The accountability inherent in both Section 404 of the U.S. Sarbanes-Oxley Act and Bill 198 has prompted at least one Canadian CEO to relinquish his title. Certification requirements seem to be too intricate and complex for old-school CEOs and CFOs to follow.

After all, in the year ending March 31, 2005, the Canadian Securities Commission (CSC), a forum of securities regulators from 13 Canadian jurisdictions which harmonizes Canadian capital market regulations, requires that CEOs and CFOs personally sign a statement that they have begun to design a system of disclosure controls and procedures, and that the effectiveness of these controls and procedures has been evaluated.

Recording, Processing, and Summarization 

Bill 198 is your governance framework, and Committee Of Sponsoring Organizations (COSO), set up by the Treadway Commission in the United States, is how you implement  governance. Good governance involves both the audit committee and the employees; Bill 198 addresses the assurance of truthfulness needed by the public regarding the quality and timeliness of financial and non-financial recording, processing, and summarization.

COSO Controls

The COSO control process arose following a string of savings and loan failures in the mid-eighties. Started by an alliance of professional organizations in auditing, accounting and financial-executive professionals it describes step-by-step controls to enforce proper auditing, quality control, and ethics standards for organizations. COSO is the de facto SEC evaluation criteria, and is an appropriate framework to use for Bill 198.

Where Do You Start? 

Beginning with a written policy from the disclosure committee, operational employees must be involved in four steps: 

1) taking an inventory of internal controls -- where are they sufficient and deficient -- and assessing those controls against the COSO framework;

2) documenting how the controls have been assessed and what, if any, policies and procedures will be used to remedy control deficiencies;

3) testing to ensure that the controls and any remedies work as intended; 

4) producing a formal report from management about the prior three phases of activities. 

Next the audit committee reviews the report; appropriate training is to be provided to both the audit and disclosure committees.

The complex environment of technology systems and databases is central to corporate governance. There is no magic matrix or crystal ball. Instead, there is a sharing of information, and the flexibility to deal with uncertainty.

Established in 1999, ßetaWatch Inc., home of digital due diligence(tm) is an independent technology audit corporation with no hidden agenda.  

Team BetaWatch International solves management of internal controls, and provides effective and efficient compliance with applicable laws and regulations. BetaWatch has expert knowledge regarding the International Organization for Standardization's document ISO 9126, a worldwide standard for software-product evaluation and quality, and are experts in COSO and SEC-mandated evaluation criteria.  

Using COSO methodology, Bill 198 certification is systematically expedited rapidly and correctly. BetaWatch provides an estimate. 

With Team BetaWatch, boards of directors and their audit and disclosure committees address today's higher standards of governance, identify and act upon appropriate accountability measures.