Under cross-examination for
corporate crime, Bernard Ebbers declared, "I don't know anything about accounting,
finance, or technology." The offence for
which the ex-CEO of WorldCom pleaded guilty does not stop at the 49th parallel. The
new rules proposed in February, 2005, in Bill 198 give the Canadian Securities
Commission (CSC) the mandate to develop Multilateral Instrument (MI) 52-109,
which will demand that CEOs and CFOs personally certify annual and interim
filings.
Bill 198 presents new challenges for management to
evaluate and test systems of internal control over financial reporting. Bill 198 is
actually is a mirror image of Sarbanes-Oxley section 404 (S404) and it certainly requires
actual display of processes and controls.
Bottom Line
If you are a CEO or CFO in either the United States or
Canada, it all points to the same thing -- you are personally responsible and liable
for your corporation. Pleading ignorance, as did Mr. Ebbers, is no
defense. Manager's heads are on the line because they must produce digital due
diligence. This certainly requires
corporate understanding of the processes that people do every day, and the
controls and feedback mechanisms that monitor and alter the processes.
Personal
Certification Methodology
The U.S. Committee of Sponsoring Organizations,
set up by the Treadway Commission, is an alliance of professional
organizations related to auditing, accounting and financial
executive professionals; published controls to enforce
organizational quality control; and governance ethics. This
methodology is called COSO, and it is the SEC S404 mandated
structure.
This is indeed spilling into the public sector.
To this end, Temi Grafstein and Lu Lahodynskj are delighted
to share BetaWatch COSO Controls and How to Estimate the Cost of
Implementation at the inaugural National Conference on Building Best
Practice Internal Audit Function in the Public Sector.
http://betawatch.com/address/05jul27COSOControls.pdf
Established in 1999, ßetaWatch Inc., home of digital due diligence™ is an
independent technology audit corporation with no hidden agenda.
Team ßetaWatch International solves management of internal controls, provides effective
and efficient compliance with applicable laws and regulations.
BetaWatch has expert knowledge regarding with the International
Organization for Standardization's document ISO 9126, a worldwide
standard for software-product evaluation and quality, and are
experts in COSO, SEC-mandated evaluation criteria.
Using
COSO methodology, Bill 198 certification is systematically expedited
rapidly and correctly. BetaWatch provides an estimate.
Identifying
critical business process dependencies on databases and staff
BetaWatch documents, evaluates, and tests controls, handing
off control monitoring to operational staff.
With
Team BetaWatch, board of directors, audit, and disclosure committees
address today's higher standards of governance, identify and act
upon appropriate accountability measures.
