Audit Committee Members: the Act Affects You!
February 06, 2004
The recent and seemingly endless series of high-profile corporate scandals and failures has caused the investing public and regulatory authorities to become increasingly concerned about corporate governance and financial disclosure. The congressional response to this concern, the Sarbanes-Oxley Act of 2002 (the Act) contains, among many other provisions, significant enhancements to the responsibilities of audit committees. As a result of the Act, audit committees can no longer be rubber-stamping "yes-men" in corporate governance. They must now meet specific qualifications of financial literacy and independence, and exercise reasonable diligence and good faith judgment in the monitoring of management, and internal and external auditors. If they do not, they could subject the company and themselves to shareholder lawsuits and the company to SEC actions and/or being de-listed by their respective exchange. The provisions of the Act that directly affect audit committees are presented by title and section and discussed in this article.
Helping a Client Select an e-Billing System
February 01, 2004
Law firms have a legitimate interest in encouraging clients to select and implement e-billing software that is cost-neutral or, preferably, advantageous to the firm. While many factors contribute to a mutually profitable e-billing setup, your research and potential advice to the client should cover at least these basics.
IRS Proposes New Obligations for Tax Advisers
February 01, 2004
With the stated purpose of restoring, promoting and maintaining the public's confidence in professionals providing tax advice, the Internal Revenue Service has issued proposed regulations that set forth "best practices" applicable to all tax advisers and mandatory requirements for advisers who provide certain tax shelter opinions. These proposed regulations, issued on Dec. 29, 2003, apply to all tax advisers who practice before the IRS (eg, lawyers and accountants) but are not intended to alter or supplement other ethical standards applicable to practitioners (such as the Rules of Professional Conduct).
Tax Returns Can Make or Break Your Case
February 01, 2004
The primary purpose of a tax return is for government entities to assess income taxes on the earnings of a business or individual, but in divorce, the role of the tax return is much broader and serves various purposes. Business and personal tax returns should be thoroughly analyzed before marital assets are divided and before income is set for the purpose of determining spousal maintenance and child support. If analyzed properly and creatively, they can help show whether: 1) there was financial irresponsibility; 2) income is much greater than appears on the surface; or 3) assets no longer exist that one spouse assumes still do exist.
Are Public Nuisance Lawsuits Against the Handgun Industry Gaining Ground?
January 01, 2004
Much has been written about the many lawsuits initiated by municipalities against the handgun industry. They are premised on the claim that the gun manufacturers and distributors saturate the market and fail to prevent their retailers from selling to persons who might resell to criminals. <i>See, e.g.,</i> Lawrence S. Greenwald, <i>Municipalities' Suits Against Gun Manufacturers ' Legal Folly,</i> 4 J. Health Care Law & Policy 13 (2000). Plaintiffs typically seek both damages and injunctive relief that would change industry marketing practices. The gun industry has challenged the legal sufficiency of the lawsuits on multiple grounds, with the majority of courts that have considered these issues dismissing the lawsuits. Recent developments, however, suggest that the pendulum may be swinging back in the governmental plaintiffs' favor.
Optimizing Retirement Plans for Law Firms
January 01, 2004
Part One of this article compared some hybrid retirement plans (combinations of defined contribution and defined benefit plans) that are potentially desirable for law firms. In Part Two, we provide spreadsheet analyses to illustrate the benefits of these plans and to reconcile them with nondiscrimination criteria of the Internal Revenue Code and of the Age Discrimination in Employment Act (ADEA).
A Records Retention Policy in the Electronic Era
January 01, 2004
Every company should have a records retention policy. Due to increased use of e-mail, this policy must address the changing business world by including a clear directive on the retention and destruction of electronic records. (Companies tend to use the term "document retention policy." However, due to the proliferation of e-mail and other electronic data, "records retention policy" is more appropriate.) Most importantly, the policy must provide a directive that ensures that, when the threat of litigation arises, whether civil or criminal, all relevant documents are preserved.
What Lies Beneath: Technology That Supports Effective Compliance
January 01, 2004
Much has been written about the reporting requirements mandated by federal laws such as the Sarbanes-Oxley Act of 2002 (the Act), the Health Insurance Portability & Accountability Act (HIPAA) and the Gramm-Leach-Bliley Act enacted in 1999 (GLBA), but less has been said about the technology that underlies successful efforts to comply. What is clear is that enterprise software and integrated records management are the only viable ways to meet these requirements. The software selected must take into account both changes in these requirements, and the prospect of future state and federal retention and reporting requirements. Since software doesn't exist in a vacuum, hardware and network considerations must be part of the overall system strategy. Law firms with corporate clients and corporate counsel need to be involved in the planning and implementation of such a system.
