Executive Education: Management Training Courses, Seminars, Classes & Workshops in USA: Las Vegas, Los Angeles, San Francisco, Seattle, Chicago, New York, Miami, Houston, and Washington, DC.

Management Training       Think Tank       About Us

  

 Investment Business Government Projects Polls Contact.

 

 

Executive Papers
Working Papers

Executive Journal > Corporate Governance > CIO and Sarbanes Oxley Compliance

CIO and Sarbanes Oxley (SOX) Act Compliance
Project Management Best Practices

Executive White Paper
Med Jones, International Institute of Management

Corporate Governance – SOX Best Practices Paper

CIO and Sarbanes-Oxley Act (SOX)

    Corporate governance best practices

What is Sarbanes-Oxley (SOX)?

  • SOX act of 2002 is a US government regulation that establishes requirements for public companies and their executives to implement test and maintain internal controls of financial reporting. SOX compliance requires internal policies, procedures and controls to “provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.”

  • "Internal control" requirements are achieved by integrating, documenting and testing three main enterprise functional areas, these are Financial Reporting, IT Security and Business Process controls (as shown in the figure below).

CIO & Sarbanes-Oxley Compliance Project. Disovery, Assesment, Remediation and Testing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What is COSO & COBIT?

  • The SOX act recommends the use of COSO (The Committee of Sponsoring Organizations of the Treadway Commission) as the framework for auditing financial systems.
     

  • The Committee of Sponsoring Organizations (COSO) was formed by several professional groups, including the Institute of Internal Auditors (IIA), Financial Executives Institute (FEI), American Institute of Certified Public Accountants (AICPA), American Accounting Association (AAA), and Institute of Management Accountants (IMA).
     

  • The COSO Report, as the framework became known, was the first-ever attempt in corporate America to establish a universal definition of internal control, along with proposed guidelines for governance, independence and quality assurance.
     

  • The Information Systems Audit and Control Association (ISACA) has prepared an industry accepted “mapping” of CoBIT (Control Objectives of Information and Its related Technology) to the COSO internal control model and the S-OX information system internal control requirements.
     

  • While CoBIT has a much broader scope in the audit process, INS core competencies align directly to the development of the support systems, processes, procedures, and controls identified under the GCCs (General Computing Controls.) . The GCCs include controls for:
     

  • Software (Systems) Development Lifecycle (SDLC)

  • Change Management

  • Production Operations

  • Operations Security (Access and Vulnerability Management)

  • Systems Backup and Recovery

  • Specifically CoBIT focuses on the following internal control processes:

  • Acquiring or developing  application system software

  • Acquiring technology infrastructure

  • Developing and maintaining policies and procedures

  • Installing and testing application software and technology infrastructure

  • Managing changes

  • Defining and managing service levels

  • Managing third-party services

  • Ensuring systems security

  • Managing the configuration

  • Managing problems and incidents

  • Managing data

  • Managing operations

What is SOX compliance project methodology and timeline?

SOX compliance is a program that includes multiple projects with typically  3 main players; an accounting audit firm, an IT security firm and the client’s business process management team.  

 A Typical Project Methodology and Timeline

 Phase 1 Discovery

    Business Scope Identification, Project Plan and Client Training      2-3 Weeks

    IT Scope Identification, Project Plan and Client Training               2-3 Weeks

Phase 2 Assessment 

    Enterprise Business Controls Gap assessment                             6-8 weeks

    Enterprise IT & Applications Controls Gap assessment                 6-8 Weeks

    Business Controls to IT Controls Mapping                                   2 to 4 weeks

Phase 3: Remediation 

    Business Process Remediation                                                   2 to 4 weeks

    IT Process Remediation                                                            2 to 4 weeks

Phase 4:  Internal Testing 

    Business Internal Testing                                                          2 to 4 weeks

    IT Internal Testing                                                                   2 to 4 weeks

Phase 5:  Certification  

    SAS 70 Compliance                                                                  2 to 4 weeks

    External Auditor Testing                                                            2 to 4 weeks

    Signoff and Certification                                                            1-2 Weeks

 

What are the SOX compliance project deliverables?

SOX Project Deliverables

Phase 1 Discovery

    Project Definition Document

    Project Plan With Resources and Dates, Milestone

    Executive and Managers Training Material

    Business Compliance and Reporting Templates

    IT  Compliance Reporting Templates

Phase 2 Assessment 

    Business Transactions Control Process Flow Diagrams

    List of mapping of all GL accounts to process flows

    List of Business Controls & Risks for each business Cycle

    IT Transactions/Process Flow Diagram

    List of IT and Applications & Risks Controls

    Mapping Biz and IT Controls ( in collaboration with business managers)

Phase 3: Remediation 

    Business Remediation Recommendation

    IT and Applications Remediation Recommendation

Phase 3:  Testing 

    Internal Testing Biz Controls Results

    Internal Testing IT Controls Results

Internal Controls Best Practices

  • Establish an independent internal audit function (full-time) for both financial and non-financial areas (IT, operational and administrative controls and processes).

  • Internal Auditors to report directly to the audit committee of the board of directors, and administratively to executive management.

  • Have board-approved charters for both their audit committees and internal audit departments.

  • Involve your external audit firm at strategic points along the SOX project timeline to ensure that they could appropriately perform internal controls attestation work for the year-end audit.

  • Ensure continuous process improvement by performing enterprise/process-specific risk assessments/review once a year.

  • Establish a project management function for the initial compliance project. The project manager's role is to help establish initial project scope, structure, time , resources quality standards and processes to meet minimum SOX compliance, which normally include documentation of each process or sub-process sufficient to support a walk-through from source transactions to the financial statements, along with the identification, documentation and testing of critical controls.

  • Identify significant processes and transactions outsourced to third parties. Determine their SAS 70 report will adequately support your organization’s SOX financial statement assertions. Get a review and opinion of your external audit firm for its review and opinion. Include that into the project scope, time and resources.

  • Establish and continuously refine methodology of financial statement assertions, key control identification, documentation, testing and IT-based key controls.

  • Conduct internal audit test and report on the effectiveness of the existing control activities.

  • Conduct management's review to correct deficiencies as noted.

  • Educate the management team and work in partnership with them to develop and test the effectiveness of all pertinent policies and procedures, along with evaluating the efficiency and effectiveness of the overall control environment.

  • Adopt COSO as the primary framework.

Key Success Factors (KSF)

A successful program must be 4 dimensional

  • People           (Organization, Roles, Skill-sets, Training)

  • Process         (Business Operations; Engineering, Production, HR, IT, etc.)

  • Technology    (Infrastructure, Applications, Tools)

  • Financial        (Budget, TCO, ROI, Risk Management )

About the Author

Med Jones is the president of International Institute of Management. A management best practices education and consulting organization. IIM has 55 universities and research partners in 40 countries.

What are White Papers?

White papers provide businesses and government leaders with a list of questions, terminology and discussion points that can be used to address emerging challenges and opportunities. Unlike academic research papers, white papers are succinct work documents designed for problems solving and communication by the leadership team. Depending on the scope of the each paper, the document structure may include three to five sections: 1). A statement of the problem or opportunity 2). Analysis of root causes and underlying forces 3). Proposed solution and 4). A checklist of best practices for solution implementation and change management 5). Notes and resources.

Copyrights License

Royalty free License is granted for use or publishing for educational (not commercial) purposes provided the user/publisher include a clear reference to the author(s) and International Institute of Management, IIM www.iim.education (please including the active hyperlink for electronic publishing). Licensing fee is required for consulting or commercial publishing

:::

Corrections and Updates

If we made an error in our papers or missed a reference to a major and direct contribution by earlier authors to the subject matter, please feel free to contact us with correction information and supporting evidence. Updates enrich our papers and ensure the integrity and accuracy of the shared knowledge. The updates and their dates will be listed in this section.

:::

Interested in learning more?
Visit Executive Education and Management Training

MIS / IT / EBIZ Management Course - Online Distance Learning
Management Information Systems Best Practices

Training Workshops: MIS / IT / EBIZ Management Course In Las Vegas, USA
Planning, building and managing information systems

 

 

 PublicationsBest Practices.  Strategic Retreats. Contact.

Executive Education: CEO Management Training Seminars, Courses, Classes, Workshops in USA: Las Vegas, Los Angeles, San Francisco, Seattle, Chicago, New York, DC, Miami



Professional Management Training
Seminars. Courses. Workshops

USA Training Venues

Las Vegas, NV. Los Angeles, CA. San Francisco, CA. Seattle, WA.
Chicago, IL. New York, NY. Washington, DC. Houston, TX. Miami, FL.

Online Navigation Map

Management Training Calendar

Management Courses.   Government Courses.   Distance Learning Courses.
Executive Education.   Custom Corporate Training.    Strategic Retreats.
CEO Club.   USA Courses.  International Courses.
Think Tank.
About Us. Contact Us.
Sitemap.  Index.
 Legal.

  

© 1998 - 2017  International Institute of Management, USA.

Last Updated: May 14, 2017.