Two headlines sum up the coming regulatory deluge that Wall Street and Main Street alike can expect from our Federal Government.
The first, from the Washington Post, states, “New SEC Chair Off and Running With Enforcement Measures.” The second, by contracting specialist Eric Sobota in the Federal Compass, notes, “Effective Investigations Key to Compliance with New FAR [Federal Acquisition Regulation] Ethics, Compliance and Mandatory Disclosure Requirements.”
Katrina and Iraq War government contracting fraud, coupled with myriad maladies on Wall Street, have jumpstarted the regulation machine. With the new Obama Administration and a Democratic Congress, expect it to accelerate to warp speed.
To avoid being run over by it, get on top of it. Get ahead and stay ahead of this new regulatory business environment by reviewing every aspect of your company’s accounting, tracking, and reporting structures—in departments ranging from accounting services to CRM.
If you don’t do it now, here’s a taste of what you may be subjected to later:
• From the Washington Post SEC story, quoting incoming SEC chairman Mary Schapiro: “The new chairman also said she would speed up the process of launching formal investigations into potential acts of corporate crime… ‘Those who break the law and take advantage of investors need to know that they will face an unrelenting law enforcement agency in the SEC.’”
• From contracting specialist Sobota: “Contractors must now deal with increased oversight and requirements that many are not well-prepared to face…The new rules carry a heavy penalty for noncompliance…”
Think you’re immune if you don’t contract with the Federal Government or have much interaction with SEC-related realms? Think again. Quoting the Post story, “Schapiro also said the Financial Accounting Standards Board, the independent panel that sets accounting rules for U.S. companies, is exploring changes to rules that require firms to mark the value of assets on their balance sheets to whatever the market is paying.” Don’t expect FASB accounting services reforms to stop there.
Sobota notes, “…the Federal Government is becoming increasingly impatient with the perceived lack of effort exhibited by contractors towards meeting their procurement integrity obligations. We advise contractors to take a fresh look at their practices to ensure they are prepared to meet this new heightened level of scrutiny.” You may not contract with the Federal Government, but expect scrutiny nonetheless.
In the accounting software realm, start your review by checking the following:
1. How does your accounting system software provider track regulatory updates?
2. How fast can accounting system software be updated to comply with new regulations and requirements?
3. How will you be notified of accounting system software updates? Will you need to be proactive and check the accounting software purveyor’s website or other information repository? Or will your accounting software provider notify you in a timely manner?
4. How will needed accounting software updates be available? Will the accounting system software user have to go to the website to request or download new accounting solutions updates, or will the purveyor push these updates out to their subscribers? If it’s the latter, how—a link to a website download area, sending of a CD, other processes?
5. Besides actual accounting software updates, how proactive will your purveyor be in keeping you “in the know” about regulations and requirements affecting the accounting services world? Again, will these be pushed out to you, or will you need to go get them on an accounting software website?
These are issues you must become knowledgeable about, to make sure your accounting services can handle the coming deluge. For those inclined toward procrastination, just remember that if you stick your head in the sand now, it’s going to be that much harder to get out later—once the deluge has turned it into quicksand.
