http://www.scmp.com/print/comment/insight-opinion/article/1673481/securities-and-futures-commission-has-spun-out-control

Securities and Futures Commission has spun out of control

Sunday, 04 January, 2015, 6:53am

Jake van der Kamp

A markets tribunal has overturned a request by Moody’s Investors Services for privacy in its appeal against a Securities and Futures Commission’s decision to fine the ratings agency HK$23 million.

SCMP Business, January 2

I just don’t understand these people at Moody’s. Here they were four years ago still facing awkward questions about whether they foresaw the 2008 financial crisis or were any better than the market itself in rating risk and they decided to come up with a new ratings tool.

They called it the “Red Flags” framework, a way of assessing fixed income risk in emerging markets. Red flags would be posted according to set rules for five critical areas in which corporate affairs could go wrong. Count the number of flags and you get a workable debt rating. Continue reading →

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11304016/Directors-are-still-not-properly-policing-corporate-dangers.html

Directors are still not properly policing corporate dangers, study finds

Study of audit committees shows slow progress on monitoring accounts and risks

Tesco’s accounting issues have highlighted the role of directors in spotting problems Photo: Bloomberg News

By Marion Dakers, Financial Services Editor

8:15PM GMT 03 Jan 2015

Many company directors have struggled to get to grips with new rules that are supposed to help identify risks that firms could face, though some progress is being made, according to new research.

Despite high-profile examples of boards missing dangers, including accounting holes at the Co-operative and Tesco in the past two years, some companies’ audit committees are still producing “disappointingly sparse and generic” reports, the accounting firm BDO said. Continue reading →

http://www.forbes.com/sites/johnwasik/2015/01/02/zombie-stocks-why-you-need-to-avoid-dormant-shell-companies/print/

John WasikContributor

PERSONAL FINANCE 1/02/2015 @ 9:32AM 327 views

Zombie Stocks: Why You Need to Avoid Dormant Shell Companies

Imagine companies that are pretty much left for dead, only to be revived by toxic waste handlers called penny stock promoters. These “dormant shell” companies are corporations in name only. Even though they don’t have any viable business operations, they continue to trade. Here’s how these companies are seemingly brought back to life:

A promoter hawks them to investors, thus pumping up the stock price, then dumps them without telling their customers, who get creamed. It’s a classic “pump and dump” scheme. The U.S. Securities and Exchange Commission and FINRA, the securities industry self-regulator recently warned about these zombie entities. Continue reading →

http://blogs.wsj.com/cfo/2015/01/02/study-going-concern-letters-on-decline-but-that-may-not-be-good/?mod=WSJ_hpp_sections_cfo

January 2, 2015, 9:12 AM ET

Study: ‘Going Concern’ Letters on Decline, But That May Not Be Good

JOHN KESTER

Reporter

Warnings to struggling companies are decreasing, but dead companies can’t be audited.

That’s part of the message from a new Going Concern Report by Audit Analytics. Fewer companies in the 2013 fiscal year saw red flags raised over their ability to continue as a going concern than did during the 2012 fiscal year. But that’s partly because many businesses closed up shop.

Audit Analytics estimates that 2,384 companies received “going concern” warnings for the 2013 fiscal year. That’s nearly a  6% drop from 2012. However, 207 companies that received such warnings in 2012 filed terminations and no longer exist.

“That’s not a good thing…you figure there’s some kind of economic pressure on companies,” said Donald Whalen, director of research at Audit Analytics. “You get a mixed bag if you just simply look at the number of going concern [warnings].” Continue reading →

http://www.koreatimes.co.kr/www/news/biz/2015/01/488_170985.html

Updated : 2015-01-02 18:38

Warning issued against L/C fraud

By Kim Jae-won

The Financial Supervisory Service (FSC) said Friday that it warned banks against hoax letters of credit (L/C), purportedly issued in the name of some foreign lenders. “We sent a letter to local lenders and branches of foreign banks to strengthen their process in managing letters of credit,” said an official at the FSC. Woori Bank and several other local banks recently discovered false letters of credit allegedly issued by foreign banks, officials said. Continue reading →

http://www.scmp.com/print/business/banking-finance/article/1672837/moodys-denied-privacy-appeal-against-sfc

Moody’s denied privacy in appeal against SFC

Friday, 02 January, 2015, 3:50am

Enoch Yiu enoch.yiu@scmp.com

Markets tribunal overturns ratings agency’s request for privacy in appeal against a fine imposed for issuing a ‘red flags’ report

A markets tribunal has overturned a request by Moody’s Investors Service for privacy in its appeal against the Securities and Futures Commission’s decision to fine the ratings agency HK$23 million.

The commission had fined Moody’s HK$23 million and publicly reprimanded the agency for breaching the code of conduct by issuing a “red flags” report on Chinese companies in July 2011. Continue reading →

http://business.financialpost.com/2014/12/18/what-if-accountants-are-no-longer-reliable/

What if accountants are no longer ‘reliable’?

Umar Saeed, Special to Financial Post | December 18, 2014 7:07 PM ET
A subtle word change in the IFRS accounting handbook could undermine the traditional role of accountants

The moral hazard is alive and well. Companies constantly look to paint a rosy picture of performance by using whatever discretion is available in the accounting handbook. Often, management benefits personally from good company results. We rely on accountants and auditors to provide a check on management. Empowered by accounting rules written with the moral hazard in mind, auditors are armed to push their clients’ optimism back into line. Society expects accountants to produce reliable information because lenders, investors and other stakeholders depend on the final numbers to make decisions. Debt covenants, regulatory requirements, management bonuses – are all separate contracts that depend on accounting numbers. So why then is the international accounting handbook being re-written to eliminate this decades-old check on the moral hazard? Continue reading →

http://www.koreatimes.co.kr/www/news/opinon/2014/12/202_170602.html

http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=2998982

No quid pro quo

Dec 27,2014

Controversy arises again over whether to give parol to business leaders in jail for fraud, corruption or other corporate malpractices. Minister of Justice Hwang Kyo-an first raised the issue by stating, “Corporate leaders are eligible for parole as long as they meet the requirements.” Then Choi Kyung-hwan, deputy prime minister for the economy and finance minister, joined the chorus by suggesting to President Park Geun-hye the need for special treatment of tycoons given their power to get the lackluster economy back on track. Kim Moo-sung, chairman of the ruling Saenuri Party, also leaped on the bandwagon by gleefully agreeing to the idea. The ruling party sooner or later plans to propose the paroles after discussing the issue in a Supreme Council meeting and consulting with the opposition New Politics Alliance for Democracy.  Continue reading →

http://www.complianceweek.com/news/news-bulletin/sec-nudges-companies-on-cash-flows#.VJjIsUABA

SEC Nudges Companies on Cash Flows

Tammy Whitehouse | December 23, 2014

The Securities and Exchange Commission is calling on companies to tighten accounting procedures and controls pertaining to statement of cash flows, amid a steady rise in restatements associated with that rather nettlesome financial document. Continue reading →

http://www.investmentnews.com/article/20141221/REG/312219985?template=printart

Nicholas Schorsch’s REIT empire is under siege

Schorsch’s future at RCAP is one of many issues confronting his vast real estate empire

By Bruce Kelly   |  December 21, 2014 – 12:01 am EST

It didn’t take long for Wall Street analysts to start calling for Nicholas Schorsch’s resignation from RCS Capital Corp. after a blockbuster lawsuit was filed last Thursday by a former accounting officer at a related firm claiming he told her to lie on the company’s financial statements. Continue reading →