News

19.08.2004

The SOX 404 process is in full swing and we are making great progress:

SOX 404 Bulletin

The SOX 404 process is in full swing and we are making great progress:

“I am impressed with the can do /will do attitude of York’s people” – Don Roberts Chairman of York’s Audit Committee

“ There is still work to be done but I have been pleased with the way all of us have embraced this challenge” – Dave Kornblatt CFO

“I appreciate your efforts and believe that 404 is just one of the many ways we are strengthening York by working together” – Dave Heck Chief Governance Officer and Director Internal Audit

I hope that SOX 404 is not new to you but by way of a quick reminder: it is now a statutory requirement to establish and maintain adequate internal controls to ensure our financial reporting is of a high standard.

Whatever your role is in the organization, your actions impact the Corporation's financial reporting. This is not something just for the accountants.

Key milestones met

• We achieved all the targets we had set ourselves for 30 June 04 – this is a terrific achievement.

• However, the process does not stop here and the level of effort has to be maintained for the rest of the year (and beyond).

What happens next

• Testing and retesting will continue at all sites;

• We will be completing SOX reviews on operations or systems where significant change is underway – for example VISTA, YorkConnect;

• KPMG are currently carrying out their audit work. The initial phase of their work is expected to be completed by the end of September 04;

• Senior management will continue to regularly brief the Board on progress;

• Compliance sign off with SOX 404 as at December 04.

Your role in 404 compliance

• As a result of SOX 404 we will see a real change in the way our external auditors KPMG carry out their work. Traditionally it was rare for them to venture outside the finance department; now they will be in contact with staff throughout the organisation.

• KPMG may well ask you about your work. Here is some guidance on what they will be looking for:

�� You understand your process / control;

�� You understand the previous and succeeding process / control;

�� You know what to do when you detect an error and understand what is required to resolve it;

�� You know what to do when a process or control is overridden or ignored.

Answer honestly and if you do not know say so. However, take the time now to ensure that, should KPMG need to speak with you, you can answer each of the points set out above.

I am afraid KPMG will not be able to share with you the results of their work on a location by location basis. Their conclusion on York's compliance will be done on a consolidated basis; they must complete their total process before reaching a conclusion.

• In addition make sure:

�� You have fixed all the control gaps identified to date that you have responsibility for ;

�� Keep your flow charts or notes on the process / control up to date;

�� Check for changes that may impact the way you or your systems work;

�� The audit file is up to date.

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