At the request of subscribers, Compliance Week offers a Remediation Center, in which readers can submit questions anonymously to securities and accounting experts. Compliance Week’s editors will review all questions and then submit them—confidentially, of course—to specialists who can address the issues. The questions and responses will then be reprinted in a future edition of […]
Tim Leech
Posted inInternal Controls
Remediation Center: Remediation Materiality Thresholds
At the request of subscribers, Compliance Week has launched a Remediation Center, in which readers can submit questions—anonymously—to securities and accounting experts. Compliance Week’s editors will review all questions and then submit them—confidentially, of course—to specialists who can address the issues. The questions and responses will then be reprinted in a future edition of Compliance […]
Posted inEthics & Culture
SOX Yielding “Grade A” Opinions, So Who’s Getting “C”s?
Since the Sarbanes-Oxley Act was passed in the summer of 2002, there has been a steady stream of criticism and objections from a wide range of players. The business community claims the additional costs caused by SOX 302 and 404 are choking off much needed risk taking and profit creation. The Europeans—led by a very […]
Posted inAccounting & Auditing
Moody’s Questions Ability To Audit Around Deficiencies
In October 2004, Moody’s Investors Service opened a Pandora’s Box with the issuance of a special comment paper titled “Section 404 Reports on Internal Control: Impact on Ratings Will Depend on Nature of Material Weaknesses Reported.” With the start of the first Sarbanes-Oxley reporting season just around the corner and more than 500 public confessions […]
Posted inAccounting & Auditing
Distilling SOX 302, 404 & 906
Since the Sarbanes-Oxley Act was passed in July 2002, most analysts in the field agree Sections 302 and 404 are the most complex and costly of what is widely regarded as the most onerous piece of the corporate governance legislation.
Posted inFrom the Archive
Controlling The High Cost Of SOX: Avoid Costly Mistakes
On Feb. 10, 2004, Financial Executives International released the results of a survey of 321 companies related to total first year costs of complying with Section 404 of Sarbanes-Oxley. The average compliance cost was $1.9 million per company. The average cost for large companies with sales over $5 billion was $4.7 million. AMR Research has […]
Posted inInternal Controls
Common SOX 302/404 Mistake: Not Assessing Controls Over Notes And Supplemental Disclosures
One of the most common mistakes we still see in practice is too narrow an interpretation of what is covered by Section 302 and 404 control effectiveness representations. Many companies appear to be under the mistaken impression that these representations relate only to the accounting processes that feed disclosures in balance sheets and income statements. […]
Posted inInternal Controls
Will Cramming For SOX 404 Exams Be Enough To Pass The Grade?
My eldest daughter came home from university for the holidays complaining loudly about her last business exam in management sciences. She claimed the exam had been ridiculously hard and didn’t think she had done very well. On the bright side however, she thought most of her classmates had also “tanked” the exam. The professor would […]
Posted inFrom the Archive
Sarbanes-Oxley Act: Hidden Shoals for the Unwary
Last year I began teaching my 16 year-old daughter to operate our 205 horsepower pleasure craft. During my newboater indoctrination sessions, in addition to covering requirements such as running the motor compartment exhaust fan for four minutes prior to starting the engine, operating the boat’s navigation lights and learning on-water navigation rules, I took Morgan […]
Posted inInternal Controls
Where Will The Cops Set The Real Limits?
Questions I sometimes ask students in risk and control assessment training workshops to illustrate the concept of residual risk tolerance include: How many of them have broken a car speed restriction law in the past three months? How many have broken a speed law more than five times over the past three months? More than […]