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Inside Internal Controls

News and discussion on implementing risk management

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financial reporting

The risk of material errors in the quarterly financial statements

Audit Analytics has released some interesting statistics on financial restatements and SOX. According to them, in 2015 about 5.3% of companies assessed their internal control over financial reporting (ICFR) as ineffective. This is down from 5.8% in 2014 but otherwise the highest level since 2008. This is the key section of their report.

 

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A new front opens in the SOX battle

When potential material weaknesses are discovered during SOX or internal audit testing, my suggestion is to review the issue with the legal function. They can advise the CEO and CFO whether this should be disclosed as part of the Section 302 certification. This new front is clearly starting to open. Don’t let it pull you under.

 

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