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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Tuesday, February 05, 2008

Commentary: Postal Service readies for Sarbanes-Oxley Act

The 2006 Postal Accountability and Enhancement Act includes a mandate that the U.S. Postal Service comply with Securities and Exchange Commission rules that implement the Sarbanes-Oxley Act (SOX) by fiscal 2010. The act requires corporations to report on the effectiveness of their internal controls, with the goal being to ensure the accuracy of financial reporting.

The Postal Service is the first federal agency mandated to comply with the act and thus faces unique challenges. With those challenges come exciting opportunities. Sarbanes-Oxley Act compliance includes both business and information technology components, each with its own requirements. Given the reliance on information technology to move the mail and report financial transactions, the Postal Service IT infrastructure and the management thereof play a significant role in ensuring the integrity and reliability of the organization’s financial reporting and in supporting Sarbanes-Oxley Act compliance.

When passage of the Postal Act was announced, the IT organization immediately went into action, proactively using the Sarbanes-Oxley Act as a trigger to advance improvements throughout IT. The newly established IT SOX team began developing key controls and related tools in preparation for required documentation, assessment and reporting. Coordination with the finance organization was also conducted to perform comprehensive risk assessments and to ensure project alignment.

Commentary: Postal Service readies for Sarbanes-Oxley Act

Labels: 2006 Postal Accountability and Enhancement Act, 2010, sarbanes oxley, sox

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Thursday, November 22, 2007

Sarbanes-Oxley turns 5 amid mixed results

Five years after shepherding passage of a landmark bill to fight corporate corruption - the Sarbanes-Oxley Act -- now retired Congressman Michael Oxley has mixed feelings about the impact of what was the most sweeping markets regulation since 1934.

"I still hear a lot of complaint and blame, mixed in with a good deal of praise for the law," said Oxley, the Ohio Republican, now a non-executive vice chairman of Nasdaq Stock Market Inc. and a counsel with law firm Baker Hostetler.

The Securities and Exchange Commission is currently looking to placate critics of the law, known simply as SOX, with a set of new ideas on how to adapt to it. And the accounting industry is preparing this fall for lighter, cheaper and more focused audits to avoid the criticism that the law was too exacting on companies.

Sarbanes-Oxley turns 5 amid mixed results

Labels: sarbanes oxley

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Tuesday, October 23, 2007

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

SAG members were concerned that items on PCAOB's priorities list from prior years remain uncompleted. They also asked if the PCAOB had sufficient resources to complete their projects. Some noted the PCAOB had become a follower rather than a leader, and suggested the PCAOB try to leverage off work being done by the AICPA's Auditing Standards Board (ASB) and the International Auditing and Assurance Standards Board (IAASB) where those groups were ahead of the PCAOB on certain standards.

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

Labels: AICPA, ASB, FEI, IAASB, IFRS, pcaob, sarbanes oxley

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Tuesday, May 29, 2007

Wall Street moves on red tape as IPO exodus continues

TyraTech, a maker of environmentally friendly pesticides, became the latest American company to float in London yesterday as growing concerns about the IPO drain from New York to the City prompted the formation of a heavyweight Wall Street panel.

The panel is being set up by Eliot Spitzer, the former attorney-general of New York who is now governor of the state. Mr Spitzer, who has given the panel until June next year to propose legislative changes, said yesterday that “the financial world has changed and we must change with it to retain our leadership position”. TyraTech, a Florida compan that raised £25 million from floating on the Alternative Investment Market (AIM) in London, said that the cost and inconvenience of strict American listing requirements, introduced after the collapse of Enron, were key to its decision to float overseas.

Douglas Armstrong, the chief executive, said: “The Sarbanes-Oxley regulations undoubtedly played a part in our decision to list in London because they place a heavy burden on small-cap companies in terms of time and cost.”

The flotation of TyraTech takes the number of US firms on AIM to about 70.

Wall Street moves on red tape as IPO exodus continues

Labels: cost of regulation, ipo, sarbanes oxley

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Sunday, April 29, 2007

Senate rejects Sarbanes-Oxley change

The U.S. Senate on Tuesday defeated a Republican attempt to weaken 2002's post-Enron Sarbanes-Oxley laws by making it optional for many corporations to comply with a controversial section on internal controls.

By a vote of 62-35, the Senate set aside an amendment to make compliance with Sarbanes-Oxley's Section 404 optional for companies with total market value of less than $700 million.

The amendment was offered by South Carolina Republican Jim DeMint, who tried to attach it to a bill on the Senate floor that was focused chiefly on boosting investment in research, and improving science, engineering and math education.In response to the amendment, defenders of Sarbanes-Oxley proposed and won passage, by a vote of 97-0, of a symbolic Senate statement expressing support for efforts already under way by federal regulators to fine-tune Section 404.

Senate rejects Sarbanes-Oxley change

Labels: 404, sarbanes oxley, senate

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Wednesday, April 18, 2007

Oxley Unhappy with SOX; Blames PCAOB for Problems

Former Congressman Michael Oxley is unhappy with implementation of the corporate reform legislation that bears his name.

In an interview with CFO.com, he was asked, “Are you happy with the way Sarbanes-Oxley has been implemented?” His answer: “Not really. The law has gotten a lot of criticism.” He noted that the vast majority of the complaints center on Section 404, which requires an audit of internal controls over financial reporting.

“It was Auditing Standard No. 2, promulgated by the PCAOB (Public Company Accounting Oversight Board), that started all the problems,” he said. “It was two paragraphs long, but by the time the PCAOB was done, it was 330 pages of regulations. It was far too prescriptive and [more] expensive than anyone anticipated. So, [the PCAOB] and the Securities and Exchange Commission proposed a risk-based assessment to better define material weakness, with more emphasis on internal audit. It adds flexibility with smaller companies.”

Oxley Unhappy with SOX; Blames PCAOB for Problems

Labels: 404, AS2, Michael Oxley, pcaob, sarbanes oxley

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Monday, April 16, 2007

SEC's key accounting guru working to streamline rules

For thousands of investors and executives at publicly traded companies, Conrad Hewitt may be one of the most important Washington civil servants they've never heard of.

The chief accounting guru at the Securities and Exchange Commission (SEC), Hewitt stands at the center of burning policy debates — from how far to cut back on corporate reforms imposed after the Enron debacle to which executives are to be punished for manipulating their companies' numbers.

Hewitt, 70, came to the job in August in the twilight of a long career as a California banking regulator and a partner at Ernst & Young, one of the nation's four largest accounting firms.

SEC's key accounting guru working to streamline rules

Labels: chief accountant, Hewitt, sarbanes oxley, sec, streamline

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'Dirty Data' is a Business Problem, Not an IT Problem

Over the next two years, more than 25 percent of critical data in Fortune 1000 companies will continue to be flawed, that is, the information will be inaccurate, incomplete or duplicated, according to research and advisory firm Gartner, Inc. Gartner expects that three-quarters of large enterprises will make little to no progress towards improving data quality until 2010. To gain competitive advantage from information, organisations need to identify ‘data stewards’ in the business and manage information as a corporate asset.

Speaking at the company’s inaugural Business Intelligence and Information Management Summit in Sydney this week, Gartner Research vice president Andreas Bitterer said that “dirty data” or poor data quality is an often-overlooked business issue and it can have a large negative impact on a business.

'Dirty Data' is a Business Problem, Not an IT Problem

Labels: Austrailia, European Basel Accords, Privacy Act, sarbanes oxley

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Tuesday, February 27, 2007

Kerry, Snowe Urge Sarbanes-Oxley Extension for Small Firms

Today Senators John Kerry (D-Mass.) and Olympia J. Snowe (R-Maine) called for a delayed
implementation of the Sarbanes-Oxley Section 404 requirements for small public firms to ease the burden on complying with the expected new auditing
standards. Section 404 requires firms to establish internal control frameworks and to file internal control reports. The Securities and
Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) proposed rules and guidance late last year addressing this section
and are accepting public comments through Monday, February 26th.

"We can have strong corporate accountability standards while also reducing the burden for small firms who spend more time and money earned
than big companies to comply with Sarbanes-Oxley," said Kerry. "We must do everything possible to appropriately reduce red tape in order for small
firms to grow and become dynamic public companies."

A recent Government Accountability Office (GAO) report requested by Senators Snowe and Mike Enzi (R-Wyo.) found that small public companies
spend considerably more on implementing Sarbanes-Oxley, particularly Section 404. The report found that firms with less than $75 million in
market capitalization were spending 877 percent more than larger counterparts -- $1.14 in audit fees per $100 of revenue, compared to just
$.13 per $100 for firms with greater than $1 billion in market capitalization.

Kerry, Snowe Urge Sarbanes-Oxley Extension for Small Firms

Labels: extension, implementation, sarbanes oxley, small business

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Tuesday, February 06, 2007

Help Wanted: A Call for Peer Network

As a consultant interested in participating in challenging projects while working with great people, it seems that, as independents, we have the contacts or the opportunities, but not always the right network of professionals with the necessary availability to deliver the specific details of a project. I want to make an effort to remedy this challenge.

I am keen on making contacts with independents that are interested in developing an informal relationship with other specialists in this space to share work in challenging projects. Given the wealth of areas for specialization in the risk and control field, I am interested in cultivating relationships with professionals interested in project work, or looking for assistance in efforts that have lined up.

I would love to hear from folks interested in expanding their network of professionals for possible project work in the future.

For those that have been reading Inside Sarbanes Oxley since it launched in the fall of 2004, I hope we've done a good job of keeping you informed of emerging issues and developments around the regulatory impact of Sarbanes Oxley. You will recognize that we've not done much in the way of connecting with readers and practitioners within this community, because so many professionals have been buried beneath the chore of just getting projects across the finish line. I now want to reach out, making connections with people that are still grooving on this work after a few implementations.

As Publisher of Inside Sarbanes Oxley and a risk and controls consultant, I continue to thrive on this work. I love the opportunities that come with a new engagement and control environment implementation, and seeing the dramatic changes that occur within an organization in a period as short as a few months. I also appreciate the new opportunities for learning that come from working with new people, and drawing new insights from their experiences.

As the breadth of the on-going compliance requirements continue to be hashed out, it occurs to me that full implementations (risk assessment through year 1 testing) will continue to shrink. Obviously there a few opportunities that remain, but the vast majority of work seems to already be shifting toward outsourced testing resources and internal control environment managers (solo artists asked to oversee the health over testing results and manage change into the documentation developed to-date).

I recognize that not everyone shares the risk tolerance of the independent consultant. I also recognize that not everyone is interested in engagements across the country or around the globe. That said, I welcome the opportunity to begin conversations that could lead to collaborative opportunities for the many of you running small (or individual) consultancies.

If gaining visibility to such a community would be of interest to you, please drop me a note at toby.lucich@insidesarbanesoxley.com, or connect to me at LinkedIn (http://www.linkedin.com/in/tobylucich). Note that connections via LinkedIn are public, so contact me at toby.lucich@insidesarbanesoxley.com for a more discrete point of contact.

I would welcome discussion about what you love to deliver to a client, the type of challenge you would love to land next, and upcoming availability or opportunities. I look forward to discussions of areas of expertise (i.e. projects managed, cycles documented, processes redesigned, industry experience) as well as your level of interest in future projects (regionally within the US or on a global basis).

Labels: consulting, implementation, independent, network, sarbanes oxley, sarbox, sox

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