Recent XBRL guidance from the Securities and Exchange Commission is expected to help steer companies to provide more accurate information, but some worry it won’t go far enough to fix the problems that prevent better use of open source financial statement data. “This latest guidance is kind of a weak attempt to get things moving in the right direction,” says Dave Frankel, an independent consultant with SlingStone Group. More inside.
French banking giant BNP entered into a guilty plea last month and agreed to a record $8.9 billion settlement—the largest penalty ever obtained by the Justice Department in a criminal economic sanctions case. Worse still, the complaince department at the bank was accused of helping to cover up the wrongdoing. “The message to banks is that they need to take more seriously a culture of compliance," says Jeffrey Alberts, a partner with law firm Pryor Cashman.
This year looks to be a record-breaking one for mergers and acquisitions. The blockbuster deals raise several compliance issues, such as potential Foreign Corrupt Practices Act violations and ethics culture mismatch, but compliance officers may not always be part of the pre-deal diligence from the start. Getting them involved can avoid the threat of “successor liability,” post-merger bribery violations, and fostering the best cultural aspects of both sides. More inside.
Shareholders put a high priority on CEO succession planning, but they have stopped short of calling for more transparency on the plans. That could be changing. A high-profile CEO’s illness and a campaign for more succession plan disclosures in the U.K. may bring greater attention to what companies reveal about the plans. “Investors want to know that boards have thoughtful long-term and emergency executive succession plans,” says Allie Rutherford, director of the Corporate Governance Center at auditing firm EY.
Good news in environmental compliance: Looming new clouds of regulation have been dissipated by the U.S. Supreme Court. A ruling last month trimmed the Environmental Protection Agency’s authority to enforce cuts in greenhouse gas emissions. The EPA cannot necessarily impose such regulations on all facilities, the court said—although it said the EPA can do so for power plants, oil refineries, factories, and the like.
Hurricane season is upon us and Mark Pearson and Larry Kivett, members of Deloitte’s supply chain forensics team, are sounding the alarm that stormy weather can bring with it supply chain fraud. In this week’s podcast, they discuss the connection and offer advice for how to shore up risk mitigation efforts.
At long last, we finally have a new accounting standard on revenue recognition. It’s comprehensive, converged, and principles-based. There’s already plenty of buzz about the new standard, some true and some not. Inside, columnist Scott Taub offers a rundown of 10 things you should know about the new revenue recognition standard.
In recent actions the U.S. Consumer Product Safety Commission has emphasized the importance of effective compliance programs, echoing the approach taken by other federal agencies in a variety of contexts. Even if a legal violation occurs, a robust compliance program may help avoid severe government action and penalties. Inside, guest columnist Stephanie Tsacoumis, general counsel of the CPSC, provides her thoughts on what constitutes an effective compliance program.
How can a company detect bad behavior at distant suppliers and reduce exposure to supply-chain risk? Data that companies may already possess, or easily obtain, can be a starting point for creating a process that can anticipate problems, not just react to them, supply-chain experts say. “There is more information nowadays, whether that is media or social media, that can be mined to effectively identify risks,” says Tom Golding, a vice president at Thomson Reuters GRC.
This summer many public companies will be spending an exorbitant amount of time examining their control documentation as audit regulators—and hence audit firms—focus not just on the detection of controls, but also whether they are operating effectively. “The issue is to what extent do you have to repeat or somehow additionally verify that the control is operating effectively?” says Larry Rittenberg, audit committee chairman for Woodward Inc.
Overseeing a global internal investigation can be one of the most difficult and perilous jobs that compliance officers do. At the Compliance Week 2014 conference, compliance executives shared their ideas for approaching an internal investigation and managing the risks that go along with them, including when to get local authorities involved. “Involving local law enforcement I find to be the most tricky, disturbing area to navigate,” said Karen Moore, former vice president of compliance at Phillip Morris.