The New SAP Management of Internal Controls Application Aims to Ease SOA Compliance

  • by Dr. Karol Bliznak, Vice President, SAP AG
  • April 15, 2004
The Sarbanes-Oxley Act (SOA) deadline is imminent and similar legislation is expected soon in Europe and other regions. To help you comply with SOA requirements, SAP has created an application called SAP Management of Internal Controls (MIC). The author discusses what you need to install MIC and how it can meet your specific requirements. He provides an example that shows the ways in which MIC streamlines an internal controls project.

SAP Management of Internal Controls (MIC) is a new application that helps companies comply with the Sarbanes-Oxley Act (SOA) or fulfill similar legislative requirements expected soon in the European Union and other regions. The U.S. Congress passed SOA on July 30, 2002, and it affects all companies registered with the Securities and Exchange Commission (SEC). The act stiffens requirements in areas related to corporate governance, financial disclosure, and fraud accountability. The first SOA-compliant financial disclosures will be required from select U.S.-based filers starting in November, and all others must be in compliance by April 15, 2005.

MIC specifically addresses two sections of the new act – Section 302 and Section 404 – that jointly require companies to provide evidence of effective internal controls. Collaborating with external audit partners and selected customers, SAP developed MIC to meet these SOA requirements and help management document business processes and controls covering all material areas. MIC also supports assessing control design and effectiveness as well as resolving or reporting any possible weaknesses related to internal controls.

MIC, which is currently shipping on CDs as part of the SAP Compliance Management for Sarbanes-Oxley Packaged Solution, will be part of mySAP ERP 2004 when it launches in the middle of the year. MIC can be installed either as a standalone application or on top of any existing SAP Basis 6.20 system, e.g., SAP R/3 Enterprise, SAP BW Release 3.0B, and higher. (See the sidebar, "What You Need for MIC," for details on an MIC implementation.)

What Can MIC Do?

MIC helps companies as they embark on an internal control project, and allows them to make fuller use of existing controls. Using a centralized process catalog and documenting internal controls by organizational unit, MIC provides structures for business processes. Its workflow capability streamlines control assessment and testing procedures. The application captures the results of these procedures and facilitates issue resolution. Executives, together with external auditors, can use the technology's reporting capabilities to stay abreast of the status of internal controls and track issue remediation throughout the organization.

Dr. Karol Bliznak

Dr. Karol Bliznak is vice president of the Rapid Innovation Group (RIG) within the mobility division at SAP. He focuses on converging SAP’s strategic innovation categories, such as mobile solutions, SAP HANA, business analytics, and the cloud. He works at the SAP AG headquarters in Walldorf, Germany. He has more than 14 years of SAP experience in business intelligence, mobility and in-memory technologies, enterprise performance management, financial accounting, controlling, governance, risk, and compliance.

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