Guidelines for Project Timing 1302
JapanSox last edited by
I was wondering if anyone had seen any industry standards yet on how long each cycle is expected to take to completion through the various steps (narrative, RCM creation, testing, etc.)?
Thanks for any help.
Denis last edited by
How long is a piece of string?
kymike last edited by
Too many variables to give an exact answer.
How experienced are the people writing the narratives? What training and direction have they been given? Are there standard templates being utilized? Are they familiar with the processes being documented / tested? Do you have a control catalog of objectives, risks and suggested controls to start from to help ensure that you have addressed all of your controls?
I would suggest that the first time through, you would spend about 40 hours each on documenting and testing every process in scope. That could be reduced if you have multiple similar processes (same process different accounting location) where you could leverage the initial documentation from one location.
Bottom line is that you cannot start too soon if you have a deadline to meet.
John_Maleckar_CPA last edited by
I agree with both Denis and kymike.
I think that the 40 hours per accounting process is a good initial estimate. However, the biggest variable is the Application and General IT controls.
The Application controls are difficult since it depends to the extent that the accounting processes rely on non-standard applications (spreadsheets used in the financial statement consolidations and footnote computations, for example).
The General IT controls also vary greatly since many companies have not focused on the security aspects of their systems, which are often an amalgem front-end systems that are cobbled together with the network.
milan last edited by
In addition to the previous comments in the earlier replies posted, I offer the following:%0A Sarbanes-Oxley%0A Develop Business Process Documentation%0A Cycle/Hours/Staffing%0ARevenue and Receivables/100-300 hrs./2+ experienced professionals%0AProcurement-to-Payables/40-200 hrs./1+ experienced professionals%0ATreasury/20-40 hrs./1 exp. professional%0ATax/20-40 hrs./1 exp. professional%0AFinancial Reporting and General Accounting/200-300 hrs./2+ experienced professionals%0APayroll/40-200 hrs./1+ experienced professionals%0AProduction, Warehousing and Distribution/100-300 hrs./2+ experienced professionals%0ALegal/20-40 hrs./1 exp. professional%0ACorporate Governance/40-200 hrs./1+ experienced professionals%0AIT General Controls/200-400 hrs./2+ experienced professionals%0AIT Application Controls/24+ hrs.per IT application/1-2+ experienced IT professionals%0AIT Governance/100 hrs./2+ experienced IT professionals%0AA simple method to develop a time budget might be to categorize the significant cycles…1, 2, or 3…3 being most difficult and requiring ## hrs. to document. The next complex cycle (2) would require about 2/3’s of the time required to document the most complex (3) cycle. A cycle that is simple and with few sub-processes might require 1/3 of the total time to develop SOX process documentation.%0ATesting each of the cycles might require anywhere from 50-75% of the hours required to document that cycle. The number of hours required is dependent on the number of locations, experience of the ‘tester’, and significant efficiencies are achieved with repeated testing (to re-test after remediation is completed).%0AHope this helps,%0Amilan%0A/as a caveat…please note that the above estimates are APPROXIMATIONS ONLY…one thing for sure…experience has shown that whatever projections and assumptions are made, it will most likely require significantly MORE HOURS and HIGHER COSTS than anticipated. Be sure to practice effective QC…measure TWICE, cut ONCE.