'Subcertification' Becomes Widespread Practice
One year after the Sarbanes-Oxley Act required CFOs and CEOs to certify their company's financial statements, a new survey by the Association for Financial Professionals (AFP) reveals that public companies are asking other corporate financial professionals to vouch for reported information as well.
This second layer of compliance is known as subcertification, and involves all levels of finance professionals, including treasurers and assistant treasures, cash managers, controllers, directors and managers.
According to the survey, nearly one-third of finance professionals in public companies indicated that they were asked to sign off on the financial information they reported that would ultimately be included in the company's financial reports.
Most of these professionals expressed concern over increased liability for their role, and one in five sought advice of corporate counsel to explore their additional exposure.
"I believe the prevalence of subcertification, while a direct result of Sarbanes-Oxley, reflects the increased level of importance that financial professionals hold within their companies," said Jim Kaitz, AFP's president and CEO. "Greater accuracy in financial reporting and increased accountability will ensure that most companies are honest and report earnings accurately. This knowledge will ultimately lead to a more stable economic environment."