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Posts Tagged ‘internal control’

Management Override and Navy SEALs

management override

Keeping pace with all the ethics and compliance lessons one can learn from the Trump Administration is no easy task. Nevertheless, we have yet another one: the perils of management override, as demonstrated by President Trump’s determination to keep a disgraced Navy SEAL in military service. The story evolved quickly over the weekend. It begins…

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Early Returns on Critical Audit Matters


Earlier this fall large corporations started to file annual reports that, for the first time ever, included “critical audit matters” identified by their audit firms. CAMs have been a controversial idea for quite some time, but they’re here — and now we have some early research on which subjects audit firms are flagging for CAM…

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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…

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Podcast: 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 —…

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FCPA 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…

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More 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…

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Conn’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…

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Internal Control Airball at Sacramento Kings

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…

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New 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…

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SEC Preps SOX 404(b) Rollback

sox compliance

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…

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