Dont Let Social Media Disrupt Your Financial Reporting Standards

Dont Let Social Media Disrupt Your Financial Reporting StandardsDont Let Social Media Disrupt Your Financial Reporting StandardsYour companys social media usage may seem like one of the last issues that influences your internal controls over financial reporting. But social media channels like Facebook and Twitter now represent some of the fastest and most reliable ways to communicate with the public. Most organizations have created branded profiles to broadcast information to their followers and engage them.Things get tricky when it comes to sharing news via social media, however, especially when it relates to financial information. For years, the U.S. Securities and Exchange Commission (SEC) has enforced Regulation ritterlich Disclosure rules, which require publicly traded companies to disclose information that would be deemed relevant for investors in nondiscriminatory ways.In the past, most organizations have relied on tools such as press releases to share quarterly financial repo rts. But as social media outlets play more prominent roles in publishing news, its important to maintain a firm grasp of your internal controls over financial reporting. You may be inadvertently violating regulations on what seems like a routine or harmless click of a button.New responsibilities for companiesIn 2013, the SEC updated Regulation Fair Disclosure to stipulate that businesses can broadcast financial information on social media channels, but only if investors are notified prior to publication and understand thats where they need to go to retrieve the information. This means chief financial officers (CFOs) and managers have new responsibilities to regulate their financial reporting standards.Its important to establish companywide guidelines and train employees on how to use these tools in accordance with federal regulations. The 2014 Internal Audit Capabilities and Needs Survey from global consulting firm Protiviti found that 74 percent of companies surveyed use social med ia for external communication, yet only 55 percent of those organizations have developed internal social media strategies.Risks to posting on social mediaYour business has a lot at stake posting information on social media platforms. CFOs and managers who are unaware of the nuances associated with financial reporting standards and verbunden communication may be putting their entire companies at risk of lawsuits and noncompliance penalties.Need to think criticallyOne way you can avoid regulatory compliance issues is to assess whether social media is the most effective channel for your audience. Some financial reports require a significant level of context and supplementary information, meaning a 140-character post on Twitter may not be useful to investors.Thats not to say social media channels cant serve as effective gateways to that information. For example, Compliance Week reported the SEC will not take issue with Twitter posts that include hyperlinks to additional information. Its just important to understand the details of the regulations ahead of time. Subscribe to our newsletterWhen you subscribe to the Robert Half newsletter, youll get articles and resources to help you build and manage a winning accounting and finance team - all sent directly to your inbox. Click the button below to sign up todaySUBSCRIBE NOW