FASB will meet next week to review research behind a possible delay in the new revenue recognition standard. The board might also consider allowing early adoption, currently prohibited under FASB’s standard. SEC Chief Accountant James Schnurrif said, “If the parties determine there are implementation issues that require additional standard setting, I would think that would be a reason why you’d have to delay the adoption.” Details inside.
The crash of Germanwings Flight 9525 last week demonstrates the most difficult choices in risk management that businesses, policymakers, and society ever have to make: how we handle people like Andreas Lubitz, the troubled co-pilot who deliberately crashed the plane—how we identify and handle persons who might potentially cause enormous damage to others. Compliance Week editor Matt Kelly has more inside.
Compliance officers worried about regulatory change, prepare yourself: The Supreme Court’s ruling to give agencies more leeway in re-interpreting rules does you no favors. Today’s estranged Washington politics means regulators are bound to try re-interpretation for the sake of expedient rulemaking, and CCOs will need to be vigilant. “This decision puts that policy-making tool right at the center of any business’ focus,” says Seth Harris, of the Dentons law firm.
Starting this month, government contractors must ensure that their supply chain is free of human-trafficking activities. The thicket of new requirements isn’t too different conceptually from other compliance obligations, but the nuances of human-trafficking risk will pose some tricky policy challenges. Companies previously might not have thought much about where the labor in their supply chain originates, says Cynthia Cordes of law firm Husch Blackwell. Those days are over.
Amid a tough climate of regulatory enforcement and an explosion of new rules after the financial crisis, many large companies—especially financial institutions—have beefed up their staffing on risk and compliance. But is more always better? While the investment sends a message, more boots on the ground may just step on each other’s toes if there isn’t a strategy for deploying them.
Here we are with a converged standard for revenue recognition, a profound achievement for financial reporting. Now comes the hard part, Compliance Week columnist Scott Taub writes. Already we see some differences in how to interpret the standard in the United States and overseas, he writes, and we’ll need some deft diplomacy to keep this hard-fought consensus together as implementation proceeds.
A new report finds corporate political pressure on chief audit executives to alter audit plans or results is “extensive and pervasive,” and it underlines the need for audit professionals to master the art of office politics. “We were really surprised by the extent of pressure,” says Larry Rittenberg, co-author of the research. “Political pressure came from all parts of the organization. We could not sort out one individual function where most pressure came from.”
Modern technology allows powerful employee monitoring ability to sharpen business performance and even support compliance efforts. The bad news: Those technologies also spawn a new set of data security risks to keep compliance officers busy. “The key is trying to strike a balance between the employee’s personal privacy interests versus the company’s interests, and trying to use the least intrusive method possible to achieve the company’s goals,” says Lilly Moon of law firm Jackson Lewis.