As reported in Compliance Week over the past year, most estimates of costs associated with the internal control provisions of Sarbanes-Oxley have hovered around 0.001 percent of revenue, or “one million in expenses per billion of revenue.” A recent survey by Financial Executives International has confirmed that estimate, keeping the number in the general ballpark […]
Internal Controls
Posted inInternal Controls
AMR Q&A On The Market For Internal Control Software
Last week, we reported that $25.1 billion PepsiCo had purchased internal control and assurance software from Nth Orbit. That news was followed by an announcement a few days ago that $24.6 billion Viacom will use OpenPages’ SOX Express for Sarbanes-Oxley compliance. Amidst these and other internal control software announcements, we decided to ask industry expert […]
Posted inInternal Controls
23 Internal Control Disclosures In January
According to a review of regulatory filings during the first month of 2004, 23 companies disclosed material weaknesses or significant deficiencies in internal controls. That number is nearly double the 14 similar disclosures made during the prior month of December 2003. Eleven companies made such disclosures in November 2003. (See box at right for prior […]
Posted inInternal Controls
Survey Shows Where 404 Fixes Are Likely To Be Made
If Section 404 is requiring more effort than predicted, you’re not alone. Nearly three-quarters of Sarbanes-Oxley project leaders recently acknowledged that they’ve seen an increase in the level of effort required to comply with internal control provisions. That’s according to a survey conducted by PricewaterhouseCoopers at a Sarbanes-Oxley Section 404 Compliance conference last week. According […]
Posted inInternal Controls
Will Cramming For SOX 404 Exams Be Enough To Pass The Grade?
My eldest daughter came home from university for the holidays complaining loudly about her last business exam in management sciences. She claimed the exam had been ridiculously hard and didn’t think she had done very well. On the bright side however, she thought most of her classmates had also “tanked” the exam. The professor would […]
Posted inInternal Controls
14 Internal Control Disclosures In December 2003
Every month, Compliance Week staffers scour SEC filings for disclosures of material weaknesses or “significant deficiencies” in internal controls. According to regulatory filings, 14 companies disclosed such weaknesses during the month of December, representing a 27 percent increase from the 11 firms who reported the same during November. The previous November survey is available in […]
Posted inInternal Controls
11 Internal Control Disclosures In November 2003
As public company executives surely know by now, Sections 302 and 404 of SOX require public companies to establish, implement and evaluate their internal controls for purposes of financial statement reporting and operational integrity. Outside auditors must attest to management’s assessment. In doing so, both parties would be — in theory — demonstrating to shareholders […]
Posted inInternal Controls
Firms Detecting Fraud Through Internal Controls, Audits
Instances of fraud have risen 13 percent since 1998, but companies are taking more proactive measures to counter fraud than ever before. According to KPMG’s Fraud Survey 2003, company management is taking a more active approach in detecting fraud through internal controls and internal audits (see chart). In fact, over 75 percent of the organizations […]
Posted inAccounting & Auditing
Proposal Would Allow Auditors to Evaluate Those Who Hire Them
In order to enhance the quality of reporting and increase investor confidence, Section 404 of the Sarbanes-Oxley Act requires that annual reports filed with the SEC must be accompanied by a statement by company management that management is responsible for creating and maintaining adequate internal controls. Management must also present its assessment of the effectiveness […]
Posted inInternal Controls
PCAOB Internal Control Standards
On Oct. 7, The Public Company Accounting Oversight Board unanimously voted to propose and issue for public comment a standard on an audit of “internal control over financial reporting.” The Board also unanimously voted to propose and issue for public comment a rule which clearly defines terms used in auditing to assist firms in complying […]
