SOX and Financials
Home Business Change Analysis & Design Agile Testing Templates About us

Key Steps

SOX and Financial Statement Assertions

There are five financial statement assertions which management makes when they prepare the company’s financial statements:

Completeness: Addresses whether “all” transactions and accounts that should be presented in the financial statements are so included

Existence or Occurrence: Addresses whether assets or liabilities “exist” at a given date and whether recorded transactions “occurred” during a given period

Valuation: Addresses whether assets or liabilities are “valued” properly

Rights and Obligations: Addresses whether assets are actually owned by the company (company has “rights” to the assets) and whether the liabilities are actually owed (company’s “obligations”)

Presentation and Disclosure: Addresses whether transactions are recorded in the proper accounts and whether particular components of the financial statements are accurately classified, described (“presented”), and “disclosed”

The first three assertions – completeness, existence or occurrence, and valuation – address whether accounts contain valid entries that are recorded accurately.

The last two assertions – rights and obligations and presentation and disclosure – focus on whether the entity’s legal rights and obligations are presented properly and described accurately in the financial statements.


SOX Impact on Process and Owner Deliverable

These considerations have no impact to this deliverable.

They may possibly not be relevant to the process designs deliverable either; this will be assessed when producing the template the process design signoff.


SOX Impact on Process Design Deliverable

These considerations may be relevant to this deliverable.

If the process deals with financial statements, the above points must be borne in mind when designing the steps. For other processes, there is no need to follow the guidelines in this section



Back Next

© 2002-2007 Codel Services Ltd

This paper has been prepared by Codel Services Ltd to illustrate how structured business modelling can help your organisation. Codel Services Ltd is an IT Consultancy specialising in business modelling. If you would like further information, please contact us at: Deryck Brailsford, Codel Services Ltd, Dale Hill Cottage, Kirby-Le-Soken, Essex CO13 0EN,United Kingdom. Telephone: +44 (0)1255 862354/Mobile: + 44 (0)7710 435227/e-mail: