August 30, 2005
Document Retention Taken Seriously by SEC
Morgan Stanley continues to feel the wrath of authorities for violations, this time for document retention violations. One wonders if they had more to lose by keeping the documents than destroying them.
"SEC may fine Morgan Stanley $10 mln over email-WSJ
Tue Aug 30, 2005 4:56 AM ET
NEW YORK, Aug 30 (Reuters) - The Securities and Exchange Commission is threatening to fine Morgan Stanley more than $10 million for failing to keep e-mails in a number of cases the agency brought against the Wall Street firm, the Wall Street Journal reported on Tuesday.
The fine, if levied, would be one of the biggest monetary penalties ever paid by a Wall Street brokerage firm for failing to preserve records, the newspaper said.
No immediate comment on the report was available from Morgan Stanley or the SEC.
Citing people familiar with the matter, the Journal said the SEC had been building its case against Morgan Stanley for some time but a final decision on penalties could be months away because both sides continue to haggle over the document-retention issues."
For the complete article, click here.
For more information on the Sarbanes-Oxley Compliance Playbook(tm), see www.issuescentral.com or call 800.410.6681 ext 112 to learn more.
"SEC may fine Morgan Stanley $10 mln over email-WSJ
Tue Aug 30, 2005 4:56 AM ET
NEW YORK, Aug 30 (Reuters) - The Securities and Exchange Commission is threatening to fine Morgan Stanley more than $10 million for failing to keep e-mails in a number of cases the agency brought against the Wall Street firm, the Wall Street Journal reported on Tuesday.
The fine, if levied, would be one of the biggest monetary penalties ever paid by a Wall Street brokerage firm for failing to preserve records, the newspaper said.
No immediate comment on the report was available from Morgan Stanley or the SEC.
Citing people familiar with the matter, the Journal said the SEC had been building its case against Morgan Stanley for some time but a final decision on penalties could be months away because both sides continue to haggle over the document-retention issues."
For the complete article, click here.
For more information on the Sarbanes-Oxley Compliance Playbook(tm), see www.issuescentral.com or call 800.410.6681 ext 112 to learn more.
August 29, 2005
Public Companies Seeking Smaller Firms for Audits
With a record 97% of audits of public firms done by the Big Four, there had to be a change. Recent reports from BusinessWeek indicate that some companies are seeking help from the next tier of firms. Makes sense. Most of these folks are former Big Four talent anyway and can offer better service for a better price. It never made sense that only the Big Four had the brains. So all this fear of KPMG doing a free fall means that maybe some people are coming to their senses and seeing that there are more than four firms in the world.
An excerpt on this topic, see here:
The Big Four -- PricewaterhouseCoopers, Ernst & Young, Deloitte & Touche and KPMG -- once "had a lock" on the auditing business of companies with $1 billion or more in revenue, BusinessWeek reported.
Grant Thornton, the fifth-largest accounting firm, followed by BDO Seidman, McGladrey & Pullen, and the Crowe Group are gaining more business from the largest firms, because some businesses like the added attention they get. Others are seeking a smaller invoice because the time charged for audits has gotten larger.
The Sarbanes-Oxley Act, passed following several accounting scandals in the early 2000s, has increased the number of hours required for a typical audit by more than 30 percent, the New York Times reported.
Some Big Four firms have had to drop clients because of the added time needed to satisfy the Sarbanes-Oxley Act." For the complete article, click here.
To see how your company can be successful with its Sarbanes-Oxley project, see www.issuescentral.com and learn more about the Sarbanes-Oxley Compliance Playbook(tm).
An excerpt on this topic, see here:
The Big Four -- PricewaterhouseCoopers, Ernst & Young, Deloitte & Touche and KPMG -- once "had a lock" on the auditing business of companies with $1 billion or more in revenue, BusinessWeek reported.
Grant Thornton, the fifth-largest accounting firm, followed by BDO Seidman, McGladrey & Pullen, and the Crowe Group are gaining more business from the largest firms, because some businesses like the added attention they get. Others are seeking a smaller invoice because the time charged for audits has gotten larger.
The Sarbanes-Oxley Act, passed following several accounting scandals in the early 2000s, has increased the number of hours required for a typical audit by more than 30 percent, the New York Times reported.
Some Big Four firms have had to drop clients because of the added time needed to satisfy the Sarbanes-Oxley Act." For the complete article, click here.
To see how your company can be successful with its Sarbanes-Oxley project, see www.issuescentral.com and learn more about the Sarbanes-Oxley Compliance Playbook(tm).
August 26, 2005
Benefits from Implementation of SOX Appearing
While most spend a lot of time talking about how painful, onerous, draconian Sarbanes-Oxley is, others are finding ways to spin it to their advantage. There is no rolling back this legislation because of the continued number of material weaknesses that are filed, so why not turn it into a competitive advantage.
See excerpt from an article here:
"... spend once on developing a risk management and control infrastructure for security and then derive multiple benefits, for example by meeting compliance and catching low-level, non-SOX fraud at the same time.
After taking the right approach, ...there will scarcely be a distinction between compliance and security success: "It's incredibly intertwined. Compliance is an overlay over your security processes." Click here for the complete article.
For more information on how your company can effectively and rapidly comply with Sarbanes-Oxley, see www.issuescentral.com to learn more about the Compliance Playbook(tm).
See excerpt from an article here:
"... spend once on developing a risk management and control infrastructure for security and then derive multiple benefits, for example by meeting compliance and catching low-level, non-SOX fraud at the same time.
After taking the right approach, ...there will scarcely be a distinction between compliance and security success: "It's incredibly intertwined. Compliance is an overlay over your security processes." Click here for the complete article.
For more information on how your company can effectively and rapidly comply with Sarbanes-Oxley, see www.issuescentral.com to learn more about the Compliance Playbook(tm).
August 24, 2005
Take a Chill Pill Alex
How can anyone dispute that internal controls are bad? The law is written such that management must provide reasonable assurance not absolute assurance. If there have been problems it is mainly due to auditors finally being governed by someone other than a peer group. They are not under scrutiny and some have made unreasonable requests for proof from their clients.
This where the CFO's and Audit Committees must know their facts about the law and stand their ground. The law is a good law. This is proven by the number of material weaknesses that continue to be reported each week.
And as far as the SEC being able to review records, they have had those rights since 1933/34. If you are a public company, expect scrutiny. You took the public's money and now you have to prove that you are using it wisely. That is the deal. That much has not changed.
An excerpt from Alex Epstein's rant about Sarbanes-Oxley is here:
"Such behavior is now rampant in corporate America. One study documents businesses engaging in practices like “requiring an auditor to attend a meeting to prove it took place” and “proving that all of the physical keys to an office in Europe have been accounted for since it opened in 1995”! “Even a completely harmless error that nobody cares about,” says a lawyer who handles Sarbanes-Oxley compliance, “takes up hundreds and hundreds of hours of the auditors, the CEO, the CFO and the audit committee.”That America’s honest, productive businessmen are spending their time and shareholder money to “prove” they are not criminals--when they could be spending those hours and dollars on R&D, new product launches, or mergers and acquisitions--is a monumental injustice.
Is it any wonder that misery among top executives is reported throughout corporate America, that top executives are departing at record rates, that businesses are “hunkering down”? Is it any wonder that the direct and indirect costs of Sarbanes-Oxley to shareholders have been estimated by a University of Rochester economist as $1.4 trillion? Sarbanes-Oxley is a moral and economic atrocity.
It is past time to repeal this monstrous law and start treating businessmen as American citizens: innocent until proven otherwise."
For his complete rant, click here.
For a cost effective way not to spend too much but to properly comply with the law, see www.issuescentral.com and learn more about Sarbanes-Oxley Compliance Playbo0ok(tm).
This where the CFO's and Audit Committees must know their facts about the law and stand their ground. The law is a good law. This is proven by the number of material weaknesses that continue to be reported each week.
And as far as the SEC being able to review records, they have had those rights since 1933/34. If you are a public company, expect scrutiny. You took the public's money and now you have to prove that you are using it wisely. That is the deal. That much has not changed.
An excerpt from Alex Epstein's rant about Sarbanes-Oxley is here:
"Such behavior is now rampant in corporate America. One study documents businesses engaging in practices like “requiring an auditor to attend a meeting to prove it took place” and “proving that all of the physical keys to an office in Europe have been accounted for since it opened in 1995”! “Even a completely harmless error that nobody cares about,” says a lawyer who handles Sarbanes-Oxley compliance, “takes up hundreds and hundreds of hours of the auditors, the CEO, the CFO and the audit committee.”That America’s honest, productive businessmen are spending their time and shareholder money to “prove” they are not criminals--when they could be spending those hours and dollars on R&D, new product launches, or mergers and acquisitions--is a monumental injustice.
Is it any wonder that misery among top executives is reported throughout corporate America, that top executives are departing at record rates, that businesses are “hunkering down”? Is it any wonder that the direct and indirect costs of Sarbanes-Oxley to shareholders have been estimated by a University of Rochester economist as $1.4 trillion? Sarbanes-Oxley is a moral and economic atrocity.
It is past time to repeal this monstrous law and start treating businessmen as American citizens: innocent until proven otherwise."
For his complete rant, click here.
For a cost effective way not to spend too much but to properly comply with the law, see www.issuescentral.com and learn more about Sarbanes-Oxley Compliance Playbo0ok(tm).
August 02, 2005
SEC Advisory Committee on Smaller Public Companies Asks for Public Input
The SEC is really trying to strike a balance of good regulations around smaller companies and take important small company differences in mind. We have attended some of these meetings and the openness with which they are conducted is stellar.
The members of the committee are from every walk of business life and are distinguished in their careers. We look forward to their input and leadership into this important issue.
For an excerpt of the release:
"The SEC Advisory Committee on Smaller Public Companies is seeking input from the public on ways to improve the current regulatory system for smaller companies under the securities laws of the United States, including the Sarbanes-Oxley Act of 2002 ("SOX"). The Advisory Committee is especially interested in hearing from smaller companies and their managements about their experiences with the existing regulatory framework. The Advisory Committee is also very interested in hearing from investors. The questions set forth below have been prepared by the Advisory Committee. The questions and statements set forth below have not been prepared by and do not reflect any position or regulatory agenda of the Commission.
You should not assume that there is a set cut-off in size of smaller companies in responding to the Advisory Committee's request. For example, answers reflecting experiences of management or investors regarding companies with sales or market capitalization of $100 million, or $750 million, or even more are appropriate where answers provide a basis for considering the company to be a smaller company. You should indicate in your answers the size of the company or companies and the basis of measurement (e.g., sales, market capitalization, number of employees) to which your answers relate.
Answers should be received on or before August 31, 2005. Questions about this request should be referred to William A. Hines, Special Counsel, at (202) 551-3320, Office of Small Business Policy, Division of Corporation Finance, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-3628. " For the complete release, click here.
To learn more about how your company can more cost effectively comply with Sarbanes-Oxley, see www.issuescentral.com to see more about the Compliance Playbook(tm).
The members of the committee are from every walk of business life and are distinguished in their careers. We look forward to their input and leadership into this important issue.
For an excerpt of the release:
"The SEC Advisory Committee on Smaller Public Companies is seeking input from the public on ways to improve the current regulatory system for smaller companies under the securities laws of the United States, including the Sarbanes-Oxley Act of 2002 ("SOX"). The Advisory Committee is especially interested in hearing from smaller companies and their managements about their experiences with the existing regulatory framework. The Advisory Committee is also very interested in hearing from investors. The questions set forth below have been prepared by the Advisory Committee. The questions and statements set forth below have not been prepared by and do not reflect any position or regulatory agenda of the Commission.
You should not assume that there is a set cut-off in size of smaller companies in responding to the Advisory Committee's request. For example, answers reflecting experiences of management or investors regarding companies with sales or market capitalization of $100 million, or $750 million, or even more are appropriate where answers provide a basis for considering the company to be a smaller company. You should indicate in your answers the size of the company or companies and the basis of measurement (e.g., sales, market capitalization, number of employees) to which your answers relate.
Answers should be received on or before August 31, 2005. Questions about this request should be referred to William A. Hines, Special Counsel, at (202) 551-3320, Office of Small Business Policy, Division of Corporation Finance, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-3628. " For the complete release, click here.
To learn more about how your company can more cost effectively comply with Sarbanes-Oxley, see www.issuescentral.com to see more about the Compliance Playbook(tm).
August 01, 2005
Ontario Securities Commission Posts Notice of Delay of 52-111
With no news release and no real explanation, the Ontario Securities Commission announces a one year delay of 52-111 the close copy of the Sarbanes-Oxley Section 404. It is quite interesting that no fan fare was made about this announcement. No coverage of it by Canadian news services even today.
What does this mean for Canadian companies? Really? They have 52-109 in place so they have to certify that they have internal controls over financial reporting but there is no testing required. It is sort of limbo now. Waiting and wondering! What impact does this have on the CICA Handbook addition regarding Integrated Audits of Financial Statements and Internal Controls reporting now awaiting approval by 2/3 of its members.
"July 29, 2005
Regulators Revise Timeline for Internal Control Reporting Project
Montreal– The Canadian Securities Administrators (CSA) announced today that they have extended the timeline for the internal control reporting project. The earliest an internal control reporting instrument would apply is in respect of financial years ending on or after June 30, 2007. Under the proposed internal control instrument, as it was originally published, internal control reporting requirements were to be phased in over four years, commencing with financial years ending on or after June 30, 2006.
The extension to the timeline for the internal control reporting project will allow the CSA sufficient time to assess the potential impact of current developments in the U.S. relating to internal control reporting requirements similar to those proposed in Canada. As well, it will allow the CSA sufficient time to consider issues raised in the 64 submissions from commenters on the proposed Internal Control Instrument." For complete announcement, Click here.
To see how your company can more effectively meet the requirments of 52-109 and 52-111 see www.issuescentral.com and learn more about the Compliance Playbook(tm) and see how you can comply with less effort and less cost.
What does this mean for Canadian companies? Really? They have 52-109 in place so they have to certify that they have internal controls over financial reporting but there is no testing required. It is sort of limbo now. Waiting and wondering! What impact does this have on the CICA Handbook addition regarding Integrated Audits of Financial Statements and Internal Controls reporting now awaiting approval by 2/3 of its members.
"July 29, 2005
Regulators Revise Timeline for Internal Control Reporting Project
Montreal– The Canadian Securities Administrators (CSA) announced today that they have extended the timeline for the internal control reporting project. The earliest an internal control reporting instrument would apply is in respect of financial years ending on or after June 30, 2007. Under the proposed internal control instrument, as it was originally published, internal control reporting requirements were to be phased in over four years, commencing with financial years ending on or after June 30, 2006.
The extension to the timeline for the internal control reporting project will allow the CSA sufficient time to assess the potential impact of current developments in the U.S. relating to internal control reporting requirements similar to those proposed in Canada. As well, it will allow the CSA sufficient time to consider issues raised in the 64 submissions from commenters on the proposed Internal Control Instrument." For complete announcement, Click here.
To see how your company can more effectively meet the requirments of 52-109 and 52-111 see www.issuescentral.com and learn more about the Compliance Playbook(tm) and see how you can comply with less effort and less cost.
