The Brave New World of InfoSec

By Jeff Bardin

About this Blog:

A seasoned security pro's take on events around the world.

Escaping the Pain?

Posted May 31, 2007 to Identity Management |

Many of the regulatory changes over the past several years benefit shareholders by making executives and directors more accountable. Many firms are going from public to private to avoid the scrutiny and added costs associated with being a public firm.

President Bush signed the Sarbanes-Oxley Act into law in July 2002 with the hope that it would put an end to the mounting corporate scandals and accounting misdeeds in the U.S. Included in the Act are a slew of new rules regarding the structure and role of the audit committee, as well as stiff penalties for corporate wrongdoing. A public company's CEO and chief financial officer must certify that its 10-K and 10-Q filings with the Securities and Exchange Commission (SEC).

Other major provisions in the Act restrict the types of services audit firms can offer to public clients, require "independent" members on audit committees and require companies to disclose whether they have a "financial expert" on their audit committee.

Some of the benefits touted by going private are:

Avoid new regulatory burdens

Reduce public pressures to maintain growth

Avoid court time and fees

Concentrate control and make a profit

Explore possible tax benefits

It has come to my attention that a well known formerly public firm who is now private has dissolved their internal audit department, dismantled the information security organization, and forced out the information security officer who is a friend of mine. The move from public to private appears to be for all the wrong reasons demonstrating a way to eliminate controls that do not provide for investor protections and surely do not execute due care and due diligence by corporate officers. Who really benefits in the end?

What has really changed since all the SEC fraud charges against multiple corporate officers of multiple companies? There is no honor amongst thieves and they still reside at the top.

Previous Post: SCRAM Next Post: Initial Setup of your Vulnerability Scanner!

WEBCAST

Transition Confidently to the Cloud

Thanks to cloud computing, your business data is everywhere and being accessed by everyone. Making the wrong decision to protect your data can result in high costs, increased risk and executive exposure. View this live webinar on cloud security and the evolving data center, and learn why a data-centric approach to security is the best bet for today's virtual environment.