SOX 302, CEO/CFO Certification

The SOX 302, CEO/CFO Certification Challenge

Section 302 of the Sarbanes-Oxley Act (SOX) states that CEOs and CFOs must certify the effectiveness of their disclosure controls and procedures (DC&P) in ensuring they receive information in sufficient time to determine its materiality and whether to disclose it to the public. This regulation has been in effect since July 30, 2002.

Canada’s MI 52-109 mirrors SOX 302.

For most companies, CEOs and CFOs are the certifying officers, but the regulations can extend to other officers who have a major role in financial reporting and the disclosure process. Certification is required for all quarterly and annual reports.

Requirements for Certification of Disclosure Controls & Procedures (DC&P)

Signing officers must certify that their company has effective DC&Ps in place and that these are maintained and regularly evaluated to ensure their ongoing effectiveness. Corporate DC&Ps must guarantee information reaches the CEO and CFO in a timely manner that enables them to determine its materiality, decide if it should be disclosed to the public and, if disclosed, to certify the disclosure is comprehensive, accurate and fairly presented.

Solution – Q4 Disclosure Management Software

The strict requirements of both U.S. and Canadian DC&P legislation cannot be addressed by any one technology. Rather, a number of software solutions that closely integrate with internal controls and procedures are required.
 
Q4 offers web-based software designed to help issuers comply with disclosure legislation and aid their CEO/CFO certification.

Q4 PRESS is a document collaboration and records system for the drafting, approval and distribution of your press releases and regulatory documents. It aids certification by mapping to your disclosure controls and procedures and by providing comprehensive, instantly searchable records that demonstrate the effectiveness of your DC&P.

Q4 PRESS automatically moves information through the approval process and increases the efficiency of your disclosure process. It ensures your company’s adherence to your DC&P by providing complete, real-time visibility into your disclosure processes as your document evolves - including the provision of instant reports detailing who has viewed a document and what role they played in its development. In addition, it automatically captures records of all versions, approvals, edits and comments and provides a verifiable audit trail that allows you to drill down into the history of the document. These comprehensive records demonstrate the effectiveness of your DC&P.

Q4 PRESS  ensures more meaningful certification because the system provides an exact replication of how your processes actually worked - without any extra effort. (Exact records eliminate the need for check lists, interviews, questionnaires, attestations and other time consuming approaches to certification.) Conducting an accurate gap analysis is easier with Q4 PRESS, meaning you can solve weak links in your DC&Ps, which is a desired outcome of certification.

With Q4 PRESS , you get ultimate efficiency and control over your entire disclosure process along with much greater visibility into the effectiveness of your DC&P.

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Q4 WEB is a complete corporate web site and disclosure management system that gives you full control over the content, functionality and navigation of your corporate and investor web site. By capturing detailed records of all web site changes and approvals in a verifiable, time-stamped audit trail, Q4 WEB applies the same stringent DC&P that you apply to other forms of disclosure. The system allows you to report on site content and to instantly recall fully functioning versions of your web site from any point in time.

Q4 WEB maps your workflow to your DC&P so that information funnels up within your organization to permit timely internal exposure and decision making.

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