"Sarbanes-Oxley mandates that management maintain strict controls over its financial reporting. This requires management to evaluate the design of controls to determine if they adequately address financial and operating risks. In conducting Treasury Risk assessments for many public companies subject to Sarbanes, it was not uncommon to identify shortfalls and deficiencies relative to the processes of and documentation for a company's banking network, to include its banks, accounts, authorizations/limits, services utilized, financing and FX facilities, etc. This issue was often more pronounced for global organizations with a centralized treasury function.
I recall asking the V/P & Treasurer of a multi-billion dollar global entity for a list of all their global banks, bank accounts, type of account, signatories and limits, services utilized, pricing and compensation, etc. The response was, "We don't have that information. We are requesting it but it is 'difficult' to obtain." The flashing red "Risk" lights really came on at that point. This was an unacceptable deficiency requiring immediate attention and a significantly enhanced control process.
Cash is a key element, the life blood, of most companies, and safeguarding that asset, whether it be in a bank account, corporate savings or a short term investment vehicle, is a critical control issue. Moreover, the authority for access to or utilization of the cash is equally as important. In the Sarbanes environment bank controls are important for financial reporting - however its importance will further increase from an operational perspective. I believe treasury banking control will attract greater attention as companies begin to move beyond Sarbanes toward greater emphasis on corporate governance and enterprise wide risk management. Financial policies and procedures will be better supported and safeguarded though more system oriented and process driven solutions.
Speranza Systems has developed a valuable web based solution to help strengthen the policy enforcement, controls and management of corporate domestic and global banking relationships. This solution is worthy of closer examination by Corporate Controllers, Treasurer's, CFO's and Internal Audit/Risk Officers along with a companies external auditors."
