The recent news that the Public Company Accounting Oversight Board has decided to take over responsibility for establishing public company auditing rules marks the end of a 100 year period in which the accounting industry had set its own standards. The Board did have the option of leaving the auditing standard-setting process to the Auditing […]
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Posted inInternal Controls
Complying With Internal Controls To Manage Enterprise-Wide Risks Effectively
The overhaul in corporate accountability sparked by the Sarbanes-Oxley Act of 2002 marks the most dramatic and far-reaching reform affecting financial reporting in almost 70 years. When it comes to complying with the new rules on certifications and the issuance of management’s report on internal controls, Section 404 can be seen as an opportunity to […]
Posted inInternal Controls
Internal Controls: More Than Safeguarding Assets
For many companies, the mention of internal controls sets off a passionate discussion of the latest physical inventory or the recent establishment of an asset tracking system. While safeguarding the company’s assets is one element of internal controls, Section 404 of the Sarbanes-Oxley Act of 2002 has brought to the forefront a concept of internal […]
Posted inInternal Controls
The Missing Link In Implementing Effective Internal Controls
Senior executives have long sought ways to better control the enterprises they run and reduce risk. Effective IC promotes efficiency, reduces risk of asset loss, and helps ensure the reliability of financial statements and compliance with laws and regulations. IC enables management to effectively react to rapidly changing economic and competitive environments, and shifting customer […]
Posted inInternal Controls
Sarbanes-Oxley: Ten Tips for Taking (Internal) Control
How do you get the undivided attention of a CFO? Sidle alongside and whisper the words “Sarbanes-Oxley” in his or her ear. No piece of legislation in recent memory has inspired consternation equal to that brought on by The Sarbanes-Oxley Act. This complex law and its associated regulations have executives, directors, and committee members scrambling […]
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 inBoards & Shareholders
Details on D&O Insurance Emerge In Filings
As reported in previous editions of Compliance Week, companies are reporting higher D&O premiums as insurers increase their rates to match executives’ increased liability with the SOX certification requirement. Mark Miller, a Washington D.C.-based partner at law firm Greenberg Traurig, told CW last year that “costs are going up drastically, and Sarbanes-Oxley is the catalyst.” […]
Posted inBoards & Shareholders
Sarbanes-Oxley Section 301
Section 10A of the Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end the following: (m) STANDARDS RELATING TO AUDIT COMMITTEES- (1) COMMISSION RULES- (A) IN GENERAL- Effective not later than 270 days after the date of enactment of this subsection, the Commission shall, by rule, direct the national […]
Posted inBoards & Shareholders
Standards Related to Listed Company Audit Committees
The SEC voted on April 1 to adopt rules that would force the national exchanges and associations to delist any company that is not in compliance with the audit committee requirements established by the Sarbanes-Oxley Act of 2002. The new rules and amendments implement the requirements of Section 10A(m)(1) of the Securities Exchange Act of […]
Posted inBoards & Shareholders
Correction to Disclosures Required by SOX Section 406 and 407
On March 26, the SEC made a technical correction to the rules implementing Sections 406 and 407 of the Sarbanes-Oxley Act of 2002 by requiring disclosures regarding audit committee financial experts and codes of ethics. On January 23, 2003, the Commission adopted rules that require disclosure of whether a company has an audit committee financial […]