Posts Tagged ‘internal control’
Oh, Gee: Fraud Case Involving Estimates
We have a fresh case of accounting fraud to mull this week, this time with a Wisconsin trucking firm where three senior executives cooked the books for years and eventually drove $245 million of shareholder value over the cliff. Yet again, poor internal control over management estimates and use of spreadsheets played a starring role…
Read MoreBankrate Pays $28.5M in Fraud Case
Yes, yes, the compliance community is buzzing today about the $850 million FCPA settlement announced Wednesday evening between U.S. authorities and Russian mobile phone company MTS. We’ll get to MTS another day. The Justice Department also settled a securities and accounting fraud case yesterday with the owners of personal finance website Bankrate.com, and that one…
Read MoreCOSO Guidance for Healthcare Firms
Fresh news on the guidance front: COSO has released a new guide to help healthcare organizations implement its internal control framework widely used by public companies. Nonprofit hospitals and related healthcare firms don’t need to use the COSO internal control framework per se, but they do have plenty of internal issues related to system access…
Read MoreSEC Hits Firms on Internal Control
The Securities and Exchange Commission dinged four companies on Wednesday for poor internal control over financial reporting — a clear warning to companies that simply disclosing a material weakness in ICFR is not sufficient to fulfill a company’s compliance duties. Executives actually have to fix the problem, and not take too long to do so.…
Read MoreOf Blown Calls and Internal Control
Effective internal control can be a difficult subject to understand, so ethics and compliance officers who hail from the legal world should be delighted right now. A great example of internal control issues gone awry fell into our laps this week from the world of sports. I speak, of course, of the blown referee call…
Read MoreDeloitte Inspection Report Released
The PCAOB has released its latest inspection report for Deloitte, finding that 20 percent of the audits examined were flawed enough to question whether auditors had reached defensible conclusions. This is the first inspection report we’ve seen this year for a Big 4 firm, and also the first one issued since new leadership took over…
Read MoreHertz, Estimates, and Internal Controls
Who says a government shutdown means no news for internal control and compliance? On New Year’s Eve the Securities and Exchange Commission served up another juicy enforcement action, hitting Hertz Corp. with a $16 million penalty for sloppy accounting practices that led to a financial restatement in 2015. The case is worth a look because…
Read MoreFood Company Cooks the Books
The SEC settled charges with an organic foods company on Tuesday over internal control failures that led to several years of revenue manipulation, in a case with multiple lessons for the internal control community. We don’t see an internal controls case this large come along every day, so let’s digest. First, the background. The accused…
Read MoreAutomation & Control Lessons in Latest SEC Enforcement
We have an interesting enforcement action from the Securities and Exchange Commission this week, where the agency dinged a telecom company and its former executives $1.9 million for misleading statements on revenue projections. The kicker: it looks like the company’s own sales automation software created the audit trail that painted the company into an enforcement…
Read MoreWhy ‘Michael Cohen Risk’ Still Matters
Over the weekend an ethics and compliance leader emailed me. This person has long, substantive experience in the field, and speaks about corporate compliance often; you would recognize the name immediately. The person had a question. Other than Radical Compliance, is anyone else talking about Corporate America’s suspicious payments to Michael Cohen, personal lawyer to…
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