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US OP SOX 404 Steering Committee Presentation August 9, 2006. Agenda. Project Status Update Business Review 15 min Segregation of Duties 5 min Management Assessment Overview 15 min IT Project Update 15 min Audit 5 min

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US OP SOX 404 Steering Committee Presentation August 9, 2006


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    Presentation Transcript
    1. US OP SOX 404Steering Committee Presentation August 9, 2006

    2. Agenda Project Status Update • Business Review 15 min • Segregation of Duties 5 min • Management Assessment Overview 15 min • IT Project Update 15 min • Audit 5 min • Embedding 5 min • Other Business – Next Meeting 0 min 1 08-09-06

    3. Upcoming Key Activities

    4. Upcoming Key Activities/Action Required 3 08-09-06

    5. Upcoming Key Activities/Action Required Cont’d 4 08-09-06

    6. Business Review/Controls at Risk

    7. Business Controls At Risk by CoB As of 8/3/2006 6 08-09-06

    8. Operating Effectiveness – Round II Testing • 453 Total System, IT Dependent and Manual Controls • 368 IT dependent and Manual Controls (excludes System) • 31 Annual Controls and 15 No transactions controls which will not be tested in Round II • 322 Total Controls to be tested in Round II (Plan developed as of June 2, 2006) • Plan is 35 controls per week in Round II vs. 27 controls per week in Round I • Team is currently on-schedule 7 08-09-06

    9. ISPO CONTROLS – Without IT 8 08-09-06

    10. Segregation of Duties

    11. OP US SOX 404 System Controls • New SoD Matrix Introduced 6/1/2006 • Lubes – excludes Canada • Magellan – excludes Stusco 10 08-09-06

    12. High Risk Cases by User New SoD Matrix Introduced 6/1/2006 11 08-09-06

    13. All Risk Cases by User New SoD Matrix Introduced 6/1/2006 12 08-09-06

    14. Management AssessmentSign-off Process

    15. Q2 Sign-Off – Business Process Overview • AoO Sign-off Scheduled for August 22nd • Q2 Sign-off Process Identical to Q1 for: - Green light/Non-Greenlight assurance - Design effectiveness evaluation • Q2 Additional Requirements are: - Testing and evaluation of operating effectiveness • Confirmation of design and operating effectiveness for controls operated by ISPs and ESPs Note: Deficiency Evaluation for Financial Impact using Process Deficiency Workbook (includes ISP controls) to be completed by September 4th . Review preliminary results with GreenLight Signatories prior to August 22nd Sign-off 14 08-09-06

    16. Q2 Sign-Off: Key Dates 15 08-09-06

    17. Q2 Sign-Off: Other Key Dates 16 08-09-06

    18. Q2 Sign-Off: Business Activity/Status 17 08-09-06

    19. Q2 Sign-off - ESP/SAS 70 Recap • Total ESP identified – 27 • Total with significant impact – 16 • Total without sufficient internal controls – 2 • CSC – Audit Rights have been exercised in IT • Avista Advantage, Inc. – SAS 70 Type II reports required • 1 - SAS 70 Required with Avista Advantage, Inc • Response Outstanding from Aviation 18 08-09-06

    20. Management AssessmentDeficiency Evaluation Process

    21. Q2 Deficiency Evaluation Status - Business 20 08-09-06

    22. Q2 PDW Evaluation Status on 9 August Business and IT Meetings are held for each control deemed by SOX Remediation Team and / or Testing Team to be not effective prior to 8/11 Draft PDW templates turned in to OP Central Team August 2nd • 4099 Supply C3.2.2.a.1, C3.3.h.1 and C3.3.h.2 • 4183 Lubes C2.1.f.1 and C2.1.f.2 • Current Status – waiting on OP and FCC feedback on documentation (expected this week) Next Steps • August 15 1-5 P.M. Business Review – time set aside if needed for issue resolution • August 17 1-5 P.M. Business Review – time set aside if needed for issue resolution • August 24 Challenge Session with Steering Committee • September 4 Final file due to the OP Central Team 21 08-09-06

    23. Summary/Expectations

    24. Summary/Expectations • Review deficiencies reported through BCIs and evaluate impact on SOX controls • Rapid escalation of deficiencies and SOX impact • Continue to follow expectations on Key Activities/Actions Required (Charts 3&4) • Overall Good Work – Need to Keep it Up However there are a few exceptions: • Finish providing information of SAS 70 • Need co-operation with Lynn Sievers on PDW • Everyone says that all controls will be effective at sign-off • Must start on Controls at Risk lists • Continue to focus on ISP Interface • Ensure correctness - especially check Manila (as it has been identified as possible issue) 23 08-09-06

    25. IT Workstream Update

    26. US IT - DE 25 08-09-06

    27. US IT - DE Q2 Status – as of 08/04 • All C12 Controls DE • 6 C13 Controls Outstanding • 4 new controls to address MS Access • 2 annual controls * Excludes No Transactions 26 08-09-06

    28. US IT - OE 27 08-09-06

    29. US IT - OE Q2 Status – as of 08/04 * Excludes No Transactions 28 08-09-06

    30. US IT - GC Deficiency Evaluation Status • ITGC Process Owner Signoff Started Aug 7 – GL Frozen • ITGC Meetings completed for all Applications week of 31 July • ITGC results presented to Business team 7 August in preparation for Business Deficiency Evaluation meetings 29 08-09-06

    31. AEC Testing Status 30 08-09-06

    32. US IT General Controls – Challenges Summary • Completion of OE by August 31 to align with PWC requirements • All controls for applications in PwC scope will be complete by August 31 • Begin focus on IT Embedding • IT Embedding workshop held week of July 31st • Project will stay in place through Q4 signoff • Line organizations will be engaged with project team during Q3 & Q4 signoffs • C11 • Knowledge Transfer planned to be complete by end of August 31 08-09-06

    33. Audit Update

    34. Internal Audit Status Status on 9 August Internal (IAF) Audit – Round III • Overall rating: Fair * Combined Business and IT report issued. • Business is currently in the process of analyzing the findings. 33 08-09-06

    35. IAF Audit Update – IT GC • IAF Audit started 26 June and completed July 14 • Draft audit report received • One medium finding regarding review of self assessment testing • Common issues noted: • Tests did not contain enough detail to meet re-performance standards • Test did not contain descriptions of the sampling methods • Test did not include the names of documents used in the execution of the test • IAF returns August 21 • Audit scope includes DE and OE for Lubes C11 and AEC only 34 08-09-06

    36. PwC Audit Update – OE Testing • No findings to date on the D1/D2 controls which have samples available for testing 35 08-09-06

    37. PWC Audit Update – IT GC • PWC • Lubes DE audit complete and no design deficiencies found • SOPUS DE audit complete and no significant deficiencies found • OE audit begins 7 August 36 08-09-06

    38. Embedding Update

    39. After Action Review (AAR) Summary From COB/COSs: • “Surprised at how little people knew – especially after all the time spent on SOX” • Customized case study examples had big impact and critical to audience acceptance and understanding (1 COB did not agree) • SOX Owner's-Manual course (presented to management) • Subject Matter Expert (SME) in class added value • Attendees pleased with content and length of courses • Delivery of courses in one day increased continuity • Training reinforced ownership to Control Owners • Training & awareness improved generation of evidence and documentation • Classes were a year too late – business was starving for information since October 2004 • SOX staff roles understood only after the training 38 08-09-06

    40. After Action Review (AAR) Summary-cont’d From EMBEDDING: • Where Focal Points took initiative to prepare attendee and provide strong leadership and support for SOX events… …A best practice • G-J Smitskamp/Leadership visibility, encouragement and attendance at courses role-modeled importance of SOX and had positive “ripple effect” across SOPUS • Great SME support, positive overall trainee attitudes (which come from the leaders) • Responsive, engaged focal points. A pleasure to work with… 39 08-09-06

    41. After Action Review (AAR) Summary-cont’d Items which may require further action…. From COB/COSs: • Training requirement met, but concern that people did not see the value of training and may have underestimated the legal aspect… • Online training resources would be helpful to meet remote training needs • Knowledge Survey was scary; don’t know why it was necessary; Not comfortable that results are given to my boss, yet I don’t know how I did • Need to understand future training requirements, i.e., new employees/updates From EMBEDDING: • Based on AAR input, need to validate ongoing role of SOX Focal Point • Agree with observation of need for annual refresher training – e.g. elearning Add’l Lesson Learned Embedding occurs in waves. The next wave is translating knowledge to consistent application. 40 08-09-06

    42. Other Business

    43. Motiva Business

    44. Motiva Agenda • Business Review/Controls At Risks • Internal Audit 43 08-09-06

    45. Business Review/Controls At Risks

    46. Business Controls At Risk by CoB As of 8/3/2006 45 08-09-06

    47. ISPO CONTROLS – Without IT 46 08-09-06

    48. Internal Audit Update

    49. Internal Audit Update • Sample Selected Includes: • - 16 Controls to Review Self-Assessment Testing • Consists of 9 IT Dependent (each has a Manual and a System control), 3 System, 4 Manual = 25 Controls to Review Documentation • 16 Controls for Independent Testing • Consists of 9 IT Dependent, 1 System, 6 Manual = 25 Controls • Estimate 50% of Work Effort Complete at This Time • First Discussion of Audit Results Scheduled for August 9 • Testing is Targeted for Completion August 18 48 08-09-06

    50. APPENDIX