Yesterday, I was at the first ISACA Israel conference on IT Governance.
My first challenge was understanding what IT governance means (and I've been an IT professional for a long time...)
IT Governance (according to Wikipedia)
is a subset discipline of Corporate Governance focused on information technology (IT) systems and their performance and risk management. The rising interest in IT governance is partly due to compliance initiatives (e.g. Sarbanes-Oxley (USA) and Basel II (Europe)), as well as the acknowledgment that IT projects can easily get out of control and profoundly affect the performance of an organization.
Well - I can identify with that.
The translations of governance and maturity to Hebrew caused a certain amount of discussion - ממשל ובשלות - and smiles - considering that Ehud Olmert - the current Prime Minister of Israel is facing corruption charges. Sam (Shoni) Albeck - who is General Counsel for the TASE - the Tel Aviv Stock Exchange. Albeck discussed the Societe Generale case and made some insightful comparisons with regulatory, compliance and governance in Israeli publicly traded companies.
Dr. Irit Haviv-Segal, from the Tel Aviv University Law School presented a good overview of corporate financial reporting regulatory requirements for Sarbanes-Oxley and their evolution from pre-Enron days to the current state.
I caught up with Dr. Haviv-Segal at the break and she commented that corporate governance has become a $100 Billion+ franchise for accounting firms who are looking after interests of the big firms or in Israeli looking after the interests of the big 5 family oligarchies who own most of the country.
She noted that SPC- Special Purpose Companies, which are considered to be one of the root-causes of the current sub-prime crisis - are a convenient way to hide revenue - and should have been dealt with by Sarbanes-Oxley. She expressed hope that abuse with SPCs would be dealt with now. See Special Purpose Companies in the Wikipedia.
Later that day - I was checking news online and saw the item on AOL Executives sued for accounting fraud.
The US Securities and Exchange Commission (SEC) has filed a lawsuit against four former AOL Time Warner executives, charging them with falsely boosting the company's advertising revenue by $1 billion.
This is a sad replay of the 2005 case where 6 AOL executives were indicted on an AOL Accounting scam.
The 31-count indictment in the 2005 case accused the executives of inflating revenue and lying to investors about the true nature of the companies' financial results. According to court documents, some of the executives forged and back-dated contracts and lied to auditors -- and then attempted to cover up the scheme by destroying documents and e-mails and lying to federal authorities.
Some things never change.
