Thursday, August 31, 2006

SITUATION: In the world of Sarbanes-Oxley now:

Written by an Audit Director of a Fortune 300 Company who has handled seven Sarbanes compliance projects, this is a breakthrough research book.

The book is a combination of narrative and case study of the Sarbanes-Oxley process from inception of the Act to the current day. Sarbanes-Oxley or versions of it are now in effect in the U.S., Canada, Britain, France and the Japanese Diet has a bill pending called J-SOX which should be legislated shortly. The European Union has passed the updated Eighth Directive which ensures strong internal control systems for its 25 EU Member Countries. This book is suitable for senior executives, management, instructors and students on an undergraduate and graduate level throughout the world. Its methods, both narrative and case study along with online reference materials, make it applicable on a university level. It is a must-read for Board Members of publicly-held corporations throughout the world as well as educators and advisors of listed corporations.

SITUATION: In the world of Sarbanes-Oxley now:

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

Wednesday, August 30, 2006

Going Private: May Well Have Been Underestimated

Euronext said expenses increased by euro16.3 million (US$20.88 million), partly because of legal and advisory costs linked to its planned US$10 billion merger with NYSE Group Inc.

The plan will be put to a vote at a Euronext general meeting in early December. The company said it aims to complete the merger in the first quarter of 2007.

A key element in the merger is for the combined business to attract foreign company listings. The London Stock Exchange currently dominates this market. Many foreign companies have been reluctant to list on the NYSE because of restrictions imposed under the Sarbanes-Oxley Act since 2002.

Euronext CEO Jean-Francois Theodore reiterated Wednesday that the terms of Sarbanes-Oxley will not be applied to Euronext.

Going Private: May Well Have Been Underestimated

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

Euronext Reports Profits Soar 97 Percent

Euronext said expenses increased by euro16.3 million (US$20.88 million), partly because of legal and advisory costs linked to its planned US$10 billion merger with NYSE Group Inc.

The plan will be put to a vote at a Euronext general meeting in early December. The company said it aims to complete the merger in the first quarter of 2007.

A key element in the merger is for the combined business to attract foreign company listings. The London Stock Exchange currently dominates this market. Many foreign companies have been reluctant to list on the NYSE because of restrictions imposed under the Sarbanes-Oxley Act since 2002.

Euronext CEO Jean-Francois Theodore reiterated Wednesday that the terms of Sarbanes-Oxley will not be applied to Euronext.

Euronext Reports Profits Soar 97 Percent

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

A Sarbanes-Oxley Tale

The term "audit committee" is being blatantly misused by Kroll, the mayor and the City Council. If you look at the meaning of the term in the federal Sarbanes-Oxley Act, you find that it does not refer to an outside company. This law only mentions corporations, not government bodies. The law describes an "audit committee" being composed of members of the board of directors.

The American Institute of Certified Public Accountants' regulations also refer to the same type of audit committee. Despite this, Kroll, with the approval of auditor KPMG, refers to itself as an "audit committee."

There is a good reason for this.

A Sarbanes-Oxley Tale

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

Euronext to install Sarbanes-Oxley protection

Mr Hohn's comments came after M Théodore said Sarbanes-Oxley legislation, which has increased the regulatory burden on US-listed firms, would "never apply" to companies listed on the European exchanges of the enlarged group.

He said: "Our teams are now working actively in close co-operation with the regulatory authorities and the various stakeholders related to the proposed combination with the NYSE...This will open the way for the creation of the world's largest global exchange, with Euronext and NYSE as the founding partners,"

Euronext to install Sarbanes-Oxley protection

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

Tuesday, August 29, 2006

FEI Cunningham to Step Down

Cunningham also declined to comment on what the big issues for FEI will be going forward, but she noted that she was particularly proud of the way the "organization and its members pulled together" to address internal controls regulation, specifically Section 404 of the Sarbanes Oxley Act. "I think we had more credibility than any other organization," regarding the cost vs. benefits debate, said Cunningham. She added that FEI and its members admitted that there were benefits to implementing more stringent internal controls, but clearly wanted to work with regulators to ease the cost burden. "From a credibility perspective, we did not run around calling for repeal [of 404]."

FEI Cunningham to Step Down

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

Sarbox Survival Guide: The Sarbanes-Oxley Scapegoat

The latest is a Liberum Research study released last month revealing that the number of CEOs and VPs that changed jobs in the first six months of the year is more than double the number that moved around in the same period last year. Why? A consultant quoted in this Bloomberg piece we saw this morning blames the increasing burden of compliance with regulations like Sarbanes-Oxley.

We know Sarbox has its problems, but it also seems to be the scapegoat for a whole lot in business today.

Sarbox Survival Guide: The Sarbanes-Oxley Scapegoat

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

White Paper: Comply with Sarbanes-Oxley using an Automated Sales Commission Solution

Did you know that manual processes such as spreadsheets do not provide an archive or audit trail as changes are made to compensation as recommended by Section 404 of the Sarbanes-Oxley Act of 2002 (SOX)?

Did you also know that independent studies have concluded that companies using spreadsheet-based compensation often unknowingly overpay commissions by as much as 3 to 10%?

Learn how your company can use an automated sales commission solution as an internal process control over incentive compensation to help comply with SOX.

White Paper: Comply with Sarbanes-Oxley using an Automated Sales Commission Solution

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

How to Make Money From Sarbanes Oxley

Some companies may use tighter market regulation -- think Sarbanes Oxley -- to reduce their cost of capital by bolstering investor confidence. Of course, companies with better reputations among investors bear the cost of these regulations, as well, and find themselves competing in the capital markets for investor dollars against the companies enjoying the boost. So the regulations essentially transfer wealth from companies with better reputations to companies with worse reputations. What’s more, the cost of enforcement is largely born by the taxpayers -- another transfer of wealth to the companies who most benefit from the regulations.

How to Make Money From Sarbanes Oxley

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

Monday, August 28, 2006

Consolidation Ahead for Accounting Firms

The news isn't all bad. Audit-related work and revenues tied to Sarbanes-Oxley legislation are expected to continue to escalate, especially among U.S. clients, and client investment in China is also expected to grow strongly, providing two bright spots in an otherwise less than rosy outlook for the future. Growth for 2006 is expected to be only 1.6 percent or $106.0 billion, however, growth is projected to increase to 4.7 percent or $111.0 in 2007, giving firms a reason for confidence.

"As the market economy slows down, professional service firms will slow incrementally as well," Lawhon adds. "This speaks to new business for CPA [certified public accounting] firms, but what we do not believe will slow down is the shift of larger private clients away from the national firms and on to the larger regional and local firms. Due to the scarcity of resources, larger regional and local firms may have clients who migrate to smaller local firms and so on and so on."

Consolidation Ahead for Accounting Firms

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

Sarbanes-Oxley: Lessons Learned

Many publicly traded companies are in their third year of dealing with the Sarbanes-Oxley Act (SOX)--the law that makes corporate executives responsible for the accuracy of their financial statements and for the internal controls that minimize errors and reduce fraud.

After going through the rigorous process of documenting and testing those controls, such as the segregation of duties and appropriate access to financial systems, many of these companies-including insurers-spent far more on the effort than they ever imagined.

Sarbanes-Oxley: Lessons Learned

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

Who's Controlling the Controller?

One of the greatest sources of controversy in the business world in recent months has been whether small public companies are capable of maintaining the level of internal controls prescribed by section 404 of the Sarbanes-Oxley Act.

But even as that debate rages on, say experts, private companies -- which are not subject to Sarbanes-Oxley -- face serious threats as a result of poor internal controls. And the smaller their staffs, and the fewer their resources, the greater the risks.

Who's Controlling the Controller?

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

High Risk of Sarbanes-Oxley Control Weaknesses Common in Financial Reporting Cycles

The reason for widespread spreadsheet use is that key revenue recognition and reporting tasks are still not automated in Financial/ERP systems. Only 8% of all responding companies report that they are able to complete their revenue reporting process without having to take data offline and into spreadsheets. The rest of the surveyed companies use spreadsheets, which are prone to errors, lack audit capabilities and resist internal controls. These results should be a concern for corporate finance departments, executives, and investors and auditors alike, because the risks introduced by spreadsheets go against basic compliance principles.

High Risk of Sarbanes-Oxley Control Weaknesses Common in Financial Reporting Cycles

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

Sarbanes-Oxley has a dark side

Sarbanes-Oxley has been characterized as the most significant legislation of its kind in 70 years. And indeed it was, but some people question whether it was necessary.

Like any legislation, the practical interpretation of what it says often is answered with litigation. Before that, many firms have taken an absurdly conservative approach to compliance partly in fear that if they misstep, they might be part of a precedent case that establishes the correct application of one or more provisions in the bill.

While the bill tightened financial controls, good companies were doing what the law wanted for years anyway. They did it out of a profit-motivated, self-interest viewpoint along with ethical and legal considerations. It just made good business sense to know exactly what was going on within their company.

Sarbanes-Oxley has a dark side

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

Friday, August 25, 2006

Q&A: Rational targets IT compliance needs, GM says

Danny Sabbah, a 32-year veteran of IBM, has overseen the company's Rational software unit since May 2005. In an interview with Computerworld this week, he spoke about the increasing pressure on development organizations to implement mechanisms that can trace activities throughout the software development life cycle. Without such capabilities, users could fail audits for compliance with regulations such as the Sarbanes-Oxley Act. Sabbah, Rational's general manager, also discussed the unit's new Eclipse-based project, code-named Jazz, which aims to link the various components of the software development life cycle and will eventually become a framework for future Rational products.

Q&A: Rational targets IT compliance needs, GM says

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

Thursday, August 24, 2006

Big4Guy: Categorizing Automated Controls for Sarbanes Oxley Testing

Regular readers here would have noted that this week, I am focusing on approaches to test automated controls. An easy way to test automated controls is to categorize them depending upon the type of automated control. Below, I have listed categories in automated controls can be classified for SOX IT audits.

Big4Guy: Categorizing Automated Controls for Sarbanes Oxley Testing

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

Backdating Causes Late Filings to Soar

Forget Sarbanes-Oxley 404. A record number of companies filed their recent quarterly reports late, and the most commonly cited reason was the rapidly growing option backdating scandal.

According to shareholder advisory firm Glass, Lewis & Co., 138 companies with market capitalizations of at least $75 million submitted late-filing notices for the second quarter, up 52 percent from year-earlier levels. Forty-eight of those companies said they postponed their filings because they were conducting investigations into their historical stock-option grants, including such well-known names as Apple Computer Inc., UnitedHealth Group Inc., Monster Worldwide Inc., CA Inc., and Juniper Networks Inc. By contrast, only three companies cited incomplete internal-control assessments as the reason for their delay.

Backdating Causes Late Filings to Soar

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

Small Biz Sits Out Sarbanes-Oxley

One of the key provisions of the Sarbanes-Oxley Act was that corporate managers inform investors about just how well they were minding the store.

That provision, known as Section 404, requires companies' executives and their auditors to assess the state of companies' internal controls. Internal controls are a system of checks and balances over financial accounting that are designed to prevent corporate fraud.

Small Biz Sits Out Sarbanes-Oxley

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

Sarbanes-Oxley Starts a Foreign Affair

Critics of the Sarbanes-Oxley Act (SOX) have been pointing to the nearly total migration of large initial public offerings (IPOs) to non-U.S. exchanges in 2005 as proof that the law is counterproductive, driving new issuers to list on other countries' exchanges. Ventana Research thinks they have a valid point, but the policy implications are much more nuanced than simply rolling back the law could address. We believe Sarbanes-Oxley will not disappear and, indeed, over time we expect there will develop a "race to the top" approach to disclosure requirements around the world. Yet the era of regulatory dominance the United States has enjoyed since the end of the Cold War is over. It is unlikely that politicians will pass securities regulations as sweeping as SOX again without considering the potentially negative consequences for the U.S. capital markets.

Sarbanes-Oxley Starts a Foreign Affair

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

Sarbanes-Oxley: Driving the narrow path between extremes

At one extreme there is an alliance of small US companies and Wall Street investment banks supported by US exchanges. The other extreme is the politicians' and governments' belief that American investors need to be protected against fraud.

In the midst of this, Christopher Cox, the SEC's Chairman, is having to steer a narrow course designed to satisfy all parties. He has made some temporary concessions, in further delaying the implementation of SOX for small US companies and all but the largest foreign issuers, as well as delaying compliance for a year for new issuers, but these concessions have met with little warmth. More relevant is the statement that the SEC would "continue the Commission's efforts to be sensitive and responsive to the particular needs of smaller public companies and foreign private issuers, and to minimize the burdens that Section 404 may impose on them."

Sarbanes-Oxley: Driving the narrow path between extremes

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

Wednesday, August 23, 2006

Elevation: From Thought Leadership to Market Leadership: Transparency on Trial

Consider this: Companies are now exiting or avoiding America's public markets to escape the excessive costs and risks they now represent. As Mr. Greenberg noted in a recent issue of the Wall Street Journal, heavy regulations -- such as those associated with Sarbanes-Oxley -- have stultified the public markets. "Of the 25 largest IPOs worldwide in 2005, only one took place in the U.S," he noted. "Most went to London or Hong Kong. Even Australia weighed in with three."

Here's a thought: If you want to be more open and transparent, then maybe you have to take your company private (or stay private).

Elevation: From Thought Leadership to Market Leadership: Transparency on Trial

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

The Fed Pause - Its Not Just About Economic Growth

Yet in what is shaping up to be one of the greatest ironies of legislation gone awry the Sarbanes-Oxley bill, originally designed to protect consumers from such financial fiascos as Enron and Worldcom may be preventing banks from setting aside sufficient loan reserves against these possible defaults. In a recent article entitled "Has Congress Sparked a Banking Crunch?" MoneyCentral columnist Jim Jubak noted that "the Sarbanes-Oxley accounting reforms have made it just about impossible for banks to prepare for the credit cycle's turn. Accountants and the Securities and Exchange Commission (SEC) are applying Sarbanes-Oxley in a way that forces banks to cut reserves for delinquent and bad loans just when they need to put money aside for the rainy days that will come."

The Fed Pause - Its Not Just About Economic Growth

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

Does Compliance Have a Silver Lining?

In the more than two years since companies have been required to comply with Sarbanes-Oxley, it's become obvious that compliance is not a one-time project, it's a process. At the Sarbanes-Oxley Conference last September, Time Warner revealed it spent an incredible 350,000 man-hours identifying, evaluating and testing its financial and I.T. controls for Sarbanes-Oxley compliance. A survey by Financial Executives International (FEI) of 274 public companies found average compliance costs were about $3.8 million in fiscal year 2005. It also found that companies spent an average 22.786 staff hours internally to comply with Section 404 of Sarbanes-Oxley in 2005.

Does Compliance Have a Silver Lining?

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

The Business of Staying in Business

Given the increasing importance of business continuity planning, regulators are already moving into the field. Lloyd says that as part of a U.S.-based company, Crawford Adjusters Canada was influenced by the Sarbanes-Oxley Act and its requirements for data retention and due diligence. In Canada, the Investment Dealers Association has a bylaw in place that requires all members to have a documented BCP implemented and tested by the end of July 2006. Benini points out that the Canadian Standards Association is also working on standards for emergency management and business continuity, expected to be published in February 2007.

Frederick suggests it could very well be shareholders of public companies who push even harder for effective business continuity plans. "Your investment is at risk if the corporation you invested in doesn't have a plan that works," he says.

The Business of Staying in Business

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

Lessons Learned: Sarbanes-Oxley to Basel II

Twin compliance is a widespread issue, as is whether these two operational mandates are in conflict. Although both require a common framework and governance model, Sarbanes-Oxley applies to all US public corporations, while Basel II covers financial institutions in over 100 countries. Sarbanes-Oxley aims to restore investor confidence by addressing issues such as financial reporting and conflicts of interest. Under Basel II, financial institutions must manage operational risk in order to reduce capital reserves.

In effect, Sarbanes-Oxley and Basel II are complimentary, not competitive mandates.

Lessons Learned: Sarbanes-Oxley to Basel II

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

Tuesday, August 22, 2006

SEC proposes extended deadlines for Sarbanes-Oxley compliance

The Securities and Exchange Commission wants to give small public companies more time to comply with the internal controls requirements of the Sarbanes-Oxley Act.

The SEC proposed extending Section 404 reporting deadlines for companies with less than $75 million in market capitalization. Under its proposal, management reports on the effectiveness of internal controls over financial reporting wouldn't be due until after Dec. 15, 2007. The previous deadline was July 15, 2007.

SEC proposes extended deadlines for Sarbanes-Oxley compliance

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

Sarbanes-Oxley and Sales

When you think of Sarbanes-Oxley (SOX) what comes to mind? Executives being scrutinized for not paying attention to business practices? Finance folk cooking the books? Time to start thinking about it in a whole new way. SOX has implications for most business practices and processes of publicly traded companies. Any errors or misstatements that could cause a company to have to re-state its financials are areas that require focus

Sarbanes-Oxley and Sales

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

Executives Switch Jobs More Often This Year Amid Added Pressure

A total of 15,650 managers from chief executive officers to vice presidents changed jobs January through June, more than twice the 6,489 who did so in the same period in 2005, New York- based Liberum Research said in a study released in July.

The pressures of complying with the Sarbanes-Oxley Act of 2002 and shareholders' demand for better performance may be leading some executives to retire early and forcing others out, said Elise Walton, director of corporate governance practices at management consulting firm Mercer Delta Consulting in New York.

Executives Switch Jobs More Often This Year Amid Added Pressure

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

Taking a company private can be risky

In a special election late last month, 98 percent of the shareholders in attendance supported the sale of Outlook Group Corp. to Vista Group Holdings in a deal worth about $47 million. During the special meeting, stockholders cited two main reasons for their stance: the "illiquidity" of the stock and the expensive requirements of the 2002 Sarbanes-Oxley Act. Sarbanes-Oxley, passed by Congress in 2002 in the wake of several corporate scandals, increased government regulations and reporting requirements for public companies.

The process of taking a public company private can be costly. But staying public can be very costly, too, mainly because of the requirements to meet the terms of Sarbanes-Oxley.

"The expense of public company compliance is growing," said Joe Thornton, a law partner at the Appleton office of Godfrey & Kahn.

"It's not just a matter of complying with all the regulations," he said "The regulations create an annual administrative overhead."

Taking a company private can be risky

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

Monday, August 21, 2006

Strategy should start in the boardroom

We find that chief executives and chairmen from other companies often make the most capable directors, particularly in their ability to provide strategic insights. Yet senior executives are increasingly unwilling or unable to take board seats. Corporate governance reforms such as the 2002 Sarbanes-Oxley Act have substantially increased the time that boards spend on inward-facing issues such as compliance. This, combined with a perceived increase in personal liability, has made directorship a less appealing prospect.

Strategy should start in the boardroom

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

Simon Caulkin: A consultant's guide to mastery of the universe

When computer giant IBM settled the longstanding antitrust suit against it in 1956, a condition was that it should not offer advice about installing or running computers. That left the way clear for Andersen (later Accenture) and others. Most ironic of all, following the Enron collapse in which professional service firms were heavily implicated, 2002's Sarbanes-Oxley Act, the most significant US governance legislation since the laws that brought consultancy into being, almost exactly replicated their effects.

As in the 1930s, Sarbox banned auditors from offering consultancy, but compelled boards to bring in outsiders to do stringent management checks. Hence, as McKenna notes, the paradoxical result was that having failed to prevent -- some would say having actively contributed to -- the corporate governance crisis, the consultancy elite has been put in charge of monitoring it. Nice work!

Simon Caulkin: A consultant's guide to mastery of the universe

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

Regulation, Yes. Strangulation, No.

Three words describe the prevailing sentiment in today's business environment -- private is beautiful. Increasingly, major U.S. corporations are removing themselves from the public equities markets and going private.

Why? To a large degree, because the cost of government regulations has become unbearable. HCA, the largest hospital operator, recently announced a record $21 billion deal to take itself private. Among reasons cited by the company's founder, Thomas Frist, for departing the NYSE: the untenable cost of complying with Sarbanes-Oxley. The recent trend of major companies going (or planning to go) private -- Hertz, Toys "R" Us, Kinder Morgan, Albertson's, Univision ...

Regulation, Yes. Strangulation, No.

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

Sarbanes refugees heading for AIM

The burden of red tape is forcing publicly traded companies to abandon Wall Street in favour of the London Stock Exchange.

The Independent on Sunday has learnt that a number of US companies are currently considering quitting the New York Stock Exchange in favour of the LSE's Alternative Investment Market for smaller stocks.

Sarbanes refugees heading for AIM

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

Fat Cats' Friend?

The sheer volume of Johnson's board work is cause for concern in some quarters. "We start raising a red flag when we see a director on four boards," says Hodgson.

The ISS sees the limit as seven. But since the implementation of the Sarbanes-Oxley law, which increases director workloads substantially, it has become increasingly rare for anyone to serve on more than two corporate boards, says ISS Executive Vice President Patrick McGurn.

But if the high number of boards Johnson serves on is an anomaly, his apparent taste for generous pay packages might not be. Academic research suggests that when highly compensated CEOs and former chief executives become board members, they favor generous pay packages for other CEOs.

Fat Cats' Friend?

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

Sox First: SOX: red tape and opportunities

Chief executive officers of more than 200 New York Stock Exchange-listed companies say Sarbanes-Oxley has created problems and opportunities. While smaller companies say Sarbanes-Oxley is killing them, big business has a different perspective.

And that highlights the big problem with the law.

Sox First: SOX: red tape and opportunities

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

Reality of stock-option drama is most errors were unintended

It also needs to be remembered that almost all of the options backdating investigations involve historic actions. In Silicon Valley time, the conduct may as well have occurred eons ago. Corporate America has undergone significant changes as a result of the 2002 Sarbanes-Oxley legislation and aggressive government prosecution that produced the largest fines against corporations and executives ever.

In August 2002, the SEC issued a rule that requires companies to disclose option grants within two days of granting. This rule largely did away with the ability to backdate options, and a soon-to-be-published study by Professors Erik Lie and Randy Heron appears to confirm this. Also, the deterrent effect of enforcement cases brought by the SEC and the Department of Justice refocused executives on ensuring that internal procedures and controls are working properly.

In short, contemporary corporate America is bound by the strongest mandatory internal control structure and governmental oversight ever.

Reality of stock-option drama is most errors were unintended

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

Small Cap Companies Get Reprieve on Compliance With Sarbanes-Oxley

Federal regulators are giving small public companies another extension to comply with one of the more costly provisions of the Sarbanes-Oxley law.

The Securities and Exchange Commission on Aug. 9 said smaller public firms -- those with market capitalizations of less than $75 million -- would get another year to comply with a provision calling for public companies to document and test their internal controls.

“This gives us a full additional year for certification,” said Pat Gray, the senior vice president of finance at Axesstel Inc., a maker of wireless phones. Gray said his firm previously was shooting to comply with the law’s internal control requirements by the end of 2007, but now has until the end of 2008.

Small Cap Companies Get Reprieve on Compliance With Sarbanes-Oxley

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

Friday, August 18, 2006

Smaller Firms Embrace Sarbanes-Oxley Rules

Expensive, onerous and unnecessary -- those are a few of the complaints U.S. publicly traded companies have leveled at the Sarbanes-Oxley Act, designed to keep companies honest. Yet auditors say an increasing number of closely held companies are complying with parts of the corporate-reform law -- even though they don't have to.

Some of these private-sector companies have investors who hope the company will one day go public, or will be acquired. Others think adhering to the law's requirements will make their businesses more efficient. Still others face pressure from lenders or customers, including government agencies, who value the strong internal controls required by Sarbanes-Oxley.

Smaller Firms Embrace Sarbanes-Oxley Rules

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

SaaS Versus SaaS

If and when NetSuite becomes a public company, it will have to deal with what seems to be the bane of every public company these days: proving that its internal controls are up to Sarbanes-Oxley spec.

According to Employease co-founder Mike Seckler, that daunting prospect is one reason the leading HR solutions SaaS vendor is eschewing the public markets.

Ironic since the rigors of regulatory compliance has done quite a bit to bolster revenue growth at software companies like NetSuite and Employease.

Ironic also because, according to more than one observer, SOX has actually helped a lot of companies get their management acts together, generating greater efficiencies and improved productivity.

But after all their stock-option shenanigans, tech companies in particular have no kick coming. And the SEC is easing up on smaller companies, too.

SaaS Versus SaaS

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

Thursday, August 17, 2006

Trust but verify

The numbers were somewhat better in the United States, where half of the 50 companies in that subset said they do at least some auditing of their self-reporting partners. This is probably due to the Sarbanes-Oxley Act, which puts a greater onus on companies to make sure their partnerships are being conducted properly.

Trust is a key to any business relationship. But as a U.S. president once said of the Soviet Union's intention to reduce its missile strength: "Trust -- but verify."

Trust but verify

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

Governance costs burdensome, but helpful: Survey

Almost half--48%--of U.S.-based CEOs and 23% of foreign CEOs say compliance costs have more than doubled. Companies with market capitalizations below $3 billion feel the greatest burdens.

Yet just over four of five CEOs surveyed see benefits from complying with tighter governance guidelines, including the Sarbanes-Oxley Act of 2002.

Thirty percent say board members have grown more engaged, and 27% say investor confidence is improved. On the other hand, 18% identify no benefits.

Governance costs burdensome, but helpful: Survey

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

Ethics pendulum needs fine-tuning

There are strong views expressed locally and internationally that the obsession with corporate governance has resulted in an increase in the cost of doing business by increasing the financial- and time-cost of compliance. This may undermine competitiveness, which was surely not the intention of the authors of the King reports in SA, the Cadbury Report in the UK and the Sarbanes-Oxley Act in the US. Critics of the compliance-focused approach to governance have argued that in some instances too great a focus on good corporate governance may destroy value in that some boards may become overly cautious and risk averse. They say it makes nonexecutive directors act like glorified policemen instead of being key strategic drivers of the growth and effective management of the business. This is as undesirable as it is unhelpful and it can be a source of frustration for the executive.

Cynics argue that the high level of obsession with good corporate governance codes is more about form and less about substance.

Ethics pendulum needs fine-tuning

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

Wednesday, August 16, 2006

Few CEOs believe Sarbanes-Oxley is benefiting investors

Few chief executive officers believe investors are better protected by the Sarbanes-Oxley Act, a survey by NYSE Group Inc. said.

The survey by of CEOs at more than 200 companies found that 6 percent said the accounting and corporate governance law, as well as NYSE governance rules produce benefits for investors. Increased costs on compliance were cited as a concern by 97 percent of those surveyed.

Companies have complained that the cost of complying with regulations such as Sarbanes-Oxley are wiping out a lot of their profits, and driving foreign companies away from U.S. capital markets.

Few CEOs believe Sarbanes-Oxley is benefiting investors

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

Congress Should Repeal the Sarbanes-Oxley Act

All too often, as with the hurried passage of the Sarbanes-Oxley Act of 2002 (SOA), it seems more important for government officials to be seen to address some problem of popular concern than to be held responsible over time for resolving the problem. As if to demonstrate this point, Senator Paul Sarbanes (D-MD) and Representative Michael Oxley (R-OH) have announced their resignation from Congress at the end of this term.

What are the most important lessons from the experience under the SOA? First, the costs of implementing Section 404 of the Act have been unusually high, especially for smaller corporations.

Congress Should Repeal the Sarbanes-Oxley Act

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

SEC Tweaks Sarbanes-Oxley Rules

The U.S. Securities and Exchange Commission on Aug. 9 granted smaller companies and many foreign private issuers extra time to comply with the Sarbanes-Oxley Act's internal control reporting and auditing provisions.

Many companies have opted to launch initial public offerings in London rather than New York, partly in response to perceived onerous U.S. securities regulatory burdens. The SEC's latest limited changes are unlikely to alter this trend and will not forestall pressure from companies and Congress to enact further comprehensive reform.

SEC Tweaks Sarbanes-Oxley Rules

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

FEI blog: Reactions to SEC Sarbanes-Oxley 404 Delay for Foreign Companies

Fallen behind on your Sarbanes-Oxley reading? Been on vacation? Living under a rock? Visit the FEI blog on Sarbanes-Oxley section 404 for a round-up of recent articles.

FEI blog: Reactions to SEC Sarbanes-Oxley 404 Delay for Foreign Companies

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

Tuesday, August 15, 2006

Republican fires Sarbanes-Oxley warning

A US congressman has voiced concerns over the effect Sarbanes-Oxley legislation is having on the country's economy.

Tom Feeney, a Republican, was reported as saying that the accountancy compliance law had led to an "outsourcing of America's 100-year lead in capital formation", in the Financial Times.

Purchasing software can help facilitate compliance to accounting regulations. When using traditional methods however, Sarbanes-Oxley laws are time-consuming and increase accountancy expenses, according to Mr Feeney.

Republican fires Sarbanes-Oxley warning

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

Is there a 'silver lining' to the Sarbanes Oxley Act?

If you own shares in a publicly traded company or you are a technology professional in one, chances are that you're already well-acquainted with the Sarbanes-Oxley Act (SOX), which was passed by Congress as a response to the pervasive corporate fraud of the 1990s involving well-known companies like Adelphia, Enron, Tyco and Worldcom.

Sarbanes-Oxley was designed to combat rampant corporate fraud; to restore investor and public confidence in American capitol markets; and to promote sound accounting practices while it policed insider trading and ensured the integrity of market research. The provisions in Sarbanes Oxley are not entirely new, and many already exist in an amalgam of existing federal and state laws and for corporate executives, accountants and technology professionals.

For many corporate IT departments, SOX at first glance loomed as a second "Y2K" effort that would delay other important projects and suck the life out of the technology budget. This article explores how much Sarbanes Oxley compliance has cost companies, how much Sarbanes Oxley has been enforced, how SOX has affected corporate IT, and whether its ultimate impact could be a beneficial one.

Is there a 'silver lining' to the Sarbanes Oxley Act?

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

University of Pittsburgh Medical Center Further Enhances Internal Controls Processes with MedAssets' Supply Chain Technology

The University of Pittsburgh Medical Center based in Pittsburgh, Penn., announced today its success to further drive corporate transparency and internal controls process enhancements using supply chain management technology offered by MedAssets Analytical Systems. Although not required by law, UPMC, a not-for-profit organization, initiated a project in June 2004 to comply with regulations set forth by the Sarbanes-Oxley Act of 2002. Subsequently, UPMC's supply chain function, a department managing an approximately $1 billion supply spend, was identified as an area of focus for improving data integrity, streamlining business processes, and enhancing internal controls in financial reporting.

"The hospital supply chain significantly impacts the financial statements of any healthcare organization," stated Robert DeMichiei, chief financial officer, UPMC. "When UPMC proactively began the endeavor to comply with SOX, establishing order in our procurement processes and reporting capabilities was a high priority. Having visibility and transparency of our supply spend across multiple facilities is paramount to the internal controls process. We must be able to document that we are paying the correct price, for the correct item, for every transaction."

University of Pittsburgh Medical Center Further Enhances Internal Controls Processes with MedAssets' Supply Chain Technology

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

Monday, August 14, 2006

Edgar Overhaul Creeping Along

"We have 15,000 public companies registered with us, but not nearly that many people who can spell XBRL," he quipped. "Still, rather than do it by fiat, this is the kind of the thing the market would drive, if it is the right idea."

Mr. Booth noted the key selling point for companies to adopt XRBL filing is that it makes compliance with Sarbanes-Oxley less of a headache.

Of course, that would mean that companies would have to stop doing their financials in multiple formats and start standardizing on XRBL.

"I think there's a lot of synergy between being SOX-compliant and XRBL compliant," Mr. Booth said. "If companies used it internally in the preparation of their statements, when you do that, you start to automate that process that SOX says you need internal controls around."

Edgar Overhaul Creeping Along

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

The Sarbanes-Oxley Yawn: Heavy Rhetoric, Light Reform (And it Might Just Work) by Lawrence Cunningham

A thorough examination of the much ballyhooed Sarbanes-Oxley Act reveals dominantly a federal codification of extant rules, regulations, practices, and norms. Despite advertising it as "the most far-reaching reforms of American business practices since the time of FDR," a soberly apolitical view sees the Act as more sweep than reform. Important are provisions calling for nine studies; redundant but much publicized were the certification requirements imposed during the summer of 2002; other moves are mere patchwork responses to precise transgressions present in the popularized scandals. The Act is far from trivial, however. A silver bullet relates to the structure and funding of those who set the standards for auditing and accounting in the United States. Stripped of power is the AICPA, and altered in funding structure is the FASB.

A thorough examination of the much ballyhooed Sarbanes-Oxley Act reveals dominantly a federal codification of extant rules, regulations, practices, and norms. Despite advertising it as "the most far-reaching reforms of American business practices since the time of FDR," a soberly apolitical view sees the Act as more sweep than reform. Important are provisions calling for nine studies; redundant but much publicized were the certification requirements imposed during the summer of 2002; other moves are mere patchwork responses to precise transgressions present in the popularized scandals. The Act is far from trivial, however. A silver bullet relates to the structure and funding of those who set the standards for auditing and accounting in the United States. Stripped of power is the AICPA, and altered in funding structure is the FASB.

The Sarbanes-Oxley Yawn: Heavy Rhetoric, Light Reform (And it Might Just Work) by Lawrence Cunningham

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

Regulatory Reform on Both Sides of the Atlantic

Global trade is increasingly connecting the world, bringing consumers lower prices and a wider selection of goods, and creating jobs. But when government regulations vary enormously from one nation to the next, they become roadblocks to the smooth flow of international commerce, and hurt both consumers and workers.

Lessening the differences in regulations between the United States and the European Union can benefit both the American and European economies. Both sides should be receptive to the concepts and practices employed by the other, and the two continents should recognize that redundant testing and certification processes are squandering resources on both sides of the Atlantic.

Regulatory Reform on Both Sides of the Atlantic

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

Daily Report: Sarbanes-Oxley forces a restatement boom

A recent federal report says costs, not revenue fixes, are the cause of most restatements since 2002.

Daily Report: Sarbanes-Oxley forces a restatement boom

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

Sarbanes-Oxley Gains Adherents

Expensive, onerous and unnecessary -- those are a few of the complaints U.S. publicly traded companies have leveled at the Sarbanes-Oxley Act, designed to keep companies honest. Yet auditors say an increasing number of closely held companies are complying with parts of the corporate-reform law -- even though they don't have to.

Some of these private-sector companies have investors who hope the company will one day go public, or will be acquired. Others think adhering to the law's requirements will make their businesses more efficient.

Sarbanes-Oxley Gains Adherents

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

Sarbanes-Oxley law trickles down

But the law's impact has trickled down to private companies, many of them family-owned, forcing them to spend more time and money on audits and, in some cases, to add outside directors to their corporate boards.

Accounting firms are often the enforcers of Sarbanes-Oxley standards at privately held companies, requiring them to make changes as part of the auditing process.

Douglas County-based CH2M Hill, though privately held, is affected like a public company by Sarbanes-Oxley because the company runs an internal stock market for trading of its own shares among its 18,000 employees.

"It has cost us so much money," said Catherine Santee, senior vice president of finance for CH2M Hill. "We knew we were going to be required to comply with Sarbanes-Oxley. What was unanticipated was how much it would cost to do that."

Sarbanes-Oxley law trickles down

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

SEC proposes delay of Sarbanes-Oxley reporting deadline

The U.S. Securities and Exchange Commission, responding to complaints that the Sarbanes-Oxley Act puts too big a burden on small companies, said the deadline for them to comply should be put off until the end of next year.

The SEC last week proposed delaying by six months the July 15, 2007, date for small companies to start reporting on whether their financial controls promote accurate numbers and prevent fraud.

SEC proposes delay of Sarbanes-Oxley reporting deadline

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

Friday, August 11, 2006

Sarbanes Oxley 404 (SARBOX 404) Compliance Extended

If approved, the good news is that small public companies not previously required to comply with SARBOX 404 now have a two-pronged approach beginning with year-ends after December 15, 2007. The Form 10-K filed after this date will require management’s assessment. The following reporting year-end the company will be required to have an auditor’s attestation report on internal controls over financial reporting (an integrated audit).

It appears the SEC will stick to its requirement that all registrants comply and this is the last compromise they intend to give. It’s apparent this delay was given due to the outcry from non-accelerated filers over the cost experienced by the accelerated filers due to the over zealousness of the audit firms involved; mainly the Big Four. I have always espoused that the extent of documentation, testing and monitoring that the accelerated filers experienced was not the intent of the Sarbanes Oxley Act of 2002.

If you read the Sarbanes Oxley Act of 2002, it is specific in internal controls over financial reporting, and this does not include all internal controls over safeguarding of assets and information. Yes, it is a good idea and good business to have strong internal controls over safeguarding of assets, but this does not extend to excessive costs from audit firms in requiring and testing the controls that have no material impact on financial reporting.

Sarbanes Oxley 404 (SARBOX 404) Compliance Extended

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

Focus On Backdating Of Stock Option Grants Intensifies

The focus has thus far been on stock option grants pre-dating August 29, 2002, when the SEC first required under the Sarbanes-Oxley Act that stock option grants be disclosed within two days of the grant. This rule has been thought to have made it much more difficult to manipulate the timing of stock option grants, but work by a pair of academics from the University of Michigan published earlier this year found that nearly one-quarter of stock option grants are reported late and that Sarbanes-Oxley may not have completely stopped manipulation of the timing of stock option grants.5

On July 26, 2006 the SEC voted to adopt changes to the rules regarding disclosure of executive and director compensation. These new rules will change the landscape for company disclosures about their stock option programs. The SEC has not yet released the actual text of the new rules, but it has indicated that companies will be required to disclose details about their stock options grants in a table and will likewise have to include a narrative description with regard to the timing of grants of stock options.

The focus continues to be on stock option grants that pre-date August 29, 2002. However, public companies should also consider their later stock option grants, particularly if problems were uncovered with earlier grants or there have been instances of late reporting of stock options grants. Going forward, companies will need to address the new disclosure requirements mandated by the SEC.

Focus On Backdating Of Stock Option Grants Intensifies

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

Sarbanes-Oxley Creating Fire-Hydrant-Sized Leak in U.S. Markets

Congressman Tom Feeney says Sarbanes-Oxley is driving capital out of the United States. Fearful of the heavy compliance burden, companies are fleeing U.S. markets in favor of markets in London, Shanghai, Hong Kong and Luxembourg. Calling himself an economic Paul Revere, Feeney is warning those who will listen that trouble lies ahead for U.S. markets — if it's not already here. And that trouble prompted him to introduce a bill that would exempt businesses whose capitalization is less than $700 million and whose revenue does not exceed $125 million from the corporate reform law's internal controls requirements.

Sarbanes-Oxley Creating Fire-Hydrant-Sized Leak in U.S. Markets

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

US prepares to lighten Sarbox burden

The SEC is proposing that international companies listing in the US should be exempted from the onerous rules for a period of one year.

The proposal is part of a package of measures aimed at easing the burden of Sarbanes-Oxley Section 404 for foreign and smaller businesses, the FT reports.

US prepares to lighten Sarbox burden

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

Atmel's Mess: You're Fired. No, You Are.

The situation at the Atmel Corporation never could have happened without Sarbanes-Oxley and the other reforms that followed the Enron scandal.

Atmel's Mess: You're Fired. No, You Are.

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

Thursday, August 10, 2006

London prospers from US regulation

An analysis by Peter Wallison, of the American Enterprise Institute, suggests that the cost to the US economy of the Sarbanes-Oxley Act of 2002 may be several times the peak market value of Enron and its fellow corporate villains. These costs vary from direct expenditure on formal internal controls and audit fees, which are up 57 per cent, to more nebulous costs, such as boards of directors spending more time and brainpower on compliance than on the company’s business and strategy.

The biggest long-term loss to Wall Street is the business it is driving away. Some is smaller companies going from stock market listings to private equity ownership, which is largely unregulated. These losses outweigh new listings on the New York Stock Exchange (NYSE) or Nasdaq. More visible is new business lost to foreign exchanges, mainly in Europe and particularly in London. In 2000, Mr Wallison claims, 90 per cent of the new equity capital raised by companies outside their home territory was raised in the US. In 2005, the US hosted only one of the top ten foreign offerings and only one of the top 25 global offerings.

London prospers from US regulation

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

Going Private: Blame The Bankers

Abnormal Returns points today to Daniel Gross' Slate.com article that insists the real reason behind the flight of IPOs from Capital Markets in the United States is not what should be the obvious answer, "Sarbanes Oxley." Instead, Gross insists it is that the United States isn't any good at IPOs anymore, citing, among other reasons, the investment banking expense.

Setting aside for a moment my constant amusement with financial reporters who believe that $3.5 million is a lot of money; and with reading an article that asserts that the costs of SarOx are insignificant without outlining the costs of SarOx, this, of course, is silly analysis. In my view anyone who dismisses the impact of SarOx on U.S. Capital Market competitiveness just isn't paying attention.

Going Private: Blame The Bankers

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

At 4, Sarbanes-Oxley worth celebrating, not maligning

"I see a growing trend of entrepreneurial companies deciding not to go public or listed companies opting to delist because of the high costs of complying with Section 404, which requires designing, documenting and auditing of financial controls," Neal Wolkoff, chairman and chief executive of the American Stock Exchange, wrote in the Financial Times this week.

He says that as a result, "many innovative companies are turning to foreign exchanges to list. Before the implementation of Sox they would have automatically listed on a U.S. exchange."

I say this: we don't want any stinking companies that choose to list on foreign exchanges as opposed to ours in order to avoid compliance issues. Those companies, I'll bet, aren't the crème de la crème anyway. Investors should expect better of companies on U.S. stock exchanges.

At 4, Sarbanes-Oxley worth celebrating, not maligning

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

SEC extends Sarbanes-Oxley internal audit deadline for small firms, foreign firms

The US Securities and Exchange Commission on Wednesday introduced plans to give small public US companies and some foreign companies additional time to comply with restrictive internal control requirements relating to financial reporting. The requirements were adopted by Congress in 2002 as part of the Sarbanes-Oxley Act.

The new requirements would extend the deadline until December 15, 2007 for small companies. Under the plan, the deadline for firms' outside auditors to evaluate the internal controls will also be extended until December 15, 2008. For foreign firms, the SEC plan would extend the deadline for internal control requirements until July 15, 2007.

SEC extends Sarbanes-Oxley internal audit deadline for small firms, foreign firms

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

CEO: AOL breach would not happen at Google

Without going into details, Schmidt said there are security measures in place at Google that would prevent a company employee from releasing information about user search histories. "We have very sophisticated security plans for an attack on information," he said.

Schmidt added that Google is compliant with Sarbanes-Oxley and other legislation that mandates how information within the company can be shared, so there are strict controls that prevent someone from inside Google from leaking private information.

The AOL incident was not the result of an attack, however.

CEO: AOL breach would not happen at Google

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

New York Times: S.E.C. Backs Delay in Rule on Small-Company Audits

The Securities and Exchange Commission, bowing to complaints that the Sarbanes-Oxley Act puts too big a burden on small companies, said yesterday that the deadline for them to comply with new auditing rules should be put off until the end of next year.

The S.E.C. proposed delaying by six months the July 15, 2007, date for small companies to start reporting whether financial controls promote accurate reports and prevent fraud. The companies could also wait until the end of 2008 to have outside auditors test and certify their controls.

New York Times: S.E.C. Backs Delay in Rule on Small-Company Audits

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

Wednesday, August 09, 2006

SEC Seeks to Ease Sarbanes-Oxley for Small Companies

The U.S. Securities and Exchange Commission, responding to complaints that the Sarbanes-Oxley Act puts too big a burden on small companies, said the deadline for them to comply should be put off until the end of next year.

The SEC proposed delaying by six months the July 15, 2007 date for small companies to start reporting on whether their financial controls promote accurate numbers and prevent fraud. The companies also could wait until the end of 2008 to have outside auditors test and certify their controls.

Executives at small companies have said such audits -- designed with scandals at WorldCom Inc. and Enron Corp. in mind -- are so expensive that they wipe out much or all of their profit, and some have gone private to escape the burden. Foreign companies have also objected to the U.S. law.

SEC Seeks to Ease Sarbanes-Oxley for Small Companies

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

The D & O Diary: SOX Consequences: London Is Calling and Companies Are “Going Dark”

As detailed in this prior D & O Diary post, the Sarbanes-Oxley Act has imposed enormous compliance burdens and expense on companies whose shares are traded on the U.S. securities exchanges. It is hardly surprising that, according to an August 8, 2006 Wall Street Journal article (subscription required), U.S. exchanges have lost ground in luring foreign listings. The article states that “[n]ine of the world’s ten largest non-U.S. IPOs listed in New York in 2000; last year, 24 of the largest 25 chose other markets, with London the leading alternative.” Sources cited in the article suggest that the U.S. regulatory burden is the principal reason for the shift, but that high U.S. underwriting fees (which may be as much as double as those assessed in London) may be a contributing factor.

The aversion to the U.S. exchanges is not limited to non-U.S companies, nor is it limited to companies contemplating their public debut. According to an August 3, 2006 New Jersey Law Journal article entitled “Companies ‘Go Dark’ to Avoid SOX Compliance,” the high cost and burden of Sarbanes-Oxley compliance “appear to be driving of companies to simply withdraw from the major exchanges.” Some companies are going private, and others are “going dark” by deregistering their stock with the SEC. Shares of companies that go dark are listed on the “Pink Sheets,” an electronic quotation medium for companies not listed on stock exchanges.

The D & O Diary: SOX Consequences: London Is Calling and Companies Are “Going Dark”

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

Press Release: SEC Offers Further Relief From Section 404 Compliance for Smaller Public Companies and Many Foreign Private Issuers

The Securities and Exchange Commission today issued two releases to grant smaller public companies and many foreign private issuers further relief from compliance with Section 404 of the Sarbanes-Oxley Act of 2002. The relief is in furtherance of the "next steps for Sarbanes-Oxley implementation" (SEC Press Release 2006-75) announced on May 17, 2006, and includes some new initiatives not previously announced.

Today's releases follow the July 11, 2006, publication of a Concept Release soliciting public comment on guidance for management the SEC plans to issue to assist companies in assessing their internal controls over financial reporting.

"The actions taken in these releases continue the Commission's efforts to be sensitive and responsive to the particular needs of smaller public companies and foreign private issuers, and to minimize the burdens that Section 404 may impose on them," said SEC Chairman Christopher Cox. "By offering further relief for smaller companies and most foreign issuers, today's actions will allow time for the Commission and the PCAOB to redesign Section 404 implementation in a way that is efficient and cost effective for investors."

"We have heard that the Section 404 reporting requirements impose a special burden on foreign private issuers, smaller companies and newly public companies. These companies play an important role in our capital markets, and these releases illustrate the Commission's commitment to improving the efficiency and effectiveness of Section 404 implementation for them," said John W. White, Director of the Division of Corporation Finance. "We believe our proposed transition relief for newly public companies should enhance the attractiveness and cost-effectiveness of participating in our markets both for companies contemplating IPO's and for foreign companies considering listing in the U.S. for the first time, without sacrificing important investor protections, and we look forward to receiving comment from a diversity of interested parties on that proposal."

The Commission will continue to work on its own, and with the Public Company Accounting Oversight Board, to take several additional steps previously outlined on May 17, 2006, in SEC Press Release 2006-75 to improve the implementation of Section 404 so that it will work efficiently and effectively for companies and auditors of all sizes.

Press Release: SEC Offers Further Relief From Section 404 Compliance for Smaller Public Companies and Many Foreign Private Issuers

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

Tuesday, August 08, 2006

Record amount raised in London this year as foreigners rush to float

More money is being raised from flotations in London than ever before, as companies flock to take advantage of more relaxed listing rules, City expertise, cheaper costs of selling their shares and the glut of funds looking for a home.

Figures from the London Stock Exchange released yesterday showed that £17.8bn has been raised through initial public offerings on its markets so far this year, more than the £17.1bn raised during the whole of 2005.

Retailers, insurance companies, oil producers, telecommunications groups and gaming firms are among those to raise sizeable amounts of capital by listing in London in 2006.

Record amount raised in London this year as foreigners rush to float

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

Key Issues Drive How Non-Profits Do Business

On everyone’s mind since the implementation of Sarbanes-Oxley (SOX) is the Audit Committee. We quite often get asked, “Does our organization need to have an audit committee?” We’ve have seen many forward-thinking non-profits consider and implement them.

If implemented correctly, an audit committee should provide the board of directors with a clear independent voice to address financial matters. It reinforces that the auditors are neither engaged by nor report to management, but rather, the board, through its audit committee.

The committee members will need to devote the time and develop the expertise to monitor effectively increasingly complex financial practices. Many non-profits will find it difficult to populate such a committee with qualified individuals. If an organization creates an audit committee, it has to actually “do” what it is designed to do. Also, an audit committee faces strong fiduciary responsibilities, though its presence does not diminish those of the board itself.

Key Issues Drive How Non-Profits Do Business

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

Sarbanes-Oxley Act compliance requirements push unclaimed property onto company executive's radar screen

The possibility of a state unclaimed property audit and the potential for significant unclaimed property liabilities that may be owed to a state, ignored by companies for years, now have the attention of chief financial officers, in-house counsel and tax directors across the country.

Why? Significant increases in states' unclaimed property audit activity, and the Sarbanes-Oxley Act's certification requirements related to compliance with applicable state laws, have moved compliance with unclaimed property laws onto company executives' radar screens. And, many businesses simply aren't prepared to comply with the myriad of laws and regulations facing them.

"Unclaimed property is an extremely complex issue which cuts across all industries. Each state has its own unclaimed property law that companies need to understand and comply with," explained Mark Paolillo, National Director of the Unclaimed Property practice of Deloitte & Touche LLP (Deloitte & Touche).

Sarbanes-Oxley Act compliance requirements push unclaimed property onto company executive's radar screen

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

London Remains an IPO Draw, U.S. Changes Notwithstanding

London stock-market customers are confident the City will remain a top financial center despite concerns that relaxation of a U.S. corporate-governance law will draw business back to the other side of the Atlantic.

The London Stock Exchange has enjoyed a flood of high-profile international initial public offerings lately, amid concern that foreign companies find America's Sarbanes-Oxley Act excessively onerous.

The 2002 law, passed in the wake of accounting scandals at such U.S. companies as Enron Corp., makes senior executives personally accountable for their company's activities and raises corporate-governance costs.

London Remains an IPO Draw, U.S. Changes Notwithstanding

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

FEI blog: Former SEC Official Katz Suggests SEC "Rethink the Rulemaking Process"

Former SEC official Jonathan G. Katz - a name familiar to many inside and outside the SEC as the person to whom all comment letters on proposed rules were addressed, and signatory on all final rules adopted by the Commission during his 20 year tenure as SEC Secretary from 1986-2005 -wrote a very insightful Letter to the Editor of the Wall Street Journal today, including a suggestion that the SEC "rethink the rulemaking process."

Appearing under the heading "Rules are Not Sacred, Principles Are," Katz responds to former SEC Chairman Harvey Pitt's July 26 WSJ OpEd entitled "Overlawyered at the SEC."

FEI blog: Former SEC Official Katz Suggests SEC "Rethink the Rulemaking Process"

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

Cox's Year 2 Means Showing Sarbanes-Oxley Works

Securities and Exchange Commission Chairman Christopher Cox has said the agency has the flexibility to implement controversial corporate regulations in a way that won't knock the United States out of the global race to attract companies and capital.

Two things seems certain to be on the chairman's agenda. First, he will lead the five-person commission to reform but not gut implementation of the Sarbanes-Oxley Act and its most controversial aspect, Section 404.

Second, Cox likely will support some increase in hedge-fund regulation by the SEC, even if it's just a more systematic way of getting so-called census information about who is running these exponentially growing pools of private investment capital.

Cox's Year 2 Means Showing Sarbanes-Oxley Works

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

Monday, August 07, 2006

The Green Brim Personal Rant: Internal Audit Independence?

Let's talk about the concept of an internal audit department being "independent" of the organization within which it exists. Can this ever really be the case? The Institute of Internal Auditors ("IIA") has produced standards (International Standards for the Professional Practice of Internal Auding) which detail certain things like reporting relationships and such that, in theory, should help to ensure that the department is not conflicted in its association with management. For example, the Standards and/or practice advisories recommend that the Audit Department report directly to the Audit Committee of the Board of Directors while maintaining administrative reporting lines to a level of management sufficient enough to convey the important of the function (i.e. the CFO). In theory may be solid and it is certainly a position which should be upheld under the current paradigm of internal audit....but let me pose a question: What happens if the CEO of the company is also the Chairman of the Board? Then the audit committee's boss is the the CEO. Doesn't this compromise the independence of the audit committee and thus the internal audit department?

The Green Brim Personal Rant: Internal Audit Independence?

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

Sarbanes-Oxley skews investors' expectations

Your confusion over the market is quite understandable. Investment analysis, which might have worked successfully 10 years ago, does not always work today. Strong earnings and revenue growth historically moved stock prices.

But over the past few years, Wall Street investors wanted both good quarterly earnings and revenue growth, and also demanded that corporate management be extremely positive during their quarterly conference calls regarding the earnings outlook for the next quarter. As a result of the Sarbanes-Oxley legislation, corporate executives have become overly cautious about "over-promising and under-delivering."

Sarbanes-Oxley skews investors' expectations

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

SeekingAlpha: Is Sarbanes-Oxley The Main Reason IPO Business Is Going Overseas?

I'm not sure I buy these arguments. In the grand scheme of things, I doubt a couple of percentage points of IB fees would be the reason firms choose to list offshore rather than in the U.S. My own reading of the academic literature on IPOs (and granted, it's not my primary area of expertise) is that firms going public focus far less on fee-related issues than on other matters (like the immense risks and payoffs associated with cashing out).

I think it's far more likely that firms see the increased costs associated with SOX as just the tip of the iceberg.

SeekingAlpha: Is Sarbanes-Oxley The Main Reason IPO Business Is Going Overseas?

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

Sarbanes-Oxley Has Its Cake and Eats It, Too

It's a practical financial control for some and a nagging moral compass for others, but no matter what approach businesses take, Sarbanes-Oxley has played an undeniably significant role in corporate governance and IR practices in recent years. Just last week (July 30), the legislation that was passed almost unanimously in reaction to...

Sarbanes-Oxley Has Its Cake and Eats It, Too

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

Three cheers for Sarbanes-Oxley

While stock option re-pricing paints corporate America in a dismally poor light, its discovery should leave observers grateful to Sarbanes-Oxley regulations. Sarbox is ritually abused for adding needless bureaucratic burdens on business. The Sarbox inspired obligations on senior executives to sign off accounts, however, seems to have led to the discovery of deplorable practice.

Making directors accountable for the books they keep may result in an extra administrative cost, but if it keeps the custodians of America’s publicly owned companies on the straight and narrow, it is a small price to pay. If it makes all executives re-examine practices blithely assumed to be justifiable, so much the better.

Three cheers for Sarbanes-Oxley

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

Friday, August 04, 2006

FEI blog: SEC Expected to Further Delay Sarbanes-Oxley 404 for Foreign Co's, Small Cos; U.S. Chamber Supports Delay

Two major newspapers interviewing SEC Chairman Christopher Cox earlier this week say they expect the SEC to offer a further delay to foreign private issuers to comply with the internal control reporting provisions under Sarbanes-Oxley Section 404 and related SEC and PCAOB rules. According to this article in the Washington Post and this article in the Financial Times, the delay (i.e., SEC final or proposed rulemaking, exemptive order or other action to extend the deadline) could come as early as this week. The expectation for a delay for foreign filers was indicated in this article in the Washington Post Aug. 2, and this article in the Financial Times Aug. 4.

FEI blog: SEC Expected to Further Delay Sarbanes-Oxley 404 for Foreign Co's, Small Cos; U.S. Chamber Supports Delay

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

I'm a Mac. I'm the SEC.

Apple Computer warned on Thursday that it will probably reduce profits posted since fall 2002 after uncovering additional evidence it didn't correctly account for employee stock options.

The company did not provide details of what its investigation found when it notified the Securities and Exchange Commission on Thursday. Furthermore, it said it had not determined how large of a financial bite the earnings restatement will take, which periods are effected or what the accounting and tax implications would be.

I'm a Mac. I'm the SEC.

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

Sarbanes-Oxley leaves its mark in India

Effectively managing procurement spending is becoming increasingly important on the sub-continent, it seems.

Business leaders in India have been spoken of the importance of efficient corporate governance, and the relationship good procurement management has with it.

Sarbanes-Oxley leaves its mark in India

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

Mallory Factor: It's Location, Location, Location in the Sarbox Aftermath

On July 11, the London Stock Exchange (LSE) affirmed that it drew 50 international initial public offerings (IPOs) from 15 different countries in the first half of 2006. Compare that to the combined 15 international IPOs offered on the Nasdaq and New York Stock Exhange in the similar period.

At the root of this recent and startling shift is the 2002 Sarbanes-Oxley Act. Imposed after the fall of Enron and WorldCom, this law has hamstrung our public companies and forced them to buck their tradition of innovation by becoming too cautious and careful. Though some type of legislation was necessary in the wake the accounting frauds, Congress acted without prudence or prescience. Its overreaching caused long-term negative economic consequences -- at an estimated cost of $1 trillion, according to Dr. Ivy Zhang, now of the University of Minnesota -- that are even greater than the initial damage.

Mallory Factor: It's Location, Location, Location in the Sarbox Aftermath

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

Stop whining about Sarbanes-Oxley

Sarbanes-Oxley turns four years old on July 30, but you won't hear corporate America singing "Happy Birthday." In fact, the grousing about the bill - designed to protect shareholders from fraudulent accounting - has never been louder.

You hear how it's heaping onerous costs onto businesses. How it's forcing companies to do IPOs overseas. How it's compelling CEOs to take their companies private.

Mallory Factor, chairman of the Free Enterprise Fund, an advocacy group focused on conservative fiscal policy, recently made all those arguments and more in written testimony to Congress. (Earlier this year his group filed suit against the Public Company Accounting Oversight Board, the entity created by Sarbanes-Oxley, claiming it is unconstitutional.) To Factor, SarbOx's bottom line is simple: "The costs in fact grossly outweigh the perceived benefits."

But do they?

Stop whining about Sarbanes-Oxley

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

Thursday, August 03, 2006

Oehenweblog: Mehr Gelassenheit auch beim Sarbanes-Oxley-Act

Sarbanes-Oxley, international headache.

Auf Deutsch.

Wenn bei seinem ersten öffentlichen Auftritt der neue US-Finanzminister Hank Paulson zur angekündigten Revision des Sarbanes-Oxley-Act (SOX) erklärte: „Das Pendel schwingt of zu weit. Die Herausforderung ist nun, die richtige regulatorische Balance zu finden“ (www.handelsblatt.de) greift er unzähligen kotierten europäischen Unternehmen an die Nase. Sie haben widerwillig meist fast mehr geleistet, als die US-amerikanischen, was Transparenz und Neugestaltung der Bilanzierungsprozesse betrifft. Und zwar unabhängig, ob an der NYSE, Nasdaq oder in Zürich oder Frankfurt kotiert. Das trifft eine Bayer, Allianz, Deutsche Bank oder Siemens und SAP genauso wie die Swisscom oder Credit Suisse.

Oehenweblog: Mehr Gelassenheit auch beim Sarbanes-Oxley-Act

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

Sarbanes-Oxley's 4th Birthday: Is Anyone Celebrating?

The Sarbanes-Oxley Act turned four years old on July 30, but don't be surprised if you didn't hear anyone singing "Happy Birthday."

To be sure, the four-year-old legislation has been a problem child for IT executives at public companies. Among other hurdles, they've been required to understand a slew of new acronyms: HIPAA, GLB, MFID, and NERC--most of which translate to a higher workload.

And it's been expensive. Firms "have been given a challenge, a compliance imperative with a deadline, and it's cost companies a lot of money," says Forrester analyst Paul Hamerman.

Sarbanes-Oxley's 4th Birthday: Is Anyone Celebrating?

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

Wednesday, August 02, 2006

Adios, IPOs: Don't blame America's declining IPO business on Sarbanes-Oxley

Wall Street and Washington are fretting that many of the world's biggest initial public offerings are taking place on exchanges in London, Hong Kong, and Shanghai—and not in New York. Rep. Tom Feeney, R-Fla., earlier this week warned darkly of "an outsourcing of America's 100-year lead in capital formation." Feeney, a self-styled "American economic Paul Revere," and other horsemen of the regulatory apocalypse are quick to blame the Sarbanes-Oxley Act and America's compliance and legal systems, which place burdens on companies seeking to list shares.

There is no single reason why IPOs are heading overseas.

Adios, IPOs: Don't blame America's declining IPO business on Sarbanes-Oxley

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

Sox First: Paulson and SOX: Has the pendulum swung too far?

In his new job, Paulson doesn't have the authority to unwind corporate governance measures, like Section 404, but there's no doubt his comments would certainly provide ammunition for those wanting to change or scrap the law.

Paulson's comments coincide with the chairman and chief executive of the American Stock Exchange, Neal Wolkoff, attacking Sarbanes-Oxley in the Financial Times. According to Wolkoff, Sarbanes-Oxley has inhibited smaller companies from accessing US capital markets and has reduced the competitiveness of US stock exchanges.

Sox First: Paulson and SOX: Has the pendulum swung too far?

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

Corporate governance and Sarbanes Oxley focus of audio interview with Todd Davis of Endexx Corporation

Phil Renshaw of Advanced Business Solutions conducted the audio interview with Todd Davis, CEO and co-founder of Endexx Corporation.

The seventeen minute interview highlights the advantages of applying Endexx Corp.'s solution based software to meet full disclosure requirements for highly regulated public companies. Through the events that unfolded with Enron and WorldCom new laws concerning transparency were instituted and adapted by domestic and international governments and governing bodies. As a result both large and small companies have spent large sums of money on best-practice solutions to fully comply with today's government mandates.

While other companies require large fees and carry a maintenance cost Endexx's cost effective pricing model can meet any company's budget. As a best-of breed provider of transparency and corporate governance solutions Endexx clients can range from Fortune 10 companies to the smallest pink sheet.

Corporate governance and Sarbanes Oxley focus of audio interview with Todd Davis of Endexx Corporation

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

White paper: Hear that whistle blowing! Establishing an effective complaint-handling process (PDF)

The third in our series -- "Hear that whistle blowing! Establishing an effective complaint-handling process" addresses an important mandate of the Sarbanes-Oxley Act: the requirement that audit committees establish procedures for receiving, doumenting, and handling complaints related to accounting and auditing matters. The paper outlines the Model Accounting Complaint-Handling (MACH) Process, a step-by-step approach to establishing a corporate whistleblower program.

White paper: Hear that whistle blowing! Establishing an effective complaint-handling process (PDF)

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

PRESS RELEASE: Symantec Launches New IT Policy Compliance Offering

Symantec Corp. (NASDAQ: SYMC) today announced Symantec Control Compliance Suite, an upgrade to the bv-Control portfolio of products that helps customers reduce the cost and complexity of IT policy compliance through automated assessment of policies against industry regulations, standards and best practices. Symantec Control Compliance Suite's new data gathering functions such as agentless reporting and database discovery offer a comprehensive solution for IT control compliance reporting across disparate platforms, providing a cost-effective method for managing global IT risks.

More than 4,000 customers worldwide currently have Symantec Control Compliance Suite components installed, relying on these automated tools to efficiently govern their IT compliance posture by detecting drift from secure baselines, identifying accounts with blank passwords, and notifying the organization when administrative accounts receive new members.

Customers are offered unparalleled auditing capabilities with hundreds of ready-to-run reports using easy customization options and flexible audit creation in each environment to improve internal and external audits. IT administrators are able to be proactive in even the most resource-constrained environments by automating tasks enterprise-wide. This automated functionality helps to streamline compliance with such regulations as Sarbanes-Oxley, FISMA, or HIPAA, while dramatically reducing the costs of doing regular audits.

"As organizations continue to face stringent IT policy compliance requirements, Symantec is committed to helping customers define what they would like to be compliant to, control their IT environment to achieve compliance, and help them govern that compliance posture over time," said Arshad Matin, vice president, compliance and security management, Symantec Corp. "Symantec Control Compliance Suite reduces costs associated with compliance by automating the management of deviations from technical standards and providing the ability to effectively remediate misconfigurations."

Tracking compliance to IT controls related to important regulations and frameworks, Symantec Control Compliance Suite provides an efficient means to assess compliance to control systems based on custom mappings between technical standards and frameworks and regulations. Symantec Control Compliance Suite supplies regulatory content for Sarbanes-Oxley, FISMA, HIPAA, GLBA, Basel II, and framework content for ISO 17799, COBIT, and NIST SP800-53.

Symantec Control Compliance Suite allows customers to produce "Evidence of Review" reporting to facilitate management review of access controls as mandated by Sarbanes-Oxley and other regulations to prove that privilege grants conform to access needs. This is supplied through granular, detailed entitlement reports that show who has access to specific information, what each individual has access to, and who the business owner is for the data.

Customers are offered powerful closed-loop identification and resolution to find and eliminate security vulnerabilities. Symantec Control Compliance Suite provides detailed remediation instructions to correct deviations and integrates with existing change control ticketing systems, such as Remedy and HP Service Desk, to ensure that changes are made only after appropriate authorization and with proper oversight.

In addition, IT administrators can establish baseline configurations for all major operating systems by creating a custom technical standard or building a reference template from pre-existing internal standards. Technical standards can be exported for archive and business continuity purposes. Technical Standard Packs are available for the following operating systems and applications: Windows, UNIX, Linux, NetWare, SQL Server, Oracle, and Exchange.

Symantec Control Compliance Suite 8.2 includes agentless UNIX reporting, Oracle patch assessment and database discovery, and reporting and database activity auditing on SQL Server 2005. In addition, customers are provided support for mobile devices connecting to Microsoft Exchange servers. It also integrates with Symantec BindView Policy Manager to provide proof of security configuration compliance with broader corporate policy.

Symantec Control Compliance Suite is a key component of Symantec's IT Policy Compliance solution. The Symantec IT Policy Compliance solution offers customizable products and services designed to help customers define, control, and govern their IT compliance initiatives.

PRESS RELEASE: Symantec Launches New IT Policy Compliance Offering

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

Restatements jump 67% after Sarbanes-Oxley

The number of U.S. companies restating their financial results increased 67% in the three years since lawmakers tightened accounting rules, a government study found.

More than 520 companies restated results through the first nine months of last year, the Government Accountability Office said in a report released Tuesday. That compares with 314 in 2002, the year President George W. Bush signed the Sarbanes-Oxley Act into law.

Restatements jump 67% after Sarbanes-Oxley

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

Tuesday, August 01, 2006

92% of Public Companies' Revenue Processes at Risk for Compliance Failures and Restatements

A recent survey of 685 senior financial executives from a broad range of companies, revealed that revenue recognition and reporting activities are not automated within Financial/ERP systems. As a result, 92% of public companies are forced to rely on spreadsheets to fill vital gaps in their revenue reporting processes—despite the fact that spreadsheets are prone to errors, lack audit capabilities, and resist internal controls. This, and other findings, is from a new report by www.RevenueRecognition.com and IDC, “Enterprise Systems and Revenue Recognition: The Missing Link”.

As a result, compliance managers should be addressing the issue of having spreadsheets in the revenue reporting process. Executives should be extremely cautious about the integrity of the numbers they are attesting to under Sarbanes-Oxley requirements. Investors have to be wary of the risks of restatement which can hurt stock prices.

92% of Public Companies' Revenue Processes at Risk for Compliance Failures and Restatements

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

US treasury chief hints at Sarbox reform

Hank Paulson, the new US treasury secretary, dropped a clear hint on Tuesday that he was ready to support reform of the controversial Sarbanes-Oxley corporate governance rules, which he warned were threatening American competitiveness.

The former chief executive of Goldman Sachs indicated in his first speech since taking office that he felt the regulatory "pendulum" had swung too far in response to the Enron and WorldCom corporate scandals and that "we need to go through a period of readjustment".

US treasury chief hints at Sarbox reform

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

Josh Maher: Sarbanes-Oxley is over, you can throw away your data now

Well at least it’s getting closer to the time that non-US companies need to be compliant with Section 404 of the Sarbanes-Oxley Act. They really have some time and have been aware of it for a while now.

Just in case there are companies who are still working on compliance, here is an interesting read that may just convince you to thow away your pesky data and buy less storage.

Josh Maher: Sarbanes-Oxley is over, you can throw away your data now

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

Sarbox hurting US stock exchanges

Writing in the FT, Neal Wolkoff, chairman and chief executive of the American Stock Exchange, said while he was not in favour of dismantling the Sarbanes-Oxley Act, he was "concerned about the effects of Sox on small businesses."

"I see a growing trend of entrepreneurial companies deciding not to go public or listed companies opting to delist because of the high costs of complying with Section 404, which requires designing, documenting and auditing of financial controls," Wolkoff said.

Sarbox hurting US stock exchanges

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

Six Sigma Users More Confident in Regulatory Compliance

Companies that regularly use Six Sigma methodologies are far more likely to have full confidence that they are complying with regulations from OSHA, Sarbanes-Oxley, and the EPA among many others, according to a survey of more than 1,000 Six Sigma professionals released in the July/August 2006 issue of iSixSigma Magazine.

"Fifty-five percent of our respondents said they had full confidence that their company was satisfactorily meeting legal regulations," said Michael Marx, Research Manager for iSixSigma Magazine. "The big majority of those -- about two-thirds -- used all or some Six Sigma tools in the process."

The reverse was also true. "Those with the least confidence were from companies who used few or no Six Sigma tools at all," said Marx.

Six Sigma Users More Confident in Regulatory Compliance

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

Missing Link: Does Sarbanes-Oxley Curb Investment?

The Sarbanes-Oxley Act has plenty of critics among companies and their advocates as a case of regulatory overkill. At the Federal Reserve, it’s also under scrutiny, as a possible damper on the economy.

Fed Governor Kevin Warsh devoted his first speech since joining the central bank in February to exploring why companies have built up such large cash hoards rather than spend it on new factories and equipment. One cause, he said, was the legislative response to the corporate scandals of 2001-2002.

“Clearly, Sarbanes-Oxley compliance costs have been substantial, diverting funds and, probably even more importantly, some of the attention of chief executive officers and boards of directors from capital spending and R&D plans,” Warsh said. “Every meeting that board members and executives spend focused predominantly on compliance issues is, by definition, meeting time generally not being spent on big strategic questions.”

Missing Link: Does Sarbanes-Oxley Curb Investment?

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

DealBreaker.com: Live Blogging Hank Paulson on CNBC

The main man at Treasury is scheduled to speak to b-schoolers at Columbia today but before that happens, he’s stopping by the New York Stock Exchange where he’ll chat with Maria Bartiromo. While we sit around nursing our hangovers from last night’s Sarbanes-Oxley birthday party, slowly pouring hot coffee on our forearm to scald away the pain, we’ll live blog his words.

Oh. And we’re going to do it hair of the dog drinking game style. Do one shot of bourbon each time Hank mentions China and three shots if he mentions the environment.

DealBreaker.com: Live Blogging Hank Paulson on CNBC

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

UPMC blazes trail for not-for-profits in Sarbanes-Oxley compliance

UPMC now boasts it is the first not-for-profit healthcare organization in the nation to become compliant with the strict reporting and internal control requirements of the Sarbanes-Oxley Act of 2002 -- or SOX -- a law that mandates certain disclosures by publicly traded companies. Although it's a difficult statement to definitively determine to be true or false, the system is indeed in the forefront, boasting that by late August or early September its outside auditor, Ernst & Young, will have certified UPMC as Sarbanes-Oxley compliant as of June 30.

"We really want to drag the industry along with us. We want to say if you are a large, multibillion-dollar academic medical center, absolutely you should have to do it," says Robert DeMichiei, UPMC's chief financial officer. "We want to set the bar for the industry and we want everybody else to jump over it as well."

But is it such a remarkable feat?

UPMC blazes trail for not-for-profits in Sarbanes-Oxley compliance

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