Tuesday, March 04, 2008

Sarbanes in Switzerland?

When it comes to administration, the Swiss are famous for their efficiency and attention to detail. It is somewhat surprising, then, that a number of changes to company audit law are only now coming into effect. Most notably, from January 1st 2008 auditors must verify internal control systems at the companies they audit.

Inevitably, this evokes comparisons with the widely reviled Section 404 of the Sarbanes-Oxley Act in the US. Swiss officials, however, sought to avoid similarly onerous rules, explains Simon Marti, a partner at KPMG in Zurich. For example, early draft legislation required auditors to verify that internal control systems were "functioning," a term that was later removed "to avoid extensive operational effectiveness testing," Marti says. Under the new rules, audits need only to verify the existence of internal controls using a walk-through test of a single transaction. What's more, executives are not required to sign off or certify control systems.

Sarbanes in Switzerland?

Labels: compliance, internal control, Switzerland, walk-throughs

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Friday, February 08, 2008

Does Mass. Law Force Sarbox on Non-Profits?

A Massachusetts healthcare workers union is asking board members of Beth Israel Deaconess Medical Center to apply Sarbanes-Oxley Act disclosure rules to the non-profit hospital's audits.

The 1199 SEIU United Healthcare Workers East sent letters to six of Beth Israel's 18 board members, who also serve as executives or sit on boards of public companies, citing state law as a precedent for the request. The SEIU acknowledges that under federal law non-profit organizations are not required to adhere to Sarbox provisions. However, the union says that under Massachusetts law, non-profit directors must use their expert knowledge and experience in their role as non-profit fiduciaries. As a result, argue union officials, any director who applies Sarbox standards to their public company duties are required to do the same at a non-profit.

Does Mass. Law Force Sarbox on Non-Profits?

Labels: compliance, non profit, sarbanes oxley

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Saturday, October 13, 2007

Compliance Provides Benefits Beyond The Obvious

Recent requirements place a stronger business focus on the acquisition and implementation of security controls. Consumers are expressing growing concern over the security of their personal information, and companies that increase security through compliance activities can sometimes gain a competitive edge. The privacy aspects of compliance call for proper and effective security controls. Privacy clarifies what needs to be protected, and a supporting risk assessment helps determine the appropriate level of security controls. This is particularly critical as the security perimeter now extends to mobile laptops and PDAs. With many data breaches caused by ignorance or a lack of policy, compliance can be used to increase awareness of and attention to data protection requirements and practices.

Compliance Provides Benefits Beyond The Obvious

Labels: compliance, gramm-leach-bliley act, hipaa, sox

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Tuesday, May 29, 2007

Directors, managers set company's ethical tone

Contrary to a popular saying, ignorance is not bliss.

The business scandals of the 1990s and early 2000s revealed ignorance by business leaders and employees about ethical and legal behavior.

Congress responded by passing the Sarbanes-Oxley Act of 2002, which all but mandates corporate codes of conduct for the top managers of publicly traded corporations. The New York Stock Exchange and Nasdaq require those same corporations to create corporate codes applicable to all employees.

To encourage compliance and ethics training, Congress amended Section 8B2.1(B)(4) of the federal sentencing guidelines.

All organizations are to take reasonable steps periodically to communicate their standards and procedures to employees, high-level personnel and members of the governing body.

Compliance with the guidelines is valuable to organizations. Effective compliance and ethics programs impact employee behavior and often prevent illegal and unethical actions. If wrongdoing occurs, compliance with the guidelines can lessen penalties by 95 percent.

Directors, managers set company's ethical tone


(thanks to Dan Swanson for sharing reference to this article)

Labels: code of ethics, compliance, Federal Sentencing Guidelines, tone at the top

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