Tone at the Top 355

  • Hi:
    Just wanted to know what is meant by Tone at the Top regarding Sox. Also, how is that measured?

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  • Tone at the top is to do with the culture of the organisation - what impact do the actions of senior management have on the financial control within the company.
    In COSO terms this is broadly addressed by entity-level controls, but is also sometimes referred to as the control environment.

  • A phrase I saw recently in relation to Enron management - which sums up tome at the top quite nicely - is ‘a fish rots from the head’.
    Many of the failings in Enron came from it’s Board of Directors, either through their dodgy off-balance sheet dealings or through the ‘ethical’ example that they set.
    Enron could have had the greatest process level controls possible and would have still failed due to the Board level (or entity level) control failures.

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