The Institute of Management Accountants (IMA®) working with ASQ
Jeffrey Thomson, IMA vice president of research & applications development, met with the ASQ SOX Team and Sal Agnello, ASQ Marketing, to discuss how we both can influence U.S. SEC to provide better guidance to executives on improving and assessing their company’s internal control framework. My previous blog entry on IMA covered their draft guidance to executives on their management and assessment of Internal Control over Financial Reporting (ICoFR). The ASQ SOX Team provided inputs which Jeffrey and co-author Tim Leech appreciated and discussed with the team. The SOX team leader, Sandy Liebesman summarized the ASQ inputs as:
· Expanding notions of Quality Assurance into Quality Management
· Alignment of ISO 9001 to Internal Control by COSO
Jeff pointed out that while SEC has been focused on the external audit community (including the Big Four), with the result that their interpretation and rules, including AS2, are the problem for business. The SEC is missing the boat by not including experts from Risk Management, Quality Management, and IT. SEC has just announced a meeting on Dec 13th to review industry comments on Management Reports on ICoFR.
IMA is trying to influence the SEC to move attention to company management who are in the best position to build good and reliable business processes with appropriate business and financial controls. The SEC objective should be to build in quality, rather than test in quality. The IMA focus includes a Residual Risk (RR) approach which is more operational than strictly financial. RR requires data analysis and quality improvement tools for management review and actions. RR tools include self-assessments which are needed to balance the formal auditing techniques.
Jeff & Sal will have other discussions on joint activities such as marketing, conferences, webinars, and certification.
