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SOX Section 404
The implementation of ' 404 of the Sarbanes-Oxley Act (SOX) is essentially complete for large public companies. Most agree it was expensive and proved an immense corporate distraction. According to Financial Executives International (FEI) 94% of executives polled reported that the cost of compliance with ' 404 far outweighed the benefits. Nevertheless, large companies were able to fund the documentation of their control structure and get on with business. Some companies even reported customer service improvements, cost-saving consolidations and streamlined operational benefits stemming from the exercise. But lost in this post-mortem is that the implementation of ' 404 is not finished. Overlooked by many is that ' 404 has yet to be implemented in one of our most important pillars of the U.S. economy, our small public companies defined as those with a market capitalization of less than $75 million.
COSO Develops Internal Control Guidance
Given the costs experienced by their larger brethren, these companies have grown increasing concerned about their ability to absorb the expense associated with ' 404. As a result, the SEC has repeatedly delayed implementation at small companies several times as it assesses how it can be best applied. It is now expected that all small public companies will implement ' 404 by July 2007. To begin addressing these concerns, the Chief Accountant of the Securities and Exchange Commission (SEC) requested that The Committee of Sponsoring Organizations of the Treadway Commission (COSO), develop internal control guidance for small companies. The result was a document that was recently issued in draft. The public comment period ended last December and we await the final submission, but the limitations of this document have already emerged. The guidance is detailed and will be a useful tool for many small companies. It presents 26 basic control principles and the supporting attributes of each. COSO then provides detailed and useful examples and different approaches that can be considered. But the document, quite rightly, stops there. COSO argues that “the fundamental concepts of good controls are the same, whether the company is large or small.” It does not try to influence public policy by opining whether all small companies should document their internal controls, only that they should maintain a viable control environment. COSO does concede, however, that third-party attestations, such as that required by ' 404, necessitates the need for formal documentation, and there is the rub. It will not simply be enough that companies maintain a strong control environment. In short, they have to be able to prove it. The attestation mandated by ' 404 will require documentation that can be tested by the registered accountants. Furthermore, the documentation, assertion and attestation of controls over financial reporting are arguably the most expensive requirements of the Act.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.