Compliance Questions That Keep Dogging the [Compliance] Profession

A good discussion from Matt Kelly at Compliance Week – compliance questions that keep dogging the compliance profession.

Click on the following link for the discussion:

Dave Tate, Esq. (San Francisco / California)

Want to beat auditors and adversaries? Think like an attacker | Government Health IT

Security is always a top concern, but the stakes are particularly high in the healthcare industry. Click on the below link for an article discussing security “desk” audits by the Department of Health and Human Services Office for Civil Rights (OCR) – the article discusses an audit at Concentra Health Services earlier this year.

Click on the following link for the article:

My thoughts:  The healthcare industry has special cybersecurity needs and requirements – nothing new here about that. But I am surprised when I still see articles suggesting that it is now time to get serious about it. And according to the article, Concentra Health was serious about security measures – but a limitation in laptop encryption was identified by Concentra itself. Takeaway: if they didn’t do so, be sure to address and remedy these situations immediately. The article also doesn’t tell us how much time had passed between the identification and what had been done or was being done. Situations arise and will continue to arise even if diligent efforts and processes have been in place.  Each situation is unique and requires individual investigation and evaluation.

Dave Tate, Esq. (San Francisco / California)

Updated 1-Page Risk and Uncertainty Management Processes and Oversight


1-Page Risk and Uncertainty Management Processes and Oversight David Tate Esq 10302014

Dave Tate, Esq.

10Minutes on why the COSO Update deserves your attention

COSO has published a PwC-authored update to its framework, the first in over 20 years, which gives you an opportunity to refresh your controls for today’s environment.

Click on the following for PWC’s discussion:

From PWC – short and sweet – COSO 2013 does deserve your attention.  See also my prior September 13, 2014, post re COSO 2013 CLICK HERE. If you are required to follow COSO for your internal controls, or if you are required to follow at least some standards or processes for your internal controls, expect to be asked why not and what standards or processes you are following. Dave Tate, Esq.

Protecting Your Board: Know Your Risks – Law Firms Are Going To Want To Be In This Practice Area

This is a specific practice area that law firms are going to want to be in, and a few are starting – board and executive risk management, audit committees, compliance, and how they tie to other practice areas.

The attached link is to a NACD seminar on risk – I’m not saying you should attend the seminar, I’m just using it as an example that these issues are recognized and aren’t going away:

Dave Tate, Esq.

Glass Lewis – Heat on the Audit Committee to Make It Right (Restatements)

I have been evaluating Glass Lewis’ Proxy Paper Guidelines, 2015 Proxy Season, An Overview of the Glass Lewis Approach to Proxy Advice, United States – there are many provisions pertaining to audit committees, audit committee members, and under what circumstances Glass Lewis will recommend voting for or against audit committee members and/or the entire committee. Audit committee members should read the Guidelines, to be informed. Some of the provisions are reasonable, others I believe are not or are overstated. This post discusses Standards for Assessing the Audit Committee #14 (restatements). Although we all agree that in most circumstances restatements should not occur and should be prevented, as far as deciding whether or not to vote for or against an audit committee member or the entire committee when a restatement has occurred isn’t necessarily cut and dry.

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The STANDARDS FOR ASSESSING THE AUDIT COMMITTEE are at pages 9-11 of the Glass Lewis Proxy Paper Guidelines.

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In pertinent part Glass Lewis advises: “When assessing the decisions and actions of the audit committee, we typically defer to its judgment and generally recommend voting in favor of its members. However, we will consider recommending that shareholders vote against the following: . . . .

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14. All members of an audit committee at a time when annual and/or multiple quarterly financial statements had to be restated, and any of the following factors apply:

•The restatement involves fraud or manipulation by insiders;

•The restatement is accompanied by an SEC inquiry or investigation;

•The restatement involves revenue recognition;

•The restatement results in a greater than 5% adjustment to costs of goods sold, operating expense, or operating cash flows; or

•The restatement results in a greater than 5% adjustment to net income, 10% adjustment to assets or shareholders equity, or cash flows from financing or investing activities.

My thoughts. Footnote 19 of the Paper, also states “Research indicates that revenue fraud now accounts for over 60% of SEC fraud cases . . . .” Provision #14 seems overstated and too bright line – (1) the audit committee members are significantly dependent on information provided by others including the CEO, CFO, internal audit, the independent outside auditor, foreign operations, etc. – (2) the audit committee only has oversight responsibilities – (3) what if the accounting treatment was a judgment call [i.e., see the new upcoming changes to “principles” based accounting for revenue]? – (4) why the entire audit committee as a group – each member has only one vote – really the entire committee out? – (5) what is “fraud”? – (6) fraud is often very difficult to prevent and detect – (7) what if the director is good for the company except perhaps in this instance of oversight? – (8) what if the audit committee was diligent and the restatement occurred anyway – (9) maybe recommend keeping the director, but not as an audit committee member? – (10) why is one of the criteria whether or not there was an SEC inquiry or investigation? – (11) more?

Comment if you would like. Please also tell others if you like this blog and my posts. Thanks.

Dave Tate, Esq., San Francisco / California,

10Minutes on revenue recognition

After much deliberation, the FASB and IASB are set to release a final global revenue recognition standard in the coming months that will do away with current industry-specific accounting and instead apply a single set of principles to all revenue transactions. Changes to practices, processes and systems could ripple through your business. 10Minutes on revenue recognition provides information about the standard as well as insight into ways in which some companies are preparing for the br

Click on the following link for the article:

Good stuff from PWC. Click on the Download: 10 Minutes on revenue recognition – the paper will come up automatically.

Enjoy.  Dave Tate, Esq.