The new rule, which the Securities & Exchange Commission is voting on today, will require company executives to show what internal controls they have in place in their annual reports and what they are doing to prevent fraud, according to the Washington Post.
This follows internal controls being blamed for accounting frauds at WorldCom and Rite Aid Corporation.
New chief auditor Douglas Carmichael said internal controls could be a significant deterrent to management fraud, although he admitted that they were not a foolproof solution.
The planned rule, the details of which are not yet known, has been praised by the American Institute of Certified Public Accountants, while most experts agree it is a positive step.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements