Posts Tagged ‘internal control’
Other Lessons in Verwaltung Case
You may have seen news last week that a Swiss bank, LLB Verwaltung, paid $10.7 million to the Justice Department to settle charges of tax evasion. The deal is notable because the bank’s compliance officer had warned senior executives about the risks they were taking — warnings that senior bank executives chose to ignore. So…
Read MorePodcast: Lease Accounting Compliance Update
Confession: I love the new accounting standard for companies to report their costs for leases. Not so much because I applaud what the standard tries to accomplish (although I support that too) but rather, because implementation of the standard demonstrates so many compliance and internal control headaches today. Hear me out. The new standard —…
Read MoreFCPA Issues Nick Microsoft $25M
Microsoft has agreed to pay $25.3 million to settle FCPA charges against subsidiaries in Hungary, Saudi Arabia, Thailand, and Turkey — the latest in a long line of cases where poor procedures to document sales discounts offered by local resellers paved the way for bribery of foreign government officials. Microsoft will pay $16.5 million to…
Read MoreMore on Embedding, Automating Controls
Last week I had a post about an SEC enforcement action against rent-to-own retailer Conn’s, where the SEC dinged Conn’s for using manually updated forecasting tools to estimate customer credit risk. Executives had low-balled their estimates for years, until that short-sighted maneuver finally forced the company to cut earnings and the share price tanked. Today…
Read MoreConn’s Lesson on Management Estimates
Oh, look. Another accounting enforcement action from the SEC, where poorly designed internal controls led to management’s abuse of estimates. Everyone put on your shocked face. The SEC settled a case on Monday with Conn’s, a rent-to-own retailer based in Texas with $1.55 billion in annual sales. Conn’s agreed to pay $1.1 million in a…
Read MoreInternal Control Airball at Sacramento Kings
Talk about a flagrant foul: The former chief revenue officer for the Sacramento Kings was sentenced Monday to seven years in federal prison, for duping some of California’s largest businesses into wiring $13.4 million to bank accounts he secretly controlled so he could buy beachfront homes on the California coast. Jeffrey David worked as the…
Read MoreNew Guidance on Critical Audit Matters
Accounting regulators have published new guidance for audit firms about how to disclose Critical Audit Matters they find with corporate clients. Internal audit and compliance managers might want to give the document a read too, since it serves as a quasi-blueprint of how to anticipate delicate subjects in internal control and corporate accounting. CAMs are…
Read MoreSEC Preps SOX 404(b) Rollback
The Securities and Exchange Commission will move forward next week with long awaited, but totally not surprising, plans to raise the threshold for accelerated filer status — a move that will pave the way for more companies to avoid outside audits of their internal control over financial reporting. The SEC posted a notice that it…
Read MoreOh, Joy: A New Cyber Risk
An interesting article from the New York Times recently, noting that some insurance firms are declining to cover damages from cybersecurity breaches — under the logic that those breaches were acts of war by foreign governments, rather than criminal acts by individuals; and therefore not covered by a corporation’s cyber insurance policies. The article cites…
Read MoreOh, 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…
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