Hot Issue and Related Poll
Most pre-IPO companies realize the need for consistent, reliable revenue recognition -- and they are not going public until they get it. While elevated pressures on company directors and executives for more revenue accountability, better internal controls and improved risk management are not new as a result of Sarbanes-Oxley, recent economic events have created a climate in which the bar is being raised even higher. This article reviews several areas where emerging regulations either already have or may soon impact an organization’s revenue risk management practices and its internal control environment.
This week’s poll question asks: "Regardless of whether your company is private or public, does your organization recognize the importance of consistent and reliable revenue recognition practices?" Participate in this quick poll to understand how you measure up against your peers.
Previous Poll Results
See the results from last week's poll, "Are C-level executives in your organization focused on improving information flow and delivering the data the board needs?"
Regulatory Updates
Last month, a court order laid down criteria for evaluating discovery conduct that potentially impacts the risk profile of every company involved in U.S. litigation. For C-level executives that have had difficulty staying with the e-discovery conversation in the past, now is the time to pay attention. Given the potential impact to the risk profile of organizations involved in U.S. litigation, the objective of issuing this Flash Report is to supplement and highlight the legal analyses with the business message to help executives outside of the legal department understand what this ruling really means from a nonlegal point-of-view.
On February 15, 2010, The Institute of Internal Auditors (IIA) opened a 90-day comment period on proposed revised and new Standards for the International Standards for the Professional Practice of Internal Auditing. The IIA’s Internal Audit Standards Board (IASB) periodically reviews all of The IIA’s guidance (at least once every three years). It is proposing three new Standards, 14 changes to existing Standards, deletion of two Standards, and edits and deletions to some glossary terms.
Article
In March 2009, the U.K. government published a draft Bribery Bill which places greater accountability on individuals and corporations registered or carrying out business in the U.K. to prevent bribery by their employees or agents. The bill is expected to be enacted during 2010.The information in this article is based on the Bribery Bill as it currently stands. Issues related to corporate hospitality, facilitation payments and offset arrangements have been raised by the industry, and such activities will be limited by the “improper performance” test and subject to prosecutorial discretion.
Auerbach Article
The goal of this article is to discuss how a backup system needs to be designed to facilitate recoveries. The purpose of a backup is to provide a mechanism to recover lost information. Therefore, backup systems must be designed to allow those recoveries to take place with as little effort or cost as possible.
Policy
This document establishes guidelines and procedures to be followed prior to signing vendor contracts on behalf of the company. Steps include obtaining required approvals from the legal department and vendor.
Questionnaire
An important contribution of risk management is to help executives and their boards make better choices during the strategy-setting process. Boards and management need an effective enterprise risk assessment (ERA) process to effectively discharge their responsibilities, especially in today’s rapidly changing environment. This questionnaire focuses on the vital steps in executing an effective ERA, and why integrating these assessments with strategy-setting is important.
Featured Links
The Securities and Exchange Commission has extended its timeline for requiring U.S. publicly traded companies to apply international financial reporting standards to their financial statements: the earliest that U.S. companies may be able to use IFRS is now 2015. The deadline in the SEC's original "roadmap" was 2014, although some large companies could have prepared their U.S. filings with IFRS this year (that option has been discarded). Source: CFO.com
As cloud computing adoption climbs, hosting providers are inking deals with security vendors to provide security-as-a-service options to customers. But will enterprise IT managers buy into these often novel forms of security woven into a cloud computing environment? This article says that even though there is some resistance as IT and security managers struggle to sort out risk factors and compliance issues, these new security-as-a-service arrangements are coming to cloud computing, and fast. Source: CIO.com
Featured KLplus Course
In this course we will cover performing the physical inventory and the risks associated with this phase of the process. The completed course is worth 1 CPE credit and by the end of the course the learner will be able to:
- Provide consultation on the implementation of a physical inventory
- Recommend key controls and best practices
- Properly test the internal controls related to the physical inventory process
To view the full list of CPE courses available on KnowledgeLeader, please visit the KLplus page, or to request an upgrade to KLplus, visit the My Account page.
Featured Favorite
There are practical issues surrounding the possible future use of International Financial Reporting Standards (IFRS) by U.S. public companies, or by entities in other countries using a different version of GAAP not conformed to IFRS. This issue of The Bulletin considers these issues and the ramifications of transitioning from country-specific GAAP to IFRS. This newsletter has been tagged as a Favorite by your fellow subscribers.
Did You Know?
KnowledgeLeader’s weekly update is available to all visitors and members in the form of a news feed. Feeds allow a user to read news, blogs, and other items from multiple sources collected together in a single place, at a time chosen by the user. Feeds avoid the need to ‘surf’ to many different websites or read multiple ‘newsletter’ emails to obtain this information.
CCH Tax and Accounting - Accounting Research Manager Updates
- EITF Materials -- FASB Issues Additional Materials for March 18, 2010 EITF Meeting
- Climate Change -- SEC Interpretive Guidance Discussed
- Checklist -- Checklist of PCAOB Standards Published
- Financial Reporting Manual -- SEC Staff Issues December 2009 Update
- Regulation S-K -- SEC Staff Updates Regulation S-K Interpretations
- Proxy Disclosures -- SEC Staff Publishes Guide on Proxy Disclosure Enhancements
- Financial Instruments -- FASB Discusses Accounting for Financial Instruments and Other Matters
- Consolidation -- IASB Discusses Consolidation and Other Matters
From the Archive
The goal of Enterprise Risk Management is to identify, evaluate and manage key risks impacting an organization’s ability to achieve its objectives and strategies. This document provides a template to inventory and assess critical risk areas (business functions) and the associated risks embedded within each area. The results can be used to help develop an Internal Audit Plan. The results may also be included in the Risk Assessment Report provided to the Audit Committee. This was one of the top 25 most viewed pages in 2009.
Top 5 Pages on KnowledgeLeader
The following links will take you to the five most popular pages from the week of February 22, 2010.