The State of Sarbanes-Oxley: 2007.Introduced the CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. Issue Update. This will give you a snapshot (1) A saved copy of memory including the contents of all memory bytes, hardware registers and status indicators. It is periodically taken in order to restore the system in the event of failure. (2) A saved copy of a file before it is updated. of an issue you need to know about as a CPA. Our inaugural topic? The latest developments of the Sarbanes-Oxley Act See SOX. of 2002 (SOX (1) (Schema for Object-oriented XML) An XML schema developed by Veo Systems and Muzino Communications, which was submitted to the W3C. SOX is based on DTD, but adds data typing and reuse mechanisms. ). Since signed into law in 2002, SOX is arguably ar·gu·a·ble adj. 1. Open to argument: an arguable question, still unresolved. 2. That can be argued plausibly; defensible in argument: three arguable points of law. the most significant piece of business legislation since the Securities Exchange Act of 1934. SOX is under scrutiny Scrutiny (Fr. scrutin, Late Lat. scrutinium, from scrutari, to search or examine thoroughly) is a careful examination or inquiry (as though there was a mistake). at all levels of business and for various reasons--from its cost burden on small businesses to its effect on capital markets in the U.S. and overseas. The chart below outlines recent changes and their impact on you. What you need to know Find an overview of the hot issues in the Society's new Issue Update column. You are a busy professional with a myriad Myriad is a classical Greek name for the number 104 = 10 000. In modern English the word refers to an unspecified large quantity. The term myriad is a progression in the commonly used system of describing numbers using tens and hundreds. of news sources in front of you. Sorting through it all to find the critical information is exhausting. Here is your solution. Every issue, we will give you the insight you need on a hot issue impacting the CPA profession. Get an overview and the latest developments in one easy to read article. Got an issue you would like to see covered? Let us know at catalyst catalyst, substance that can cause a change in the rate of a chemical reaction without itself being consumed in the reaction; the changing of the reaction rate by use of a catalyst is called catalysis. @ohio-cpa.com.
OWNER PROPOSAL POTENTIAL IMPACT
SEC Issued This move could
recommendations on benefit smaller
April 4 to public companies
eliminate waste facing significant
and duplication cost burdens
with SOX complying with
compliance and to Section 404
work with the
PACAOB to make the
internal controls
provisions--SOX
Section 404--more
efficient and cost
effective
Public Company Proposed Auditing The PACOB is
Accounting Standard - proposing changes to
Oversight Board Evaluating its auditing
(PACAOB) Consistency Of standards in light of
Financial FASB's issuance of
Statements and Statement of
Proposed Financial Accounting
Amendments To Standards No. 154,
Interim Auditing Accounting Changes
Standards and Error
Corrections, and
Proposed Statements
of Financial
Accounting Standards,
The Board's proposals
would, if adopted and
approved by the SEC,
supersede AU sec.
420, Consistency of
Application of
Generally Accepted
Accounting
Principles, with a
new auditing
standard, Evaluating
Consistency of
financial Statements;
remove the hierarchy
of generally accepted
accounting principles
("GAAP hierarchy")
from the interim
auditing standards;
and make conforming
amendments to the
interim auditing
standards.
Public Company Proposed Auditing The PCOAB proposed an
Accounting Standard - An auditing standard, An
Oversight Board Audit of Internal Audit of Internal
(PCAOB) Control Over Control Over
Financial Financial Reporting
Reporting that is that is Integrated
Integrated with an with an Audit of
Audit of Financial Financial Statements,
Statements that would supersede
its Auditing Standard
No. 2.
The PCAOB also
proposed a related
auditing standard,
Considering and Using
the Work of Others in
an Audit, an
independence rule
relating to the
auditor's provision
of internal
control-related
non-audit services,
and certain
amendments to its
interim standards.
U.S. Department Treasury Leading business
of the Treasury Conference on US executives met to
Capital Markets examine issues
Competitiveness, affecting U.S.
March 13, capital markets'
competitiveness.
At the conference in
March, Secretary
Henry. Paulson, Jr.
served as moderator.
Conference panelists
included:
* SEC Chairman
Christopher Cox
(moderator)
* Billionaire
investor Warren
Buffett
* General Electric
Co. Chair Jeffrey
Immelt
* Brokerage founder
and CED Charles
Schwab
* Former Federal
Reserve Chairman Alan
Greenspan
* New York Mayor
Michael Bloomberg
U.S. Chamber of Chambers' Six specific
Commerce Commission on the recommendations:
Recommendations Regulation of U.S.
Capital Markets in
the 21st Century
issued final
report on U.S.
market
competitiveness
with
recommendations
intended to
significantly
improve the U.S.
position in global
markets
1. Reform and
modernize the federal
government's
regulatory approach
to financial markets
and market
participants
2. Give the SEC the
flexibility to
address issues
relating to
implementing SOX by
making it part of the
Securities Exchange
Act of 1934
3. Convince public
companies to stop
issuing guidance or,
alternatively, move
away from quarterly
earnings guidance
with one earnings per
share (EPS) number to
annual guidance with
a range of EPS
numbers
4. Call on domestic
and international
policy-makers to
seriously consider
proposals by others
to address the
significant
catastrophic
litigation risks
faced by the public
audit profession. In
addition, consider
the Commission's
suggestion that
national audit firms
be allowed to raise
capital from private
shareholders other
than audit partners
5. Increase
retirement savings
plans by connecting
all employers of 21
if more employees
without any
retirement plan to a
financial institution
that will offer a
retirement
arrangement to those
employees
6. Encourage
employers to sponsor
retirement plans and
enhance the
portability of
retirement accounts
through the
introduction of a
simpler, consolidated
401(k)-type program
Retired Expressed
Congressman significant
Michael Oxley concerns over the
enormous costs
generated for
businesses
implementing the
provisions of SOX
in a recent
interview with
CFO.com
Committee on The Committee on The Committee on
Capital Markets Capital Markets Capital Markets
Regulation Regulation is Regulation's report,
(a.k.a, Hal independent and issued November 2006,
Scott bipartisan group addresses concerns
Committee) comprised of 22 that excessive
leaders, from the regulation is adding
investor to corporate costs,
community, stifling the public
business, finance, securities markets
law, accounting, and causing the U.S.
and academia. It markets to lose
began its work in business to foreign
2006 and is competitors.
directed by Prof.
Hal S. Scott,
Nomura Professor
and Director of
Program on
International
Financial Systems
at Harvard Law
School. The
committee
co-chairs are
Glenn Hubbard,
Dean of Columbia
Business School,
and John L,
Thornton, Chair of
the Brookings
Institution. Not
officially
recognized, the
participants were
chosen by Scott,
Hubbard and
Thornton.
Global Public The symposium is The vision looks at
Policy sponsored by the what changes are
Symposium six largest required in global
accounting firm financial reporting
networks--PwC, and public company
KPMG, Deloittee, auditing to better
E&Y, BDO and Grant serve global capital
Thornton markets and is
designed to be the
beginning of a
dialogue with all
stakeholders on these
issues
Beckstead & Filed a lawsuit The plaintiffs' case
Watts LLP of challenging the challenged the
Henderson, constitutionality creation of the PCAOB
Nevada & the of the PCAOB. as a violation of the
Free Enterprise separation-of-powers
Fund principle. The
plaintiffs argued
that the president
should appoint the
members of the PCAOB,
because the entity
functions as part of
the government,
rather than as part
of the SEC.
OWNER AUTHORITY STATUS
SEC Government SEC is now
regulator of focusing on four
all publicly are as:
traded
companies
1. Aligning the
PCAOB's new
auditing standard
(AS-5) with SEC
guidance
2 Scaling the 404
audit to account
for the
particular facts
and circumstances
of companies
3 Encouraging
auditors to use
professional
judgment in the
404 process,
particularly in
using
risk-assessment
4. Following a
principles-based
approach to
determining when
and to what
extent the
auditor can use
the work of
others
Public Company PCAOB is an May 18 is the
Accounting arm of the deadline for
Oversight Board SEC, which comments on the
(PACAOB) develops proposed auditing
auditing standard and the
standards for amendments to the
all publicly interim audit
traded standards.
companies.
Public Company PCAOB is an The deadline to
Accounting arm of the comment on this
Oversight Board SEC, which proposal was Feb.
(PCAOB) develops 26, 2007. The
auditing PCAOB is expected
standards for to submit the
all publicly final rules to
traded the SEC in May.
companies.
U.S. Department The Treasury
of the Treasury Department of officials believe
the Treasury that the
is the conference will
primary yield proposals
federal that can be acted
agency upon immediately,
responsible as well as others
for the that will lay the
economic and groundwork for
financial longer action.
prosperity
and security
of the United
States.
Major discussion
at the conference
included:
* Benefits of
moving toward a
more principles -
based regulatory
system
* Restructuring
the accounting
profession
* Significant
wasted effort and
cost caused by
SOX of others
U.S. Chamber of The U.S. The U.S. Chamber
Commerce Chamber of of Commerce
Recommendations Commerce is launched the
the world's Center for
largest Capital Markets
business Competitiveness
federation (CCMC). The
representing Center will
more than advance a
three million legislative,
businesses of regulatory and
all sizes, legal agenda the
sectors and Chamber believes
regions. will strengthen
the
competitiveness
of U.S. capital
markets. The
Chamber plans to
begin
aggressively
implementing key
recommendations
from its report.
Retired Although The PCAOB and the
Congressman Oxley is now SEC proposed a
Michael Oxley retired from risk-based
the U.S. assessment to
Congress, he better define
has taken on material
two new weakness, with
roles: as more emphasis on
counsel for internal audit.
the Cleveland It adds
- based law flexibility with
firm Baker smaller
Hostetler and companies. Oxley
as is confident that
nonexecutive this is the right
vice chair of move - it will
NASDAQ. protect the
investor and make
regulations work
to everyone's
satisfaction.
Committee on The committee
Capital Markets report outlined
Regulation 32 specific
(a.k.a, Hal recommendations
Scott in four key areas
Committee) to improve the
regulatory system
and give U.S.
capital markets
the competitive
boost necessary
to respond to the
increasingly
aggressive
efforts of other
countries to
attract equity
capital markets.
Below are the
highlights
recommended for
SOX:
* The SEC should
adopt a more
reasonable
materiality
standard both for
internal controls
and financial
statements.
* The SEC and the
PCAOB should
adopt enhanced
guidance on
auditors' roles
and duties in
testing for
compliance with
Section 404
* If a revised
Section 404 is
too burdensome
for small
companies ($75
million market
cap and less),
even after the
general reforms
outlined above
are implemented,
the SEC should
recommend to
Congress that
small companies
be exempt from
auditor
attestation and
be subject to a
more reasonable
standard for
management
certification.
Global Public Issued a white
Policy paper in November
Symposium 2006 that
provides a new
perspective on
meeting investor
needs in an
evolving global
market, Global
Capital Markets
and the Global
Economy: A Vision
from the CEOs of
the International
Audit Networks.
Beckstead & In a 14-page
Watts LLP of opinion, Judge
Henderson, James Robertson
Nevada & the of the PCAOB in
Free Enterprise march 2007.
Fund
The plaintiffs
plan to appeal
the decision.
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