Monday, November 19, 2007

GAO Flunks SEC's Internal Controls

The Government Accountability Office said Monday that the Securities and Exchange Commission had a material weakness in the internal controls over its financial reporting.

The GAO's report said that data related to accounts receivable balances is processed manually at the SEC in a manner that is prone to error and could result in inaccurate financial reporting by the agency. The news is a blow to the SEC, which was criticized by the GAO in 2006 for the same manual processes, but narrowly avoided a material weakness by putting in place extra controls to compensate for them. The GAO said those controls were not effective in 2007.

GAO Flunks SEC's Internal Controls

Labels: gao, sec

Tell us what you think. (0) comments.
Send to a friend:   

Monday, October 22, 2007

PCAOB Told to Plan for Global Standards

Members of the Public Company Accounting Oversight Board's advisory group are split on the question of how hard it would be for the auditing profession to adapt to International Financial Reporting Standards.

In light of a recent Securities and Exchange Commission proposal that U.S. companies should be given the choice between IFRS and U.S. generally accepted accounting principles, some PCAOB advisers worried that such a choice would overly burden accounting professors who are already strapped for resources. They also questioned whether the International Accounting Standards Board's version of IFRS is of high enough quality to meet U.S. regulators' and investors' expectations. The IASB expressed similar worries on Thursday.

The larger accounting firms, however, assured the advisory group that they have been training their staffs on using IFRS. Perhaps surprisingly, a member of the Financial Accounting Standards Board spoke in favor of a move to international standards.

PCAOB Told to Plan for Global Standards

Labels: GAAP, IFRS, pcaob, sec

Tell us what you think. (0) comments.
Send to a friend:   

Tuesday, May 29, 2007

10 Threats to SOX Compliance for Smaller Public Companies

Lord & Benoit, a leading Sarbanes-Oxley research and consulting firm, is applauding the efficiencies and affordability of this week's PCAOB and SEC actions requiring smaller public companies to comply with Sarbanes-Oxley this year. To help CFOs to navigate wisely through the process, Lord & Benoit just published a study, 10 Threats to SOX Compliance for Smaller Public Companies.

In summarizing the results, Lord & Benoit suggests this list should be used by CFOs as a starting point for a macro-level risk assessment at smaller public companies. Identifying potential concerns, developing action plans to remediate these risks, and taking quick action can minimize the likelihood of an adverse Section 404 report at the end of the first year of compliance.

10 Threats to SOX Compliance for Smaller Public Companies

Labels: as5, pcaob, sec, small business

Tell us what you think. (2) comments.
Send to a friend:   

Wednesday, May 23, 2007

Getting SOX Right

Recent talk of overhauling accounting regulations has the potential to turn the business world upside down.

Last week, Federal Reserve Chairman Ben Bernanke argued in favor of the U.S. developing a U.K.-style, principles-based, risk-focused approach in its financial market regulation. This comes only a few weeks after the chairman of the Securities and Exchange Commission, Christopher Cox, said the U.S. and Europe should be able to achieve a single accounting standard by 2009. But perhaps more urgent, on Wednesday the SEC is expected to release its final guidance to management for implementing Section 404 of the Sarbanes-Oxley Act of 2002.

The SEC is certainly keeping busy, but is it taking the right approach?

Getting SOX Right

Labels: sec, sox

Tell us what you think. (0) comments.
Send to a friend:   

Saturday, May 19, 2007

Just Days Away: The Fate of 404

For many corporate critics of the Sarbanes-Oxley Act, the 2002 law has become synonymous with added cost and work. But when they've voiced their frustration with regulators and congressmen, asking them to amend or repeal the law, they're usually talking about just one of its provisions: Section 404.

After nearly five years of hearing concerns about uncertainty regarding management's responsibilities under 404 and complaints about burdensome audits under its companion auditing standard, the Securities and Exchange Commission may formally make the first change to the provision before Memorial Day weekend. In back-to-back meetings, the SEC will vote on its proposed management guidance for complying with the internal-control rule on May 23, and the Public Company Accounting Oversight Board will decide whether to adopt its new companion auditing standard on May 24.

Just Days Away: The Fate of 404

Labels: as5, pcaob, sec

Tell us what you think. (0) comments.
Send to a friend:   

Wednesday, May 16, 2007

SEC Faces Some Crucial Questions

In the coming weeks, the Securities and Exchange Commission must decide a series of critical issues worth billions of dollars to the business community: from how far to cut back accounting rules to whether it should side with investment banks or shareholders in a Supreme Court case.

The nation's premiere markets watchdog is operating in the wake of complaints that government clamped down too tightly on business practices after financial scandals from Wall Street to Main Street. Several crucial decisions the SEC is about to make will determine the course of financial regulation in the coming year -- and will offer indications about whether the agency will respond to the concerns of either investors or industry.

SEC Faces Some Crucial Questions

Labels: regulation, sec

Tell us what you think. (0) comments.
Send to a friend:   

Tuesday, May 08, 2007

SARBANES-OXLEY ADVICE FOR SMALLER PUBLIC COMPANIES

Up to now, smaller public companies -- usually those with just less than $75 million in public equity -- have not been required to comply with Section 404 of the Sarbanes-Oxley Act. That section requires that a public company's management file a report on its assessment of the company's internal control over financial reporting -- including the financial work that passes through IT. It also requires the company's auditors attest to the quality of the company's internal control over financial reporting in the auditor's annual report.

The Securities and Exchange Commission (SEC) itself has recognized the challenges for smaller companies: smaller companies typically don't have full-time financial controllers; managers in smaller companies have a broad span of control, and this could lead to management override of financial controls; and smaller companies are more dynamic and don't have well-documented processes. Your company may have a lot of work to do to produce a report that makes investors feel confident about your numbers -- even if you are the most honest company.

SARBANES-OXLEY ADVICE FOR SMALLER PUBLIC COMPANIES

Labels: Champy, sec, small business

Tell us what you think. (1) comments.
Send to a friend:   

Sunday, April 29, 2007

SEC's Cox sees common accounting standards by 2009

SEC's Cox sees common accounting standards by 2009

Labels: GAAP, sec

Tell us what you think. (0) comments.
Send to a friend:   

Thursday, April 19, 2007

Will the SEC Embrace a Softer Sarbanes-Oxley?

When the Sarbanes-Oxley (SOX) Act was passed by Congress and signed into law in 2002, its goal was to protect investors through increased disclosure and stiffened internal controls. The law was passed following accounting frauds at Enron, WorldCom and other U.S. companies.

But on April 4, 2007, the Securities and Exchange Commission announced it will revisit some of SOX's rules. The primary focus will be the heavy financial costs of Section 404, which requires auditors of most publicly listed companies to verify the effectiveness of the company's internal controls and procedures for financial reporting.

Will the SEC Embrace a Softer Sarbanes-Oxley?

Labels: congress, sec, sox

Tell us what you think. (0) comments.
Send to a friend:   

Tuesday, April 17, 2007

User's Guide to SEC Pay Disclosure Rules

As CFOs tussle this proxy season with the complexities of the Securities and Exchange Commissions new disclosure rules for executive pay, Moody's Investors Service is coming out with a user's guide to help shareholders benefit from the disclosures.

By calling for more information from companies, the SEC rules reveal "the way performance incentives influence management behavior and retention of top-level executive talent," said Mark Watson, managing director of the rating service's Corporate Governance Group and a co-author guide. "We believe compensation is a determinant of management behavior that indirectly affects credit quality."

User's Guide to SEC Pay Disclosure Rules

Labels: Executive Compensation, Moody's, sec

Tell us what you think. (0) comments.
Send to a friend:   

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

Tell us what you think. (0) comments.
Send to a friend:   

Gulf between US and international accounting standards remains

Companies from overseas that are listed in the US are still facing considerable differences between international and US accounting standards, Ernst & Young has stated.

The accounts of 130 foreign private issuers filed with SEC had more than 200 differences between the International Financial Reporting Standards (IFRS) and the US Generally Accepted Accounting Principles (GAAP), Accountancy Magazine reports.

Areas with the most substantial differences were pensions, business contributions and financial instruments.

Gulf between US and international accounting standards remains

Labels: GAAP, IFRS, sec

Tell us what you think. (0) comments.
Send to a friend:   

Thursday, April 05, 2007

SEC Tells Staff to Revise AS5

The Securities and Exchange Commission is sending its accounting staff to work with the Public Company Accounting Oversight Board on additional revisions to the auditing standard that has been criticized by public companies and legislators for creating costly audits of internal controls.

At a Wednesday SEC hearing, staff members of the Office of the Chief Accountant asked the commissioners for permission to work with the PCAOB to address several concerns that were raised during the current public comment period on the revised Auditing Standard No. 2 — which both regulators loosely refer to as AS5. Saying the staff will be "fine-tuning" AS5, the commissioners voted unanimously on all the staffers' requests.

SEC Tells Staff to Revise AS5

Labels: 404, as5, pcaob, sec, sox

Tell us what you think. (0) comments.
Send to a friend:   

Wednesday, March 28, 2007

SEC Charges Two for Enron's Brazil Deal

The Securities and Exchange Commission has charged two former Enron lawyers for their role in the sale of a Brazilian power project to one of the company's infamous partnerships.

The SEC alleged that Jordan H. Mintz, former vice president and general counsel of Enron's global finance group, and Rex R. Rogers, former vice president and associate general counsel, of making material misrepresentations and omitting material disclosures from the company's public filings. According to the commission, the misconduct concerned Enron's 1999 sale of an interest in a troubled power project in Cuiaba, Brazil, to a related party called LJM Cayman (a.k.a. LJM1), controlled by then-chief financial officer Andrew Fastow.

SEC Charges Two for Enron's Brazil Deal

Labels: criminal charges, enron, lawyers, partnership, sec

Tell us what you think. (0) comments.
Send to a friend:   

Saturday, March 24, 2007

Foreign firms' deregistration rules eased

Foreign firms' deregistration rules eased

Labels: foreign filer, registration, sec

Tell us what you think. (0) comments.
Send to a friend: