embrace

CDA disclosures to follow Sarbox precedent?

Tue, 16 Oct 2007 06:59:59 -0400

The ramp-up to Sarbanes Oxley compliance was painful for many companies. For many, the pain got even worse in subsequent years, as many companies were left flailing for standards and guidance. Are we now seeing a repeat? Turns out the SEC has conducted a year-one review of CDA (compensation discussion and analysis) disclosures and isn't very happy. It wants shorter, less technical discussions, less focus on processes and more on the actual decisions. The SEC hopefully has learned a bit from its Sarbox experience. In the absence of solid guidance and strong examples, companies will embrace a cover-your-butt approach that will ultimately undermine the goal of the new disclosure rules, which is to provide a simple explanation to investors of why a company paid its top dogs what it did. It will be interesting to watch this unfold.

For more:
- here's a CFO.com article

ALSO NOTED: Scandal at Duke business school underscores the need for Sarbanes-Oxley-like laws; Forensic accounting booms;

Mon, 07 May 2007 20:01:38 -0400

> Oracle aims to strengthen its GRC offering, answering critics that once said it was a laggard in the market. Article

> The PCAOB has taken issue with a handful of E&Y audits. In its review, it found several deficiencies and a few cases where they could have led to misstatements. Article

> Forensic accounting is booming as a professional niche, as more companies demand more rigorous auditing services in the Sarbox era. Article

> Google Map-like software can help pinpoint potential environmental liabilities. Article

> More nonprofits embrace Sarbox-like accountability standards. Article

> PCAOB outreach goes global with the first International Auditor Regulatory Institute. Article

> Arthur Levitt says the benefits of Sarbox far outweigh the costs. Article

And finally... How Shakespeare would have dealt with pesky analysts. Article

Take a big picture view of information

Mon, 12 Mar 2007 20:01:38 -0400

It has become something of a cliché that Sarbanes-Oxley has led companies to embrace more sophisticated reporting infrastructures to provide access to more detailed transactions in real time. But there are times when it pays to take a global look. Too often, we see the issues in terms of discrete solutions. There are some thorny issues that all IT and finance executives have to be aware of when assessing their information environment. A principal in Deloitte Consulting's Information Dynamics unit notes a host of problems: Too many instances of copied data, the latency of such data and the availability of data at different points in time in its lifecycle. Among the biggest issues is that many companies have overtasked their enterprise information systems. Column

The shape of reform to become clearer soon

Mon, 20 Nov 2006 19:01:39 -0500

Chris Cox, chairman of the Securities and Exchange Commission, says that changes are coming soon. Most likely, various reform measures will be adopted at a Dec. 13 public meeting. This has been known for a while, but Cox has certainly kept up the drum roll. We've had a lot of hints as to what the SEC considers reform. The best bet is that it will embrace some of the changes that the PCAOB has already proposed to the agency. The PCAOB has been re-formulating Auditing Standard No. 2, aiming to clarify definitions of material weakness and significant deficiency among other things. The main problem seems to be that auditors have interpreted guidelines way too conservatively in order to protect themselves. Cox is moving with the political winds. Sarbox reform is certainly vogue in Washington.

For more on this:
- read this update

PLUS: Some accountants react to impending changes. Article

ALSO: Paulson keeps up the drumbeat for 404 change. Article

AND: The Bush Administration will review financial regulations. Article

Little movement on principles-based accounting

Mon, 04 Sep 2006 20:01:39 -0400

Principles-based accounting has long been seen as a logical alternative to the current rules-based system. The triumph of rules has resulted in a slow shift in the accounting mindset, away from common-sense judgment and toward arcane ways of staying inside the bounds of technical compliance. Leases and pension have been the hot button issues. Should we not allow companies to use their own judgment in determining at what point something should be noted as a balance sheet item? While Sarbanes Oxley mandated that the SEC look into ways to embrace the principles-based approach, it's fair to say there is no real move in that direction. Many CFOs fear it would lead to even more litigation. Others say that auditors would prove too conservative, making the accounting process all but impossible.

For more on the future of principles-based accounting:
- Here's an article from CFO.com