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PUBLIC LAW 107-204-JULY 30, 2002

The Sarbanes-Oxley Act of 2002

§404 management assessment of internal controls

The onset of the Sarbanes-Oxley Act has meant laborious new financial requirements and painstaking standards regarding how financial information must be developed and reported. If you are the CFO or controller of a public company, you are no doubt concerned whether your current staff is up to the task.

Geller & Company offers you instant bench strength to respond to the demands of the Sarbanes-Oxley Act. We provide the methodology, tools and guidance so you can be confident you are in compliance without needing to add headcount or divert hard-pressed staff from their current priorities.

We break down our methodology into four areas of concern:

The SEC’s rules relating to management’s reports on internal control include commentary on the background of the rules and insight on how the rules should be interpreted and implemented, including:

“The assessment of a company’s internal control over financial reporting must be based on procedures sufficient both to evaluate its design and to test its operating effectiveness. Controls subject to such assessment include, but are not limited to: …controls related to the prevention and detection of fraud.”

In addition to the SEC guidance, the PCAOB, in its Auditing Standards #2, has stated the following:

“That management’s responsibility when designing a company’s internal control over financial reporting style is to design and implement programs and controls to prevent, deter and detect fraud. Management, along with those who have responsibility for oversight of the financial reporting process (such as the audit committee), should set the proper tone; create and maintain a culture of honesty and high ethical standards; and establish appropriate controls to prevent, deter and detect fraud.

In 1985, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) was formed to sponsor the National Commission on Fraudulent Financial Reporting, whose charge was to study and report on the factors that can lead to fraudulent financial reporting.

Geller & Company will implement the five components of COSO for developing guidance on internal control and ensuring anti-fraud provisions are implemented for you. The planning and results of work performed in each phase will be reviewed with you. Your external auditors will be consulted, as necessary, to ensure compliance. We will establish a timeframe, with the goal of completing the project, that will allow time for remediation of control gaps and for your external auditors to perform their tests.

Here is more information about our approach.

For a summary of the services we offer mid-size and global organizations, see the column to the right. For additional information, please contact us today.

SOX and audit support from back office to corner office

Sarbanes-Oxley implementation

Training and guidance
Identify business processes
Identify significant control objectives
Perform risk assessment
Document processes
Document controls
Evaluate design
Design test plans
Execute test plans
Evaluate results
Address deficiencies using the "Framework for Evaluating Control Exceptions and Deficiencies, Version 3, dated 12/20/2004"

Internal audit services

Define your audit universe with your audit committee
Develop an effective corporate governance
Develop a risk assessment methodology for the auditable entities identified in the model of major processes/operations
Develop an audit plan based on the risk assessment and requests from management and get it approved by the board
Develop an audit charter, approved by both senior management and the audit committee, for the internal auditing activity
Develop or enhance your policies and procedures manual