Sox-404 Corporate Governance

It is often recommended for (HCO)’s to have a corporate compliance plan to be more efficient, reduce errors, and not have small errors turn into large errors. As (OIG) it’s a necessary and fundamental need to incorporate a corporate compliance plan to have for staff and management to stay organized and lessen the chance of fraud, waste, and abuse in the company. Stated by, (Cleverly, Song, & Cleverly, 2011), it is effective only if it includes management support, effective communication, continuous monitoring, and individual accountability. All these aspects are a continual monitoring requirement as long the corporate compliance is in place for the duration.

History of SOX - the Sarbanes-Oxley Act of 2002 is legislation in response to the high profile financial scandals, such as seen with Enron and WorldCom. The purpose of this act is to protect shareholders and the general

Trinity’s project team began the implementation of SOX with pilot projects to obtain a general idea of what was going to be required across the entire company. During the scoping phase of implementation, Trinity selected two business units, Highway Safety and Marine Tank-Barge, to assist the SOX compliance team in understanding how much time and effort would be needed, what control documentation would be required, and what control gaps would be identified (Schultze, 2011, p. 96). Trinity’s team worked closely with members of each business unit and conducted interviews with the goal of documenting the processes and controls of those units. The next step was that the team performed a gap analysis to identify gaps of the processes and controls and rectified the gaps when discovered. The identified controls were then assigned to various employees and quarterly those employees would have to complete a control certification letter, which would allow the

According to the Sarbanes-Oxley Section 404 Act, it is the responsibility of the management to establish and maintain internal controls required for financial reporting. The company’s latest year assessment of

According to the owner of the Gardner Novelties, Inc., William Montgomery Gardner III (WG), the company needs to be compliant with Sarbanes-Oxley (SOX) Act Section 404. This will involve making assessment of the internal controls over the financial reporting for the company. Such internal controls have to be adequate, tested, and audited as the required by the SEC (Moeller, 2008). As a result, the company has been requested to explore the COBIT framework for the implementation of the compliance with the SOX Act, more specifically, Sarbanes-Oxley Act Section 404 (Hoitash, Hoitash, & Bedard, 2008). According to SOX Act, the insurer of IPO needs all the information concerning their annual reports which should involve scope and adequacy of internal control structures and procedures for financial reports.

According to Terry Sheridan, in the article, SOX Compliance is Still a Challenge- and Costly- for Many Companies, she states that “Aside from external audit fees,

The Sarbanes-Oxley Act (SOX) is a legislation enacted in 2002 under the sponsorship of U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative Michael G. Oxley (R-OH). The law introduced increased government oversight for publicly held companies. It also imposes additional management responsibilities and corporate operating costs on companies trading under SEC regulations. Sarbanes-Oxley was enacted in direct response to a number of corporate accounting scandals, including those of Enron, Tyco International, and WorldCom.

For the public traded companies in the United States, the Sarbanes-Oxley Act has approximately eleven different sections that these public traded companies must abide by. In addition, The Securities and Exchange Commission or the SEC also has a significant impact in the implementation of rules and requirements to abide by the law. As a result, top level management officers such as the Chief Executive Officer (CEO), Chief Operations Officer (COO), Chief Financial Officer (CFO), and the Board of Directors must now follow stricter laws enacted such as internal control, corporate governance, auditing rules, and other financial practices.

The committee of sponsoring organizations and the Control objectives for information and related technology are important because they supply advice to businesses as to what internal controls should involve. COSO tells a business how to prevent risk or fraud with the internal control it uses, and COBIT with the IT controls, and how to avoid the misuse of funds, or to prevent any

Internal controls represent an organization’s processes and procedures used to meet its goals and objectives and serve as a defense in safeguarding assets and preventing and detecting errors, fraud, and abuse. Effective internal controls provide reasonable assurance that an organization’s objectives are achieved through (1) reliable financial reporting, (2) compliance with laws and regulations, and (3) effective and efficient operations. The passing of the Sarbanes-Oxley Act of 2002, as well as the numerous corporate frauds and bankruptcies over the past decade—including some

Despite the aforementioned efforts to strengthen the internal controls provision, violations persist. In 2008, BHP Billiton failed to implement a thorough internal controls system. The SEC report noted BHP Billiton did not prepare or train its employees to handle riskier situations. However, the SEC acknowledged BHP Billiton implemented a few internal controls (U.S. Securities and Exchange Commission, 2015a). This case reflects an uncertainty over the SEC’s inconsistent interpretation of the internal controls

When it comes to top-down versus bottom-up approach, Trinity used a top-down approach with Mr. Collum leading the project on compliance. He and his steering committee laid out all of the factors for sox compliance and internal controls. A bottom-up approach would have started from manufacturing line of the business. Bottom-up has material risks but can easily be identified and corrected compared to top-down where it can stall an investigation into the risk. This would also improve the financial reporting for Trinity.

COSO does not believe that the additional criteria changed what is required for an effective system of internal control over financial reporting. Even so as managers and internal auditors access the design and effectiveness of the companies ICFR they may identify internal control deficits that require remediation during 2014.

Under the Sarbanes-Oxley Act of 2002, reports on internal control are required. Did the company’s management acknowledge its responsibility for establishing and

Managers must assess and auditors must attest to the effectiveness of its internal controls over financial reporting. SOX addresses the issue of management assessment of internal controls. This section requires both independent auditor and management opinion regarding the effectiveness of