Law's Big Weapon Sits Idle [WSJ] As the Sarbanes-Oxley Act turns 10 years old, the law's biggest hammer—the threat of jail time for corporate executives who knowingly certify inaccurate financial reports—is going largely unused. After the financial crisis, the certification rules seemed like a strong weapon against executives suspected of misleading investors. But prosecutors haven't brought any criminal cases for false certification related to the crisis. Regulators have brought only a handful of crisis-related civil allegations in that area.
Ten years after Sarbox, time for an audit of the auditors [FT]
Banks and their investors have taken huge hits since the crisis because of fraud and illegal acts, as well as poor risk management and weak internal controls. Bad news will continue for all companies, with no warning from auditors, if regulators do anything less than a complete redesign of audits and the way auditors deliver them.
A decade on, is Sarbanes-Oxley working? [Reuters] Michael Oxley, former chairman of the House of Representatives Financial Services Committee, said the law he co-authored has stood the test of time. “We've not had anything even approaching an Enron or a WorldCom or any of the other accounting scandals that we witnessed 11 years or so ago,” he said in an interview. Blaming the law for some of the recent scandals is based on a misconception about what it was supposed to do, said Oxley, a Republican. “It really had nothing to do with Lehman Brothers, AIG and the other meltdowns in 2008. It didn't really have anything to do with Bernie Madoff," he said. Former Democratic Senator Paul Sarbanes, who is scheduled to speak on Monday night with Oxley at an event marking the law's 10th anniversary, has also been upbeat in recent remarks about the law.
Reznick moving Midwest HQ downtown from Skokie [CT] The company, which also provides tax and business advisory services, plans to bring 150 to 200 jobs downtown by the end of 2015. That will include the 65 positions now in Skokie, plus new jobs. The company has not yet signed a lease downtown. "We are confident that a location in the city center will allow us to attract and retain the top-quality talent," said George Klenovich, Reznick Group's Chicago office managing principal.
Wal-Mart Names Former KPMG Chairman Timothy Flynn to Board [DJ] T Fly will be the audit committee, obviously. He becomes the 17th member of the Walmart board.
Henry W. Bloch, America’s tax man, is turning 90 [KCS]
As he begins to wind down some of his commitments, Bloch, a child of the Depression era and World War II Army aviator, shunned any credit for building a Fortune 500 firm or for showering his hometown with his personal wealth. “I never expected to do anything like this,” Bloch said. “I’m extremely grateful for the luck I’ve had. I believe my case especially was mainly luck, 99 percent luck.”
Athletes be warned: Do not shower with your medal; Brazilian breaks his, wants another [AP]
Felipe Kitadai said he was carrying the medal everywhere. He took it with him to the shower as a joke, then dropped it while trying to keep it from getting wet.
‘Big four’ auditors bring in independent directors in response to regulators [Guardian]
The Financial Reporting Counc CAEW, issued a new audit governance code back in January that recommended audit firms appoint non-executive directors to their UK firm however, Ernst & Young will go so far to appoint them to their global advisory boards.
“Although the code technically applies only to our UK business, as a globally integrated organisation, we believe it is most appropriate for us to implement the code’s provisions on a global basis also,” said Jim Turley, global chairman and chief executive of Ernst & Young. “Including individuals from outside Ernst & Young on the global advisory council will bring to the senior leadership of our global organisation the benefit of significant outside perspectives and views.”
BP Won’t Issue New Equity to Cover Spill Costs [WSJ]
But if you want to pitch in, they are happy to take you up on an offer, “BP would welcome it if any existing shareholders or new investors want to expand their holding in the company, she said. BP’s shares have lost almost half their value since the Deepwater Horizon explosion that triggered the oil spill April 20.
BP Chief Executive Tony Hayward is visiting oil-rich Azerbaijan amid speculation the company may sell assets to help pay for the clean-up of the Gulf of Mexico oil spill. The one-day visit comes a week after Mr. Hayward, who has been criticized for his handling of the devastating oil spill, traveled to Moscow to reassure Russia that the British energy company is committed to investments there.”
Looking for a post-college job? Try accounting [CNN]
Happy times continue for accounting grads, according to the latest survey on the matter, this time from the National Association of Colleges and Employers. The average salary listed for an entry-level accounting major is just over $50k and the article also notes that most accounting jobs go to…wait…accounting majors.
FASB, IASB Staff Describe Plans for New Financial Statements [Compliance Week]
As always, the two Boards are hoping that bright financial statement users will chime in with their suggestions but they’ve got the basic idea down, “The FASB and IASB are rewriting the manner in which financial information is presented to make it more cohesive, easier to comprehend, and more comparable across different entities. The proposals would establish a common structure for each of the financial statements with required sections, categories, subcategories and related subtotals. It would result in the display of related information in the same sections, categories and subcategories across all statements.”
Accounting rules “practically impossible to implement”, Barclays claims [Accountancy Age]
Barclays’ finance director, Chris Lucas isn’t too keen on these new loan valuation proposals. Besides the ‘practically impossible’ thing, he says, “The sensitivity disclosures…are highly subjective, difficult to interpret, and potentially misleading, particularly when the underlying data is itself highly subjective,” Lucas said.
“It is hard to see how sensitivity disclosures could be aggregated by a large institution to provide succinct data that avoids ‘boilerplate’ disclosure.”
Asking The Difficult Questions [Re: The Auditors]
“Audit committees too often rely on the auditors’ required disclosures without comment. They sometimes lack the independence, experience, or determination to ask the probing questions. It’s critical, however, that committees seek answers to vexing questions and not accept the response, ‘But that’s the way management has always done it.’ “
Buffett Donates $1.6 Billion in Biggest Gift Since 2008 Crisis [Bloomberg]
WB continues his plan of giving away 99% of his fortune, “[Buffet] made his largest donation since the 2008 financial crisis after profits at his Berkshire Hathaway Inc. jumped.
The value of Buffett’s annual gift to the foundation established by Bill Gates rose 28 percent to $1.6 billion from $1.25 billion last year. The donation, made in Berkshire Class B stock, was accompanied by gifts totaling $328 million in shares to three charities run by Buffett’s children and another named for his late first wife, according to a July 2 filing.”
The case for cloud accounting [AccMan]
Dennis Howlett continues to provide evidence that switching to the cloud provides benefits that are simply too big to ignore, “This 2min 1 sec video neatly encapsulates why this is something you should be considering, especially if you are operating electronic CRM or e-commerce for front of house activities.”
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