Friday, September 29, 2006

On Second Thought...

Former Federal Reserve Bank Chairman Alan Greenspan said this week that the Sarbanes-Oxley corporate governance rules are stifling. Strong words from a man who once supported the law.

Just last year, Greenspan was complimentary of Sarbanes-Oxley, which was passed and signed ostensibly to prevent public corporation accounting messes such as the ones that roiled Enron, WorldCom and Adelphia Communications and outraged the public, which played into the media's overreaction.

"I am surprised that the Sarbanes-Oxley Act, so rapidly developed and enacted, has functioned as well as it has," Greenspan said as recently as May 2005.

On Second Thought...

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Thursday, September 28, 2006

Thank you Sarbanes and Oxley

A market needs a legal structure which will give people the confidence and trust necessary to make deals but does not strangle trust with overbearing regulations.

So thank you, Rep. Mike Oxley and Senator Paul Sarbanes. Thank you for a regulatory structure from which we can all benefit.

By 'we', of course, I mean people in the UK in general, and in and around London in particular.

Thank you Sarbanes and Oxley

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SOX Life: IPOs Popping Abroad - Go Figure

I often wonder at the surprise of somethings. A recent article notes Bloomberg is engaging McKinsey ("New York to Study Lack of IPOs")to figure out why companies are going public in London or in their own countries instead of the good ol' US of A. There is a preliminary finger wagging at SOX, which reasonably could carry some of the brunt.

What wasn't clear to me is the population of new IPOs occurring with companies based in the US versus abroad - which I think would be a telling indicator.

Before the official study gets released, and it becomes all to clear as to the real culprit, let me take a few uneducated guesses as to why I might chose to list abroad, assuming I were a foreign company.

SOX Life: IPOs Popping Abroad - Go Figure

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Law Blog: A Dark Chapter in Corporate Governance

We were particularly impressed with the remarks of Rep. Dianna Degette (D. Colo.).

She called this a "dark chapter in corporate governance" and said she was "very concerned about the judgment that went into these decisions and why with a company of H-P's sophistication, nobody -- neither the board, nor its CEO, nor its general counsel, nor its outside counsel had the common sense to say, 'NO, this is not the 'H-P Way.'"

Law Blog: A Dark Chapter in Corporate Governance

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The IT factor

Sarbox is making waves. Enough column inches have been given over to its effect on big international businesses. What’s new is its impact on the IT spend of smaller players.

Many UK businesses have had to face Sarbanes-Oxley in one way or another. From holding a US listing, or being a small supplier that is being scrutinised because a client is undergoing a thorough Sarbox audit, many companies have been affected by the US controls legislation.

Yet the reach of Sarbox has extended further than imagined. The UK business software industry is buoyant at the moment, because Sarbox has been focussing business minds on corporate governance across the business community.

The IT factor

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Wednesday, September 27, 2006

Oxley: Holes in SOX can be mended

"We've changed from a nation of savers to a nation of investors," Mr. Oxley said, explaining why interest was so intense from voters.

He added that it is hard to get the "momentum to change major legislation" and predicted small changes by regulators instead.

His comments came as recent talk has focused on easing the rules of Sarbanes-Oxley for smaller and foreign companies.

Oxley: Holes in SOX can be mended

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Bulldog Accounting?

Debra Zumwalt, vice president and general counsel at Stanford University, says that because accounting at universities and other nonprofits can be more complex than at for-profit companies, irregularities are more likely to arise from honest mistakes. Nonprofits must not only track expenditures from a multitude of received funds, she explains, but they must also ensure that all spending is earmarked according to a fund's criteria.

Like for-profit companies, many nonprofit organizations are currently examining accounting controls, and many are adopting Sarbanes-Oxley.

Bulldog Accounting?

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Oxley sees changes in Sarbanes-Oxley in near future

Speaking at the Dow Jones Private Equity Analyst Conference, Ohio Republican Rep. Michael Oxley, the chairman of the House Financial Services Committee, said he sees bipartisan support for changes in the regulation at the Securities and Exchange Commission, rather than new legislation from Congress.

Oxley defended the law, which was passed in the heat of the corporate governance scandals of 2002: "We did a good job, all things considered."

Oxley sees changes in Sarbanes-Oxley in near future

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Tuesday, September 26, 2006

SOX Life Blog: How to Interpret the Fastow Verdict

Wow.

Milken. Ebbers. Fastow. One of these is not like the others. Poor Bernie, with no chance at the speaker tour or to save the family name with a charitable foundation. At least Andrew will still have a crack at public redemption.

With the announcment of Fastow's 6-year prison term, I'm sure many pensioners, 401(k) holders, and business professionals are asking, "and then...?"

How to Interpret the Fastow Verdict

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Big4Guy: Process Driven Sarbanes Oxley Compliance

Most consulting firms in the Sarbanes Oxley compliance busines, stress on process driven sarbanes oxley compliance to clients. Though most companies are now in years 3 and 4 of their SOX complaince, some are still grappling with compliance issues. Before I explain what process driven SOX compliance is, let me touch upon a few important issues. Any regulatoty compliance needs to be sponsored by the senior management. If you are interested, here is a post I did about who should be the SOX sponsor. Moving on to the tpoic of my discussion today, process driven Sarbanes Oxley compliance. There are three main things which contribute to process driven SOX compliance.

Big4Guy: Process Driven Sarbanes Oxley Compliance

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Hyde Park: Congress expected to pass Sarbanes Oxley Social Media Amendment

The idea that Sarbanes Oxley would be amended to exclude social media is fantasy. But unless Sarbanes-Oxley and dozens of other laws and regulations governing corporate compliance, accounting rules, truth in advertising, etc. are repealed, companies who throw wide open the doors of social media without regard for these regulatory and ethical realities, and sound corporate communications practice, are irresponsible and just plain stupid.

Hyde Park: Congress expected to pass Sarbanes Oxley Social Media Amendment

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Sarbox Survival Guide: Fixing Sarbanes-Oxley 404

When Securities and Exchange Commission Chairman Christopher Cox testified before the House Financial Services Committee not long ago, he admitted that the process audits required by section 404 of the Sarbanes-Oxley Act of 2002 are much too costly. (A study from AMR Research says companies will spend more than $6 billion this year on compliance.)

Nonetheless, he assured the committee that there are no "irreparable problems" with Sarbox, according to an International Herald Tribune report. Moreover, the SEC has "ample authority" to correct the problems that do exist without congressional intervention.

Sarbox Survival Guide: Fixing Sarbanes-Oxley 404

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Oxley sees changes in Sarbanes-Oxley next year

The co-author of the landmark Sarbanes-Oxley corporate governance law said Tuesday he expects some changes in the way the law is enforced next year. Speaking at a Dow Jones equity conference, Ohio Republican Rep. Michael Oxley, the chairman of the House Financial Services Committee, said he sees bipartisan support for a new rule-making at the Securities and Exchange Commission, rather than new legislation from Congress. Oxley defended the law, which was passed in the heat of the corporate governance scandals of 2002: "We did a good job, all things considered." The cost of compliance to the law has been a burden to small companies, he said.

Oxley sees changes in Sarbanes-Oxley next year

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Monday, September 25, 2006

Greenspan: Scrap Sarbanes-Oxley

Alan Greenspan told a Boston business audience tonight that nearly all of the Sarbanes-Oxley corporate governance rules passed in 2002 should be scrapped.

The legendary former Fed chief also called for higher gasoline taxes to reduce U.S. oil consumption on “national security” grounds.

Greenspan, who in his 18 years running the Fed earned a reputation for speaking cautiously, also raised eyebrows with other unusually frank remarks in an hourlong conversation in front of 800 members of the Mass. Technology Leadership Council.

Greenspan: Scrap Sarbanes-Oxley

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Thinking Outside the Sarbox

Mr. Hubbard's panel is noteworthy mainly for the breadth of its investigating. To be sure, the committee will tackle the post-Enron Sarbanes-Oxley law, and especially Section 404 of "Sarbox," which sets onerous new requirements for internal controls that are strangling many small companies. But the scholars and businessmen will do so much more. The barriers to American competitiveness extend beyond Sarbox, Mr. Scott is at pains to tell us.

Securities class-action reform is toward the top of the list. Twice in the 1990s, Congress flirted with reform in this field although each effort ultimately fell short. While the demise of perennial class-action plaintiffs' firm Milberg Weiss appears to be putting a dent in new litigation, America is still competing against countries like Britain and Australia that offer more protections. A London-based company operates in a loser-pays system where plaintiffs have to shoulder the company's legal costs if a suit is unsuccessful; the system is a natural deterrent to frivolous litigation. In Australia, the lead plaintiffs and their lawyers in a class action face a similar threat if they lose.

Thinking Outside the Sarbox

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Vital Integrities Blog: HP and Sarbanes-Oxley: Built to Last?

The latest HP scandal points out a flaw in the law enacted to address corporate misbehavior. Business scandals were supposed to cease after the introduction of Sarbanes-Oxley. After all, the 2002 law gave corporation boards broad responsibility for keeping their companies on the straight and narrow. But just as foxes put in charge of guarding the henhouse can't be trusted, HP's board proved that directors need oversight, too.

Vital Integrities Blog: HP and Sarbanes-Oxley: Built to Last?

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Friday, September 22, 2006

Sarbox Survival Guide: Will Foreign Sarbanes-Oxley Deadline Bring Backlash?

Forrester Research's "Navigating the European Compliance Jungle" reports on a survey of 20 IT vendors and 20 customer companies regarding the complex regulatory regimes with which businesses in EU member states must comply.

Surprisingly, half of those responding said that compliance processes proved beneficial for their businesses in spite of the insane amounts of paperwork and the huge costs that come with those processes.

Sarbox Survival Guide: Will Foreign Sarbanes-Oxley Deadline Bring Backlash?

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SOX Institute Announces Sarbanes-Oxley Roadshow in Cities around the World

After completing its Canadian SOX roadshow promoted by the Certified Management Accountants in September, SOX Institute will be going back to Washington DC, Dallas, Chicago (at the CompTia facility), Atlanta, New York, Singapore, Hong Kong, Kuala Lumpur and other cities around the globe as part of its Annual Autumn SOX Roadshow.

“As SOX impacts companies beyond the boundaries of the US, it becomes imperative that we serve not only the needs of corporations here but also of those around the globe,” said the SOX Institute’s chairperson, Sanjay Anand.

With a network of partners across most continents, SOX Institute has a global reach, yet tailors the programs to the needs of the local audiences by introducing local content and inviting local speakers/instructors to participate in the discussions.

Focused on not just imparting theory, but rather on using a blend of theory and practice, SOX Institute’s foundation and advanced programs have been very well received by local and global professional bodies in accounting, auditing, finance and technology.

“Thanks to the endorsements from the ACCA, ICPAS, MIA, HKICPA, ICAA and others, we have been able to reach a wide audience across Asia,” said Ms. Jocelyn Lim, Director of FP Consultants, partner of SOX Institute for Asia, excluding India, China and Japan.

With new curricula reflecting the latest developments and advanced expectations, SOX Institute presents this unique opportunity for the participants to learn directly from the Chairperson of the Institute. Mr. Anand has agreed to conduct this 10-city tour himself.

The tour is currently scheduled to visit five cities within the US in October and five cities outside the US in November.

SOX Institute Announces Sarbanes-Oxley Roadshow in Cities around the World

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IT chiefs find Sarbanes-Oxley compliance worthwhile

Complying with complex regulatory legislation, such as Sarbanes-Oxley (SOX), is a millstone for businesses, but one many IT bosses find worthwhile, according to a new report.

Conducted by the research firm Forrester, the study charts the impact of convoluted legislative rules governing transatlantic commerce and concludes that red tape may frustrate IT firms, but it ultimately offers invaluable insight.

IT chiefs find Sarbanes-Oxley compliance worthwhile

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Thursday, September 21, 2006

Kerry Bill Helps Small Businesses Comply With Sarbanes Oxley

Sen. John Kerry (D- Mass.) introduced legislation today that would help small public companies with the costs of implementing Sarbanes-Oxley regulations.

The Small Business Sarbanes-Oxley Assistance Act of 2006, introduced by Kerry, would authorize the U.S. Small Business Administration to award federal grants to small businesses to help them cope with the cost of complying with Sarbanes-Oxley regulations. It also creates a task force, assembled by the SBA Chief Counsel for Advocacy, and comprising of representatives from the U.S. Securities and Exchange Commission (SEC) and others, to report semi-annually on how to reduce the red tape and financial burden, assisting small public companies complying with Sarbanes-Oxley.

"We passed Sarbanes Oxley to create accountability and transparency in the corporate structure, and it's helping to battle corporate fraud," Kerry said. "But too many small companies don't have the resources or expertise to make the necessary structural changes on their own, and we need to make sure they compete on a level playing field. It's just not right that their resources are being stretched thinner than those of the corporate giants, just to comply and compete. This bill will help small businesses comply with Sarbanes-Oxley, and offer federal assistance to those who need additional help -- so small businesses can abide by the law, create jobs and grow our economy."

Kerry Bill Helps Small Businesses Comply With Sarbanes Oxley

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Sarbanes-Oxley: Nothing wrong with Section 404 except implementation, says SEC

On Tuesday, the two chief Sarbanes-Oxley Act (SOX) supervisors, gave their testimonies to their supervisor, the US House of Representatives' Committee on Financial Services. Christopher Cox of the Securities and Exchange Commission (SEC) confirmed his view that SOX had succeeded in its aims and that the issues of Section 404 were not in the regulation but in the method of its implementation. In this he was supported by Mark Olsen, Chairman of the PCAOB, the body set up to replace the audit profession’s previous self-regulation with an independent oversight body.

Sarbanes-Oxley: Nothing wrong with Section 404 except implementation, says SEC

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Apes of the Apocalypse: Sarbanes-Oxley (again)

Before Sarbanes-Oxley, the "discipline of the market" led many CEOs to condone accounting fraud, while their underlying companies continued to be sound businesses. Sarbanes-Oxley was designed to protect investors, but it has ended up hurting employees, customers, and society in general. With Sarbanes-Oxley, since CEO's can no longer just make stuff up, their pursuit of earnings growth is destroying the companies themselves. The collapse of Dell is a beautiful example. A company once known for quality control and customer care has been slowly cheapening its brand for the last ten years, until the customers who buy exploding laptops find themselves unable to parse the thick accents of the customer care representatives.

Apes of the Apocalypse: Sarbanes-Oxley (again)

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Watchdog says LSE safe

The body hinted that Treasury secretary Ed Balls overreacted when he announced radical plans to ring-fence the London capital markets regime from Sarbanes-Oxley regulation.

‘Joint ownership of a US exchange and a non-US exchange would not result in automatic application of US securities regulation to the listing or trading activities of the non-US exchange. You can’t be subject to US rules unless you either raise capital or provide financial services in the US,’ SEC spokesman John Nester said.

Watchdog says LSE safe

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Wednesday, September 20, 2006

Sarbanes helped restore faith in financial markets

Thank you Sen. Paul Sarbanes. Thank you for many years of public service to the citizens of Maryland and the United States.

Being a conservative, fiscally and socially, I would nowise vote to replace Paul Sarbanes with a new liberal U.S. Senator. Now is no time for the overly liberal social policies of a new Democratic senator. But amongst all the meaningful accomplishments reflecting the career of Sen.. Sarbanes, I would like to commend his leadership in the Sarbanes-Oxley Act of 2002.

Sarbanes helped restore faith in financial markets

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My Daily Fatwa: An American (inspector) in London

Speaking of the extraterritorial reach of U.S. regulators (goooooo, Empire!)... One of the things that has the UK folks upset these days (in addition to the NatWest Three, and our beloved president referring to Tony Blair as "Yo, Blair!") is a recent inspection by the Public Company Accounting Oversight Board (PCAOB) of the London offices of the accounting firm Ernst & Young. (See Barney Jopson's "US inspectors scrutinise E&Y in London". I particularly like his opening paragraph describing it as "the latest case of US regulatory 'creep'".)

Don't get me wrong--I'm all for extraterritoriality. But I fail to see how this lives up to my high standards of reaching across borders to impose your rules on someone else. I also don't see how this is news.

For one thing, this isn't about imposing U.S. regulations abroad.

My Daily Fatwa: An American (inspector) in London

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ProfessorBainbridge.com: Can Sarbanes-Oxley 404 be fixed? And why it matters - a lot

In testimony before Congress, both SEC Chairman Chris Cox and PCAOB Chairman Mark Olson testified, as Cox put it, that "those parts of SOX that aren’t working as well as they should -- notably Section 404 -- can be made to work better through better implementation." They're referring to Section 404 of the Sarbanes-Oxley Act, which requires companies to implement and certify extensive internal controls designed to ensure accurate disclosure of finaancial information. Compliance with section 404 has become vastly expensive - on the order of millions of dollars per year per company.

Although SOX 404 may seem like a dry and technical issue, let me remind you of what the stakes are.

ProfessorBainbridge.com: Can Sarbanes-Oxley 404 be fixed? And why it matters - a lot

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Small Business Administration Office of Advocacy comments on Section 404 (PDF)

On September 14, 2006, Advocacy submitted comments on the proposed rule extending the compliance deadlines to Section 404 of the Sarbanes Oxley Act of 2002 for smaller and newly public companies. On September 15, 2006, Advocacy also submitted comments on management guidance that the SEC is developing on Section 404 compliance.

Small Business Administration Office of Advocacy comments on Section 404 (PDF)

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SEC, PCAOB Chiefs Testify on SOX

The committee also heard testimony from Mark Olson, chairman of the Public Company Accounting Oversight Board since July 2006. Olson said his board has established an independent auditor oversight program to protect the interests of investors, and is working to make internal control audits efficient by monitoring how auditors implement Auditing Standard No. 2 (an integrated audit of both internal control over financial reporting and the financial statements themselves).

The hearing came on the heels of a controversial move made by the PCAOB a week earlier, when the board dispatched investigators to a U.K. Ernst & Young office, raising questions about SOX's reach and the PCAOB's authority.

The SEC and PCAOB have been working together to make 404 compliance more efficient.

SEC, PCAOB Chiefs Testify on SOX

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Sarbanes-Oxley audits too costly, regulator says

The chairman of the U.S. Securities and Exchange Commission, Christopher Cox, has said that business practice audits required by the Sarbanes-Oxley Act are too costly and represent the "one notable exception" to the positive impact of the law.

Companies' bills for first-year compliance were especially high because of start-up costs and excessive efforts by the firms and their outside accountants, Cox told a hearing of the House Financial Services Committee on Tuesday.

Sarbanes-Oxley audits too costly, regulator says

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Tuesday, September 19, 2006

VIDEO: C-Span House Financial Services Cmte. Hearing on Sarbanes-Oxley

Grab a cup of coffee and sit through the C-Span video footage of the House Financial Services Committee hearing on Implementation of Sarbanes-Oxley.

VIDEO: C-Span House Financial Services Cmte. Hearing on Sarbanes-Oxley

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PHOTO: Cox and Sarbanes-Oxley for Dummies

Securities and Exchange Commission Chairman Christopher Cox holds up a copy of the 'Sarbanes-Oxley for Dummies' while testifying on Capitol Hill in Washington, Tuesday, Sept. 19, 2006 before the House Financial Services Committee.

PHOTO: Cox and Sarbanes-Oxley for Dummies

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Webcast: Database Auditing for SOX Compliance: Effective Privileged User Monitoring

This webcast examines Sarbanes Oxley (SOX) database auditing problems and solutions from two unique perspectives: A SOX auditor and a CTO. The SOX auditor sets requirements that need to be met to ensure SOX database compliance while the CTO is experienced in developing and implementing enterprise activity auditing and monitoring technologies to help meet SOX compliance requirements.

Webcast: Database Auditing for SOX Compliance: Effective Privileged User Monitoring

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Sarbanes UK swoop

Inspectors from the Public Company Accounting Oversight Board, the US audit watchdog, spent two weeks at E&Y's offices in early August and returned for a second visit this month, according to people familiar with the process.

The inspections have been expected since the enactment of Sarbanes-Oxley in 2002 but details of their timing had been unclear. Inspections involve US staff interviewing accountants and scrutinising audit documents relating to selected client engagements.

Sarbanes UK swoop

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Sarbanes-Oxley spurs US inspectors scrutinise E&Y in London

US inspectors have swooped on the London offices of Ernst & Young as they began scrutinising the work of the UK's big-four audit firms in the latest case of US regulatory "creep".

The inspections stem from a contentious requirement of the Sarbanes-Oxley Act and a new example of its "extra-territorial" reach beyond the US. The Financial Times learned of the inspections as British concern about US regulation was underscored last week by the announcement of a UK Treasury move to ringfence the London Stock Exchange from Sarbanes-Oxley-type laws.

Sarbanes-Oxley spurs US inspectors scrutinise E&Y in London

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Pub Philosopher: British firms under US rules

In July I wrote about the onerous American business regulations being imposed on British companies. Now, two months after the Sarbanes-Oxley compliance deadline, American regulators have begun their surprise inspections of British companies.

So why has there been so little about this in the media? The TV stations have not covered it and outside the business press, so far only the Scotsman has run the story.

If you substitute EU for US, imagine the outcry.

Pub Philosopher: British firms under US rules

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Fraud case shows need for experts in finance

On audit committees, experience can really count. Getting individuals with some accounting background can allow the boards to keep better tabs on companies’ financial measures and mechanisms.

The Sarbanes-Oxley corporate reform act has helped make that happen by forcing companies to disclose whether their audit committees include at least one member who is deemed a financial expert. If they don’t comply, they then must say why.

And that’s just what Herley did earlier this year. In a financial filing, the company said none of its audit committee members had the required financial expertise since they were not current on all aspects of generally accepted accounting principles. Known as GAAP, those are the standards companies must follow to complete their financial statements.

Fraud case shows need for experts in finance

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4 In 10 Nonprofits Would Have Trouble Implementing Sarbanes-Oxley's Audit Committee Provisions

Applying the Sarbanes-Oxley Act's audit committee provisions to nonprofit organizations would test the administrative mettle of two-fifths of America's charities, according to initial findings from the Urban Institute's National Survey of Nonprofit Governance. The 2005 survey, the first such national measure, gathered responses from 5,115 nonprofits of varied size, type, and location.

Applying the Sarbanes-Oxley Act's audit committee provisions to nonprofit organizations would test the administrative mettle of two-fifths of America's charities, according to initial findings from the Urban Institute's National Survey of Nonprofit Governance. The 2005 survey, the first such national measure, gathered responses from 5,115 nonprofits of varied size, type, and location.

4 In 10 Nonprofits Would Have Trouble Implementing Sarbanes-Oxley's Audit Committee Provisions

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Conglomerate Blog: Committee on Capital Markets Regulation

Has Sarbanes-Oxley and other regulation passed in the wake of corporate accounting scandals caused America's capital markets to lose their competitive edge in the global marketplace? That is a question about which a group of business and financial leaders hope to find an answer. The group is a recently formed committee called "The Committee on Capital Markets Regulation," whose director is Harvard professor Hal Scott and whose members include several academics such as Allen Ferrell, Reinier Kraakman and John Coffee as well as business and industry leaders such as the chief executives of DuPont and Office Depot and the president of the NYSE. Part of the Committee's charge is to generate a report with recommendations regarding the impact of liability on public companies and gatekeepers as well as the impact of Sarbanes-Oxley, with particular attention on Section 404. All apparently with an eye to determine whether these regulations have caused our markets to be less attractive to investors and thus less competitive.

Conglomerate Blog: Committee on Capital Markets Regulation

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Lawmakers to review embattled Sarbanes-Oxley

Written four years ago in the wake of big accounting scandals at companies like Enron and WorldCom, the Sarbanes-Oxley law was intended to clean up corporate culture and make executives accountable for their companies' books.

But the law has been accused of saddling companies with heavy burdens, since it requires potentially expensive audits and multiple hours dedicated to checking and re-checking corporate balance sheets.

Members of the House Financial Services Committee, including Rep. Michael Oxley, one of the law's authors, will question Securities and Exchange Commission Chairman Christopher Cox and Public Company Accounting Oversight Board Chairman Mark Olson about implementation of the law Tuesday afternoon.

Lawmakers to review embattled Sarbanes-Oxley

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Tell the Truth About Sarbanes-Oxley

Today, Congress will be wrestling with a trillion dollar issue--literally. The stakes for the U.S. economy are that high, and getting higher, so we should all pay attention.

Christopher Cox, chairman of the Securities and Exchange Commission, will appear at a hearing of the House Financial Services Committee on “Sarbanes-Oxley at Four: Protecting Investors and Strengthening the Markets.” Rep. Mike Oxley (R.-Ohio), co-author of the legislation, will chair the hearing. Mark Olson, chairman of the Public Company Accounting Oversight Board, which implements the Sarbanes-Oxley Act (“Sarbox”), will also testify.

In its four years, “Sarbox” has damaged the American economy as badly as a group of unsupervised four year-olds would damage a playroom. U.S. companies have spent tens of billions of dollars in compliance costs (about $35 billion), far more than the SEC’s 2003 estimate of $1.2 billion, with small companies hit especially hard.

Tell the Truth About Sarbanes-Oxley

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Monday, September 18, 2006

ANALYSIS: Is the Big Four boom over?

The Sarbox boost was a predictable phenomenon, whilst the M&A boom took the firms by surprise. So in saying that there is nowhere obvious for the firms to go, they may just be saying there is no banker, like Sarbox, to rely on. M &A could still come to their rescue.

PwC's transaction services revenue, which is likely to include due diligence work for clients, increased fee income by 27% and interestingly came under the assurance bracket – an area that saw overall growth of 11% to £952m. Corporate finance work climbed 13% compared to 14% a year earlier.

What are the other firms saying? Deloitte reported at the beginning of August. John Connolly, chief executive, says: ' "Calling" the market in the year ahead is challenging. The first quarter of the financial year saw continued strong growth in line with the previous year but the outlook remains uncertain.'

Connolly says M&A remains a great opportunity.

ANALYSIS: Is the Big Four boom over?

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Unintended Consequences Of Sarbanes-Oxley

The greatest cost of Sarbanes-Oxley is derived from the law of unintended consequences. Nonprofit organizations, foreign-registered corporations, and others that are not directly covered by the new law worry that they are caught in the web of Sarbanes-Oxley. A law aimed at reinforcing faith in American financial securities has ensnared many entities not involved in those securities.

All of these costs might plausibly be worthwhile if investors and corporations had increased confidence in securities traded in American markets. Positive signs for the law would include increased registration of international corporations and their securities in America, a shift from private equity to public equity, and a shift from private debt to public debt.

We find just the opposite.


Unintended Consequences Of Sarbanes-Oxley

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Sunday, September 17, 2006

SEC's Cox to testify on Sarbanes-Oxley progress

The House of Representatives Financial Services Committee on Wednesday said Securities and Exchange Commission Chairman Christopher Cox and Public Company Accounting Oversight Board Chairman Mark Olson will testify at next week's hearing.

"This committee played a crucial role in responding to the massive corporate fraud cases that threatened the stability of our capital markets," said committee Chairman Michael Oxley.

"Four years after the passage of the Sarbanes-Oxley Act, investors and our capital markets continue to benefit from the legislation," the Ohio Republican said in a statement.

SEC's Cox to testify on Sarbanes-Oxley progress

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Mexico's Salinas Settles Sarbanes-Oxley Suit

Ricardo Salinas Pliego, who made his fortune in television, retail, and cellular services, and is one of Mexico's more colorful billionaires, reached a settlement with the U.S. Securities and Exchange Commission last week in the first lawsuit against a foreign company under the rules of the Sarbanes-Oxley Act.

Salinas Pliego, who owns Mexico's second-largest broadcaster, TV Azteca, agreed to pay $7.5 million in penalties and compensation to settle accusations of fraud involving a scheme to conceal a deal between a TV Azteca subsidiary and a company he secretly owned.

Mexico's Salinas Settles Sarbanes-Oxley Suit

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Friday, September 15, 2006

FEI blog: Constant comment

Like the changing colors of the falling leaves, the return of the comment season on the SEC and PCAOB rules under Sarbanes-Oxley Section 404 is looked upon happily by many, who see the comment letter process as an opportunity to weigh in on ways to make the SEC and PCAOB rules lead to behaviors that are more conducive to efficient and effective implementation of Section 404.

Specifically, commenters are likely to address improving the cost-benefit balance (efficiency) as well as how to better achieve the intent of the Act - which presumably was to encourage better internal control through the sunshine of disclosure, thereby increasing the quality of financial reporting and related investor confidence in the market, in turn fueling economic growth (effectiveness).

FEI blog: Constant comment

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Reaction to Sarbanes-Oxley: Darned SOX

Everyone knew exactly whom Britain's Treasury had in mind this week when it appeared to lay down the line on the creeping influence of financial regulators from abroad. Ed Balls, a senior Treasury official, said on September 13th that Britain's Financial Services Authority (FSA), the City's top watchdog, would be granted new powers to protect the country's light touch on regulation of exchanges. America was the bogeyman.

Reaction to Sarbanes-Oxley: Darned SOX

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Billionaire in Mexico Settles Case With S.E.C.

The billionaire tycoon Ricardo Salinas Pliego and the Securities and Exchange Commission of the United States reached a settlement on Thursday in the first lawsuit against a foreign company under the corporate governance rules of the Sarbanes-Oxley Act.

Mr. Salinas Pliego, who owns Mexico’s second-largest broadcaster, TV Azteca, agreed to pay $7.5 million in penalties and compensation to settle accusations of fraud involving a scheme to conceal a deal between a TV Azteca subsidiary and a company secretly owned by Mr. Salinas.

Billionaire in Mexico Settles Case With S.E.C.

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ViewPoints: Sarbanes-Oxley ready for a trim?

Say "regulation" and all but the most ardent followers of business will turn the page. But the announcement this week that a committee of business leaders and academics had been formed to review the way U.S. securities markets and companies are regulated was cause for celebration by anyone who invests, saves or works for a public company. The group, with the blessing of Treasury Secretary Henry Paulson Jr., promises to look at whether Section 404 of the Sarbanes- Oxley law, which requires U.S.-listed companies to audit and report on their internal control systems, should be changed - a possibility that will cheer companies groaning under the weight of paperwork generated by the law. But the most promising part of the new group's work is the examination of whether laws governing civil and criminal liability for auditors, companies and directors should be changed. In the five years since Enron, whose implosion led to Sarbanes-Oxley and other governance laws, the liability overhang - which crushed Arthur Andersen, Enron's auditors, and hinders the work of the entire auditing industry - has not even been on the table; now that it is, some real progress on meaningful forms of scrutiny and control can finally be made.

ViewPoints: Sarbanes-Oxley ready for a trim?

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Thursday, September 14, 2006

U.K. eyes law to bar Sarbanes-Oxley for listed firms

A U.K. official has proposed legislation to give the government veto power over rule revisions by exchanges, although one expert doubts that any U.S. bourse would attempt to impose stricter rules in the wake of two key mergers in the works.

SEC spokesman John Nester said the exchange has no comment on Ball's remarks. Nasdaq spokesman Wayne Lee also declined to comment.

U.K. eyes law to bar Sarbanes-Oxley for listed firms

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Going Private: Rule #1: You Do Not Talk About SarOx in London

In keeping with the increasing convergance of private equity and hedge funds, I find myself dreaming up hedge fund strategies in any number of strange situtations. Most recently, literally, I dreamed it. I am pretty sure the seed was planted elsewhere, but it has recently been bolstered by an article in The Guardian (which a fond reader, reading my mind, also recommended and quoted in an email today). That reader also points to a Bloomberg piece wherein British authorities related with chill voices, the prospect of a purchase of the London Stock Exchange by U.S. interests exporting SarOx to their shores.

Going Private: Rule #1: You Do Not Talk About SarOx in London

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International Corporate Governance: Sarbanes-Oxley Statute of Limitations Case

The United States Court of Appeals for the Fifth Circuit decided a case this week regarding whether the statute of limitations and statute of repose under the Sarbanes-Oxely Act revived claims that were extinguished under the shorter limitations periods that applied prior to the Act's passage. The decision, Margolies v. Deason, is available here.

International Corporate Governance: Sarbanes-Oxley Statute of Limitations Case

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The Real Source of SOX Woes

Sarbanes-Oxley is about restoring investor confidence in publicly traded companies by attempting to ensure that the financial reports that they present to the investing public are accurate.

As a result, public companies have been forced to review and implement controls to help ensure that risks to the financial reporting process are properly managed. Of course, fraud and malicious activities get a lot of trade press and management attention, but the far greater risk to the integrity of financial reporting is human error.

In today’s high-speed complex enterprises, errors in the programming of an application, interface or spreadsheet, can lead to mistakes in the financial reports that are disclosed to the public. The dollar amount of the mistake can range from immaterial up to very material with significant repercussions.

The Real Source of SOX Woes

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UK to block Sarbox threat with legislation

Clara Furse, the London Stock Exchange's chief executive, will be breathing a huge sigh of relief today after the economic secretary Ed Balls said the Treasury was going to strengthen the Financial Service's Authority's powers in order to protect the light regulatory regime of the London Markets.

In a speech to the Hong Kong General Chamber of Commerce and the British Chamber of Commerce in Hong Kong, Balls said that the government would introduce legislation that will allow the FSA to veto any regulatory rule changes proposed by any foreign buyers of the LSE.

UK to block Sarbox threat with legislation

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Closely Held Companies Adopting Sarbanes, Increasing Demand for Auditors

Privately owned companies, although not bound by the requirements of the Sarbanes-Oxley Act (SOX), are feeling the effects of the law in specific areas of their businesses, as well as the impact of widespread public commitment to stronger internal controls that the law has helped to create. In response to these pressures, more closely held companies are demanding additional internal audits and internal auditors, as well as providing new business opportunities for external auditors.

Private companies chose to adopt some or most of the requirements of Sarbanes-Oxley, according to the Wall Street Journal, because their executives believe stronger internal controls will improve efficiency, and directors see its benefits on public companies. Companies may feel pressure from customers or suppliers who are public companies.

Closely Held Companies Adopting Sarbanes, Increasing Demand for Auditors

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Wednesday, September 13, 2006

Sarbox 404: The New Feeling-Out Period

Next year, many finance executives will likely be able to take a sabbatical to get their companies' internal controls up to snuff far from the annoying questions of independent auditors. But the executives shouldn't avoid the auditors either, Securities and Exchange Commission officials says.

An August 9 SEC proposal would let newly public companies and smaller issuers complying with Section 404 of the Sarbanes-Oxley Act for the first time next year off the hook of having to provide a report on internal controls from their auditors in 2007.

Sarbox 404: The New Feeling-Out Period

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If SOX Were a Tree...

It's not every accounting conference that the attendees have a chance to come away with a bit of horticulture knowledge.

Speaking earlier this week to a crowd of CPAs, it wasn't statistics, or legalese, or accounting theory that Public Company Accounting Oversight Board member Charles Niemeier turned to in describing the problems at the root of the accounting environment. It was the mozo bamboo plant. And in making the case for the Sarbanes-Oxley Act, it was the history of the automotive seat belt.

If SOX Were a Tree...

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Sox First: Sarbanes-Oxley remakes accountants

Sarbanes-Oxley has reshaped accounting and opened new career paths. They've gone from being fact checkers and number crunchers to guardians and protectors of the public's trust. And that creates a lot more different jobs which provides accountants with more opportunities to remake themselves. For a better fee, of course.

Sox First: Sarbanes-Oxley remakes accountants

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Sarbox Survival Guide: Recreating Sarbanes-Oxley

The latest group to take up the gauntlet is the Committee on Capital Markets Regulation, chaired by a former Goldman Sachs CEO and a former White House adviser. Brought together by Harvard professor Hal Scott, the group also has the support of U.S. Treasury Secretary Henry Paulson, who is concerned that Sarbanes-Oxley is harming U.S. competitiveness in the international economy.

Sarbox Survival Guide: Recreating Sarbanes-Oxley

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Cox to testify in House about Sarbanes-Oxley Sept. 19

SEC Chairman Christopher Cox and Public Company Accounting Oversight Board Chairman Mark Olson will testify before the House Financial Services Committee on Sept. 19 about the implementation of the Sarbanes-Oxley corporate governance law, the committee said Wednesday.

Cox to testify in House about Sarbanes-Oxley Sept. 19

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London erects wall against Sarbanes-Oxley

British authorities are moving to ensure that Washington`s Sarbanes-Oxley rules never apply to the London Stock Exchange.

LSE leaders want to make sure than if any foreign buyers take control of their exchange it will not be subject Sarbanes-Oxley rules, which they view as draconian, the Telegraph reported Wednesday.

Those concerns have risen as New York's Nasdaq Stock Exchange Inc. has gained a nearly 30-percent stake in the LSE.

London erects wall against Sarbanes-Oxley

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Tuesday, September 12, 2006

New US group seeks changes to Sarbanes-Oxley

A private-sector group with ties to the Bush administration has been formed to recommend changes to the 2002 Sarbanes-Oxley Act and other regulations seen by critics as hindering the competitiveness of U.S. capital markets, it was announced Tuesday.

The group said it intends to recommend changes to not only the post-Enron Sarbanes-Oxley reforms, but on other topics, including securities class-action litigation, criminal enforcement, overall regulations and shareholder rights.

New US group seeks changes to Sarbanes-Oxley

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Another bid to 'fix' on Sarbanes-Oxley

The group`s effort is the latest to attempt to deal with a law that many business and financial experts say is driving business from the United States: Nine of the 10 largest initial public offerings this year, and 24 of the 25 largest last year, were done in overseas markets.

By contrast, nearly all such IPOs in the 1990s were made in U.S. financial markets.

Another bid to 'fix' on Sarbanes-Oxley

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Bristol-Myers' Chief Dolan Resigns; Shares Rise

Bristol-Myers Squibb Co. Chief Executive Officer Peter Dolan stepped down effective immediately after a bungled agreement to keep a generic version of the drugmaker's top-selling heart pill Plavix off the market.

The Federal Bureau of Investigation raided Dolan's office July 26 searching for documents and e-mails that might show he deceived U.S. antitrust enforcers about the accord. Bristol- Myers's settlement to avoid prosecution for channel stuffing included a promise that the company "will at all times strive for openness and transparency in its public reporting and disclosures."

Bristol-Myers' Chief Dolan Resigns; Shares Rise

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New commission seeks changes to Sarbanes-Oxley

A new independent commission that plans to recommend changes to the 2002 Sarbanes-Oxley Act and other regulations it believes hinder the competitiveness of U.S. capital markets will be unveiled on Tuesday, The Wall Street Journal reported.

"The Committee on Capital Markets Regulation," will be chaired by former White House economic adviser Glenn Hubbard and former Goldman Sachs president John Thornton, the Journal said.

New commission seeks changes to Sarbanes-Oxley

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Monday, September 11, 2006

Capitol's New Bank Examiners

Four years after enacting landmark corporate-governance laws, the men behind Sarbanes-Oxley are leaving Congress. The retirements of Sen. Paul Sarbanes (D., Md.) and Rep. Mike Oxley (R., Ohio) spell changes next year in the House and Senate committees that regulate Wall Street, banks and finance.

The new leaders of the banking panels will affect how Congress deals with issues such as whether hedge funds should be regulated, whether commercial banks should be allowed to enter the real-estate brokerage business and how the government should treat Fannie Mae and Freddie Mac.

Capitol's New Bank Examiners

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SEC Statement: A Race to the Top: International Regulatory Reform Post Sarbanes-Oxley (Ethiopis Tafara)

This article identifies the widespread global adoption of the major provisions of the Sarbanes Oxley Act of 2002 (SOX). The global adoption of these provisions is interesting on a number of counts. As is the case in many industries today, the US financial services industry competes on a global scale. From this competitive vantage point, the industry has discovered — and at times loudly proclaimed — that their products and services are inextricably bundled with (or, depending on one's perspective, burdened by) the domestic regulatory framework in which they operate. In particular, it has been argued by some that SOX may have generated regulations that are not cost justified, and that this may have created certain competitive disadvantages for the US market.

To be sure, given the technological revolution in connectivity, investors and issuers can largely meet in the jurisdiction of their choosing. Investors as well as issuers have choices about where to invest, where to raise capital and where secondary trading is to occur. In other words, they have some choice about which regulatory safeguards (and associated enforcement efforts) they conduct their financial activities under. Moreover, important economic characteristics (such as cost and risk) of financial services and products are affected by the particular (and inevitably costly) regulatory safeguards associated with any given jurisdiction, as backed up by the enforcement efforts in that jurisdiction. As a consequence, domestic regulations may admittedly have an impact on the global competitiveness of financial services and products, for good or potentially for ill.

While the reality may be a bit more complicated than either a race to the bottom or a race to optimality would suggest, the global adoption of the major provisions of SOX may shed some light on these and other issues.

SEC Statement: A Race to the Top: International Regulatory Reform Post Sarbanes-Oxley (Ethiopis Tafara)

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My Daily Fatwa: Sarbanes-Oxley: The New International Standard?

The Sarbanes-Oxley Act of 2002 has been called the most significant reform of U.S. securities laws in 70 years. And it has also been called a lot of other, less flattering, things. Despite all the domestic and international whining over SOX (as it’s affectionately called—or “Sarbox”, for those of you who like their laws to sound like detergent brands), it appears that everyone else in world secretly thinks Sarbanes-Oxley got it right.

My Daily Fatwa: Sarbanes-Oxley: The New International Standard?

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The Korea Times : Companies Under Pressure by Strict US Exchange Rules

South Korean firms listed on U.S. exchanges are facing growing costs due to stricter accounting rules and some of them consider leaving the markets, according to Financial Supervisory Service (FSS) yesterday.

Not only Korean but also many other non-U.S. firms saw costs to maintain their listing on the U.S. markets rise after the implementation of Sarbanes-Oxley Act, according to FSS official Jung Young-won.

The Korea Times : Companies Under Pressure by Strict US Exchange Rules

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Accountants remade by Sarbanes-Oxley

The Sarbanes-Oxley Act of 2002 has given bean-counters an image makeover.

Traditionally considered fact-checkers and number-crunchers, accountants and auditors have been recast by Sarbanes-Oxley as protectors of the public's trust.

"A lot of what it does is all about making the public feel confident in the information we put out there for them. . . . And it creates a whole lot more jobs," said Adam Liebl, a graduate accounting student at the University of Wisconsin-Whitewater.

Accountants remade by Sarbanes-Oxley

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Friday, September 08, 2006

Michael Katsimbris's Blog: What the Sarbanes-Oxley Act Did or Did Not Change

When first passed, I thought the Sarbanes-Oxley Act of 2002 created new roles in enforcement and overseeing, but because these roles were new and there was no previous estimate as to how much all of this new involvement would cost or what it would actually do, I was skeptical from the start.

So, when at work an article written by James Brady Vorhies from the American Institute of Certified Public Accountants (AICPA) is passed around at my workplace like what he’s writing is some sort of revelation; I have to stop and say, "Why?"

Michael Katsimbris's Blog: What the Sarbanes-Oxley Act Did or Did Not Change

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Tale of Two Cities

London officials opened a New York office in March devoted to luring New York companies there, and when the mayor of London, Ken Livingstone, was asked on a visit here about his economic development strategy, he answered in two words: "Sarbanes-Oxley," the name of the American law mandating a post-Enron crackdown on accounting and corporate governance standards.

It says a lot that the biggest beneficiary of Sarbanes-Oxley turns out to be a communistic-type mayor known as "Red Ken" who is gleeful about capitalism being driven out of New York and into his own city. Ms. Gardiner's series, which concludes today, noted that when the Russian oil company, Rosneft, recently made one of the largest public offerings in history, raising more than $10 billion in a fell swoop, it was on the London stock exchange, not New York's, notwithstanding Attorney General Spitzer's much-heralded efforts to clean up the Big Board.

Tale of Two Cities

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Sarbanes-Oxley for Nonprofit Boards

The role of the nonprofit board has changed dramatically in the last three years. With the Grassley Hearings in 2004 and 2005, the high-profile scandals at nonprofits such as the United Way of the National Capital Area and the James Beard Foundation, nonprofit boards are under significant scruitiny. As with corportate boards, the nonprofit board as the charitys governance entity is being held ultimately accountable for the actions of the charity. Sarbanes-Oxley for Nonprofit Boards examines how the adaptation of Sarbanes-Oxley requirements and best practices can facilitate the recognition and acceptance of this new governance paradigm.

Sarbanes-Oxley for Nonprofit Boards

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Thursday, September 07, 2006

Suman Chaudhuri's Blog: Sarbanes-Oxley and the CIO

Many CIOs see SOX compliance as yet another drain on their already tight budgets and over worked IT department. In many cases, this is true and many CIOs struggle with juggling SOX compliance with other project initiatives that are already underway or in the pipelines. However, this does not have to be the case. Later on in other articles, I will mention what CIOs can do to ease the pain of working on SOX compliance initiatives.

Which brings me to the most important topic when it comes to SOX -- compliance.

Suman Chaudhuri's Blog: Sarbanes-Oxley and the CIO

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Bobsguide: Conference findings demonstrate need for improved spreadsheet management systems

Sarbanes Oxley legislation is now being embraced in many UK firms. As few banks have independent spreadsheet measurement systems internally, this is a good indicator that banks are not only taking their legal duty more seriously. More importantly, this is also a sign that people in the financial world are appreciative of the role spreadsheets play in maintaining economic accuracy.

Bobsguide: Conference findings demonstrate need for improved spreadsheet management systems

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Euronext installs Sarbox barricade

Euronext said that it will put in a Dutch buffer body to prevent companies listed on its exchanges being subjected to Sarbanes-Oxley rules.

The stock exchange operator, which has about 19 UK companies on its list including Aviva plc, HSBC Holdings and BP plc, was planning to set up a Dutch-based body with an independent board to decide on any regulatory arrangements.

Euronext installs Sarbox barricade

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Wednesday, September 06, 2006

HP engulfed in extraordinary boardroom fight

For Hewlett-Packard, boardroom intrigue is nothing new. But in recent months, warfare has been breaking out behind the scenes, with company directors accusing each other of media leaks and spying on board members' phone calls.

On Tuesday, the brouhaha became public in a Newsweek story on its Web site. And today, HP will disclose some of the details in a Securities and Exchange Commission filing. HP is expected to disclose that board member George "Jay" Keyworth will not be nominated again to its board because HP believes he was leaking confidential company information to the press.

HP engulfed in extraordinary boardroom fight

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Sox First: Accountants continue to rake it in

Everyone knows that Sarbanes-Oxley has been a licence to print money for auditors and accountants.

And the latest figures from the CCH Public Accounting Report show that revenue growth rates reported by most Top 100 accounting firms have hit the highest reported level since 2000.

Sox First: Accountants continue to rake it in

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Tuesday, September 05, 2006

Flight of IPOs from U.S. points to challenges ahead for securities regulation

During 2005, 24 of the 25 largest initial public offerings were listed on exchanges outside of the United States. Those who oppose the Sarbanes-Oxley Act (particularly its infamous Section 404) are pointing to this movement as market-based proof that the law has been counterproductive, driving new issues that might have been listed (if only partially) in the U.S. to other exchanges. Ventana Research thinks they have a point, but over time, it will prove to be a minor one.

For one thing, the shift was inevitable. The United States' dominance of the equity capital markets is likely to erode over the next decade simply because the increasing pools of savings in other countries will drive the growth of those markets. Many of the largest IPOs of 2005 were once nationalized companies, so their listing in local exchanges made sense. This will become the case for smaller companies as well. An Indian grocery chain or a regional Chinese trucking firm, for example, will be served best by a local listing. For smaller countries, electronic trading has enabled regionalization, eliminating fragmented national exchanges that were not very competitive with the New York Stock Exchange and NASDAQ.

Flight of IPOs from U.S. points to challenges ahead for securities regulation

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Blogging Stocks: Time Warner CEO on corporate governance

NYSE Magazine (August-September 2006) contains snapshot interviews with 20 CEOs of leading companies, including Richard D. Parsons, CEO of Time Warner Inc., who spoke about changes in corporate governance in the wake of Sarbanes-Oxley. Almost 90% of CEOs surveyed admitted that they were spending more time and money on regulatory and compliance issues than three years ago. Amazing how much more seriously CEOs take their responsibilities now that there is the possibility they could become the prom queen of cell block H!

Blogging Stocks: Time Warner CEO on corporate governance

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Whistleblower uses YouTube to air concerns

De Kort said he tried to alert the chain of command at the Coast Guard and at Lockheed about the problems but was rebuffed by supervisors who told him to keep quiet because the program was behind schedule and over budget. De Kort was eventually transferred off the project, and he was laid off earlier this month. A company spokeswoman said he was laid off for financial reasons, but De Kort insists it was in retaliation for his complaints.

"The formal systems that whistle-blowers are expected to use have failed. That's why you're seeing people be creative like this," said Danielle Brian, executive director of the Project on Government Oversight. "This is a tremendous way for someone brave enough to do it to say something directly and not have to go through a filter."

Whistleblower uses YouTube to air concerns

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Regulation redundancy: Money down the drain

Khalid Kark, an analyst at Cambridge, Mass.-based Forrester Research Inc., said compliance software vendors are partly to blame for compliance redundancy. He said many vendors have developed products that focus on one set of regulations.

"Vendors came out and said, 'This is a one-off thing,'" Kark said. "'Our product is going to help you do HIPAA [the Health Insurance Portability and Accountability Act].'"

When Sarbanes-Oxley or another regulation came along, vendors would offer a separate module, Kark said. "It made more revenue for vendors, but there has been a lot of mistrust because of that. Some people have been put off and they are saying, 'Let me do this myself until someone offers a holistic solution.'"

Hagerty, of AMR Research, said customers can't wait for vendors to offer a unified approach to compliance.

Regulation redundancy: Money down the drain

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SEC Supports PCAOB in Lawsuit Defense

The Securities and Exchange Commission late Friday announced that it has joined a U.S. Department of Justice legal brief in support of the Public Company Accounting' Oversight Board defense against a lawsuit challenging the PCAOB's constitutionality.

Filed in February, the lawsuit led by the Free Enterprise Fund, a conservative nonprofit group, challenges the constitutionality of the PCAOB, the accounting industry overseer created by the Sarbanes-Oxley Act of 2002.

SEC Supports PCAOB in Lawsuit Defense

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City waits for the knockout Nasdaq bid that would finally seal LSE's fate

The Big Board's European foray is seen by many as a dress rehearsal for the justifications, arguments and counter-arguments likely to engulf the LSE before long. Chief among them is a fear among companies listed in London that draconian US Sarbanes-Oxley (SOX) regulation - rushed through in 2002 to protect investors post-Enron - may be imported to London.

SOX has in effect rendered US markets uncompetitive. The US pain has been London's gain, and business over here is booming.

Last month, the LSE revealed 2006 had already become a record year for fundraisings by flotations, surpassing in just seven months the total raised throughout 2005. International listings had played a "significant role" in this success.

City waits for the knockout Nasdaq bid that would finally seal LSE's fate

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Sarbanes-Oxley White Paper: Non-Accelerated Filers: Accelerate your SOX with proven best practices

The SEC has made it clear that compliance with the Sarbanes-Oxley regulations will be required. Stories of companies spending vast amounts of money and time to comply have made the SEC’s decision a concern for many. At the beginning, larger companies had no SOX history to benefit from. In a business sense, these companies can be viewed as market "first-movers" that bore the costs associated to paving the way for others to follow in their footsteps. Non-accelerated filers can take advantage of the three year Section 404 compliance experiences of the Accelerated filers. Today, we have proven advise and practices to best keep both the aggravation and the money spent on SOX compliance under control.

Sarbanes-Oxley White Paper: Non-Accelerated Filers: Accelerate your SOX with proven best practices

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You are not alone in the struggle with Sarbanes-Oxley

And while SOX is a US regulation, its affects are far reaching… and according to a new survey by the Help Desk Institute Europe, not clearly understood, as less than a quarter of IT support professionals in the UK are aware of the Act or its potential equivalents in Europe.

Only 20% of those surveyed indicated that they were aware of the regulatory laws, with almost 70% completely unaware of Sarbanes-Oxley or similar legislation which may be introduced in the European Union.

You are not alone in the struggle with Sarbanes-Oxley

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Monday, September 04, 2006

Accountants are increasingly in demand

In addition, auditing regulations have intensified as a result of the Sarbanes-Oxley scandal. This means that auditing has become a lengthier process, requiring more hours to complete each job. A job that used to take 10,000 hours might now require 15,000 or 20,000.
As a result, new legislation passed in 2005 allows different types of accountants, such as certified general accountants and certified management accountants, to fill public accounting positions.

Accountants are increasingly in demand

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Friday, September 01, 2006

Private Vs. Public

For Luther, going private was a no-brainer. His fellow CEOs seem to agree. So far this year, about $200 billion has flowed into private equity buyouts of public firms in the U.S., according to Thomson Financial. That compares with $129 billion for all of 2005. For CEOs, going private allows an escape from the twin pressures of quarterly earnings and the Sarbanes-Oxley Act’s crushing compliance regulations.

But is private equity ownership that much less onerous than being publicly traded? For managers, the advantages of going private are no longer as clear as they once were. Critics of Sarbanes-Oxley claim that CEOs can't wait to escape the law, but many private companies are actually complying with it in case they eventually go public again.

"It's better to operate in a public way, so they don't have to incur a lot of additional costs when they do go public," says William Gedwed, CEO of HealthMarkets, formerly UICI, a specialty insurer that was bought by three private equity firms in April.

Private Vs. Public

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Institute proposes IT principles

The Institute of Internal Auditors’ (IIA) Advanced Technology Committee in the US has developed an exposure draft of Generally Accepted IT Principles (GAIT) to help internal auditors and management evaluate and manage IT risks related to specific internal control objectives, such as those over financial reporting.

The document contains detailed guidance to help management and internal auditors define the scope of work and support their conclusions for IT-related internal control objectives, such as those described in the Committee of Sponsoring Organisations of the Treadway Commission’s (COSO’s) internal control framework. COSO is a voluntary organisation dedicated to improving the quality of financial reporting through business ethics, effective internal controls and corporate governance.

Institute proposes IT principles

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PomTalk: Facts Silence SarbOx Critics

Critics of Sarbanes-Oxley have long argued that foreign companies will forego U.S. listings to avoid compliance costs. While the theory may have some intellectual appeal, year-to-date statistics show that the exact opposite has occurred. According to a recent WSJ article, foreign firms have sold $5.8 billion worth of stock so far this year in U.S.-listed initial public offerings, more than any year since 2000.

PomTalk: Facts Silence SarbOx Critics

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Get to Know GAIT - Management will thank you for it

For all those that struggle with getting their minds around the IT management aspects now required by SOX, good news - others are trying to work through this as well. For all the frameworks and "guidance", practitioners still haven't landed at a place that helps us really apply judgement to risk managment.

And some folks are doing something about this. With a core team representing industry and education alike, the linkages are being drawn between known frameworks, past practices, new requirements, and business needs.

GCC Considerations - GAIT and AS2

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UK and European reporting times catch up with US

These increases come as some UK companies wrestle with both Sarbox legislation and the implementation of IFRS.

'This trend is even more impressive given the pressures for British and European corporations to move to International Financial Reporting Standards and the need for 20% of the European companies we studied to prepare for Sarbanes-Oxley compliance themselves from next year,' said BPM International chairman, David Jones.

'At the same time, US Companies appear to have been hit very hard by the new regulations introduced by Sarbanes-Oxley and the SEC.'

UK and European reporting times catch up with US

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