 The fallout of financial scandals of organisations such as Enron and World com led to the enactment of the Sarbanes-Oxley Act (SOX) Act in July 2002. Its intended objective is to protect investors in public companies along with interests of workers and shareholders. It does this by way of stipulating baseline requirements for improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. The flip side of the Act is that it punishes those found guilty of corporate and accounting fraud. Notable punishments of which are prison terms of up to 10 years and penalties of up to $1 million or three times the amount of any profits or loss.
Key compliance sections of the Act are 302, 404, 401, 409, 802 and 906. However section 404 relating to internal controls appears to be the one giving most concern for organisations.
Section 404 identifies management's responsibility for ensuring internal controls are adopted to protect financial reporting systems from activities which could have a material effect on their financial statements. Issues arise for organisations when they try to identify the requirements for monitoring, detecting and recording electronic information disclosures on financial their reporting systems.
Our Governance audit centres around assisting organisations identify deficiencies in relation to aspects of their financial reporting and supporting systems which may not meet internal control requirements as mandated by section 404 of the Sarbanes-Oxley Act.
Our approach involves:
- Identifying internal control requirements
- Conducting walkthrough of identified financial reporting systems
- Reviewing procedures, polices and processes
- Assessing compliance with defined requirements
- Identifying gaps
- Agreeing remediation
- Testing systems
- Conducting periodic reviews
Benefits of selecting Zylt Consulting to assist in conducting a Sarbanes-Oxley section 404 review:
- Our consultants are skilled in the mapping of technical controls to legislative requirements
- We have previous experience in advising organisations in this area
- We are cost effective
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