On behalf of the governing board of the National Association of Corporate Directors (NACD), we commend the Securities and Exchange Commission for the decision to hold a Roundtable on the Implementation of Sarbanes-Oxley Internal Control Provisions, and to seek comments on this topic. As the nation’s only membership organization for corporate directors, NACD values the opportunity to speak at the Roundtable and to submit this comment letter. Michele Hooper, undersigned, will represent NACD at the Roundtable. NACD board member Hon. Barbara Hackman Franklin will participate in the Roundtable as well.
NACD supports the intention of the internal control provisions of the Sarbanes-Oxley Act (Section 404). Oversight of internal controls is a key duty of audit committees. Since our founding in 1977, we have asserted the importance of strong internal controls. This is a key message of the Report of the NACD Blue Ribbon Commission on Audit Committees, as well as all of our other publications and programs pertaining to the audit committee. NACD also supports the work of the Public Company Accounting Oversight Board (PCAOB) and the process by which it arrived at its Standard 2, Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements. The NACD sees value in using a “comply or explain approach” to these rules and others, but that should be the subject of a separate comment letter.
See full Letter, in pdf format.
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