Sarbanes-Oxley Deja Vu

Last week, the U.S. House of Representatives proposed amendments to the Investor Protection Act of 2009 that will in essence seek to roll back some of the reforms implemented as a result of the Sarbanes-Oxley Act of 2002.  Specifically, Representatives Carolyn Maloney and Scott Garrett are seeking to exempt public companies with a market capitalization of less than $75 million from the requirement to have their internal controls audited by an external firm.

Their approach is to request the SEC to perform a study on the costs of compliance for these firms and then, determine the need for the requirement. While this may be a reasonable request, it has already been made and the SEC completed a similar study this year.  As a result, the SEC confirmed the need for the external audit and announced it will be required of all companies next year.  The Huffington Post reported that several investor advocate groups as well as a former SEC chairman were outraged by the proposed amendment.  Read more at: http://www.huffingtonpost.com/2009/10/27/house-democrats-john-adle_n_334876.html

Keep Your Eye on Compliance

The primary focus of most CFOs these days is credit and liquidity.  However, during a crisis such as the one we are experiencing, it is easy to become distracted and lose focus in other critical areas.  Compliance is one of these areas and with the recent election results, it is sure to be an area of great risk in the months and years to come.  Here's what Barry Bregman, a partner with CTPartners in New York, had to say about the topic at CFO.com.

That's not to say compliance has fallen by the wayside, especially at a time when the government is looking even harder at the operations of financial-services companies. "CFOs should make sure they have their eye on that ball and that they have the right people managing those functions."

Wheelhouse Advisors is equipped to help CFOs and their organizations maintain the proper focus on risk management and compliance with cost-effective solutions.  Visit www.WheelhouseAdvisors.com to learn more.