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When Should an Audit Committee Consider Independent Counsel?
As widely reported and discussed since July 2002, the Sarbanes-Oxley Act of 2002 (the Act) imposes a substantial number of new responsibilities on the audit committee of a public company required to file periodic reports under the Securities Exchange Act. These responsibilities include:
- appointing the company's registered public accountant, determining his or her compensation and overseeing his or her work (including resolution of disagreements between management and the accountant regarding financial reporting);
- approving the receipt of audit and non-audit services from the accountant;
- receiving the accountant's report on critical accounting policies and practices and alternative treatments of financial information discussed with management;
- receiving complaints regarding accounting, internal controls and auditing matters; and
- receiving reports of counsel of evidence of a material violation of securities law or breach of fiduciary duty.
The audit committee is also expected to oversee management's performance of a number of new responsibilities under the Act, including participating in the preparation of, and certifying the accuracy of, periodic reports and establishing, maintaining and assessing the effectiveness of internal controls. Further, at least under the proposed revised Nasdaq listing rules, the audit committee will be required to review and approve related-party transactions.
Need for Audit Committee Counsel
In view of the numerous new responsibilities imposed directly on audit committees, audit committee members are likely to desire the assistance of counsel to help them understand and comply with these requirements. Indeed, Section 301 of the Act expressly mandates that, as a condition of listing on a stock exchange or Nasdaq, an issuer must grant its audit committee authority to engage independent counsel and other advisers, as the committee determines necessary to carry out its duties, and provide for appropriate funding, as determined by the committee, for payment of compensation to such advisers.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.