ITGCs are required by the Sarbanes Oxley Act of 2002 (SOX) to ensure the integrity of financial reports. While SOX is focused on the propriety of your financial and accounting practices, SOX ITGC controls focus on IT systems such as applications, operating systems, databases, and the supporting IT infrastructure. Your SOX ITGCs ensure IT and security activities are managed and governed according to your policies and procedures and support the effective functioning of application controls by helping to ensure the proper operation of information systems. Together ITGCs and application controls ensure the integrity of your data and processes across the IT environment to manage and mitigate risk. 

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Unisys Corporation (NYSE: UIS) today announced that Unisys Vice President of Internal Audit and Chief Audit Executive Lucia Wind has been named board chair of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Wind will begin her three-year term on January 1 and as chair, she will lead COSO in fulfilling its mission of providing thought leadership that enhances internal control, enterprise risk management, governance and fraud deterrence.

Wind joined Unisys in 2019, where she currently leads the company's enterprise risk management (ERM) program and oversees the internal audit function. Before joining Unisys, she served as chief audit executive at Ellucian while assisting the company in its strategic transformation to an entirely SaaS solution organization. She also led audit functions at AOL and has held roles at global companies across the technology, retail, hospitality and government sectors.

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FTX CEO John Ray will tell lawmakers on Tuesday that the bankrupt cryptocurrency exchange had "unacceptable management practices" including the commingling of assets and lack of internal controls, according to prepared remarks published Monday by the U.S. House Financial Services Committee.FTX filed for U.S. bankruptcy protection last month and its founder Sam Bankman-Fried resigned as chief executive. Both Ray and Bankman-Fried will testify before the committee on Tuesday at 10 a.m. ET (1500 GMT). Bankman-Fried said earlier Monday that he would appear remotely the hearing. Ray in his prepared remarks said that the FTX collapse appeared to stem from the concentration of control" in the hands of a very small group of grossly inexperienced and unsophisticated individuals."" Never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever," Ray said.

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Denmark’s largest bank, Danske Bank, is to pay 3.5 billion kroner (€470 million) in fines to end prosecution in a massive money laundering scandal involving its Estonian subsidiary.This was announced on Wednesday by the Danish financial watchdog. The fine, which comes a day after Danske Bank settled a case in the US for $2 billion, “is the largest ever imposed in Denmark in the area of money laundering,” prosecutor Jens-Christian Bülow was quoted in the statement as saying. “It is extremely serious that a bank does not have the necessary corporate governance and internal controls in the area of money laundering and that it does not react correctly and quickly to warnings about possible money laundering,” he stressed.

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The worldwide recession in corporate prosecutions, ushered in during the Trump administration, appears to be coming to an end. Despite a slow start by the Biden administration’s prosecutors, Department of Justice officials appear poised for an increase in enforcement of the Foreign Corruption Practices Act in 2023. Any increase may mean a financial gain for DOJ’s foreign prosecution partners who increasingly have assisted the U.S. in enforcement of bribery laws.

Any coming increase in FCPA prosecutions would be following an initial—and surprising—slowdown. In 2021 and 2022, Biden’s DOJ resolved a meager total of only eleven corporate and individual FCPA enforcement actions. From 2017 through 2020 during the Trump administration, however, DOJ resolved a total of 83 corporate and individual FCPA enforcement actions, averaging 22 resolutions each of those years. This Trump-era average marked a 50% decrease in resolutions compared to the preceding eight years.

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Investigations are underway into the stunning collapse of FTX and its sister company, Alameda Research. FTX-related case studies will be taught in business schools for years to come. Out of the tangled mess, one lesson already has become clear: The lack of a serious accounting system or even basic internal controls contributed to the company’s downfall. As professors of accounting, it’s a continual challenge convincing students that our courses are important when they’re tempted by sexier-sounding classes with titles that include words like “innovation,” “artificial intelligence” or “fintech.” “Introduction to Financial Accounting” doesn’t pique the interest of the typical 20-year-old. The FTX debacle has given us our best argument yet. It enshrines all the reasons a solid accounting system and well-structured internal controls are critical to a business and its investors, creditors, customers, suppliers and other stakeholders.

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Enacted in 2002, Sarbanes-Oxley (SOX) has been called one of the most consequential governance developments in history. But 20 years later, something else just as consequential has unfolded—business itself changed. It’s a different world today full of new business entities that shoulder novel business risks. All things digital has become a ubiquitous business imperative, along with the rise of artificial intelligence (AI), cloud computing, and now—for some--fully remote modes of working. Indeed, the world has seen massive changes over the past 20 years, yet too many financial departments have neglected to adjust and modernize their SOX controls in response. Based on our experience, we estimate that half of all businesses currently need some degree of SOX modernization today. With repercussions affecting everything from business risk to talent, the liabilities in this new world are very real. But so, too, are the opportunities to refresh and rethink SOX while optimizing operations through deeper insights and entirely new efficiencies. As always, the goal is compliance, but the opportunity is to create compliance while unlocking significant new value from powerful new capabilities achievable today. 

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Investors bemoan the lack of disclosure in the crypto industry. But many crypto companies disclose a lot of information, and some of it is worrisome, a review of financial statements shows. The blowups of FTX and Celsius Network LLC exposed hidden risks that might have raised red flags for investors, including related-party transactions, commingled customer funds, sketchy record-keeping and questionable accounting. Some of these problems often appear in disclosures by public crypto companies, including weak systems used to keep numbers accurate.

A look at 19 of the publicly traded crypto miners showed that 16 disclosed significant internal-control weaknesses in the past four years, some of which were "alarming," according to Bedrock AI, which makes software that analyzes financial filings. Crypto miners build powerful networks of computers that process transactions and are rewarded in newly generated currency.

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Control Quotes:

“Leadership is a matter of having people look at you and gain confidence. If you’re in control, they’re in control.” 

–Tom Landry