SIMPSON CPA, LLC 512.243.8922
^{Doug Simpson,Certified Public Accountant}

Retail Industry

Case Study:

Director Internal Audit and SOX PMO Leader

Retail Industry

Crisis Management and New Compliance Requirement

The Company: This mid-cap company is the second largest bricks and mortar book retailer in the nation. The company presently operates over 200 stores in 31 states and the District of Columbia. The company’s first year SOX initiative was led by the Director – Internal Audit and the Chief Financial Officer. The Director left the company for a new company at the end of the first quarter 2005 with assurances to executive management and the audit committee that its SOX documentation was prepared and the internal audit team was ready to complete walk-throughs, write test scripts and begin testing for 302 and 404 reporting.

The company engaged Doug Simpson CPA to serve as Interim Director Internal Audit. Doug joined the company during the second quarter for the express purpose of working with staff and executive leadership to improve internal audit roles and activities to better meet the Standards of the Professional Practice of the IIA; to lead the company through the final phases of the first year SOX initiative; and to assist the company transition to another permanent internal audit leader.

The Challenge: When SOX documentation prepared by the former Director Internal Audit was reviewed for completeness, it was determined the company did not meet minimum standards for compliance. Risk assessment and gap analysis procedures were then completed in earnest. During this process management identified material weaknesses in their control environment effecting their 2d and 3d quarter 302 certifications.

The Solution: Executive Management assigned Doug Simpson CPA responsibility for leading the company through the 302 remediation process, and for leading the company through each phase of the SOX-404 process.

The Results:

Working with executive management, legal counsel and Grant Thornton external auditors identified and reported control weaknesses during the 2d and 3d quarter 302 certification processes.
Working with control owners, designed and effected change in the company’s control environment needed to remediate weaknesses for 404 testing.
Working closely with the Chief Financial Officer and Controller, built a PMO and developed a team of internal and external resources required to successfully complete each phase of the SOX-404 project on an accelerated time line.

The Outcome: No material weaknesses were reported when the company’s 10-k was issued at year end. When the first SOX initiative was complete, the company successfully transitioned to a new Director Internal Audit.

Main Navigation

Retail Industry