Home : SERVICES: Sarbanes-Oxley Compliance Services: Phase I - Scoping

Phase I: Scoping

• Operations in multiple locations, including the financial and operational significance and aggregation of several locations

• SAS 70 needs and other controls that reside at third parties

• Management letters received from the external auditor and other audit issues or findings presented to the company

• An examination of your financial statements for the description of the business and other disclosures

• Project initiation

- Establish scope and timing - your participation and role toward compliance

- Develop training material for you and your staff to participate in SOX compliance

- Develop Environmental questionnaires for management and audit committee

- Establish scope of consolidating entities

- Review existing policies and procedures

- Meet with your external auditor

• The scoping process is to identify the significant accounts, disclosures, business processes/cycles and locations that must be documented and tested.

- Identify significant accounts and disclosures by considering:

1. Items separately disclosed in the consolidated financial statements
2. Qualitative and quantitative factors
3. Materiality at the consolidated financial statement level



- Identify business processes/cycles and sub-processes/cycles and map to significant accounts and
  disclosures

- Identify the relevant financial statement assertions for each significant account and disclosure

- Perform a risk assessment of the business sub-processes/sub-cycles

- Obtain a complete listing of locations or business units

- Map locations to the business processes/cycles and sub-processes/sub-cycles previously identified