September 18, 2006
Documentation of KC (key controls): we would require additional guidance from the SEC/PCAOB in regards to the definition towards what is material, since the explanation indirectly affects the reach of SOX and therefore the amount of controls to be tested and documented.
We would require further guidelines from PCAOB/SEC in relation to the implementation of Anti-Frauds Programs (fraud detection, prevention and investigation). There is no recognized standard on this matter.
We propose increase in the percentage of the external auditors reliance in the internal testing process according to the control environment present in each case. This might reduce significantly external auditing costs.
We propose to cancel the Audit Standard # 2 of the PCAOB requirement recommending that if the processes do not change significantly it is not necessary to remake all the walkthroughs. Those will be completely reviewed each time material changes are included in the process.
We suggest rotational testing based on risk.
Increase the weight of unsworn statement as enough evidence for internal control assessments
It would be desirable that full compliance in the SOX Act impacted in the market risk ratings of a foreign listed company. Although this is a market requirement the recognition of this status in the companies rating would allow certain degree of recovery of the costs involved.