As reported in the April 29th edition of Compliance Week, the law firm of Foley Lardner recently published a study that claimed companies can expect the cost of being public to increase by nearly 100 percent. The cause: more rigorous governance compliance, legal fees, D&O insurance, and disclosure requirements, and other costs associated with the […]
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Posted inBoards & Shareholders
60 Percent Of Firms Changing Board Compensation
The shortage of qualified board candidates and a stronger corporate governance environment have prompted nearly 60 percent of companies to change some aspect of their outside board of director compensation in 2003, according to Hewitt Associates. Hewitt surveyed 187 companies nationwide (with median revenues of $3.7 billion) in its “Timely Topic Study on U.S. Board […]
Posted inInternal Controls
Internal Control Provisions of Sarbanes-Oxley Act
On May 27, 2003, the SEC voted to adopt rules concerning management’s report on “internal control over financial reporting” and certification of disclosures in Exchange Act periodic reports. Key components of the rule are listed below: Basic Concepts Section 404 of Sarbanes-Oxley mandated that the SEC adopt rules requiring companies to disclose in annual reports […]
Posted inFrom the Archive
M&A Activity Increasing, But So Is Post-SOX Scrutiny
Buried deep in PricewaterhouseCoopers’ most recent Management Barometer survey on M&A activity were some interesting statistics. The survey, which claimed that large U.S. multinational companies expect to increase M&A activity over the next two years, also stated that those acquisitions are getting closer scrutiny. Among the two areas that executives expect to spend more time […]
Posted inAccounting & Auditing
CW Survey: Most Firms Are Using Backup Certifications
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 […]
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.
