Financial transparency and accountability are the cornerstones of modern business practices. Delve into the intricacies of Internal Controls over Financial Reporting (ICFR) and the Sarbanes-Oxley Act (SOX) with our expert-led webinar in partnership with Open Compliance and Ethics Group (OCEG).
You can now review the slide deck and watch the video replay on “Mastering ICFR and SOX Compliance in 2024: Financial Reporting for Organizational Excellence” where Kristina Demollari, CPA, Associate GRC Product Manager, Resolver and Pooja Azhalavan, MBA, CPA, GRC Product Marketing Manager experts deep dive into the precision, integrity, and compliance of financial reporting controls.
Watch the replay to gain insights on:
- Overview of ICFR: Unravel the fundamental principles of Internal Controls over Financial Reporting and its pivotal role in safeguarding the integrity of financial data.
- SOX Compliance Essentials: Gain a comprehensive understanding of the Sarbanes-Oxley Act and its impact on corporate governance and financial disclosures.
- Building Effective Controls: Explore practical strategies for designing and implementing robust internal controls that meet regulatory requirements and enhance overall organizational efficiency.
- Common Challenges and Solutions: Identify challenges organizations face in maintaining and mastering ICFR and SOX compliance, and proactive approaches to mitigate issues.
- Technology and Automation: Discover how technology and automation can be leveraged to enhance the effectiveness of internal controls and streamline compliance
Resolver’s “Mastering ICFR and SOX Compliance in 2024” webinar is designed for:
- Finance professionals, auditors, compliance officers, and anyone involved in financial reporting. Whether you’re new to ICFR and SOX or looking to deepen your expertise, our webinar offers valuable insights and actionable strategies.
Don’t miss this opportunity to enhance your expertise in financial compliance. Click the “Play” button on the video above now to instantly watch the replay of “Mastering ICFR and SOX Compliance in 2024: Financial Reporting for Organizational Excellence”.
Webinar transcript:
Melissa Lentz:
Hello everyone, this is Melissa Lentz. I’m the Director of Education at OCEG and I’d like to welcome you to our webcast today, during which we will present, “Mastering ICFR and SOX Compliance in 2024: Financial Reporting for Organizational Excellence”. We are very glad you can join us for this insightful webinar as we delve into the intricacies of internal controls over financial reporting and the Sarbanes Oxley Act. In an era where financial transparency and accountability are paramount, understanding the nuances of these regulatory frameworks is essential for financial professionals, executives, and compliance officers alike.
Today we are joined by our speakers from Resolver, Kristina Demollari, Associate GRC Product Manager, and Pooja Azhalavan, Product Marketing Manager for GRC. Whether you’re new to these regulations or seeking to deepen your understanding, we are glad to be joined by these expert speakers as they provide valuable insights and practical guidance to navigate the complex ICFR and SOX compliance landscape.
But before we start, I’d like to take a minute to go over a few housekeeping notes. First, regarding continuing education credit, we provide NASPA-approved CPE credit for you for participation in live webinars. If you have an OCEG all-access pass, which you can purchase individually or as part of a company subscription, the all-access pass includes many benefits in addition to CPE credit for webcasts, such as access to all OCEG resources and on-demand education series. So if you don’t already have a pass, I would encourage you to check it out on the OCEG site. If you do have an all-access pass and would like a certificate of completion for CPE for this event, please stay with us for the entire hour and answer all the polls through the polling function in our webinar platform. These are requirements for receiving CPE credit for this event, and please note that certificates of completion for CPE credit are available only for live events.
They’re not available for viewing archived webinars. Additionally, if you need CPE credit only for OCEG certifications, your webinar attendance will be automatically tracked, and your certification dashboard on the OCEG site, will not need to upload your certificates of completion for OCEG certifications. Second, regarding the recording from this webcast, we will have the recording of this event posted on the OCEG website. Just log into the site, go to the resources tab, select webinar recordings, and then this webcast, anyone with an all-access pass may view this recording. Third, regarding our audience feedback, please feel free to submit your questions during our event today. If our presenters do not have the opportunity to respond directly during the webinar, they will be able to respond to you via email after the event.
Additionally, we value your opinions and encourage you to submit the evaluation offered after the webinar.
Fourth, regarding upcoming events and activities, please watch your email for announcements from OCEG about other upcoming webinars. You can view this information about these upcoming webcasts on the OCEG site, but before we hand over the presentation to our speakers, we’d like to offer our first poll. So again, please be sure to answer this poll by responding in the poll panel on your screen. If you are interested in receiving CPE credit for this event, please note that we will email certificates of completion for this webinar in a day or two to all participants who meet all the criteria for CPE credit.
The first poll question is, do you have an OCEG all-access pass, which is a paid membership that will enable you to receive CPE credit for this event? Your options here are yes, I have an all-access pass that will enable me to receive a certificate of completion for this event. If I attend the entire meeting and answer all the polls or not, I do not have an all-access pass, so I understand I will not receive CPE credit for this event. As you answer this poll, I’d like to hand over the presentation to our speakers to begin our discussion today.
Pooja Azhalavan:
Awesome, thanks as always, Melissa. Good morning, afternoon, and evening to everyone; I know many of you are joining us from all over. I think there are a couple of hundred of you here today from different places and different time zones, so we truly, truly appreciate it. So, today’s webinar is all about learning about the intricacies of internal controls over financial reporting and the Sarbanes Oxley compliance and of course lots of things happening in the news across the pond in the UK, but more on that as we run through this webinar.
Alright, so before we delve into the core of our discussion, let me introduce my esteemed colleague who is going to be doing most of the talking today. Kristina Demollari is an associate GRC product manager at Resolver. She brings a wealth of experience from her roles at Brookfield Assets, EY, and other global organizations. Her expertise in the internal controls and audit space, coupled with her firsthand experience in enhancing the equivalent of a software solution and Resolver makes her an invaluable asset in our journey toward building some of the best-in-class solutions in financial reporting.
Kristina Demollari:
For sure. Thank you, Pooja and hello, everyone. I’m super excited to be here today and have a conversation about one of my personal favorite topics, which is ICFR and SOX compliance.
Pooja:
Amazing and I serve as the Product Marketing Manager for again, the GRC division at Resolver with a focus on enterprise risk compliance, and BCP audit control solutions. I’ve had the privilege of working with our customers to really understand and navigate some of the complex challenges that they faced in this space and delve into solutions that can really alleviate some of their struggles. So that’s a little intro from our end very quickly on what we plan to cover today. So first we’ll get into the very basics focused on a quick intro to the concept of ICFR. We’ll follow that with SOX and its impact on financial disclosure and corporate governance.
We’ll then explore some actual strategies to use to design and implement internal controls. And lastly, we’ll dive into the challenges to maintain compliance in these different areas of business and how and why affordable technology like Resolver is increasingly necessitated to automate and streamline much of the compliance process. And with that, over to you Kristina.
Kristina:
Amazing. As Pooja mentioned, we have a well-packed agenda and hopefully a very informative session to start with. Let’s get an understanding of what is ICFR. I know that the finance and accounting world loves acronyms, but what ICFR really means is internal controls over financial reporting. ICFR is a process consisting of policies and procedures to assess financial statement risk and provide reasonable assurance that a company prepares reliable financial statements. So if we take a step back, what is one of the reasons companies exist? It is to make a profit, and one of the reasons accounting or finance departments were created is to be able to track these profits and compile financial statements starting with bookkeeping month-end or quarter-end, analyzing annual balance sheet income statements, and cash flow statements. We really understand the power of finance departments for stakeholders to have more credibility over these financial statements.
ICFR programs were created as part of ICFR companies establishing internal control systems with policies and procedures that include segregation of duties, invoice document matching, and authorizations or approvals for proper separation of duties. The same employee isn’t handling assets like cash and recording accounting transactions for revenue, cost, assets, expenses, and other expenditures. So in short, by creating ICFR programs, we are saying let’s have a look at the procedures the finance team is completing so we can have more reassurance and credibility that our financial statements represent the reality of our organizations. Continuing this conversation, let’s go through ICFR expectations for our internal stakeholders, maybe starting with the board and audit committee, which uses the financial statements to understand the progress of the organizations and help them in the decision-making. Their ICFR expectation is to ensure that financial statements prepared by management are based on an effective ICFR framework.
For these, they approve the required budget, they go through policies and procedures associated with the ICFR and this is a continuous conversation that happens with the senior management trustee, CEO, or CFO, where they receive the required budget approvals from the board or audit committee and have the authority to implement effective ICFR practices. They play a crucial responsibility because they sign off the organization’s conformance with ICFR practices and endorse it for board or audit committee approvals. This is a legal or regulatory obligation if the organization is public, but we’ll go into those details a bit later.
I just want to pass it on to process owners what does that exactly mean? Who are the process owners From the name? We can say that the process owner consists of team members from the finance department such as the director of cash, the director of equity, et cetera. Process owners obtain guidance from senior management and the internal audit team in understanding financial reporting controls and their role in managing them.
Process owners exercise compliance with organizations in internal control practices during day-to-day operations. So they’ll follow those policies and procedures. That audit committee and senior management, that tone of the top has provided as part of their day-to-day operations, which might be month end, quarter end, and so on. Lastly, internal audit teams provide advisory support to the finance departments in the effective implementation of ICFR. They are involved in discussions with the finance team where any specific input is required on critical controls. They are the experts of documentation and as such they provide this guidance when it comes to controls and how those should get documented to help process owners, as well as tone at the top, which is senior management and board or audit committees. Now I just want to go through a new concept that has recently come up such as ICFR teams. A common but also not-so-common practice is for organizations to have specific ICFR teams.
As we discussed earlier, finance teams are already very busy handling what they traditionally have been handling, which is financial day-to-day operations and compiling financial statements. As such, there is a risk that ICFR may not get as much attention if handled by these teams. Some companies have created ICFR core teams that lead ICFR mandate in the organization to ensure financial controls are adequately designed and operating effectively. Best practices indicate that the ICFR team should be separate in between finance and risk management to help with communication between teams and organize the documentation of each process in more detail. The ICFR core team is responsible for planning and conducting the annual risk assessment and the testing and evaluation of the design and operating effectiveness of key controls.
Pooja:
I just wanted to add a quick comment here Kristina. I think sometimes it’s always good to sort of weave some historical context to see why something like this is so relevant even today. So I think if you jog your memory back to say the Enron scandal that happened in the 2008 financial crisis, we saw that cascading impact of having weak controls or no ICFR frameworks in place for several years even after that incident took place and it just shook investor trust and value across the board. So it’s really a stock reminder why a concept like having an independent and dedicated ICFR team is necessary and it’s not just necessary for compliance, but it is that linchpin for economic stability and whereas Kristina was mentioning, organizations having this can help support. But anyway, thanks, Kristina. I’ll leave it to you to shed some more light on I think the workflow that these teams do.
Kristina:
Absolutely, and we’ll go into all of that just a couple of slides later when we dig deeper into SOX compliance how that act got created, and the importance of it. However, I just want to put a bit more emphasis on the workflow because it’s so good to talk in theory about the ICFR teams. ICFR is important, but I believe that by getting an understanding, okay, what is their day-to-day responsibilities when it comes to the ICFR program. It just can help the audience here get an understanding of the ICFR framework. We start with a strategy companies set up an ICFR internal controls over financial reporting strategy to establish the policies and procedures for the internal controls. We talked on the previous slide about the board audit committee and senior management, whic