JSOX Documentation

[SageTrout]

I'm in the middle of a consulting project to implement JSOX for a Japanese company with US and Canadian subsidiaries. Since I have both SOX and manufacturing experience I seemed like the ideal candidate for this. I'm finding similarities between the two - SOX and JSOX - when it comes to process level controls (PLC). Where we diverge is when we get into CLC (company level controls) and FCRP (Financial Closing & Reporting).

I'll skip the CLC discussion for now. Where I need some help is in the area of FCRP documentation. It requires basically two documents 1) Accounting Policy Manual and 2) Financial Closing Manual. I've located an example of an accounting policy manual we can use from a consultants site (Protiviti) but I can't seem to locate any examples of the Financial Closing manual that would meet JSOX requirements.

Has anyone had experience with this yet or are we all in the same boat struggling to figure this one out? Where can one find a good example of a Financial Closing Manual for JSOX?

I look forward to your replies.

Thanks, Doug

[lwh]

It appears that alot of us are struggling to find useful JSOX guidance. I have not been fortunate enough to locate the Accounting Policy Manual you referenced in your post. I have been on that website several times and have not located much useful information. Did you obtain this manual via the website or did you contact someone at the company? We hope to be able to accomplish this task w/o engaging a consultant if at all possible.

Thanks in advance for any direction you may be able to provide.

[SageTrout]

I found an Accounting Policies Manual on the Protiviti web site. They have a knowledgebase and lots of different SOX and related documents. We modified their manual for our purposes. You can get a free 30 day subscription to the website and download whatever you might need. www.protiviti.com

Besides the PLC (process level controls) documents which are similar to SOX documentation for control matrixes, narratives & flowcharts, the most difficult area has proven to be the FCRP (Financial Closing and Reporting Process). There are basically three types of documents you need to complete this beside the RCM (risk control matrix). 1) Accounting Policies Manual 2) Financial Closing Manual (FCM) and 3) Accounting Rules. The policies manual is the easiest of the three. We received outline of the contents of the FCM and Accounting Rules from the company HQ in Japan. Among the more significant items we got was the format for the closing manual for significant accounts. Without that I would have been lost.

It took me a while to understand what they wanted for Accounting Rules but I finally concluded that it represents the "accounting rules" outlined in the RCM for the PLC and FCRP plus a couple of extras for Fixed Assets, Budgeting, etc. In other words, it's a rule book to back up what you've described as your controls in the RCM.

I know you'd prefer not to hire a consultant but you may need one. Since I've just gone through this with one company and I'm available, you might contact me about this and see if I can help you.

[hw3004]

Could someone point me in the direction of the Accounting Policies Manaul? I can't seem to find this on the Protiviti (Knowledge Leader) site.

[SageTrout]

All I can tell you is that the Accounting Policies Manual was in the Protiviti site when I went to get it. Try searching under different names - policies, procedures, etc. and see if you can find it.

[SageTrout]

The Japanese use some arcane and vague terminology to describe documentation on some areas of JSOX.

One of the more arcane terms is Terms Of Reference. WTH? I struggled with this one for a while. I had to have a Japanese associate translate the description of it for me into English before I began to understand it.

Finally a lightbulb went on. Terms of reference = Corporate Governance Guidelines. Now we understood each other. Why they call it terms of reference I'll never know but what it is are the Governance Guidelines to be used by the board of directors and senior management. There is a Table of Authority that delineates what authority lies with the board of directors and what authority has been delegated to management.

It's a very complex document and will take you days to complete. Hopefully someone will provide you with an outline of what is needed in it but I thought I'd share my discovery with you.
_________________
Doug