Thursday, August 31, 2006
IT Veteran Keith Cooley Joins Oversight Systems as Vice President of Engineering
ATLANTA (Aug. 31, 2006) - Oversight Systems Inc., the leading provider of automated continuous monitoring solutions, today announced that H. Keith Cooley has joined the company as Vice President of Engineering. As a key member of Oversight's executive team, Cooley will lead all product development and engineering for the company.
Cooley is an information technology veteran who was most recently Chief Customer Officer at Witness Systems, Inc. In previous leadership roles, Cooley served as executive vice president of product development for EzGov and vice president of engineering for Internet Security Systems where he was responsible for production of the company's award-winning product lines.
"Only with a growing list of customers could Oversight attract a proven IT leader like Keith Cooley," Oversight Systems CEO Patrick Taylor said. "Keith will build upon our strong reputation for providing innovative solutions and unequalled customer satisfaction."
Cooley's experience also includes executive positions at Dun & Bradstreet Software and Management Science America. Before Dun & Bradstreet acquired MSA, Cooley managed various support, engineering and marketing functions for MSA. After the acquisition, he served as Dun & Bradstreet’s vice president of information systems, vice president of worldwide client server support and vice president of European support and development.
"Oversight Systems faces a huge opportunity to provide the market with automated continuous monitoring solutions that both reduce Sarbanes-Oxley compliance costs and drive operational improvements in financial processes," Cooley said. "I look forward to building on the company's momentum and delivering easy-to-use software solutions that deliver immense value."
posted by Brian Moran @ 1:39 PM
Tuesday, August 29, 2006
Sarbanes-Oxley: Lessons Learned
Organizations that need to be SOX-compliant are just now realizing they need to get serious about using technology to monitor and test their internal controls.
By Therese Rutkowski
September 1, 2006 - Many publicly traded companies are in their third year of dealing with the Sarbanes-Oxley Act (SOX)--the law that makes corporate executives responsible for the accuracy of their financial statements and for the internal controls that minimize errors and reduce fraud.
After going through the rigorous process of documenting and testing those controls, such as the segregation of duties and appropriate access to financial systems, many of these companies-including insurers-spent far more on the effort than they ever imagined.
A full 70% of respondents to a 2005 Ernst & Young LLP cross-industry survey on trends in internal controls indicated SOX compliance costs were more than 50% higher than originally estimated. In fact, the average cost of SOX compliance was $4.4 million, according to a March 2005 survey by the Financial Executives International, a professional association based in Florham Park, N.J.
posted by Brian Moran @ 10:24 AM
Friday, August 25, 2006
Backdating Causes Late Filings to Soar
Forget Sarbanes-Oxley 404. A record number of companies filed their recent quarterly reports late, and the most commonly cited reason was the rapidly growing option backdating scandal.
According to shareholder advisory firm Glass, Lewis & Co., 138 companies with market capitalizations of at least $75 million submitted late-filing notices for the second quarter, up 52 percent from year-earlier levels. Forty-eight of those companies said they postponed their filings because they were conducting investigations into their historical stock-option grants, including such well-known names as Apple Computer Inc., UnitedHealth Group Inc., Monster Worldwide Inc., CA Inc., and Juniper Networks Inc. By contrast, only three companies cited incomplete internal-control assessments as the reason for their delay.
posted by Brian Moran @ 10:37 AM
Thursday, August 24, 2006
Defending Against Backdating Suits
Companies will have to make improvements in their internal control procedures to deal with sloppy recordkeeping, poor controls, and improper options practices to satisfy shareholders. However, Conroy points out that, except in cases where there appears to have been deliberate manipulation, there is generally little significant price reaction to corporate backdating announcements.
That's because backdating does not directly affect future cash flow, a metric that investors value greatly, contends Conroy. And while backdating may produce a risk to a company's reputation, as shareholders don't usually like to see restatements, the economic effect remains in the past.
posted by Brian Moran @ 9:15 AM
Wednesday, August 16, 2006
Webcast: Controls, Compliance & the Role of Continuous Monitoring
Webcast with Controls Expert Anne Marchetti, author of Beyond Sarbanes-Oxley Compliance: Effective Enterprise Risk Management & The Sarbanes-Oxley Ongoing Compliance Guide
Date: Thursday Aug. 31
Time: 2 p.m. EST/ 11 a.m. PST
Duration: 45 minutes
The public outcry against Sarbanes-Oxley is largely based on the excessive costs and relatively few tangible benefits recognized. However, continuous monitoring of financial processes and the underlying transactions can reduce compliance cost as well as deliver tangible benefits to business operations. Continuous monitoring drives risk-based compliance and controls that allow an organization to maintain full compliance while reducing ongoing costs, strengthening the overall control environment and improving financial processes.
Continuous monitoring of financial processes and related transactions can help companies avoid the expensive compliance burden of reconfiguring financial systems to support compliance requirements. Public companies and their auditors should act now to better understand the role that technology and continuous monitoring can play as a mitigating control as well as in the automation of the reporting of control effectiveness.
posted by Brian Moran @ 3:35 PM
Wednesday, August 09, 2006
Why options backdating is a big deal
A debate over its nuances misses the point: Incentive-based compensation is broken.
By Adam Lashinsky, Fortune Magazine senior writer
If the subject is so complex, then why argue that the whole system is rotten? Consider this: Stock options were invented as a way to align the interests of employees with shareholders. The first time the system began to crack was in the 1990s, when companies with falling stock prices began to re-price their stock options in order to retain their employees. With a righteous fury, arrogant Silicon Valley executives in particular glared at anyone who suggested shareholders would benefit by ending a practice that would lead to losing valued employees. Shareholders, of course, didn't get the opportunity to re-price their shares. The practice halted when rules changes required shareholder approval for re-pricing.
posted by Brian Moran @ 9:24 AM
Monday, August 07, 2006
Three cheers for Sarbanes-Oxley
THE STOCK option re-pricing scandal has been perturbing corporate America for months but yesterday’s admissions by Apple thrust the issue right to the front of minds all across the globe. Not only is Apple a big name, it also projects an image of cleanliness and decency. If the top brass at Apple thought it was reasonable to re-price options retrospectively to maximise the financial rewards to executives, it suggests that the practice was widespread.
It also suggests that standards of behaviour among executives are woefully low. It simply cannot be right to issue options to buy shares at levels below the market price at the time of grant. If this is not appreciated, it raises questions about all manner of other judgments made by businessmen and women. Besides being intuitively wrong, it makes a mockery of the justification for the schemes. It is good for executives to have shares or share options, so the argument goes, because it aligns the financial interests of shareholders and executives. But if the starting price is revised downwards, directors are getting money for nothing. That does shareholders no good at all.
While stock option re-pricing paints corporate America in a dismally poor light, its discovery should leave observers grateful to Sarbanes-Oxley regulations. Sarbox is ritually abused for adding needless bureaucratic burdens on business. The Sarbox inspired obligations on senior executives to sign off accounts, however, seems to have led to the discovery of deplorable practice.
Making directors accountable for the books they keep may result in an extra administrative cost, but if it keeps the custodians of America’s publicly owned companies on the straight and narrow, it is a small price to pay. If it makes all executives re-examine practices blithely assumed to be justifiable, so much the better.
posted by Brian Moran @ 1:51 PM
Friday, August 04, 2006
Stock options troubles: background
Apple Computer may be the highest-profile but it is not the first company to admit that it would probably have to restate its earnings as a result of the widening stock options backdating scandal.
McAfee, the security software company, said last month that manipulation of the timing of options meant it would have to restate earnings going back to at least 2003, and the impact would be significant. It also fired its general counsel as a result of the episode.
Mercury Interactive, a business software company, was also forced to restate several years’ worth of earnings reports. Mercury’s shares were de-listed from the Nasdaq and its former chief executive resigned last November amid revelations that he and other executives had benefited from favourable backdating of stock options grants.
San Francisco-based CNET Networks also said last month that it expected to restate financial statements.
Last month, US authorities handed down the first criminal and civil charges in the scandal, charging three former executives of California technology company Brocade Communications Systems.
posted by Brian Moran @ 3:20 PM
Thursday, August 03, 2006
Oversight Systems Launches Continuous Monitoring for OFAC Compliance
Oversight Systems Inc., the leading provider of continuous monitoring solutions, today announced the launch of OFAC compliance functionality into the Oversight solutions for procure-to-pay and order-to-cash.
As demanded by the Patriot Act and regulated by the Office of Foreign Asset Control, U.S. companies must not conduct business with individuals, companies, organizations and countries that support terrorism or drug trafficking or otherwise find themselves on the OFAC list of Specially Designated Nationals and Blocked Persons.
"The Patriot Act raises the bar for OFAC compliance, and financial executives must be on constant guard to monitor their vendors, contractors and customers -- or face stiff penalties and government scrutiny," Oversight Systems CEO Patrick Taylor said. "By integrating the SDN list with Oversight's advanced analysis, Oversight delivers precise results for a centralized and fully automated control that ensures OFAC compliance."
Oversight's continuous monitoring platform and real-time transaction inspection maintain all updates to OFAC's designated list and automates the analysis of every vendor, contractor, customer and -- more importantly -- your company's financial transactions for potential violations.
For businesses with decentralized order-to-cash and procure-to-pay processes, Oversight delivers centralized controls over all financial systems and disparate financial operations. Companies with centralized financial operations rely on Oversight to automate their controls for OFAC compliance.
posted by Brian Moran @ 10:00 AM
Tuesday, August 01, 2006
Suits, Sarbanes linked to CEO stock sales -study
Chief executives are more likely to sell large chunks of their stock holdings when their companies disclose new litigation or a violation of Sarbanes-Oxley internal controls requirements, according to a study released on Monday.
The report by The Corporate Library, which examined 120 chief executives who sold more than a third of their company shares in 2005, showed 30 percent sold stock when their company was involved in some sort of litigation. Twenty-four percent of the chief executives sold stock when there was a Sarbanes-Oxley violation at their firm.
"This would indicate a CEO's general lack of confidence in the company's stock price and should be cause for concern for shareholders."
posted by Brian Moran @ 1:58 PM