Ask FERF (financial executives research foundation) about ... private company compliance with section 404.
In the article "Defining Moment for Good Governance The terms governance and good governance are increasingly being used in development literature. Governance describes the process of decision-making and the process by which decisions are implemented (or not implemented). ," on page 48, Financial Executives Research Foundation (FERF FERF Financial Executives Research Foundation
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Much of AUL's work focused on compliance with Sarbanes-Oxley Section 404, Management assessment of internal controls, to which it initially chose to be in compliance by the end of 2004. Coincidentally co·in·ci·den·tal
1. Occurring as or resulting from coincidence.
2. Happening or existing at the same time.
co·in , this date became the revised deadline for many public companies.
The company identified these steps in its 404 Implementation Assessment:
* Inventory all financial classes of transactions/accounting processes by business unit (premiums, claims, etc.)
* Determine significance of transactions/processes based on materiality MATERIALITY. That which is important; that which is not merely of form but of substance.
2. When a bill for discovery has been filed, for example, the defendant must answer every material fact which is charged in the bill, and the test in these cases seems to and risk
* Determine objectives for all significant cycles, accounting processes (completeness, accuracy, valuation, presentation, existence)
* Evaluate design of controls and test controls' operating effectiveness to achieve objectives
* Determine and correct gaps
* Test remediated areas
* Institute an ongoing monitoring program
* Provide report on internal controls
AUL also conducted a pilot 404 project that achieved the following:
* Completed documentation of process and controls
* Established preventive measures, improved monitoring and accountability
* Increased understanding and awareness of controls and control points by all individuals in the unit
* Boosted morale and provided a sense of challenge and accomplishment
* Promoted ownership of business processes
Before deciding on a consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a to assist in implementation, AUL used selection criteria to identify vendor advantages and disadvantages and rated vendors that include:
Degree of independence
Perception of audit committee
Brings a fresh perspective
Expertise and cost
Approach and scope
Flexibility to work with people
Ability to work with external auditor The examples and perspective in this article or section may not represent a worldwide view of the subject.
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Commitment of resources within the company's implementation timeframe
Technology and ongoing capabilities
After identifying a consultant, a project team was organized. The team included representatives from the consulting company Noun 1. consulting company - a firm of experts providing professional advice to an organization for a fee
business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , project sponsors from corporate management and representatives from operations, IT, financial reporting and the external audit firm. The timetable was initially established over six quarters.
A comprehensive Project Charter, developed to assist in implementation, was organized as follows:
Project Scope Statement
Excluded from Scope
High Level Risks
Project Assumptions and Constraints
Key Project Participants
Project Charter Attachments
Roles & Responsibilities
Project Initiation Document A Project initiation document is a logical document whose purpose is to bring together the key information needed to start the project on a sound basis; and to convey that information to all concerned with the project. (PID (1) (Process IDentifier) A temporary number assigned by the operating system to a process or service.
(2) (Proportional-Integral-Derivative) The most common control methodology in process control. )
Acceptance of Project Completion
Both private and public companies can further leverage the internal control infrastructure to generate greater business success. Benefits can include:
Timely detection of issues leading to less rework re·work
tr.v. re·worked, re·work·ing, re·works
1. To work over again; revise.
2. To subject to a repeated or new process.
Improved flow of information, permitting better business decisions
Better resource management
Reliable financial reporting
FERF publications provide additional information on compliance with Section 404 and other aspects of Sarbanes-Oxley. FERF products are available on the Web at www.fei.org/rfbook store. In addition, see FEI's Web site for Sarbanes-Oxley-related resources at www.fei.org/advocacy/sarbanesoxley.cfm.
Cheryl de Mesa Graziano, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. (firstname.lastname@example.org) is Director of Research for Financial Executives Research Foundation (FERF).