Now that the wait for the 404(b) reprieve is over, it appears that a new trend is emerging to investigate 404(a) statements more closely, as expressed in recent articles on investor and auditor sentiment regarding the legislative change. We are hearing from auditors directly that they will be applying more scrutiny to 404(a) statements made by their clients in their financial reports, to ensure that there is a real basis for self-certification. The newly aggressive SEC and DOJ are expanding personnel and focusing on Corporate Governance and the role of Audit Committees, Directors and Company Officers in Compliance and Financial reporting.
Tags: Sarbanes-Oxley Articles & Information, risk assessment, Announcements, 404, 404 audit, Non-accelerated filer 404(b) information, Wall Street Reform, risk management, Sarbanes-Oxley for Non-Profits
Here at Vibato, we were recently questioned about what the Wall Street Reform Act means for non-accelerated filers with June 30th year-ends. Some lawyers have been claiming that the Wall Street Reform Act will be retroactively applied to these companies, so we contacted the SEC about the issue.
Interesting article on User Developed Applications (UDAs). This could also apply to spreadsheets used for internal controls work, especially if they are distributed across departments and not centralized. Applications are typically developed for expense calculation and tracking (e.g. stock comp expense) as well as financial analysis. We try to take an approach that these types of tools should have permission control and be stored in documented locations where appropriate review and updating can be performed. It makes audit-related work much easier in the end!
The Public Company Accounting Oversight Board has made a concept release on the "Possible Rulemaking Approaches to Complement Application of Section 105 (C)(6) of the Sarbanes-Oxley Act of 2002."
Yesterday the PCAOB released a news release about the Wall Street Reform Act's passage yesterday morning.
The article below was sent from a dear friend of mine and fellow SOX enthusiast, Clark Keeler, Director, BPM. I find the article to have a significant amount of irony considering it claims that "American business people of a conservative nature have been dreaming about driving a stake through the heart of the Sarbanes-Oxley act ever since the legislation was passed..." It would seem to me that if a person was truly fiscally conservative, they would consider Sarbanes-Oxley to be the prudent choice rather than the radical one. Internal controls require there to be a check point in a business procedure that requires someone other than the preparer of the documentation to verify the accuracy of what was prepared. This verification prevents someone from acting alone when making decisions about shareholder assets (physical assets, capital, intangible assets, etc). I am of the opinion that this double check adds a necessary layer of review considering the potential for fraud, errors, omissions, etc. Considering all that we at Vibato, LLC have found when testing internal controls, this is no longer just opinion but rather, fact. Read more on the article here:
Tags: Sarbanes-Oxley Articles & Information, Compliance tools, Announcements, 404, 404 audit, audit costs, Non-accelerated filer 404(b) information, SOX Compliance Made Simple, Wall Street Reform, Sarbanes-Oxley Training, Sarbanes-Oxley, external auditing, Sarbanes-Oxley for Non-Profits
404(b) will no longer be required for non-accelerated filers per the Wall Street Reform Act that was signed into law on, July 21, 2010.
In the wake of a potential Sarbanes-Oxley 404(b) exemption via the Wall Street Reform Act, the PCAOB seems to be doing what it can to require a deeper audit than previously accepted. This is inline with what we at Vibato have also been seeing on the external audit side. Most external auditors we encounter are claiming if the 404(b) reprieve goes through, or, if non-accelerated filers (those companies with a $75M or less market cap) are not required to comply with 404(b) (the section of Sarbanes-Oxley that requires external auditors to review management's internal controls), then they are planning to audit any 404(a) claim as though it were a 404(b) claim. 404(a) is where all public companies are required to attest to the effectiveness of their internal control infrastructure via their 10K, 10Q, and 302 / 906 certifications. Here is the article from CFO.com about the PCAOB activities:
I learned an interesting tidbit of information yesterday while at a new client...an Accounting Manager signed a payroll tax return she prepared for her company (which is common - executives do not typically sign this form). Well, when the payment was not made promptly and the IRS came-a-calling...the IRS agent told the Accounting Manager that because she signed the return, she was liable for the amount - not her company. So if the company decided to not pay the bill, the Accounting Manager would have to fork over the cash.
Vibato is pleased to announce the win of Golden Phoenix Mineral's Sarbanes-Oxley compliance work. Golden Phoenix came as a referral from HJ & Associates out of Salt Lake City, Utah.
Here is an article I thought our readers would find interesting that details the Wall Street Reform and the effects it will have on various industries. There is also a video of Obama discussing the topic of the Wall Street Reform:
I read an interesting Press Release this morning, titled "House Approves Wall Street Reform Package." To read the press release, follow the link below: