The Securities and Exchange Commission has slowly enhanced its technological capabilities to enable it to do a better job of searching for red flags in company filings. With the SEC’s increased use of data analytics, even relatively minor filing mistakes could put you in its crosshairs. Some recent enforcement actions, for example, indicate a shift to a “broken windows” approach, pursuing less-egregious rules violations that have been virtually ignored in the past. More inside.
Squeezed by regulatory demands and salary pressure, audit firms are starting to charge public companies more for audit work after roughly a decade of declining or stagnating fees. Audit Analytics says the cost of a public company audit inched up to $479 per $1 million in revenue in 2013, up 1.4 percent from 2012. “What it takes to comply with auditing standards today takes a greater level of effort,” says Trent Gazzaway, national managing partner at Grant Thornton.
Oct. 14—This year’s Compliance Week Europe conference began on Oct. 13 in Brussels with a message from Ewoud Sakkers, the directorate-general for competition at the European Commission, on European antitrust laws and regulations: Even though enforcement is always directed at companies rather than individuals, increasing fines can be reduced through self-reporting and offering evidence of an effective compliance program. “In terms of deterrence, there is a philosophy of parental liability that is very central and important to our enforcement practice,” Sakkers said. Full details inside.
“Extreme risk” is back on the agenda this week, thanks to the Ebola outbreak in Dallas. Most alarming isn’t that we have no cure yet for the disease, Compliance Week Editor Matt Kelly says; it’s that already, organizations are demonstrating that they lack the risk-management and operational processes to execute a containment plan properly. The importance of strong internal control has never been more life-or-death. More inside.
As financial markets become increasingly global and interconnected, hammering home country regulations that align with those abroad becomes more and more difficult. U.S. regulators and their counterparts in the European Union and elsewhere, for example, are increasingly at odds on a host of topics, including data privacy, antitrust rules, and accounting standards. Perhaps nowhere are those differences more evident than on swaps regulation. Details inside.
Federal contractors await tough new recordkeeping requirements that could expose them to discrimination cases. The Office of Federal Contract Compliance Programs plans to demand more detailed information on compensation practices and more data on the hiring of minorities and veterans. “For some companies, they’re going to have to really look at their information technology systems to make sure they’re capturing all of this information,” Andrew Turnbull, an associate at law firm Cooley, says.
Many third-party risk-management efforts, whether centered on anti-corruption or supplier due diligence, often have the goal of providing full visibility over a company’s universe of third-party relationships. For global companies with thousands of business partners, however, that strategy can be overwhelming. Developing a risk matrix can help companies focus on where the exposures are. More details inside.
The rapid pace of change in new data technologies including mobile apps, social networking, and cloud computing have fundamentally changed business operations and the work environment. Along with these advances come new and often unexpected privacy, security, and compliance challenges. Inside, columnist Jose Tabuena discusses the emerging developments and the technological competence internal auditors and compliance professionals will need to keep up with them.
All corporate boards occasionally make bad business decisions. Some poor judgments come because directors didn’t have enough information, or the right information at the right time. Directors might not ask the right questions, probe deeply enough, or corroborate information with other company executives or expert views. Inside, columnist Richard Steinberg looks at what can happen when boards don’t get the right information.