Accountants Round Up

"Insurers Prepare for SOX-like Audit Rules in 2010"

By Chris Rauber: A new model audit rule for non-publicly traded insurance companies — basically their version of Sarbanes Oxley — takes effect in January for companies with $500 million or more in premium volume. But some big players, including Kaiser Foundation Health Plan, the State Compensation Insurance Fund, Delta Dental of California and affiliates, Fireman’s Fund and the California State Automobile Association, are getting ready early for the new requirements.

The main changes require senior executives to explicitly confirm that their accounting practices are up to snuff and their financial reports accurately reflect reality.

Read complete article Insurers Prepare for SOX-like Audit Rules in 2010
Source: San Francisco Business Times, 10 April 2009. © 2009 American City Business Journals, Inc. and its licensors. All rights reserved.

"Sarbanes-Oxley Requirements Have Made Financial Statements More Confusing"

By AccountingWEB: The goal of the 2002 Sarbanes-Oxley Act was to make corporate accounting more transparent. In practice, a new Cato Institute study finds, the law's requirements have had the opposite effect.

Sarbanes-Oxley sought to achieve its aims by having the Financial Accounting Standards Board (FASB) mandate that corporations use Generally Accepted Accounting Principles (GAAP) in reporting their balance sheets to shareholders. In the Cato Institute Briefing Paper FASB: Making Financial Statements Mysterious, T.J. Rodgers explains why the GAAP rules complicate financial statements to the point where even CEOs have trouble reading them. 

Read complete article Sarbanes-Oxley Requirements Have Made Financial Statements More Confusing
Source: AccountingWEB, 26 August 2008. Copyright © 2008 AccountingWEB, Inc. All rights reserved.

"Before and After Sarbanes-Oxley - Learning to Live With Change"

By AccountingWEB: Less than two months after a jury found Arthur Andersen guilty of "corrupt persuasion" of others to withhold documents in the Enron investigation, Congress passed the Sarbanes-Oxley Act of 2002 (SOX), legislation designed to address the shock and anger in the country over the bankruptcies of WorldCom and Global Crossing, also clients of Arthur Andersen, and other business and accounting scandals.

The goals of SOX were to enhance the transparency of financial information, reaffirm auditor independence, and define corporate governance – the responsibilities of corporate boards and audit committees. Accountants gained prominence and respect as guardians of investors and thousands of young people were drawn to the profession to fill the many new jobs that were created as a result of the law.

Read complete article Before and After Sarbanes-Oxley - Learning to Live With Change
Source: AccountingWEB, 19 August 2008. Copyright © 2008 AccountingWEB, Inc. All rights reserved.

"Report: Sarbox Worsens Fraud Losses"

By Alan Rappeport: As if business needed one more reason to dislike the Sarbanes-Oxley Act, here's a doozy: It may actually worsen the impact of financial statement fraud, the very problem it was created to address.

A new report from the Association of Certified Fraud Examiners found that companies that had the controls mandated by Sarbanes-Oxley actually suffered greater losses from financial statement fraud than those that did not have the controls.

Read complete article Report: Sarbox Worsens Fraud Losses
Source: CFO.com, 22 July 2008. © CFO Publishing Corporation 2008. All rights reserved.

"Accounting Cleanup Board is Facing a Gutting"

By Jane Bryant Quinn: Just when you thought that the drive toward better financial accounting couldn't be stopped, a stick may be shoved into the spokes. A decision expected soon from a federal court might throw the Sarbanes-Oxley Act into limbo. The law, also known as SOX, is essential to the movement for accurate and honest corporate reports. Congress would rescue SOX but perhaps with its beating heart cut out.

A sideways challenge to the law is currently before the U.S. Court of Appeals for the District of Columbia Circuit.

Read complete post Accounting Cleanup Board is Facing a Gutting
Source: Bloomberg.com, 16 July 2008. © 2008 Bloomberg LP. All rights reserved.

"SOX Ineffective, Chiefs Say"

By SmartPros: Chief executives across the United States view the Sarbanes-Oxley law as reactionary and over-burdensome. Yet they still cite "improper accounting practices" as the number one ethical issue facing business today, according to a survey conducted by ethics centers at Georgia State and Clemson universities.

The National Survey of CEOs on Business Ethics, by Georgia State's Center for Ethics and Corporate Responsibility and Clemson's Robert J. Rutland Institute for Ethics, polled 293 chief executives at both private and public companies in 48 states.

Read complete article SOX Ineffective, Chiefs Say
Source: SmartPros, 23 June 2008. © 2007 SmartPros Ltd. All rights reserved.

"Can This Relationship Be Saved?

By Kate O'Sullivan: The healing has begun. It's been six years since the passage of the Sarbanes-Oxley Act, and four years since companies faced their first Sarbox audits. After a painful start, compliance with the act has become more or less routine for many businesses and their external auditors.

But what about the CFO-auditor relationship?

Read complete article Can This Relationship Be Saved?
Source: CFO.com, 1 May 2008. © CFO Publishing Corporation 2008. All rights reserved.

"SOX Hiring Slows Down at Big Four Firms"

By Ty West and Lizette Wilson: Call it the bean-counter bubble.

The $10,000 referral bonuses and car giveaways popular during the talent crunch of 2004 are gone.

Work created by the Sarbanes-Oxley Act - designed to increase transparency and prevent another Enron - has largely been carried out.

Read complete article SOX Hiring Slows Down at Big Four Firms
Source: Birmingham Business Journal, 9 May 2008. © 2008 American City Business Journals, Inc. and its licensors. All rights reserved.

"Sarbanes-driven Growth is Over at Big Four Firms"

By Lizette Wilson: Call it the bean-counter bubble.

The $10,000 referral bonuses and car giveaways popular during the talent crunch of 2004 are gone. Work created by the Sarbanes-Oxley Act -- designed to increase transparency and prevent another Enron -- has largely been carried out. Controls are in place and demand for additional advisory services from Big Four firms is beginning to wane even as the local guys continue hiring. 

Read complete article Sarbanes-driven Growth is Over at Big Four Firms
Source: San Francisco Business Times, 21 March 2008. © 2008 American City Business Journals, Inc. and its licensors. All rights reserved.

"Survey: Post-SOX Audit Quality Has Improved"

By SmartPros: More than three-quarters of audit committee members who took part in a recent survey commissioned by the Center for Audit Quality (CAQ) rate overall audit quality "very good" or "excellent," and 82 percent say it has improved in recent years. 

The survey offers a look at the views of key players in the fight against corporate fraud -- corporate board members who oversee the preparation and auditing of public company financial statements.

Read complete article Survey: Post-SOX Audit Quality Has Improved
Source: SmartPros, 19 March 2008. 2006 © 2007 SmartPros Ltd. All rights reserved.