Using risk management techniques is an important component in creating the internal control required for compliance with Sarbanes-Oxley (SOX) Section 404.  Risk management includes all the activities associated with identifying and reducing risk, as well as coping with negative events should they occur.  Identifying risks and creating systems and safeguards to ameliorate them is one way to create a basic internal control system. »» Read more… »

It has been more than five years since most provisions of the Sarbanes-Oxley Act of 2002 took effect (in mid- 2003). Many publicly traded companies, however, still seem to struggle with developing a confident understanding of compliance. »» Read more… »

Question of the Month: Why is due diligence and transparency important?

Due diligence means you are collecting the proper information and ensuring you are aware of all the relevant facts. As the term transparency implies, it means there is a degree of openness and honesty. The recurring theme of October’s articles illustrate how important due diligence and transparency can be to business success. »» Read more… »

We have been told repeatedly that there are two things at the heart of the current financial crises. The sub-prime home lending fiasco (with the bad loans then bundled into investment securities) and the credit default swaps that had organizations falling like dominoes once bad mortgage loans started taking some institutions down. »» Read more… »

We are experiencing an avalanche in our financial system. Major financial institutions are failing to the shock of investors and depositors, and there is such a high level of uncertainty in the financial system that availability of credit has been shut off even to the most highly rated borrowers. »» Read more… »

How could the current financial crises been avoided? The answer is really easy: due diligence and transparency. »» Read more… »

Question of the month: How can you make sure that procedures are used in your organization?

How effective are procedures that languish in file drawers or collect dust in binders… never used or seeing the light of day? What is the point of having procedures like these? We have talked in the past about why you need procedures, now let’s talk about how to get those procedures used. »» Read more… »

Our general topic this month is how to get procedures used. Most organizations put at least some effort into creating procedures. Shouldn’t they have a functional role in the organization? Isn’t it a wasted effort if they are just going to collect dust stuck in a binder sitting on a shelf, or if they languish in a file drawer and never see the light of day? »» Read more… »

Last week we discussed how to ensure procedures are used. Along with communication, training and auditing, we brought up the concept of buy-in. We thought the topic of buy-in deserved further discussion. So, what is buy-in? »» Read more… »

Our previous essay listed the typical problems with procedures that we hear from those attending our Well-Defined Processes class. We divided these problems into two broad categories: poorly written and not used. The previous essay also covered problems that fit into the “poorly written” category. »» Read more… »