February 08, 2005
Section 404 Compliance Weaknesses are Being Reported
It is no surprise that companies of all sizes are reporting internal control weaknesses. Many experts are surprised at the number of companies reporting problems because they have had so much time to remediate them. But many companies used spreadsheets, documents and manually developed flowcharts, that their process documentation probably took so long and had inconsistencies, that time to remediate was not enough. This is most likely further complicated by the fact that the economy over the last few years has been tough so companies have been running lean - meaning that segregation of duties will be the number one personnel issue they face.
From a Compliance Week Subscription Article issued today:
"Weaknesses related to financial systems and procedures typically involve the financial close process, account reconciliation, or inventory processes. $3.8 billion industrial manufacturer Terex, for example, cited problems "as they relate to the recording of certain intercompany transactions."
Personnel issues were the second most common type of weakness and deficiency disclosures. In January, 21 percent of the disclosures were related to personnel problems, which typically involve poor segregation of duties, inadequate staffing, or related training or supervision problems. J&J Snack Foods Corp., for example, cited problems with "segregation of duties in some of our disbursements, inventory and purchasing functions." $177.6 million Flow International cited "insufficient staffing of the accounting and financial reporting function."
To find out more about how your company can help determine and remediate problems in internal controls, see www.issuescentral.com and learn more about the Sarbanes-Oxley Compliance Playbook(tm).
From a Compliance Week Subscription Article issued today:
"Weaknesses related to financial systems and procedures typically involve the financial close process, account reconciliation, or inventory processes. $3.8 billion industrial manufacturer Terex, for example, cited problems "as they relate to the recording of certain intercompany transactions."
Personnel issues were the second most common type of weakness and deficiency disclosures. In January, 21 percent of the disclosures were related to personnel problems, which typically involve poor segregation of duties, inadequate staffing, or related training or supervision problems. J&J Snack Foods Corp., for example, cited problems with "segregation of duties in some of our disbursements, inventory and purchasing functions." $177.6 million Flow International cited "insufficient staffing of the accounting and financial reporting function."
To find out more about how your company can help determine and remediate problems in internal controls, see www.issuescentral.com and learn more about the Sarbanes-Oxley Compliance Playbook(tm).
