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Investors in the country's publicly traded companies will shortly have access to an unprecedented amount of corporate information when companies issue their annual reports, which, for initially ever, will include details about their internal get a grip on over financial reporting and provide a better degree of openness.

PricewaterhouseCoopers and KPMG have developed two easy-to-use resource books, to simply help investors comprehend the new reporting, Deloitte & Touche, Ernst & Young.

Whenever a company measures its internal get a grip on over financial reporting, it monitors the vital processes involved with recording transactions and preparing financial reports. A company now must make public its examination of the potency of its central control over financial reporting, including a direct statement as to whether that control is beneficial and whether management has recognized any "material weakness."

The business's independent auditor will evaluate management's assessment and express an opinion on that assessment. These details is always to can be found in corporate annual reports starting in February 2005.

These new reports were put in place by the us government in response to the series of business failures and corporate scandals that began with Enron in 2001. The disclosures are essential to buyers because effective central get a handle on over financial reporting helps increase the reliability of financial reports and can be a deterrent to corporate fraud.

To make use of this information properly, buyers should consider that a weakness in internal get a handle on over financial reporting doesn't suggest that a financial misstatement has occurred or may occur, but that it could occur. It is a warning flag.

A material weakness should be considered in the context of the company's unique situation, including consideration of the following parts.

• Fraud: Does the weakness contain corporate fraud by senior management?

• Duration: Was the weakness the result of a temporary breakdown or perhaps a more systemic problem?

• Pervasiveness: Does the weakness relate solely to matters that may have a pervasive effect on financial reporting?

• Relevance: Is the weakness related to a procedure that is crucial to the company?

• Investigation: Is the weakness associated with an ongoing regulatory analysis or lawsuit?

• History: Does the organization have a history of restatements?

• Management reaction: How has management responded to the material weakness?

• Tone at the top: Does the weakness represent a concern with the "tone at the top?"

Substance weaknesses can happen in any part of the financial reporting process, and can vary with a company's features, the industry and the company environment. The brand new reports don't address the soundness of a company's business strategies or its capability to achieve economic goals. www.s-oxinternalcontrolinfo.com.- NU types of fraud