Financial Reporting
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August 30, 2010 Accounting Research ManagerTM The following accounting update summaries are provided courtesy of Accounting Research Manager, a subscription service that provides a timely and comprehensive online database of analytical accounting, auditing and SEC information as well as authoritative literature. KnowledgeLeader members are eligible to receive a 15% discount if they would like to subscribe to Accounting Research Manager. CONTENT AREA: Accounting Research Manager TOPICS: Accounting/Finance, Financial Reporting, Laws & Regulations, PCAOB, IFRS August 23, 2010 A Guide for Commercial Real Estate Tenants: Understanding the Variable Cost Risks of a Commercial Lease Organizations choose to lease commercial space for a variety of reasons, including: long-term financial objectives, ability to access limited resources, questionable long-term market viability and other considerations strategic to their individual business needs. Unfortunately, organizations often fail to fully understand the financial risks associated with the leases they engage in beyond base rent factors. This article discusses the nature, financial risks and management considerations for recurring lease-related occupancy costs. CONTENT AREA: Articles TOPICS: Financial Reporting, Expense Reporting, Risk Management , Cost Management August 23, 2010 Accounting Research ManagerTM The following accounting update summaries are provided courtesy of Accounting Research Manager, a subscription service that provides a timely and comprehensive online database of analytical accounting, auditing and SEC information as well as authoritative literature. KnowledgeLeader members are eligible to receive a 15% discount if they would like to subscribe to Accounting Research Manager. CONTENT AREA: Accounting Research Manager TOPICS: Accounting/Finance, Financial Reporting, Laws & Regulations, PCAOB, IFRS August 9, 2010 Revenue Recognition Policy - Sample 2 This policy establishes guidelines for revenue recognition including right of return procedures and revenue recognition prior to delivery of goods. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Budgeting, Financial Reporting, Revenue, Sales Process & Marketing August 2, 2010 Audit Committee Checklist: Good Disclosure Compliance Week’s Audit Committee Checklist series continues with a look at new challenges in compliance with disclosure rules. “Audit committees are more involved in review and discussing all disclosures—particularly in light of the continuing uncertainty in the business and regulatory environments,” says Mary Pat McCarthy of KPMG’s Audit Committee Institute. CONTENT AREA: Articles TOPICS: Financial Reporting, Internal Audit, Audit Committee & Board, Risk Management & Assessment, Reporting/Disclosure July 26, 2010 Guide to International Financial Reporting Standards International Financial Reporting Standards (IFRS) are the principles-based financial reporting requirements adhered to by more and more countries worldwide. Conversion to these standards is well-underway in many nations, including Canada and Japan. There is now little doubt that IFRS is coming to the United States. The purpose of this publication is to assist organizations with this pending transition and provide answers and guidance to some of the many questions about the conversion to IFRS. This second edition provides an updated view on the state of IFRS adoption. CONTENT AREA: Protiviti Booklets TOPICS: Accounting/Finance, Financial Reporting, Cross Border & Non-US Issues, Canada, Japan, IFRS, Project Management July 19, 2010 Intercompany Commissions Policy The purpose of this policy is to define guidelines, requirements and processes for revenue sharing between two corporate subsidiaries when customers relocate to another country due to events such as acquisition, restructuring or cost reduction. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting, Investments & Foreign Exchange, Revenue, Accounting Organizations, Outsourcing/Co-sourcing/Shared Services June 7, 2010 Six Elements of Infrastructure for Public Company Readiness The six elements of infrastructure is a useful tool for categorizing issues, understanding where problems are occurring within the organization, and drawing conclusions to form the basis for recommendations. Consider these elements when designing a new process or assessing an existing process. This example focuses on aspects of an initial public offering (IPO). CONTENT AREA: Methodologies & Models TOPICS: Close the Books, Financial Reporting, IT Strategy, Internal Audit, Self-Assessment, IT Controls, Entity-Level Control May 24, 2010 Internal Audit’s Role in a Successful IFRS Conversion As the United States, along with every major capital market, moves toward International Financial Reporting Standards (IFRS), it is important for internal audit to sort out its role as a participant in the process. No matter what the SEC does, convergence seems likely to continue to occur and companies, public or private, should prepare for that eventuality. It is not too soon to focus on the process and the role internal audit can best play. CONTENT AREA: Articles TOPICS: Financial Reporting, Internal Audit, Risk Management & Assessment, IFRS, Project Management May 10, 2010 The Move to IFRS – Start Early to Save Significant Cost, Time and Effort Without question, a transition to IFRS is not just an accounting issue. It has far-reaching business consequences affecting not just external financial reporting, but many other operations and functions. In this podcast, Protiviti Managing Directors Christopher Wright and Steve Hobbs discuss the current IFRS landscape in the United States and challenges related to the transition. Chris is the global leader of Protiviti's IFRS practice, while Steve is the firm's U.S. IFRS practice leader. CONTENT AREA: Podcasts TOPICS: Accounting/Finance, Financial Reporting, Cross Border & Non-US Issues, Canada, Japan, IFRS, Project Management April 26, 2010 IFRS in Japan This section of Protiviti's "Guide to International Financial Reporting Standards" addresses common questions concerning the impact and implications of the International Financial Reporting Standards (IFRS) in Japan. Topics covered include: Is adoption of IFRS required or permitted in Japan? How will IFRS affect the statutory filings and consolidation reporting package for my company’s international reporting units, including its subsidiaries and affiliates? And, where can I find information on the differences between current Japanese GAAP and IFRS? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Cross Border & Non-US Issues, Japan, Change Management, IFRS April 19, 2010 New Accounting Standards for Revenue Recognition – Accelerating to the Speed of Business In this episode of Powerful Insights, Protiviti Managing Director Steve Hobbs discusses recent significant changes in revenue recognition requirements and the resulting benefits to organizations. CONTENT AREA: Podcasts TOPICS: Accounting/Finance, Revenue, Financial Reporting, Close the Books April 12, 2010 Evolving Answers on Good Accounting Policy Questions about accounting policy never change. Old ways of doing business give way to the new. In some instances, however, the old ways might be worth keeping around. This week, Compliance Week Columnist Scott Taub, former deputy chief accountant at the SEC, reviews wisdom from the past that regulators and companies alike might want to apply to problems of today. CONTENT AREA: Articles TOPICS: Accounting/Finance, Financial Reporting, Best Practices, Change Management, Compliance, Internal Controls April 12, 2010 IFRS in Canada This section of Protiviti's "Guide to International Financial Reporting Standards" addresses common questions concerning the impact and implications of the International Financial Reporting Standards (IFRS) in Canada. Topics covered include: What are the timelines for conversion to IFRS in Canada? Will the adoption of IFRS be required for organizations that are not publicly accountable enterprises (PAEs)? And, as a private company looking to be acquired by a public company, should we consider converting to IFRS? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Cross Border & Non-US Issues, Canada, IFRS April 5, 2010 Corporate Governance Transition – Sarbanes-Oxley Readiness There is much more to SOX than simply testing a company’s internal control over financial reporting. Companies entering public markets must have the proper board composition, evaluate the need for an internal audit function (required by the New York Stock Exchange), and have the requisite corporate policies and procedures. They also must be prepared to provide quarterly executive certifications, and eventually, management’s conclusion on the internal control over financial reporting. This compliance effort can be costly, but does not have to be if organizations proactively focus on implanting a sustainable process. CONTENT AREA: Articles TOPICS: Financial Reporting, Corporate Governance, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, Cost Management, Project Management March 29, 2010 Financial Reporting Issues Poll This week’s poll question asks: Does your organization proactively address financial reporting issues through a risk-based process? CONTENT AREA: Articles Support TOPICS: Accounting/Finance, Financial Reporting, Risk Management & Assessment, PCAOB, Financial and Credit Risk March 29, 2010 Financial Reporting Risk Profile – Are You Ahead of the Risk Curve? To stay ahead of ever-expanding challenges, companies need to get out in front of financial reporting issues before they become reputation-threatening. The increasing complexity of this environment drives the need for a risk-based process to sharpen management’s focus when evaluating internal controls related to financial reporting. For a pre-public entity, the understanding and continuous evaluation of an organization’s financial reporting risk profile (FRRP) is critical to senior management and directors. CONTENT AREA: Articles TOPICS: Accounting/Finance, Financial Reporting, Risk Management & Assessment, PCAOB, Financial and Credit Risk March 29, 2010 IFRS in the United States This section of Protiviti's "Guide to International Financial Reporting Standards" addresses common questions concerning the impact and implications of the International Financial Reporting Standards (IFRS) conversion process. Topics covered are: When is the adoption of IFRS required in the United States and by what companies? Will the adoption of IFRS be required for nonpublic companies? And, is early adoption of IFRS allowed? CONTENT AREA: Questions & Answers TOPICS: Accounting/Finance, Financial Reporting, Change Management, IFRS March 22, 2010 SEC Publishes Interpretive Guidance on Climate-Change Disclosure (证交会发布有关气候变化的披露准则解释指引) 2010年1月27日，美国证券交易委员会（简称“证交会”）经投票后决定向上市公司提供解释指引，以指导其在应对涉及气候变化的商业活动或法律事项时应如何运用证交会现行披露准则。证交会的解释指引着重强调了四个方面可能会引发有关气候变化的披露，而这些披露主要体现在主要风险因素的披露、管理层讨论与分析（MD&A），以及在某些情况下，企业的业务描述部分。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Compliance, Laws & Regulations, China March 22, 2010 U.S. and Foreign Nonaccelerated Filers and Foreign Locations This section of Protiviti's "Guide to The Sarbanes-Oxley Act" addresses common questions focused on U.S. and foreign nonaccelerated filers and foreign locations. Topics covered are: Is Section 404 applied differently to smaller companies? Based on experiences to date by U.S. and foreign filers, what are the lessons for companies who have just begun their compliance efforts? And, when evaluating the severity of control deficiencies, how do foreign private issuers apply the reference to “interim financial statements” included in the definition of a material weakness? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Taxation, Cross Border & Non-US Issues, Sarbanes-Oxley Act, External Auditor, Section 404 - Internal Control Reporting, IFRS March 1, 2010 Accelerated Filing Requirements This section of Protiviti's "Guide to The Sarbanes-Oxley Act" addresses common questions focused on accelerated filing requirements. Topics covered are: For purposes of applying the SEC’s market capitalization test, what is meant by “public float”? When determining the applicability of the accelerated filing requirements under the SEC’s Section 404 rules, when is the measurement date for purposes of quantifying a company’s “market capitalization”? And, if a company is below the market capitalization threshold now, but subsequently exceeds the threshold, when must it begin to comply with the accelerated filing deadlines? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Sarbanes-Oxley Act, Internal Controls, Section 404 - Internal Control Reporting March 1, 2010 IFRS or Country-Specific GAAP: Who’s on First? – Questionnaire There are many practical issues surrounding the possible future use of IFRS by U.S. public companies or by entities in other countries using a different version of GAAP not conformed to IFRS. This questionnaire considers these issues and the ramifications of transitioning from country-specific GAAP to IFRS. CONTENT AREA: Checklists & Questionnaires TOPICS: Financial Reporting, Audit Committee & Board, Change Management, IFRS February 22, 2010 SEC Publishes Interpretive Guidance on Climate-Change Disclosure On January 27, 2010, the Securities and Exchange Commission (SEC) voted to provide public companies with interpretive guidance on existing SEC disclosure requirements as they apply to business or legal developments relating to the issue of climate change. As a result, the SEC has published interpretative guidance that highlights four areas as examples where climate change may trigger disclosure requirements, primarily in the risk factors disclosure, management discussion and analysis (MD&A), and, in some cases, the company’s business description. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Compliance, Laws & Regulations February 15, 2010 Getting Ready for the IFRS Ripple Effect The latest chapter of the Open Compliance & Ethics Group’s GRC Illustrated series explains how to start preparing for the transition from U.S. Generally Accepted Accounting Principles to International Financial Reporting Standards. CONTENT AREA: Articles TOPICS: Financial Reporting, Audit Committee & Board, Change Management, IFRS February 8, 2010 Process Optimization Poll This week’s poll question asks: Regardless of whether your organization is private or public, does senior management view business and IT process, policies and internal controls as equal in importance to developing products, increasing revenue and cutting costs? CONTENT AREA: Articles Support TOPICS: Accounting/Finance, Financial Reporting, Audit Committee & Board, IT Infrastructure, Change Management February 8, 2010 SEC Provides Transition Guidance for New Proxy Disclosure Enhancements (证交会就新的委托书信息披露规定提供过渡性指引) 2009年12月22日，美国证券交易委员会(简称“证交会”)发布过渡性指引，说明有关加强委托书和信息披露要求的新规定。生效日期令公司大感困惑，且不清楚在不同情况下的遵守日期。本快报针对以上问题及其他问题，就过渡性指引的内容作出归纳。 CONTENT AREA: Regulatory Updates TOPICS: Compensation & Benefits, Financial Reporting, Corporate Governance, Audit Committee & Board, Risk Management & Assessment, Reporting/Disclosure, China February 8, 2010 State of the Pre-IPO Market – Opportunities Ahead Advice for pre-IPO companies: Run your business as if you were already public. What does that mean? This means that while developing products, increasing revenue and cutting costs remain top priorities, the underlying business and IT processes, policies and internal controls demand similar attention. CONTENT AREA: Articles TOPICS: Accounting/Finance, Audit Committee & Board, Change Management, Financial Reporting, Initial Public Offering, IT Infrastructure February 1, 2010 Impact and Implications of IFRS Conversion This section of Protiviti's "Guide to International Financial Reporting Standards" addresses common questions concerning the impact and implications of the International Financial Reporting Standards (IFRS) conversion process. Topics covered are: Will IFRS reduce the current level of complexity that exists in financial reporting? Will IFRS improve the transparency of financial reporting? And, how will IFRS affect my organization’s business policies and procedures? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Audit Committee & Board, External Auditor, Change Management, IFRS February 1, 2010 Process Scalability and the Circle of Distrust Protiviti Managing Director Gordon Tucker and Director Philip Boken are joined by Joe Allanson, Senior Vice President and Controller for Salesforce.com, in an informative discussion about practical approaches to reducing manual effort and risk in the close, consolidate and reporting cycle. CONTENT AREA: Podcasts TOPICS: Close the Books, Financial Reporting, Change Management, Performance Management/Measurement February 1, 2010 Public Company Readiness: Getting Ready for Prime Time – Before the Market Does – Questionnaire When preparing for an initial public offering (IPO), it is vital to pay close attention to the underlying business and IT processes, policies and internal controls. This questionnaire focuses on certain aspects of the IPO preparation process and specific areas management should address – common financial reporting challenges, the close process, Sarbanes-Oxley compliance and IT infrastructure. CONTENT AREA: Checklists & Questionnaires TOPICS: Close the Books, Financial Reporting, Initial Public Offering, IT Controls, Sarbanes-Oxley Act, Segregation of Duties January 18, 2010 Capitalization and Fixed Asset Accounting Policy This policy provides guidelines for capitalizing, depreciating, transferring, disposing, and maintaining control of capital or fixed assets. It establishes standards and procedures to ensure that accounting for capital assets and depreciation is in compliance with management’s objectives. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting, Fixed Assets, Cost Management, Process-Level Control January 18, 2010 Cost Allocations and the Financial Close Cycle With the renewed focus on cost, organizations are refreshing their awareness of the impact of indirect costs on both margin and the bottom line. Consequently, they are developing a better understanding of the processes that support the capture, application and reporting of their indirect cost allocations. In many cases, though, the more sophisticated the allocation methodology, the greater the downstream impact on financial reporting processes. CONTENT AREA: Articles TOPICS: Close the Books, Financial Reporting, Cost Management, Performance Management/Measurement January 18, 2010 Impact of Indirect Costs Poll This week’s poll question asks: Does your organization have a renewed focus on the impact of indirect costs in 2010? CONTENT AREA: Articles Support TOPICS: Close the Books, Financial Reporting, Cost Management, Performance Management/Measurement January 18, 2010 SEC Provides Transition Guidance for New Proxy Disclosure Enhancements On December 22, 2009, the Securities and Exchange Commission (SEC) provided transition guidance with respect to the implementation of its new rules enhancing the information provided to shareholders in proxy and information statements. Questions have arisen as to exactly what that effective date means and how it is applied in different situations. This Flash Report summarizes the transition guidance addressing these questions. CONTENT AREA: Regulatory Updates TOPICS: Compensation & Benefits, Financial Reporting, Corporate Governance, Audit Committee & Board, Risk Management & Assessment, Reporting/Disclosure December 21, 2009 Overview of IFRS and Conversion This section of Protiviti's "Guide to International Financial Reporting Standards" addresses common questions concerning International Financial Reporting Standards (IFRS) and the related conversion process. Topics covered are: Is IFRS, as issued by the IASB, the same for all companies and industries in all countries? What is the role of the audit committee in implementing IFRS? And, what major activities and steps should be considered when developing a conversion project plan? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Audit Committee & Board, Risk Management & Assessment, Change Management, IFRS, Project Management December 14, 2009 Special Circumstances and Situations This section of Protiviti's "Guide to The Sarbanes-Oxley Act" addresses common questions concerning special circumstances and situations when complying with the Sarbanes-Oxley Act. Topics covered include: How are material acquisitions occurring during the fiscal year handled for purposes of determining the scope of the Section 404 assessment? How are divestitures of significant entities (or net assets) and discontinued operations considered for purposes of evaluating internal control over financial reporting? And, is monitoring of debt compliance within the scope of Section 404 compliance? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Investments & Foreign Exchange, Sarbanes-Oxley Act, Internal Controls, Section 404 - Internal Control Reporting December 7, 2009 Best Practices for Transitioning to IFRS As convergence toward a single global set of accounting standards gains steam, U.S. companies inevitably will encounter financial reporting challenges while preparing a transition plan. Details on how to overcome them are inside. CONTENT AREA: Articles TOPICS: Financial Reporting, Change Management, IFRS, Training & Development November 30, 2009 Financial Close Poll This week’s poll question asks: Has your organization recently undergone an initiative to improve the efficiency and effectiveness of the financial close cycle? CONTENT AREA: Articles Support TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Performance Management/Measurement November 30, 2009 Why the Financial Close Process Matters For many companies, the financial close process resides in the valley of “just getting the books closed.” Migration to the next plateau of maturity – “closing the books completely and efficiently” – is typically not an easy leap. While many companies continue to experience longer-than-necessary close cycles, inadequate analysis of results, duplication of efforts and overall process inefficiencies, few have the appetite to undertake a focused improvement effort, saying instead, “...we will focus on the close process next month…” As the economy continues to tighten, and more reporting requirements loom on the horizon, many organizations are now looking to drive greater efficiency and effectiveness into their close cycle. CONTENT AREA: Articles TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Performance Management/Measurement November 23, 2009 Process Scalability and the “Circle of Distrust” With the demands of today’s economy, most companies are being pressed to drive greater efficiency into their operations. Organizations in the technology, media and communications (TMC) industry are no different, and many would argue that they are feeling the pressure even more than those in other industries. Most TMC companies envision medium- to long-term improvements in their markets. Accordingly, many are focusing on efforts that drive increased efficiency and scalability into existing operations, often impacting finance and accounting processes. This article focuses on practical approaches to reducing manual effort and risk in the financial close, consolidate and reporting cycle. CONTENT AREA: Articles TOPICS: Change Management, Close the Books, Financial Reporting, Performance Management/Measurement, Spreadsheet Risk November 16, 2009 Revenue Recognition Questionnaire The purpose of this questionnaire is to document the revenue recognition review completed by the finance department. It evaluates whether persuasive evidence exists to support revenue recognition, the delivery method scheduled, and that established collection procedures exist. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Financial Reporting, Revenue, Sales Process & Marketing, Internal Controls November 9, 2009 Account Reconciliations Poll This week’s poll question asks: Does your organization primarily use spreadsheets to complete the account reconciliations? CONTENT AREA: Articles Support TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Performance Management/Measurement November 9, 2009 Reconciliations – A Sustainable Approach Despite years of increased focus on internal control over financial reporting, many companies continue to face significant risks associated with the completeness, accuracy, timeliness, quality and efficiency of their account reconciliations. Striving to enhance their comfort with financial statement certifications, executives are grappling with how to obtain greater visibility into the status of this process. They are realizing that reliance on spreadsheets burdens the company with continued dependence on a manual process that is prone to error and requires significant, continued dedication of staff. CONTENT AREA: Articles TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Performance Management/Measurement, Spreadsheet Risk October 19, 2009 Month-End Close Template - Sample The purpose of this month-end close document is to ensure that all responsible employees are fully aware of their assignments and their responsibilities are completed on time, properly and accurately in accordance with the company’s financial closing and reporting internal control structure. This document is organized by ERP cutoff tasks and activities broken down into pre-close, recurring entries, reconciliations, internal controls and analysis & reporting. CONTENT AREA: Samples TOPICS: Accounting/Finance, Financial Reporting, Close the Books, Internal Controls, Segregation of Duties October 19, 2009 Public Company Readiness: Getting Ready for Prime Time – Before the Market Does (为上市做好准备：厚积薄发，抢占先机) 随着美国IPO（首次公开招股）市场近期已有回暖迹象，公司在着重开发新产品、提高收入及降低成本的同时，务必密切关注相关的业务及信息技术流程、政策及内部控制。这种经营方式近似于一家管理完善的上市公司。本文将重点讨论IPO就绪准备计划，包括开展就绪工作评估的必要性和管理层必须关注的具体领域，例如，常见的财务报告问题、关账流程、《萨班斯－奥克斯利法案》合规，以及信息技术基础设施等。 CONTENT AREA: Newsletters TOPICS: Audit Committee & Board, China, Close the Books, Financial Reporting, Initial Public Offering, Internal Audit, Internal Audit Administration, Internal Controls, IT Infrastructure, Sarbanes-Oxley Act, Self-Assessment October 12, 2009 SEC Says IFRS Convergence Back in Play The SEC has put convergence of U.S. and international accounting standards back on the agenda, after months of speculation that the idea might be abandoned. SEC Chief Accountant James Kroeker said convergence of U.S. GAAP and International Financial Reporting Standards is “going to be a priority of the staff over the coming weeks and months.” CONTENT AREA: Articles TOPICS: Financial Reporting, PCAOB, IFRS October 5, 2009 Confronting the Challenges of Manual Journal Entries Management, regulators and investors demand better information faster, which adds pressure to already compressed timelines for closing the books. One obstacle standing in the path of financial close-process efficiency and effectiveness is the volume and complexity of manual journal entries. While there will always be a need for manual journal entries in the close process, opportunities for improvement can be found in reducing the volume of entries, increasing standardization and automating certain types of transactions. CONTENT AREA: Articles TOPICS: Accounting/Finance, Close the Books, Financial Reporting, GRC, Performance Management/Measurement, Risk Management & Assessment, Spreadsheet Risk October 5, 2009 Manual Journal Entries Poll This week’s poll question asks: Would your organization benefit from reducing the number of manual journal entries created during the financial close process? CONTENT AREA: Articles Support TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Risk Management & Assessment, Performance Management/Measurement, Journal Entries, GRC September 28, 2009 Account Reconciliation Policy (Sample 2) This policy establishes standards and procedures for ensuring that a company performs account reconciliations in compliance with management’s objectives. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Outsourcing/Co-sourcing/Shared Services, SAS 70 September 7, 2009 What Is Meant by “Internal Control Over Financial Reporting” and “Disclosure Controls and Procedures”? This section of Protiviti's "Guide to The Sarbanes-Oxley Act" addresses common questions concerning internal control over financial reporting and disclosure controls and procedures. Some topics covered are: What are examples of disclosure controls and procedures that generate required disclosures? How is internal control over financial reporting distinguished from disclosure controls and procedures? And, are there examples of internal control over financial reporting that fall outside the realm of disclosure controls and procedures? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Sarbanes-Oxley Act, PCAOB, Reporting/Disclosure, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting August 31, 2009 When Is Section 404 Effective for Different Companies? This section of Protiviti's "Guide to the Sarbanes-Oxley Act" addresses common questions concerning when Sarbanes-Oxley Section 404 is effective for different companies. Some topics covered are: When do companies have to comply with the Section 404 requirements? When is the internal control report due? And, is a quarterly assessment required of internal control over financial reporting? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Sarbanes-Oxley Act, PCAOB, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting August 17, 2009 Applicability of Section 404 Requirements This section of Protiviti's "Guide to The Sarbanes-Oxley Act" addresses commonly asked questions concerning the Sarbanes-Oxley Section 404 requirements. Some topics covered are: Which companies are subject to the requirements of Section 404? Are foreign companies subject to the requirements of Section 404? And, does Section 404 apply to the MD&A disclosures? CONTENT AREA: Questions & Answers TOPICS: Financial Reporting, Nonprofit Industry, Financial Services Industry, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting August 17, 2009 Fixed Assets Poll This week’s poll question asks: Does your organization have strong internal controls in place over fixed assets? CONTENT AREA: Articles Support TOPICS: Financial Reporting, Fixed Assets, Sarbanes-Oxley Act, Internal Controls, Process-Level Control August 17, 2009 Ghost and Zombie Assets: It’s Midnight. Do You Know Where Your Assets Are? Internal controls over fixed assets are sadly lacking in many companies. Often gross fixed assets can be one third of total company assets. If fixed asset balances are material to a company, and hence should be subject to good internal controls, why are internal controls often lacking in strength? CONTENT AREA: Articles TOPICS: Financial Reporting, Fixed Assets, Sarbanes-Oxley Act, Internal Controls, Process-Level Control August 17, 2009 Internal Disclosure Certification Policy (Sample 2) The purpose of this policy is to document an organization’s internal disclosure certification process. These steps are designed to assist executive management responsible for signing external disclosure certifications related to the company’s internal controls over financial reporting. CONTENT AREA: Policies & Procedures TOPICS: Financial Reporting, Corporate Governance, Audit Committee & Board, Sarbanes-Oxley Act, Reporting/Disclosure, Internal Controls, GRC August 10, 2009 SEC Proposes New Proxy Disclosures and Solicitation Enhancements (证交会建议加强委托书的信息披露和征集工作) 2009年7月10日，美国证券交易委员会（简称“证交会”）刊发题为“加强委托书的信息披露与征集”（Proxy Disclosures and Solicitation Enhancements）的征求意见稿。该提案对证交会相关规则进行了修订，目的是加强对薪酬政策和公司治理等事项的披露。相关披露要求旨在提高委托书的信息披露质量。建议草案的公众评论期将于9月15日结束。本快报将就建议草案作进一步阐述。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Payroll, Corporate Governance, Audit Committee & Board, Compliance, Internal Controls, China, GRC July 27, 2009 Value Creation in an Economic Downturn – The CFO as a Dilemma Manager Companies are being confronted with a difficult dilemma. On one hand, they need to save cost and restructure their operations due to the economic crisis. On the other hand, they need to invest and innovate to create long-term value for shareholders, clients, employees and other stakeholders. The CFO plays a key role in managing this “business split,” but how should it be done? CONTENT AREA: Articles TOPICS: Accounting/Finance, Financial Reporting, Internal Controls, Performance Management/Measurement July 20, 2009 SEC Proposes New Proxy Disclosures and Solicitation Enhancements On July 10, 2009, the Securities and Exchange Commission (SEC) issued for public comment a proposed rule, Proxy Disclosures and Solicitation Enhancements. This proposal includes amendments to the Commission’s rules aimed at enhancing disclosures pertaining to compensation and corporate governance matters. These disclosure requirements are intended to improve the quality of certain disclosures included in proxy statements. Comments on this proposal are due on September 15, 2009. Additional details are discussed in this Flash Report. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Payroll, Corporate Governance, Audit Committee & Board, Compliance, Internal Controls, GRC July 13, 2009 IPO Process Poll This week’s poll question asks: Do you agree that processes, policies and internal controls should be top priority during the IPO process? CONTENT AREA: Articles Support TOPICS: Close the Books, Financial Reporting, IT Infrastructure, Internal Audit, Audit Committee & Board, Internal Audit Administration, Self-Assessment, Sarbanes-Oxley Act, Internal Controls July 13, 2009 Public Company Readiness: Getting Ready for Prime Time – Before the Market Does With the recent uptick in the IPO market in the United States, it is vital to pay close attention to the underlying business and IT processes, policies and internal controls even while new product development, revenue generation and cost management remain top priority. This approach is similar to how a well run public company operates. This issue of The Bulletin focuses on certain aspects of the IPO preparation process, including the need for a readiness assessment along with specific areas management should address – common financial reporting challenges, the close process, Sarbanes-Oxley compliance and the IT infrastructure. CONTENT AREA: Newsletters TOPICS: Audit Committee & Board, Close the Books, Financial Reporting, Initial Public Offering, Internal Audit, Internal Audit Administration, Internal Controls, IT Infrastructure, Sarbanes-Oxley Act, Self-Assessment July 6, 2009 Fraud Examination and Forensic Accounting (Sample Syllabus) This course discusses standards, ethics, and practice of operational auditing particularly as it concerns the fraud examining profession. After completing this class students will have the capability to recognize ethical issues in accounting; be effective communicators; assess situations and apply various analytical methods to solve business problems, and gain a global business perspective. CONTENT AREA: Professor Resources TOPICS: Accounting/Finance, Ethics, Financial Reporting, Fraud June 29, 2009 SEC Commissioner Weighs In on Expanded Disclosure of the Effects of Compensation on Short-Term Risk Taking (证交会表示应就薪酬制定如何影响公司短期风险水平扩大披露范围) 证交会主席Mary Schapiro女士于今日就高管薪酬的披露问题在一份声明中发表意见。她指出，证交会正在“积极拟定一揽子新的委托披露规则，旨在为薪酬制定提供更多的视角和指引。”根据相关规则，上市公司须就其薪酬制定准则对公司风险水平的影响，以及这些准则所引发的行为对公司长远发展的影响进行分析和评估。这些问题受到广泛关注，是因为许多人认为，由于各公司薪酬激励计划所倡导的激励措施从长远上损害了股东价值，因此部分导致了当前经济危机的爆发。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Payroll, Corporate Governance, Audit Committee & Board, Enterprise Risk Management, China, GRC June 22, 2009 FASB Moves to Codify US GAAP (美国财务会计准则委员会将美国公认会计准则汇编成典) 我们在2009年5月21日的甫瀚快报中，曾报道过美国财务会计准则委员会(FASB)预计将于2009年7月1日正式批准以新的方式编纂会计准则。2009年6月3日，FASB一致确定“FASB会计准则汇编”(FASB Accounting Standards CodificationTM)将成为美国公认会计准则(US GAAP)的惟一官方资料来源。另外，FASB今天同时决定，该汇编将自截止于2009年9月15日或之后日期的中期和年度会计期间开始生效。据此，于日历年末结算的公司将在其第三季度中期财务报表中首次应用该汇编。 CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, External Auditor, Compliance, Laws & Regulations, China, GRC June 15, 2009 Disclosure Committee Questionnaire The purpose of this questionnaire is to ensure that all necessary quarterly financial reporting disclosures are addressed, and any changes to these disclosures are explained by management. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Financial Reporting, Corporate Governance, Audit Committee & Board, Sarbanes-Oxley Act, Internal Audit, Internal Controls, Section 404 - Internal Control Reporting, GRC June 15, 2009 SEC Commissioner Weighs In on Expanded Disclosure of the Effects of Compensation on Short-Term Risk Taking On Wednesday, June 10, 2009, SEC Chair Mary Schapiro commented on executive compensation disclosures in a statement issued by the Commission. In her remarks, she noted that the SEC is “actively considering a package of new proxy disclosure rules that will provide further sunshine on compensation decisions.” These rules would require companies, among other things, to disclose how the issuer – and its board – manages risk and analyze how their compensation practices impact risk-taking and the implications for long term corporate health of the behaviorial outcomes of those compensation practices. This Flash Report reports further on Commissioner Schapiro’s remarks. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Payroll, Corporate Governance, Audit Committee & Board, Enterprise Risk Management, GRC June 8, 2009 FASB Moves to Codify US GAAP In our Flash Report dated May 21, 2009, we reported that on July 1, 2009, the FASB was expected to formally approve a change in the way accounting standards are organized. On June 3, 2009, the FASB unanimously confirmed that the FASB Accounting Standards CodificationTM will become the single official source for authoritative nongovernmental U.S. GAAP. In addition, the FASB decided that the Codification will be effective for interim and annual periods ending on or after September 15, 2009. Under this guidance, calendar year-end companies would initially apply the Codification to their third-quarter interim financial statements. CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, External Auditor, Compliance, Laws & Regulations, GRC April 13, 2009 IFRS Convergence Poll This week’s poll question asks: Has internal audit started planning for its role in the IFRS convergence? CONTENT AREA: Articles Support TOPICS: Financial Reporting, Internal Audit, Audit Testing, IFRS, Project Management April 13, 2009 Time to clear up misunderstandings about IFRS convergence The timetable for U.S. companies to move from GAAP to IFRS is not set in stone, but such a transition is moving inexorably forward, either through conversion or convergence. While many companies have taken baby steps toward the changeover, a surprising number have yet to act. Such stasis may be due, in part, to a lot of “fuss” clouding the truth behind convergence. It is time to address those concerns and get a clear understanding of what is involved. CONTENT AREA: Articles TOPICS: Financial Reporting, Internal Audit, Audit Testing, IFRS, Project Management March 22, 2009 Financial Reporting Timeline - Sample This sample timeline outlines steps needed to complete the financial reporting process. It helps management define roles and responsibilities and meet specified deadlines. CONTENT AREA: Samples TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Reporting/Disclosure, Best Practices March 2, 2009 Audit Committee Agenda Poll This week’s poll question asks: Has your audit committee’s agenda changed since one year ago? CONTENT AREA: Articles Support TOPICS: Financial Reporting, Internal Audit, Audit Committee & Board, Risk Management & Assessment, Sarbanes-Oxley Act, External Auditor, Internal Controls, GRC March 2, 2009 Intercompany Accounts Reconciliation Template - Sample Performing regular account reconciliations contributes to strong internal controls. The purpose of this sample is to provide a template to document the reconciliation of the intercompany payable and receivable accounts. CONTENT AREA: Samples TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Internal Controls March 2, 2009 Setting the 2009 Audit Committee Agenda Since we published Issue 1 of Volume III of The Bulletin, Setting the 2008 Audit Committee Agenda, a year ago, the world has changed – dramatically. This issue of The Bulletin provides observations and ideas for boards and their audit committee regarding matters they should consider to get through the trying times in the year ahead. In addition to the unfinished business, we see several additional mandates on the minds of members on audit committees. These eight items on the list are discussed further in this issue. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Internal Audit, Audit Committee & Board, Risk Management & Assessment, Sarbanes-Oxley Act, External Auditor, Internal Controls, GRC February 23, 2009 Managing M&A in a downturn Some companies, across all industries, will emerge from this current economic downturn as leaders while others will be considerably weakened. Given the growing disparity between strong and weak players, many industries will experience substantial consolidation in the near future. Knowing there are few companies sufficiently capitalized to pursue an M&A strategy, this article outlines some of the challenges companies will face when pursuing this type of strategy in the current economic environment. CONTENT AREA: Articles TOPICS: Accounting/Finance, Financial Reporting, Compliance, Internal Controls, GRC January 12, 2009 IFRS Impact Poll This week’s poll question asks: Has your organization outlined how IFRS will impact its internal and external financial reports? CONTENT AREA: Articles Support TOPICS: Financial Reporting, Change Management, Compliance, Laws & Regulations, Project Management, IFRS, GRC January 12, 2009 Preparing for 'Crunch Time' in the Transition to IFRS For many companies significant changes in their accounting practices are appearing on the horizon, given impetus by proposals from the SEC. That agency is calling for a migration from U.S. GAAP to IFRS. Such a convergence seems inevitable, and smart companies will want to prepare sooner, rather than later. In this two part series, Protiviti’s Steve Hobbs, shares his insights on what topics executives should address for a smooth transition to IFRS in a series of questions and answers. CONTENT AREA: Articles TOPICS: Change Management, Compliance, Financial Reporting, Laws & Regulations, Project Management, IFRS, GRC January 5, 2009 IFRS Poll This week’s poll question asks: Has internal audit addressed with management the role it will take during the IFRS transition? CONTENT AREA: Articles Support TOPICS: Financial Reporting, Change Management, Compliance, Laws & Regulations, Project Management, GRC January 5, 2009 SEC Proposes Roadmap for Potential Required Use of IFRS in 2014, with Use Permitted in 2009 for Eligible Filers (证交会出台关于国际财务报告准则执行路线图的建议-可能于2014年被要求强制执行，合格编报者被允许提前至2009年) 2008年11月14日，美国证券交易委员会（证交会）针对美国发行人向其提交报告这一活动，出台了关于采用国际财务报告准则(IFRS)（由国际会计准则理事会发布）编制财务报表的路线图建议。该路线图列出了几项“达标要求”（milestones），一旦它们获得实现，证交会将要求美国发行人于2014年起执行IFRS，但前提是证交会确信其符合公众利益并能够惠及投资者。换句话说，路线图旨在要求证交会注册公司（美国编报公司）于2014年开始采用IFRS编制财务报表，同时，它也允许合格编报者提前从2009年起执行该准则（于2010年编报）。 CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Change Management, Compliance, China, IFRS, GRC December 22, 2008 FS Insights 2008: The Year in Review FS Insights, a publication from Protiviti’s Financial Services Practice, provides timely coverage of issues facing the financial services industry. This issue provides a review of the year 2008 -- it was an annus horriblis. CONTENT AREA: Newsletters TOPICS: Accounting/Finance, Financial Reporting, Financial Services Industry, Financial and Credit Risk December 22, 2008 Impact of the Current Financial Crisis on the Energy and Utilities Industry (当前金融危机对欧美能源业及公用事业的冲击) 我们正处在金融市场的非常时期，几乎所有经济行业难以幸免。即便是因能源价格居高不下(虽然最近已逐渐下调)而受惠的能源业及公用事业，也一样要面对资本上涨和融资困难的挑战。这些难题不仅影响能源业及公用事业，也波及至其业务伙伴，例如金融机构和建筑承包商。针对上述问题，甫瀚于近期发布了题为“当前的金融危机对能源及公用事业行业的冲击”的《甫瀚通讯─应对全球金融危机》。 CONTENT AREA: Newsletters TOPICS: Financial Reporting, Energy & Utilities Industry, Financial Services Industry, Compliance, Financial and Credit Risk, China, GRC November 24, 2008 Impact of the Current Financial Crisis on the Energy and Utilities Industry This period of unprecedented turmoil in the financial markets is affecting nearly every sector of our economy. Even the energy and utilities industry faces potential challenges in accessing capital and funding, including their business partners such as financial institutions and construction contractors. This issue of the Global Financial Crisis Bulletin summarizes the key potential impacts of the financial crisis across various sectors within this energy and utilities industry. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Energy & Utilities Industry, Financial Services Industry, Compliance, Financial and Credit Risk, GRC November 24, 2008 PCAOB Update on Proposed New Auditing Standards and Audit Considerations in the Current Economic Environment
(上市公司会计监管委员会快报 - 基于当前经济环境，PCAOB提出新的审计准则及应考虑的相关审计事项) 10月22日,PCAOB与常务咨询小组召开会议讨论了若干问题,即当前的经济环境会如何影响重大错报的风险及财务报表审计,以及PCAOB是否应发布指引以协助审计师实施审计工作。10月21日,PCAOB建议推出七项新的审计准则，实施更有效的以风险为基础的审计方法。本文将就此予以详细说明。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Financial Services Industry, Sarbanes-Oxley Act, Internal Controls, PCAOB, Risk Management & Assessment, Section 404 - Internal Control Reporting, China, Financial and Credit Risk, GRC November 24, 2008 SEC Proposes Roadmap for Potential Required Use of IFRS in 2014, with Use Permitted in 2009 for Eligible Filers November 14, 2008, the SEC proposed a roadmap for the potential use of financial statements prepared in accordance with IFRS – as issued by the International Accounting Standards Board – by U.S. issuers for purposes of their filings with the Commission. This Flash Report provides further insights as to the milestones and the roadmap including the staged implementation for all U.S. registrants beginning in 2014. It also discusses how the proposed roadmap changes or clarifies the SEC’s position reported in the Commission’s August 27th meeting. CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Change Management, Compliance, IFRS, GRC November 3, 2008 PCAOB Update on Proposed New Auditing Standards and Audit Considerations in the Current Economic Environment On October 22, the PCAOB held a meeting with its Standing Advisory Group to discuss how the current economic environment affects the risk of material financial misstatements and the resulting impacts on financial statement audits, and whether the PCAOB should issue guidance to assist auditors in the audit process. In a separate meeting, on October 21, the PCAOB proposed seven new auditing standards that support a more effective and risk-based audit approach. These two developments are detailed in this Flash Report. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Financial Services Industry, Sarbanes-Oxley Act, Internal Controls, PCAOB, Risk Management & Assessment, Section 404 - Internal Control Reporting, Financial and Credit Risk, GRC October 13, 2008 Relationship with External Auditors Policy This policy outlines the relationship between a company and its external auditors. This document also discusses the importance of providing external auditors adequate information and other related company responsibilities. CONTENT AREA: Policies & Procedures TOPICS: Financial Reporting, Corporate Governance, Audit Committee & Board, Sarbanes-Oxley Act, External Auditor, Entity-Level Control, GRC October 13, 2008 SEC Proposes Roadmap for IFRS Adoption in the United States by 2014 (证交会快报-2014年起采用国际财务报告准则，证交会为此制定路线图) 8月27日，美国证券交易委员会(以下简称证交会)五位委员经投票一致决定，就美国所有发行人从2014年开始自愿或强制采用国际财务报告准则（IFRS）的建议向公众刊发一份计划，以征求公众意见。根据该计划，约110家美国公司可以更早开始遵循国际准则的标准。有关此计划的公众意见应在计划刊登于《联邦宪报》60天内提交证交会。 CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Corporate Governance, Audit Committee & Board, Compliance, China, IFRS, GRC September 22, 2008 Manual Journal Entries in the Consolidations System This questionnaire focuses on the financial close process, specifically manual journal entries in the consolidation system. This document includes a process description, key risks, expected key controls, and key questions to ask during this process review. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Internal Controls, Process-Level Control September 8, 2008 SEC's Advisory Committee on Improvements to Financial Reporting Releases Final Report (证交会快报-证交会财务报告改进咨询委员会发布最终报告) 2008年8月1日，证券交易委员会(简称“证交会”)收到其财务报告改进咨询委员会（简称“委员会”）出具的最终报告。该报告就如何使财务信息为投资者更好地应用和理解提出了25项建议。应2008年7月14日快报中的承诺，我们在此对最终建议进行更详尽的概括。 CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Corporate Governance, Audit Committee & Board, Internal Controls, Laws & Regulations, China, IFRS, GRC September 8, 2008 SEC Proposes Roadmap for IFRS Adoption in the United States by 2014 On August 27, the five SEC commissioners of the Securities and Exchange Commission (SEC) voted unanimously to publish for public comment a proposed roadmap that could lead to the voluntary or mandatory use of International Financial Reporting Standards (IFRS) by all U.S. issuers beginning in 2014. Under this plan, about 110 companies could start following international rules even earlier. This Flash Report provides further insights as to the milestones and the roadmap, as envisioned by the Commission.
CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Corporate Governance, Audit Committee & Board, Compliance, IFRS, GRC September 1, 2008 Eliminate Intercompany Transactions and Consolidate Financial Data This questionnaire focuses on the financial close process, specifically elimination of intercompany transactions and consolidating financial data. This document includes: a process description, key risks, expected key controls, and key questions to ask during this process review. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Close the Books, Financial Reporting, Internal Controls, Process-Level Control September 1, 2008 SEC Provides Guidance to Open Up Use of Corporate Web Sites for Disclosures to Investors (证交会快报- 证交会就如何利用公司网站向投资者披露信息提供指引) 2008年7月30日，证券交易委员会（简称“证交会”）全体投票后一致同意，针对上市司利用其公司网站，作为向投资者披露重要信息的有效渠道这一举措，证交会将就上市公司在这一过程中如何遵守证券法为其提供新的指引。该项指引以解释指引而不是规则形式刊发，旨在为那些考虑利用公司网站向投资者发布信息的公司提供相关说明和指导，包括互动信息、概括性信息和第三方信息链接。该指引的刊发源于证交会财务报告改进咨询委员会的一项建议。此项建议是于2008年2月份的进度报告中向证交会提出的，即：就重大非公开信息选择性披露过程中出现的有关证交会规则的问题和疑问，证交会应做出明确解释。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Technology, IT Controls, China August 11, 2008 SEC's Advisory Committee on Improvements to Financial Reporting Releases Final Report On August 1, 2008, the Securities and Exchange Commission (SEC) received the final report of the SEC Advisory Committee on Improvements to Financial Reporting. The report contains 25 recommendations to make financial information more useful and understandable to investors. This Flash Report provides ten key message points summarizing the essence of the proposed changes. It also reports the Committee’s outline of the 25 recommendations in an Appendix, which organizes the recommendations along the four chapters in the Advisory Committee’s report. CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Corporate Governance, Audit Committee & Board, Internal Controls, Laws & Regulations, IFRS, GRC August 11, 2008 SEC Provides Guidance to Open Up Use of Corporate Web Sites for Disclosures to Investors On July 30, 2008, the SEC voted unanimously to provide new guidance to public companies about how to comply with the securities laws while developing their web sites to serve as an effective means for disseminating important information to investors. Issued in the form of an interpretive release rather than as a rule, the SEC's guidance is intended to provide information for companies considering providing investors with interactive content on their web sites, as well as summary information and links to third-party information. This Flash Report provides a brief summary of the four parts of this new guidance. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Technology, IT Controls August 4, 2008 Consolidations System Chart of Accounts Maintenance This questionnaire focuses on the financial close process, specifically consolidation system chart of accounts maintenance. This document includes: a process description, key risks, expected key controls, and key questions to ask during this process review. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Financial Reporting, Process-Level Control, Close the Books July 28, 2008 SEC Proposes Rule to File Financial Statements in Interactive Data Format
(证交会快报 - 建议以交互式数据格式提交财务报表) 证券交易委员会（简称“证交会”）于本周宣布，他们经过一致投票后决定，要求各公司采用可扩展商业报告语言（简称“XBRL”），以交互式数据格式提交财务报表。该规则最早将于明年予以采纳，证交会计划利用三年的时间来实现该规则的全面实施。公众评论期将持续至七月中旬。本快报将说明以交互式数据格式提交财务报表的目的，并概述证交会的三年计划以及受计划影响的公司。 CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Technology, IT Strategy, Accounting Organizations, Performance Management/Measurement, China July 28, 2008 Stock Compensation - A Perspective on Historical and Current Financial Controls (KLplus Risk Brief) The 2007 proxy season ushered in significant challenges for companies that grant stock options, restricted stock and other equity-based compensation awards. In addition to SOX compliance, the changing accounting rules for equity-based awards also have specific implications for executive compensation disclosures. To assist companies in addressing the challenges posed by the requirements, this risk brief provides two conceptual frameworks and leading trends to shed light on the elements and integrated activities of a well-controlled stock compensation process. CONTENT AREA: Risk Briefs TOPICS: Compensation & Benefits, Compliance, Financial Reporting, Internal Controls, Sarbanes-Oxley Act, GRC July 21, 2008 Creating Transparency into Your Largest Risk Exposures (甫瀚通讯 - 为公司的重大风险建立透明度) 2008年1月，一家全球性金融机构公布其因非法交易而遭受了70亿美元的亏损。这次事件令银行监管程序受到质疑，尤其是当内控报告的结论是银行官员未能对可疑交易的警告信号进行跟进。 CONTENT AREA: Newsletters TOPICS: Financial Reporting, Investments & Foreign Exchange, Financial Services Industry, Internal Audit, Risk Management & Assessment, Enterprise Risk Management, China, GRC July 21, 2008 Goodwill / Indefinite Lives Impairment Analysis - Sample Template This template was designed to assist companies in the periodic evaluation of potential impairment of Goodwill and Indefinite Lived Intangibles. Note that this is a tool to assist companies in the summarization of their impairment evaluations under U.S. GAAP, but is not intended to promote one valuation model/methodology over another. CONTENT AREA: Samples TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, Audit Testing, Internal Controls, Process-Level Control July 21, 2008 SEC's Advisory Committee on Improvements to Financial Reporting Releases Draft Final Report and Holds Public Meeting On July 11, 2008, the SEC Advisory Committee on Improvements to Financial Reporting held a public meeting to discuss and deliberate its draft report detailing recommendations to reduce the complexity of the financial reporting process and increase the usefulness of financial information to investors. This Flash Report provides a brief summary of the major themes being addressed by the Advisory Committee’s report. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act July 14, 2008 Control Environment Audit Work Program This audit work program focuses on the control environment component of the COSO Framework. Sample risks addressed in this audit work program include: a code of conduct and other policies does not exist regarding acceptable business practices, conflicts of interest, or expected standards of ethical and moral behaviour; adequate staffing levels are not maintained to effectively perform required tasks; and an independent governing body that provides oversight for management's activities does not exist. CONTENT AREA: Work Programs TOPICS: Financial Reporting, Human Resources, Corporate Governance, Audit Committee & Board, Internal Audit, Audit Testing, Entity-Level Control, GRC July 14, 2008 Corporate Finance Function Poll This week’s poll question asks: "Has your organization recently realigned the corporate finance function to increase its overall effectiveness?" CONTENT AREA: Articles Support TOPICS: Accounting/Finance, Accounts Receivable, Financial Reporting, Revenue, Internal Controls, Performance Management/Measurement July 14, 2008 Credit Rating Analysis of Enterprise Risk Management at Nonfinancial Companies: Are You Ready? (非金融机构的企业风险管理信用评级分析：你准备好了么？) 现今，企业风险管理开始得到来自新领域的有力支持：信用评级分析。2007年11月，标准普尔（以下简称“标普”）发布名为《征求意见：非金融机构信用评级中的企业风险管理分析》的意见稿（以下简称“《征求意见稿》”），表明该评级机构有意就其评估的所有公司的企业风险管理质量进行打分，并在其评级报告中纳入企业风险管理部分。 CONTENT AREA: Newsletters TOPICS: Financial Reporting, Corporate Governance, Audit Committee & Board, Internal Audit, Risk Management & Assessment, Enterprise Risk Management, Entity-Level Control, China, GRC July 14, 2008 Transforming the Finance Function from Underperformer to Strategic Partner Within any organization, the finance function is one of the most critical components to company operations. However, when handicapped by process inefficiencies or actual deficiencies in operations, the finance function may become a drain on operational effectiveness and a liability to strategic planning. This article discusses how transforming the finance function into a more effective resource is an objective that takes on even greater urgency when the rest of the organization is undergoing reengineering and transformation initiatives. CONTENT AREA: Articles TOPICS: Accounting/Finance, Accounts Receivable, Financial Reporting, Revenue, Internal Controls, Performance Management/Measurement, Close the Books June 30, 2008 Current Trends in Fraud and its Detection This article discusses the basic nature of fraud, including the major accounting scandals of the last decade, and the role of auditors. The article also examines recent standards, rules, and acts, and discusses whether they will have an impact to deter financial statement frauds from occurring in the future. CONTENT AREA: Articles TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, Fraud June 23, 2008 Credit Rating Analysis of Enterprise Risk Management at Nonfinancial Companies: Are You Ready? ERM initiatives appear to be gaining strong support from a new source: credit rating agencies. This issue is a reissuance of a prior issue of The Bulletin by the same title. The prior issue was based on Standard & Poor’s (S&P) November 2007 Request for Comment: Enterprise Risk Management Analysis for Credit Ratings of Nonfinancial Companies (RFC). After receiving comments from over 60 respondents, S&P released in May 2008 Enterprise Risk Management: Standard & Poor’s to Apply Enterprise Risk Analysis to Corporate Ratings. This reissued edition of The Bulletin has been updated to reflect the program outlined in the May 2008 release. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Corporate Governance, Audit Committee & Board, Internal Audit, Risk Management & Assessment, Enterprise Risk Management, Entity-Level Control, GRC June 23, 2008 Generate Financial Statements and Disclosures This questionnaire focuses on the financial close process, specifically generating financial statements and related disclosures. This document includes: a process description, key risks, expected key controls, and key questions to ask during this process review. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, Audit Testing, Internal Controls, Process-Level Control June 23, 2008 SEC Approves Extension for External Auditor’s Section 404 Attestation for Smaller Public Companies and Begins Data Collection for Cost-Benefit Study The long awaited and expected decision by the SEC to approve a one-year extension to the Section 404(b) auditor attestation requirement for smaller companies is finally here. On June 20, 2008, the SEC approved an extension of the Section 404(b) requirement applicable to smaller public companies so that it will not be required until fiscal years ending on or after December 15, 2009. CONTENT AREA: Regulatory Updates TOPICS: Section 404 - Internal Control Reporting, Sarbanes-Oxley Act, Internal Controls, Financial Reporting June 16, 2008 U.S. Subprime Crisis: Risk Management’s Next Steps The financial industry is hard at work trying to move beyond the U.S. subprime problems that surfaced in 2007. As part of the recovery effort, financial institutions are reconsidering their credit practices, quantitative models, governance structures and risk management activities. Each of these areas will experience change as banks and their boards and executives adapt to the current economic and credit environment. CONTENT AREA: Articles TOPICS: Accounting/Finance, Credit & Collections, Financial Reporting, Financial Services Industry, Compliance, Financial and Credit Risk, GRC June 9, 2008 Financial Close Process – Sample Schedule Improvement Action Plan The purpose of this sample is to document the activities performed as part of the monthly financial close process and identify areas where task duration can be improved upon. As part of this effort, users are encouraged to document the responsible person for each financial close task, current task duration, and desired task duration. CONTENT AREA: Samples TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, Audit Testing, Performance Management/Measurement, Close the Books June 2, 2008 Analyze Financial Results This questionnaire focuses the financial close process, specifically reviewing and analyzing consolidated financial information and business segment information. This document includes: a process description, key risks, expected key controls, and key questions to ask during this process review. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, Audit Testing, Internal Controls, Process-Level Control May 26, 2008 SEC Proposes Rule to File Financial Statements in Interactive Data Format On Wednesday, May 14, the SEC approved a proposed rule requiring companies – by as early as next year – to file financial statements in an interactive data format using eXtensible Business Reporting Language (XBRL). The SEC's plan would entail a three year phase-in. The comment period on the proposal runs through mid-July. This Flash Report explains the purpose of reporting in XBRL interactive data format and outlines the SEC’s three year plan as well as the companies affected by that plan. CONTENT AREA: Regulatory Updates TOPICS: Accounting/Finance, Financial Reporting, Technology, IT Strategy, Accounting Organizations, Performance Management/Measurement May 26, 2008 Upload Data from General Ledger to the Consolidations System This questionnaire focuses the financial close process, specifically when data is uploaded the general ledger (G/L) to the consolidations system. This document includes: a process description, key risks, expected key controls, and key questions to ask during this process review. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, IT Audit, Risk Management & Assessment, Process-Level Control, GRC May 12, 2008 The PCAOB Issues Strategic Plan for 2008 - 2013
(上市公司会计监管委员会发布2008-2013年度战略计划) 2008年4月2日，上市公司会计监管委员会(以下简称“委员会”)发布了未来五年战略计划。该计划的目的是为委员会的程序和运作制定指引，并阐述委员会的使命和愿景、核心价值、关键的环境因素、目的和目标，以及绩效标准。该计划的宗旨是务求委员会的程序、运作及预算与该组织机构的整体使命、目的和目标相一致。计划深入说明了上述准则制定方针，以及可能会对委员会程序产生影响的风险因素，令兴趣人士对委员会有更清晰的认识。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Project Management, Section 404 - Internal Control Reporting, China April 21, 2008 U.S. Treasury Secretary Paulson Releases Blueprint for Financial Regulatory Reform On March 31, 2008, Treasury Secretary Paulson presented to the American public the U.S. Department of the Treasury’s Blueprint for a Modernized Financial Regulatory Structure. This marked the conclusion of an evaluation process initiated in March 2007 by industry leaders and policymakers, prior to the peak of the subprime mortgage crisis and industry duress. The Blueprint lays out a staged transition from the rules-based supervisory structure of the past 75 years to an objectives-based structure designed to make regulation of U.S. financial services more effective and appropriate for modern financial markets. To provide a path for this evolution, the proposed changes are allocated into three time frames: the short term (in the next year or two), the intermediate term (in a two- to eight-year period), and the long term. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Corporate Governance, Audit Committee & Board, Financial Services Industry, Ethics, Fraud, GRC April 14, 2008 The PCAOB Issues Strategic Plan for 2008 - 2013 On April 2, 2008, the Public Company Accounting Oversight Board (PCAOB) issued its five-year strategic plan. This plan is developed, and updated annually, to guide the organization’s programs and operations. It details the PCAOB’s mission, vision, core values, key environmental factors, goals and objectives, and performance metrics. The plan is intended to align the Board’s programs, operations, and budget with the organization’s overall mission, goals and objectives. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Project Management, Section 404 - Internal Control Reporting, IFRS April 7, 2008 Creating Transparency into Your Largest Risk Exposures In January 2008, a global financial institution reported a $7 billion loss that occurred when unauthorized trading positions were closed. This substantial loss, among others, is yet another reminder that there are severe penalties if the largest risk exposures are not identified in a timely manner, properly monitored and managed effectively. This issue of The Bulletin suggests approaches for improving transparency into an entity’s most significant risk exposures, with the objective of minimizing the risk of unwanted surprises. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Investments & Foreign Exchange, Financial Services Industry, Internal Audit, Risk Management & Assessment, Enterprise Risk Management, GRC March 10, 2008 IFRS or Country-Specific GAAP: Who’s on First There are practical issues surrounding the possible future use of International Financial Reporting Standards (IFRS) by U.S. public companies, or by entities in other countries using a different version of GAAP not conformed to IFRS. This issue of The Bulletin considers these issues and the ramifications of transitioning from country-specific GAAP to IFRS. CONTENT AREA: Newsletters TOPICS: Accounting/Finance, Financial Reporting, Cross Border & Non-US Issues, Canada, European Union, Sarbanes-Oxley Act, External Auditor, Internal Controls, IFRS January 21, 2008 Setting the 2008 Audit Committee Agenda Over the last year new issues have arisen that warrant the audit committee’s attention. This issue of The Bulletin provides observations and ideas for boards and their audit committees regarding matters they should consider in 2008. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Corporate Governance, Audit Committee & Board, Internal Audit, Risk Management & Assessment, Sarbanes-Oxley Act, Internal Controls, Enterprise Risk Management, Audit Planning, IFRS, GRC January 14, 2008 Financial Spreadsheet Controls Policy (财务电子数据表控制政策) 此政策不但适用于财务意义重大的由用户开发或维护的微软Excel电子数据表，亦适用于各类桌面工具，例如Access数据库、Crystal报告(Crystal Reports)、Queries及公司所确认的其它财务意义重大的桌面工具。这些工具在此文件中将统称为 “终端用户计算机工具” (简称“EUC”)。 CONTENT AREA: Policies & Procedures TOPICS: China, Financial Reporting, GRC, IT Controls, Risk Management & Assessment, Software, Spreadsheet Risk, Technology January 7, 2008 Guide to the Sarbanes-Oxley Act: Internal Control Requirements Frequently Asked Questions Regarding Section 404 Since the third edition of Protiviti's Guide to the Sarbanes-Oxley Act: FAQs Regarding Section 404 was released in August of 2004, enough changes have occurred to warrant an update to this publication. This fourth edition considers the SEC’s interpretive guidance to management and incorporates the PCAOB’s major revisions to Auditing Standard No. 2. It includes questions directed to foreign filers and U.S. domestic non-accelerated filers; it is updated for lessons learned since publication of the third edition; and also incorporates responses to frequently asked questions that both the SEC and PCAOB staff have published since the last edition of this publication. CONTENT AREA: Protiviti Booklets TOPICS: Audit Committee & Board, Corporate Governance, Enterprise Risk Management, Financial Reporting, GRC, Initial Public Offering, Internal Audit, Internal Controls, PCAOB, Reporting/Disclosure, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting November 26, 2007 Monthly Financial Close Process Checklist The purpose of this checklist is to document the activities performed as part of the monthly financial close process at a company. For each step covered in this checklist, users are encouraged to document the responsible person, date due, and whether the task has been completed and reviewed. This tool has been updated with additional general financial close procedures and steps related to recording fixed assets. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounting/Finance, Accounts Receivable, Cash & Treasury, Financial Reporting, Fixed Assets, Revenue, Close the Books November 26, 2007 The Board Finalizes the Revised Auditing Standard AS5 (上市公司会计监管委员会快报_审计准则修订获落实) 上市公司会计监管委员会落实了对审计准则的修订，投票通过了对财务报告内部控制审计的最终准则，以及一项相关独立性条款。新准则《第5号审计准则-财务报告内部控制审计与财务报表审计的整合》将取代《第2号审计准则》。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, Entity-Level Control, China November 26, 2007 The SEC Approves Auditing Standard - AS5 (上市公司会计监管委员会快报-AS5获证交会通过) 证券交易委员会（证交会）今天宣布通过《第5号审计准则-财务报告内部控制审计与财务报表审计的整合》（简称《第5号审计准则》），新准则将取代上市公司会计监管委员会于3年前颁布的内部控制审计准则-《第2号审计准则》。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, China November 12, 2007 Financial Service Agency Issues Internal Control Report System Q&A On October 2, 2007, the Financial Service Agency issued the “Internal Control Report System Q&A,” in which answers to frequently asked questions regarding the Internal Control Reporting System were addressed to set good precedents in practice for J-SOX execution. This publication contains some of these questions and answers with commentary, accompanied by references, where necessary, to the Guidelines for Audit Concerning Internal Control over Financial Reporting. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Japan, Internal Audit, Internal Audit Administration, Compliance, Internal Controls, Segregation of Duties, GRC November 5, 2007 U.S. Domestic Income and Property Tax Review Audit Work Program This work program focuses on key tax processes and systems related to a company’s U.S. operations. This review focuses on related business strategies and policies, business and risk management processes, management reports, methodologies, people and organizational structure, and systems and data. CONTENT AREA: Work Programs TOPICS: Financial Reporting, Taxation, Internal Audit, Audit Testing, Internal Controls September 24, 2007 SFAS 13 Lease Criteria Template The purpose of this document is to provide a template to use when analyzing whether a lease should be classified as a capital or operating lease for financial reporting purposes. This template is based on the criteria outlined in SFAS 13. Note: This template contains formulas as outlined in the instructions. CONTENT AREA: Samples TOPICS: Financial Reporting, Fixed Assets, Purchasing & Accounts Payable, Internal Audit, Audit Testing September 17, 2007 Due Diligence Checklist – Example 2 The purpose of this document is to provide a list of items to consider when performing due diligence on a potential acquisition. This checklist is intended to be a list of financial items to consider during this process. This list should be customized to fit the nature of the acquisition process. CONTENT AREA: Checklists & Questionnaires TOPICS: Accounts Receivable, Financial Reporting, Fixed Assets, Investments & Foreign Exchange, Purchasing & Accounts Payable, Revenue, Taxation September 17, 2007 Financial Due Diligence Report Template - Sample The purpose of this document is to provide a financial analysis of a company being purchased by another company. This report template can be used during the process of performing financial due diligence on company being acquired. CONTENT AREA: Samples TOPICS: Accounts Receivable, Financial Reporting, Fixed Assets, Materials Management & Inventory, Revenue September 10, 2007 Board Issues Report Summarizing Results of 2006 Inspections of Auditing Standard No. 2 Implementation (上市公司会计监管委员会快报_2007年5月1日) 上个月，上市公司会计监管委员会（以下简称“委员会”）发表了一份报告，总结了其于2006年依据《第2号审计准则--财务报告内部控制审计与财务报表审计结合进行》对近275家注册会计师事务所进行的审查结果。本次审查报告提供了一些待《第5号审计准则》尘埃落定后，委员会将对审计师持何种期望的观点和见解。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, China, Entity-Level Control August 27, 2007 SAS 112: Are You Ready? External financial statement auditors are required to evaluate all internal control deficiencies they find during the course of their work, and report to the audit committee (or other designated governing body) any deficiencies deemed to be significant or a material weakness under the new Statement on Auditing Standard (SAS) 112. This article asks: Are you ready for SAS 112? CONTENT AREA: Articles TOPICS: Financial Reporting, Internal Audit, Compliance, Segregation of Duties, GRC August 6, 2007 Journal Entries Audit Work Program The purpose of this audit work program is to review procedures regarding the creation, posting and retention of journal entries. This includes determining if evidence exists and supports the amount booked in the accounting system; proper approval; and completeness and accuracy of each journal entry. CONTENT AREA: Work Programs TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, Audit Testing, Internal Controls July 30, 2007 The SEC Approves Auditing Standard (AS5) As expected, on July 25, 2007 the SEC announced that it has approved Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements. The new standard replaces the previous internal control auditing standard, Auditing Standard No. 2, issued by the PCAOB three years ago. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Section 404 - Internal Control Reporting July 23, 2007 Executive and Board Compensation Trends Executive and director compensation has been one of the hottest topics in board governance during the past year. The new SEC disclosure rules have significantly altered the executive compensation disclosure landscape. At the Foley & Lardner LLP sixth annual National Directors Institute on March 8, 2007 in Chicago, participants in the “Executive and Director Compensation Trends” session discussed their experiences with and thoughts on the new reporting requirements. CONTENT AREA: Articles TOPICS: Compensation & Benefits, Financial Reporting, Human Resources, Payroll, Corporate Governance, Audit Committee & Board, GRC July 23, 2007 The SEC’s New Guidance on Section 404: What It Means to You In May 2007, the SEC approved its interpretive guidance to management on implementing Section 404 of the Sarbanes-Oxley Act of 2002. What’s new with respect to this guidance? What hasn’t changed? What’s the impact and opportunity for management and the audit committee? This issue of The Bulletin explores these and other questions. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Sarbanes-Oxley Act, Internal Controls, PCAOB, Section 404 - Internal Control Reporting July 16, 2007 Recent Developments in Financial Reporting Focus on Significant Potential, Pending or Newly Required Reporting This Flash Report focuses on recent financial reporting developments which may or will significantly affect the form and content of financial reports for public companies. At the same time, during recent months, several new important accounting pronouncements became effective. The contents of this Flash Report are divided into two groups – (1) potential, pending and newly required public reporting and (2) new accounting pronouncements. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Cross Border & Non-US Issues, Accounting/Finance, Internal Controls, Entity-Level Control, IFRS July 2, 2007 Model Audit Rule Best Practices for the Insurance Industry The Model Audit Rule is an annual assessment requiring executive certification. To comply with the Model Audit Rule requirements, management needs a comprehensive internal controls evaluation approach. This article describes a COSO-based mechanism for complying with the rule. CONTENT AREA: Articles TOPICS: Financial Reporting, Financial Services Industry, Internal Controls, Risk Management & Assessment, GRC June 18, 2007 Financial Reporting Risk Profile (FRRP) Poll This week's poll question asks, "Does your organization understand and evaluate its FRRP regularly?" CONTENT AREA: Articles Support TOPICS: Financial Reporting, Audit Committee & Board, Internal Controls June 18, 2007 Glossary of Inventory-Related Terms This glossary contains frequently used terms related to the inventory process. This document includes terms such as: activity-based costing, cycle counting, inventory roll-forward, and work order. CONTENT AREA: Guides TOPICS: Consumer Products & Retail Industry, Financial Reporting, Manufacturing & Distribution Industry, Materials Management & Inventory June 18, 2007 The Financial Reporting Risk Profile: Getting Ahead of the Curve This issue of The Bulletin, the last of a succession of four issues following Issue 7, addresses the process of understanding and continuously evaluating an organization’s financial reporting risk profile (FRRP), and why this process is important to senior management and directors. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Audit Committee & Board, Internal Controls May 28, 2007 The Board Finalizes the Revised Auditing Standard (AS5) On May 24, 2007, the PCAOB voted to issue a final standard on auditing internal control over financial reporting, as well as a related independence rule and conforming amendments to the Board’s interim auditing standards. The new standard, Auditing Standard No. 5, An Audit of Internal Control over Financial Reporting Performed that is Integrated with an Audit of Financial Statements, supersedes Auditing Standard No. 2 (AS2). This flash report discusses the changes that are effective for fiscal years ending on or after November 15, 2007. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, Entity-Level Control May 7, 2007 Board Issues Report Summarizing Results of 2006 Inspections of Auditing Standard No. 2 Implementation In April 2007, the PCAOB issued a report following its 2006 inspections of the audits of internal control over financial reporting (ICFR) by registered public accounting firms in accordance with Auditing Standard No. 2 (AS2). While AS2 has no future because it is being revised by the forthcoming AS5, this inspection report is significant in that it illustrates expectations the Board has of auditors and their performance in conjunction with an audit of ICFR. In its report, the PCAOB indicated that auditors can benefit from further lessons learned. The Flash Report lists these important lessons and provides Protiviti commentary. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, External Auditor, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, Entity-Level Control May 7, 2007 Making Section 404 Compliance Cost-Effective While Improving Quality and Sustainability As companies take stock of their focus on "pass/fail" compliance with Section 404 of the Sarbanes-Oxley Act, it is time to reflect on the objectives and costs of the effort. While the SEC's new guidance to management and the PCAOB's revamping of AS2 will help improve the cost-effectiveness, senior management has a more important opportunity to focus on quality and sustainability. This article asserts that every organization should take a step back to evaluate how to transition from the narrow focus on pass/fail compliance to a cost effective, sustainable and value-added process. CONTENT AREA: Articles TOPICS: Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, Financial Reporting, Self-Assessment, Best Practices, External Auditor, PCAOB, Entity-Level Control April 30, 2007 Glossary of Commonly Used Acronyms and Terms This glossary contains frequently used terms related to financial reporting, internal audit, corporate governance, technology, and risk management processes. This document has been updated with terms such as: accrual accounting, accrued expense, accrued income, accrued interest, balance sheet, cash basis, income statement, and statement of cash flow. CONTENT AREA: Guides TOPICS: Accounting/Finance, Financial Reporting, Internal Audit, Internal Audit Administration, Sarbanes-Oxley Act, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting April 23, 2007 Canadian Securities Administrators Issue for Comment Revisions to National Instrument 52-109 Certification of Disclosure in Issuers’ Interim and Annual Filings On March 30, 2007, the Canadian Securities Administrators (CSA) released for comment a revised National Instrument 52-109 Certification of Issuers’ Interim and Annual Filings. The Proposed Instrument reflects the approach to reporting on internal control over financial reporting that the CSA previously announced in Staff Notice 52-313 on March 10, 2006. This Flash Report discusses the key features of the Proposed Instrument. CONTENT AREA: Regulatory Updates TOPICS: Canada, Compliance, Financial Reporting, Internal Controls, Laws & Regulations, GRC April 16, 2007 Research Analyst Views of Corporate Governance Is corporate governance a non-factor for analysts? Or is it, in fact, an issue that analysts take into consideration, specifically when dealing with long-term investors? This publication summarizes business leaders’ thoughts on the role of and importance that corporate governance plays in a research analyst's mind. CONTENT AREA: Articles TOPICS: Financial Reporting, Corporate Governance, Audit Committee & Board, Sarbanes-Oxley Act, Internal Controls, Compliance, GRC March 26, 2007 Stock Options Process Flow This stock option process flow focuses on the following areas: grant process, exercise of options, terminating employees with outstanding stock options, and roll-forward of database activity. This document can be used as a general guide to understand and review these processes. Organizations should continuously update and monitor the process flows to ensure that they accurately reflect business operations. CONTENT AREA: Process Flows TOPICS: Compensation & Benefits, Compliance, Financial Reporting, Payroll, GRC March 5, 2007 Share-Based Payments (FAS 123R) Poll The 2007 proxy season ushers in significant new challenges for companies that grant stock options, restricted stock and other equity-based compensation awards. In addition to SOX compliance, the new and changing accounting rules for equity-based implications also have specific implications for executive compensation disclosures. This poll question asks: “How would you rank your company’s preparedness for compliance with Statement of Financial Accounting Standards No. 123(R), “Share-Based Payments”?” CONTENT AREA: Articles Support TOPICS: Financial Reporting, Compliance, Compensation & Benefits, GRC March 5, 2007 Stock Compensation – A Perspective on Historical and Current Financial Controls The 2007 proxy season ushers in significant new challenges for companies that grant stock options, restricted stock and other equity-based compensation awards. In addition to SOX compliance, the new and changing accounting rules for equity-based awards also have specific implications for executive compensation disclosures. To assist companies in addressing the challenges posed by the new requirements, this article provides two conceptual frameworks and leading trends to shed light on the elements and integrated activities of a well-controlled stock compensation process. CONTENT AREA: Articles TOPICS: Compensation & Benefits, Compliance, Financial Reporting, Internal Controls, Sarbanes-Oxley Act, GRC January 29, 2007 Project Management Process – Monitoring, Scope Changes, Forecasting, and Contract Closing Process Flow This process flow focuses on the project management process. It addresses the risk that project costs and revenues are not accurately presented in the financial statements or customer deliverables are improperly prepared. Also included throughout the process flow are controls to mitigate associated risks. CONTENT AREA: Process Flows TOPICS: Accounts Receivable, Budgeting, Financial Reporting, Internal Audit, Internal Audit Administration, Project Management January 22, 2007 Payroll Process - SAS 70 Review Report Sample The SAS 70 report is intended to communicate, from auditor to auditor, the testing performed around the outsource provider’s internal controls, particularly controls over IT processes. This report provides an example of how to communicate the findings of a Type II SAS 70 review when a company outsources the processing of its employee payroll checks. It assess how the results of the report impact the company’s SOX compliance process. CONTENT AREA: Samples TOPICS: Compliance, Financial Reporting, IT Controls, Payroll, Sarbanes-Oxley Act, SAS 70, GRC January 1, 2007 What's New with the Board's Recent Proposals to Revise Auditing Standard No. 2 Based on Protiviti’s review of the recently published PCAOB materials, this Flash Report summarizes what is new with respect to the PCAOB’s proposals and is intended to assist interested parties in understanding the nature and scope of the changes in the Board’s direction to auditors performing an audit of internal control over financial reporting (ICFR). CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor January 1, 2007 What's New with the Board's Recent Proposals to Revise Auditing Standard No. 2 (上市公司会计监管委员会对《第2号审计准则》作出的最新修订建议) 2006年12月19日，上市公司会计监管委员会全体成员经过投票，一致通过就发布有关建议准则及规则并征询公众意见的决议，该建议准则及规则将取代现行的《第2号审计准则》。早前于2006年12月19日发布的委员会快报突出强调这些建议是基于委员会公开会议的陈述和会谈所作出的。本期快报更加详细地归纳出委员会的最新修订建议，目的在于帮助相关利益群体理解委员会对审计师执行有关财务报告内部控制审计指引变化的性质和范围。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor, China December 19, 2006 PCAOB Proposes Revised Auditing Standard on Internal Control over Financial Reporting On December 19, 2006, the Public Company Accounting Oversight Board (PCAOB) voted unanimously to issue proposed standards and rules for public comment that will replace Auditing Standard No. 2 (AS2). If issued and approved, these proposals will produce (a) two new auditing standards, (b) a new rule and (c) a new amendment to the Board’s interim standards. This flash report provides a overview of the proposals and a summary of the key changes. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor December 19, 2006 PCAOB Proposes Revised Auditing Standard on Internal Control over Financial Reporting (上市公司会计监管委员会建议对有关财务报告内部控制的审计准则作出修订) 2006年12月19日，上市公司会计监管委员会（以下简称“委员会”）全体成员经过投票，一致通过就发布有关建议准则及规则并征询公众意见的决议，该建议准则及规则将取代现行的《第2号审计准则》。如获发布和批准，这些建议将产生：(a) 两项新的审计准则，(b) 一项新的规则，及(c) 有关委员会临时准则的一项修订。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor, China December 18, 2006 Proper reconciliations speed closings, improve accuracy, cut costs Tightened SEC filing deadlines and month-end close requirements have created the need for companies to reconcile accounts, close the books and file financial reports more quickly. Unfortunately, a large percentage of companies are struggling with this process. This article focuses how to automate the reconciliation process and shares Accenture’s experience in automating this process for thousands of ledger accounts. CONTENT AREA: Articles TOPICS: Accounting/Finance, Cost Management, Financial Reporting, Technology, Internal Controls, Performance Management/Measurement, Sarbanes-Oxley Act, Software, Close the Books December 11, 2006 PCAOB Announces the Nature of the Forthcoming Proposed Revisions to Auditing Standard No. 2 The PCAOB announced an open meeting for Tuesday, December 19, 2006 to consider proposing for public comment a new auditing standard to replace the Board’s existing Auditing Standard No. 2 (AS2) on an integrated audit of both internal control over financial reporting (ICFR) and the financial statements. This flash report summarizes the five goals that the Board's proposal will address. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor December 11, 2006 PCAOB Announces the Nature of the Forthcoming Proposed Revisions to Auditing Standard No. 2 (上市公司会计监管委员会公布对第2号审计准则的建议修订内容) 上市公司会计监管委员会（简称PCAOB）今天宣布，将于12月19日（星期二）举行公开会议，以征求公众意见，以考虑制定一项新的审计准则以取代PCAOB现有的有关对财务报告内部控制及财务报表进行整合审计的第2号审计准则。在PCAOB召开公开会议之前，美国证券交易委员会（简称SEC）也将召开一次公开会议，预计届时SEC将发布针对管理层的指引，并且可能会对404条款的若干方面做出精简。SEC目前定于12月13日召开此会议。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor, China November 27, 2006 Sarbanes-Oxley 404 Compliance Project Testing Guidelines and Documentation Standards Presentation An efficient and organized testing strategy is an important part of complying with Sarbanes-Oxley (SOX) Section 404. This presentation serves as a guide to train SOX project teams in testing Section 404 key controls and documenting testing results. It incorporates the importance of independent testing by Internal Audit to lessen the work required by the external auditor. CONTENT AREA: Guides TOPICS: Financial Reporting, Internal Controls, Project Management, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, Training & Development, Entity-Level Control November 20, 2006 Financial Reporting (External) Audit Work Program The objective of this audit work program is to evaluate the operating effectiveness of internal controls identified in the external financial reporting process. The audit work program specifically focuses on controls related to the earnings release, filing Forms 10-Q and 10-K, and debt compliance sub-processes. CONTENT AREA: Work Programs TOPICS: Financial Reporting, Internal Controls, Reporting/Disclosure, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting November 6, 2006 PCAOB Staff Signals Potential Revisions to Auditing Standard No. 2 Earlier this year the PCAOB announced a plan to revise Auditing Standard No. 2 (AS2). That plan was announced in the aftermath of the joint roundtable conducted with the SEC in May. In a recent article published by CFO.com on October 27, 2006, Thomas Ray of the PCAOB staff outlined in an interview several changes to AS2 that the Board was considering. This Flash Report summarizes the points made in the article and provides Protiviti commentary. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor, Entity-Level Control October 2, 2006 Financial Reporting and General Ledger Control Self Assessment Questionnaire This is an example of a self assessment questionnaire that can be presented to managers or process owners before conducting an audit. It is intended to help the Internal Audit department understand existing controls around financial reporting and general ledger processes. CONTENT AREA: Checklists & Questionnaires TOPICS: Financial Reporting, Self-Assessment, Internal Controls, Process-Level Control, Segregation of Duties October 2, 2006 Financial Reporting and General Ledger Control Self Assessment Questionnaire (财务报告及总账 – 控制自我评估调查问卷) 本文件是用于对控制进行自我评估的调查问卷样本，可以在审计工作开始前交于各经理或流程负责人填写。该调查问卷旨在帮助内审部门了解有关于财务报告及总帐流程的现有控制。 CONTENT AREA: Checklists & Questionnaires TOPICS: Financial Reporting, Self-Assessment, Internal Controls, China, Process-Level Control, Segregation of Duties September 25, 2006 SEC Chief Accountant Issues Guidance on Stock Option Dating The SEC has provided some commentary and guidance on “current events” regarding historical stock option activity in a letter on September 19, 2006 to the Chairs of the Committee on Corporate Reporting and the Center for Public Company Audit Firms. This Flash Report summarizes the messages in this letter. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, Compliance, Cross Border & Non-US Issues, Audit Committee & Board, Internal Controls, Section 404 - Internal Control Reporting, GRC September 25, 2006 Section 404 Compliance: Lessons Learned for the Next 12 Months Because many accelerated filers are either preparing for or executing their third year Section 404 assessments, it is a good time to reflect on lessons learned. This exercise can provide valuable insights not only for accelerated filers, but also for foreign filers and U.S. non-accelerated filers who must complete their Section 404 assessments by the end of calendar 2007. This issue of The Bulletin outlines seven lessons for improving processes and compliance approaches. A Supplement to this Bulletin provides additional lessons learned. CONTENT AREA: Newsletters TOPICS: Financial Reporting, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, Internal Controls September 18, 2006 SEC Staff Issues Staff Accounting Bulletin 108 to Clarify Consideration of the Effects of Prior Year Errors When Quantifying Misstatements in Current Year Financial Statements The U.S. Securities and Exchange Commission announced the release of a Staff Accounting Bulletin (SAB) that provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a potential current year misstatement. This Flash Report discusses the SEC staff’s point of view and the transition process for adopting the approach outlined in the SAB. Although SAB 108 is effective for fiscal years ending after November 15, 2006, early application is encouraged and the Flash Report discusses how that is accomplished. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, Compliance, Cross Border & Non-US Issues, Audit Committee & Board, Internal Controls, Section 404 - Internal Control Reporting, GRC September 11, 2006 Confessions of a Configurer: Managing Risk in the SAP Environment: Controlling Postings to Closed Accounting Periods (Part 3) This is the third in a series of articles whose goal is to explain the potential risk areas within SAP, how to test for them, and how to ask more pointed questions to ensure that risks are adequately managed around that configuration. This article discusses how to restrict the ability to post to a ‘closed’ accounting period to just a select few. CONTENT AREA: Articles TOPICS: Technology, Risk Management & Assessment, Accounting/Finance, Financial Reporting, Software, Segregation of Duties, GRC September 8, 2006 SOX Testing Review Checklist This excel-based template provides an example of how to review SOX testing documentation. You would use this review process sheet to document the reviewer’s comments and tester’s response. The excel form allows you to record comments related to the test plan, test execution, and documentation format. CONTENT AREA: Checklists & Questionnaires TOPICS: Financial Reporting, Sarbanes-Oxley Act, Process-Level Control August 14, 2006 Check Your Options: The Devil is in the Details The consequences of option timing can be severe, resulting in possible violations of SEC disclosure rules, misstatement of compensation expense and negative tax implications for companies as well as back taxes and penalties for executives. While today’s headlines focus primarily on the scrutiny over the dating of options, this Flash Report focuses on what management should be doing to address this challenging environment. It also encapsulates a number of risk areas related to stock options and their accounting challenges – potentially leading to the headlines of tomorrow. The Flash Report includes an executive summary outlining seven steps management should consider and tracks the roots of the current controversy and summarizes risk factors which, if unaddressed, could lead to future controversies. CONTENT AREA: Regulatory Updates TOPICS: Audit Committee & Board, Compliance, Corporate Governance, Financial Reporting, Payroll, GRC August 14, 2006 SEC Offers Further Relief from Section 404 Compliance for Smaller Public Companies and Many Foreign Private Issuers The SEC issued two releases to grant smaller public companies and many foreign private issuers further relief from compliance with Sarbanes-Oxley Section 404. These releases represent a follow-up on certain points articulated in the Commission’s plan to improve the implementation of Section 404, as announced on May 17, 2006. This Flash Report describes the Commission's recommendations and their impact on foreign private issuers, non-accelerated filers, and new public companies. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, Compliance, Cross Border & Non-US Issues, Audit Committee & Board, Internal Controls, Section 404 - Internal Control Reporting, GRC August 14, 2006 SEC Offers Further Relief from Section 404 Compliance for Smaller Public Companies and Many Foreign Private Issuers (证交会进一步放宽对小型上市公司与许多国外私人发行商关于404条款的合规要求) 证券交易委员会（以下简称" 证交会"）发布了两份文件，进一步放宽了小型上 市公司与许多国外私人发行商有关2002 年萨班斯-奥克斯利法案（以下简称" 萨奥法案"）的合规要求，特别是对有关404 条款的合规要求。这两份文件是对证交会于2006 年5 月17 日公布的404 条款实施改进计划的重要补充。该计划是在证交会就该问题召开的圆桌会议后予以公布的。证交会颁布这两份文件的目的是为证交会及上市公司会计监管委员会提供时间，以对404 条款的实施流程进行评估和改进，从而如Cox 主席所描述的那样" 提高投资者的效率并为其节约成本"。证交会颁布了两份文件，原因是其中一份文件是最终规则，另外一份则是建议书。 CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Sarbanes-Oxley Act, Compliance, Cross Border & Non-US Issues, Audit Committee & Board, Internal Controls, Section 404 - Internal Control Reporting, China, GRC August 7, 2006 Setting the 2006 Audit Committee Agenda Much has happened since 2003 when the SEC adopted rules mandated by The Sarbanes-Oxley Act of 2002 (SOX) that, among other things, expanded and formalized the responsibilities of audit committees. Rather than focus on history, this issue of The Bulletin provides observations and ideas for boards and their audit committees regarding matters they should consider during the coming year. CONTENT AREA: Newsletters TOPICS: Audit Committee & Board, Financial Reporting, Fraud, Internal Audit, Internal Controls, PCAOB, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, COSO, Enterprise Risk Management, Audit Planning, GRC July 10, 2006 SEC adds to pressure to shorten close process The SEC has compressed the time companies have to file their annual and quarterly reports, adding the pressure to speed-up the financial close process. The companies first impacted by these new reporting timelines are “large accelerated filers,” a group newly defined by the SEC. Protiviti’s Tom Batina outlines the new rules and provides a number of recommendations to help companies accelerate and improve their financial close process. CONTENT AREA: Articles TOPICS: Accounting/Finance, Financial Reporting, Internal Controls, Section 404 - Internal Control Reporting, External Auditor, Sarbanes-Oxley Act June 19, 2006 Financial Spreadsheet Controls Policy This policy outlines the roles and responsibilities of the IT department as well as the users and developers of spreadsheets and financially significant desktop tools (including Access, Crystal Reports, and Queries) to meet SOX requirements for control over financial reporting. CONTENT AREA: Policies & Procedures TOPICS: Financial Reporting, GRC, IT Controls, Risk Management & Assessment, Software, Spreadsheet Risk, Technology May 22, 2006 PCAOB Announces Plan to Improve Auditors’ Implementation of the Internal Control Reporting Provisions On May 17, 2006, the PCAOB announced a four-point plan to improve auditors’ implementation of the internal control reporting provisions of SOA. The Board’s announcement coincided with the SEC’s announcement of its plan for improving Section 404 implementation. The Board announced that it will proceed with four initiatives to assist with the implementation of Auditing Standard No. 2 (AS2). This report discusses these initiatives. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor May 15, 2006 Confessions of a Configurer: Managing Risk in the SAP Environment: Critical Considerations for using Sets in SAP (Part 2) This is the second in a series of articles whose goal is to explain the potential risk areas within SAP, how to test for them, and how to ask more pointed questions to ensure that risks are adequately managed around that configuration. This article asks: What are Sets, where are they used, and why you should be losing sleep if you don’t know? CONTENT AREA: Articles TOPICS: Technology, Risk Management & Assessment, Accounting/Finance, Financial Reporting, Software, Segregation of Duties, GRC April 17, 2006 Balance Sheet Review Audit Work Program This sample balance sheet review audit work program can be downloaded and reviewed for ideas and comparison with your own work programs. CONTENT AREA: Work Programs TOPICS: Internal Audit, Cash & Treasury, Financial Reporting March 27, 2006 Addressing Recent Changes Driven by International Convergence 2005 was another record breaking year for financial statement restatements -- many driven by international companies implementing the new International Financial Reporting Standards, but numerous others resulted from issues arising from the application of current standards, rules and guidance. This Flash Report provides explanations of changing standards and rules impacting a large number of companies and outlines key questions for management to assist them in understanding whether such changes impact their organization's financial reporting. CONTENT AREA: Regulatory Updates TOPICS: Cross Border & Non-US Issues, Corporate Governance, Accounting/Finance, Financial Reporting, IFRS, GRC March 27, 2006 Management Reporting (Revenue) Policy This policy addresses the regular reporting and analysis requirements relating to the revenue cycle that must to be produced and reviewed to control and manage the organization. CONTENT AREA: Policies & Procedures TOPICS: Financial Reporting, Revenue March 20, 2006 Confessions of a Configurer: Managing Risk in the SAP Environment: All SAP Journal Entries Balance – Right? (Part 1) This is the first in a series of articles whose goal is to explain the potential risk areas within SAP, how to test for them, and how to ask more pointed questions to ensure that risks are adequately managed around that configuration. This piece focuses on answering questions for Internal Audit and IT Audit about Special Purpose Ledger Documents which can be directly entered into a Special Purpose reporting ledger. CONTENT AREA: Articles TOPICS: Technology, Risk Management & Assessment, Financial Reporting, Software, Accounting/Finance, GRC March 6, 2006 Planning for a Faster Close – Are You Ready? Due to faster filing requirements by the Securities and Exchange Commission (SEC), U.S. companies have an added reason to speed up the financial close process. Even without the extra push from the SEC there are good reasons for companies to improve this process. In this article, Protiviti’s Gordon Tucker and Rachel Bell compare how large and small companies are performing in this area; discuss common hurdles; and provide leading financial close practices. CONTENT AREA: Articles TOPICS: Best Practices, Sarbanes-Oxley Act, Accounting/Finance, Financial Reporting, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting, Close the Books March 6, 2006 Section 404 Internal Control Material Weakness Dashboard - Results for the First 3 Quarters of Section 404 Disclosures As of November 15, 2005, 3,524 Section 404 Internal Control Opinions had been filed by SEC registrants. To deliver a more accurate picture of the number of adverse Section 404 opinions, Audit Analytics reviewed every Accelerated Filer financial restatement issued since April 2005 to determine whether a subsequent restatement of their 404 opinion has been filed or still needs to be filed. This publication details the primary drivers of adverse Section 404 opinions. CONTENT AREA: Survey Reports TOPICS: Sarbanes-Oxley Act, Financial Reporting, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting January 30, 2006 Auditing Anti-Money Laundering Compliance Beyond fulfilling a legal requirement, an anti-money laundering (AML) audit can also help to identify problems and areas for improvement in advance of a regulatory examination. Further, the AML audit will be used by regulators in setting the scope of their examination and identifying areas that may require more or less scrutiny. CONTENT AREA: Articles TOPICS: Compliance, Fraud, Internal Audit, Laws & Regulations, Financial Reporting, Financial Services Industry, GRC December 19, 2005 PCAOB Issues Report on Initial Implementation of Auditing Standard No. 2 On November 30, 2005, the PCAOB issued a report discussing issues identified during the Board's monitoring of the implementation of Auditing Standard No. 2 (AS2). The Board's report indicated that its monitoring has focused on whether the audit firms’ audit methodologies, and the firms’ execution of those methodologies, resulted in audits of internal control over financial reporting (ICFR) that are efficient and effective. This flash report summarizes the Board's observations. CONTENT AREA: Regulatory Updates TOPICS: Financial Reporting, Internal Controls, Sarbanes-Oxley Act, PCAOB, External Auditor December 19, 2005 SEC Amends Accelerated Filing Rules and Proposes New Deregistration Rules for Foreign Companies On December 14, 2005, the SEC adopted rules affecting acceleration of filing deadlines for periodic reports required under the Securities Exchange Act of 1934. The Commission also voted to publish for comment rule proposals concerning (a) the process whereby a foreign private issuer can terminate reporting requirements for classes of its securities registered under the Exchange Act and (b) the best-price rule on tender offers. This flash report expands on these topics. CONTENT AREA: Regulatory Updates TOPICS: Cross Border & Non-US Issues, Financial Reporting, Reporting/Disclosure December 12, 2005 Revenue Recognition (Software) Policy This sample outlines revenue recognition policies for the sale of software, services, and hardware. The document discusses topics such as order documentation, contingencies, payment terms, and the percentage-of completion method. CONTENT AREA: Policies & Procedures TOPICS: Technology, Revenue, Software, Financial Reporting, Accounting/Finance, Consumer Products & Retail Industry November 28, 2005 2005 Trends in the Corporate Governance Practices of the 100 Largest US Public Companies The 2005 proxy season is the second season during which most of the Top 100 companies were required to comply with the revised NYSE and Nasdaq listing standards and various provisions of the Sarbanes-Oxley Act of 2002. Certain trends have developed over the last three years as companies have implemented the listing standards and SEC rules adopted during that period. This publication presents the results of Shearman & Sterling LLP’s third annual survey of corporate governance practices of the 100 largest US companies. CONTENT AREA: Survey Reports TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Ethics, Audit Committee & Board, Internal Controls, GRC November 28, 2005 Sarbanes-Oxley and Revenue Recognition Practices One of the primary goals of the Sarbanes-Oxley Act (SOX) is to ensure that companies are reporting accurate revenue numbers. Consequently, revenue recognition policies have been under particular scrutiny. A new survey of 400 public and private companies found that more than half (55%) of all public companies have changed revenue recognition policies as a result of SOX, and that many of these changes were “moderate” to “significant”. In addition, revenue recognition was identified as one of the top three ongoing control risks and remediation challenges. CONTENT AREA: Articles TOPICS: Sarbanes-Oxley Act, Financial Reporting, Revenue, Internal Controls, IT Controls, Software November 21, 2005 Manual General Ledger Journal Entries Policy This sample policy ensures all manual journal entries to the Company’s general ledgers are properly prepared, supported by adequate documentation, reviewed, approved and recorded and that journal records are maintained in accordance with audit requirements. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting November 21, 2005 Section 404 Compliance: Planning for Next Year Year Two of Section 404 compliance for most accelerated filers is shaping up to be a year of incremental improvement. Management has taken a hard look at items such as number of key controls and testing scopes. This issue of The Bulletin focuses on some of the opportunities companies should consider as they plan for Year Three. Specifically it suggests that senior management take a fresh look at how to elevate the compliance activity to another level by formulating four specific plans. CONTENT AREA: Newsletters TOPICS: Sarbanes-Oxley Act, Self-Assessment, Financial Reporting, Fraud, Internal Controls, IT Controls, Entity-Level Control November 21, 2005 SOX – Section 404 – Documentation of Tax Compliance Process Report - Sample This is an example of how a Sarbanes-Oxley (SOX) team can report their findings related to the tax compliance process. This document reviews the business processes related to the tax compliance process, identifies manual and system-based controls, and documents issues and weaknesses. CONTENT AREA: Samples TOPICS: Sarbanes-Oxley Act, Cross Border & Non-US Issues, Taxation, Financial Reporting, Internal Controls, Section 404 - Internal Control Reporting September 26, 2005 General Ledger Account Reconciliations Policy This sample policy outlines a set of policies and procedures to reconcile the significant accounts contained in the general ledges of a Company and its subsidiaries to assure their accuracy. This document specifically discusses topics such as responsibility for this process, reconciliation completion and review steps, and disposition of unreconciled items. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting September 12, 2005 Next Generation Accountant: A New Outlook on a Timeless Profession This publication is the result of research undertaken by Robert Half International to gain insight into the future of the accounting and finance profession. The study confirmed that the accounting and finance profession is undergoing profound change. Looking into the future of the accounting and finance profession, the research examines topics such as the long-term impact of reforms and how future professionals should prepare for this changing environment. CONTENT AREA: Articles TOPICS: Internal Audit, Training & Development, Financial Reporting, Accounting/Finance, Internal Audit Administration September 12, 2005 Revenue Recognition Policy - Sample 2 This sample policy outlines a set of policies and procedures governing the revenue recognition process. This document specifically discusses topics such as sales, deferred sales, freight out, contra accounts to net sales, and applicable external guidance related to this process. CONTENT AREA: Policies & Procedures TOPICS: Internal Audit, Financial Reporting, Accounting/Finance, Revenue, Internal Audit Administration September 5, 2005 Inventory Management Control Questionnaire Inventory is an important asset for many companies as it is often a large asset on the company’s financial statements and represents a source of revenue in the near future through sales of the goods. This excel-based template provides a number of business activities and related control objectives for each activity. Within the questionnaire you can document items such as whether the control exists; whether it was designed properly; related test procedures; and management action plan for deficiencies. CONTENT AREA: Checklists & Questionnaires TOPICS: Sarbanes-Oxley Act, Compliance, Internal Controls, Materials Management & Inventory, Financial Reporting, Process-Level Control, GRC August 29, 2005 Fraud Schemes and Scenarios Addressing fraud is one of the ways companies are working to restore investor confidence to the marketplace. This checklist provides a list of various different fraud scenarios to be considered by company management. The purpose of this document is to reach a common understanding of the potential fraud schemes and scenarios included in an entity-level fraud risk assessment. CONTENT AREA: Guides TOPICS: Internal Audit, Sarbanes-Oxley Act, Fraud, Ethics, Financial Reporting, Audit Testing August 25, 2005 Wanted: A Cost-Effective Approach to Validating Performance of the Internal Control Structure This issue of The Bulletin discusses the implementation of a cost-effective Section 404 compliance process. It addresses the importance of integrating self-assessment, entity-level monitoring and independent tests of controls into a coordinated approach to build the body of evidence supporting management’s assertion in the annual internal control report. The Bulletin asserts that companies need to think more broadly than testing when planning a cost-effective approach to validating internal controls. CONTENT AREA: Newsletters TOPICS: Internal Controls, Sarbanes-Oxley Act, Self-Assessment, Financial Reporting, IT Controls, Project Management, Section 404 - Internal Control Reporting August 25, 2005 Wanted: A Cost-Effective Approach to Validating Performance of the Internal Control Structure (寻求：一种符合成本效益的方法，以验证内部控制架构的成效) 本期通讯着重阐述了如何通过整合自我评估、公司层面的监控，及独立的控制测试为支持管理层在年度控制报告中的声明提供证据来源。本通讯认为：公司在思考如何建立一种符合成本效益的方法来验证内部控制的有效性时，应扩宽视野，不应仅仅局限于执行测试这一形式。 CONTENT AREA: Newsletters TOPICS: Internal Controls, Sarbanes-Oxley Act, Self-Assessment, Financial Reporting, IT Controls, Project Management, Section 404 - Internal Control Reporting, China August 22, 2005 Process Level Documentation Requirements Memo – Sample This is an example of a memo used by a public company to describe the documentation they prepared for each process determined applicable to their Section 404 compliance efforts. The three levels of documentation described correlate to the priority rating of the financial statement elements and associated processes. Also included are descriptions of standard documentation types (process narrative, process flow, and risk control matrix). CONTENT AREA: Samples TOPICS: Sarbanes-Oxley Act, Compliance, Section 404 - Internal Control Reporting, Financial Reporting, Internal Controls, Process-Level Control, GRC August 15, 2005 Financial Elements and Business Process Prioritization Memo - Sample This is an example memo used to define the process a company used to explain the models they employed to prioritize the financial elements and processes for Section 404 purposes. This memo describes using the Process Classification Framework and the ranking criteria applied to financial statement elements and associated processes. The prioritization of these items helps define the extent of a company’s process-level documentation efforts. CONTENT AREA: Samples TOPICS: Sarbanes-Oxley Act, Compliance, Financial Reporting, Project Management, Internal Controls, Section 404 - Internal Control Reporting, GRC August 1, 2005 The Cost of Being Public in the Era of Sarbanes-Oxley Foley & Lardner LLP commissioned a study of what it was costing companies to be public in the Sarbanes-Oxley era. One aspect of the study involved statistical analysis of proxy statement data compiled and maintained by Standard and Poor’s Investment Services Custom Business Unit. In addition, Foley & Lardner distributed a survey to executives of both public and private companies. The results from this survey include year-over-year comparison of corporate governance trends in 2003, 2004 and 2005. CONTENT AREA: Survey Reports TOPICS: Sarbanes-Oxley Act, Cost Management, Compliance, External Auditor, Financial Reporting, Internal Controls, GRC July 18, 2005 Internal Auditing Around the World: This publication from Protiviti details internal audit best practices, processes and strategies being employed at some of the world’s most successful companies. Each of the 13 profiles describes successes, challenges and lessons learned by audit teams from a variety of industries and countries. The booklet was produced as part of the Performer Profile series on KnowledgeLeader. CONTENT AREA: Protiviti Booklets TOPICS: Airline Industry, Audit Testing, Australia, Automotive Industry, Consumer Products & Retail Industry, Cross Border & Non-US Issues, Financial Reporting, France, Internal Audit, Internal Audit Administration, Italy, Japan, Risk Management & Assessment, United Kingdom, GRC June 13, 2005 Direct Charges Audit Work Program This sample work program provides steps to review the direct charges process. Specific objectives of the work program include: understand procedures relating to the processing, payment, billing and reconciliation of direct charges; evaluate the control environment within the direct charge process; and investigate build up of direct charge transactions (debits) in the direct charge clearing account. CONTENT AREA: Work Programs TOPICS: Internal Audit, Financial Reporting, Accounts Receivable, Purchasing & Accounts Payable, Audit Testing April 18, 2005 The Next Step: Extracting Value from Sarbanes-Oxley Buried in the mountains of SOA documentation are opportunities to accelerate the month-end close process while reducing both cost and risk. The task-level process review required by SOA can help identify redundancies, inadequate systems tools and process quality issues that reduce effectiveness and efficiency. This article discusses key indicators that your process can be improved, how to start moving towards optimization, and what companies can expect to gain. CONTENT AREA: Articles TOPICS: Corporate Governance, Sarbanes-Oxley Act, Accounting Organizations, Accounting/Finance, Financial Reporting, Internal Controls, Close the Books, GRC March 28, 2005 Audit Committee Charter - Example 5 Audit committees assist the board in monitoring the integrity of the financial statements, external auditor qualifications, performance of the internal audit function and external auditors, and company’s compliance with regulatory requirements. This charter provides one example. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Accounting/Finance, Financial Reporting, GRC March 28, 2005 Audit Committee Charter - Example 6 Audit committees assist the board in monitoring the integrity of the financial statements, external auditor qualifications, performance of the internal audit function and external auditors, and company’s compliance with regulatory requirements. This charter provides one example. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Accounting/Finance, Financial Reporting, GRC March 28, 2005 Audit Committee Charter - Example 7 Audit committees assist the board in monitoring the integrity of the financial statements, external auditor qualifications, performance of the internal audit function and external auditors, and company’s compliance with regulatory requirements. This charter provides one example. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Accounting/Finance, Financial Reporting, GRC March 21, 2005 Audit Committee Charter - Example 1 Audit committees assist the board in monitoring the integrity of the financial statements, external auditor qualifications, performance of the internal audit function and external auditors, and company’s compliance with regulatory requirements. This charter provides one example. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Accounting/Finance, Financial Reporting, GRC March 21, 2005 Audit Committee Charter - Example 2 Audit committees assist the board in monitoring the integrity of the financial statements, external auditor qualifications, performance of the internal audit function and external auditors, and company’s compliance with regulatory requirements. This charter provides one example. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Accounting/Finance, Financial Reporting, Audit Planning, GRC March 21, 2005 Audit Committee Charter - Example 3 Audit committees assist the board in monitoring the integrity of the financial statements, external auditor qualifications, performance of the internal audit function and external auditors, and company’s compliance with regulatory requirements. This charter provides one example. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Accounting/Finance, Financial Reporting, GRC March 21, 2005 Audit Committee Charter - Example 4 Audit committees assist the board in monitoring the integrity of the financial statements, external auditor qualifications, performance of the internal audit function and external auditors, and company’s compliance with regulatory requirements. This charter provides one example. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Accounting/Finance, Financial Reporting, Audit Planning, GRC March 14, 2005 Driving Value Out of the Section 404 Compliance Process Many would agree that the first year cost of complying with Section 404 were sky high. Surveys and other sources of evidence make it clear that the administrative burden of compliance was significant enough for most companies to warrant a review of strategies and tactics for maximizing value-add from the compliance process. Issue 2 of Volume 2 of The Bulletin incorporates insights and “lessons learned” about finance processes and how such value can be derived from improving these processes while still meeting compliance standards. CONTENT AREA: Newsletters TOPICS: Sarbanes-Oxley Act, Compliance, Accounting/Finance, Financial Reporting, Internal Controls, Project Management, GRC December 20, 2004 PCAOB Proposes Ethics and Independence Rules Concerning Independence, Tax Services, and Contingent Fees Following its July public roundtable on auditor independence and in response to the need to address issues relating to tax services and contingent fees, the Public Company Accounting Oversight Board voted to propose for public comment certain ethics and independence rules concerning independence, tax services, and contingent fees. CONTENT AREA: Articles TOPICS: Audit Committee & Board, Corporate Governance, Ethics, Financial Reporting, Internal Audit, Internal Controls, PCAOB, Sarbanes-Oxley Act, Taxation, GRC December 6, 2004 PCAOB Adopts Temporary Transitional Rule Relating to Auditing Standard No. 2 Timing its activities with the postponement by the Securities and Exchange Commission (SEC) of the internal control reporting requirements for certain accelerated filers, the Public Company Accounting Oversight Board (PCAOB) met to adopt a temporary rule that would permit the delayed filing of auditors' internal control reports consistent with the SEC's order. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Financial Reporting, Internal Audit, Internal Controls, PCAOB, Reporting/Disclosure, Section 404 - Internal Control Reporting, GRC December 3, 2004 SEC Postpones Filing Date for Internal Control Reports for Some Accelerated Filers The Securities and Exchange Commission issued an “exemptive order” to grant certain accelerated filers up to an additional 45 days after their 10-K filing deadline to include in their annual reports the following two reports required under The Sarbanes-Oxley Act of 2002, Section 404: (1) management’s report on internal control over financial reporting and (2) the related auditor’s report on management’s assessment of internal control over financial reporting. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Compliance, Financial Reporting, Internal Controls, Reporting/Disclosure, Section 404 - Internal Control Reporting, GRC November 29, 2004 PCAOB Staff Issues Its Third Segment of Responses to Frequently Asked Questions Regarding Audits of Internal Control Over Financial Reporting On November 22, 2004, the Public Company Accounting Oversight Board (PCAOB) staff issued the third in a series of staff questions and answers to assist in the implementation of PCAOB Auditing Standard No. 2, regarding audits of public companies' internal control over financial reporting. CONTENT AREA: Articles TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Financial Reporting, Internal Audit, Internal Controls, PCAOB, Reporting/Disclosure, Section 404 - Internal Control Reporting, GRC November 22, 2004 SEC Approves Temporary Postponement of Final Phase-In Period for Accelerated Filers As expected, the U.S. Securities and Exchange Commission (SEC) issued a final release adopting proposed amendments to postpone, for one year, the final phase-in period for acceleration of periodic report deadlines that apply to so-called "accelerated filers." The purpose of the accelerated filing phase-in period was to allow a transition for companies to adjust their reporting schedules and to develop efficiencies to ensure that the quality and accuracy of reported information would not be compromised. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Internal Controls, Reporting/Disclosure, Section 404 - Internal Control Reporting, GRC November 8, 2004 IT Controls Impact Sarbanes-Oxley Compliance Efforts Information technology is a central business process element in most organizations today. The effectiveness of the controls around applications and systems will directly impact the integrity of financial reporting, including the data that is input into the process, as well as the information that ultimately becomes the output. With this in mind, many organizations have come to understand the significant impact IT carries in Sarbanes-Oxley compliance, and they recognize that IT must be carefully considered when documenting, evaluating and attesting to the effectiveness of internal controls surrounding financial reporting. CONTENT AREA: Articles TOPICS: Technology, Sarbanes-Oxley Act, Financial Reporting, IT Audit, IT Controls, Internal Controls October 25, 2004 Policies and Procedures For Preparing Analyses And Notes To Financial Statements The following sample outlines policies and procedures to be used to manage financial reporting information to ensure accurate disclosure in the financial statements. CONTENT AREA: Policies & Procedures TOPICS: Internal Controls, Security, Financial Reporting October 18, 2004 Consolidated Financial Statement Reporting and Disclosures Policy The following sample outlines policies and procedures to be used to ensure the completeness and accuracy of disclosures made in quarterly and annual public filings with the SEC. CONTENT AREA: Policies & Procedures TOPICS: Internal Controls, Accounts Receivable, Financial Reporting, Purchasing & Accounts Payable October 11, 2004 Internal Disclosure Certification Process Policy This sample outlines policies and procedures to be used to ensure the fair presentation and disclosure of financial results, and is designed to ensure comfort to those Company X executives responsible for signing the external disclosure certification submitted to the SEC in accordance with SEC rules and regulations as required by the Sarbanes-Oxley Act of 2002. CONTENT AREA: Policies & Procedures TOPICS: Internal Controls, Sarbanes-Oxley Act, Audit Committee & Board, Financial Reporting, Reporting/Disclosure, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting October 11, 2004 PCAOB Staff Issues Responses to Additional Frequently Asked Questions Regarding Audits of Internal Control Over Financial Reporting The PCAOB staff issued a “Staff Questions and Answers” document providing three questions. To understand the staff’s views, there is no substitute for a careful review of the document released by the PCAOB staff. This flash report addresses the following topics: Incorporation of compliance with laws and regulations within scope of testing; Audit report implications of inadequate evidence concerning service organization controls; and Walkthroughs at service organizations. CONTENT AREA: Articles TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Financial Reporting, Internal Audit, Internal Controls, PCAOB, Reporting/Disclosure, Section 404 - Internal Control Reporting, GRC October 11, 2004 SEC Staff Issues Responses to Additional Frequently Asked Questions Regarding Management’s Report on Internal Control Over Financial Reporting The SEC has updated the frequently asked questions document on its website regarding management’s issuance of internal control reports in compliance with Section 404 and disclosure in Exchange Act periodic reports. These responses address questions the SEC staff has received from time to time regarding the implementation and interpretation of the Commission’s rules CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Financial Reporting, Internal Audit, Internal Controls, PCAOB, Reporting/Disclosure, Section 404 - Internal Control Reporting, GRC September 27, 2004 Managing the IFRS project: Now it’s time for action In France, the real question is not whether to launch the International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) project. Rather, it is how to manage the whole project and related sub-projects in order to stick to the tight deadlines and achieve objectives set by both European Union regulators and top management of listed companies. CONTENT AREA: Articles TOPICS: Corporate Governance, Cross Border & Non-US Issues, Accounting/Finance, Financial Reporting, European Union, France, IFRS, GRC September 20, 2004 Interpreting "Reliance on the Work of Others" Public Company Accounting Oversight Board Standard No. 2 allows independent auditors to rely on the work of others to assess management's assertions regarding internal control over financial reporting. But there is still a big question over how much reliance outside auditors will accept. This article presents some perspectives on the issue of reliance on the work of internal audit for Sarbanes-Oxley compliance. CONTENT AREA: Articles TOPICS: Internal Audit, Laws & Regulations, Sarbanes-Oxley Act, Financial Reporting, External Auditor, Internal Controls, Section 404 - Internal Control Reporting August 30, 2004 SEC Proposes to Postpone Final Phase-In Period for Acceleration of Periodic Report Filing Dates The Securities and Exchange Commission (SEC) proposed to postpone for one year the final phase-in period for accelerating the due dates of periodic reports required to be filed quarterly and annually under the Securities Exchange Act of 1934 by registrants commonly known as "accelerated filers." CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Project Management, GRC August 23, 2004 The Impact of Virus Attack Announcements on the Market Value of Firms There is a relatively small but growing body of academic research that can help managers assess the economic threats and financial vulnerabilities caused by information security breaches. The goal of this article is to add to this body of knowledge by assessing the financial impact of virus attack announcements on attacked companies. CONTENT AREA: Articles TOPICS: Risk Management & Assessment, Security, Financial Reporting, Operations Security, Telecommunications, Network & Internet Security, Communications Industry, GRC August 20, 2004 Document Access Controls For Analyses and Notes to the Financial Statements Policy This policy documents the controls and procedures designed to ensure limited access to, and control of financial reporting documents used for the preparation and updating of quarterly and annual public filings with the US Securities and Exchange Commission. CONTENT AREA: Policies & Procedures TOPICS: Internal Controls, Security, Access Control Systems & Methodology, Financial Reporting August 16, 2004 SEC Official Reports Commission is Considering Delay of Certain Initiatives to Enable Companies to Comply with Section 404 In a speech delivered on Tuesday, August 10, 2004, SEC Chief Accountant Donald Nicolaisen informed the American Accounting Association that the Section 404 rules under The Sarbanes-Oxley Act of 2002 requiring public companies to review the effectiveness of their internal control over financial reporting are so important that the Commission may recommend that other requirements and initiatives be delayed ''at least temporarily'' to help companies put the Section 404 reforms in place. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Project Management, Section 404 - Internal Control Reporting, GRC August 6, 2004 Overall Financial Reporting Document and Disclosure Controls Policy This policy documents the overall controls and procedures designed to ensure the quality and accuracy of disclosures made in quarterly and annual public filings with the US Securities and Exchange Commission. CONTENT AREA: Policies & Procedures TOPICS: Internal Controls, Financial Reporting July 26, 2004 Building Upon Section 404 Compliance: Moving Beyond Year One In recent months, first-year compliance with Sections 30 and 404 of The Sarbanes-Oxley Act of 2002 has commanded the attention of CEOs and CFOs. In just a few months, many US accelerated filers will progress beyond “first-year through” compliance to ongoing annual compliance with these SOA sections. As they do so, many companies could face even more challenging environment. Issue 12 of The Bulletin discusses moving beyond year one compliance. CONTENT AREA: Newsletters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Project Management, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting, GRC July 26, 2004 Closing Out Volume One With the release of Issue 12, the first volume of The Bulletin, Protiviti’s newsletter focusing on corporate governance and risk management comes to a close. Each Issue of Volume 1 is available on KnowledgeLeader. We are pleased to present you with this summary of Volume 1 of The Bulletin, and look forward to publishing the first issue of Volume 2. CONTENT AREA: Newsletters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Compliance, Financial Reporting, GRC July 8, 2004 Close the Books Audit Work Program (Sample 2) The preface to this sample audit program discusses general audit procedures, other considerations, and management controls to review in auditing the close the books process. CONTENT AREA: Work Programs TOPICS: Internal Audit, Compliance, Financial Reporting, Close the Books, Segregation of Duties, GRC July 5, 2004 SEC Names Director of New Office of Risk Assessment On July 1, 2004 the SEC announced the selection of Charles A. Fishkin as Director of the newly formed Office of Risk Assessment (ORA). ORA will coordinate the Commission’s internal risk teams to improve the agency's ability to anticipate potential problem areas across the securities industry, and will focus on early identification of new or resurgent forms of fraud and illegal or questionable activities. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Risk Management & Assessment, GRC July 5, 2004 SEC Staff Announces Intention to Publish Comment Letters On-Line The staff of the Securities and Exchange Commission (SEC) has announced their intention to make available on the Commission’s website the staff’s comment letters and the subsequent filer responses to the staff’s comments. The action will apply to the staff’s letters of comment on filings made after August 1, 2004. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, GRC June 28, 2004 PCAOB Staff Issues Responses to Frequently Asked Questions Regarding Audits of Internal Control Over Financial Reporting Following the issuance of responses to frequently asked questions by the SEC staff earlier this week, the PCAOB staff subsequently followed suit with a “Staff Questions and Answers” document of their own. To understand the staff’s views, there is no substitute for a careful review of the document released by the PCAOB staff. This Flash report includes some of the points of view expressed by the PCAOB staff in the 26 questions listed in this document. CONTENT AREA: Articles TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Internal Controls, Section 404 - Internal Control Reporting, GRC June 28, 2004 SEC Issues Frequently Asked Questions Regarding Management’s Report on Internal Control The Securities and Exchange Commission (SEC) has posted a frequently asked questions document on its website regarding management’s issuance of internal control reports in compliance with Section 404 of The Sarbanes-Oxley Act and management's disclosure in Exchange Act periodic reports. This flash report summarizes the SEC staff’s views on certain topics. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Internal Controls, Section 404 - Internal Control Reporting, GRC June 21, 2004 PCAOB Adopts Final Standard for Audit Documentation On June 9, 2004, the Public Company Accounting Oversight Board (PCAOB) unanimously adopted Auditing Standard No. 3, Audit Documentation, to establish general requirements for documentation auditors should prepare and retain in connection with engagements conducted pursuant to the Board’s standards. While these rules apply to audit firms performing audits in accordance with generally accepted auditing standards (as defined by the PCAOB), they may be of interest to internal auditors, Section 404 compliance teams and other parties. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Document Retention, PCAOB, GRC June 21, 2004 SEC Approves PCAOB Auditing Standard No. 2 Regarding Audits of Internal Control Over Financial Reporting On June 17th, 2004 the Securities and Exchange Commission finalized its long-awaited approval of Auditing Standard No. 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements. The Public Company Accounting Oversight Board (PCAOB) had earlier released Auditing Standard No. 2 on March 9, 2004. The SEC applied its normal process of exposing the PCAOB's standard to the public and receiving letters of comment. In announcing its approval of the standard, the Commission reported that various implementation questions were identified during the comment period, and implementation guidance will be forthcoming shortly for the benefit of issuers and their auditors. Accordingly, companies should expect both the SEC and PCAOB staffs to issue guidance on specific issues. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, GRC May 20, 2004 Record Retention Policy This policy is intended provide guidance about the retention and access of corporate documents by employees. CONTENT AREA: Policies & Procedures TOPICS: Internal Controls, Knowledge Management, Financial Reporting May 14, 2004 Early Identification Of New Disclosure Items For SEC Reporting Policy This policy is intended to facilitate the early detection and disclosure of reportable items to the SEC and to improve the efficiency and effectiveness of compliance efforts. The policy applies to all corporate and subsidiary locations, with particular emphasis on parties responsible for financial reporting and disclosure of related events. CONTENT AREA: Policies & Procedures TOPICS: Laws & Regulations, Sarbanes-Oxley Act, Financial Reporting May 3, 2004 Pre-IPOs Seek Sarbanes Compliance Following the widely watched example of Internet search engine giant Google, private companies are beginning to adopt Sarbanes-Oxley Act governance and reporting provisions months - sometimes as much as a year - ahead of going public. This article addresses planning issues and governance considerations for pre-IPO companies. CONTENT AREA: Articles TOPICS: Corporate Governance, Financial Reporting, GRC, Initial Public Offering, Internal Audit, Laws & Regulations, Sarbanes-Oxley Act May 3, 2004 Preparing to Go Public Going public, now more than ever is a process that requires significant forethought and advance planning. This paper from O’Melveney & Myers LLP discusses when and how to start preparing, the advantages and disadvantages of going public, and structural issues to consider. CONTENT AREA: Articles TOPICS: Corporate Governance, Financial Reporting, GRC, Initial Public Offering, Laws & Regulations, Sarbanes-Oxley Act April 28, 2004 Month-End Close: Best Business Practice Checklist This checklist contains a set of questions that can be used to determine the extent to which various best business practices are being followed when performing a month-end close. The answers to these questions will help to determine areas for improvement. CONTENT AREA: Checklists & Questionnaires TOPICS: Best Practices, Financial Reporting April 21, 2004 AML Audit Checklist The USA PATRIOT Act requires that all financial institutions maintain an anti-money laundering (AML) program that is tested by independent auditors. This audit checklist is intended to assist financial institutions in preparing for the independent tests of their AML programs. It identifies areas that are generally within the audit scope, and lists the types of information that the auditors will likely request. CONTENT AREA: Checklists & Questionnaires TOPICS: Ethics, Fraud, Compliance, Financial Reporting, Financial Services Industry, GRC April 19, 2004 Strategic Planning for Sarbanes-Oxley 2005-2007 The Sarbanes-Oxley Act may have become law in 2002, but public companies are only now feeling its full impact, and they will for years to come. This article addresses the requirements of the PCAOB's Auditing Standard No. 2, the disclosure of material weaknesses and changes in the control environment, and the post-certification updating of documentation and ongoing testing. Companies must also remember to avoid becoming so focused on Sarbanes-Oxley that other important issues are neglected -- such as effectiveness and efficiency of operations and regulatory and legal compliance. CONTENT AREA: Articles TOPICS: Internal Audit, Risk Management & Assessment, Sarbanes-Oxley Act, Compliance, Financial Reporting, Project Management, GRC April 14, 2004 Intangibles Policy This sample outlines a set of policies and procedures to provide a standardized means of identifying and accounting for the acquisition of intangibles and their amortization while utilized by the U.S. offices and subsidiaries of Company X, for transactions in excess of $1,000 U.S. dollars. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting April 12, 2004 Moving targets: Achieving Sarbanes-Oxley assurance in an industry where uncertainty rules Engineering, construction and other specialty contracting firms live in a world where unpredictability is a way of life. Frequently they work under fixed-price or target-price contracts that lock in contract values when the full costs and risks are not yet fully uncovered. These and other issues make the presentation of financial information far from straightforward. Throw into the mix the demands of complying with the Sarbanes-Oxley Act and you have a daunting task in achieving an effective internal control environment. This article addresses three areas that significantly increase a contractor’s risk profile in achieving a compliant SOA internal control structure. CONTENT AREA: Articles TOPICS: Risk Management & Assessment, Sarbanes-Oxley Act, Financial Reporting, Internal Controls, GRC April 12, 2004 SEC Requires Additional Form 8-K Disclosure Items and Accelerates 8-K Filing Date Last month, the Securities and Exchange Commission (SEC) adopted amendments to expand the number of events that are reportable on Form 8-K, the Exchange Act form used by public companies to disclose important corporate events on a current basis. The amendments added eight new items to the list of events requiring filing of the form and transferred, in part, two items from the periodic report requirements to the Form 8-K reporting requirements. In addition, the Commission expanded two pre-existing Form 8-K items. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Reporting/Disclosure, GRC March 25, 2004 Financial Reporting Package Policy This sample outlines a set of policies and procedures to provide a consistent format for reporting required financial information for management and statutory reporting requirements. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting March 18, 2004 Accrued Liabilities Policy The following sample outlines a set of policies and procedures for accrued liabilities. It is intended to provide guidance with regard to the definition of and responsibility for items included in the Accrued Liabilities-Other account. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Expense Reporting, Financial Reporting March 15, 2004 PCAOB Adopts Final Standard for Audits of Internal Control Over Financial Reporting On Tuesday, March 9, the PCAOB held its open meeting and adopted PCAOB Auditing Standard No. 2, "An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements." The standard will be submitted to the SEC for approval and become effective when approved by the Commission. This Flash Report summarizes the final standard, focusing on the Board's changes from the proposed standard. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, GRC March 11, 2004 Foreign Subsidiary Review – Audit Report The objectives of this foreign subsidiary internal audit review were to: assess the adequacy of the overall financial control environment, assess the adequacy of key financial and accounting internal controls, evaluate compliance with significant corporate policies and procedures, and identify opportunities for process and internal control improvement. This sample report includes procedures performed as well as detailed issues and observations. CONTENT AREA: Audit Reports TOPICS: Internal Audit, Cross Border & Non-US Issues, Financial Reporting March 1, 2004 Open Meeting Scheduled by PCAOB to Finalize Standard for Audits of Internal Control Over Financial Reporting On February 24, 2004 the PCAOB announced the scheduling of an open meeting on Tuesday, March 9, to consider the adoption of the long-awaited auditing standard, "An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements." The Board also announced that the text of the final standard will be posted to its Web site as soon as possible after the Board's meeting. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, GRC March 1, 2004 SEC Extends Effective Date of Section 404 Compliance On February 24, 2004 the SEC extended the effective dates for implementing the Sarbanes-Oxley Act Section 404 internal control over financial reporting requirements by both accelerated and non-accelerated filers. A company that is an "accelerated filer" must begin to comply with Section 404 for its first fiscal year ending on or after November 15, 2004. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Project Management, Section 404 - Internal Control Reporting, GRC February 16, 2004 Canadian Securities Regulators Issue New Investor Confidence Measures On January 1, 2004, securities regulators in Canada released three new rules to address investor confidence and uphold the reputation of Canada's capital markets. The rules were adopted by the Canadian Securities Administrators, a council of the 13 securities regulators of Canada's provinces and territories that coordinate and harmonize regulation for the Canadian capital markets. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Laws & Regulations, Cross Border & Non-US Issues, Financial Reporting, Canada, GRC February 9, 2004 NYSE and Nasdaq Publish FAQs on New Corporate Governance Rules Recently, the NYSE and Nasdaq posted “Frequently Asked Questions” on their respective websites relating to the new corporate governance listing standards, which were approved by the SEC late last year. These FAQs address a variety of topics relating to the new corporate governance rules and may be useful to public companies in understanding the applicable listing requirements. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Laws & Regulations, Sarbanes-Oxley Act, Financial Reporting, GRC February 2, 2004 Establishing an Effective Complaint and Confidential, Anonymous Reporting Process Earlier this year, the SEC issued rules, pursuant to Section 301 of the Sarbanes-Oxley Act , requiring audit committees to establish procedures for “(a) the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal accounting controls or auditing matters, and (b) the confidential, anonymous submission by employees of the issuers of concerns regarding questionable accounting or auditing matters.” This edition of The Bulletin focuses on the issues that audit committees and management should consider as they collaborate to comply with this requirement. CONTENT AREA: Newsletters TOPICS: Fraud, Sarbanes-Oxley Act, Financial Reporting, Whistleblower/Complaint Reporting February 2, 2004 OFAC Compliance: The Role of Internal Audit Since Sept. 11, 2001, governments and regulators globally have recommitted themselves to strengthening anti-money laundering regimes and enforcing anti-money laundering requirements. In the United States, the heightened emphasis has been accompanied by an increased focus on compliance with the regulatory requirements of the Office of Foreign Assets Control (OFAC). In many companies, the responsibility for conducting independent testing of the OFAC program falls to internal audit. To discharge this responsibility effectively, internal auditors must understand the OFAC requirements and how these requirements could impact their companies. CONTENT AREA: Regulatory Updates TOPICS: Ethics, Fraud, Internal Audit, Compliance, Cross Border & Non-US Issues, Financial Reporting, GRC January 26, 2004 FEI CEO's Top Financial Reporting Issues For 2004 In a year of unprecedented regulation, FEI President and CEO Colleen Sayther offers the following list of 11 financial reporting issues that require the attention of financial executives during 2004. She notes they are not listed in any particular order, as the level of importance is certain to vary among companies. CONTENT AREA: Articles TOPICS: Laws & Regulations, Financial Reporting January 26, 2004 Internal Audit Directors Sign-off SOA Sub-certifications With the first round of Sarbanes-Oxley filings occurring in 2004, management’s concern over signing on the dotted line has resulted in a de facto extension of that responsibility deeper into the organization. In this article audit directors and experts discuss so-called "trickle down" or "cascading" sub-certifications and share their thoughts on responding and positioning audit efforts. CONTENT AREA: Articles TOPICS: Corporate Governance, Internal Audit, Sarbanes-Oxley Act, Audit Reporting, Financial Reporting, Internal Audit Administration, Project Management, GRC January 23, 2004 Sarbanes-Oxley Section 404: Compliance Plan for 2004 - Sample This sample document establishes the framework and standard policy for compliance with Section 404 of the Sarbanes-Oxley Act. CONTENT AREA: Samples TOPICS: Internal Audit, Laws & Regulations, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Project Management, Section 404 - Internal Control Reporting, Entity-Level Control, GRC January 19, 2004 Guide to the Sarbanes-Oxley Act: IT Risks and Controls This detailed booklet from Protiviti provides guidance to Section 404 compliance project teams on the consideration of information technology risks and controls at both the entity and activity levels within an organization. Questions and answers in the book focus on the interaction between the IT organization and the entity's application and data-process owners, and explain the implications of general controls and how they are considered at the process level. This guide also explores how application-control assessments are integrated with the assessment of business-process controls, and addresses documentation, testing and remediation matters. CONTENT AREA: Protiviti Booklets TOPICS: Corporate Governance, Technology, Sarbanes-Oxley Act, Financial Reporting, IT Controls, Entity-Level Control, GRC January 19, 2004 Technology Risks and Controls: What You Need to Know The impact on information technology must be considered carefully during an evaluation of internal control over financial reporting. Protiviti’s 10th issue of The Bulletin addresses key questions surrounding IT risks and controls. It also provides key questions for board members and management to ask. CONTENT AREA: Newsletters TOPICS: Corporate Governance, Technology, Sarbanes-Oxley Act, Financial Reporting, IT Controls, GRC December 22, 2003 A French "Sarbanes-Oxley Act" (Loi de Securite Financiere) - Impacts US subsidiaries in France The French law, Loi de Sécurité Financière (LSF), published in August, is in some ways even tougher than the US Sarbanes-Oxley Act. The three main objectives of the LSF are (1) to merge the COB (the French SEC), the CMF and the CDGF, into a unique institution - AMF - that controls all financial activities in France, (2) to reinforce security for stockholders and (3) to require more transparency from every listed and not listed "Société Anonyme" (SA), in France. What are the main implications? And, more importantly, what are the practical action steps companies should follow to ensure that their 2003 financial reporting statements comply with the new law? CONTENT AREA: Articles TOPICS: Corporate Governance, Laws & Regulations, Compliance, Cross Border & Non-US Issues, Financial Reporting, France, GRC December 11, 2003 Facilitating SOA Compliance Using Committees Following the release of Sarbanes-Oxley and new SEC regulations, many organizations have created a "Disclosure Committee" and a “Section 404 Committee.” This guide discusses the duties, composition, structure and interrelationships of these committees and suggests some general rules to follow. CONTENT AREA: Guides TOPICS: Corporate Governance, Internal Audit, Risk Management & Assessment, Sarbanes-Oxley Act, Audit Committee & Board, Enterprise Risk Management, Financial Reporting, Project Management, Section 404 - Internal Control Reporting, GRC December 8, 2003 SEC Adopts Rules on Disclosure of Nominating Committee Functions and Communications Between Security Holders and Boards of Directors On November 19, 2003, the SEC adopted rules to improve disclosure to investors regarding nominating committee processes and the ways by which security holders may communicate with directors. The Commission expects these new disclosure requirements to enhance the transparency of the proxy process as it relates to the director nominating and election process. They are also intended to improve the shareholder communications processes of public companies. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Section 302 - Executive Certifications, Audit Committee & Board, Reporting/Disclosure, GRC December 3, 2003 Being Proactive: Staying Ahead of the Curve on Corporate Governance For months now, public companies have been busily addressing new requirements stipulated by the Sarbanes-Oxley Act, the SEC and the stock exchanges. To better identify and implement changes most critical for them, firms need to keep in touch with the progress of corporate governance reform across the board. How effective are other companies’ governance policies and what are they doing to strengthen them? What is likely to happen next on the regulatory front? And, most important for internal auditors, what can we do to facilitate corporate governance reform in our own organizations? CONTENT AREA: Articles TOPICS: Entity-Level Control, Corporate Governance, COSO, Internal Audit, Laws & Regulations, Financial Reporting, GRC December 1, 2003 Financial Execs Who Do the Right Thing Virtually every financial executive with years of experience has tales to tell about pressure to compromise ethics - and often to keep silent. The editors of Financial Executive sought out a few executives willing to relate their stories, with the hope that their lessons will help peers muster the courage - if and when it is needed - to take a stand and uphold ethical practices. CONTENT AREA: Articles TOPICS: Ethics, Fraud, Financial Reporting, Canada December 1, 2003 The Expanded Responsibilities of the Audit Committee: A New Mandate Earlier this year, the SEC adopted rules mandated by the Sarbanes-Oxley Act of 2002 that, among other things, expanded and formalized the responsibilities of audit committees. The major exchanges have also weighed in, defining expectations for audit committees. This issue of The Bulletin explores the new requirements of audit committees and their implications. It also outlines six keys to an effectively functioning audit committee. CONTENT AREA: Newsletters TOPICS: Corporate Governance, Internal Audit, Risk Management & Assessment, Sarbanes-Oxley Act, Audit Committee & Board, Financial Reporting, GRC November 17, 2003 Internal and external audit: an evolving relationship Coordinating internal and external audit, never simple to begin with, promises to become even more charged as companies and their auditors work out the details of complying with Sarbanes-Oxley. A handful of experts recently shared their thoughts with KnowledgeLeader, discussing the evolving relationship between internal and external auditors. This article also presents the PCAOB’s rules for reliance on insider’s work products by the external auditor. CONTENT AREA: Articles TOPICS: Accounting Organizations, Internal Audit, Sarbanes-Oxley Act, Audit Reporting, Enterprise Risk Management, Financial Reporting, Internal Audit Administration, GRC November 17, 2003 SEC Approves New Rules Proposed and Adopted by NYSE and NASD to Strengthen Corporate Governance Standards for Listed Companies On November 4, the Securities and Exchange Commission (SEC) approved the listing requirements proposed by the New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASD), or the so-called "self-regulatory organizations". This long-awaiting action by the SEC is intended to further strengthen corporate governance standards for listed companies. This action is one of the last reforms arising from the corporate scandals leading to The Sarbanes-Oxley Act of 2002 (SOA). CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Internal Audit, Sarbanes-Oxley Act, Compliance, Financial Reporting, GRC October 30, 2003 SOA and NYSE Web Disclosure Guidelines Several Sarbanes-Oxley and related SEC/NYSE mandates require posting of governance information to a corporate website for public access. This guide will highlight a few key areas auditors and financial reporting professionals should be aware of concerning web posting and summarize a few key elements of dealing with entity postings. CONTENT AREA: Guides TOPICS: Corporate Governance, Ethics, Laws & Regulations, Sarbanes-Oxley Act, Compliance, Financial Reporting, Reporting/Disclosure, GRC October 20, 2003 Auditing Standards for Internal Control over Financial Reporting – An Update This week's report is issued to supplement the Proposed Auditing Standards for Internal Control over Financial Reporting from October 7, 2003, with more specifics regarding the proposed standard and what it means to public companies. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, GRC October 13, 2003 The PCAOB Proposes Auditing Standards for Internal Control over Financial Reporting On October 7, 2003, the Public Company Accounting Oversight Board (PCAOB) unanimously voted to propose and issue for public comment a standard on an audit of internal control over financial reporting. The proposed auditing standard addresses both (a) the work that is required to audit internal control over financial reporting and (b) the relationship of such audits to audits of financial statements. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Internal Controls, PCAOB, Section 404 - Internal Control Reporting, GRC October 2, 2003 Sarbanes-Oxley Public Disclosure Summary This presentation summarizes public disclosure requirements for Sarbanes-Oxley by section including basic descriptions, rule status or effective date, and related required disclosures. Some applicable SEC Release disclosure items are also included. CONTENT AREA: Guides TOPICS: Corporate Governance, Ethics, Laws & Regulations, Sarbanes-Oxley Act, Financial Reporting, GRC September 26, 2003 Hotel Financial Reporting and Management Contract/Lease Agreement Areas Review Audit Work Program This work program is designed to assist the audit team in performing a comprehensive review of the financial reporting area and of a hotel or similar facility’s compliance with its management contract or lease agreement. CONTENT AREA: Work Programs TOPICS: Internal Audit, Financial Reporting, Hospitality/Gaming Industry September 22, 2003 Insights on Today’s Sarbanes-Oxley and Corporate Governance Challenges Protiviti recently completed a comprehensive survey of 300 chief financial officers with public companies nationwide. The results, detailed in a report titled, Insights on Today’s Sarbanes-Oxley and Corporate Governance Challenges, reveal the policies, opinions and concerns of publicly traded companies, and assess the degree to which Sarbanes-Oxley and other regulatory requirements are driving change in corporate governance practices. CONTENT AREA: Survey Reports TOPICS: Corporate Governance, Sarbanes-Oxley Act, Audit Committee & Board, Financial Reporting, GRC September 15, 2003 SEC Proposes Disclosure Requirements Related to Director Nominations and Shareholder Communications The Securities and Exchange Commission voted in August to propose rules that would strengthen the proxy process by requiring disclosures relating to the nomination of directors and shareholder communications with directors. These proposed changes focus on providing better information about the way board nominees are identified, evaluated and selected as well as on improving shareholder communications with directors. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Audit Committee & Board, Reporting/Disclosure, GRC August 25, 2003 Internal Control Over Financial Reporting -- An Update on Section 404 of Sarbanes-Oxley Section 404 of the Sarbanes-Oxley Act required the SEC to adopt rules for companies to file an annual internal control report. That report must contain statements from management regarding the effectiveness of the company's internal control over financial reporting. Additionally, the company's auditor must attest to management's assertions in the internal control report. The SEC released its final rules in June 2003 regarding Section 404, making time an asset rather than a liability. This issue of The Bulletin addresses these final rules and what they mean to your company. CONTENT AREA: Newsletters TOPICS: Corporate Governance, Internal Controls, Risk Management & Assessment, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Section 404 - Internal Control Reporting, GRC August 25, 2003 SEC Staff Responds to Frequently Asked Questions Regarding Auditor Independence Last week, the SEC's Office of the Chief Accountant issued its responses to 35 "frequently asked questions" regarding the application of the Commission's rules on auditor independence. Companies and their audit committees will want to pay close attention to these interpretations issued by the SEC staff. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, GRC August 21, 2003 Financial Disclosure Communication Questionnaire This questionnaire is designed to facilitate communication of items that should be considered for disclosure in SEC filings. It does not include all possible disclosure items, but does include some examples of primary types of items that should be considered. CONTENT AREA: Checklists & Questionnaires TOPICS: Fraud, Internal Controls, Sarbanes-Oxley Act, Financial Reporting, Reporting/Disclosure, Section 302 - Executive Certifications August 13, 2003 Sarbanes-Oxley: Strategies for Complying with the Final Section 404 Rules This presentation provides an overview of the final SOA Section 404 rules. It also discusses what companies are doing to comply and why, the options for compliance and the related pros and cons, and why companies should undertake compliance activities now despite the extended deadline provided by the SEC. CONTENT AREA: Guides TOPICS: Corporate Governance, Laws & Regulations, Risk Management & Assessment, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Section 404 - Internal Control Reporting, GRC August 8, 2003 COSO Framework Description In 1992, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) developed a model for evaluating internal controls. This guide provides a brief description of the COSO framework. CONTENT AREA: Guides TOPICS: Corporate Governance, COSO, Laws & Regulations, Risk Management & Assessment, Financial Reporting, Entity-Level Control, GRC August 8, 2003 COSO Internal Control Framework Overview Presentation This presentation explains the key parts of the COSO Internal Control Framework, in particular the objectives and components of COSO. It also defines and explains ‘internal control,’ ‘internal control deficiency,’ and ‘material weakness’ based on COSO. CONTENT AREA: Guides TOPICS: Corporate Governance, COSO, Laws & Regulations, Risk Management & Assessment, Financial Reporting, Entity-Level Control, GRC August 4, 2003 PCAOB Flash Report -- The PCAOB Conducts a Roundtable Meeting on July 29 to Address Issues Reporting on Internal Control The PCAOB conducted a roundtable meeting on Tuesday, July 29, to solicit views on the responsibilities of registered public accounting firms to report on the assessment of internal controls by issuers. This flash report document articulates the key points discussed during the roundtable and is accompanied with an appendix listing the 31 discussion questions introduced by the PCAOB. The summary captures the salient points exchanged during the meeting. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Accounting/Finance, Financial Reporting, GRC July 21, 2003 PCAOB Flash Report: The PCAOB Schedules a Roundtable Meeting on July 29 to Address Issues Reporting on Internal Control The PCAOB has scheduled a roundtable meeting for Tuesday, July 29, to solicit views on the responsibilities of registered public accounting firms to report on the assessment of internal controls by issuers. The roundtable will be looking at many issues from the perspective of the outside auditor. Companies will be given the opportunity to comment from a preparer’s perspective based on the outcome of these discussions. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Accounting/Finance, Enterprise Risk Management, Financial Reporting, GRC June 16, 2003 SEC Issues Final Rules Implementing Internal Control Provisions of Sarbanes-Oxley Act and Amending Quarterly Certification Requirements On Friday, June 6, 2003, the Securities and Exchange Commission published its final rules on Section 404 of the Sarbanes-Oxley Act of 2002. This report follows up on the flash report of May 28th. The published rules provide further insights regarding the comments made by the SEC commissioners and staff during the Commission's open meeting on May 27, 2003. Key provisions of the final rules are described herein. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Compliance, Enterprise Risk Management, Financial Reporting, Internal Controls, Section 404 - Internal Control Reporting, GRC June 2, 2003 Strengthening Governance Through Risk Management Boards and management know that the price of surprise is steep and should work together on an effective plan for managing risk. In a McKinsey study released in May 2002, 36 percent of the directors indicated their boards did not understand the company's major risks. This issue of The Bulletin provides five specific, detailed recommendations for strengthening governance through improved risk management. It includes a list of key questions for management and the board to consider. CONTENT AREA: Newsletters TOPICS: Corporate Governance, Internal Controls, Risk Management & Assessment, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, GRC May 28, 2003 SEC Implements Internal Control Provisions of Sarbanes-Oxley Act and Amends Quarterly Certification Requirements On May 27, 2003, the SEC voted unanimously to adopt new rules (1) concerning management's report on internal control over financial reporting and (2) requiring Exchange Act Reporting Companies to provide the certifications required by Sections 302 and 906 of Sarbanes-Oxley Act (SOA) as exhibits to the periodic reports to which they relate. Last October, the Commission published proposals to implement the requirements of Section 404 of SOA. This report provides a summary of the major changes in the final rules as compared to the proposal. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Internal Controls, Section 302 - Executive Certifications, GRC May 5, 2003 SEC Votes to Prohibit Improper Influence of Auditors New rules prohibit an issuer’s officers and directors, and persons acting under their direction, from coercing, manipulating, misleading or fraudulently influencing the auditor of the issuer's financial statements. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, GRC April 28, 2003 PCAOB Flash Report: The Board Rolls Up Its Sleeves On April 16, just one day after the SEC selected the Public Company Accounting Oversight Board (PCAOB) Chairperson (who is expected to start in May), the four acting members of the PCAOB got busy. They voted unanimously to take control of the auditing standards setting process, effectively ending more than six decades of self-regulation of the accounting profession. CONTENT AREA: Articles TOPICS: Corporate Governance, Sarbanes-Oxley Act, Taxation, Financial Reporting, PCAOB, GRC April 21, 2003 PCAOB Flash Report: Chairperson of the Public Company Accounting Oversight Board Selected On April 15, 2003, the SEC announced that it has selected William J. McDonough as its nominee to be the new Chairperson of the five-member Public Company Accounting Oversight Board (PCAOB) established pursuant to the Sarbanes-Oxley Act of 2002. In contrast to last year's polarizing split resulting in the ouster of Harvey Pitt as SEC Chairman, Mr. McDonough's selection was unanimous among the SEC Commissioners. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, PCAOB, GRC April 21, 2003 SEC to Review Current Proxy Rules and Regulations to Improve Corporate Democracy The SEC has directed the Division of Corporation Finance to review the proxy rules and regulations and their interpretations regarding procedures for the election of corporate directors and formulate possible changes in those rules, regulations and interpretations. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Laws & Regulations, Financial Reporting, Reporting/Disclosure, GRC April 14, 2003 PCAOB Flash Report: Recent Remarks by Charles Neimeier, Acting Chairman of the PCAOB At a recent seminar, the Acting Chairman of the Public Company Accounting Oversight Board (PCAOB) commented on changes on auditing and the impact on the audit committee. He spoke about registration of audit firms and the requirement that public companies must be audited by "registered" CPA firms. He indicated that the old peer review model will be replaced with a new model of "several hundred" investigators working as a review team under the supervision of the PCAOB. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Audit Committee & Board, PCAOB, GRC April 14, 2003 SEC Adopts Final Audit Committee Standards Rule Requiring Exchange Listing Standards for Audit Committees in Accordance with Sarbanes-Oxley Act Section 301 On April 1, 2003 the SEC adopted a final rule requiring US listed companies to comply with the audit committee requirements established by Section 301 of the Sarbanes-Oxley Act of 2002 (SOA). This update describes the final requirements and the required compliance dates. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Audit Committee & Board, GRC April 10, 2003 Finance Function Resource Assessment Guide Internal auditors can use this guide to help perform and document a resource assessment of the company’s financial functions. The purpose of such a review is to assess these functions from a people, process, and technology perspective in performance of their "business as usual" job functions. CONTENT AREA: Guides TOPICS: Corporate Governance, Internal Audit, Internal Controls, Risk Management & Assessment, Financial Reporting, Human Resources, Self-Assessment, Project Management, Accounting/Finance, Process-Level Control, GRC April 7, 2003 SEC Proposes Rules Amending CEO, CFO Certification Requirements Under Sarbanes-Oxley On March 21, 2003, the Securities and Exchange Commission proposed amendments to its rules and forms that would require companies to provide the executive certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act as exhibits to the periodic reports (Forms 10-K and 10-Q) to which they relate. The SEC stated that the purpose of the proposed amendments is to make it easier for investors to access the certifications more efficiently. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Reporting/Disclosure, Section 302 - Executive Certifications, GRC April 3, 2003 Board Of Directors Authority Charter, Checklist, and Matrix This sample Board of Directors authority charter can be used to assist board members, management, and internal audit directors to establish clear attributes of authority to better manage the governance process. The charter includes an activities checklist and an authority matrix for specific areas. CONTENT AREA: Charters TOPICS: Corporate Governance, Internal Audit, Sarbanes-Oxley Act, Financial Reporting, Audit Committee & Board, GRC April 3, 2003 Sarbanes-Oxley Act and Proposed NYSE Listing Standards Compliance Checklist This compliance checklist provides a summary of the Sarbanes-Oxley Act requirements, final and proposed SEC rules, and the corporate governance standards proposed by the New York Stock Exchange. It includes a disclosure-only checklist, which identifies new and proposed SEC disclosure requirements. CONTENT AREA: Checklists & Questionnaires TOPICS: Risk Management & Assessment, Sarbanes-Oxley Act, Accounting/Finance, Corporate Governance, Enterprise Risk Management, Financial Reporting, Reporting/Disclosure, Section 404 - Internal Control Reporting, GRC March 24, 2003 Internal Controls over Financial Reporting: Understanding Section 404 of Sarbanes-Oxley Section 404 of the Sarbanes-Oxley Act requires management to file an internal control report with the annual report on Form 10-K. This edition of The Bulletin addresses these requirements in detail and answers common questions. CONTENT AREA: Newsletters TOPICS: Corporate Governance, Internal Controls, Risk Management & Assessment, Sarbanes-Oxley Act, Enterprise Risk Management, Financial Reporting, Section 404 - Internal Control Reporting, GRC March 17, 2003 Assessing internal controls under Sarbanes-Oxley How does internal audit assist management to document and evaluate internal controls and procedures for financial reporting? This article addresses the potential role and responsibility of internal auditors, disclosure committees, audit committees and external auditors in the new reporting environment. CONTENT AREA: Articles TOPICS: Internal Audit, Risk Management & Assessment, Sarbanes-Oxley Act, Financial Reporting, Internal Controls, GRC March 10, 2003 Internal audit's role in identification and investigation of frauds and other financial reporting irregularities This hot issue – presented by John Cherpock at the General Audit Management Conference – enumerates the frauds and scandals that have tainted investor confidence. He explains internal audit’s role in identifying and investigating frauds and irregularities, and provides advice and best practices for conducting internal investigations and preserving the integrity of evidence. CONTENT AREA: Articles TOPICS: Best Practices, Fraud, Internal Audit, Risk Management & Assessment, Enterprise Risk Management, Financial Reporting, GRC March 3, 2003 SEC Adopts Rules on Regulation Analyst Certification On February 20, the SEC voted to adopt Regulation Analyst Certification to require that research reports disseminated by brokers, dealers, or covered persons include certifications by research analysts that the research report accurately reflects the analyst's personal views, and whether the analyst received compensation in connection with his or her specific recommendations. Brokers or dealers are also required to obtain research analyst certifications in connection with their public appearances. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, GRC February 10, 2003 SEC Adopts Attorney Conduct Rule Under Sarbanes-Oxley Act In late January the SEC voted to adopt a number of rules mandated by the Sarbanes-Oxley Act of 2002. The following document summarizes the final rule regarding the Attorney Conduct Rule Under Sarbanes-Oxley Act. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, GRC February 10, 2003 SEC Adopts Rules on Disclosure of Off-Balance Sheet Arrangements and Aggregate Contractual Obligations In late January the SEC voted to adopt a number of rules mandated by the Sarbanes-Oxley Act of 2002. The following document summarizes the final rules on Disclosure of Off-Balance Sheet Arrangements and Aggregate Contractual Obligations. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Reporting/Disclosure, GRC February 10, 2003 SEC Adopts Rules on Retention of Records Relevant to Audits and Reviews In late January the SEC voted to adopt a number of rules mandated by the Sarbanes-Oxley Act of 2002. The following document summarizes the final rules on Retention of Records Relevant to Audits and Reviews. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Document Retention, GRC February 10, 2003 SEC Adopts Rules Strengthening Auditor Independence In late January the SEC voted to adopt a number of rules mandated by the Sarbanes-Oxley Act of 2002. The following document summarizes the final rules strengthening auditor independence. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Internal Audit, Sarbanes-Oxley Act, Taxation, Enterprise Risk Management, Financial Reporting, GRC November 27, 2002 Revenue Recognition Audit Work Program Revenue recognition at cut-off dates for financial reporting of sales and inventory can create overstatements, double counting and other risk of misstatement. The following work program will assist in development of a tailored company internal control effort designed to ensure accurate transaction recording. CONTENT AREA: Work Programs TOPICS: Internal Audit, Financial Reporting, Supply Chain, Revenue, Sales Process & Marketing November 18, 2002 SEC Proposes Rules to Implement Sarbanes-Oxley Act Provisions Concerning Standards of Professional Conduct for Attorneys On November 6, 2002, the SEC issued proposed rules implementing provisions of the Sarbanes-Oxley Act that prescribe "minimum standards of professional conduct for attorneys." This article summarizes the proposed rule which would require a lawyer to report any material violation of securities laws by the company. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, GRC November 11, 2002 SEC Issues Proposed Rules Implementing Additional Provisions of Sarbanes-Oxley Act The SEC has just issued proposals relating to (1) non-GAAP financial information, (2) rapid disclosure of financial information, (3) MD&A disclosure of off-balance sheet arrangements, contractual obligations and contingent liabilities and commitments and (4) insider trading during pension fund blackout periods. Each of these proposals are discussed briefly in this article. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Sarbanes-Oxley Act, Financial Reporting, Reporting/Disclosure, GRC November 4, 2002 Focus on the balance sheet In this new era of increased scrutiny on financial reporting processes and improved corporate governance, will internal auditors place more emphasis upon reviewing the quality of company financial reporting? CONTENT AREA: Articles TOPICS: Internal Audit, Financial Reporting October 21, 2002 Frequently Asked Questions Regarding the Sarbanes-Oxley Act Executive Certification Requirements There are many questions on the minds of directors, certifying executives and auditors as they work together to comply with the Sarbanes-Oxley Act and new requirements from the SEC and NYSE. Listed in this booklet are common queries from companies who are dealing with these requirements. We have provided responses based on our experience that will assist executives as they evaluate their company's disclosure controls infrastructure and processes supporting executive certifications. CONTENT AREA: Protiviti Booklets TOPICS: Corporate Governance, Internal Controls, Sarbanes-Oxley Act, Financial Reporting, Section 302 - Executive Certifications, GRC August 16, 2002 New York Stock Exchange - Summary of Proposed Corporate Governance Requirements This presentation outlines and summarizes the corporate governance requirements proposed by the New York Stock Exchange (“NYSE”) on August 16, 2002 for listed companies in reaction to a spate of malfeasance and securities frauds. The most significant changes include executive compensation committee parameters and a diktat stipulating an internal audit function. CONTENT AREA: Regulatory Updates TOPICS: Corporate Governance, Internal Audit, Sarbanes-Oxley Act, Audit Committee & Board, Compensation & Benefits, Financial Reporting, Internal Audit Administration, GRC August 9, 2002 Banking Controls: Management Control Structure Evaluation Questionnaire This guide is designed to assist management in analyzing the effectiveness of a company's management control structure MCS over financial reporting. It consists of a guide to the four main components of the MCS and how they work together, and checklists that can be used to evaluate the effectiveness of those components. CONTENT AREA: Checklists & Questionnaires TOPICS: Financial Reporting, Financial Services Industry February 7, 2002 Sales Forecast Process Flow This sample sales forecasting process can be used as a general guide to help understand and review a company's sales forecasting procedures. Accurate forecasting benefits the financial, operational, production, inventory and marketing functions in the company. CONTENT AREA: Process Flows TOPICS: Financial Reporting, Materials Management & Inventory, Revenue, Sales Process & Marketing December 13, 2001 Accrued Liabilities Audit Work Program This audit program primarily focuses on identification and reporting of contingencies and accrued liabilities. CONTENT AREA: Work Programs TOPICS: Internal Audit, Financial Reporting, Purchasing & Accounts Payable July 31, 2001 Bank Controls: Information Systems Evaluation Questionnaire This guide can help bank management and internal auditors to analyze the effectiveness of the internal control structure over financial reporting as it relates to information systems. CONTENT AREA: Checklists & Questionnaires TOPICS: Technology, Internal Controls, Security, Financial Reporting, Financial Services Industry, Operations Security July 31, 2001 Bank Financial Reporting Cycle: Control Objectives and Audit Work Program This control objectives guide identifies the types of risks that can be present in a bank's financial reporting cycle, and lists many process and monitoring type controls that can be put in place to minimize the risks. The associated work program can assist in evaluating the effectiveness of the financial reporting cycle internal control structure. CONTENT AREA: Work Programs TOPICS: Financial Reporting, Financial Services Industry July 17, 2001 Audit Committee Annual Planning Schedule - Sample The audit committee is a committee of the board of directors. This sample schedule provides an annual planner for audit committee activities. CONTENT AREA: Samples TOPICS: Corporate Governance, Internal Audit, Accounting/Finance, Audit Committee & Board, Financial Reporting, Audit Planning, GRC May 2, 2001 Initial Public Offerings: A Guide This guide summarizes the rules and procedures essential to the process of public ownership though the initial public offering (IPO). It is intended to guide you though the necessary research and analysis. CONTENT AREA: Guides TOPICS: Accounting/Finance, Financial Reporting, Initial Public Offering December 22, 2000 Turnbull Report - A Best Practices Guide Publication of the Internal Control Working Party's recommendations on the Combined Code ('Turnbull Report') presents businesses with an opportunity. For the first time, the link between risk management and improved business performance is being acknowledged by governance regulations. CONTENT AREA: Guides TOPICS: Best Practices, Corporate Governance, Risk Management & Assessment, Financial Reporting, United Kingdom, GRC December 18, 2000 Financial Close Schedule Policy This sample outlines a set of policies and procedures for financial close schedule. This policy establishes the standards for the closing cycle in compliance with management's objectives, so that the close cycle will facilitate the production of timely and accurate information. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting, Close the Books November 29, 2000 Account Reconciliations Policy The following sample outlines a set of policies and procedures to define the requirements for balance sheet reconciliations, and to communicate those requirements to those responsible for preparing the reconciliations. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Close the Books, Financial Reporting November 29, 2000 Inter-company Accounting/Reporting Policy This policy establishes the standards and procedures for ensuring that the company accounts for inter-company charges in compliance with management's objectives and generally accepted accounting principles ("GAAP"). The purpose of inter-company accounting is to allocate assets, liabilities, revenues, and expenses to the appropriate legal entity in relation to the economic benefits and obligations associated with the operational activity incurred. CONTENT AREA: Policies & Procedures TOPICS: Accounting/Finance, Financial Reporting, Internal Controls November 28, 2000 Capitalized Software for Internal Use Policy The following sample outlines a set of policies and procedures to establish the standards and procedures to ensure that accounting for capitalized software for internal use is in compliance with management's objectives. The overall objective is to provide guidance that specifically addresses the accounting for the costs related to designing, developing, obtaining, modifying and/or implementing internal use software. CONTENT AREA: Policies & Procedures TOPICS: Technology, Accounting/Finance, Financial Reporting, Software November 14, 2000 Close the Books and Provide Financial Information: Preliminary Internal Controls Questionnaire This is an example of a self-assessment questionnaire which can be presented to managers or process owners prior to conducting an audit. CONTENT AREA: Checklists & Questionnaires TOPICS: Internal Audit, Financial Reporting, Self-Assessment, Process-Level Control, Close the Books October 31, 2000 Close the Books Audit Work Program The purpose of this work program is to provide the general steps used to perform a “close the books” audit. This document provides guidance for ensuring related systems are fully integrated, the company is in compliance with established schedules, and determining whether segregation of duties is adequate. CONTENT AREA: Work Programs TOPICS: Internal Audit, Financial Reporting, Close the Books, Segregation of Duties October 31, 2000 Confidentiality Policy The following sample outlines a set of policies and procedures defining the guidelines concerning confidential company information. This applies to the public disclosure of confidential company information by any company employee, .i.e. any information not publicly announced that could reasonably affect the market price of the company's stock if it were disclosed to the public. CONTENT AREA: Policies & Procedures TOPICS: Intellectual Property, Knowledge Management, Financial Reporting, Internal Controls, Best Practices October 31, 2000 Consolidation of Finance Functions Audit Work Program The purpose of this work program is to provide the general steps used to perform an audit on consolidation of finance functions. This document provides the audit steps needed to address the finance functions associated with the accounts payable, accounts receivable, accounting operations, payroll, cost accounting, information systems, human resources, and transfer pricing departments. CONTENT AREA: Work Programs TOPICS: Internal Audit, Internal Controls, Financial Reporting October 31, 2000 Insider Trading Policy This sample outlines a set of policies and procedures for insider trading. All insider trading transactions must comply with these procedures in order to comply with securities laws as defined by the Security Exchange Commission. CONTENT AREA: Policies & Procedures TOPICS: Best Practices, Cash & Treasury, Ethics, Financial Reporting, Fraud, Initial Public Offering, Internal Controls October 31, 2000 Revenue Forecasting Audit Work Program The purpose of this work program is to provide the general steps used to perform a revenue forecasting audit. This document provides steps to review forecasting development/methodology and forecast execution. CONTENT AREA: Work Programs TOPICS: Internal Audit, Financial Reporting, Revenue October 30, 2000 Shareholders' Equity Controls Checklist This checklist can be used to determine the existence of shareholders' equity controls. CONTENT AREA: Checklists & Questionnaires TOPICS: Internal Audit, Internal Controls, Financial Reporting, Self-Assessment Audit and Accounting Standards and Organizations This page provides links to authoritative auditing and accounting standards set forth by domestic and global organizations and associations. CONTENT AREA: Standards & Organizations TOPICS: Accounting Organizations, Accounting/Finance, Australia, Canada, Cross Border & Non-US Issues, European Union, Financial Reporting, Germany, Internal Audit, Japan, United Kingdom CFOnet Users can access full-text articles dating back to 1993. This site also features special reports on topics such as financial benchmarking, financial best practices, budgeting, compensation, finance education, and more. CONTENT AREA: Best Business Links TOPICS: Risk Management & Assessment, Cash & Treasury, Financial Reporting, Media Industry, GRC Compliance Week Compliance Week is an online resource for financial compliance and disclosure for public companies. The site features a weekly news-style layout with the latest from regulatory bodies such as the SEC, FASB, and PCAOB. Informative articles from sections include: Q&A, Rule Setters, Rules & Commentary, International Developments, and Filers Update to name a few. Although most of the site is subscription based there are white papers on various topics, compliance career opportunities and timely events listings. CONTENT AREA: Best Business Links TOPICS: Corporate Governance, Risk Management & Assessment, Sarbanes-Oxley Act, Compliance, Financial Reporting, GRC Documenting Processes and Internal Controls (KLplus CPE Course) The Sarbanes-Oxley Act of 2002 requires the documentation of transaction flows and processes affecting key financial reporting elements. This course focuses on the different approaches to documenting these processes and controls. CONTENT AREA: Sarbanes-Oxley TOPICS: Internal Controls, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, Training & Development, Financial Reporting, PCAOB Executive Certification: Understanding Section 302 of Sarbanes-Oxley (KLplus CPE Course) Executive management has always been responsible for the quality and fairness of public reporting. However, under Sarbanes-Oxley, the risks are higher and the consequences of failure more significant. In this environment, all companies should perform a rigorous review of their disclosure processes and implement needed changes. CONTENT AREA: Sarbanes-Oxley TOPICS: Training & Development, Sarbanes-Oxley Act, Section 302 - Executive Certifications, Financial Reporting Internal Control Over Financial Reporting: Understanding Section 404 of Sarbanes-Oxley (KLplus CPE Course) Sections 302 and 906 of SOX lay a foundation for restoring investor confidence in the integrity of public reporting. Building on that foundation, Section 404 requires management to file an internal control report with the annual report on Form 10-K. This course focuses on the SEC’s rules for Section 404. CONTENT AREA: Sarbanes-Oxley TOPICS: Training & Development, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, Financial Reporting, External Auditor Protiviti Flash Reports This page provides links to and summaries of the Protiviti analysis - flash reports - that have been released in conjunction with changes and announcements from COSO, the PCAOB, or the SEC. CONTENT AREA: Regulatory Updates TOPICS: Compliance, Corporate Governance, COSO, Financial Reporting, IFRS, Technology, Internal Controls, PCAOB, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, GRC Q&A Sections From Protiviti's "Guide to The Sarbanes-Oxley Act: Internal Control Reporting Requirements” This page contains links to the Q&A sections published on KnowledgeLeader from Protiviti's "Guide to The Sarbanes-Oxley Act: Internal Control Reporting Requirements” CONTENT AREA: Questions & Answers TOPICS: Corporate Governance, Internal Audit, Internal Controls, Sarbanes-Oxley Act, Audit Committee & Board, Enterprise Risk Management, Financial Reporting, Section 404 - Internal Control Reporting, PCAOB, Reporting/Disclosure, GRC Q&A Sections From Protiviti's "Guide to The Sarbanes-Oxley Act: Managing Application Risks and Controls” This page contains links to the Q&A sections published on KnowledgeLeader from Protiviti's "Guide to The Sarbanes-Oxley Act: Managing Application Risks and Controls” CONTENT AREA: Questions & Answers TOPICS: Audit Committee & Board, Corporate Governance, Enterprise Risk Management, Financial Reporting, GRC, Internal Audit, Internal Controls, IT Audit, IT Controls, PCAOB, Reporting/Disclosure, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting Sample Charters Available on KnowledgeLeader Greater responsibilities have been thrust at companies and their executive committees through various corporate governance initiatives. This environment has heightened the demand for qualified and educated members to sit on company boards, requiring written committee charters and increased responsibility over the company’s financial reporting. This hub provides you with various committee charters and related resources to help successfully apply these corporate governance requirements. These are also are intended to provide examples of the language and structure of various committee charters. CONTENT AREA: Charters TOPICS: Corporate Governance, Sarbanes-Oxley Act, Accounting/Finance, Audit Committee & Board, Compensation & Benefits, Financial Reporting, Reporting/Disclosure, GRC Sarbanes-Oxley Act - Resources for Compliance Available on KnowledgeLeader KnowledgeLeader is a one-stop source for valuable materials and informative guides on the Sarbanes-Oxley Act (SOX). You will find updates, presentations and tools to help you execute the requirements of the act, in particular Section 302 and Section 404. These resources, along with many others, will help you save time and improve your SOX compliance processes. CONTENT AREA: Sarbanes-Oxley Act TOPICS: Sarbanes-Oxley Act, Section 302 - Executive Certifications, Section 404 - Internal Control Reporting, Financial Reporting, Internal Controls, PCAOB Validating Operational Effectiveness (Testing of Controls) (KLplus CPE Course) For Management to assert that internal control over financial reporting is effective, evaluating design effectiveness and validating operating effectiveness are both required. Validating operating effectiveness is the process of determining that the controls are operating as designed. CONTENT AREA: Sarbanes-Oxley TOPICS: Training & Development, Sarbanes-Oxley Act, Section 404 - Internal Control Reporting, Internal Controls, Financial Reporting
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