Retaining Ethical Cultures During a Weak Economy

Building a culture of integrity, ethics, and compliance is no longer anything new. Keeping such a culture during a downward-spiraling economy, however, is. Inside, Compliance Week Columnist (and former SEC Chairman) Harvey Pitt suggests ways companies can maintain good corporate governance and encourage ethical business behavior even in these turbulent times.

Reducing e-Discovery Costs

Lawyers exasperated with the high cost of electronic discovery are trying a new tactic to curb costs: mediators specifically versed in e-discovery disputes. By reaching a compromise outside the courtroom, litigants can “come to the judge with progress reports, rather than being embroiled in suits,” says Rick Wolf, CEO of legal consulting firm Lexakos.

Mid-Year Litigation Update

Corporate America, brace yourself: The unending fallout of the global financial crisis continues to drive a wide range of complicated and highly aggressive securities litigation. Worse yet, filing activity shows no signs of slowing down. A review of what’s happened, and what’s likely to come, is inside.

Social Media & Compliance: Finding the Right Solution

Online media—blogs, Twitter, Facebook, whatever—is here to stay. The challenge for compliance officers is how to draft a policy that minimizes legal or reputation risks without alienating employees. “We believe that by giving employees that access and having guidelines they agree with, they will do the right thing,” says Adam Christensen of IBM. More is inside.

Documenting Fair Value

Amid confusion and demands for guidance on how to measure the fair value of assets in the midst of uncertain markets, current accounting practice is settling on an immediate solution: document everything. “The burden of justification is on the companies,” says Chris Wright of the consulting firm Protiviti.

Key Qualities of a Financial Expert

Nobody doubts the importance of having financial expertise on the audit committee, but few know how to define that expertise clearly. This week, guest columnist K. Sue Redman, chair of the audit committee at the Apollo Group, offers her thoughts on the topic—and whether such expectations are practical.

SEC Needs to Decide on IFRS

Either the United States is going to adopt International Financial Reporting Standards or it isn’t. And if we are, says Compliance Week Columnist Colleen Cunningham, the SEC should get moving. “If we want to continue to have a seat at the table in international standard setting, we need to set a date already and begin planning for the ultimate move to IFRS,” she writes.

Webcast: Compliance Management

Our next Webcast, on July 16 at 2 p.m. EDT, features Paisley Systems talking about integrated management of GRC efforts. Free; register now.

SEC Approves NYSE Ban on Broker-Dealer Voting

The SEC on July 1 voted 3-2 along party lines to approve the New York Stock Exchange rule amendment that effectively ends broker discretionary voting in director elections. The rule change will be effective for shareholder meetings held on or after Jan. 1, 2010. Details inside.

PwC Helps Cos. Close Quarter

PricewaterhouseCoopers has released a checklist of recent regulatory events to help companies determine whether such events have been taken into consideration and addressed. “We tried to pare it down to things people need to know now, things that are coming up, and things that are on the horizon,” said Jan Hauser, a partner at PwC.

Report: Material Weaknesses Identified in Internal Controls

A report published by consulting firm Lord & Benoit highlights numerous material weaknesses in internal controls over financial reporting at publicly held insurance companies. Among them: proper accounting for income taxes, significant audit adjustments and segregation of duties.

ERM Disclosures Lacking

When it comes to disclosing risk-management practices, public companies still have a long way to go, according to a report by governance research and rating firm GovernanceMetrics International. More details of the report are inside.

Fighting SEC Enforcement

It’s a new tactic when faced with SEC enforcement actions: settle all charges except for the agency’s ban against certain officers or directors, and litigate that. Well, that might not always be a wise idea. Compliance Week legal blogger Bruce Carton examines a recent case where a company fought the SEC’s request for a ban, and lost.

PCAOB Delays Inspection Plan

The PCAOB has voted itself an extension on its plans to inspect overseas audit firms, amid legal obstacles the board faces in other countries. Details are inside.

Internal Audit Guide on XBRL

The Institute of Internal Auditors has published a free whitepaper for internal auditors on their potential role in helping their companies transition to filing financial statements with XBRL technology. More details inside.

Podcast: Cloud Computing

In this week’s podcast, Compliance Week Editor Matt Kelly talks with Doug Cornelius, chief compliance officer of Beacon Capital Partners, about “cloud computing” and how such IT systems can affect compliance. Hear it now.

GAAP Codification Update

FASB has announced its terms for access to its Accounting Standards Codification, the online database replacing U.S. Generally Accepted Accounting Principles. Registration for access to the Codification will begin on July 1.

Financial Crisis Commission Prepares to Start Inquiry

The independent commission tasked with investigating the causes of the financial crisis is ramping up. That means companies caught in the cross-hairs of legal proceedings need to be prepared and “thinking ahead about how they’re going to handle that,” said John Olson of law firm Gibson, Dunn & Crutcher. Details inside.