The Sarbanes-Oxley Act of 2002, popularly known as SOX or Sarbox, is a U.S. law meant to protect investors from fraudulent accounting activities by corporations. Sarbanes-Oxley Act was enacted after several major accounting scandals in the early 2000s perpetrated by companies such as Enron, Tyco, and WorldCom. However, at times it is felt that only the internal auditor cares about the same.
Many feel that the task of documenting their company’s Sarbanes-Oxley controls has become routine and downright boring. Though that fact is the SOX documentation process is one of the best ways for CFOs and CEOs to be comfortable in signing off documents that make them personally and criminally responsible for the accuracy and reliability of their public company's financial statements and the effectiveness of financial controls.
This session attempts to show why SOX is one of the most important tools for public company executives, accountants, as well as auditors with the following Key Topics.
Topics Covered in this session:
- What are the key items the SEC will be watching out for - now and into the future?
- Compliance: the 3 key questions internal auditors still need to answer: 1) Is it accurate? 2) Are you sure? 3) Can you prove it?
- The Do’s and Don’ts you need to know
- The benefits of SOX
- Resources you need to have
Session - 2: SOX Internal Controls for Accounts Receivable
For many companies, Accounts Receivable is the largest or second-largest assets on the balance sheet. This means that any weakness in the financial controls for A/R could have a serious impact on the company’s financial statements. As well, since Accounts Receivable departments interact with almost every other department in the company, weak controls in A/R can lead to increased risk in other areas.
The Sarbanes-Oxley Act of 2002 makes company executives of publicly traded US companies personally and criminally responsible for the accuracy and reliability of the financial disclosures of their companies. They are required to sign reports that attest to the effectiveness of their companies’ internal controls, including foreign subsidiaries.
Many of these executives are "pushing down" the signoff of reports that attest to the effectiveness of their companies’ internal controls, including foreign subsidiaries. Credit professionals need to understand their responsibilities under the Act before they sign off on the effectiveness of the financial controls in their department.
This session looks at specific issues affecting Credit and Accounts Receivable, Including Credit Risk Management, the adequacy of provisions for Bad Debt, Collection Procedures, dependence on processes outside the credit the department, and outside the company.
This session will provide you with the tools you need to establish and maintain strong internal controls in the A/R department that meet Sarbanes-Oxley standards and reduce risk and protect company assets. There will be opportunities for online discussions and questions.
Topics Covered in this session:
- How to establish financial controls for Credit and Accounts Receivable
- Establishing segregation of duties
- Setting up cash application controls
- Structuring bad debt reserves
- Improving credit policy
- Introducing collateral controls
- Developing invoice accuracy
- Review the approval process
- Examining the role of IT systems
- Integrating SOX into daily routines
- Techniques for testing Credit and Accounts Receivable controls
- Documentation requirements specific to Credit and Accounts Receivable
Session - 3: SOX Internal Controls for Accounts Payable
Setting up controls for the purchasing and payment processes and analyzing the risk to the financial statements can be a daunting task. Since most companies have to purchase many different items every day, there is a real potential for fraud.
The Sarbanes-Oxley Act of 2002 makes company executives of publicly traded US companies personally and criminally responsible for the accuracy and reliability of the financial disclosures of their companies. They are required to sign reports that attest to the effectiveness of their companies’ internal controls, including foreign subsidiaries.
This session looks at specific issues affecting Accounts Payable, including Payables Risk Management, the adequacy of payment oversight, dependence on processes outside the Payables department, and outside the company.
This session will provide you with the tools you need to establish and maintain strong internal controls in the A/P department that meet Sarbanes-Oxley standards and reduce risk and protect company assets. There will be opportunities for online discussion and questions.
Topics Covered in this session:
- Safeguarding inventory purchasing
- Examining supplier payments
- Reviewing risks associated with payroll and taxes
- Know best practices and types of approvals
- Reviewing repetitive processes
- Understanding the dangers inherent in inter-company payments
- Verifying accruals
- Assess currency issues
- Building and using audit trails
- Review the approval process
- Examining the role of IT systems
- Integrating SOX into daily routines
- Techniques for testing Credit and Accounts Receivable controls
- Documentation requirements specific to Credit and Accounts Receivable
Session - 4: SOX Internal Controls for Inventory
Inventory, often a company’s largest or second-largest asset has a significant impact on both the balance sheet and the income statement. Easily manipulated, it can be hidden, stolen, or simply forgotten. Effective internal controls keep track of inventory and ensure that its proper value is reflected on the financial statements.
The Sarbanes-Oxley Act of 2002 makes company executives of publicly traded US companies personally and criminally responsible for the accuracy and reliability of the financial disclosures of their companies. They are required to sign reports that attest to the effectiveness of their companies’ internal controls, including foreign subsidiaries.
This session looks at specific issues affecting Inventory, including
- Inventory Risk Management,
- The adequacy of Inventory purchasing and stores management oversight,
- Dependence on processes outside the Purchasing and Inventory departments and
- Dependence on processes outside the company.
This session will provide you with the tools you need to establish and maintain strong internal controls in Inventory Management that meet Sarbanes-Oxley standards and reduce risk and protect company assets.
Topics Covered in this session:
- Accountability
- Risk of manipulation
- Purchasing
- Obsolescence
- Valuation
- Inventory returns
- “Channel Stuffing”
- Physical counts
- Inter-company transactions
- Inventory sent to outside processors
- Inventory as collateral
This session will provide opportunities for discussion on the subject queries.
