Home : SERVICES: Sarbanes-Oxley Compliance Services: Phase IV - Reporting

Phase IV: Summarizing testing results and evaluating deficiencies

Evaluating the significance of internal control deficiencies and reporting is an evolving area that will require a significant degree of management judgment. Control deficiencies can range from internal control deficiencies to significant deficiencies to material weaknesses in internal control.

When internal control gaps are found, an analysis is performed to determine the severity of the deficiency. We will perform the following steps for each control gap in this final phase using the following seven steps:

Step 1:  Identify the deficiencies


Step 2:  Understand and assess the deficiencies


Step 3:  Assess the likelihood of misstatement


Step 4:  Assess potential magnitude of misstatement


Step 5:  Identify compensating controls


Step 6:  Determine classification of deficiencies


Step 7:  Assess deficiencies in aggregation with others

We will use the "Framework for Evaluating Control Exceptions and Deficiencies, Version 3, dated 12/20/2004" to determine whether the deficiency is negligible, significant or material.