Tuesday, October 31, 2006

Use Sarbanes-Oxley compliance as a catalyst to drive ROI

Sarbanes-Oxley (SOX) section 404 compliance requires companies to implement extensive internal controls and documentation. Many companies did not have sufficient control in place to comply when SOX was passed, so investments have been made in systems, personnel and auditing to assure compliance.

In order to achieve a positive ROI, the SOX compliance must have net benefits that exceed the investment to achieve compliance. These benefits cannot be the compliance itself -- ie. Avoiding fines and litigation, but they must be the rewards of compliance itself.

While implementing SOX some companies seek not merely to comply, but use the regulations as a catalyst to overhaul their controls programs.

Use Sarbanes-Oxley compliance as a catalyst to drive ROI

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Sarbanes-Oxley may have gone too far, says Cheney

Dick Cheney said yesterday that the White House would be willing to lighten the Sarbanes-Oxley legislation, after admitting that the measure could be considered to have gone "too far."

The US Vice-President's remarks came a month after Hank Paulson, the Treasury Secretary, began to meet bank executives to discuss regulatory concerns, and appeared to confirm a broader shift in American policy towards a watering down of the Sarbanes-Oxley rules.

The Vice-President went on to indicate that he would be "happy to work with" Democrats on relaxing some Sarbanes-Oxley rules if they were to triumph in the midterm congressional elections next month. However, it is not certain that all Democrats see eye-to-eye with the emerging Republican consensus.

Sarbanes-Oxley may have gone too far, says Cheney

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Monday, October 30, 2006

Elections will determine future of Sarbanes-Oxley

The authors of the infamous Sarbanes-Oxley Act retire from the US Congress at next week’s mid-term elections and plenty of critics hope the act will not last much longer. Opponents of the corporate governance act, which has been accused of wrapping business in expensive red tape and driving international companies away from the US capital markets, hope the departure of Democratic senator Paul Sarbanes and Republican representative Michael Oxley will herald a wholesale revision of the law that bears their name.

Luminaries such as Henry Paulson, former chief executive of Goldman Sachs who became treasury secretary in June, and Michael Bloomberg, the mayor of New York, are concerned that Sarbanes-Oxley is harming the US capital markets. The retirement of Sarbanes and Oxley, and the election of a new Congress, could provide the stimulus for reform.

Elections will determine future of Sarbanes-Oxley

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Sarbanes-Oxley deserves scrutiny

The Sarbanes-Oxley Act and other reforms must undergo a rigorous cost-benefit analysis to ensure they aren't harming competitiveness, leaders of an independent group studying the U.S. capital markets said in an opinion piece in Monday's Wall Street Journal.

R. Glenn Hubbard, dean of the Columbia Business School and a former chairman of President Bush's Council of Economic Advisers, and John Thornton, chairman of the Brookings Institution and a former president of Goldman Sachs Group Inc., are part of a newly formed committee considering changes to Sarbanes-Oxley and other reforms.

"Rolling back the Sarbanes-Oxley law wholesale is not the answer," they wrote in their opinion piece. "But subjecting regulation to rigorous cost-benefit analysis is surely right."

Sarbanes-Oxley deserves scrutiny

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Thursday, October 26, 2006

Forbes attacks "onerous" SOX

Steve Forbes, chief executive of media giant Forbes, has predicted that US lawmakers will implement major changes to the controversial Sarbanes-Oxley (SOX) Act, in the wake of the sentencing earlier this week of disgraced Enron executive Jeffrey Skilling.

Speaking after his keynote speech at SAS' BetterManagement Live conference in Las Vegas yesterday, Forbes argued that the SOX corporate reporting legislation had been rushed through in the wake of the collapse of Enron and Worldcom. As a result, he said the rules were ineffective, onerous and unnecessary.

"A person intent on committing fraud will not be deterred by paper walls," Forbes said. "The best [defence against] corporate crime is stiff jail sentences."

Forbes attacks "onerous" SOX

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First SOX Compliance Firm to Use COSO for Small Companies

Lord & Benoit, LLC a national SOX (Sarbanes-Oxley) compliance firm is pleased to announce that it is one of the first firms in the country to implement COSO’s new “Internal Control over Financial Reporting - Guidance for Smaller Public Companies” for one of its smaller public company clients. Lord & Benoit completed a successful and affordable SOX Section 404 self assessment for a fixed fee of under $25,000.

“Our mandate is to help smaller public companies comply with SOX Section 404 affordably and COSO for Smaller Public Companies definitely helped us do that,” says Bob Benoit, President and Director of SOX Research. “The new COSO the framework covers the unique needs of the financial reporting requirement and is therefore much more focused on achieving understandable and efficient SOX compliance.”

Lord & Benoit’s research has been quoted by all of the Big 4 firms, SEC, IIA, PCAOB, SAG, AIPCA-CFCAF, SEC Advisory, Wall Street Journal and over 100 other trade journals. Bob Benoit teaches “Complying with SOX Section 404” particularly for smaller public companies. He has also been on the AICPA Peer Review Acceptance Board in Massachusetts for the past 10 years. For more information about Lord & Benoit research, go to www.Section404.org.

More information about Lord & Benoit.

First SOX Compliance Firm to Use COSO for Small Companies

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Wednesday, October 25, 2006

Paulson Says Sarbanes-Oxley Adds to Companies' Burden

U.S. Treasury Secretary Henry Paulson said he is considering recommending changes to the 2002 Sarbanes-Oxley corporate governance law because its restrictions have overwhelmed some American companies.

While the "net result" of stricter reporting standards for executives has been positive, Sarbanes-Oxley has also contributed to "an atmosphere that has made it more burdensome for companies to operate," Paulson said in an interview today from Washington.

"We're going to need to look at how we can address some of these issues," Paulson said. "This is something we're giving a lot of thought to."

Paulson Says Sarbanes-Oxley Adds to Companies' Burden

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Friday, October 20, 2006

Tougher Oversight Prompts Turnover Among CFOs

The Sarbanes-Oxley Act, sweeping financial reforms enacted by Congress in 2002 in the wake of high-profile accounting scandals, have been a popular target for critics who bemoan the impact of costly, time-consuming government regulations.

The law also is being blamed for increased turnover among chief financial officers -- the top accountants at public companies whose performance has come under increased scrutiny.

"We could tell in our work levels it was increasing post-Sarbanes-Oxley," say Lorraine Hack, executive director of Russell Reynolds Associates' financial officers practice.

Tougher Oversight Prompts Turnover Among CFOs

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Thursday, October 19, 2006

Sarbox clever

Four years after the introduction of Sarbanes-Oxley many organisations are still struggling with embedding compliance in their business.

They are realising that they need to get smarter at addressing regulatory compliance. It’s a challenge that requires a change of mindset from senior management.

Non-compliance is not an option. Instead, we need to work out how best to minimise the effort and burden, and focus on sustainability. These are the challenges that the more progressive global organisations have addressed with their Sarbox programmes.

Sarbox clever

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Wednesday, October 18, 2006

Study Finds Sarbanes-Oxley Benefits Business

Despite current calls in Congress to ease the impact of the Sarbanes-Oxley Act, an MIT Sloan School of Management professor and coauthors find that the Act's reporting and disclosure standards have brought significant financial benefits for businesses, including smaller firms that some have been seeking to exempt from the law.

Far from just adding to corporate costs, says MIT Sloan Assistant Professor Ryan LaFond, "our findings tell a very different but consistent story about Sarbanes-Oxley. Firms with strong internal controls already in place and firms that remediate prior control weaknesses are rewarded with a significantly lower cost of capital," which falls by as much as 150 basis points for firms that can demonstrate such compliance.

LaFond compared unaudited financial disclosures by companies prior to Sarbanes-Oxley to audit opinions issued after the law was enacted.

Study Finds Sarbanes-Oxley Benefits Business

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Sarbanes-Oxley works for all

What's going on? Thanks to Sarbanes-Oxley, which established the Public Company Accounting Oversight Board, someone is looking at those firms for the first time.

Before Sarbanes-Oxley, the only real regulation of the audit industry came from the Securities and Exchange Commission, which had limited authority and a limited staff. It could file suits against auditors or their firms and bar them from auditing public companies. But a commission staff that lacked the resources even to look at the vast majority of filings by large companies was unlikely to spend time reviewing many audits of tiny companies.

Sarbanes-Oxley works for all

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Sarbox Survival Guide: Sarbanes-Oxley Whistleblowers in for Long Haul

One of the first people to seek protection under the whistleblower provisions of the Sarbanes-Oxley Act is still awaiting resolution of his case.

According to a CFO.com story, David Welch alleges that he lost his job as CFO of a financial institution in 2002 after questioning the company’s internal controls and refusing to sign off on financial statements.

Sarbox Survival Guide: Sarbanes-Oxley Whistleblowers in for Long Haul

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Tuesday, October 17, 2006

PCAOB Q&A - PCAOB Issues Guidance on Auditing the Fair Value of Share Options Granted to Employees

Washington, DC, October 17, 2006 - The Public Company Accounting Oversight Board today issued staff questions and answers about auditing the fair value of share options granted to employees.

The staff guidance provides direction for auditing a company’s estimation of the fair value of stock options granted to employees pursuant to Statement of Financial Accounting Standards No. 123 (Revised), Share-Based Payment (FAS 123R). FAS 123R became applicable for financial statements of companies with fiscal years ending on or after June 15, 2006.

“I appreciate that many firms currently are auditing the fair value of share options and have developed their auditing approaches using the general principles in the existing auditing literature," said Tom Ray, PCAOB Chief Auditor and Director of Professional Standards. "The staff's questions and answers were developed to help auditors apply the existing auditing standards to this area appropriately and consistently, and I encourage auditors to review this guidance as they plan for calendar year-end audits."

PCAOB Issues Guidance on Auditing the Fair Value of Share Options Granted to Employees

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IT Governance Institute Releases Update of Popular Sarbanes-Oxley Guidance on Press Releases

An updated edition of the globally demanded IT Control Objectives for Sarbanes-Oxley was released today by the nonprofit, independent IT Governance Institute (ITGI) and is available as a complimentary download at www.itgi.org.

The first edition of the guidance, published in 2004, has been downloaded more than a quarter of a million times. Companies around the world have used it as a tool for evaluating information technology (IT) controls in support of Sarbanes-Oxley compliance and other global financial reporting requirements.

Experts from many organizations and issuers, including the top 10 accounting and professional firms, provided input and direction for the publication. The document underwent a 60-day exposure process, and was enhanced based on comments received from more than 100 respondents.

The second edition incorporates many of the lessons learned regarding financial reporting and IT controls since the first edition of the publication was issued—most significantly, the need to take a top-down, risk-based approach in Sarbanes-Oxley compliance programs to ensure that sufficient attention is given to high-risk areas.

IT Governance Institute Releases Update of Popular Sarbanes-Oxley Guidance on Press Releases

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Monday, October 16, 2006

Corporate America needs Sarbanes-Oxley

Although regulators have forced big corporate-governance changes, many boards have proved unable to operate in the best interests of shareholders.

In light of the recent controversy over stock option backdating, it is clear that corporate America needs Sarbanes-Oxley to maintain transparency and to keep the microscope on big business.

Boards of directors are responsible for enforcing corporate governance, and they are failing that responsibility. Action needs to be taken.

Corporate America needs Sarbanes-Oxley

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Whistleblower Protections under the Sarbanes-Oxley Act: A Primer and a Critique

In the wake of scandals involving Enron Corporation, Arthur Andersen and other corporations, Congress enacted the landmark Sarbanes-Oxley Act of 2002, the Corporate and Criminal Fraud Accountability Act of 2002 (hereinafter the "Act" or "Sarbanes-Oxley").This article critically examines the whistleblower protections afforded employees under Sarbanes-Oxley.

Part I of the article considers the statutory language, the legislative history, and the regulations pursuant to the Act. Part II of the article examines recent decisions by the U.S. Department of Labor in Sarbanes-Oxley whistleblower cases (cases under the Act are initially adjudicated by the Department of Labor) and the overall framework for implementation of the law. The manner in which Sarbanes-Oxley relates to state law, particularly the doctrine of at-will employment, is discussed in Part III. In Part IV, the breadth and effectiveness of the Sarbanes-Oxley whistleblower protections and the existing legal and corporate cultural framework is considered. Finally, Part V proposes suggestions for improving current whistleblower protections under Sarbanes-Oxley so that they will accomplish their intended legislative purposes: that of protecting and encouraging corporate whistleblowers.

Normatively, it appears that meaningful changes must occur on three levels to protect and encourage whistleblowers to "whistle" early on and to thereby prevent corporate fraud: i) there must be more exacting implementation of the existing Sarbanes-Oxley regulations; ii) administrative tribunals and courts must give effect to the intent of the statute: to actually protect whistleblowers; and iii) years after the "Enron wake-up call," public companies must still reform their business cultures to encourage the free flow of information and reporting of wrongdoing. Whistleblower protection is a critical part of Sarbanes-Oxley and fraud prevention.

Loyal employees with information to report about their corporate employer will only come forward readily -- to protect investors and individual shareholders against corporate fraud -- when they believe that their livelihoods will be protected in an immediate and real way. Only when all employees are watching -- and no one is afraid to blow the whistle -- will the incidence of fraud in public corporations drop to an acceptable level.

Whistleblower Protections under the Sarbanes-Oxley Act: A Primer and a Critique

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More Restatements in 2006 for Smaller Accounting Firms

With Sarbanes-Oxley (SOX) requiring the Public Company Accounting Oversight Board (PCAOB) to inspect every firm that audits companies registered with the Securities and Exchange Commission (SEC), at least every three years, smaller firms may be preparing the restatements in anticipation of SOX 404 audits, the Times report suggests.

"The auditors are being audited by the PCAOB and that is forcing them to pay more attention to the details," said Mark Cheffers, the chief executive of AuditAnalytics. The prospect of audits of internal controls "has been forcing smaller registrants to assure their statements pass muster," Cheffers said.

One smaller accounting firm, Beckstead & Watts of Las Vegas, Nevada, is suing the PCAOB because the oversight board forced two Beckstead clients to restate financial statements because of errors.

More Restatements in 2006 for Smaller Accounting Firms

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Saturday, October 14, 2006

Tougher oversight prompts turnover among CFOs

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Friday, October 13, 2006

SEC Announces Meeting on Sarbanes-Oxley Rules

Recommendations regarding Section 404 of the Sarbanes-Oxley Act, foreign private issuer deregistration, internet availability of proxy materials, and Securities Exchange Act Rule 14a-8 will be reviewed at an SEC open meeting on Dec. 13.

SEC Chairman Chris Cox said 404 guidance for management and foreign private issuer deregistration will be addressed before year-end.

SEC Announces Meeting on Sarbanes-Oxley Rules

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Thursday, October 12, 2006

PCAOB- Auditor Oversight and its Implications on the Resilience of our Capital Markets

Speech Text by Chairman Mark W. Olson

At the FEE Conference on Audit Regulation
in Brussels, Belgium
October 12, 2006

I appreciate the opportunity to join you this morning to discuss auditor oversight and its implications on the investor confidence in our capital markets. Financial regulators and supervisors play a critical role in strengthening the infrastructure of our markets, including by enhancing the reliability of financial information. On that note, I specifically would like to share with you today some thoughts on how the efforts of the Public Company Accounting Oversight Board (or PCAOB) and counterpart bodies around the world can strengthen confidence in audited financial statements.

PCAOB- Auditor Oversight and its Implications on the Resilience of our Capital Markets

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Wednesday, October 11, 2006

Two Years Into the Reign of SOX: More to Do

You could be forgiven for thinking that as far as IT is concerned, the lion's share of Sarbanes Oxley (SOX) work has been done. After all, we are rapidly approaching the second anniversary of the original SOX deadline for fiscal years ending on or after November 15, 2004.

But you'd be wrong. You may have put in long hours and seen your organization invest millions in software, hardware and consulting fees to help you get SOX compliant, but in fact the job has only just begun.

That's because much of the IT spending over the past two years has been related to general IT infrastructure, including security and archiving: making sure that e-mails and instant messages are recorded and stored away in case they need to be produced later. That kind of thing.

Two Years Into the Reign of SOX: More to Do

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Storage special: Just can't get enough

In the US, the Sarbanes-Oxley Act of 2002 has affected US multinationals wherever they operate around the globe. Jeff Rodwell, head of IT at law firm Reed Smith in the UK, says, "People are becoming aware it is the retrieval of storage that is really important."

The area that really interests lawyers is where there are different requirements in different jurisdictions. A corporation cannot simply divide its data up if it has regional servers, but needs a common set of data to satisfy different laws.

"I do not know of any multinational that has one server per country, because it is antithetical to any contingency planning," says Rodwell. "Multinational CIOs need to have a global perspective. One of our clients, for example, has to review 43 countries."

Storage special: Just can't get enough

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Tuesday, October 10, 2006

Sarbox Survival Guide: Do People Fit in Your Sarbox Compliance Plan?

Succeeding at compliance today (Sarbanes-Oxley or otherwise) requires a specific corporate culture, according to experts with whom we've spoken. Or at least "compliance culture" is the latest buzzword in the compliance arena. So what does that encompass?

Generally, it addresses incorporating compliance into existing processes across your enterprise rather than allowing compliance to become a standalone, or a process unto itself. Doing this makes processes more efficient and more consistent -- even across departmental boundaries.

Sarbox Survival Guide: Do People Fit in Your Sarbox Compliance Plan?

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UPMC 'first' makes it compliant with Sarbanes-Oxley law

UPMC said yesterday it had become the first nonprofit medical system in the country to be certified compliant with the most stringent provisions of Sarbanes-Oxley, a 2002 corporate governance law designed to prevent mistakes and corrupt accounting.

Private and nonprofit organizations such as UPMC, the region's largest health-care system, are not required to comply with most of Sarbanes-Oxley, which was enacted in the wake of Enron and other corporate corruption scandals and requires public companies to install and monitor internal controls. But it's expected that such organizations will begin moving to become compliant under the assumption that the law eventually will become mandatory for nonprofits and private concerns, too.

UPMC 'first' makes it compliant with Sarbanes-Oxley law

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Monday, October 09, 2006

The Social Construction of Sarbanes-Oxley by Donald Langevoort

The meaning of the Sarbanes-Oxley Act--not just its words and phrases but its legitimacy--is still being contested. My paper takes a close look at SOX's origins along with the early post-SOX evidence. There is no clear-cut answer to the question of how much SOX benefits investors; both positive and critical positions are plausible. As to costs, they are far greater than expected, but more from the way SOX has been implemented than anything that necessarily follows from the legislative drafting. Before turning to how and why implementation has occurred that way--an issue involving both politics and social construction--it considers whether there is an alternative interpretation of SOX that helps explain its motivations and likely long-term effects.

I raise the possibility that SOX's most important effects on business may be less about investor protection per se and more about renegotiating the boundary between the public and private spaces in big corporations, a much deeper ideological issue. The legislation may reflect a political instinct that the incentive structure in the modern public corporation generates risks that require public (not just investor) accountability to be legitimate.

I suggest that the "independent" director, currently seen largely as an investor advocate, is being pushed toward becoming a "public" director whose main assignment is risk management. The paper then turns to the various interpretive communities (managers, investors, Wall Street, accountants, lawyers, regulators, the media and company employees) that are significant in contesting SOX's meaning and how they are likely to interact, again with attention to the different ways that either support or criticism of SOX could find its voice and the behavioral impact as a result.

My prediction, consistent with neither enthusiasm nor harsh criticism of the legislation, is that the interpretive pluralism will gradually moderate both costs and benefits, though slowly tilting toward a public values account.

The Social Construction of Sarbanes-Oxley by Donald Langevoort

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My Daily Fatwa: Bloomberg says Paulson in drive to reform U.S. financial Regulations

Robert Schmidt of Bloomberg is reporting that Treasury Secretary Hank Paulson is leading a drive pushed by the business community to roll back the Sarbanes-Oxley Act ("Paulson Leads Drive to Ease Regulations of Sarbanes-Oxley Law").

Schmidt's article does a good job explaining Paulson's views and the pressure the Treasury Secretary would like to mount in a campaign to repeal Sarbanes-Oxley, but only touches on how limited Paulson's ability to maneuver is in this area. It also fails to mention that Paulson's objectives do not seem to be limited to just SOX but all U.S. financial regulation. This has several important implications.

My Daily Fatwa: Bloomberg says Paulson in drive to reform U.S. financial Regulations

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Companies get ally in bid to ease Sarbanes-Oxley

Wall Street and corporate America have found a potent champion in Washington to back their demands for reduced corporate regulation: Treasury Secretary Henry Paulson.

Mr Paulson, just three months on the job, has offered a thinly veiled criticism of the 2002 Sarbanes-Oxley corporate governance law, endorsed a group aiming to curb investor lawsuits and make corporate prosecutions harder, and picked a former colleague from his days as chief executive of Goldman Sachs Group to oversee domestic finance.

Companies get ally in bid to ease Sarbanes-Oxley

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Paulson Leads Drive to Ease Regulations of Sarbanes-Oxley Law

Wall Street and corporate America have found a potent champion in Washington to back their demands for reduced corporate regulation: Treasury Secretary Henry Paulson.

Paulson, just three months on the job, has already offered a thinly veiled criticism of the 2002 Sarbanes-Oxley corporate- governance law, endorsed a group aiming to curb investor lawsuits and make corporate prosecutions harder, and picked a former colleague from his days as chief executive officer of Goldman Sachs Group Inc. to oversee domestic finance.

Paulson Leads Drive to Ease Regulations of Sarbanes-Oxley Law

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Friday, October 06, 2006

Enron exec gets two years probation

Former Enron Corp. executive Paula Rieker was sentenced to two years probation today for insider trading, according to published reports.

Prosecutors had asked to have Ms. Rieker 's potential 10-year jail sentence reduced because she helped authorities in their investigation.

Ms. Rieker, Enron's former No. 2 investor relations executive, pleaded guilty in May 2004 to insider trading for selling company shares in mid-2001 upon learning that the Houston-based energy company's broadband unit lost millions of dollars.

Enron exec gets two years probation

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Mallory Factor on Sarbanes-Oxley on NRO Financial

During Prohibition, the time of gangsters, speakeasies, and Al Capone, the government appointed the "National Commission on Law Observation and Enforcement" to judge the effectiveness of the liquor ban. The commission in fact determined that Prohibition was not working, but it refused to call for repeal.

This piece of history came to mind last week while listening to a congressional hearing on the fourth anniversary of the Sarbanes-Oxley Act (Sarbox). Chairman Christopher Cox of the Securities and Exchange Commission testified that Sarbox "Is not perfect in every respect. But the vast majority of its provisions are net contributors to the nation's economic health. And 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."

Well, the vast majority of the Washington Nationals may be great baseball players, but if they can't bring in the runs, the team isn’t going to win. It’s the same with Sarbox.

Mallory Factor on Sarbanes-Oxley: Sarbox Is a Disaster and Chris Cox Is For It

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Thursday, October 05, 2006

Forty Percent of 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.

Only 20 percent of the survey's respondents had an independent audit committee, ranging from 15 percent among nonprofits with under $100,000 in annual expenses to 58 percent among those with over $40 million.

HandsNet: Forty Percent of Nonprofits Would Have Trouble Implementing Sarbanes-Oxley's Audit Committee Provisions

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Dunn's zeal to fix one mess created another

Dunn joined a rogues' gallery of business leaders who have faced criminal charges, such as Kenneth Lay of Enron, Bernie Ebbers of WorldCom and Martha Stewart. Criminal accusations were leveled against her Wednesday by California's attorney general just two days before she's scheduled to start chemotherapy for advanced ovarian cancer.

Dunn's alleged crimes are different from the usual corporate malfeasance, corporate governance experts said. She didn't misstate business results, enrich herself with insider information or hurt shareholders. It was less "Den of Thieves" and more "Aesop's Fables": Her zeal to solve one ethical problem -- catching a boardroom leaker -- led her to cross ethical lines herself, some said, and possibly commit crimes.

"It's important not to conflate what Patricia Dunn did here with the behavior of the Enron, WorldCom, Tyco executives," said Kirk Hanson, executive director of the Markkula Center of Applied Ethics at Santa Clara University. "There's mortal sins and venal sins, as the Catholics say."

Dunn's zeal to fix one mess created another

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CFOs: Kerry's Sarbox Relief Bill Not Enough

Sen. John Kerry (D-Mass.) has introduced legislation to ease the concerns small companies have about the cost of complying with section 404 of the Sarbanes-Oxley Act. But amid Congress's month-long break until the Nov. 7 elections, followed by a year-end, lame-duck session, the bill isn't expected to go anywhere or get much attention.

None of the sources CFO.com contacted for this article--many of them small business executives--had heard of the legislation, which the former presidential candidate introduced in the Senate nearly two weeks ago. It was referred to the Committee on Small Business and Entrepreneurship.

CFOs: Kerry's Sarbox Relief Bill Not Enough

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Sarbanes-Oxley has Spirent scrapping New York listing

Spirent Communications is dropping its New York listing because of the high costs of meeting the Sarbanes Oxley regulations on corporate governance.

The communications technology company said in a statement: "The US listing has become significantly more costly and onerous in recent years, not least due to the imposition of the Sarbanes Oxley regulations."

The New York listing costs £3m a year which Spirent believes is "disproportionate to the actual or potential benefit in maintaining the US listing". Spirent will maintain its London listing.

Sarbanes-Oxley has Spirent scrapping New York listing

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Wednesday, October 04, 2006

Independent Capital Markets Regulation Committee To Examine Sarbanes-Oxley Securities Regulations

The Committee is being directed by Hal S. Scott, a professor at Harvard Law School who was instrumental in forming the group. The group’s co-chairs are R. Glenn Hubbard, dean of the Columbia Business School and a former chairman of President Bush’s Council of Economic Advisors, and John L. Thornton, chairman of the Brookings Institute and former president of Goldman Sachs (where Secretary Paulson was his boss). Other luminaries on the Committee include former Commerce Secretary Donald L. Evans, the heads of PricewaterhouseCoopers, Deloitte Touche Tomatsu, Office Depot, DuPont and the CIT Group. In addition to Professor Glauber, academia is represented by Peter Tufano of Harvard Business School and Luigi Zingales of the University of Chicago Graduate School of Business, among others.

Notably absent from the Committee’s composition are any government officials or regulators, although at least one member (Robert Glauber, a visiting professor at Harvard Law School and former chairman of the NASD) has significant regulatory experience.

Independent Capital Markets Regulation Committee To Examine Sarbanes-Oxley Securities Regulations

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Compliance Survey: Public Companies Highlight Automation as Key to Realizing Business Value from Compliance Investment

pprova® Corporation (www.approva.net), the leader in continuous controls monitoring and audit software, today announced the results of a survey of 200 high-level finance, internal audit and IT executives at leading public companies. According to the results of the survey (www.approva.net/survey), while the majority of companies that use software to automate their controls see business value in their investment beyond Sarbanes-Oxley (SOX) compliance, most have yet to implement such a solution. Further, the survey found that many companies still manually audit a large portion of their organization’s internal controls. The survey also explored companies’ compliance technology spending plans, the adequacy of ERP controls and the perceived effect of SOX on corporate fraud and investor confidence.

"Companies today are realizing that it is in their best interest to build a well-controlled environment across their organization," said Rick Cobb, chief operating officer for Approva. "Controls automation technology touches all departments, employees and operations and offers overarching benefits to companies which range from a reduction in audit preparation time to the near removal of human error."

Key findings from the Approva survey include...

Compliance Survey: Public Companies Highlight Automation as Key to Realizing Business Value from Compliance Investment

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WS+BGA Earns Innovation Award from Practical Accountant Magazine

Firm Recognized for Creation of Scalable Methodology To Support Smaller Public & Private Companies

PRINCETON, NJ, October 3, 2006 – WithumSmith+Brown Global Assurance (WS+B GA), a division of WithumSmith+Brown Certified Public Accountants and Consultants (WS+B), today announced it has received the 2006 Practice Innovation Award from Practical Accountant Magazine for creating a unique and efficient methodology to support public and private mid-market entities. The award also recognized WS+B GA for creating its original SOX¹²³product and a separate Private Equity Division geared to address the needs of private equity backed middle market entities.

Published in the September issue, the Fifth Annual Practical Accountant Innovation Awards are voted by the magazine’s editorial staff and recognize firms for taking a lead in developing new or improved services and promoting efficiency. WS+B GA’s Private Equity Services Division and its original SOX¹²³methodology offer an experienced source of subject matter experts that provide hands-on support along with an innovative methodology that streamlines compliance with Section 404 of Sarbanes-Oxley (SOX) and provides cost-effectiveness through its scalable and customized model.

“We wanted to create a unique, scalable methodology for SOX compliance that meets the needs of middle market companies, whether public or private,” said Thomas A. Basilo, Chairman and CEO of WithumSmith+Brown Global Assurance. “We are honored to receive an award that recognizes us for the value we offer clients.”

Headquartered in Princeton, New Jersey WS+B GA was created to answer the growing demand for dedicated support and advanced capabilities in obtaining SOX compliance while also offering an extensive collection of other internal audit/risk assurance related services. SOX¹²³was developed by WS+B GA to provide a highly customized service that addresses the specific needs and particular issues of private entities. SOX¹²³assists clients with key business processes, sub-processes, operational systems, risks and controls in order to improve or create an ordered control environment suited in size and complexity to the nature and size the business.

“Receiving this award is an acknowledgement of the effort we have placed in creating a service that is original in approach,” said Basilo. “Since many of us at the firm have entrepreneurial backgrounds, we can relate to the pressures and limitations many private companies experience and have strived to deliver a personalized and efficient process that gives clients the most for their investment.”

About WithumSmith+Brown Global Assurance, LLC.

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Compliance Survey: Public Companies Highlight Automation as Key to Realizing Business Value from Compliance Investment

Respondents Also Find Link Between Sarbanes-Oxley and Reduced Corporate Fraud

Approva^® Corporation (www.approva.net), the leader in continuous controls monitoring and audit software, today announced the results of a survey of 200 high-level finance, internal audit and IT executives at leading public companies. According to the results of the survey (www.approva.net/survey), while the majority of companies that use software to automate their controls see business value in their investment beyond Sarbanes-Oxley (SOX) compliance, most have yet to implement such a solution. Further, the survey found that many companies still manually audit a large portion of their organization’s internal controls. The survey also explored companies’ compliance technology spending plans, the adequacy of ERP controls and the perceived effect of SOX on corporate fraud and investor confidence.

“Companies today are realizing that it is in their best interest to build a well-controlled environment across their organization,” said Rick Cobb, chief operating officer for Approva. “Controls automation technology touches all departments, employees and operations and offers overarching benefits to companies which range from a reduction in audit preparation time to the near removal of human error.”

Key findings from the Approva survey include:

-- 81 percent of companies who currently use software to automate their controls predict their controls management investment will provide value beyond SOX compliance

-- 72 percent of companies do not currently use a software solution to automate the testing and monitoring of IT controls

-- 37 percent of companies surveyed say that at least 40 percent of their IT controls are still manual while 68 percent say that at least 20 percent of their IT controls are manual

-- 41 percent of companies reported that their ERP system does not do an adequate job of demonstrating compliance with audit and regulatory requirements

-- 47 percent of companies believe SOX has been successful in helping to prevent corporate fraud

-- 32 percent of companies who test more than 20 different applications believe investor confidence in their company has increased since SOX was introduced in 2002

“We are currently seeing a ‘boomerang effect’ occur with regards to corporations’ attitudes toward compliance and their interest in controls automation solutions,” said John Hagerty, vice president, AMR Research, [at a roundtable discussion in New York City, where the survey results were released]. “When the act was first passed in 2002, companies experienced ‘SOX fatigue.’ Today, companies are realizing that they must take a systematic approach to compliance and controls monitoring. Furthermore, they now understand that the solutions they need to invest in for SOX compliance can deliver solid business benefits across the entire organization.”

The complete results of the 2006 Approva Corporation Compliance Survey, including the revenue ranges of those companies surveyed is available for download at www.approva.net/survey.

For more news and information please visit www.approva.net/company/press/pressroom.

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Tuesday, October 03, 2006

Sarbanes-Oxley and the City

Recognizing that New York is losing important wealth-generating business to overseas markets, the city Economic Development Corp. last week approved the hiring of consultant McKinsey & Company to "study the issue."

The consultants will advise the city on how to improve its competitive standing into the future. According to a City Hall spokesman, Sarbanes-Oxley will play just a bit part in the conversation.

How . . . underwhelming.

Sarbanes-Oxley and the City

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Sarbanes-Oxley Whistleblower Action Against Nektar Therapeutics

A Sarbanes-Oxley ("SOX") whistleblower action has been filed with the Department of Labor on behalf of a former employee of Nektar Therapeutics, Inc. (NASDAQ: NKTR), Ellen Leznik, against that company. The case is pending in the Office of Administrative Law Judges at the United States Department of Labor.

This action charges that Leznik, then Senior Corporate Counsel at Nektar Therapeutics, engaged in protected activity by reporting to the company's management various violations of federal securities laws and internal control procedures and ultimately suffered adverse action by Nektar (termination), triggering the SOX whistleblower shield.

Sarbanes-Oxley Whistleblower Action Against Nektar Therapeutics

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Monday, October 02, 2006

Big4Guy: Sarbanes Oxley Approach for Small Business - What Not to Do

Sarbanes Oxley is here to stay. Even though there had been speculations that the act would be repealed, but this seems unlikely. However, changes to the act are expected. SEC included small businesses under the purview of the SOX act. Though there is some relief for such small businesses since they have one year extension to file their first management report. For non-accelerated filers, they have one additional fiscal year ending after 15th December 2008 to carry out an auditor's attestation of internal controls.

Many small companies have a lmited budget for regulatory compliance. Small companies require a practical approach towards SOX compliance. Rules for Sarbanes Oxley which apply to big businesses also apply to small companies. Only the approach towards applying those rules has changed. Specifically speaking, I can atleast list down three things small companies should not do in their Sarbanes Oxley compliance route.

Big4Guy: Sarbanes Oxley Approach for Small Business - What Not to Do

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Sarbanes-Oxley audits too costly, regulator says

Companies will spend more than $6 billion this year to adhere to Sarbanes- Oxley, according to a study released in March by AMR Research, a Boston- based business research firm. The Business Roundtable, an association whose members include the chief executives of the largest U.S. companies, said the same month that 40 percent of its member companies would pay more than $10 million each.

The securities commission is working to make the Section 404 auditing requirements less expensive, and there are no "irreparable problems," he said.

Sarbanes-Oxley audits too costly, regulator says

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