July 09, 2009
Sarbanes-Oxley for Banks
As reported by Courthouse News yesterday, the FDIC (Federal Deposit Insurance Corporation) will require banks over $1 billion in assets to held to the standards of Sarbanes-Oxley. This is quite an interesting development considering how the Act was so maligned and trashed for years BEFORE the meltdown.
But it is quite interesting that the banks were already extremely regulated and probably had strong internal controls. The real issue is going to be to look at the way risk is managed and how independent and active the boards and audit committees are.
Our numerous years of experience in this area in US and Canada has shown us that you can certify internal controls but if the board and audit committee are not active and independent, then all the controls at the lowest levels will not compensate for lack of an adequate Control Environment at the top.
Stay tuned for more regulations from the current administration. Let's just hope that the regulations are well thought out and not a pile on of new regulations without consideration of what is already in place. Further, let's be sure of the root of the real problems before regulations are enacted.
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® at http://www.issuescentral.com/. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™. For IFRS Transition products, see http://www.ifrspartner.com/ from Issues Central.
But it is quite interesting that the banks were already extremely regulated and probably had strong internal controls. The real issue is going to be to look at the way risk is managed and how independent and active the boards and audit committees are.
Our numerous years of experience in this area in US and Canada has shown us that you can certify internal controls but if the board and audit committee are not active and independent, then all the controls at the lowest levels will not compensate for lack of an adequate Control Environment at the top.
Stay tuned for more regulations from the current administration. Let's just hope that the regulations are well thought out and not a pile on of new regulations without consideration of what is already in place. Further, let's be sure of the root of the real problems before regulations are enacted.
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® at http://www.issuescentral.com/. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™. For IFRS Transition products, see http://www.ifrspartner.com/ from Issues Central.
