March 2, 2005
Steps to Take: How to Avoid Director Liability
Join us tomorrow on CompensationStandards.com – Thursday, March 3rd – for this important webcast – “Steps to Take: How to Avoid Director Liability After WorldCom, Enron and Disney” – during which an all-star panel will provide specific “how to” practical guidance, including examples of actions companies should consider taking now to protect their directors. Join these experts:
· John Olson, Partner, Gibson Dunn & Crutcher LLP
· Marty Lipton, Partner, Wachtell Lipton Rosen & Katz LLP
· Frank Balotti, Partner, Richards Layton & Finger LLP
· Rich Koppes, Of Counsel, Jones Day and Director of two NYSE-listed companies (Apria Healthcare Group and Valeant Pharmaceuticals International)
CEO/CFO Certification Reminder
I’ve noticed several accelerated filers who recently have filed 10-Ks without the requisite internal control language in paragraph 4 of their certifications (i.e., including a reference to internal controls). Accelerated filers were permitted to omit that paragraph until now – companies that are not accelerated filers can still omit it. For an example of what the 302 certifications should now look like, see our Sample 302 Certifications.
New Global Regulator of Auditing Standards
On Monday, the Public Interest Oversight Board (PIOB) was formed to oversee the public interest activities of the International Federation of Accountants (IFAC). This new global regulator was formed by the International Organization of Securities Commissions (IOSCO), two other international regulators (banking, insurance), the World Bank and the Financial Stability Forum.
Notably absent from the founders is the PCAOB (which oversees auditing standards in the US) – but I believe the PCAOB was asked to provide input. Unlike the PCAOB, the PIOB will not have the authority to enforce its own standards. This was the primary problem with the PCAOB’s ineffectual predecessor, the AICPA – but the PIOB would not be unable to overcome the practical obstacle of enforcing standards in jurisdictions for which it doesn’t have authority.
One of the eight members of the PIOB include Aulana Peters, former SEC Commissioner, former member of the AICPA Public Oversight Board and retired partner of Gibson Dunn.