How to Comply with Sarbanes-Oxley Section 404: Assessing the Effectiveness of Internal Control, Third Edition

HOW TO COMPLY WITH SARBANES-OXLEY SECTION 404: ASSESSING THE EFFECTIVENESS OF INTERNAL CONTROL THIRD EDITION......Page 5
CONTENTS......Page 7
PREFACE......Page 11
ACKNOWLEDGMENTS......Page 13
ABOUT THE AUTHOR......Page 15
MANAGEMENT’S EVALUATION OF INTERNAL CONTROL......Page 17
RISK-BASED JUDGMENTS......Page 20
RISK-BASED, TOP-DOWN EVALUATION APPROACH......Page 24
WORKING WITH THE INDEPENDENT AUDITORS......Page 39
CHAPTER 2 INTERNAL CONTROL CRITERIA......Page 41
COSO INTERNAL CONTROL INTEGRATED FRAMEWORK......Page 42
INFORMATION AND COMMUNICATION......Page 57
INTERNAL CONTROL FOR SMALL BUSINESSES......Page 60
CONTROLS OVER INFORMATION TECHNOLOGY SYSTEMS......Page 64
CHAPTER 3 PROJECT SCOPING......Page 68
INTRODUCTION......Page 69
ENTITY-LEVEL CONTROLS......Page 70
IDENTIFYING SIGNIFICANT ACTIVITY-LEVEL CONTROL OBJECTIVES......Page 90
Appendix 3A ACTION PLAN: IDENTIFYING SIGNIFICANT CONTROL OBJECTIVES......Page 91
Appendix 3B EXAMPLE CONTROL OBJECTIVES......Page 93
OBJECTIVE OF PLANNING......Page 97
INFORMATION GATHERING FOR DECISION MAKING......Page 98
INFORMATION SOURCES......Page 109
STRUCTURING THE PROJECT TEAM......Page 116
COORDINATING WITH THE INDEPENDENT AUDITORS......Page 119
DOCUMENTING YOUR PLANNING DECISIONS......Page 121
Appendix 4A ACTION PLAN: PROJECT PLANNING......Page 123
Appendix 4B SUMMARY OF PLANNING QUESTIONS......Page 126
IMPORTANCE OF DOCUMENTATION......Page 131
ASSESSING THE ADEQUACY OF EXISTING DOCUMENTATION......Page 132
DOCUMENTATION OF ENTITY-LEVEL CONTROL POLICIES AND PROCEDURES......Page 134
DOCUMENTING ACTIVITY-LEVEL CONTROLS......Page 139
SARBANES-OXLEY AUTOMATED COMPLIANCE TOOLS......Page 163
COORDINATING WITH THE INDEPENDENT AUDITORS......Page 172
Appendix 5A ACTION PLAN: DOCUMENTATION......Page 173
Appendix 5B LINKAGE OF SIGNIFICANT CONTROL OBJECTIVES TO EXAMPLE CONTROL POLICIES AND PROCEDURES......Page 176
OVERALL OBJECTIVE OF TESTING ENTITY-LEVEL CONTROLS......Page 183
TESTING TECHNIQUES......Page 186
EVALUATING THE EFFECTIVENESS OF ENTITY-LEVEL CONTROLS......Page 201
COORDINATING WITH THE INDEPENDENT AUDITORS......Page 206
Appendix 6A ACTION PLAN: TESTING EVALUATING ENTITY-LEVEL CONTROLS......Page 208
Appendix 6B SURVEY TOOLS......Page 210
Appendix 6C EXAMPLE INQUIRIES OF MANAGEMENT REGARDING ENTITY-LEVEL CONTROLS......Page 217
INTRODUCTION......Page 224
CONFIRM YOUR UNDERSTANDING OF THE DESIGN OF CONTROLS......Page 225
ASSESSING THE EFFECTIVENESS OF DESIGN......Page 227
OPERATING EFFECTIVENESS......Page 230
EVALUATING TEST RESULTS......Page 247
COORDINATING WITH THE INDEPENDENT AUDITORS......Page 248
Appendix 7A ACTION PLAN: DOCUMENTATION......Page 250
Appendix 7B EXAMPLE INQUIRIES......Page 252
CONTROL DEFICIENCIES......Page 254
EVALUATING CONTROL DEFICIENCIES......Page 255
ANNUAL AND QUARTERLY REPORTING REQUIREMENTS......Page 261
EXPANDED REPORTING ON MANAGEMENT’S RESPONSIBILITIES FOR INTERNAL CONTROL......Page 265
COORDINATING WITH THE INDEPENDENT AUDITORS AND LEGAL COUNSEL......Page 269
Appendix 8A ACTION PLAN: REPORTING......Page 270
INDEX......Page 273