December 12, 2007
One More Time: One Year Delay Proposed for Small Companies for SOX 404(b): Auditor Attestation
Well, they done it again. The SEC is proposing one more delay for small companies for the auditor attestation portion of SOX 404. That is 404(b). So this gives companies a breather to let the larger brethren to get Audit Standard #5 road tested.
But this means, look out when the Auditor Attestation occurs in 2009. The auditors will be there with full confidence. Time to get those risk control documents in order and test those controls and remediate as necessary.
Here is the detail so far from Market Watch:
"CAMBRIDGE, Mass., Dec 12, 2007 /PRNewswire via COMTEX/ -- The Committee on Capital Markets Regulation applauds SEC Chairman Cox's testimony proposing the delay of an additional year before requiring that small companies get external audits under Sarbanes Oxley Section 404(b), in order to complete what amounts to a cost-benefits analysis of that requirement. As we noted in our Interim Report of November 2006 and in our testimony in June 2007 before the U.S. House Committee on Small Business, Section 404 costs, averaging $4.4 million in the first year, have disproportionate impact on small companies.
Let's wait to see whether these costs are substantially reduced by the SEC's and PCAOB's recent Section 404 reforms before applying them to small companies. Unreasonable 404 costs will either prevent small private companies from going public, or drive them abroad to do so. Indeed, our December 4th report on The Competitive Position of the U.S. Public Equity Market found that through the first three quarters of 2007, a remarkable 9.2% of U.S. companies did their IPOs only abroad. "
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell.
But this means, look out when the Auditor Attestation occurs in 2009. The auditors will be there with full confidence. Time to get those risk control documents in order and test those controls and remediate as necessary.
Here is the detail so far from Market Watch:
"CAMBRIDGE, Mass., Dec 12, 2007 /PRNewswire via COMTEX/ -- The Committee on Capital Markets Regulation applauds SEC Chairman Cox's testimony proposing the delay of an additional year before requiring that small companies get external audits under Sarbanes Oxley Section 404(b), in order to complete what amounts to a cost-benefits analysis of that requirement. As we noted in our Interim Report of November 2006 and in our testimony in June 2007 before the U.S. House Committee on Small Business, Section 404 costs, averaging $4.4 million in the first year, have disproportionate impact on small companies.
Let's wait to see whether these costs are substantially reduced by the SEC's and PCAOB's recent Section 404 reforms before applying them to small companies. Unreasonable 404 costs will either prevent small private companies from going public, or drive them abroad to do so. Indeed, our December 4th report on The Competitive Position of the U.S. Public Equity Market found that through the first three quarters of 2007, a remarkable 9.2% of U.S. companies did their IPOs only abroad. "
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell.
December 03, 2007
Is White Collar Crime Really Less Evil than Violent Crime?
Conrad Black has started his public rantings again against this time the US legal system. In an article in today's Globe and Mail, he claims he is innocent. He has not yet been sentenced but he is speaking out. But hey that is Conrad. He cannot stop talking even when it might cut his jail time.
Conrad played by his own rules, not the ones he was supposed to. Just because he thinks that some of the charges were dropped, does not mean they were not true, the prosecutors may just have had to pick their battles to win the war.
But to me the most interesting item in this article relates not to Conrad Black, who frankly raided the corporate cookie jar and got caught.
A Mr. Frenkel from the British Press is quoted in this article: "There's no question that the conviction of [ex-Enron CEO] Jeffrey Skilling warranted jail, but when drug dealers and murderers are serving fewer than the 24 years he will be serving, there is certainly an inequity."
I beg to differ. Has anyone ever bothered to go back and count the lives that were lost due to suicide from these fraudulent investments? Those who ended it all because they lost their life savings. They believed the fraudulent promises of these white collar criminals such as Jeffrey Skillings, Conrad Black, etc..
How many people did not go to college because savings were lost? How many people ended up homeless because they lost their money? Why are these consequences not counted among the "lives wrecked or lost? It is easier when there is a murder or drugs sold to say these criminals are evil, but that is only because the wreckage is either tracked by government statistics or covered by the media.
The personal economic devastation caused by these criminals, and they are criminals, is real and they should be punished just like other criminals.
There is a good reason to have good governance. It is not just fluff. The truth matters. Investors should be able to trust what officers of companies publish in their financial records and news releases. There has to be accountability.
Those former corporate titans like Jeffrey Skillings and Conrad Black always thought they were the smartest ones in the room. But at least for awhile, their rooms are far away from the public and their ability to commit crimes is diminished.
Conrad played by his own rules, not the ones he was supposed to. Just because he thinks that some of the charges were dropped, does not mean they were not true, the prosecutors may just have had to pick their battles to win the war.
But to me the most interesting item in this article relates not to Conrad Black, who frankly raided the corporate cookie jar and got caught.
A Mr. Frenkel from the British Press is quoted in this article: "There's no question that the conviction of [ex-Enron CEO] Jeffrey Skilling warranted jail, but when drug dealers and murderers are serving fewer than the 24 years he will be serving, there is certainly an inequity."
I beg to differ. Has anyone ever bothered to go back and count the lives that were lost due to suicide from these fraudulent investments? Those who ended it all because they lost their life savings. They believed the fraudulent promises of these white collar criminals such as Jeffrey Skillings, Conrad Black, etc..
How many people did not go to college because savings were lost? How many people ended up homeless because they lost their money? Why are these consequences not counted among the "lives wrecked or lost? It is easier when there is a murder or drugs sold to say these criminals are evil, but that is only because the wreckage is either tracked by government statistics or covered by the media.
The personal economic devastation caused by these criminals, and they are criminals, is real and they should be punished just like other criminals.
There is a good reason to have good governance. It is not just fluff. The truth matters. Investors should be able to trust what officers of companies publish in their financial records and news releases. There has to be accountability.
Those former corporate titans like Jeffrey Skillings and Conrad Black always thought they were the smartest ones in the room. But at least for awhile, their rooms are far away from the public and their ability to commit crimes is diminished.
