SOX compliance missteps are alleged in a recently filed lawsuit against National Beverage Corp. (NASDAQ: FIZZ). The plaintiff claims the defendants made false and/or misleading statements and/or failed to disclose the company lacked effective internal controls over financial reporting due, in part, to undisclosed channeling of expenses through off book entities and undisclosed material related parties transactions.

As a result, defendants’ statements about National Beverage Corp’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.

SOX Compliance Challenges

Sarbanes-Oxley rules (SOX compliance) require public companies to provide adequate internal control over their financial reporting process.

On September 27, 2016 a report was published that alleges, among other allegations, that: the Company’s former CEO and Chairman admitted to “manipulating FIZZ’s earnings…[and] directing his son to create fake invoices”; the Company refused to allow a potential acquirer to perform adequate due diligence on the Company, thus leading to the failure of the transaction; and that the Company’s officers are “compensated by a privately held company” that disallows shareholder visibility.

Shares of National Beverage Corp. declined to as low as $39.14 per share on September 28, 2016.

Improving Internal Controls

DFND Analytics wants public companies, which can be hit hard by allegations of fraud, to have a better understanding of their risks and opportunities while protecting shareholder’s interests at the same time.

DFND’s proprietary software runs more than 30 forensic checks against an organization’s enterprise and accounting data to search for errors, omissions, and fraud. Reports can be run as often as six times a year, and a DFND professional reviews every report before it goes to a client.

DFND’s tools take a high-level view of a company that has thousands, or millions, of transactions and pin-point a questionable individual invoice or payment.

Sarbanes-Oxley compliance (SOX compliance) has never been as easy and affordable.

Learn how DFND’s internal controls will improve the financial reporting process for your organization.