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Latest News

Boards Issue Latest Plans
to Overhaul Lease Accounting

At long last, the Financial Accounting Standards Board and the International Accounting Standards Board have published their second draft of a proposed standard to overhaul lease accounting to bring all but the shortest-term leases onto corporate balance sheets. Three of FASB's seven members do not support the proposal, however, calling it overly complex and overly burdensome on preparers. More inside.
 

House Passes Bill to Slow
SEC’s Rulemaking Ability

The House of Representatives passed a bill Friday that orders the SEC to perform new cost-benefit analyses for rules the agency wishes to adopt. The bill's Republican backers say the measure will force the SEC to be more thoughtful in its rulemaking, while opponents say the bill does nothing more than impede the agency's ability to do its job.
 

Compliance Week 2013 Is Here:
What’s Cool and Compelling

The Compliance Week 2013 conference happens this week in Washington, where more than 500 executives will gather to talk shop. Expect various updates from us throughout the week about what's happening. Meanwhile, as always—here is Editor Matt Kelly's rundown of the most interesting or informative sessions we have on deck. (And given how strong our agenda is, picking only a handful is not easy.)
 

Walmart FCPA Probe Costs
Hit $230 Million and Running

The Justice Department has yet to sock Walmart with any fines or penalties related to a massive bribery and corruption investigation, and already the scandal is costing the retailer a not-so-low price. Walmart said last week that the cost associated with its own investigation into the charges hit $73 million in the first quarter, bringing the total costs so far to $230 million, with another $70 million forecast for the second quarter.
 

Nasdaq Withdraws Internal
Audit Rule Proposal, for Now

Responding to cost and implementation concerns voiced by small and growing enterprises, Nasdaq has withdrawn a proposed rule that would have required listed companies to establish and maintain an internal audit function. It plans to submit a modified rule to the Securities and Exchange Commission after a full review of submitted comments.
 

Survey: Boards Put Reputational Risk Near the Top of the List

After financial risk, reputation risk is the biggest concern that keeps board directors awake at night, according to the latest poll from audit firm EisnerAmper. Nearly two-thirds of the board members surveyed say it is their next biggest risk, a huge increase from when the survey was conducted last year. Directors cited compliance and regulatory risk as the third largest risk. More survey results inside.
 

Study Finds Top European Countries for Corruption, Fraud

Ernst & Young's annual fraud survey covering Europe, the Middle East, India, and Africa revealed that bribery and corruption are not just developing-market problems. The survey found that large percentages of European executives believe bribery, unethical practices, and outright fraud are common in their home countries. And some say corporate compliance programs are harming their competitive edge. More inside.
 

Another Court Decision Contests Legitimacy of NLRB Rulings

Last week was a tough one for the National Labor Relations Board. Just before U.S. senators commenced with grilling the current slate of NLRB nominees, yet another court ruling was handed down that vacated an order because of contested recess appointments made by President Obama, further raising the possibility of nullifying NLRB rulings going back to August 2011.
 

In-Depth Coverage

Updated COSO Framework to Spark Internal Control Review

Now that COSO has completed the update of its widely used internal control framework, it's time for companies to determine where control changes might be in order. The good news is that the framework keeps the five core principles, but it also adds 17 new underlying principles that will likely require additional documentation. "Now you need to go one level below," says Christian Peo, a partner with KPMG.
 

After Three Years, Why Are Some Still Losing Say-on-Pay Votes?

While many companies have revamped pay plans to pass muster with shareholders, plenty are still failing say-on-pay votes this proxy season, including Navistar International, Comstock Resources, Stillwater Mining, and many others. "Now that we are in the third year of say-on-pay, why are some companies still failing?" asks Brian Sohmers, a general manager at Equilar's. The answer has as much to do with performance as it does with pay. Details inside.
 

Compliance Budgets Rising for Banks as Regulations Multiply

The onslaught of new regulations for financial institutions continues to make life difficult for compliance officers at financial services firms. In response, banks and insurers are increasing their compliance budgets, according to a survey by Thompson Reuters. Still many report the added resources aren't enough. "There's so much going on. It's the 'bombs bursting in air' kind of thing," says Richard Riese, senior vice president at the American Bankers Association Center for Regulatory Compliance.
 

EU Set to Adopt More Stringent, Wider Data Privacy Regulation

The European Parliament is working on a final proposal that would make the European Union's already stringent data privacy laws even tougher for businesses and would cast a wider net, requiring many U.S. companies to comply with European data protection regulation for the first time. The new laws, if passed, would require companies to report serious data breaches to regulators as soon as possible, meaning within 24 hours if feasible. More details inside.
 

Healthcare Companies Struggling Still on Sunshine Act Compliance

Drug companies and medical equipment makers are facing dark days ahead as they struggle with the cost, complexity, and even legal risks associated with the Sunshine Act. The Centers for Medicare & Medicaid Services estimate the total cost for Sunshine Act compliance will hit $269 million in year one and $180 million each year going forward. Manufacturers are "struggling to get their systems in place," says Michaeline Daboul, CEO of MMIS, a healthcare software provider.
 

Columnists

Why the Current Proposal on Loan-Loss Accounting Is Flawed

Late last year the Financial Accounting Standards Board issued its second proposal on accounting for loan losses, which would require companies to recognize all expected losses for every financial instrument not carried at fair value. Inside, Columnist Scott Taub provides his take on the proposal, which he says would abandon the long-established idea of recording things as they occur, not before or after, and he examines some solutions for the current problems of loan-loss accounting.
 

Does It Pay to Be Ethical?

For awhile, the idea that ethics was an integral part of business was grounded in the thinking that it was a defense against reputational risk or that it was simply the right thing to do. More recently, though, another notion has come to the fore: that it actually pays to be ethical. Inside, Columnist Richard Steinberg looks over the evidence—anecdotal and empirical—that good behavior is good for the bottom line.
 

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Events of the Week

Addressing the Challenges of Solvency II Pillars 2 and 3
Sponsored by IBM

Information Governance: Managing the Lifecycle of Data
Sponsored by HP Autonomy

Who's Minding the Files? Managing the File Transfer Explosion
Sponsored by IBM

e-Books

Getting It In Writing: The Art of Policy Management
Sponsored by NAVEX Global

Information Governance: Managing the Lifecycle of Data
Sponsored by HP Autonomy

Anti-Money Laundering Illustrated: Visualizing an Effective Capability
Sponsored by OCEG

Thought Leadership

What Does an Effective Customer Risk Assessment Program Look Like?
Sponsored by OCEG

Getting Ready for the Physician Payment 'Sunshine' Rule
Sponsored by Bloomberg BNA

New Compliance Week and Kroll Benchmarking Report on Anti-Bribery & Corruption
Sponsored by Kroll

Strategies for Aligning GRC with Business Priorities
Sponsored by EMC

Upcoming Webcasts

Strengthening Controls in 2013, Part 3: Purchase-to-Pay Cycle
Sponsored by ACL

Evolution of Compliance: 2013 State of Compliance Survey Results
Sponsored by PwC

Compliance Week Podcasts ...

Every week we chat with leading thinkers in compliance, auditing, risk management, public policy and more. These short (10-15 minutes) interviews are free to all. Follow Compliance Week podcasts on iTunes.