Latest news with #Sarbanes-OxleyAct
The Hill
4 days ago
- Business
- The Hill
US markets need accountability — it would be a mistake to dismantle Sarbanes-Oxley
Recently, the House Financial Services Committee approved a proposal to dissolve the Public Company Accounting Oversight Board, which supervises audits of publicly listed companies, and transfer its responsibilities to the Securities and Exchange Commission. In times of economic uncertainty, the strength and integrity of our financial systems become even more crucial. Regardless of the outcome with the board, it would be a mistake to eliminate the broader Sarbanes-Oxley framework that has served as a foundation for market integrity since 2002. Dismantling these guardrails would increase the risk of financial reporting fraud that could trigger a crisis of confidence among investors and increased market volatility, putting trillions of dollars in market value and retirement savings at risk. The bipartisan Sarbanes-Oxley Act was enacted in 2002 in the wake of a number of accounting scandals, most prominently Enron and WorldCom, which wiped out billions in market value and retirement savings. It passed with overwhelming support in both houses, reflecting the urgency lawmakers felt to address the crisis threatening our capital markets. At its core, Sarbanes-Oxley established crucial guardrails. Section 404 requires companies to maintain robust internal controls over financial reporting, while Section 302 mandates that CEOs and CFOs personally certify the accuracy of financial statements. These provisions ensure that those who lead corporations are accountable for the integrity of their financial disclosures. Sarbanes-Oxley also established independent oversight of auditors responsible for verifying financial statements. This provided essential third-party assurance that investors could trust what companies report — a crucial element in rebuilding market confidence. Critics of Sarbanes-Oxley complain that compliance costs are a burden on businesses. While initial implementation was indeed expensive, companies have since learned to leverage technology and risk-based approaches to streamline the process. Research from firms like Protiviti and AuditBoard consistently shows that these costs have decreased over time as processes have become more efficient. More importantly, we must weigh these costs against the benefits. The data is compelling: financial restatements, which initially surged after Sarbanes-Oxley implementation as companies 'cleaned up' their books, have shown a sustained downward trend. According to the Center for Audit Quality, restatements rose sharply right after the law was enacted, to nearly 1,800 in 2006, but have generally trended downward overall since — with a substantial decline of 60 percent between 2006 and 2009. Restatements dropped 50 percent, from 858 restatements in 2013 to just 402 in 2022, XBRL reported. America's capital markets remain the envy of the world precisely because investors trust them. Foreign companies willingly subject themselves to our rigorous standards because the resulting investor confidence translates into better valuations and capital access. This trust premium has contributed to trillions in market value growth over the past two decades. As this regulatory reorganization is considered, we should ensure that any structural changes don't inadvertently weaken the broader framework of Sarbanes-Oxley that delivers accountability, transparency and investor protection. Instead, continued refinement of implementation and embracing technological innovations can make compliance more efficient without sacrificing effectiveness. The goal is evolution, not revolution. Twenty-three years after its passage, Sarbanes-Oxley has become an integral part of America's financial architecture, contributing to a period of remarkable growth and stability in our capital markets. The political right and left came together to enact this landmark legislation because they recognized a fundamental truth: without trustworthy financial reporting, markets cannot function effectively. Today, that core principle remains unchanged. While organizational structures may evolve, preserving the integrity of Sarbanes-Oxley's core principles isn't just good for investors — it's essential for America's continued economic leadership. Richard Chambers worked in auditing in the U.S. Government Accountability Office. He is currently CEO of Richard F. Chambers and Associates and senior adviser at AuditBoard.
Associated Press
14-05-2025
- Business
- Associated Press
Gorilla Technology Group Appoints Bruce Bower as Chief Financial Officer
London, United Kingdom--(Newsfile Corp. - May 14, 2025) - Gorilla Technology Group Inc. (NASDAQ: GRRR) ('Gorilla' or the 'Company'), a global solution provider in Security Intelligence, Network Intelligence, Business Intelligence and IoT technology, is pleased to announce the appointment of Bruce Bower as Chief Financial Officer (CFO), effective 1 June 2025. Mr. Bower brings a wealth of experience in strategic financial management, capital raising and corporate governance. Since joining Gorilla as Interim CFO in September 2024, he has played a pivotal role in restructuring the Company's finance department, streamlining operations, and enhancing Gorilla's financial oversight and internal controls. Under Bruce's leadership, the Company has achieved full compliance with the Sarbanes-Oxley Act (SOX) and resolved any previously disclosed material weaknesses, while continuing to secure significant partnerships. 'Bruce has been instrumental in driving Gorilla's financial strategy during a transformative period. We successfully navigated a complex landscape, optimised capital structures that drove profitability in key growth areas and accelerated our position in the market as a global innovator of AI solutions in smart infrastructure, energy and security,' said Jay Chandan, Chairman & CEO of Gorilla Technology Group. 'Under Bruce's leadership, we have successfully enhanced our financial reporting and governance frameworks, reinforcing our commitment to the highest standards of corporate integrity.' 'I am proud to continue the important mission that Gorilla has set forth,' said Mr. Bower. 'While we have made great progress as a team, I have more conviction than ever that our greatest opportunity lies ahead. I look forward to continuing to deliver on our growth plans as we collectively work to achieve Gorilla's innovative vision of the future.' About Gorilla Technology Group Inc. Headquartered in London U.K., Gorilla is a global solution provider in Security Intelligence, Network Intelligence, Business Intelligence and IoT technology. We provide a wide range of solutions, including, Smart City, Network, Video, Security Convergence and IoT, across select verticals of Government & Public Services, Manufacturing, Telecom, Retail, Transportation & Logistics, Healthcare and Education, by using AI and Deep Learning Technologies. Our expertise lies in revolutionizing urban operations, bolstering security and enhancing resilience. We deliver pioneering products that harness the power of AI in intelligent video surveillance, facial recognition, license plate recognition, edge computing, post-event analytics and advanced cybersecurity technologies. By integrating these AI-driven technologies, we empower Smart Cities to enhance efficiency, safety and cybersecurity measures, ultimately improving the quality of life for residents. For more information, please visit our website: Investor Relations Contact: Dave Gentry RedChip Companies, Inc. 1-407-644-4256 [email protected] To view the source version of this press release, please visit
Finextra
05-05-2025
- Business
- Finextra
From Manual to Machine: How AI is Streamlining Compliance in Financial Services: By Erica Andersen
Financial institutions are turning to artificial intelligence (AI) to navigate an increasingly complex regulatory landscape, transforming compliance from a burden into a potential competitive advantage amid growing pressure to innovate while maintaining strict regulatory standards. In the United States alone, banks must comply with multiple regulations including the 9,000-page Dodd-Frank Act, Sarbanes-Oxley Act, Basel Accords, and various anti-money laundering regulations. For European banks operating in the U.S., this regulatory maze becomes even more challenging as they navigate dual jurisdictions and sometimes conflicting requirements. The traditional approach to regulatory compliance has often led to "Catch-22" type situations, where customers find themselves trapped in unfriendly processes. Banks frequently struggle with conflicting systems designed to solve specific regulatory requirements in one area while creating friction in another. In addition, 'Know Your Customer' can put a significant burden on both the financial institution and customer when on boarding. With this, some financial services companies are starting to rethink their approach to compliance. "Compliance is quickly evolving from a rigid set of rules to a more nuanced approach encompassing consumer duty and ensuring customers receive appropriate and suitable products," says Al Southall, a challenger bank CTO specialist. "Appropriate use of AI can speed up the analysis of individual customer needs, align solutions with a Firm's risk appetite and provide a platform for ongoing analysis of customer risk with Open Banking solutions." This evolution comes at a crucial time. Financial institutions face mounting pressure to modernize their services while adhering to increasingly stringent regulatory requirements. The implementation of consumer duty regulations in particular has added new layers of complexity to compliance processes, requiring firms to demonstrate they are delivering good outcomes for retail customers. AI's ability to process vast amounts of data and information at speed and with great accuracy is proving transformative in meeting these challenges. Unlike traditional software that might fail with minor changes, AI systems can adapt to variations in forms and processes without requiring reprogramming. This flexibility enables financial institutions to respond more quickly to new compliance requirements while maintaining operational efficiency. The technology is already delivering substantial returns in specific operational areas. At Benefit Street Partners, automation of tax compliance processes has yielded significant improvements. The company is using a streamlined AI-powered solution designed to pull in all relevant analytics for the relevant tax notice activity into a single screen. "This ensures that decisions are both more accurate and efficient, saving us 80% in processing time and an equivalent amount in costs," says Eric Wempen, Former MD Tax at the firm. According to Jas Dillion, Finance IQ, who led the implementation, "There are dozens of use cases inside each big financial services company right now that could benefit from automation with AI." Dillion emphasizes that "The pay back is often measured in weeks not years." The impact of AI in compliance extends far beyond simple automation. Financial institutions are now deploying sophisticated AI systems across multiple critical functions: • Fraud Detection and Prevention: AI systems can analyze transaction patterns across millions of data points in real-time, flagging suspicious activities for human review. This capability is particularly valuable in detecting emerging fraud patterns that might escape traditional rule-based systems. • Network Analysis and Risk Assessment: Modern AI tools can map complex networks of beneficial ownership and relationships between entities, supporting both anti-money laundering compliance and credit risk assessment. This capability has become increasingly important as financial structures become more complex and interconnected globally. • Customer Due Diligence: AI's ability to process billions of data points helps streamline customer onboarding while ensuring appropriate duty of care standards are met. This includes analyzing customer behavior patterns to identify potential vulnerabilities or special needs that require additional attention under consumer protection regulations. • Regulatory Reporting: AI systems can automate the collection and analysis of data required for regulatory reporting, reducing errors, and ensuring consistency across different jurisdictional requirements. • Training and Staff Development: AI platforms are being used to maintain and update staff knowledge of compliance requirements, providing real-time guidance and scenario-based training that adapts to regulatory changes. "By assessing data and evaluating patterns and outliers, there is huge potential for AI not only to reduce gruntwork, but to enable risk professionals to add insights and value to enable businesses to grow," notes Mary O'Connor, Non-Executive Director and Audit Committee Chair. "Compliance and internal audit can move from pure assurance functions to being sustainable business enablers." This transformation is particularly relevant as financial institutions face pressure to reduce costs while improving service quality. The ability to automate routine compliance tasks allows highly skilled compliance professionals to focus on complex cases and strategic initiatives that require human judgment and expertise. The Bank of England and Financial Conduct Authority in their "Artificial Intelligence Public-Private Forum" Report from 2022 looks at the use cases for AI. There are a number of sections that are relevant to using AI for compliance. While there are many important safeguards organizations must take when implementing AI, the report is generally favorable to the implementation of AI in compliance situations. At the end of the report, an AML and fraud detection use case is considered. The report concludes that, "AI can help address the challenge of synthetic identity fraud, whereby synthetic identities are created from a jigsaw of real data." Another use case looks at savings and investment advice which falls under the duty of care function. In both cases, the report concludes that AI can play a constructive role in helping financial services companies improve their operations. However, the adoption of AI in compliance also presents new challenges. Financial institutions must ensure their AI systems remain explainable and auditable, particularly when these systems are making or supporting decisions that affect customer outcomes. The need for human oversight and the ability to demonstrate regulatory compliance means that AI systems must be designed with transparency and accountability in mind. Other factors that need to be considered are data governance and privacy, as well as bias and fairness in the data and models. The report also made another recommendation, that is sometimes not considered in the application of AI. Organization should practice model risk management which includes considering the lifecycle of the model and continuous monitoring of the model. We have seen in other industries, that models can degrade overtime, and that benchmarks and testing is an ongoing process. Financial services companies should expect to see similar problems, and must plan to ensure their models remain bias free, and working effectively, even as market conditions change. Looking ahead, the integration of AI into compliance functions is expected to accelerate as technology continues to evolve and regulatory requirements become more complex. Financial institutions that successfully leverage AI for compliance are finding they can not only reduce costs and improve efficiency but also enhance their ability to serve customers while managing risk effectively. The shift from manual to machine-assisted compliance represents more than just a technological upgrade – it marks a fundamental change in how financial institutions approach regulatory requirements and risk management. As this transformation continues, the role of compliance professionals is evolving from focusing on routine checks and documentation to providing strategic insights and value-added services that support business growth while ensuring regulatory compliance. Originally published by Thomson Reuters © Thomson Reuters. Written by Oliver King-Smith, founder and CEO, smartR AI
Yahoo
23-04-2025
- Business
- Yahoo
PCAOB issues sanctions against Adeptus Partners and partner for audit violations
The Public Company Accounting Oversight Board (PCAOB) has sanctioned Adeptus Partners and Howard S. Krant, a partner at the company, for breaches of rules and standards. The disciplinary order addresses inadequate supervision and review of engagement teams during the audits of Blockchain of Things and Applied UV. Adeptus Partners has also been penalised for not adhering to PCAOB quality control standards. PCAOB chair Erica Williams said: 'Substandard audit work and inadequate quality control put investors at risk. 'When violations like these occur, the PCAOB will take enforcement actions to hold auditors and firms accountable.' The specific violations by Krant include insufficient oversight of the engagement teams for the 2020 audits of Blockchain of Things and Applied UV, as well as a failure to review workpapers or secure computer access to them. Additionally, Krant did not properly assess the team's work on deferred revenue during the Blockchain of Things, Inc. 2021 audit to ensure adequate audit evidence was obtained. The PCAOB found that Adeptus Partners' quality control system failed to ensure that issuer audits were performed in compliance with professional standards and regulatory requirements. Krant and the company, without admitting or denying the findings, have consented to the PCAOB's order. The order censures both parties, imposes a $75,000 civil money penalty on the company, and a $50,000 penalty on Krant. It also suspends Krant from associating with any registered public accounting company for one year and expects Adeptus Partners to hire an independent consultant to review and recommend improvements to its quality control system. The investigation was conducted by PCAOB enforcement staff members Stefan Hagerup, Christina Carroll and Nick Gradone, with assistance from K Lynn Dunston and supervised by Kyra Armstrong, William Ryan and John Abell. The PCAOB is responsible for ensuring auditors' compliance with the Sarbanes-Oxley Act, auditing-related securities laws, professional standards, and PCAOB and SEC rules. Last month, the PCAOB announced sanctions against James Pai CPA and its owner Yu-Ching James Pai for similar violations during audits of an issuer client. James Pai CPA faced reprimands for not meeting quality control standards, with Yu-Ching James Pai contributing to these violations. "PCAOB issues sanctions against Adeptus Partners and partner for audit violations" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Yahoo
12-03-2025
- Business
- Yahoo
PCAOB sanctions nine KPMG global companies for quality control breaches
The Public Company Accounting Oversight Board (PCAOB) has sanctioned nine companies from the KPMG global network for breaches of rules and standards, including quality control norms. The businesses facing disciplinary orders are KPMG Brazil, KPMG Canada, KPMG Italy, KPMG Israel, KPMG UK, KPMG Mexico, KPMG Samjong, KPMG Switzerland, and KPMG Australia. The PCAOB found that each company failed to adhere to quality control standards necessary to meet professional standards, regulatory requirements, and their own quality benchmarks. Additionally, they did not properly monitor procedures. PCAOB chair Erica Y Williams said: 'It is essential that investors and audit committees know where issuers' audits are being conducted and by whom so that they can make informed selection and ratification decisions. These violations prevent investors and audit committees from obtaining important information. 'Firms must take these obligations seriously and ensure their required communications and reporting are complete and accurate.' The violations included inaccuracies in PCAOB Form AP disclosures regarding the participation of other accounting companies in audits, which is crucial for multicountry audits where various parties may be involved. The board notes that this lack of transparency meant that investors and audit committees were not fully informed about who conducted the audits and the extent of the work done by the signing company compared to other businesses. Specifically, four companies - KPMG Australia, KPMG Brazil, KPMG Canada, and KPMG UK - did not adequately communicate to audit committees the details of other accounting businesses' involvement in audits as mandated by AS 1301. Furthermore, KPMG Brazil was found to have breached PCAOB Rule 2200 by failing to report certain audit reports or consents on Form 2. Each company has agreed to the PCAOB's censure without admitting or denying the findings and will pay civil money penalties totalling $3.37m. They have also agreed to implement remedial measures to enhance their quality control policies and procedures. The PCAOB is responsible for ensuring auditors comply with the Sarbanes-Oxley Act, related securities laws, and PCAOB and SEC rules. This follows the Brattle Group's report that indicates constitutional challenges have impacted the PCAOB and the US Securities and Exchange Commission's enforcement activities involving auditors in 2024. "PCAOB sanctions nine KPMG global companies for quality control breaches " was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
