Manager's Guide to the Sarbanes-Oxley Act: Improving Internal Controls to Prevent Fraud

198 Pages·2004·2.3 MB·English

by  Scott Green

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Manager's Guide to the Sarbanes-Oxley Act
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Manager's Guide to the Sarbanes-Oxley Act
Improving Internal Controls to Prevent Fraud
SCOTT GREEN
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This book is printed on acid-free paper.
Copyright © 2004 by Scott Green. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
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Library of Congress Cataloging-in-Publication Data:

Green, Scott, 1962–
Manager's guide to the Sarbanes-Oxley Act: improving internal
controls to prevent fraud / Scott Green.
p. cm.
Includes bibliographical references and index.
ISBN 0-471-56975-5 (CLOTH)
1. Corporations— Accounting. 2. Corporations—Corrupt practices. 3. Corporations—
Accounting—Law and legislation. 4. Disclosure of information—Law and legislation. I. Title.
HF5686.C7G5687 2004
658.4'73—dc22

2003020250
Printed in the United States of America
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To my wife Gabriella. Your support and untiring efforts on my
behalf made this work a reality.
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Contents
FOREWORD ix
PREFACE xi
ACKNOWLEDGMENTS xvii
CHAPTER 1 Sarbanes-Oxley Myth 1
Legislating Evil Out of Our Corporations 2
Employees, Fraud, and Lessons Forgotten 6
Why You Should Not Rely on Auditors 8
You Can't Trust the Lawyers Either 11
Supporting the Fraud Culture 12
What Really Works 20
CHAPTER 2 Control Smart Approach 23
Smart Basics 26
Case Study: Andy Fastow's Shell Game 30
CHAPTER 3 Threats and Dangers 33
How to Recognize a Pending Nightmare 34
I See It. Should I Worry? 39
Whose Job Is It Anyway? 44
CHAPTER 4 Know Yourself 47
Do You Have Decision Rights? 47
Key Activities Model 51
Tell Your Story 59
CHAPTER 5 Identify Where You Are Vulnerable 63
What Are Controls? 64
Pull Levers—Often 67
Activities That Improve Your Business 72
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CHAPTER 6 SMART LINKS 81
Step 1: Establish Behavioral Boundaries 84
Step 2: Choose Your Customers 88
Step 3: Did You Get What You Paid For? 90
Case Study: Greed's Siren Song: Dennis Kozlowski 93
Step 4: Who's Reading Your E-mail? 95
Step 5: What's It Really Worth? 100
Step 6: Growth Busters! 105
Step 7: Has Your Ship Sailed? 112
Step 8: Keep Everyone Happy 114
Step 9: Cash Is the Same as Money 116
Step 10: Where Did It Go? How Do You Know? 117
Step 11: Take Your Temperature Often 118
Step 12: Speaking Out Loud to a Crowd 121
Case Study: The Cynthia Cooper Story 137
Step 13: Knowing the Best and Brightest 139
CHAPTER 7 PROTECT YOURSELF 145
Find Those Gaps: The Dentex Case 146
Applying Smart Links 149
Interrupting an Embezzlement 159
Finishing the Job 161
Applying Smart Links to Financial Reporting Processes 163
CHAPTER 8 MONITOR YOUR HEALTH 171
What Is Driving Your Business? 172
We Know We Are Better! 173
Are We There Yet? 174
What Happens Now? 176
CHAPTER 9 A CALL TO ACTION 181
EPILOGUE 185
APPENDIX A Statement of Values 191
APPENDIX B Key Performance Indicator Reporting 194
APPENDIX C Examples of Key Performance Indicators 196
APPENDIX D Control Activities 198
APPENDIX E Example of Section 302 Certification 208
APPENDIX F Attestation Checklist 210
NOTES 217
BIBILIOGRAPHY 219
SUBJECT INDEX 227