The Securities and Exchange Commission proudly announced it has given its first whistleblower award to an individual who worked in compliance or audit—the agency hasn’t said which. The $300,000 jackpot was to reward the individual for reporting concerns to the SEC when the company failed to take action on those same reports internally. “I definitely think the SEC is trying to send a message with this,” says Gregory Keating, a shareholder with law firm Littler Mendelson.
Another news cycle, another tale of cyber thieves infiltrating a major business and stealing huge troves of customer data. This month was Home Depot’s turn, and so far all evidence suggests the malware used against the retailer was very similar to that used in the massive breach Target suffered last year. What risk management and control principles can you put to work to thwart thieves after your data? Details inside.
Will the SEC ever get around to finishing the pay-ratio rule? What about political spending disclosure requirements? Has the SEC done anything more on disclosure reform? What can banks expect in the months ahead on liquidity and capital requirements? What firms may be targeted as systematically important? As 2014 hits the homestretch, regulators are providing some insight into their priorities for the rest of the year. More inside.
If principles-based standards, with their room for judgment, can be a cause for heightened fraud risk, the new standard on revenue recognition must look positively terrifying to audit executives and risk managers. In 700 pages of guidance, the word “estimate” appears 500 times. “That will create challenges both in interpreting and, for auditors, in ascertaining whether the accounting is consistent with the standard,” says Alex Wodka, a partner with Crowe Horwath.
Investors are pushing for reform on disclosure of director self-evaluation details. They want boards to share more about the process they use for reviews and how they use the information. “No one expects anyone to name names or include reviews of individual directors. We want to ensure that there is a vigorous process for how the board evaluates how well it is performing,” says Amy Borrus, deputy director for the Council of Institutional Investors.
Companies that market products and services to children online increasingly are finding themselves in the crosshairs of the Federal Trade Commission. This month the FTC reached a settlement with Google for not doing enough to allow parents to approve purchases made by children through apps downloaded from the Google Play store, and has filed similar charges with Apple and Amazon. It is also conducting a review of the Children’s Online Privacy Protection Act. More inside.
When a member of pop star Justin Bieber’s entourage gave a Canadian border guard valuable backstage passes to get two Americans with criminal records into the country, it raised some questions large companies struggle with every day: What is a bribe, and when are facilitation payments illegal? Inside, columnist Tom Fox uses the case to explore the problems such payments can create and the questions companies should consider when investigating or making policies on them.