Saturday, July 30, 2005

Higher Audit Fees, More Accountability

Three years after Congress passed a strict corporate accountability measure designed to make it harder to defraud investors about corporate financial health, companies are experiencing higher audit fees and increased turnover among financial executives.

The Sarbanes-Oxley Act, approved three years ago today, imposed new duties on corporate officials and subjected auditors to discipline from an independent panel. Analysts say the law has induced executives to pay more attention to financial data and prompted board members and accounting firms to take their work more seriously.

Higher Audit Fees, More Accountability

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Wednesday, July 27, 2005

Sarbanes-Oxley Turns 3, But It's a Costly Birthday for Business

The historian, George Santayana, is quoted as saying: Those who cannot learn from history are condemned to repeat it.

So, what has that got to do with Section 404 of the Sarbanes-Oxley Act? Plenty.

Back before the end of the 20th Century, some people worried that all computers would malfunction, businesses would grind to a halt and society would disintegrate. Why? Because software designers had not planned for computers to change from year 1999 to 2000.

Sarbanes-Oxley Turns 3, But It's a Costly Birthday for Business

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Regulators Agree on Auditor Rule

The panel that regulates corporate auditors approved a proposal on Tuesday to ban them from providing aggressive tax shelter advice to audit clients.

The panel, the Public Company Accounting Oversight Board, which was set up under the post-Enron Sarbanes-Oxley Act corporate overhaul, adopted the proposal unanimously. It now goes to the Securities and Exchange Commission for further review.

The rules, proposed in December, are expected to largely shut down the tax shelter advisory business, once quite lucrative for auditors.

"This will keep auditors out of aggressive tax work that has so damaged investor confidence," the panel's chairman, William J. McDonough, said.

Regulators Agree on Auditor Rule

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U.S. SEC pick Cox pledges vigorous enforcement

Rep. Christopher Cox, the White House's pick to chair the U.S. Securities and Exchange Commission, said on Tuesday his "top priority will be vigorous enforcement of our securities laws."

The California Republican pledged "continuity, clarity, and consistency in the commission's rule-making and enforcement responsibilities," in written remarks prepared for his confirmation hearing before the Senate Banking Committee.

U.S. SEC pick Cox pledges vigorous enforcement

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Monday, July 25, 2005

How Markets Punish Material Weaknesses

A new report examines shortcomings that lead to losses in share price; Sarbanes-Oxley requirements are understood poorly by investors, say some observers.

Section 404 of the Sarbanes-Oxley Act requires companies to disclose internal-control deficiencies in their annual reports. The effects on share prices are examined in "Control Deficiencies: Finding Financial Impurities," a new analysis of 2004 and early 2005 disclosures by shareholder-advisory firm Glass, Lewis & Co.

Glass Lewis examined companies with a market capitalization in excess of $75 million. About 11 percent of these companies disclosed a control deficiency between January 1, 2004, and May 2, 2005. The number of companies that disclosed a material weakness — the most severe control problem — totaled 586 for the first four months of 2005, compared with 313 for all of 2004, according to the report.

How Markets Punish Material Weaknesses

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Friday, July 22, 2005

Sarbanes-Oxley assistance

Secude IT Security GmbH joins the SAP Consulting Global Security Alliance to support companies in rapidly implementing the Sarbanes-Oxley guidelines. The objective of the Global Security Alliance is to provide companies with organisational assistance in selecting and implementing appropriate solutions to comply with the statutory requirements.

European companies listed on the New York Stock Exchange (NYSE) are obliged to implement the requirements of the Sarbanes-Oxley Act (SOX) by the end of 2006.

Sarbanes-Oxley assistance

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Mr. McDonough, You Have The Floor

After two years as chairman of the Public Company Accounting Oversight Board, William J. McDonough is feeling the heat. Corporate executives fume that the board's rules on testing internal financial controls -- required by Section 404 of the Sarbanes-Oxley Act -- are too costly and cumbersome. Auditors want McDonough to defend them more vigorously. McDonough, 71, joined the board in June, 2003, after a decade as president of the Federal Reserve Bank of New York. On July 15, he met with BusinessWeek editors. Here are excerpts.

Mr. McDonough, You Have The Floor

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Thursday, July 21, 2005

Here's what Sarbanes-Oxley has wrought

Approaching the July 30 three-year anniversary of the Sarbanes-Oxley Act, some workplace effects include...

Here's what Sarbanes-Oxley has wrought

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Wednesday, July 13, 2005

(Real Estate) GMAC Joins with Microsoft to Create Sarbanes-Oxley-Compliant Software

It's no secret that all public companies are affected by the Sarbanes-Oxley Act-and managing risk to avoid another Enron-size meltdown has become an important and expensive aspect of doing business, particularly among public REITs. In response, GMAC Commercial Mortgage has created a software program with Microsoft Corp. to help real estate companies integrate risk-management solutions into financial dealings.

GMAC Joins with Microsoft to Create Sarbanes-Oxley-Compliant Software

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Monday, July 11, 2005

IT security 'worse than root canal'

Managing security on their networks is such a headache for many IT administrators, they would rather undergo a root canal.

At the same time, regulatory compliance is the becoming the main driver for organisations to step up their security.

These are the findings of recent surveys conducted by management systems vendor NetIQ, which says clever resellers can turn these challenges into opportunities.

IT security 'worse than root canal'

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Sunday, July 10, 2005

Using Spreadsheets for SOX Documentation: Pros, Cons, and Hidden Dangers

By Tim J. Leech, FCA-CIA, CCSA, CFE

It is important that I declare for the record that I have a conflict of interest. I work for Paisley Consulting, the dominant SOX software vendor in the market. Writing this article is somewhat akin to a tractor salesman in the early part of the 20th century promoting the benefits of tractors over horses and mules for ploughing the fields. Tractors at the time were far from perfect but it became clear early on that tractors were capable of significantly outperforming horses and mules. The problem was that many farmers were very accustomed to doing their work this way and sometimes were even emotionally attached to their horses and mules.

Using Spreadsheets for SOX Documentation: Pros, Cons, and Hidden Dangers

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Saturday, July 09, 2005

Deloitte Audit of Navistar Is Investigated

Deloitte & Touche, the nation's largest accounting firm, is being investigated by federal regulators over a 2003 audit of the Navistar International Corporation, according to a document authorizing the inquiry.

The Public Company Accounting Oversight Board, in a two-page order issued in May, said Deloitte's work at Navistar might have failed to comply with at least five auditing standards. The formal investigation is the first to emerge aiming at one of the Big Four accounting firms - Deloitte, Ernst & Young, PricewaterhouseCoopers and KPMG - since the agency was created by the Sarbanes-Oxley Act of 2002.

Deloitte Audit of Navistar Is Investigated

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Sunday, July 03, 2005

Some say new SEC regulations waste company time, money

Federal regulations in response to Enron, WorldCom and other corporate scandals have been a huge waste of time and money for public companies, and they should be repealed as soon as possible.

That's the view of Steve Sanghi, CEO of Chandler-based Microchip Technology and one of the East Valley’s most respected executives. "Our competitors in other countries are dancing in the street," he said. "Our government is doing the job for them to make us less competitive."

Some say new SEC regulations waste company time, money

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Saturday, July 02, 2005

Execs on trial lean on ignorance defense

Perhaps the biggest surprise in Richard Scrushy's acquittal this week in the $2.7 billion accounting fraud at HealthSouth Corp. was that the jury believed his "I didn't know even though I was the CEO" defense.

Just months ago it seemed like executives could no longer plead ignorance and get away with it, a view that came after former WorldCom CEO Bernard Ebbers tried that tactic but was still convicted of being part of a conspiracy that cooked his company's books.

Execs on trial lean on ignorance defense

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Execs on trial lean on ignorance defense

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