July 20, 2007

Chart: What to Do When Auditing Goes Awry

We have posted a new nifty chart that analyzes what the SEC and NYSE rules, disclosure, lenders and D&O insurer issues are implicated under six different scenarios involving auditing crisises, including:

– Auditor gives SAS 71 letter with exceptions
– Auditor unable to perform SAS 71 review
– Failure to file Section 906 certification
– Failure fo file a Form 10-Q
– Unable to file clean 906 CEO/CFO certification in a timely manner
– Auditor pulls opinion
– Decision made to reaudit

CEO Turnover and Succession

In this podcast, Steve Wheeler of Booz Allen Hamilton analyzes the latest trends regarding CEO turnover and succession planning (as reflected in Booz Allen’s recent study), including:

– What are the most notable trends you found in your study?
– What do you see happen to most CEOs at targets in the wake of a merger?
– What do you see happen to CEOs at companies that are not performing well?
– What are the timeframes that companies are looking at for CEO performance?
– Are the trends different on a global scale?
– Your study talks about the end of the imperial CEO and the beginning the era of the inclusive leader – what does that mean for companies and CEOs?

It’s Just Human Nature: Playing “Fast and Loose” in the Credit Market

This WSJ article is one of those that you read and it gives you pause. This excerpt says it all:

“In a new report that assesses the status of the market, the Moody’s Corp. unit said it was passed over and not hired for 75% of the commercial mortgage-backed securities rating assignments issued in the past few months as a result of its requirement that issuers add an extra layer of credit enhancement. Moody’s said issuers are “rating shopping” — meaning they were hiring competitors that would hand out higher ratings on securities. Because Moody’s makes money rating the creditworthiness of bond issuances, blacklisting could potentially eat away at the firm’s bottom line if the trend continues.”

Brings back memories of why Congress forced the SEC to conduct a study back in 2003 regarding the role and function of rating agencies in the markets – which then led to the Credit Rating Agency Reform Act of 2006 (which gave the SEC more power over rating agencies). Learn more in our “Rating Agencies” Practice Area.

– Broc Romanek