title slide . proworks for sarbanes-oxley (sox) compliance
TRANSCRIPT
Introduced as a result of corporate failures such as Enron, Tyco, WorldCom….. to restore investor confidence in companies
Sarbanes Oxley Act of 2002
SOX Key Requirements
Corporate Management Must Certify:
• Internal Controls:– Exist – Are Periodically Tested
• Deficiencies are Disclosed
• Control Changes Reported; and
• Financial Statements are Accurate
SOX Key Requirement
• Annual report (10K) must contain a report from management on internal controls
Definition of Internal Control
Process effected by a company’s board of directors, management and other personnel that drives business success in three categories:
– Reliability of financial reporting
– Effectiveness and efficiency of operations
– Compliance with laws and regulations
Efficiency & Efficiency & Effectiveness Effectiveness
of of OperationsOperations
Reliability of Reliability of Financial Financial ReportingReporting
Compliance with Compliance with Laws / RegulationsLaws / Regulations
Control Self Assessment
• Your Role:
– Design:• Effectiveness of controls
– Operation:• How the control was applied
What Does Your Company Need?
• A documented internal control structure that includes all relevant policies, procedures and operating principles
• A structure that is:
– robust
– designed to be kept current and cost effective
What Does Your Company Need?
• An infrastructure that:
– Facilitates management’s confidence
– Supports monitoring the completion of applicable control procedures on a real-time basis
– Can be tested
Layers of Testing• Self Assessment Done locally
• Management Assertion As instructed by Headquarters/Parent Company
• External Auditor Attestation
• ProWorks can help with all 3 layers of testing!
How ProWorks can help
– What is it / What can it do• Initially developed for Manufacturing Process
Control & Maintenance• Can be leveraged for Accounting Process
Control to meet SOX testing requirements
SOX
Company’s Policies/Procedures and Processes
ProWorks
*Created: One time for all sites
Site A * Site B * Site C *
An Example of a Company’s Key Processes
Accounts Receivable/Revenue
Consolidation/Financial Reporting
Inventory/Purchasing Debt/Treasury
Fixed Assets Insurance
Cash ManagementLong- Lived Assets – Goodwill Intangibles, etc.
Information Technology HR – Payroll/Benefits
Taxes – Deferred/Provision
Acquisitions and Dispositions