Congress to Debate Companies’ Speech and Spending Rights

Sen. John Kerry wants to restrict companies’ funding of political campaigns — which was loosened by a January Supreme Court decision — through a constitutional amendment.Such a change would “make it clear once and for all that corporations do not have the same free speech rights as individuals,” ...

By Sarah Johnson • Feb. 2, 2010

GRC: The Solution Remains Elusive

The software category known as “governance, risk, and compliance” ended 2009 pretty much where it began: still lacking a clear identity. Any apt description of GRC, in fact, remains tantamount to, as one industry insider puts it, “an academic definition of the word mess.“It is an open question wh...

By David McCann • Feb. 1, 2010

SEC Comes Clean on Climate Disclosures

New guidance from the Securities and Exchange Commission will prompt companies to reexamine how they explain the effects of climate change on their business in regulatory filings. The clarification from the regulator arrives just as companies with a calendar year-end are putting together their 10...

By Sarah Johnson • Jan. 27, 2010

Bad Times for Brokers

In a topsy-turvy financial world, commercial insurance premiums have kept on a steady downward course. The trend continued in the fourth quarter of 2009, with prices for liability coverage declining and property insurance holding steady, according to a new survey of 1,100 risk managers.The survey...

By David Katz • Jan. 19, 2010

Truth and No Consequences

Witnesses to securities fraud have had little incentive to tattle on their errant co-workers — or accomplices, as the case may be. Coming forward, after all, can put one’s career, reputation, and wallet at risk. “In terms of your legal exposure, there [has been] little or no incentive to step for...

By Sarah Johnson • Jan. 14, 2010

A Risk Top 10 for 2010

After the economic turmoil of 2009, CFOs could be forgiven for trying to relax a bit. But the new year will offer plenty of reasons to stay awake at night, according to a new survey by the Corporate Executive Board (CEB).The business-research company recently asked finance executives to identify ...

By Kate O'Sullivan • Jan. 12, 2010

Could New Regs Bring More Lawsuits?

The number of securities class-action claims made in 2009 declined 24% from the previous year, according to a recent study by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research. A total of 169 claims were made in 2009, compared with 223 in 2008. However, the di...

By Sarah Johnson • Jan. 11, 2010

Best of 2009: Regulation

The year 2009 was a traumatic one for financial regulators, no less than for the publicly traded companies and the accounting firms they oversee. Tarnished by revelations of excessive risk-taking (see the banking meltdown) and massive fraud (see Bernard Madoff), regulatory agencies faced the pros...

By CFO Editorial Staff • Jan. 4, 2010

Best of 2009: Risk Management

The 2004 Basel II capital accords break down “risk management” into three basic categories: market, credit, and operational. As they routinely do, operational risks — the potential for man-made or machine-made losses — have plagued finance chiefs in 2009. But there can be little doubt that credit...

By CFO Staff and David Katz • Dec. 28, 2009

Protecting a Privilege

Bank of America’s agreement to turn over privileged documents to the Securities and Exchange Commission earlier this year was not popular with corporate lawyers wanting to maintain employees’ and companies’ legal rights. For the past decade, they have warned that protections of the confidential i...

By Sarah Johnson • Dec. 22, 2009

Stalling on Sarbox

Rick Brounstein, CFO of microcap company NewCardio, hopes one day to be required to comply with the auditor-attestation requirement of the Sarbanes-Oxley Act, known as Section 404(b). Really, he does.Presuming the time comes when NewCardio’s technology, which is designed to improve the accuracy o...

By Sarah Johnson • Dec. 17, 2009

Will the SEC Get Personal?

When a U.S. District Court judge rejected a $33 million settlement between the Securities and Exchange Commission and Bank of America in September, he was especially troubled that the regulator’s case had not singled out any employees for allegedly making misstatements.In his ruling denying the s...

By Sarah Johnson • Dec. 15, 2009

Wait ‘Til Next Year for Credit, Suppliers Say

As they have in other parts of their jobs, finance chiefs have reasons to be cautiously optimistic about their trade-credit relationships with customers. After an extraordinarily bleak 2009, which saw many suppliers forced to renegotiate terms with their customers or write off bad debt altogether...

By David Katz • Dec. 14, 2009

As Internal Audit Staffs Shrink, Will Fraud Rise?

Few corporate departments have been spared layoffs in recent months, and internal audit and compliance are no exceptions. According to a new poll by Deloitte Financial Advisory Services, 27% of executives reported reductions in these areas at their companies in the past 18 months, despite the fac...

By Kate O'Sullivan • Dec. 10, 2009

Benchmarking Credit Risk: Cash Is the Key

Editor’s Note: For a look at how three dozen industries are faring on key metrics associated with timely payment of invoices, check out the 2009 Credit Risk Benchmarking Report.On the heels of a two-year economic downturn, most midcap companies are throwing off enough cash from their sales to be ...

By David Katz • Dec. 9, 2009

A Contained Depression

If you’re breathing a little easier because the Great Recession seems to be ending, consider this: the U.S. economy may remain in a “contained depression” for months or years to come. That warning comes from economist David Levy, chairman of the Jerome Levy Forecasting Center, an economic researc...

By Vincent Ryan and Kate O'Sullivan • Dec. 4, 2009

Its Future in Limbo, the PCAOB Asks for More Money

The week before Supreme Court justices will hear reasons why the Public Company Accounting Oversight Board should be dissolved, the auditor watchdog appears undeterred and has asked for a 16% boost to its 2010 budget.Members of the board attribute the request for an additional $25.7 million — for...

By Sarah Johnson • Dec. 3, 2009

Does Sarbox Reduce Restatements?

A recent study could give some fodder to opponents of the movement toward exempting small publicly traded companies from the auditor-attestation requirement of the Sarbanes-Oxley Act. And it could deflate the hopes of small-company CFOs who are praying for the exemption.The study, from research f...

By Sarah Johnson • Dec. 2, 2009

No Worries

Having failed to anticipate a series of recent catastrophes, from the housing crash to the liquidity crisis, it comes as no surprise that fully 96% of senior executives said in a recent Ernst & Young survey that their companies’ risk-management processes leave room for improvement.Many will a...

By Josh Hyatt • Dec. 1, 2009

Congress Waters Down FASB-Oversight Plan

Lawmakers have backed away from a proposal that would have weakened the Securities and Exchange Commission’s oversight of accounting standard-setters.Reps. Ed Perlmutter (D-Colo.) and Frank Lucas (R-Okla.) introduced a bill earlier this year that would have created a new body to oversee the Finan...

By Sarah Johnson • Nov. 23, 2009

Keep Bank Regulators Away from FASB: SEC Commissioner

SEC commissioner Elisse Walter is fighting a proposal that would weaken the regulator’s authority over accounting standards-setters. In a hearing Tuesday before a House committee, Walter called the concept of allowing bank regulators to have a significant say in accounting rules “a grave mistake....

By Sarah Johnson • Nov. 17, 2009

Derivatives: over the Counter, out of Sight

In 1958 American onion farmers, blaming speculators for the volatility of their crops’ prices, lobbied a congressman from Michigan named Gerald Ford to ban trading in onion futures. Supported by the president-to-be, they got their way. Onion futures have been prohibited ever since.Futures are agr...

By Economist Staff • Nov. 13, 2009

No More Lenience on Pay Disclosure: SEC

After three years of reviewing companies’ pay disclosures, the Securities and Exchange Commission appears to be running out of patience.Since late 2006, when the SEC revamped its guidelines for disclosing information on the compensation of top executives, the regulator has been sending out commen...

By Sarah Johnson • Nov. 11, 2009

Madoff Auditor Pleads Guilty but Makes Bail

David Friehling, who audited — or more precisely, perhaps, did not audit — Bernard Madoff’s books for 18 years, reversed course and pleaded guilty Tuesday to nine criminal counts of securities fraud, investment adviser fraud, and filing false reports with the Securities and Exchange Commission.Th...

By David McCann • Nov. 3, 2009

An Agency Ready to Roar?

When Mary Schapiro took over the chairmanship of the Securities and Exchange Commission, she enjoined the staff to “act like our hair is on fire” in curing the agency of various ills such as the botched investigation of Bernard Madoff’s Ponzi scheme. But in the past nine months, a daunting slate ...

By Alix Stuart • Nov. 1, 2009