Companies have to embrace a holistic management approach to their internal controls. In the corporate governance world, a new approach is needed to develop a more rational and consistent method for managing your company’s internal controls. This is not a radical proposal but a rational response to the enforcement risks and the need for consistency across an organization. Let’s start with a basic set up. ...
Laws control the lesser man — right conduct controls the greater one – Mark Twain A company’s internal controls define the backbone of its operations, encompassing financial, operational and compliance functions. The FCPA defines requirements for publicly-traded companies to implement internal controls, including compliance controls. Under the internal controls requirements, issuers must devise and maintain a system of internal accounting controls sufficient to assure management’s...
The FCPA includes a specific requirement that a public company maintain an adequate set of internal controls. A company’s compliance program is one component of a company’s internal controls. Sarbanes-Oxley expended and reinforced this important requirement. The Department of Justice and the SEC have aggressively enforced the internal controls requirement. The SEC, in particular, has expansively enforced the internal controls requirement even where a failure...
