In this post, we examine the critical SOX/ICFR governance structures, focusing on the establishment of a steering committee as a pivotal component.
While ultimate oversight resides with the Company Board and, more frequently, the Audit Committee, it is often pragmatic to establish a steering committee to drive the day-to-day agenda. This approach enables all stakeholders to be aligned, provides executive support to ensure program efficacy, and secures necessary resources to deliver a quality outcome.
A crucial consideration in setting up this committee is selecting its members. Ideally, the CFO should chair the committee, lending credibility and senior-level backing to the initiative. In a SOX environment, the CFO's role in signing off on the management assessment of internal control over financial reporting underscores the importance of their involvement.
Key committee members should also include representatives from IT management, ensuring alignment with the Information Technology General Control (ITGC) agenda, as well as functional discipline experts, such as:
Procurement
Order Processing
Treasury
Enterprise systems (including Masterdata management and financial/external reporting)
Controllership
The membership of the committee should be tailored to reflect the breadth and depth of their departmental impact on financial reporting controls.
Depending on the ICFR program's setup, representatives from risk, assurance, and compliance functions may also be incorporated, including:
Risk Management
Internal Audit
Corporate Law
For personalized guidance on establishing a governance structure that meets your organization's unique requirements, please contact us for a complimentary, no-obligation consultation.
Until next time!