SARBANES OXLEY

CORPORATE CERTIFICATION OF FINANCIAL STATEMENTS

Sarbanes Oxley Sections 302, 404 & 906a

Sections 302, 404 & 906a of the Sarbanes Oxley Act 2002 contain the following requirements:
302 Corporate responsibility for financial reports 404 Assessment of internal controls 906a Certification of periodic financial reports

Section 302 Overview

Section 302 of the Sarbanes Oxley Act 2002 requires that: an Issuers annual and quarterly financial statements are certified by the organisations principal officers for: correctness completeness effectiveness of underlying internal controls

Section 302 Summary of Requirements

Certification required by Issuers principal officers confirming that quarterly and annual financial statements: Disclose material untrue statements or omissions Fairly present financial condition and results Are supported by effective internal controls

Definition of Principal Officers (302)

The Sarbanes Oxley Act defines principal officers as:

principal executive officer (CEO) principal financial officer (CFO) officers performing similar roles to the CEO or CFO

Review of Report by Signing Officer (302)

The signing officers are to certify that they have actually reviewed the report being published The signing officers should understand all aspects of the report and raise any concerns they have about its contents

Review of Report by Signing Officer (302)

An effective process should exist within the organisation to pre-check correctness and completeness of the report Consideration should be given to introducing an upward certification process within the organisation

Untrue Statements or Omissions (302)

Based on their knowledge, the signing officers must certify that the report does not:

contain any material untrue statements

omit to state a material fact

that may be considered to be misleading

Financial Condition and Results (302)

Based on their knowledge, the signing officer must certify that the financial statements fairly and accurately reflect the Issuers:

Financial condition as at a specific date

Results for the specific periods as stated in the report - in all material respects.

Responsibility for Internal Control Systems (302)

The signing officer(s) must certify that they: are responsible for the disclosure controls and the internal control systems (ICS) have ensured that material information is communicated to the signing officers have evaluated the ICS in last 90 days to filing date have reported findings from evaluation process

Reporting on Internal Control Systems (ICS) (302)

Following their ICS evaluation, the signing officer(s) must report to the audit committee and external auditors: all significant deficiencies any material weaknesses Any fraud, whether material or not, involving any person involved in the ICS Any significant changes to the ICS since evaluation

Internal Control Report (404)

An Issuers annual report must include an internal control report that: Confirms management responsibility for the internal control structure Confirms management responsibility for the financial reporting procedures Includes an assessment of of the effectiveness of the ICS Requires the external auditor to provide an opinion on this assessment

Certification of Periodic Financial Reports (906a)

Section 906a requires certification of each periodic financial report by the CEO and CFO that:

the report complies with the Exchange Act

The information fairly presents, in all material aspects, the financial condition and results of the issuer.

Foreign Re-incorporations Ineffective

Sarbanes Oxley prohibit Issuers from trying to reduce the legal implications of Section 302 through:
Re-incorporation outside the United States

Engaging in a transaction that results in transfer of corporate domicile outside the United States

Upward Certification System

Relates to requirements of Sarbanes Oxley Act Sections 302, 404 and 906a
Creates chain of certifications for the internal control system (ICS) based on agreed procedures and check lists

Involves all levels of specialists and management in the ICS certification process

Upward Certification System

Each specialist responsible for a business process with a material risk profile certifies that specific business process Each level of management certifies their own area of responsibility based on the individual business process certifications received
Results can form basis of report required for Section 404 reporting

Upward Certification Benefits

All areas of the business are covered Provides structured audit trail Easier to re-certify specialist areas of the business Easier to follow up to correct deficiencies and problems All management have a corporate responsibility for the process

Upward Certification - Implementation

Develop procedures covering the certification process Design common forms and checklists Train staff in understanding internal control system (ICS) Train staff in evaluating the ICS and assessing risks Monitor and report on deficiencies identified

Upward Certification Enforcement

Make all specialists and management accountable for the certification process Ensure each process re-evaluated each time the certification forms are required Have evaluation process audited and checked Maintain audit trail of check lists and certifications

SARBANES OXLEY

CORPORATE CERTIFICATION OF FINANCIAL STATEMENTS End of Presentation

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