Attending the Section 404 Conference
Invaluable in the Sarbanes-Oxley Era

By Wayne Whalen, Marketing Coordinator

Tax professionals are urged to attend an upcoming Foundation for Accounting Education (FAE) conference on April 26 at the Hotel Pennsylvania in New York City. The Section 404 Conference is aimed at explaining the implications of a new Sarbanes-Oxley requirement, Section 404.

Section 404 of the Sarbanes-Oxley Act requires that each annual report of a public company include a separate report on the internal control process, as well as an assessment by management of the fiscal process. Section 404 also requires the company’s auditor to attest and report on management’s assessment of the effectiveness of the company’s internal controls and procedures for financial reporting, in accordance with Public Company Accounting Oversight Board (PCAOB) standards.

“The impact of this requirement will cause a significant increase in costs to the companies. In addition, auditors will have to significantly increase the capabilities for assessing these controls,” Conference Chair Paul D. Warner said.

Warner also expressed concern that privately owned companies may ultimately be required to meet the same standards.
Laura J. Phillips, assistant chief auditor with the PCAOB, will discuss how the standard impacts management’s annual report on a company’s internal control over financial reporting, and on auditors’ attestation responsibilities.

Security and Exchange Commission Deputy Chief Accountant Andrew D. Bailey Jr. will cover the Commission’s view on the auditing standard and the related benefits that the SEC anticipates.

The SEC requires that management’s assessment of a company’s internal controls be based on an established control model. Paul J. Sobel, vice president of internal audit for Mirant Corporation, will conduct a session that will review the basics of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework and its utilization in conducting an internal control assessment.

Joseph M. Leone, vice chairman and chief financial officer of CIT Group Inc., will discuss management’s assessment of internal controls from the perspective of a public company CFO who has completed the process.

Alec G. Arons, CPA, a partner in the Business Risk Services practice of Ernst & Young, will describe a practical approach to management’s assessment of internal controls. Harriet I. Greenberg, CPA, an audit partner at Friedman Alpren & Green LLP, will discuss the impact of Section 404 on small companies.

A panel composed of all session speakers, and moderated by CPA Journal Editor-in-Chief Robert Colson, will discuss the implications of Section 404 on public companies and the auditing profession, and respond to questions from conference participants.

For more information, visit www.nysscpa.org/FAEOnline/course.cfm?ccid=25137412 or call 800-537-3635.