The Sarbanes-Oxley Act (commonly referred to as 'SOX') of 2002 affects every listed company in the United States. CEO's and CFO's are being held more accountable for the integrity of their financial reporting as well as the effectiveness of internal controls. Some highlights include:

• CEO and CFO Financial report certification
• Enhanced SEC financial disclosure
• Code of ethics requirements and disclosure
• Management assessment of the effectiveness of internal control over financial reporting
• New provisions for audit committees, including:
• Independence
• Financial expertise
• Establishment of the Public Company Accounting Oversight Board (PCAOB), which has responsibility to:
• Establish or adopt auditing and related attestation standards, including quality control and independence standards for the audits of public companies
• Establish rules for investigations and disciplining registered public accounting firms and individuals
• Limitations on auditors, including:
• Prohibition of certain non-audit services
• Audit committee approval of services
• Partner rotation
• Conflicts of interest

Our professional consultants use a COSO-based methodology to provide complete documentation of your internal control environment and best practices to guide in establishing controls in remediation. Deliverables are prepared in accordance with external auditor's requirements following guidance of the SEC and PCAOB. Additionally, our consultants' use of ezCompliance software tools enables the process to be completed with efficiency and consistency not matched by standard manual practices.

To help in better understanding the issues related to the Sarbanes-Oxley Act and the internal control reporting directed under Section 404, the following publications were jointly prepared by the 'Big Four' CPA firms. They provide a good background and discussion of the issues and requirements surrounding internal control reporting.

Investor Resource Guide
Perspective on Internal Control Reporting

The effects of the legislation are not limited to public companies, the implications extend to private companies as well. Most notably, a number of public companies now require SOX compliance for all significant suppliers and business partners, whether public or private. Why? SOX compliance suggests that a company's processes and procedures operate within a controlled environment and that reports generated by those processes can be relied upon, not only by investors but by customers, suppliers and other business partners as well. As a result, control and reliability of data, or at least the perception of that reliability, has become a very real competitive component in the marketplace which must now be addressed by all companies regardless of ownership.