Accounting

Management’s Reporting on Internal Control Over Financial Reporting (Portfolio 5317)

  • This Portfolio focuses on management’s responsibility for reporting on the effectiveness of internal control over financial reporting, as mandated by the Sarbanes-Oxley Act of 2002.

Description

Bloomberg Tax Portfolio 5317, Management’s Reporting on Internal Control Over Financial Reporting (Accounting Policy and Practice Series), focuses on management’s responsibility for reporting on the effectiveness of internal control over financial reporting as mandated by Section 404 of the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley Act created a requirement that annual reports filed with the Securities and Exchange Commission contain management’s report on the effectiveness of internal control over financial reporting. This Portfolio analyzes that requirement. The Portfolio outlines a process that may be adopted by management to assess the effectiveness of internal control over financial reporting and includes a discussion on the interrelated activities of public company external auditors. Management is reminded that the SEC provides the relevant guidance for management reporting on internal control over financial reporting, and management should refer to the appropriate literature on assessing the effectiveness of internal control over financial reporting.

This Portfolio also provides a historical perspective on voluntary and mandated reporting on internal control over financial reporting, including information on internal control reports filed with the SEC under the requirements of Sarbanes-Oxley §404, and discusses widely accepted internal control frameworks, inclu
ding the Committee of Sponsoring Organizations’ (COSO) framework of internal control, Internal Control—Integrated Framework and COSO’s updated framework, Internal Control Over Financial Reporting—Guidance for Smaller Public Companies.

This Portfolio may be cited as Bloomberg Tax Portfolio 5317, Gramling and Walker, Management’s Reporting on Internal Control Over Financial Reporting (Accounting Policy and Practice Series).

Table of Contents

I. Introduction and Scope of Portfolio
II. History, Purpose, and Components of MD& A
III. Forward-Looking Information
IV. Significant Judicial and Administrative Action Involving MD& A
V. Recent Years’ Guidance on MD& A Disclosure in 2001 and Beyond
VI. Organization and Relationship to Part 1
VII. Introduction or Overview Section of MD& A
VIII. Liquidity and Capital Resources
IX. Results of Operations
X. Key Indicators of Financial Condition and Operating Performance
XI. Known Trends and Uncertainties
XII. Forward Looking Information
XIII. Safe Harbors – Meaningful Cautionary Language
XIV. Material Changes in Financial Statement Line Items
XV. Interim Period Reporting
XVI. Segment Analysis
XVII. Critical Accounting Estimates
XVIII. Off-Balance Sheet Arrangements and Tabular Disclosure of Contractual Obligations

Audrey Gramling
Department Chair and Professor, Accounting Department
Colorado State University
Paul Walker
James J. Schiro / Zurich Chair in Enterprise Risk Management and Executive Director, Center for Excellence in ERM
St. John's University
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