June 16, 2006
Protection of Audit Documents in Internal Investigations
As so well illustrated during yesterday’s popular webcast (audio archive now available) – “The Evolving Relationship Between Lawyers and Auditors” – the tension between lawyers and accountants has never been greater and there has been a lot of understandable confusion as old relationships have suddenly evolved.
In this podcast, Todd David and Jessica Corley of Alston & Bird provide some insight into this court order from the recent case – Polymedica Securities Litigation – dealing with the protection of audit documents in internal investigations, including:
– What did Judge Young find in the Polymedica case?
– What were the facts of that case?
– In the wake of the decision, what guidance would you provide you companies regarding their audit documents?
DOJ Seeks Dismissal of Sarbanes-Oxley Lawsuit
A few weeks back – even though the US was not a party to the case brought by the Free Enterprise Fund – the DOJ weighed in on the lawsuit seeking to overturn Sarbanes-Oxley by seeking of dismissal of the case on procedural grounds. The DOJ said the challenge was “brought at the wrong time, in the wrong court” as part of its statement of interest in support of the PCAOB. Arguments are scheduled to be heard soon. We have posted all the pleadings filed in this case – Free Enterprise Fund and and Beckstead & Watts vs. Public Company Accounting Oversight Board – in our “Sarbanes-Oxley” Practice Area under “5. Debate of Legal Authority of SOX”.
Debate over the Impact of Sarbanes-Oxley on World Markets Intensifies
Speaking of Sarbanes-Oxley, the House Subcommittee on Regulatory Affairs will hold a hearing on Monday, June 19th in New York City to examine the impact that the SEC’s implementation of Sarbanes-Oxley has had on US markets. The hearing is entitled: “A Balancing Act: Cost, Compliance, and Competitiveness After Sarbanes Oxley” and will be held at the U.S. Customs House at 10 am (oddly, I can’t find any information about this hearing on the Web).
This topic is likely to continue to gather momentum. The pending merger of the NYSE and Euronext has raised the profile of the impact of SOX to high levels all over the world. Yesterday’s NY Times listed all the European market leaders that have expressed concerns that the merger could result in applying Sarbanes-Oxley to foreign issues. In the same article, SEC Commissioner Nazareth countered that “the notion that this is a backdoor means of exporting Sarbanes-Oxley requirements internationally is completely misguided.”
The topic of the impact of Sarbanes-Oxley on listing on US exchanges even took up a big chunk of time during this week’s “Past Enforcement Directors’ Roundtable” at the SEC, as noted in FEI’s “Section 404″ Blog. I’m sure we haven’t heard the last word on this topic – globalization ain’t easy…