| Announcements |
New Certification Training Programs
The Internal Control Institute has begun new certification training in a classroom format for the internationally recognized CICS certification in internal control in Europe, China, Jordan and Nigeria. Information on these programs regarding dates, schedule, cost, etc can be directed to:
Europe: yves.dupont@icib.org
China: ccit.zy@gmail.com
Jordan: tarekruhmi@gmail.com
Nigeria: tunjialuko5@yahoo.com
Information about training in the English on-line program is available at: http://www.spcollege.edu/ct/ici.html
ICI-Europe
Our European partner ICIB launches a new training program in Northern Africa; Algeria will be the first hosting country. The program integrates the internal control practice (preparation to the CICS exam) as a key component of corporate governance CRG. Other chapters of the training cover topics such as management control and internal audit. A major breakthrough of the CICS certification initiatives in this part of the world. Visit their website http://www.icib.org/bienvenue.ws
ICI Website
On our redesigned website there is an announcement area for each of the main pages. Announcements are located just below the blue header. Check out the recent announcements at Internal Control Institute. Visit us often to keep up with the latest news in internal control and corporate governance. |
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What Are the Seven Principles of Internal Control
By Michelle Miley, eHow Contributor updated: April 08, 2011 | | When creating an accounting system, businesses and nonprofit organizations must establish a framework for internal control. The internal control process helps to ensure that the system is working well and that all of the employees involved are performing as expected. Having such an essential business function provides reasonable assurance by decreasing the likelihood of mistakes and safeguarding the organization's assets. Because of its significance, companies would do well to consider these fundamental principles of internal control. Read the Article
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COSO Expanding 5 Component Internal Control Framework Into 20+ Principles; May Impact Sarbox 404 Assertions
accountingWEB
Posted by Edith Orenstein - 04/05/2011 | |
In an update provided at the March 24, 2010 PCAOB Standing Advisory Groupmeeting, COSO Chairman Dave Landsitteldescribed COSO's current project to modernize and update its 1992 Internal Control- Integrated Framework. COSO plans to issue an Exposure Draft of a proposed revision later this year, followed by the release of two final documents in 2012: 1. An updated internal control framework, broadly scoped like the current framework, to include internal control over financial reporting, compliance, and operational controls, and 2. A separate document focusing on application of the guidance to internal control over financial reporting (that portion of the guidance most relevant to Sarbanes-Oxley Section 404 internal control attestations). 5 Components To Be Expanded To 20 'Principles,' Additional 'Attributes,' Potential Impact on Sarbox Assertions Significantly, Landsittel noted that the updated framework "Will focus on 20-plus principles in total, extending over the 5 components [i.e., the 5 components of internal control over financial reporting established in the 1992 framework: control environment, risk assessment, control activities, information & communication, and monitoring], in other words, for each of the 5 components, we'll have a specific set of principles that support those components, and in each chapter [of the updated framework], we'll have 'attributes' that support those principles." He noted that the expansion to a 20+ principles and additional attributes approach was first used in COSO's 2006 guidance for small public companies. Read the Post
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The Dodd-Frank Act's Robust Whistleblowing Incentives
By BEN KERSCHBERG
Forbes April 14, 2011 | |
The Securities Exchange Commission ("SEC") settled three securities cases in July 2010 worth $550 million, $100million, and $75 million, respectively. Last year alone, the SEC and the Department of Justice ("DOJ") settled three cases involving claims of corruption under the Foreign Corrupt Practices Act ("FCPA"). Those cases settled for $450 million, $300 million, and $200 million, respectively. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), whistleblowers who bring violations of securities law, commodities law, or the FCPA to the attention of the proper government authorities-the SEC, DOJ, or Commodities Futures Trading Commission-are entitled to between 10% to 30% of any government recovery in excess of $1 million. This incentive structure demands close attention, as well as a review of corporate compliance programs. The aim is not to stop or deter whistleblowing, which serves a valuable function. On the contrary, corporations should to the extent possible foreclose violations by fostering from the top (board of directors) down a culture of compliance and by encouraging internal reporting so that companies can report themselves to the proper regulatory authorities and/or government enforcement agencies.
Read the Article |
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Former Chairman of Taylor, Bean & Whitaker Convicted for $2.9 Billion Fraud Scheme
Department of JusticeOffice of Public Affairs
NEWS RELEASE Tuesday, April 19, 2011
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WASHINGTON - Lee Bentley Farkas, the former chairman of a private mortgage lending company, Taylor, Bean & Whitaker (TBW), was convicted today for his role in a more than $2.9 billion fraud scheme that contributed to the failures of Colonial Bank, one of the 25 largest banks in the United States in 2009, and TBW, one of the largest privately held mortgage lending companies in the United States in 2009.After a 10-day trial, a federal jury in the Eastern District of Virginia found Farkas guilty of one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; four counts of wire fraud; and three counts of securities fraud. At sentencing, scheduled for July 1, 2011, Farkas faces a maximum prison term of 30 years for the conspiracy charge and for each count of bank fraud, 20 years for each count of wire fraud related to TARP, 30 years for each count of wire fraud affecting a financial institution and 25 years for each securities fraud count. Farkas was remanded into custody. Read the News Release |
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PCAOB penalizes PW India
Moneycontrol News
Published on Sat, Apr 09, 2011 at 12:28 | Source : CNBC-TV18 |
PW India violated its most fundamental duty as a public watchdog - say the SEC and the PCAOB of Pricewaterhouse India's role in the Satyam fraud. The two American regulators have imposed their largest ever penalties on PW India, USD 6 million by the SEC and USD 1.5 million by the PCAOB. The PCAOB or Public Company Accounting Oversight Board - an Audit Super regulator created by the Sarbanes-Oxley Act, 2002 and working under SEC's oversight - has also imposed other sanctions on 5 PW India firms including a bar on accepting any new US based clients for six months. All this while Indian authorities struggle to build a case against the firms or their partners. So how did PCAOB arrive at these charges, how did they determine the penalty and the limitations and what does this mean for PW India and the audit fraternity in the country? In their first ever interview to Indian media Jay Hanson, a Board Member of the PCAOB and Claudius Modesti, PCAOB's Director of Enforcement and Investigations speak to CNBC TV18's Menaka Doshi.
Read a verbatim transcript of the interview |
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Buffett Jolted as Aide Quits
Sokol Resigns After Stock Disclosure; Berkshire Succession Thrown Into Question
The Wall Street Journal - Management
March 31, 2011 | | David Sokol, widely seen as the leading contender to succeed billionaire Warren Buffett at the helm of Berkshire Hathaway Inc., resigned unexpectedly amid surprising revelations about his personal stock trading.In an unusual and personal announcement, Mr. Buffett said the resignation followed revelations that Mr. Sokol had purchased roughly $10 million in shares of a chemicals company that Berkshire recently agreed to buy at the suggestion of Mr. Sokol, Lubrizol Corp. Mr. Buffett said Mr. Sokol, 54 years old, had bought 96,060 shares in January, before Berkshire reached a $9 billion deal to acquire the company. Berkshire's purchase price of $135 per share meant that Mr. Sokol's stake rose $3 million in value. ....The incident is also a potential black eye for Mr. Buffett, 80, who emphasizes character and integrity in his manager choices and who himself is known for his ethics. Shares of the conglomerate, one of the nation's biggest companies, declined 3.2% in after-hours trading. A conflicts of interests section in Berkshire's "Code of Business Conduct and Ethics" posted on its website says a chief executive of a Berkshire subsidiary, whch Mr. Sokol was, "shall disclose any material transaction or relationship that reasonably could be expected to give rise to such a conflict to the Chairman of the Company's Audit Committee. No action may be taken with respect to such transaction or party unless and until such action has been approved by the Audit Committee." Mr. Buffett is not the audit committee's chairman. It is unclear whether Mr. Sokol's actions would have fallen under this policy. The policy on the website also states: "When in doubt, remember Warren Buffett's rule of thumb: '...I want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper-to be read by their spouses, children and friends-with the reporting done by an informed and critical reporter.' Read the Article
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Japanese Plant Had Barebones Risk Plan
The Wall Street Journal Business
By Phred Dvorak and Peter Landers
March 31, 2011 | | TOKYO-Tokyo Electric Power Co.'s disaster plans greatly underestimated the scope of a potential accident at its Fukushima Daiichi nuclear plant, calling for only one stretcher, one satellite phone and 50 protective suits in case of emergencies. Disaster-response documents for Fukushima Daiichi, examined by The Wall Street Journal, also contain few guidelines for obtaining outside help, providing insight into why Japan struggled to cope with a nuclear crisis after an earthquake and tsunami devastated the facility.The disaster plans, approved by Japanese regulators, offer guidelines for responding to smaller emergencies and outline in detail how to back up key systems in case of failure. Yet the plans fail to envision the kind of worst-case scenario that befell Japan: damage so extensive that the plant couldn't respond on its own or call for help from nearby plants. There are no references to Tokyo firefighters, Japanese military forces or U.S. equipment, all of which the plant operators eventually relied upon to battle their overheating reactors. The disaster plan didn't function," said a former Tepco executive. "It didn't envision something this big." Read the Article
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Hacker Pleads Guilty to Identity Theft and Credit Card Fraud Resulting in Losses of More Than $36 Million
Department of Justice- Office of Public Affairs
NEWS RELEASE - Thursday, April 21, 2011
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WASHINGTON - Rogelio Hackett Jr., 26, of Lithonia, Ga., pleaded guilty today before U.S. District Judge Anthony J. Trenga in Alexandria, Va., to trafficking in counterfeit credit cards and aggravated identity theft, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia. According to court documents, U.S. Secret Service special agents executing a search warrant in 2009 at Hackett's home found more than 675,000 stolen credit card numbers and related information in his computers and email accounts. Hackett admitted in a court filing that since at least 2002, he has been trafficking in credit card information he obtained either by hacking into business computer networks and downloading credit card databases, or purchasing the information from others using the Internet through various "carding forums." These forums are online discussion groups used by "carders" to traffic in credit card and other personal identifying information.
Read the News Release
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US Navy sets special review team to avert fraud
Team asked to investigate procurement incident
Reuters-April 11, 2011
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WASHINGTON, April 11 (Reuters) - U.S. Navy Secretary Ray Mabus on Monday said he had set up a special review team to investigate procurement practices after a Navy acquisition official and the owner of a small technology firm were indicted for an alleged $10 million kickback scheme."We will not accept any impropriety, kickbacks, bribery or fraud," Mabus told the annual conference of the Navy's biggest booster group, the Navy League.Mabus, a former prosecutor and state auditor, said the case, described by a Navy investigator as a $10 million heist, "got my attention" and he created the review team to investigate and recommend improvements in the contracting process to prevent any future incidents. Read the Article |
Department of Justice Takes Action to Disable International Botnet
More Than 2 Million Computers Infected with Keylogging Software as Part of Massive Fraud Scheme
Department of Justice- Office of Public Affairs
NEWS RELEASE - Thursday, April 21, 2011 |
WASHINGTON - Today the Department of Justice and FBI announced the filing of a civil complaint, the execution of criminal seizure warrants, and the issuance of a temporary restraining order as part of the most complete and comprehensive enforcement action ever taken by U.S authorities to disable an international botnet. The botnet is a network of hundreds of thousands of computers infected with a malicious software program known as Coreflood, which installs itself by exploiting a vulnerability in computers running Windows operating systems. Coreflood allows infected computers to be controlled remotely for the purpose of stealing private personal and financial information from unsuspecting computer users, including users on corporate computer networks, and using that information to steal funds. |
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| ABOUT ICI |
The Internal Control Institute™ (ICI) a worldwide organization devoted exclusively to internal control and corporate governance. The Institute is dedicated to the developement world-class educational programs and best practice guidelines on internal control and corporate governance based on the Sarbanes-Oxley Act and the COSO internal control framework. Visit us on the web at the Internal Control Institute | |
