SOx Finance Auditor Internship Angelita Chandra Overview Beckman Coulter, Inc. Sarbanes-Oxley (SOx) Internship Experience Beckman Dr. Arnold O. Beckman 1900 - 2004 3 pH Meter Inventor Launched Beckman Instruments in 1935 Went public in 1952 2004 Lifetime Achievement Award of the National Inventors Hall of Fame Discovered The Coulter Counter Principle Established Coulter Electronics, Inc. in 1958 In Oct. ’97, Coulter Corporation was acquired by Beckman Instruments, Inc. 4 Coulter Beckman Coulter, Inc. 5 Biomedical company Public company (NYSE: BEC) 130 countries; 10,000 employees Annual Sales $2.44 billion in 2005 Wide range of customers Competitors: J&J, Bayer, Roche Barriers to entry: R&D investment and technical infrastructure; FDA approval What is SOx? SOx The Sarbanes-Oxley Act of 2002 United States federal law Major corporate and accounting scandals Act’s key provisions: – PCAOB (Public Co. Accounting Oversight Board) – Auditor independence – Corporate governance – Enhanced financial disclosures Sarbanes-Oxley Requirements Comparison of Sections 302, 404, 409 and 906 302 404 409 906 Summary Executive certification issued quarterly Internal control report issued annually Independent accountant attests to annual report Quarterly review for change Real time issuer disclosures 8K requirements Abbreviated certification issued quarterly Criminal penalties How often are the evaluations? Quarterly evaluation Annual assessment Quarterly review for change As needed based on triggering events Quarterly evaluation Who signs off? CEO CFO Management Independent accountant Management CEO CFO 8 SOx Objectives Objectives – Internal controls should be designed to provide reasonable assurance on: Effectiveness and efficiency of operations Reliability of financial reporting Compliance with laws and regulations The Company’s SOx process narratives and testing of key controls are to support the reliability of our financial reporting. 9 What SOx Auditors Do Quality control of SOx narratives ensures proper internal controls are established and all identified financial risks are mitigated Upload the templates to Internal Control Management (ICM) Walkthrough Testing 10 Intern’s Responsibilities Update narratives Create testing templates (risks and controls, audit procedures) Upload templates ICM In ICM: create audit engagement, update information Upload narratives EDMS Sample selections for testing Testing 11 Example: Manufacturing Inventory - Cycle Count Description: Periodic inventory counts Cycle counting produces a unit count accuracy of equal to or greater than 90%. Cycle count accuracy is reported in monthly Cycle Count Summary report. 12 Risks – Cycle Count All inventory is not counted Cycle Count adjustments are not made to the Oracle G/L Cycle Count adjustments are not researched and approved 13 Key Controls – Cycle Count Automatic review of ABC methodology Reports of new parts to be counted next quarter Approval of cycle count variance adjustments Higher level review of Cycle Count Summary 14 Update Narrative 15 Risk & Control Template Audit Procedure Template Upload Risk & Control Template Upload Audit Procedure Template Create Audit Engagement Test Performed Internship • How? – Email from Accounting Dept. • Qualifications: – Pursuing a degree in Accounting or related field – Audit course (ACC 419) is a plus Challenges & Obstacles Computer access Technical terms Timing Project Management System Lack of SOx Audit experience Overall Experience Wonderful! Learn about how different processes work Opportunity to use what I studied in school Real work experience Improving my skills Networking Intern fun activities Thank You Questions?