THE CHANGING ROLE OF THE INTERNAL AUDITOR March 31-April 2, 2003 * Georgian Terrace Hotel * Atlanta, GA
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At 10:38 AM 3/1/2003 -0500, [EMAIL PROTECTED] wrote:
Before you start going over board on SOX you may just want to read this article, <http://www.electronicaccountant.com/ElectronicAccountant/index.cfm?txtFuse=dspShellContent&fuseAction=DISPLAY&numContentID=21271&numSiteID=4&numTaxonomyTypeID=11&numTaxonomyID=179> There seems to be the start of a backlash against the bill that was initiated, designed, written and signed in haste, JUST to show the public that the government was doing something in response to the Enrons of the world. It is about time someone realized just how poorly conceived it was.
Have you ever heard of a law that was repealed because of haste (except for Prohibition of course ;-)?
Isn't SOX really Turnbull with a twist (jail term)? In fact the Institute of Chartered Accountants in England & Wales sent a letter of comment in response to the SEC's consultation document entitled "Disclosure required by Sections 404, 406 and 407 of the Sarbanes-Oxley Act 2002". In it they say that the Institute has been closely involved with developments in corporate governance and internal control in the UK for over ten years (their Cadbury report). It's a lengthy paper, but may be a good read. http://www.sec.gov/rules/proposed/s74002/rhodgkinson1.htm
Many of our colleagues in the UK are looking at some of the aspects of SOX in a positive light. They experienced a crisis of confidence in financial reporting following corporate scandals in the late 1980s and early 1990s. That ultimately led to the publication in 1992 of the highly respected `Report of the Committee on the Financial Aspects of Corporate Governance' (the Cadbury Report). Hence, they strongly support the goal of improving the quality of financial reporting.
IMHO, if anything, there will be a "new & improved" version of SOX, perhaps Turnbull/Cadbury Americanized (we need to have our opinions in everything ;-). For example, I think the Boards of Directors need more control or more understanding of the inner workings of a company - not in line positions, but as protectors of the assets for the shareholders. While the CEO/CFO is responsible for sign off, what happens when they are in cahoots and are both crooks? Sure, they can get caught and go to jail, but that's after the fact - when the company is beyond repair. (I lived through an experience as an officer in an international financial services company)
As such, I think we need a new organization chart with a C-Level officer on the same level as the CEO who reports directly to the Board. And, all reporting of issues within the organization needs to be reported as is, with exceptions to changes made by superiors noted. I'm working on a new white paper addressing these issues as I see them. Stay tuned.
FWIW
George
_______________________________________________________ George Matyjewicz, Ph.D. Managing Director - Consulting D'Arcangelo Software Services Telephone: 914-694-4600 Toll free: 877-839-8222 Fax: 914-694-3658 mobile: (678) 428-7378 E-mail: [EMAIL PROTECTED]
This conference provides expert speakers addressing the latest and most topical issues regarding new processes & practices helping internal auditors successfully meet the expectations of BODs & auditing committees, senior executives, clients and external consultants. Includes case studies from Fidelity Investments, Bon Secours Health Systems, Staples, Schwan Food Company, FedEx, Anchor Bancorp, and others.
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