
Investor advocates are wary of a regulatory proposal that could decrease the number of times companies restate their financial results.Barbara Roper, director of investor protection for the Consumer Federation of America, contends that the suggested changes to the Securities and Exchange Commission's nearly 10-year-old materiality guidance ? which companies rely on to calculate an error's effect on financial statements ? will likely reduce transparency and encourage "shoddy practices" by unscrupulous companies...

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