“It is clear to us the first round of internal control audits cost too much,” declares PCAOB Chairman William McDonough.
Companies in the first year of The Sarbanes-Oxley Act, Section 404(a) compliance need to start early with a lot of planning.
Marmann & Associates P.C. believes an economical approach to compliance is possible with the “Top-Down Approach” to internal control over financial reporting.
If your company is trying to use its existing internal control structure, which normally utilizes controls and procedures performed by lower managerial personnel (bottom-up) to provide for accurate recording of individual transactions, expect your compliance cost to soar. This is already documented with the accelerated filers and the PCAOB press release of May 16, 2005.
The bottom-up approach is usually beneficial in highly regulated industries such as banks that already have a well-documented system of internal control.
Now read Marmann
& Associates in-depth analysis 
We at Marmann & Associates, P.C. stand ready to assist in your understanding of the Top-Down Approach. Contact us.
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Related Information
Marmann & Associates, P.C. In-depth Analysis
Internal Control - Integrated Framework Executive Summary
Creating Cash Flow Projections You Can Trust
PCAOB Press Release of May 16, 2005
For an understanding of internal control, also see, Internal Control – Integrated Framework Executive Summary from The Committee of Sponsoring Organizations of the Treadway Commission.
For guidance in our example of cash flow forecasting, see Creating Cash flow Projections You Can Trust from Philip Campbell, author of the book “Never Run Out of Cash, The 10 Cash Flow Rules You Can’t Afford To Ignore”.
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