Internal Controls

The Financial Choice Act: The End of Dodd-Frank?

For those who work in public companies or financial institutions, corporate compliance is an ever-present concern. The primary regulations that drive this emphasis on internal controls and audit are the Dodd-Frank and Sarbanes-Oxley (SOX) Acts. However, with the recent change in administration, Dodd-Frank has been teed up for a major overhaul, and SOX may see... Read more »
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Foreign Corrupt Practices Act (FCPA)—Ignore It At Your Peril

By Pam Miller, APMD One way to remember the Foreign Corrupt Practices Act of 1977 (FCPA) is that it rhymes with SPCA—the organization that takes care of strays. Interestingly, the FCPA also takes care of strays, since it prosecutes and fines organizations that have strayed from obeying the law. Domestic businesses may not be fully... Read more »
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The Foreign Corrupt Practices Act: Review Invoices and Expense Reports for Suspicious Transactions

As more companies do business outside the U.S. through agents and representatives, the possibility of violating the law increases. Since accounts payable is responsible for paying vendors and reimbursing employees for expenses, it represents the last line of defense against illegal practices. AP therefore needs to review invoices and expense reports. In several cases, AP... Read more »
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Seven Best Practices to Counter Today’s Growing Risk of Customer Bankruptcy

Recent historic market volatility—and the underlying negative economic indicators it reflects—have raised the ugly specter of a rise in business bankruptcies. Commercial bankruptcy numbers have actually been falling, if slowly, from the highs reached during the Great Recession (see accompanying table). However, recent developments like the spreading eurozone debt crisis, the potential exposure of U.S.... Read more »
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Compliance Programs Key to Preventing Crime and Avoiding Liability

There is both good news and bad news regarding corporate criminal liability. The bad news is that the Supreme Court reinforced the doctrine with a 2010 decision, and its application has been expanding. The good news is that there is a doable formula that, if followed, provides a strong shield against it. A corporate criminal... Read more »
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Playing Catch-Up to Social Media Risks Is Growing Critical

Of 300 security executives included in a SDR survey, only about half said their organizations have specifically addressed social media in computer use policies (see the figure below). But there are several reasons for laggards to face up to the issue—including predictions by security experts and newly revised FTC guidelines. Survey Results Social media have rapidly emerged... Read more »
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Global Picture Requires More Attention to Supply Chain Risks

The number of vulnerable links in the global supply chain has grown since last year, and the high price companies pay for disruptions has never been clearer. For security executives trying hard to link security to business drivers, look no further—and consider how one firm meets the challenge. The Cost We’ve reported many times on... Read more »
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How to Structure a Multiparty Transaction to Minimize Risk

Do you know what risks your company faces if it is part of a three-party transaction and one of the players later files bankruptcy? The simple answer is that a bankruptcy trustee may avoid and recover the assets your company received in that triparty deal. This can occur even if more than three years have... Read more »
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Risk Alert: Wage-and-Hour Class-Action Lawsuits Up Sharply

A statistic that controllers should pay special attention to—and act on to ensure Fair Labor Standards Act (FLSA) compliance—is the dramatic 15 percent rise in wage-and-hour lawsuits that reached federal court in 2011 compared with 2010. Of the 7,008 total cases, a significant number were potentially costly class actions. Price Tag: $225 Million Aggressive Department... Read more »
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Recent Escheatment Cases Increase Firms’ Vulnerability to Fines and Violations

Staples, John Hancock, Prudential, and McKesson are just the most prominent among corporations recently penalized during state-initiated audits that have significantly increased companies’ vulnerability to violations and fines. Revenue-hungry states are aggressively conducting audits utilizing third-party auditors paid on a contingency basis. States are also legislating shorter dormancy periods and increasingly targeting securities property. New... Read more »
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