Thursday, April 10th, 2008
Blogger LORA BENTLEY - One of the first non-profits to demonstrate voluntary compliance with the Sarbanes-Oxley Act of 2002 was the University of Pittsburg Medical Center. Representatives said they chose to do so as a means of maintaining accountability with the organization’s contributors and the public. New research reveals, however, that not all Sarbanes-Oxley-like requirements are effective in the non-profit health care environment. In particular, it seems that imposing requirements upon non-profit hospital boards of directors — such as minimum donations or term limits — don’t yield significant improvements in hospital financial management or patient care. The study, conducted by researchers from the University of Michigan, found only a weak connection between board structure and hospital function. READ MORE
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Wednesday, April 9th, 2008
Recent Industry Headlines
We peruse the Internet headlines so you don’t have to. Here are the recent headlines (and links) we felt newsworthy:
PCAOB Addresses Emerging Audit Issues In 2008 Forums on Auditing in the Small Business Environment - These forums are designed to help share important information with registered public accounting firms and public companies operating in the small business community.
PCAOB Releases Five-Year Plan - The Public Company Accounting Oversight Board wants to reduce the amount of time it takes to post inspection reports for audit firms, according to the board’s five-year strategic plan. Click here for the report.
Fears That the Market Watchdog Is Losing Its Bite - Wall Street and the broader business community have pushed aggressively in recent years to roll back regulation, arguing the United States is losing its competitive edge. But with the recent financial crisis, which many call the worst since the Depression, critics wonder whether the S.E.C. has given in to the push to lighten up.
65% of businesses experience fraud - Most of the survey’s respondents agreed that the largest risk facing them was from computer fraud, with 68 per cent saying it is a high or medium level risk to their organisation.
It’s time to embrace risk management - With the debut of Standard & Poor’s new enterprise risk rating for non-financials, execs need to start paying attention
A Brighter Spotlight, Yet the Pay Rises - Wasn’t 2008 supposed to be the year of shareholder victory on the executive compensation front? After all, tighter disclosure rules kicked in last year, and - the theory went - once companies had to shine a spotlight on their compensation practices, they were bound to make them better.
Sara Lee, Coach Set Rules To Deter Devious Shareholders - Corporate-governance experts believe Sara Lee and Coach are breaking new ground, enacting a preventive measure to deter hedge funds or activist investors from manipulating a company’s stock price for their own gain.
Indian companies focusing on risk management - Intense global competition and rapid growth are forcing Indian firms to examine corporate enterprise risk management (ERM) elsewhere, especially in Europe, Australia and North America, where the process is more mature, according to a study.
Making governance a priority - BHP is about to elevate its focus on governance by becoming the first Australian company, and one of the few worldwide, to appoint a corporate governance expert to a senior management position.
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Monday, April 7th, 2008
Sarbanes-Oxley compliance looms large for big enterprises and small companies alikeBy
Jon Brodkin , Network World
Five years after the controversial Sarbanes-Oxley Act was enacted to prevent Enron-like scandals, the law’s financial control requirements are having myriad impacts: large companies have cleaned up their accounting, but at great cost; foreign businesses are dropping out of U.S. stock exchanges to avoid SOX requirements; and many small public companies are scrambling to meet a crucial compliance deadline in December.
Signed into law by President Bush on July 30, 2002, SOX forces public companies to prepare reliable financial statements and bring material weaknesses into public view, with mandated testing for integrity and ethical behavior, IT controls related to financial reporting, whistleblower programs, antifraud provisions and other requirements.
Compliance has become “pretty much routine” for large companies, who have faced SOX requirements since 2004, says Bob Benoit of Lord & Benoit, which performs SOX research and helps companies comply.
It hasn’t been cheap: spending on SOX compliance was $5.5 billion in 2004 and is now more than $6 billion annually, according to AMR Research.
1,035 large public companies have at some point failed to comply with SOX, out of a total of 4,862 that have reported under the law’s Section 404, Benoit says, citing figures from Audit Analytics.
Yet many individual enterprises spent far more on SOX compliance than they had to because the federal government initially failed to issue clear instructions.
READ MORE OF THIS ARTICLE
The cost of SOX
A sampling of SOX facts, figures and projections:
| Spending on SOX compliance will surpass $32 billion by the end of 2008. |
| $6 billion will be spent this year alone. |
| July 30, 2002, is when President Bush signed Sarbanes-Oxley into law. |
| Nov. 15, 2004, is when companies with more than $75 million in market capitalization were expected to comply. 4,862 companies with market caps that high have reported under SOXÕs Section 404. 1,035 of those have failed to comply at some point. |
| About 7,400 companies with market caps under $75 million face a compliance deadline of Dec. 15, 2007. |
| SOURCES: AMR RESEARCH, AUDIT ANALYTICS |
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