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Control Chatter

October 2022

News that Control Professionals need to know

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Internal Control Chatter
Each month the staff of The Internal Control Institute reviews hundreds of articles related to Internal Control and Corporate Governance. Here are brief summaries of some of the top articles (along with links to the original article) that may be of interest to you.

Mattel to pay $3.5M to settle SEC charges over accounting


By Ben Unglesbee

Oct. 24, 2022

Commission to settle charges related to what the agency said were misstatements about its financials in 2017.  The SEC said that Mattel understated a tax-related valuation allowance by $109 million in Q3 of 2017 and overstated its tax expense by the same amount in 2017, according to an SEC release. Mattel did not immediately reply to Retail Dive’s request for comment. The effect was to understate and then overstate the company’s net loss in Q3 and Q4, respectively, of that year. The erroneous financials were still uncorrected when the toy giant was selling new bonds to the market in 2018. Mattel later canceled the note offering after learning of the error in a whistleblower letter. The SEC found that Mattel had no internal controls in place to prevent such an issue.

Read The Article

SEC Charges Cronos and Former COO with Fraud

by TG Branfalt

Oct 26th, 2022  

The U.S. Securities and Exchange Commission (SEC) on Monday charged NASDAQ-listed cannabis producer Cronos and the company’s former chief commercial officer with fraud related to falsely accounting for millions of dollars in revenue and other accounting misconduct. The SEC said former Chief Commercial Officer William Hilson aided the company in the violations. Neither Cronos nor Hilton admitted or denied the allegations, the SEC said. According to the SEC, from 2019 to 2021 Cronos filed financial statements in three separate quarters with the commission that contained material accounting errors.

Read The Article

The Intersection Of Technology And Quality In The Audit

By Russ Banham


Oct 26, 2022

According to a global survey of business leaders conducted by KPMG and Forbes Insights, nearly all executives (98%) say their external audit firm uses advanced technology extensively. There’s little doubt that technology is transforming the audit, with tech solutions giving auditors “more insight than they ever thought possible,” according to Christian Peo, National Managing Partner, Audit Quality and Professional Practice, KPMG LLP. As discussed in a recent article with Lou Trebino, Chief Technology Officer, KPMG LLP, about how technology is modernizing the audit to provide insights, the overall topic of advanced technology is a big umbrella. When it comes to improving audit quality, for example, precisely which tech is making a difference? What exactly can auditors expect in that regard from the broad range of solutions available today?

Read the article to reveal where technology can have a significant positive impact on audit quality.

Lafarge Part 2: The Funding Schemes and Red Flags


October 26, 2022

We continue our exploration of one of the most public cases of corporate moral bankruptcy where Lafarge SA and its Syria unit Lafarge Cement Syria, or LCS, each pled guilty to a count of conspiring to provide material support to foreign terrorist organizations and will pay a total of $777.78 million. According to the Plea Agreement, this amount consisted of a total criminal fine of approximately $91 million and forfeiture of $687 million. As I noted in Part 1, this is not a Foreign Corrupt Practices Act (FCPA) enforcement action, but an enforcement action based on USC §2339B for one count of conspiracy to provide material support to one or more foreign terrorist organizations. While this is not a FCPA enforcement action, the mechanisms by which Lafarge paid bribes or otherwise funded the terrorist organizations ISIS and ANF are instructive for the anti-corruption compliance professional. These strategies were laid out in the Statement of Facts.

Read The Article

United States: OFAC Publishes Sanctions Compliance Guidance for Instant Payment Systems


OCTOBER 27, 2022  

On September 30, 2022, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) published “Sanctions Compliance Guidance for Instant Payment Systems” (the “Guidance”). The Guidance underscores the importance of a risk-based approach to managing sanctions risks related to payment technologies such as instant payment systems. The availability of funds in real time poses a challenge for financial institutions that seek to comply with US sanctions regulations. OFAC recommends that developers of instant payment systems incorporate sanctions compliance considerations in the design and development processes and add compliance features and tools that enable participants and users to maintain an effective sanctions compliance program.

Read The Article

DOJ Corporate Compliance Certifications Appear to Be Here to Stay

By Patrick T. Campbell, Alexandra Karambelas, Lauren J. Resnick and George A. Stamboulidis

October 21, 2022

As part of its renewed focus on corporate crime, the Department of Justice (DOJ or the Department) is requiring chief compliance officers (CCOs) and CEOs to certify the effectiveness of their company’s compliance program in all corporate criminal resolutions, including guilty pleas, non-prosecution agreements (NPAs) and deferred prosecution agreements (DPAs), at the end of the term of the agreement.This policy has been met with unease by some compliance professionals over concerns that the certifications may leave CCOs open to criminal prosecution.But the policy has been repeatedly emphasized by DOJ officials and appears to be here to stay. The DOJ has used compliance certifications in two corporate criminal resolutions thus far, most recently on Sept. 15, 2022, in a DPA with GOL Linhas Aéreas Inteligente (GOL).

Read The Article

Is Your Board Effective?

by Rich Fields and Rusty O'Kelley

October 21, 2022

Directors and executive leaders want their boards to be effective—that’s undeniable. But what makes a board not just competent, but a truly high-performing, value-enhancing board? That definition is much more elusive. At too many companies, effectiveness is only evaluated in the past tense, and sometimes only after something has gone wrong. If the question is “why wasn’t the board effective?,” there can be real reputational or legal culpability. Instead, boards should focus in the present and future tense: Is the board effective? Does it understand and execute its responsibilities, staying focused on truly strategic items and fostering an environment conducive to value creation? Does it have the right mix of backgrounds, skills, and experiences to thrive? And will it remain effective in the future, given anticipated challenges and opportunities?

Read The Article

Back to FCPA Basics: Who’s a foreign official?

By Richard L. Cassin

October 20, 2022

An FCPA anti-bribery offense requires five essential elements: (1) Corruptly (2) paying or promising to pay (3) anything of value (4) to a foreign official (5) for the purpose of obtaining or retaining business or securing any improper advantage. Each element has been contentious, but none more than the fourth element — “foreign official.” One result of all the “foreign official” contention is a judicial record deep by FCPA standards. Several FCPA defendants — mostly individuals facing criminal prosecution — have argued there was no foreign official involved in their bribe paying and therefore no FCPA anti-bribery offense. That argument hasn’t succeeded at trial. But it has forced courts to consider carefully who’s a foreign official under the FCPA. In the FCPA Resource Guide, the DOJ and SEC recap the judicial record related to “foreign officials".

Read The Article


The Internal Control Institute™ (ICI) improves organizational Internal Control worldwide by providing training, products and services and individual Professional Certifications
recognized internationally. The Institute's Board of Advisors has determined it would like to further expand into areas where it is not directly represented. ICI provides world-class
programs and its intellectual property to affiliates free of charge and shares all program
revenue with them. If your organization is interested in partnering with ICI to earn revenue while you contribute to the development of the internal control profession worldwide please contact Dr. Michael Pregmon, Jr., Chief Operations Officer, by email at or by phone at 727-538-4113 in the USA.

Below is a list of WorldWide Affiliates currently serving the profession. If your area is not represented please consider partnering with ICI
2022 Certification Training Program & Exams

ICI and affiliates around the world have a busy training program scheduled for 2022. For more details on the CICS Training programs on offer visit the Events page on our website by clicking on the link below.

ICI World Wide Affiliates

Contact: Mr Aminur Rahman
Tel: +88 01749 400600
Contact: Soulémane BABA DAMAGUI
Tel: +0022997492600

Contact: Mr Humphrey Chawafambira
Tel: +267 75618647
Contact: Mr Eduardo Person Pardini
Tel: +55 11 2599 8360
Contact: Mr Eric Kamegne
Tel: +237 658 292 978
The website of ICI Cameroon is now operational

Our first CICS session in April is online only
Contact: Mr Qiu Jianting
Tel: 400-098-1119 or 010 68004176

Contact: Mr. Yves Dupont
Tel: 0032 2 305 35 25
Contact: Mr Summit Goyal
Tel: +91 9810 575 613
Contact: Mr Nereo Guzman Mendoza
Tel: +52 811 181 3514
Middle East
Contact: Mr Belal Abdul Jabbar
Tel: +962 6 5927171
Contact: Mr Yazid Berrada
Tel: +212 (0) 522-872-585
Contact: Mr Joel Aluko
Contact: Mr Muhammad Farooq Hammodi
Contact: Mr Cosmin Serbanescu
Tel: +40 752 525 525
Singapore, Malaysia, Indonesia & Taiwan China
Contact: Mr Bob Seetoh

South Africa
Contact: Ms Sedie Jane Masite
Email: or
Contact: Ms Nadia Yaich
Contact: Ms Ilknur Tunc
Tel: +90 312 442 50 15
Contact: Mr Jesus Salazar Ras
Tel: +58 426 737 8096 or + 58 416 291 3788
Contact: Mr Nguyen Thanh Tung
Tel: 848 3803 5020
Contact: Dr Proctor Nyemba
Tel: +263 4 443124

Control Quotes:

Learn from the past, set vivid, detailed goals for the future, and live in the only moment of time over which you have any control: now.

Denis Waitley

About ICI
The Internal Control Institute™ (ICI) is a worldwide organization devoted exclusively to internal control and corporate governance. The Institute is dedicated to the development of world-class educational programs and best practice guidelines on internal control and corporate governance, based on the Sarbanes-Oxley Act and the COSO internal control framework.
Visit us on the web at the Internal Control Institute