Call it the intersection of convergence and compliance: Companies trying to obey Sarbanes-Oxley’s internal control provisions are finding that not only must they evaluate the controls their own operations—but also those of partners with whom they may form an alliance. In general, the risk that the internal controls of a collaborative effort won’t catch an […]
Internal Controls
Posted inAccounting & Auditing
Talking Fraud With A Reformed Fraudster
This week, Compliance Week chats with Sam Antar—former CFO of Crazy Eddie’s, the disgraced stereo equipment business that foisted a $70 million fraud on investors in the 1980s. Antar helped mastermind the scheme, and then was a star witness in the trial that sent his cousin Eddie Antar to prison. Today, Sam Antar is an […]
Posted inAccounting & Auditing
Companies Say Risk-Based Approach Remains Elusive
Corporate executives gave regulators an earful of complaint last week that hopes of a risk-based, top-down approach to audits of internal control still have yet to take root, despite extra guidance and two years of experience. Speaking at a much-anticipated roundtable discussion among auditors, regulators and corporations to review progress in the second year of […]
Posted inAccounting & Auditing
Major Review Of SOX Compliance This Week
A who’s who of corporate governance will convene in Washington, D.C., this week for a much-anticipated summit meeting on the state of Sarbanes-Oxley compliance, as regulators try to gauge how compliance has evolved in the last two years and what further steps they might need to take to make the process more efficient. Billed as […]
Posted inInternal Controls
When SOX 302, 404 Control Attestations Contradict
At first glance, it was a seemingly incongruous filing that Centerpoint Energy made in January. The company confessed to ineffective disclosure controls and procedures surrounding some natural gas transactions, which overstated its 2004 revenues and expenses by $511 million—and then, two paragraphs later, asserted that its internal control over financial reporting was fine. In fact, […]
Posted inAccounting & Auditing
Twenty Questions For Directors To Ask Internal Auditors
The internal audit department’s unique position within a company provides management and audit committee members with valuable assistance, by giving objective assurance on governance, risk management and control processes. Audit committees, of course, are responsible for providing oversight to the internal audit efforts within the organization—so how audit committees work with their internal audit staff […]
Posted inInternal Controls
Cox Talks 404; Effectiveness Orders; More
As public companies wait to see what action, if any, the Securities and Exchange Commission will take on recommendations proposed by its Advisory Committee on Smaller Public Companies, SEC Chairman Christopher Cox told lawmakers the agency’s preference is to find a way to make the controversial internal controls provisions of Section 404 work rather than […]
Posted inInternal Controls
The Price Of Poor Controls: 100 Basis Points
Plenty of surveys and studies have tracked the dollars companies are spending to meet the internal control reporting requirements of Sarbanes-Oxley—but less is said or known about any positive effect improved controls might have on a company’s bottom line. Now Corporate America might finally get some answers. A quartet of academics has scrutinized equity capital […]
Posted inInternal Controls
404 Exemption Plan Now In SEC’s Hands
The final report of the closely watched Advisory Committee on Smaller Public Companies is now in the hands of the Securities and Exchange Commission, which next must determine how to act on the group’s recommendations—including the controversial proposal to exempt small companies from complying with Section 404 of the Sarbanes-Oxley Act. After 13 months, “It’s […]
Posted inInternal Controls
Effective Controls, Clean Opinions Rule The Roost
An overwhelming majority of large public companies now report strong internal controls over financial reporting—a further indicator that Sarbanes-Oxley may be producing its intended effect, and possibly portending a future of fewer financial restatements. A Compliance Week study of the 10-K filings of nearly 300 Dec. 31 year-end filers found that only 2 percent rated […]
