Discontinued operations 1509

  • Can someone help me with ICQ for discontinued operations? We are planning to close a manufacturing division and I would like to work with a check list.
    Thanks in advance for the help

  • Hi - In a quick search using Google and the keywords ‘SOX Discontinued Operations Checklist’, I saw some promising guidelines and checklists. You might have tried this and just wanted to see if this might help.

  • Hi,
    Page #231 of Audit Standard No 2. states the following regarding SOX Testing and Discontinued Operations:
    Special Situations
    B14. The scope of the evaluation of the company’s internal control over financial reporting should include entities that are acquired on or before the date of management’s assessment and operations that are accounted for as discontinued operations on the date of management’s assessment. The auditor should consider this multiple locations discussion in determining whether it will be necessary to test controls at these entities or operations.
    Discontinued Operations Fixed Asset Accounting Policy and Procedures
    It might be helpful when considering internal controls, financial reporting, and Discontinued Operations, you review for the accounting treatment of them in the Accounting Policy and Procedures. The Fixed Assets Policy and Procedures might address related accounting requirement and GAAP reporting requirements.
    Discontinued Operations Statement of Cash Flows
    For GAAP purposes, it is not necessary to distinguish financial data regarding Discontinued Operations separately in the Statement of Cash Flows. However, if it is reported separately, it must be reported in all 3 categories (Operating/Investing/Financing Activities) and not on one line only.
    Thus, it might be helpful to review the method for reporting the amounts from Discontinued Operations that were included in the FS.
    Protiviti Guidance
    See Question #160, page 129, from Guide to the Sarbanes-Oxley Act: Internal Control Reporting Requirements, Frequently Asked Questions Regarding Section 404, Third Edition.
    How are divestitures of significant entities (or net assets) and discontinued operations considered for purposes of evaluating internal control over financial reporting?
    Disclosures and Notes SEC Guidance
    Determining what notes are essential is a matter of judgment. However, one should consider matters affecting comparability such as business combinations, discontinued operations, changes in accounting principles and estimates, pledged assets, unusual or nonrecurring items, new borrowings, and significant contingences. These should always be disclosed in the notes to the condensed presentations. Reference can be made to material contained in the notes for a more complete discussion. Regulation S-X, Rule 10-01(a) addresses this area.
    No much, but hope this helps,

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