Small company reporting needs to improve | AccountingWEB

Small company reporting needs to improve | AccountingWEB

Small Business Are Attractive Target for Fraudsters

A new Javelin Strategy & Research report, 2011 Small Business Owners (SMBO) Identity Fraud Report: How SMBO Fraud Rates Impact FI Revenues and Retention,” describes the higher rates of fraud faced by small business owners (SMBOs) today, including unique online security challenges. By sharing effective anti-fraud solutions with SMBOs, FIs and credit card issuers can also create revenue opportunities and reduce client churn. The report outlines the steps SMBOs can take in partnership with financial institutions (FIs) and credit card issuers to combat and prevent online fraud.

SMBOs are an attractive target for fraudsters because they conduct a myriad of transactions that often span both business and personal accounts. As small businesses, they are vulnerable in areas that fraudsters can exploit, namely, the lack of a dedicated IT staff to monitor and protect online operations and less formalized processes around security practices and credit card transactions. This creates opportunities for security breaches and risks for inadvertently releasing personal data.

See full Press Release.

KPMG - A closer look at IFRS for SMEs

In-depth report on the IASB’s simplified version of IFRS available for use by ‘small and medium-sized entities,’ or SMEs, if they are nonpublic entities without ‘public accountability’ and local jurisdictions permit its use. Most U.S. nonpublic companies fit the SME definition and its use is permitted.

See full Report.

Why Small Manufacturers Are Going Green

Tooling up to supply solar, wind power, and other clean industries could revive strong, long-term growth, even in an economic slowdown

As a maker of conveyor systems for manufacturers, Shuttleworth always changed with the times. The 100-employee Huntington (Ind.) company's strong business in electronics dropped off about five years ago as more production moved overseas. After that, the company focused on conveyors for food, health care, automotive, and paper products—until this year, when it entered what could be its most profitable niche yet: solar panels.

"It's got some of the biggest potential of the markets we've been in," says Jim Bonahoom, Shuttleworth's vice-president for finance. Even though Shuttleworth only just entered the market, the company expects solar to account for one-fifth of its roughly $20 million in revenue this year, Bonahoom says.

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“Translating CSR to the specific questions of each sector would be a great contribution for SMEs”

Q: One of the important issues faced by CSR today is its dissemination to SMEs. Not all SMEs are yet committed to CSR. What would be the incentives for SMEs to become engaged to CSR?

A: Wait! You are starting at the wrong point. Implicit in the question is the assumption that SMEs are not ‘doing’ CSR already. My research and that of many others shows that there is plenty of socially responsible activities in SMEs, but that it looks different compared to larger firms. For example, a large firm is likely to have a mission and values statement, a code of conduct, an ethics officer or CSR Director, maybe a whistleblowing hotline, be signed up to environmental management schemes etc.

An SME is unlikely to have any of these in place, but may put employees as their key stakeholder, get involved in the local community and win business on its trustworthy reputation. So in answering the question, the first point is to encourage SMEs to see what they do as ‘CSR’, and understand that they could publicize their practices as such. SMEs I speak to often assume that their activities are ‘un-businesslike’, so the first step is to raise awareness of CSR as legitimate business practice. I believe that the best way of doing this is through trade associations. Sector makes a huge difference for SMEs, and translating CSR into sector-specific issues would help enormously. So the incentive is to make CSR ‘normal’ for SME business practice and for others in the same sector.

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Corporate Board Member Conference - Audit Committee Forum: For Mid-Cap Companies

When: April 16-17, 2008
Where: Gaylord National Resort & Convention Center, Washington, D.C., USA

Description:
Corporate Board Member magazine is pleased to announce a NEW Audit Committee Forum for Mid-Cap Companies to be held April 16 - 17, 2008 at the Gaylord National Resort and Convention Center in Washington, D.C.

Recognizing the unique audit committee challenges that mid-cap public companies face, we have partnered with Grant Thornton to develop an event that will provide practical, first-hand tips from knowledgeable officers and audit committee chairs, along with veteran advisers.

Topics will include:

* Key Oversight Challenges and Emerging Issues for Today’s Mid-Cap Audit Committees
* Role of the Audit Committee in Enterprise Risk Management
* Audit Committee Relations With Internal Audit Department
* Oversight of Internal Investigations
* Managing IT Risks

See full Details.

SOX compliance costs small companies $78K, less than expected

Small public firms face less-strict requirements than non-public companies do, study finds

Complying with the Sarbanes-Oxley Act costs an average of $78,474 for smaller public companies, less than government projections and less than 1% of the companies’ average revenue, according to a report released Wednesday.
Other stories on this topic

The U.S. Securities and Exchange Commission had predicted compliance costs of $91,000 for smaller public companies, technically those with less than $75 million in market capitalization. "Since its enactment, complaints of spiraling compliance costs have flooded the halls of Congress," states the report, written by Bob Benoit of Lord & Benoit in Massachusetts, a research and consulting firm that focuses on SOX compliance for smaller public companies.

See full Article.

Mid-Caps Continuing to Spend on Sarbanes-Oxley

A Swiss Management Center Report

Compliance is costly. Since its inception in 2002, the Sarbanes-Oxley Act (SOX) has drawn the ire of companies traded in US capital markets. Steep fees have led to an aggregate compliance spend of US$5.8 billion in 2005, according to research firm AMR, diverting a substantial sum of funds which otherwise could be invested in growth. The opportunity cost has been staggering.

The cost of compliance has been most pronounced in smaller public companies. Without vast resources and economies of scale to support their efforts, smaller public companies struggle to comply with SOX. While absolute costs are lower for smaller companies, they pay a disproportionately high amount to attain SOX compliance. Larger public companies can accept SOX as part of the cost of doing business, however grudgingly. For smaller public companies, SOX is a salient barrier to growth.

Methodology
Micro cap companies have received a steady stream of deferments, sparing them the disproportionately high costs of compliance. Though larger companies have had to comply, their relative sizes and maturities of operation make it difficult to apply their lessons to smaller counterparts. Smaller companies can learn from "mid cap" companies, which currently have to comply but which lack the financial and human resources of the Fortune 1000.

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SMEs and CSR: a realistic proposition?

As the European Multi Stakeholder Forum on CSR gathers momentum, it is only natural that attention should turn to addressing how the majority of businesses in Europe - SMEs - are dealing with corporate social responsibility (CSR).

From this perspective the question is not so much whether it is realistic to expect SMEs to take on the CSR agenda but rather how responsible business practices - based on economic, social and environmental considerations - are being integrated into the core activities and strategies of Europe's SMEs.

A realistic approach to SMEs and social responsibility needs first and foremost to be grounded in reality. That means acknowledging and valuing current practices: SMEs are already actively addressing economic, social and environmental issues on a daily basis. Contrary to larger companies SMEs do not publicise or label these activities as being CSR. The challenge for policy makers and the broader business community lies in finding collaborative ways in which to strengthen, help to improve and support SMEs in their current practices.

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Sarbanes-Oxley Rules for Small Business Still up in the Air

It now looks like the SEC is willing to reconsider their decision not to extend the deadline for small public firm compliance with section 404 of the Sarbanes-Oxley Act. The Office of Advocacy of the SBA wrote to the commissioners in the wake of the SEC's decision not to grant postponement of deadlines for public firms with less than $75 million in market value. You can read the contents of the Office of Advocacy's letter here.

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SEC Should Reconsider Sarbanes-Oxley Extensions For Small Business

The Office of Advocacy today praised Securities and Exchange (SEC) Commissioners Paul Atkins and Kathleen Casey for their willingness to reconsider the SEC decision not to extend the deadline for small public firm compliance with section 404 of the Sarbanes-Oxley Act. Advocacy wrote to the commissioners in the wake of the SEC’s decision not to grant postponement of deadlines for public firms with less than $75 million in market value.

In the letter, Chief Counsel for Advocacy Thomas M. Sullivan asked the SEC to revisit the issue of compliance deadline extensions for smaller public firms. This request mirrors that of recent letters to the SEC by Senators John Kerry (D-Mass.), Chairman of the U.S. Senate Committee on Small Business & Entrepreneurship, and Olympia Snowe (R-Maine), the Ranking Member.

In April, Sullivan’s congressional testimony noted, “There is a compelling record demonstrating that the costs of complying with Section 404 are large and disproportionately high for small public companies. . . Advocacy believes that the excessive cost of Section 404 internal controls reporting may restrict a new generation of small innovative companies from seeking capital in the U.S. capital markets.”

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UK SMEs In The Dark About Bribery and Corruption

Bribery and corruption are just as likely to affect SMEs (Small and Medium Sized Enterprises) as large companies, yet only one fifth of SMEs feel able to distinguish between bribery and corruption or corporate hospitality and facilitation fees. This is according to a new survey report, Bribery and Corruption: The Impact on UK SMEs, by the Association of Chartered Certified Accountants, a global association of accountancy professionals.

According to the study, which surveyed 558 ACCA members either working in SMEs as accountants or general managers or providing professional services to SMEs, over two-thirds (69%) of respondents agree that SMEs are likely to be confronted with bribery and corruption in the course of their business dealings, yet fewer than half thought that SMEs understand the law in this area, revealing a fundamental uncertainty about what bribery and corruption amounts to in practice.

Findings from the survey include:

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SEC Commissioners Endorse Improved Sarbanes-Oxley Implementation To Ease Smaller Company Burdens, Focusing Effort On 'What Truly Matter

The SEC's Commissioners today endorsed the recommendations of the agency's professional staff to eliminate waste and duplication in the Sarbanes-Oxley compliance exercise, in a move that will particularly benefit smaller companies. The Commissioners urged the SEC staff to continue to work closely with the Public Company Accounting Oversight Board (PCAOB) to make the internal controls provisions of Section 404 of the Sarbanes-Oxley Act of 2002 more efficient and cost effective.

Under the Sarbanes-Oxley Act, PCAOB audit standards must first be approved by the SEC and cannot take effect without a vote of the Commission. The Commission expects the new PCAOB standard will be submitted for SEC review by the end of May or early June, in time for the 2007 financial statement audits.

"These needed improvements in the Sarbanes-Oxley process are especially urgent for smaller companies, who will begin complying with Section 404 this year," said SEC Chairman Christopher Cox. "The result of the new auditing standard for 404, together with the SEC's new guidance to management, should make the internal control review and audit more efficient by focusing the effort on what truly matters to the integrity of the financial statements," he added.

See full Press Release.

When the head of the family business moves on

Whether a child is groomed to take over the family business or mistakenly pushed into it, problems often arise when family and authority mix.

It's not something that most family-run businesses want to think about, but selecting an heir apparent can be even trickier than launching the company.

Family-owned businesses have a strong foundation in emotion, according to Joel Getzler, vice chairman of Getzler Henrich, a turnaround and restructuring company, and that can make it nearly impossible to make impartial decisions about the future of the firm without allowing deep-seated emotions to creep in.

"Being in an emotional relationship and a business relationship puts a different, more difficult kind of strain on relationships," said Getzler, who inherited his consulting firm from his father.

See full Article.

Internal Control over Financial Reporting — Guidance for Smaller Public Companies

This small business guidance takes the concepts of the 1992 Internal Control – Integrated Framework and demonstrates their applicability for achieving financial reporting objectives of smaller publicly traded companies.

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) today announced that its latest guidance, titled Internal Control over Financial Reporting — Guidance for Small Public Companies, will be released on July 11 with a special Webcast. The free Webcast will focus on the purpose of the guidance and how small companies can use it to become more knowledgeable about internal controls, ultimately leading to more effective control systems and greater proficiency in reporting on internal controls for regulatory compliance purposes.

Representing diverse professions, the Webcast panel will include an internal auditor, an external auditor, a management accountant, and a small business consultant. From their unique perspectives, they will discuss the document’s value, the tenets of the guidance, and how the principles can be internalized and put into operations throughout an organization. The Webcast also will serve as a forum for questions from the media and other viewing audiences.

See full Press Release, in pdf format.

Lex - Family-owned businesses

Here we are again talking about the merits of family ownership over public ownership. Tiring propaganda.

Allow me to refer all to Ford Motor Company. We heard about the merits of family ownership there as well, with the having been: delayed decisions or no decisions, dithering and billion dollar losses. Not a pretty site.

Of course there is room for family-owned business, but attempts to justify their superiority is a nonsense and humbug!.

Onésimo Alvarez-Moro

See article:
Investing fashions come and go. Public ownership has been often criticised for not serving the interests of all shareholders. Now, investors are being encouraged to think about the benefits of family-owned companies.

Examples of successful family-owned businesses abound. Wal-Mart is still chaired by the eldest son of founder Sam Walton. According to the Maine-based Institute for Family-Owned Business, more than a third of the listed companies in the Fortune 500 are family-controlled, as are nearly half of Italy’s 100 biggest companies and a quarter of France’s.

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IASB seeks to woo smaller companies

The International Accounting Standards Board has ripped up its original rule book and produced a thinner version in a bid to woo small companies and emerging markets.

After more than three years of work, the IASB will today publish a 320-page draft standard for small and medium-sized enterprises (SMEs) – its response to complaints that its full rule book, which is eight times the size, is too complex.

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The smaller company advantage

A practical, streamlined approach to certification compliance for smaller companies

For smaller organizations, the cost and complexity of developing a compliance program to meet the Canadian Securities Administrators’ new certification requirements for internal controls over financial reporting (ICFR) is daunting.

Not only is the certification journey paved with cautionary tales from large organizations of cost overruns, complex frameworks, and excessive documentation and testing, certification also exposes the inherent challenges of smaller companies. These challenges include the absence of systemized processes to implement regulatory initiatives, a shortage of appropriately skilled resources, lack of segregation of duties, and the lack of a sophisticated IT infrastructure to support certification data needs.

How does a smaller enterprise avoid the pitfalls and costly experiences of the SEC filers that have already complied with Section 404 of the Sarbanes-Oxley Act?

See full Press Release.

Mentors Offer Guidance to Small-Business Owners

Well, not literally, of course, which is why seemingly the only friends the $1.4 trillion industry has are the ones it buys.

Al Gore, Dan Quayle, John Snow and Madeleine Albright are all on one hedgie payroll or another, their trading duties likely limited to trading on their good names. But, somehow, the real power brokers in New York and Washington don't seem especially impressed.

The SEC has just begun a major probe of suspected information leaks between big brokers and hedge funds. This is on top of the coming examinations of hedge funds that have voluntarily registered with the agency, after mandatory registration requirements were thrown out in court. Oh, and the feds also plan to shrink the pool of U.S. residents eligible to invest in hedge funds by approximately 85%. And they're working on a database designed to ferret out illegal hedge-fund trades in concert with exchange regulators.

Meanwhile, banking regulators are trying to make sure that their charges don't lend hedge funds too much money. The Massachusetts attorney general wants to crack down on the incentives brokers offer hedge funds to trade through them. Germany has made international regulation of hedge funds the cornerstone of its financial diplomacy. And, of course, Congress stands ready to subpoena anyone who manages to escape this dragnet with a few billion in pocket change.

See full Article.