Sarbanes-Oxley

PCAOB Contemplates Its Next Move on Improving Audit Quality

May 08, 2012

The Public Company Accounting Oversight Board may be cooling on its idea of mandatory audit rotation, but don't expect it to walk away from the idea of putting new measures in place to improve audit quality, including strengthening the role of the audit committee. "We're all anxiously awaiting exactly what they'll decide to do," says James Comito, a shareholder at audit firm Mayer Hoffman McCann.
 

Deloitte Loses Guam Client Over Registration Lapse

April 26, 2012

Audit regulators have denied a Deloitte affiliate in Guam and another firm in Germany permission to audit U.S. public companies because they performed audit work in the United States before seeking permission. The Public Company Accounting Oversight Board said the firms did not demonstrate the proper "degree of care." Details inside.
 

JOBS Act Inspires Criticism of Regulatory and Governance Rollback

March 27, 2012

The newest members of the public company ranks will now have five years to avoid corporate governance requirements, thanks to the JOBS Act passed by Congress last week. Critics say the measure will do little more than play to scam artists. "With securities fraud running at a record level ... any reasonable person would understand there needs to be adequate protection of investors," says Lynn Turner, governance activist and former SEC chief accountant.
 

PCAOB Kicks Off Auditor Rotation Debate

March 27, 2012

A who's who of the auditing world convened at the Public Company Accounting Oversight Board last week for two days of discussion about term limits for audit firms' engagement with clients. Opinions were predictably diverse, and consensus was rare. Goodyear CFO Darren Wells, for example, said auditor rotation should only be required after an audit failure. More views inside.
 

Investor Groups File Auditor Rotation Proxy Proposals

February 07, 2012

Two investor groups recently filed proxy proposals to compel companies to adopt auditor rotation policies. So far, their arguments have fallen on deaf ears. Companies have either ignored the proposals or petitioned the SEC for no-action letters, which they have won. But don't expect the battle to stop there. Details inside.
 

Fewer Companies Changing Auditors

January 31, 2012

Fewer companies changed audit firms in 2011, reflecting relative stability in the market for financial reporting. While second-tier audit firms made some inroads, picking up a net gain of 28 audit clients, the Big 4 firms saw little turnover, losing a net of only eight clients. Deloitte experienced the most turnover, with a net loss of 22 clients. More audit change analysis and data inside.
 

Can Whistleblower Retaliation Lead to Racketeering Charges?

January 17, 2012

A recent court decision expands protections for whistleblowers and could put companies that retaliate against them in violation of racketeering laws enacted to combat organized crime. Based on the ruling, companies could also be exposed to whistleblower retaliation claims even if they are later cleared of the alleged wrongdoing. More details inside.
 

OSHA Makes It Easier to File a Whistleblower Claim

November 22, 2011

Psst—looking for a roadmap to how OSHA investigates whistleblower complaints? The Occupational Safety and Health Administration has updated its Whistleblower Investigations Manual with new guidance paving the way for employees to file whistleblower claims. OSHA investigators also have new procedures to follow when investigating claims, and companies face more penalties for violations. Full coverage inside.
 

Court Ruling Could Limit SOX Whistleblower Retaliation Claims

August 30, 2011

Good news for companies concerned about lawsuits based on allegations of retaliating against whistleblowers: A recent district court ruling could make it harder for employees to claim whistleblower protection under the Sarbanes-Oxley Act. The court affirmed that employees have to show the allegations involve activity covered by SOX. Details inside.
 

Restatements by Small Companies Could Revive SOX 404 Debate

May 24, 2011

The number of non-accelerated filers restating financial reports jumped nearly 14 percent last year, while restatements at larger companies continued their three-year decline. That divergence is prompting some to wonder whether small filers' exemption from internal control audits is to blame. "It's an amazing coincidence if there isn't some kind of cause," says Don Whalen, director of research at Audit Analytics. More details inside.
 

Fired Boeing Auditors Lose Whistleblower Appeal

May 05, 2011

A federal appeals court has thrown out the claims of two former internal auditors at Boeing, who had been fired for airing their concerns over Boeing's financial reporting in the media. The two had argued that they were covered by the whistleblowing protections of the Sarbanes-Oxley Act, but the appellate court ruled that SOX only protects concerns raised through internal corporate channels.
 

SEC Publishes Study on Auditing Internal Controls

April 25, 2011

The SEC has published yet another report mandated by the Dodd-Frank Act, this one concluding that companies with market capitalizations from $75 million to $250 million should not be exempt from compliance with Section 404(b) of the Sarbanes-Oxley Act, which requires an outside auditor's review of internal controls. The report could not say whether compliance costs discourage some small companies from going public. More inside.
 

Beazer CEO Returns $6.5M to Settle SEC Clawback Suit

March 04, 2011

Ian McCarthy, the chief executive officer of Atlanta-based homebuilder Beazer Homes, will pay back $6.5 million in bonus pay and stock profits to settle an SEC complaint brought against him under the clawback provision of the Sarbanes-Oxley Act. It is the latest settlement against an executive who wasn't charged in the fraud that prompted the clawback.
 

The SEC's Busy Dodd-Frank Rulemaking Schedule

September 21, 2010

Those involved in any facet of corporate compliance, governance, and/or financial reporting now have a roadmap of sorts for what they can expect to fill up their calendar—and to submit comments on—in the coming months.The Securities and Exchange Commission has laid out a schedule of how it plans to tackle...
 

GAO: Whistleblower Program Still Needs More Work

September 20, 2010

The agency tasked with ensuring whistleblowers who report workplace misconduct are protected from retaliation still has plenty of room for improvement in meeting that mission, according to a government watchdog.The Occupational Safety and Health Administration needs to take several steps to shore up its Whistleblower Protection Program, including ensuring it...
 

Clawback Case Against Former CSK CEO Moves Forward

June 11, 2010

A lawsuit brought by the Securities and Exchange Commission seeking to claw back pay from a former chief executive the agency isn't accusing of wrongdoing appears set to move forward.An Arizona district court judge denied the motion to dismiss filed by Maynard Jenkins, the former chief executive of auto parts retailer...
 

SEC Settlements Up in First Half, Driven by Individuals

June 04, 2010

The uptick in Securities and Exchange Commission settlements continued during the first half of the year-much of it due to settlements with individuals.According to data tracked by NERA Economic Consulting, the SEC settled with 354 defendants in the first half of 2010, compared with 328 in the second half of...
 

Senators File Amendment to SOX 404(b) Exemption

May 07, 2010

Gear up for more fighting on SOX 404: An amendment to Senate financial reform bill would exempt companies with less than $150 million in public float from Sarbanes-Oxley's outside auditor attestation requirement, which would include some companies already complying with the provision.Sen. Kay Bailey Hutchison (R-Texas) and Sen. Mary Landrieu (D-La.), chair of the Committee...
 

Whistleblower Ruling on SOX 806, De Novo Review

April 12, 2010

A Massachusetts district court has addressed two thorny issues confronting employers defending against whistleblower claims brought under Sarbanes-Oxley: Who's protected under the statute and whether whistleblowers are entitled to a so-called second bite at the apple.A March 31 combined ruling by U.S. District Judge Douglas Woodlock addressed motions to dismiss in...
 

SOX Clock Ticking, Senate Financial Reform Bill Advances

March 22, 2010

A key Senate committee has passed sweeping financial reform legislation, advancing the Dodd regulatory bill for consideration by the full Senate, moving lawmakers a small step forward in their effort to overhaul the U.S. regulatory system.The Senate Banking Committee on Monday evening voted 13-10 along party lines to approve the...
 

Whistleblowing to Media Not Protected Under SOX 806

February 22, 2010

Employers and employees take note: Another district court ruling sheds light on what is and isn't protected whistleblowing activity under Section 806 of Sarbanes-Oxley.The U.S. District Court for the Western District of Washington has dismissed whistleblower claims brought by two former compliance auditors of the Boeing Company who were fired...
 

SEC's Aguilar on SEC, Financial Regulation Reforms

February 08, 2010

Despite the progress made during the last year, both with respect to financial reform and reform of the Securities and Exchange Commission's enforcement program, there's more work to do, according to at least one SEC official.While he praised some of the progress made to date, SEC Commissioner Luis Aguilar, in...
 

Financial Regulation Moves Ahead, With SOX Exemption

December 14, 2009

Congressional efforts to chart the future of U.S. financial services regulation continue to forge ahead with the passage by the House of Representatives of a mammoth regulatory reform bill that combines several previous proposals into a massive 1,279 page tome.The House on Dec. 11 voted 223-202 to approve the Wall...
 

NERA: 2009 SEC Settlements Hit Post-SOX Low

December 08, 2009

For the second consecutive year, the number of Securities and Exchange Commission settlements declined in fiscal 2009, representing the lowest number of settling defendants since the Sarbanes-Oxley Act was implemented in 2002.The SEC also saw fewer settlements for the third quarter, according to the latest data tracked by NERA Economic...
 

Aguilar Rails Against Effort to Roll Back 404(b)

November 09, 2009

If it clears Congress, an amendment to pending legislation could roll back the auditor attestation requirement of Sarbanes-Oxley for more than 6,000 public companies, according to a Securities and Exchange Commission official.SEC Commissioner Luis Aguilar, who railed against an amendment to The Investor Protection Act passed by the House Financial Services...
 

Key Congress Committee Approves SOX 404 Exemption

November 04, 2009

The House Financial Services Committee formally approved an amendment this morning to exempt small companies from Section 404(b) of Sarbanes-Oxley.On a 37-32 vote—that, notably, went against the wishes of powerful committee chairman Rep. Barney Frank—the lawmakers approved an amendment to the Investor Protection Act that would exempt all non-accelerated filers...
 

Drama! Intrigue! Congress and Section 404!

October 30, 2009

Section 404 of the Sarbanes-Oxley Act has been in the legislative whirlwind this week.Two amendments to delay or even rescind Section 404 for many companies came before the House Financial Services Committee on Wednesday, a surprise move that left investor advocates fulminating to anyone who would listen. One amendment to...
 

SOX Exemption Bill Introduced

October 09, 2009

Here we go again. Roughly a week after the Securities and Exchange Commission announced what it vowed its last extension for non-accelerated filers to comply with the auditor attestation requirement under Section 404(b) of Sarbanes-Oxley, Congress has revived efforts to exempt those companies from the provision.Rep. Scott Garrett (R-N.J.) on...
 

404(b) for Small Cos. Delayed to FYEs Until June 15, 2010

October 02, 2009

Good news for non-accelerated filers: The Securities and Exchange Commission has granted them more time to begin providing audited assessments of their internal controls over financial reporting as required under Section 404(b) of the Sarbanes-Oxley Act,The SEC announced the extension today at the same time it published the findings of...
 

Former CEO Accused in SEC Clawback Case Fights Back

September 28, 2009

Maynard Jenkins, the former chief executive who made headlines as the subject of a first-of-its kind clawback suit brought by the Securities and Exchange Commission, has come out swinging against the agency's "vicarious strict liability" interpretation of the statute as raising "serious constitutional issues."Jenkins, the former CEO of auto parts...
 

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