November 28, 2005
Finally Some Guidance on the New COSO Framework
When the new COSO was released last month, we were highly supportive on this blog. The framework IS principles based. This means that inherently it can be "right-sized". Good job!
An excerpt on an article here:
Scaling COSO by Company Size
''We were not interested in creating 'COSO-lite','' says a board member.
Helen Shaw, CFO.com
November 28, 2005
A recently released exposure draft by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) may have been designed for smaller businesses, but it has applications for larger companies as well.
Chuck Landes, vice president of the professional standards group for the American Institute of Certified Public Accountants (AICPA) — one of COSO's five member organizations — notes that the 189-page draft is aimed at smaller public companies that typically do not have the internal depth and breadth of in-house talent to help them embrace the criteria of the original COSO framework.
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Landes maintains, however, that Guidance for Smaller Public Companies Reporting on Internal Control over Financial Reporting can help businesses both large and small. "We were not interested in creating 'COSO-lite'," says Landes, the AICPA's representative on the COSO board. "Because the framework is principles-based, we feel organizations and non-public entities of any size can use the framework and adapt it."
The draft lists 26 control principles of the original COSO framework that relate to the five elements of internal control: control environment, risk assessment, information and communication, control activities, and monitoring. The principles provide templates for how companies can assess their internal controls, provide alternative examples of how a company can achieve compliance, and make it easier for companies to understand the original framework, says Landes.
"The principles give companies something more solid as a benchmark when they look at internal control," he explains. He notes that the document also offers illustrations of how companies can scale COSO to fit their own needs, so they can have less-formal controls without decreased quality." For the complete article, click here.
To learn more about the "right-sized" Compliance Playbook(tm) to help your company cost effectively comply with Sarbanes-Oxley, see www.issuescentral.com.
An excerpt on an article here:
Scaling COSO by Company Size
''We were not interested in creating 'COSO-lite','' says a board member.
Helen Shaw, CFO.com
November 28, 2005
A recently released exposure draft by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) may have been designed for smaller businesses, but it has applications for larger companies as well.
Chuck Landes, vice president of the professional standards group for the American Institute of Certified Public Accountants (AICPA) — one of COSO's five member organizations — notes that the 189-page draft is aimed at smaller public companies that typically do not have the internal depth and breadth of in-house talent to help them embrace the criteria of the original COSO framework.
title=http://ad.doubleclick.net/jump/cfo2.dart/np1248;pos=body;cat=np1248;kw=;sz=336x280;tile=5;num=static_number?
href="http://ad.doubleclick.net/jump/cfo2.dart/np1248;pos=body;cat=np1248;kw=;sz=336x280;tile=5;num=static_number?">
document.write('');
document.write('');
document.write('');
document.write('');
document.write('');
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Landes maintains, however, that Guidance for Smaller Public Companies Reporting on Internal Control over Financial Reporting can help businesses both large and small. "We were not interested in creating 'COSO-lite'," says Landes, the AICPA's representative on the COSO board. "Because the framework is principles-based, we feel organizations and non-public entities of any size can use the framework and adapt it."
The draft lists 26 control principles of the original COSO framework that relate to the five elements of internal control: control environment, risk assessment, information and communication, control activities, and monitoring. The principles provide templates for how companies can assess their internal controls, provide alternative examples of how a company can achieve compliance, and make it easier for companies to understand the original framework, says Landes.
"The principles give companies something more solid as a benchmark when they look at internal control," he explains. He notes that the document also offers illustrations of how companies can scale COSO to fit their own needs, so they can have less-formal controls without decreased quality." For the complete article, click here.
To learn more about the "right-sized" Compliance Playbook(tm) to help your company cost effectively comply with Sarbanes-Oxley, see www.issuescentral.com.
November 24, 2005
Fraud is Everywhere...Maybe the UK needs some Sarbanes-Oxley
Not too long ago, Tony Blair came out strongly against Sarbanes-Oxley. We wrote about this "nosiness" on this blog. One wonders if continued reports of fraud coming out of the UK may make Tony wonder if the UK needs to do more on this front. Fraud is everywhere Tony! It is just a matter if you tolerate it or whether you want to root it out.
An excerpt on fraud in the UK:
"Compass Group Is Under Review by U.K. Fraud Office
Nov. 24 (Bloomberg) -- Compass Group Plc, the world's largest caterer, is under review by the U.K.'s Serious Fraud Office amid allegations in the U.S. of corruption in some contracts awarded by the United Nations.
The SFO, part of the U.K. criminal justice system, said it will assess whether a closer inspection of Chertsey, England-based Compass is appropriate and if so, by which investigating authority.
``The SFO has a duty to record and consider reports of possible overseas corruption involving U.K. persons and/or corporate entities,'' the government group said today in an e- mailed statement. ``Consequently, we have noted the reports concerning Compass and will in due course come to a view.'' For the complete article click here.
If your company needs to comply with Sarbanes-Oxley or the Canadian equivalents, MI-52-109/MI-52-111, see www.issuescentral.com for more information on how to cut cost on your compliance efforts and fully adhere to the legislation.
An excerpt on fraud in the UK:
"Compass Group Is Under Review by U.K. Fraud Office
Nov. 24 (Bloomberg) -- Compass Group Plc, the world's largest caterer, is under review by the U.K.'s Serious Fraud Office amid allegations in the U.S. of corruption in some contracts awarded by the United Nations.
The SFO, part of the U.K. criminal justice system, said it will assess whether a closer inspection of Chertsey, England-based Compass is appropriate and if so, by which investigating authority.
``The SFO has a duty to record and consider reports of possible overseas corruption involving U.K. persons and/or corporate entities,'' the government group said today in an e- mailed statement. ``Consequently, we have noted the reports concerning Compass and will in due course come to a view.'' For the complete article click here.
If your company needs to comply with Sarbanes-Oxley or the Canadian equivalents, MI-52-109/MI-52-111, see www.issuescentral.com for more information on how to cut cost on your compliance efforts and fully adhere to the legislation.
November 22, 2005
Canadian Companies Get Help with Compliance
Carswell partners with Issues Central, Inc., to distribute software solution to Canadian-based publicly traded companies.
Announcing Compliance Partner™ – providing a unique solution for the Canadian market to design, implement and monitor cost-effective internal control over financial reporting …
TORONTO, ON — November 22, 2005 — Today, Carswell and Issues Central, Inc., announced the introduction of Compliance Partner™ for the Canadian market. This software solution will help companies meet requirements for internal control over financial reporting under both the Sarbanes-Oxley Act of 2002 (SOX) s.302/404 and the Canadian Securities Administrators’ Multi-lateral Instrument 52-109/111 (MI).
Carswell, Canada’s largest provider of information and knowledge solutions to the legal, finance, tax and accounting markets, together with Issues Central, Inc., will provide Compliance Partner™ to the Canadian market. The product is designed to dramatically reduce the costs and potential business interruption associated with the new internal control requirements over financial reporting. Canadian-based firms that are listed solely on the TSX® or those that are dually listed on both the Securities Exchange Commission and the TSX® exchange will benefit from using Compliance Partner™.
The Compliance Partner™ software solution builds on the success of Issues Central, Inc.’s compliance product, which has been implemented by companies listed on every major North American exchange. Compliance Partner™ provides a unique solution for the Canadian market to design, implement and monitor internal control over financial reporting on a more cost-effective basis.
“We are very pleased to enter into this agreement with the team at Issues Central, Inc. and to leverage the success of their Compliance Playbook™ product,” said Don Van Meer, President and CEO of Carswell. “In offering the Compliance Partner™ product, as well as supporting training, customer support and education, we are providing a logical extension to our finance and accounting information and business solutions to help the Canadian market.”
“Carswell is well positioned to lead the market for an internal controls compliance product in Canada. They have a clear focus on solutions for finance, accounting and legal professionals,” said Cathy Connally, President of Issues Central, Inc. “The introduction of the Compliance Partner™ product will provide Canadian companies with a strong approach to streamlining their efforts and cost outlay to achieve SOX s.302/304 and MI 52-109/111 compliance.”
About Carswell
Carswell (www.carswell.com) is Canada's leading provider of specialized information and electronic research solutions to the legal, tax, finance, accounting and human resources markets. Headquartered in Toronto, ON, Carswell provides integrated information in a range of formats, including books, loose-leaf services, journals, newsletters, CD-ROMS and online. Carswell is a business within The Thomson Corporation.
About Issues Central, Inc.
Issues Central, Inc. is the developer of the Compliance Playbook™ software solution for Sarbanes-Oxley geared to helping SEC-based filers comply with the requirements of Section 404 and Section 302 of the Act. The Compliance Playbook™ is an award-winning product designed to provide public filers with a streamlined approach to the implementation and ongoing management of internal controls over financial reporting and related compliance activities. The company has offices in New York and Toronto.
About The Thomson Corporation
The Thomson Corporation (www.thomson.com) with 2004 revenues of $8.10 billion is a global leader in providing integrated information solutions to business and professional customers. Thomson provides value-added information, software tools and applications to more than 20 million users in the fields of law, tax, accounting, financial services, higher education, reference information, corporate e-learning and assessment, scientific research and healthcare. With operational headquarters in Stamford, Conn., Thomson has approximately 40,000 employees and provides services in approximately 130 countries. The Corporation's common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
For more information, please contact:
Jayne Jackson
Media Relations
Charley Best
Vice President
Carswell
Issues Central
416.298.5007
1.800.410.6681 ext. 112
jayne.jackson@thomson.com
charleybest@issuescentral.com
November 17, 2005
More Exceptions Noted by PCAOB
It seems that the PCAOB now believes that all Big Four and BDO Seidman have deficiencies in their audit engagements. The PCAOB has spent extensive time in these reviews. They just outline the very reasons why the PCAOB was created by Sarbanes-Oxley.
The Act has outlined deficiencies at public firms and the firms that audit them.
"Panel finds audit deficiencies at 3 firms
THE ASSOCIATED PRESS
WASHINGTON -- The Public Company Accounting Oversight Board found audit deficiencies at three major accounting firms.
Reports on the PCAOB's inspection of Ernst & Young LLP, PricewaterhouseCoopers LLP and BDO Seidman LLP, issued Thursday, said the inspection team identified matters it considered to be audit deficiencies.
In the reports, the PCOAB said those deficiencies included failures by the firm "to identify and appropriately address errors in the issuer's application of GAAP (or generally accepted accounting principles)," and that one or more of those errors was "likely to be material to the firms' financial statement."
In all three reports, the PCAOB said "the deficiencies also included failures by the firm to perform, or to perform sufficiently, certain necessary audit process."
The three reports, which can be viewed on the PCAOB's Web site, http://www.pcabous.org, provide details of specific cases, without mentioning the audited entities by name." For the complete story, click here.
To learn more about how your company can effectively comply with Sarbanes-Oxley, see www.issuescentral.com to find out more about the Compliance Playbook(tm).
The Act has outlined deficiencies at public firms and the firms that audit them.
"Panel finds audit deficiencies at 3 firms
THE ASSOCIATED PRESS
WASHINGTON -- The Public Company Accounting Oversight Board found audit deficiencies at three major accounting firms.
Reports on the PCAOB's inspection of Ernst & Young LLP, PricewaterhouseCoopers LLP and BDO Seidman LLP, issued Thursday, said the inspection team identified matters it considered to be audit deficiencies.
In the reports, the PCOAB said those deficiencies included failures by the firm "to identify and appropriately address errors in the issuer's application of GAAP (or generally accepted accounting principles)," and that one or more of those errors was "likely to be material to the firms' financial statement."
In all three reports, the PCAOB said "the deficiencies also included failures by the firm to perform, or to perform sufficiently, certain necessary audit process."
The three reports, which can be viewed on the PCAOB's Web site, http://www.pcabous.org, provide details of specific cases, without mentioning the audited entities by name." For the complete story, click here.
To learn more about how your company can effectively comply with Sarbanes-Oxley, see www.issuescentral.com to find out more about the Compliance Playbook(tm).
November 14, 2005
CFO's Find Value in Sarbanes-Oxley 404
Even with all the complaining about Sarbanes-Oxley Section 404, CFO's are beginning to see benefits to really pulling back the covers on this whole internal controls issue. When they first started projects, many felt that they had really great internal controls.
But as they began to look at controls in depth, they discovered that processes were broken, inefficient and certainly lacked the proper controls. In some cases, controls were too tight and in some cases, processes were so fragile due to extreme amounts of manual intervention. But in the end, many true problems were detected.
The legislation works! The number of deficiencies says it all. Stay the Course Mr. Cox.
An excerpt from an article is here:
Most CEOs -- but not all. A few companies are discovering, to their surprise, that taking stock of internal controls can help beyond just unmasking accounting problems. By forcing executives to dig deep into how their companies get work done, Section 404 is enabling businesses to cut costs and boost productivity. "There truly is a silver lining" in 404, says Gary Moran, managing director of Alvarez & Marsal Business Consulting LLC. His firm and CFO Research Services sponsored a report that discusses the unexpected benefits that 404 yielded at Cisco Systems, Genentech, and other companies.
"DIRTY LITTLE SECRET"
Of course, even the most onerous rules handed down from Washington hold some advantage for somebody. In the case of 404, the vast majority of companies still thinks it's overkill. In the FEI survey, 94% of top executives at the 217 public companies it polled said the costs of compliance far outstrip any gains.But for some companies, 404 documentation is turning out to be a catalyst for computer-system upgrades and other efficiency moves that chief financial officers have long had on the back burner. "The dirty little secret is that many CFOs love 404" because it has given a boost to initiatives that had trouble getting traction, says William J. McDonough, chairman of the Public Company Accounting Oversight Board, the agency that turned Sarbanes-Oxley's language on Section 404 into specific directions for management and auditors.
For the complete article, see www.businessweek.com
But as they began to look at controls in depth, they discovered that processes were broken, inefficient and certainly lacked the proper controls. In some cases, controls were too tight and in some cases, processes were so fragile due to extreme amounts of manual intervention. But in the end, many true problems were detected.
The legislation works! The number of deficiencies says it all. Stay the Course Mr. Cox.
An excerpt from an article is here:
Most CEOs -- but not all. A few companies are discovering, to their surprise, that taking stock of internal controls can help beyond just unmasking accounting problems. By forcing executives to dig deep into how their companies get work done, Section 404 is enabling businesses to cut costs and boost productivity. "There truly is a silver lining" in 404, says Gary Moran, managing director of Alvarez & Marsal Business Consulting LLC. His firm and CFO Research Services sponsored a report that discusses the unexpected benefits that 404 yielded at Cisco Systems, Genentech, and other companies.
"DIRTY LITTLE SECRET"
Of course, even the most onerous rules handed down from Washington hold some advantage for somebody. In the case of 404, the vast majority of companies still thinks it's overkill. In the FEI survey, 94% of top executives at the 217 public companies it polled said the costs of compliance far outstrip any gains.But for some companies, 404 documentation is turning out to be a catalyst for computer-system upgrades and other efficiency moves that chief financial officers have long had on the back burner. "The dirty little secret is that many CFOs love 404" because it has given a boost to initiatives that had trouble getting traction, says William J. McDonough, chairman of the Public Company Accounting Oversight Board, the agency that turned Sarbanes-Oxley's language on Section 404 into specific directions for management and auditors.
For the complete article, see www.businessweek.com
November 08, 2005
Revenue Recognition Still a Hot Spot for Registrants and Auditors
Ever since the report (Section 704) supporting Sarbanes-Oxley, revenue recognition has been a huge area of problems. Now there are more rules SAB 101 and 104 taking this issue to a new level.
An excerpt on this topic is here:
"The Impact of Sarbanes-Oxley on Revenue Recognition Practices
2005-11-08 12:00:00.0 CDT Part One: Key Processes for Revenue Compliance
By Robert O’Connor
Revenue accounting has become a “hot spot” for auditors and investors. It is simultaneously coming under greater scrutiny and becoming more complex. Guidelines and regulations are under constant review, and many industries are adopting new business models involving wide ranging customer relationships with long-term financial implications. The introduction by the Securities and Exchange Commission of Staff Accounting Bulletins (SAB) 101 and 104, as well as FASB’s Emerging Issues Task Force (EITF) 00-21 and the Sarbanes-Oxley Act underscore the fact that reliable revenue reporting is a demand all companies must meet, and that it is non-negotiable. Accurate, timely, and comprehensive revenue reporting is a requirement for enterprise infrastructures and an essential component for regulatory compliance."
For complete article, click here.
To learn more about the Sarbanes-Oxley Compliance Playbook(tm) see www.issuescentral.com
An excerpt on this topic is here:
"The Impact of Sarbanes-Oxley on Revenue Recognition Practices
2005-11-08 12:00:00.0 CDT Part One: Key Processes for Revenue Compliance
By Robert O’Connor
Revenue accounting has become a “hot spot” for auditors and investors. It is simultaneously coming under greater scrutiny and becoming more complex. Guidelines and regulations are under constant review, and many industries are adopting new business models involving wide ranging customer relationships with long-term financial implications. The introduction by the Securities and Exchange Commission of Staff Accounting Bulletins (SAB) 101 and 104, as well as FASB’s Emerging Issues Task Force (EITF) 00-21 and the Sarbanes-Oxley Act underscore the fact that reliable revenue reporting is a demand all companies must meet, and that it is non-negotiable. Accurate, timely, and comprehensive revenue reporting is a requirement for enterprise infrastructures and an essential component for regulatory compliance."
For complete article, click here.
To learn more about the Sarbanes-Oxley Compliance Playbook(tm) see www.issuescentral.com
