A survey conducted in last week’s edition of Compliance Week showed that internal or “cascading” certifications are—or will be—in place at over 90 percent of responding companies. The attestations, often called internal representations, have become increasingly common as companies prepare for Section 404 IC certifications. The law firm of Sidley Austin Brown & Wood was […]
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Posted inFrom the Archive
Disclosures Of Qualified Legal Compliance Committees
On January 23, the SEC codified rules imposing an “up-the-ladder” reporting requirement when attorneys become aware of material violations by the officers, directors or employees of thier companies. According to the rule, an attorney must initially report such evidence to the company’s chief legal officer or to both the CLO and chief executive officer. Reporting […]
Posted inAccounting & Auditing
Improper Influence on Conduct of Audits
O On May 20, the SEC published its adopted rules related to Section 303 of the Sarbanes-Oxley Act of 2002, which prohibit officers and directors from “coercing, manipulating, misleading, or fraudulently influencing” their outside auditor. The original proposal was published Oct. 18th but only differs slightly from the adopted rule. Key components, details, effective dates […]
Posted inAccounting & Auditing
Study Says Banned Non-Audit Work, Restatements Unrelated
While many non-audit accounting & tax services are now either banned or require audit committee pre-approval, a new academic study shows little or no correlation between those services and lax GAAP enforcement. Scholz The study of non-audit services, conducted by several academics including Susan Scholz at the University of Kansas and William Kinney at the […]
Posted inBoards & Shareholders
Audit Committee Financial Expert: An Overview
The Sarbanes-Oxley Act and SEC rulemaking have placed a duty on public companies to determine if their audit committees contain a financial expert and disclose this in their financial statements. If a company decides that its audit committee does not have at least one financial expert, the firm must tell investors the reasons why. Companies […]
Posted inFrom the Archive
Objectives And Principles Of Securities Regulation
68-page document from the International Organization of Securities Commissions outlines 30 principles of securities regulation, which are based on three core objectives: the protection of investors; the reduction of systemic risk; and ensuring that markets are fair, efficient and transparent.
Posted inFrom the Archive
Cost of Being Public Increasing Due To New Regs
In the wake of more rigorous governance compliance and increased disclosure requirements, companies can expect the cost of being public to increase by nearly 100 percent, depending on their size. Estimated costs for middle-market companies, some listed at right, include increased accounting and legal fees, according to the law firm of Foley Lardner, which conducted […]
Posted inInternal Controls
Rules of the Road for Internal Controls Attestations
Even though standards or deadlines are not yet mandated, many companies are spending inordinate amounts of time — or should be — beefing up their internal controls. Much of this activity is at the prodding of the independent auditors, whose attestation fees are often estimated at a level at least as high as the current […]
Posted inFrom the Archive
SEC Votes To Mandate Electronic Filing of Ownership Reports
On April 24, the Securities and Exchange Commission voted to require that reports by insiders disclosing their securities holdings be filed electronically with the SEC. Filing and Posting The Commission voted to mandate the electronic filing of beneficial ownership reports filed by officers, directors and principal security holders under Section 16(a) of the Securities Exchange […]
Posted inInternal Controls
Biggest Barrier to Fixing IC Weakness: Skilled Workforce
ODon’t give me more reports on my control weaknesses — fix them!” That’s increasingly the attitude in some corporations, reacting to ever increasing pressure on internal controls, particularly from Section 302 and Section 404 of the Sarbanes-Oxley Act. When CEOs and CFOs certify their assessments of internal controls effectiveness, the last thing they want is […]