Published Article-Sox Institute 12/2008
The Essence of Internal Control
A statement on policy and procedures issues as they relate to managements views and /or findings with regard to OMB A-123 audits.
Writing position papers on justification of actions taken has raised some questions about control. There seems to be a shift in the mind set of managers now that Section 404 of Sox's (documentation) has really kicked in with compliance performance of the financial managers responsibility or in others words , who has or had authority ,command, and control of the process. The cause and effect of policy often goes against the procedures that are written to enforce the objectives of the policy. This is the standard loop hole in the blame game of shifting responsibility to the weakest component in the chain of custody process. In researching this issue a new term has been developing in my statement writings, reciprocal responsibility. This reinforces the checks and balance that is intended to be in place at the out set. Most players in this game like this idea but there's not enough wiggle room for them. What they really want is assurance that the process is the root cause and not the policy. Managers enforce policy. Policy and procedures must be reciprocal to be effective and efficient. Most of the regulations allow for this sort of dialog to take place and encourage it, which is why Sarbanes-Oxley is so board in its overall concept. Section 404 barely consist of a whole paragraph Thus allowing for broad interpretation for unknown circumstances yet to be considered (lessons learned)
I have successfully brought together adversarial components of major operational programs to bring clarity, understanding, and appreciation of each opposing inherent view of responsibility, objectives, and concerns that cause conflict in information flow. By its very nature, program management is very personal and control is a major part of that activity. Most people are...
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