This is “Disclosure of Internal Controls”, section 1.11 (from appendix 1) from the book Governing Corporations (v. 1.0). For details on it (including licensing), click here.

For more information on the source of this book, or why it is available for free, please see the project's home page. You can browse or download additional books there. To download a .zip file containing this book to use offline, simply click here.

Has this book helped you? Consider passing it on:
Help Creative Commons
Creative Commons supports free culture from music to education. Their licenses helped make this book available to you.
Help a Public School
DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.

12.11 Disclosure of Internal Controls

As directed by section 404 of Sarbanes-Oxley, the SEC adopted a rule requiring registered companies to include in their annual reports a report of management on the company’s internal control over financial reporting. The internal control reportA rule within Sarbanes-Oxley that requires registered companies to include in their annual reports a report on the company’s internal control over financial reporting. must include

  • a statement of management’s responsibility for establishing and maintaining adequate internal controls;
  • a management assessment of the effectiveness of the company’s internal controls including disclosure of any material weaknesses;
  • a statement identifying the framework used by management to evaluate the effectiveness of internal controls;
  • a statement that the independent auditors have issued an attestation report on management’s assessment of the company’s internal controls over financial reporting. In addition, companies must provide disclosure about off-balance-sheet transactions in registration statements, annual reports, and proxy statements.