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1- Private Companies: Are Your Internal Controls Supporting Your Business Strategy?
Article selection: Hamid Atharinejad
Summary : In years past, the words “internal controls” were rarely mentioned in the business section of newspapers or in business magazines. Today, however, thanks to recent headlined scandals, frauds, and business failures, you’re almost as likely to see internal controls mentioned on the front page of the newspaper as in the business section.
More often than not, the names Sarbanes-Oxley will appear in the same story. This, of course, refers to the 2002 federal legislation requiring public companies to meet strict requirements for implementing, documenting, and testing internal controls. Its enactment was a response to widely-publicized control failures and their sometimes catastrophic consequences. By compelling transparency in financial statements and holding management more accountable for its actions, Sarbanes-Oxley seeks to restore rigor to financial reporting and confidence to investors.
The law was enacted as a corrective measure. What has emerged as companies work to bring themselves into compliance, however, is the significant business benefits that flow from the strengthened internal controls it mandates.
Although the
law and its supporting regulations apply only to public
companies, putting aside the compliance factor, private
companies usually derive the same benefits from enhanced
controls as public companies. And the benefits
can be very significant.
2- Audit Committee Effectiveness
Article selection: Hamid Atharinejad
Summary : Now more than ever, the capital markets tend to punish unpredictability in corporate performance. Unpleasant surprises of any kind – whether these are erroneous financial statements, ethical scandals or inadequately anticipated/improperlymanaged risks – have the potential to wreak havoc among corporate reputations and share price values.
In this environment, audit committees should consider taking the initiative – looking to go beyond compliance, and actively seeking to identify ways in which they can enhance the quality of governance that exists in their organisations.
3- PCAOB Reveals What's Next for AS2
Article selection: Hamid Atharinejad
Summary : Possible amendments to the Public Company Accounting Oversight Board 's Auditing Standard No. 2 include rethinking the auditor 's role in assessing management, improved term definitions, and an emphasis on a top-down, risk-based audit approach, revealed Thomas Ray, chief auditor and director of professional standards for the PCAOB.
4- PCAOB Proposes Revised Auditing Standard on Internal Control over Financial Reporting
Article selection: Hamid Atharinejad
Summary : Washington, DC, December 19, 2006 – The Public Company Accounting Oversight Board today voted unanimously to propose for public comment a new standard on auditing internal control over financial reporting and other related proposals. The proposed standard would replace the Board's existing internal control standard, Auditing Standard No. 2.
5- AS5: Clarification or Confusion?
Article selection: Hamid Atharinejad
Summary : On paper, a new standard proposed by the Public Company Accounting Oversight Board appears to address the concerns of companies that felt auditors spent too much time scrutinizing their internal controls and technology systems. Critics of the existing and much-contested Auditing Standard No. 2 have said it encourages auditors to spend hours questioning issues that have little relevance to financial statements, particularly with regard to the computer systems and software that are involved in producing those statements. Yet it's not clear whether a new standard will change that behavior for the better.
6- Key Elements of Antifraud Programs and Controls
Article selection: Hamid Atharinejad
Summary : Executives must process more information, make more critical decisions, and endure more scrutiny than ever before. But, sometimes, stopping for a look at the environment is the best decision you can make during a busy day.