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 […]
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Posted inBoards & Shareholders
How Firms Report Financial Experts Varies Widely
Pursuant to Section 407 of Sarbanes-Oxley, public companies will be required to annually disclose whether they have at least one “audit committee financial expert” on their audit committee, and if so, to disclose the name of that expert and whether the expert is independent of management. The rules define an “audit committee financial expert” as […]
Posted inBoards & Shareholders
12 Questions Boards of Directors Should Ask Their IROs
In response to the plethora of corporate failures in the past two years, new legislation adopted by Congress and subsequent SEC regulations have placed greater responsibility on the board of directors. And in fulfilling these new responsibilities, boards are expected to oversee corporate ethics and governance, as well as compliance. But in many cases, boards […]
Posted inInternal Controls
Enforcement Critical To Corporate Records Programs
Corporate records management is not about policies, procedures, retention schedules and inventory and email control software. It’s about enforcement that is consistent, systematic and defendable. With the rapid and very public evaporation of the venerable Arthur Andersen company, we have seen how a multi-billion dollar firm can be put out of business because of lapses […]
Posted inBoards & Shareholders
QLCC An Attractive Alternative For Section 307 Compliance
Congress, in a bold and dramatic move, has placed the SEC for the first time into the uncharted waters of federal regulation of attorneys. Section 307 of the Sarbanes-Oxley Act, and the attendant SEC rules, firmly remind attorneys appearing and practicing before the SEC in the representation of a company that they owe their professional […]
Posted inEthics & Culture
Best Practices for Ethics Hotlines
One of the many effects of the Sarbanes-Oxley Act of 2002 is that thousands of public companies are now considering offering their employees an anonymous hotline. This is an important step toward minimizing losses due to fraud. The Association of Certified Fraud Examiners found in their 2002 Report to the Nation that fraud was detected […]
Posted inRegulatory Enforcement
Can A Possible Reg. FD Violation Turn Into An 8-K Breach?
Can a possible Reg FD violation turn into an 8-K breach? This is one of the questions surrounding AFC Enterprises, the fast food company that operates Cinnabon, Popeye’s and Church’s fried chicken. Last week, AFC filed its long-awaited 10-K for 2002, restating previously-reported earnings by $27.4 million over a three-year period due to what it […]
Posted inFrom the Archive
Checklist of Disclosures to Consider for the Proxy Season
Most companies with calendar year-ends are knee deep — or more — in drafting their Form 10-Ks and proxy statements. In light of the incredible level of SEC rulemaking during the past year, it is wise to double-check your set of rules and regulations to ensure they are complete and up-to-date. Romanek Among other new […]
Posted inAccounting & Auditing
Quality Financial Reporting – What Is It?
Over the last six years or so, starting long before the current search for accounting reform, the two of us have gone through the process of changing the way we look at public financial reporting. Mind you, we didn’t just tweak our perspective but completely changed our views on the objectives and methods of financial […]
Posted inAccounting & Auditing
Quality Financial Reporting for Everyone
PART FIVE IN A SERIES Over the last month, we have had the opportunity to describe in these pages the basics of Quality Financial Reporting. QFR is our proposed alternative to management’s current dependence on compliance with generally accepted accounting principles to produce fully informed capital markets. Whereas the status quo paradigm looks for ways […]