VideoTim Reason, CFO.com | US
April 25, 2006
- Controls for Controls sake vs. Controls for SOX sake
Amidst all the brouhaha, people are tending to forget that running a business with a strong control edifice can be only beneficial for it, not detrimental.
SOX or reduced SOX may be the burning questions of the moment; the fundamental question, however, remains: do we have what it takes to create a sound control mechanism for the overall good of the business and the ability to work towards sustained maintenance of this environment in a cost effective manner ?Posted by Chandrasekar Venkataraman | Apr 26, 2006 7:40 AM ET
- Strong leadership by Cox
Appearing before the Senate Banking Committee today, SEC Chairman Cox has set a strong "tone at the top" for keeping all sizes of publicly traded companies accountable to investors on a sensible controls foundation. Section 404 of Sarbanes-Oxley is very simply about management "testifying" that an organization has effective controls over its financials. Who is against that? No one. A thoughtful implementation of a revised COSO framework; a streamlining of the interpretation of AS2; and strong encouragement to the audit community to eliminate non-value-added/checkbox auditing of controls, will address most concerns. Section 404 will turn out to be a strong positive differentiator in the marketplace when you compare U.S. markets to all others. In addition, if the SEC does not support the effective implementation of Section 404 at this point for small/micro-cap companies, there will be a negative cascade of consequence (a compliance erosion) for Section 302 (Corporate Responsibility for Financial Reports) as it relates to validating the effectiveness of internal controls. If you take the public's money you are going to have to pay a price. Business needs to pick up the ball and get on with it.
Posted by Charley Best | Apr 25, 2006 3:55 PM ET
