Highlights

• The SEC's Management Guidance and Auditing Standard 5 for SOX 404

  • Focus on aligning costs and benefits

  • Key issues and opportunities

  • Making it work for you

  • Improving your process

  • Understanding and using the principles to reduce workload and costs

• Understanding the crucial principles behind the new principles based guidance

• Understanding the process steps in the SEC Management Guidance AS 5

• Revisiting your “Top-Down” model

• Remaking scoping decisions based on the new risk level guidance

• Scoping to only identify “Material Weaknesses”

• Internal Control Over Financial Reporting versus COSO – operation control issues

• What is reasonably possible or probable?

• Documenting entity level controls and their impact on risk and testing

• The auditor’s new role – no evaluation of management’s assessment

• Identifying opportunities to build efficiencies

• Overcoming resistance to change in your process

• The new definition of significant account

• Reducing documentation

• Issues with IT controls and how to identify which IT controls are relevant

• Reducing the number of controls you test

• The revised definitions of Significant Deficiency and Material Weakness

Freshly updated for the new guidance and latest developments

Agenda

DAY 1

12:30 - 1 p.m. -- Registration

1 - 1:20 p.m. -- Workshop Overview – The State of the 404 Process

• Workshop schedule, administrative matters and introductions

• Overview of latest guidance from the SEC and PCAOB

1:20 - 4:30 p.m. -- The SEC’s New Guidance for Management

• Overview

• The new report – no auditor’s report on management’s assessment

• The SEC’s “safe harbor”

• Two basic principles

• Structure of the process

• Identifying financial reporting risks

• What is a material weakness?

• Issues in scoping

• Identifying controls to address financial reporting risks

• Design effectiveness evaluation

• Operating effectiveness evaluation

4:30 - 5 p.m. -- SOX as it Exists versus the New SEC Guidance

• Working without the auditor’s constraints

• Adjusting testing to identify only material weaknesses

• Operational control issues

• Entity level controls – when could they be enough?

• Could you reduce some process level documentation?

5 p.m. - 6:30 p.m. --Cocktail Party for Participants and Their Guests

DAY 2

8 - 8:30 a.m. -- Continental Breakfast

8:30 - Noon -- The PCAOB’s New Audit Standard 5

• Overview of the auditor’s SOX 404 process

• “Top-down” now required by AS 5

• Entity level control issues

• Starting with the financial statements

• The new definition of significant account

• Is process documentation required?

• Testing issues

• Refining sample size decisions

• Maximizing efficiency of testing by finding opportunities to combine walkthroughs, design effectiveness and operating effectiveness testing

• Maximizing efficiency in testing controls with multiple objective tests

• Making more efficient sample size decisions

• Timing your testing to make remediation efforts on a timely basis

Noon - 1 p.m. -- Luncheon

1 - 2:30 p.m. -- Summary of Areas for Change

• Focus on material weakness issues

• Eliminating operational control issues

• Identifying financial reporting risks

• Using entity level controls

• Reducing “significant accounts”

• Testing effectively

• Self assessment and other testing regimens

2:30 - 3 p.m. -- Material Weakness and Other Reporting Issues

• The large CPA firm's "Framework" document for analyzing control deficiencies – adapting for the new definitions

• Reporting the remediation of material weaknesses and AS 4

• When must changes in internal control be reported in Form 10-Q and 10-K?

• The requirement for "robust" disclosure of material weaknesses

• Tips for writing a clearer, more effective report

3 - 4 p.m. -- Dealing Effectively with IT Issues

• Determining which IT general controls to document and test

• Issues in hard-to-obtain SAS 70 service organization reports

• Effective documentation of IT application controls in process documentation

4 - 4:30 p.m. -- Questions and Answers

• Getting benefit and building lasting value from establishing and improving internal control

• Should you use the COSO's Enterprise Risk Management Framework?

• Benchmarking, what cost information is available? Averages per company?

• What is the market impact of reporting material weaknesses?

• Learning curves - getting better each time

• Avoiding mistakes from earlier years

• COSO's new "Implementing the COSO Control Framework in Smaller Businesses"