Corporate Governance and Compliance
By leveraging an industry-experienced approach, CTS provides a practical, hands-on perspective. We collaborate with clients to develop and implement elements of corporate strategy.
- Internal audit
- Standard policies and procedures — develop and document
- Sarbanes-Oxley 404 compliance (operational and IT system controls)
- IFRS compliance
- Forensics and litigation support
Quick Links – CTS Project Highlights:
Internal Audit – Operational, Financial and IT Systems
Industry: Fortune 500 Manufacturing
Scope: Internal Audit—Operational, Financial and IT
Background: As part of its annual operational audits of this CTS client’s 850 manufacturing facilities, field audits were performed globally on a rotational basis, driven by an annual risk assessment.
Due to resource-constraints, this client needed experienced auditors with manufacturing industry experience who could quickly ramp-up to execute audit plans related to operational efficiency, financial controls and IT systems controls.
CTS Solution: With significant depth in large, complex manufacturing environments, CTS deployed a team of experienced Internal Auditors to perform the following:
- Develop test plans based on internal control questionnaires
- Perform testing and document audit findings
- Identify operational inefficiencies
- Conduct closing meetings with business units to communicate findings and recommendations
- Prepare audit reports
Internal Controls Review and SOX Compliance – Post-Fraud
Industry: Fortune 1000 Healthcare
Scope: Internal Controls Review and SOX 404 Compliance – Post-fraud
Background: In the aftermath of a material accounting fraud, this CTS client was required to restate several years of financial data. In conjunction with this effort, an extensive review of its internal controls was required, including remediation of material weaknesses in its controls over financial reporting at both the field operations and at the corporate level.
- Field testing coordination
- Develop and manage a Field Testing Help Desk, along with related project management tools, to coordinate testing at over 100 facilities across the U.S.
- Review test results submitted by field testing teams to identify controls gaps
- Develop test plans and conduct testing at selected facilities
- Liaison with external auditors and other third-party service providers
- Corporate testing
- Document and test corporate-level controls including treasury, cash management and tax functions
- Remediation planning to address material weaknesses
Project Management – Global SOX 404 Compliance
Industry: Publicly-held Telecommunications
Scope: Sarbanes-Oxley 404 Compliance — Financial and IT Systems Controls
Background: As a result of a spin-off and subsequent IPO, this CTS client needed to demonstrate compliance with SOX 404 requirements. Previously, this company was an operating subsidiary of another larger firm, and did not have in-house expertise. Moreover, little formal documentation existed to substantiate its internal controls in place.
During the review, some financial data was required to be restated due to a material accounting error. Due to this added complexity, the level of scrutiny performed by the external auditors was extensive.
CTS Solution: By leveraging the CTS SOX Toolkit, CTS managed the comprehensive SOX program and provided hands-on staff to perform all facets of the review including Financial, IT, and Entity-Level controls.
- Perform risk assessment based on COSO framework and AS 5
- Rationalize and document key controls, and underlying business processes
- Develop test plans and perform testing
- SAS 70 review of third-party service providers
- Analysis of deficiencies
- Remediation planning and oversight
- Anti-fraud controls review
- Liaison to Big 4 external auditors
- Audit Committee updates
Other Services: Concurrently, this client required assistance with day-to-day accounting activities during peak periods including SEC reporting, and an Interim Accounting Manager to oversee transaction processing activities.
Also, with its expansive network of telecommunications infrastructure, this client leased a high volume of real estate holdings nationwide. To automate the lease administration process, a new Lease Administration System was licensed. CTS assisted with the data conversion and testing during the implementation of the new system.
SOX 404 Compliance – Financial and IT Systems
Industry: Fortune 500 Manufacturing
Scope: Global SOX Compliance — Domestic and Foreign
Background: In order to manage a global Sarbanes-Oxley 404 corporate compliance program, business tools needed to be developed and maintained to analyze and track progress, manage resource utilization and control costs. The diverse program encompassed a team of 30 professionals across numerous legal entities in over 50 countries. Due to the varying levels of detail to meet the information requirements of the constituents (e.g. field operations, Steering Committee, Audit Committee), status reporting presented some unique challenges.
CTS Solution: As the Global SOX Project Manager, CTS supported the full life-cycle of this multi-year program:
- Project plan updates and status reporting
- Develop standard reporting tools to monitor and analyze progress on a global basis
- Functional design of project intranet site
- Coordination of all compliance activities (financial operations and IT systems)
- Documentation of key controls
- Remediation oversight
- Foreign operations support – CTS staff worked on-site across Europe and Latin America to provide hands-on assistance to the operating business units with all phases of this compliance program.
Forensic IT Analysis
Industry: Financial Services
Scope: Forensic IT Analysis
Background: In the wake of several reporting errors and inconsistencies, this CTS client needed to investigate the root cause of these issues on a confidential basis. Once identified, new standard operating procedures were needed to enhance the internal controls to prevent re-occurrence.
CTS Solution: In order to accurately interpret results, CTS provided Forensic IT expertise with strong real estate industry background to conduct the following:
- Data extraction and analysis
- Targeted data-mining and queries of multiple conditions and scenarios
- Analyze content for potential conflicts and/or other inappropriate activities
- Publish final report
- Document standard operating procedures
Forensic Accounting and Litigation Support
Industry: Fortune 1000 Real Estate – Joint Venture
Scope: Forensic Accounting and Litigation Support
Background: As a result of deteriorating financial returns from one of its joint venture investments, this CTS client needed to scrutinize the operations of its partner at a more detailed level.
Once management control was exercised over the joint venture, all accounting operations needed to be migrated to the home office shared services platform, along with other asset management activities.
CTS Solution: To analyze the complexities of this venture, CTS provided forensic accounting expertise with deep real estate industry experience to investigate and report on the following:
- Transaction mapping and analysis
- Funds flow analysis
- Review of significant contracts and agreements
- Loan review
- Reconstruction of financial statements
- Pro forma analysis
Once litigation was pursued, CTS assisted with the identification of potential issues, along with preparing analysis and support for various litigation strategies deployed by the client.