Sarbanes-Oxley

Community News

Insider View: The Sarbanes-Oxley Conference and Exposition

I was pleased to participate in a recent roundtable discussion at The Institute for Financial Excellence’s Sarbanes-Oxley conference in Baltimore, Maryland. It prompted a lively discussion, moderated by John Hagerty from AMR Research.

Investors See SOX Regulations Lacking

A new poll Wall Street Journal Online / Harris Interactive Personal Finance Poll shows that 55 percent of the participating adult investors believe the current financial and accounting regulations governing publicly held companies are too soft. Harris Interactive reports that for male investors aged 45 to 54, this number rose to 77 percent.
Community News

Smaller Accounting Firms in Big Demand

With the Big Four accounting firms busy helping public companies comply with the Sarbanes-Oxley Act, smaller firms are picking up business once dominated by their bigger rivals.At least two surveys over the last two years show that Big Four accounting firms are losing clients. Some of it is by choice, as the Big Four have had to drop some smaller companies to make sure their big public clients are in full compliance with the corporate reform legislation, especially the rigorous internal control requirements.
Community News

Section 404 Spurs Competition Among Audit Firms

Section 404 of the Sarbanes-Oxley Act (SOX) requires public companies to document and report annually on their corporate internal controls. SOX also requires executives to confirm the accuracy of their company’s financials. SOX compliance usually requires the outsourcing of the audit function to Big Four accounting firms but that has changing since the act was enacted in 2002.

Judge: Private Suits Not Allowed Under Section 304 of SOX

A federal judge has ruled that private shareholders cannot file derivative lawsuits under Section 304 of the Sarbanes-Oxley Act.Under Section 304, corporate executives can be forced to give back profits and bonuses gained in alleged accounting scandals. U.S.

Debate on Global Accounting Standards: Rules Versus Principles

Harmonizing accounting standards among the United States and 95 other countries means agreeing to a common language for financial reporting.Advertisement
Practice

Businesses Seek Solutions for Storing E-mail

Failing to retain e-mail records may cost Morgan Stanley $10 million.The Securities and Exchange Commission is threatening to levy the fine because the Wall Street brokerage firm did not keep e-mails connected with a number of big cases the SEC is investigating, the Wall Street Journal reported.The newspaper, citing people familiar with the matter, said that the firm, the SEC and other regulators met last week in Washington to discuss the document-retention problems.
Technology

New Compliance Solution Saves Time and Money

A new service from e-know, Inc. automates the outbound communications, business ethics policies, finance and administration controls, non-compete/non-disclosure agreements, conflict of interest policies, operating procedures, sexual harassment policies and other compliance related activities helping commercial and government organizations dramatically reduce the time, expense and effort required to implement initiatives, conduct audits and manage the organization’s overall risk mitigation effort.“Companies continue to spend huge sums and
Practice

SOX Institute Takes Sarbanes-Oxley Training Program on the Road

“Last month, the Institute of Management Accountants reported that top management accountants and finance professionals pulled ahead of public accountants in both average salary and total compensation in 2004 as a direct result of Sarbanes-Oxley,” says Board Chairman Fw. CFE, CSOX, CSOXP. “This is an opportunity for us to reach those who want and need the education right where they are, and at a price they can afford.”The SOX Institute is taking its SOX training program on the road.

A Conversation With...Robert H. Krebs

As the new president of the Pennsylvania Institute of Certified Public Accountants, Robert H. Krebs Jr. already knows his first order of business-attract more members.The Pittsburgh-based partner of the small Goff Backa Alfera & Co. LLC firm is hardly alone in his plight.
Practice Management

Stock Option Studies and Options Expensing

Two studies have found connections between lucrative stock options and grants paid to chief executives as compensation and companies that report accounting irregularities, flawed accounting practices, or engage in risky business strategies.

Sarbanes-Oxley Act Whistle-blower Provisions: Practical Concerns

The comprehensive protection afforded whistleblowers in the Sarbanes-Oxley Act (SOX) creates significant liability for companies covered under the law. Section 806 of Sarbanes affords direct protection against retaliation to whistleblowers employed in publicly held companies. Privately held companies are indirectly covered by the Act for three reasons, according to Marc Steinberg and Seth Kaufman writing for the Journal of Corporation Law of University of Iowa College of Law.
Tax

Whistleblowers Pay a Heavy Price

While whistleblowers are protected under the Sarbanes-Oxley Act, the financial and emotional toll remains alarmingly high.Just ask David Windhauser, the former controller for Trane, the heating and cooling company. He was the first person to receive a U.S. Department of Labor order requiring his former employer to rehire him under Sarbanes-Oxley. He complained in 2003 that managers were committing fraud by recording fake expenses on financial statements. He was fired one month later.

Sarbanes-Oxley Impacts Nonprofits

Many nonprofit organizations, while not required to meet the provisions of the Sarbanes-Oxley Act of 2002, are beginning to adapt some of the Act’s standards to their own governance practices. One of these is New York's Juilliard School, where President Joseph Polisi has long stressed transparency and board involvement, according to the Wall Street Journal.

SOX No Cure-All for Accounting's Ills

Accountants have been on high alert in the post-Enron work environment, but experts say that while accounting has improved, fundamental problems remain.The Sarbanes-Oxley Act of 2002 has required tight internal controls over financial reporting, better documentation and in general, more accountability. But some observers point out that, in effect, the fox is still watching the hen house. As long as the accounting firms are paid by the companies they audit, scandals will continue, New York Times columnist Joseph Nocera suggests.
A&A

Analysts Ignoring Cost of Stock Options

Some Wall Street analysts are failing to figure the cost of stock options in their reports to investors, at least so far.Public companies last month were required for the first time to account for stock options as expenses, lowering their bottom line. For some companies, those new figures will be reflected in regulatory reports due soon, but stock analysts are not following suit, the Wall Street Journal reported.Analysts are leaving out the information in earnings-per-share figures included in reports to investors. For example, Microsoft Corp.

A Conversation With...Barry Melancon

More than two years after federal law changed the way accounting firms conduct business, the head of the profession's advocacy says significant challenges remain.
Technology

Mark Your Calendar: 2005 State Of Regulatory Compliance Summit

This month marks the third anniversary of the Sarbanes-Oxley (SOX) Act of 2002. In recognition of that milestone, BindView Corp., is hosting the 2005 State of Regulatory Compliance Summit at the National Press Club in Washington, D.C. on July 19 beginning at 10 a.m. EST.“Three years after the passage of Sarbanes-Oxley, U.S. business finds itself having to come to grips with a complex array of new regulations.

Private Companies Feeling Effects of SOX

As you know, private companies aren’t currently required to comply with provisions of the Sarbanes-Oxley (SOX) Act of 2002. CEOs from 17 percent of the nation’s fastest-growing private companies say SOX has already had impact on their business and another 13 percent believe they will be impacted in the near future, according to a survey conducted by PricewaterhouseCoopers.
Community News

Former HealthSouth CEO Scrushy Found Not Guilty

After 21 days of deliberation, an Alabama jury on Tuesday, June 28, 2005 found former HealthSouth CEO Richard Scrushy not guilty on all counts. The verdict comes only five days after one juror was replaced with an alternate juror forcing deliberations to begin anew. It is the first acquittal in a series of trials of high-profile CEOs accused of accounting fraud.Scrushy initially faced 85 charges of mail fraud, conspiracy, making false statements, money laundering, securities fraud and wire fraud resulting in a $2.7 billion inflation of HealthSouth’s profit numbers.

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