Though asset misappropriation and “cybercrimes” like denial-of-service and virus attacks are among the most prevalent economic crimes, most senior executives are apparently kept up at night by fears of financial misrepresentation, in which company accounts are altered. However, those crimes only constitute two percent of economic crimes, according to a study by Wilmer, Cutler & […]
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Posted inInternal Controls
Audit: SEC Has Material Weaknesses In Internal Controls
EXAMPLES OF WEAKNESSES Lacks adequate internal control to track, report “sensitive property.” Disgorgement tracking system not current; can’t be relied upon. Inadequate reconciliation, controls for disgorgement receivables. IT office not clearly authorized to enforce IS and security policies. IT office not promptly disabling accounts after users leave SEC. Financial system controls to monitor unauthorized activities […]
Posted inInternal Controls
Documentation, Legal, Seen As Biggest SOX Costs
Senior executives at U.S. multinational companies are somewhat divided over the financial impact of complying with the Sarbanes-Oxley Act of 2002. According to a recent survey by PricewaterhouseCoopers, 56 percent of surveyed executives said initial compliance with Sarbanes-Oxley was not very costly for their company, while the remainder claimed compliance was at least “somewhat” costly. […]
Posted inFrom the Archive
Section 16 Best & Worst Practices — Web Posting
Now that the SEC’s new Section 16 rules are in effect, companies must file all Forms 3, 4 and 5 electronically. The electronic filing process is pretty straightforward — the SEC has a new on-line filing system for all forms, and documents submitted by direct transmission on or before 10 p.m. EST are deemed filed […]
Posted inInternal Controls
Audit Committees Have Role in Section 404 IC Regime
As nearly everyone knows by now, one of the most significant provisions of Sarbanes-Oxley is “Management Assessment Of Internal Controls,” known to most firms as “SOX 404.” Section 404 requires that annual reports be accompanied by a statement clarifying that company management is responsible for creating and maintaining adequate internal controls, and that management has […]
Posted inBoards & Shareholders
Accounting Violations Linked To Acquisitions, CEO Age
According to a two-and-a-half year study conducted at the Robert H. Smith School of Business at the University of Maryland, firms that violate accounting rules are more likely than their peers to provide extravagant stock options to their CEOs, to have history of making numerous acquisitions, and to have younger CEOs. The study looked at […]
Posted inTechnology
Electronic Filing and the EDGAR System: A Regulatory Overview
Below is the complete text of an outline prepared by staff members of the SEC Divisions of Corporation Finance and Investment Management to aid electronic filers. Compliance Week has also made available a downloadable PDF version of the outline, which can be found in the box in the right-hand column. Overview In early 1993, the […]
Posted inFrom the Archive
Shareholder Approval Of Equity Compensation Plans
On June 30, the SEC approved rules requiring shareholder approval of equity compensation plans, including stock option plans. The new rules will also require approval for repricings and material plan changes. The rules were originally proposed and adopted by the New York Stock Exchange and the Nasdaq Stock Market, and will apply to their listed […]
Posted inFrom the Archive
Corporate Governance on a Budget
Recent reports suggest that the cost of corporate governance reform has become quite significant, especially for small- and mid-cap companies. If you are responsible for compliance by a small- or mid-cap company, this increase in estimated costs can be staggering. However, if your company has relatively simple management and business structures and adequate in-house support, […]
Posted inFrom the Archive
Study: Don’t Wait For FASB; Cheaper To Expense Now
FASB plans to require companies to expense stock-options next year, but a new study shows it may be wise to act now. Buck Consultants, part of Mellon Financial, predicts that technology companies will experience a median decrease in EPS of approximately 20 times greater than companies that voluntarily adopt stock-option expensing guidelines now. The reason, […]
