Section 404 of the Sarbanes‐Oxley Act requires management to include in the annual report a report on the effectiveness of the company's internal control over financial reporting. This assessment must be supported by evidential matter, including documentation, regarding both the design of internal controls and the testing process. Understandably, many executives are seeking the assistance from their internal auditors in satisfying the Section 404 requirements, leaving internal auditors with the important task of ensuring that the corporation's internal control system is properly documented and tested. This paper discusses how nine leading internal auditors of large publicly listed corporations are assisting their respective companies in implementing the Section 404 requirements. Further discusses some of the significant issues that these auditors are addressing and their prediction on the expected future impact of Section 404.
Cenker, W.J. and Nagy, A.L. (2004), "Section 404 implementation: Chief audit executives navigate uncharted waters", Managerial Auditing Journal, Vol. 19 No. 9, pp. 1140-1147. https://doi.org/10.1108/02686900410562786
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