Sarbanes-Oxley | AccountingWEB


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.
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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.

The Shareholder View of Sarbanes-Oxley

The Sarbanes-Oxley (SOX) Act of 2002 and the scandals that precipitated it have had a profound effect on the accounting world. How have those effects been perceived outside the realm of accounting and what, if any, effect has SOX had on the average individual investor?Who is the average individual investor? According to the Voice of the American Shareholder survey conducted by Harris Interactive for BetterInvesting, they are 49.4 year-old married white men living in the South with less than $100,000 in investable assets but who consider themselves somewhat knowledgeable about investing.

Smaller Accounting Firms Reap Benefits from SOX

Many companies, both large and small, have complained that the tough accounting and corporate governance standards of the Sarbanes-Oxley Act are far too costly.For mid-level and regional accounting firms, however, SOX has created an opportunity to provide tax services to corporations that need to divvy up work among various firms.

Spring a Good Time to Clean Up Your Accounting Procedures

With the lessons of the last tax year fresh in mind, now is the perfect time to make sure your company's compliance procedures are working the way they should be.Although many companies are just coming up for air after struggling through the difficulties of complying with the Sarbanes-Oxley Act or the Financial Services Authority requirements in the U.K., the beginning of a new tax year offers an ideal opportunity to put new procedures in place.A report by SourceWire lists common compliance concerns, which include the fact that the chief executive and chief financial officer are now pers

Cisco Proposes Option for Options

When the new rules regarding the expensing of options go into effect over the next year, technology firms, like Cisco Systems Inc., will be among the hardest hit. Billions of dollars are stake in Silicon Valley with its high concentration of technology firms.

Accounting for Derivatives Leads to GE Restatement

General Electric Co.

Keeping IT Secure and Complying with SOX

As public companies scramble to meet the many layers of requirements contained in the Sarbanes-Oxley Act, information security is getting serious attention.The Public Company Accounting Oversight Board (PCAOB) requires that companies and their auditors must maintain audit records for seven years. SOX carries heavy penalties for companies that destroy, alter or falsify business records, which include e-mail and instant messages.
Community News

AIG To Restate Four Years of Earnings, Admits to Derivatives Blunder

One blunder may slightly offset another as American International Group (AIG) sorts out its complicated accounting and derivatives errors. The company issued an 11-page statement that was hammered out by accountants, auditors and attorneys over the weekend, the reported.The company said plans to restate its fiscal 2000, 2001, 2002 and 2003 statements and the March, June and September quarters for 2004.

New Software to Improve Financial Reporting, Compliance

Software makers Hyperion Solutions and UpStream have joined forces to create a new way to speed up and improve the collection of financial data to comply with an array of requirements.The companies say that customers using the combined solution get greater insight into their financial performance and an integrated way to meet regulatory requirements.Hyperior offers what it calls the Compliance Management Dashboard, which gives finance professionals a better view into their compliance with the requirements of the Sarbanes-Oxley Act.

SOX Accounting Expensive for Fortune 1000 Companies

Sarbanes-Oxley Act (SOX) has increased the auditing costs by $1.4 billion, collectively, for Fortune 1000 firms based on figures reported as of April 27, 2005. Two professors at the University of Nebraska-Omaha (UNO), report that 633 Fortune 1000 firms have paid more than $3.6 billion for 2004 audits so far, compared to $2.2 billion the previous year. To comply with SOX, public firms, including those in the Fortune 1000, were required to complete their first audit of internal controls as well as audits of their historical financial statements, in 2004.

Accounting Rule Change Affects Pediatric Vaccine Stockpile

A change in accounting rules has forced the hands of the companies that make pediatric vaccinations and has caused a serious shortfall in the government's vaccine stockpile.Under the new rule, companies can't recognize the revenue for a vaccine until it is given to a patient, so selling to the stockpile no longer benefits the companies, the Washington Post reported.

Senator Santorum and Panel Comment on SOX

Senator Rick Santorum (R-PA) was the keynote speaker Monday in a panel discussion sponsored by the National Investor Relations Institute (NIRI) on the Sarbanes-Oxley Act of 2002.Senator Santorum who is Chairman of the Senate Republican Conference and a member of both the Senate Banking and Finance Committees, is the most likely of the four panelists to be in a position to influence the Securities and Exchange Commission (SEC) and other regulatory bodies.

SOX and Small Business

The Securities and Exchange Commission (SEC) has created an advisory committee to look at the impact of federal securities laws including Sarbanes-Oxley (SOX) on small businesses. The 21 members of the Committee on Smaller Public Companies is charged with examining the impact of SOX in three key areas:Internal Controls. What financial reporting frameworks are available to smaller companies? How does management assess internal controls and what audit standards exist?Corporate Disclosure, Reporting Requirements, and Governance Requirements.

Companies Aim to Help Small Businesses Meet SOX Rules

Two technology companies have announced a partnership to help owners of small and medium-sized businesses meet the internal control requirements of the Sarbanes-Oxley Act.The demanding internal control rules in Section 404 have caused U.S. public companies and their auditors the most headaches since the 2002 law went into effect.

SEC Delays Implementation of Accounting Rules

The Securities and Exchange Commission (SEC) announced on Thursday that large public companies won’t have to expense options until the fiscal year beginning after December 15, 2005.The rules, issued by the Financial Standards Accounting Board (FASB), were have gone into effect for large firms in the first quarter starting after June 15, 2005. The deadline for smaller firms has always been the first fiscal after June 15, 2005.

SOX Causes Jump In Audit Costs, But Benefits Seen

As companies struggle to meet the demanding mandates of the 2002 Sarbanes-Oxley Act, some executives are griping that the costs outweigh the benefits.But of course not everyone agrees, and some business leaders say the benefits of increased transparency are worth the costs.Not only are companies watching their audit bills rise – 45 percent was the average increase at the 100 largest U.S.

SEC May Delay New Accounting Rules for 6 Months

It’s no secret that many US firms are struggling to understand and comply with new rules regarding stock options. The costs of audits and additional staffing to help ensure compliance continue to rise. Businesses are starting to complain.

Scrutinizing Accounting in the Retail Industry

The ever-changing world of vendor accounting is particularly susceptible to abuse. It is no surprise that under the increased scrutiny of the Sarbanes-Oxley era, problems with vendor accounting are affecting the retail industry as demonstrated by a probe by the Securities and Exchange Commission (SEC) into retail giant Saks, Inc.Saks announced in March that the SEC was probing vendor markdown allowances and the adequacy of Saks internal investigation into the matter at one of six merchandising divisions of it Saks Fifth Avenue stores.

Improper Accounting for Leases Triggers New Restatements

Changes in how companies account for real estate leases is forcing a wave of corrections in earnings reports.Accounting for leases came under scrutiny as part of the tough reforms of the 2002 Sarbanes-Oxley Act.


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