Sarbanes-Oxley Act of 2002
Disclosure/Internal Control Primer
The primer is organized into the following chapters:
Chapter 1 – Internal Control Framework
Chapter 2 – Audit Considerations
Chapter 3 – Assurance Methodology
Chapter 4 – Risk/Control Matrices
Chapter 5 – Self-Assessment Questionnaires
Chapter 6 – Audit Testing Programs
After determining to what extent, if any, disclosure/internal controls have been designed, placed into service and are operating effectively, depending on the nature of the engagement, the practitioner may further develop policies and procedures, design and implement controls, and periodically test and audit the effectiveness of the controls to determine the level of conformance with the compliance requirements contained under this Act.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. The publisher has not sought or obtained approval of this publication from any other organization, profit or nonprofit, and is solely responsible for its contents.
Copyright © 2003 Karl Nagel & Co.
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher.
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Sarbanes-Oxley compliance requirements can be grouped into four broad categories:
Audit Committee/Corporate Governance
Certification, Disclosure and Internal Controls
Financial Statement Reporting
Executive Reporting and Conduct
For medium and small-capitalized public companies, certification of disclosure/internal controls represent perhaps the most time consuming and costly Sarbanes-Oxley Act (SOA) compliance areas. The reason is straightforawrd: many medium/small companies either have non-existent or limited formal documentation of their disclosure/internal controls. Prior to the passage of SOA, this did not pose too much of a problem for auditors - reliance on internal controls could be reduced to near zero by focusing entirely on substantive or balance tests (i.e. '100% testing').
However, SOA mandates that all public companies must demonstrate that they have established, implemented and evaluated both 'disclosure' and internal controls for purposes of certifying reports filed with the SEC and meeting the requirements of SOA. For medium and small-cap companies that either do not have, or have not sufficiently documented their internal controls, they must first establish and implement these necessary controls. Then, these disclosure and internal controls must statisfy a range of audit tests to provide reasonable assurance that they are operating effectively.
To assist medium and small-cap companies comply with these SOA requirements, and help reduce the increased implementation and auditing costs associated with SOA, (as well as serve as a refresher for both CPAs and internal auditors at larger companies), Karl Nagel & Co. has developed this Guide to allow companies to internally design, document, implement and evaluate the operating effectiveness of their disclosure/internal controls.
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Author: Karl D. Nagel, CPA Price: $89
Code: ICP1 Name: Sarbanes-Oxley Disclosure/Internal Control Primer
File: ICP1.doc Size: 535K
Pages: 155 Updated: 4/2003
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Posted on December 18, 2002 by KarlN
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