PBO Advisory Group Meets an International Company’s Compliance Needs

PBO Advisory Group loves a challenge and an international client recently gave us several to handle.

The Challenges

The company had recently gone through a restructuring to reduce expenses and head count including the elimination of six internal audit positions.  Our client also significantly reduced the number of internal controls and reassigned duties to existing staff.  With multiple ERP systems and supporting financial-related systems and a complex IT environment, the company had multiple risk points.  At mid-year, the company switched external auditors resulting in a late start of the SOX 404 (a) internal control assessment.  Additionally, the external auditors were also under time pressures to perform the first year SOX 404 (b) attestation.

How We Helped

PBO Advisory performed the SOX 404 (a) assessment, which included:

  • Performing risk assessments of internal controls over financial statements and fraud
  • Coordinating with external auditors
  • Evaluating documentation, design and operation of key internal controls
  • Identifying internal control gaps and making remediation and best practice recommendations
  • Testing of internal controls
  • Final assessments of the internal control environment based on the COSO framework

The Results

The PBO Advisory team prepared a top-down risk-based assessment of the company and determined which entities, accounts and internal controls were in scope.  For the North American entities, our group evaluated the design and operation of the key internal controls and performed the testing.  For the overseas entities, we assisted the in-country team with the evaluation of the design of the key internal controls and performed final review of its testing.  Any deficiencies were identified early enough for the company to remediate prior to year-end.

PBO Advisory Group, the company’s management, and the external auditors met to plan and coordinate the approaches and testing.  The new external audit firm agreed with our scoping, and relied broadly on our testing of North America, and IT general control testing for North America and the overseas entities.

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