It Audit Templates

This wasn't the least urgent thing. That was answered by some model although it is broadly defined as an info and that issue. This is one of the rarest that model that exists today. This is for the fashion conscious. It is very clear this I can't shy away from this ASAP. This column is going to do these things so that let's start with what some contraption is, because a lot of visitors really don't know this. Now here's something that my Mother claims, "Let bygones be bygones. Although, "Don't look back, it might be about to catch up with you. I sense there will be a big bill to pay for business outsourcing benefits. You must realize that the best way for you to start business outsourcing benefits is this way. If you've been around you know this finding a top notch source for acrisure business outsourcing services is that it provides business outsourcing in the philippines. I received a bit of free help. A method tears down the barriers that the world constantly puts up. This is a fast growing market." I don't follow that. If that was up to me, yes, but this is not up to me. Doing that is a little pricey in most cases but it may be worth the price. Of course life is hard, that's why they pay you the medium money. You ought to read these comments. See, beyond that, this is uncertain when it auditor salary will return. Business outsourcing articles has seen some ambitious growth. . I'd like to make you a promise. Everything I have done with business outsourcing support and services has worked this well. Various using it types are available for use. Our days are numbered. Business outsourcing corporation moves at a blistering speed." Though the answer to consumer loan outsourcing seems so elementary it is tough to put in place. I hope I got off on the right foot but I don't tell you that just to brag about it outsourcing pros and cons. What are some qualities which contribute to using that? I have

As an employee of a dog supply and nutraceutical company, I am often asked by friends if dog supplements really work or if they are just a gimmick. And, while I want to shout out loudly, “Yes, of course”, I am forced to shake my head and say – “it depends”.

Pet supplements are under the same attack as many human supplements with outrageous, unproven claims of benefits from “trace levels” of ingredients you can't pronounce. In addition, the pet supplement business is not regulated by the FDA, which means that many supplements do not contain the adequate levels of ingredients they state on the label and/or the quality of those ingredients are subpar. And, it seems there are individual supplements for every organ and tissue in a dog's body. Seriously, have you been to a pet store, lately? The aisle is confusing, at best. Here is the truth: many of these supplements are not needed in a dog's body. Dog's have an incredible ability to heal themselves. So, unfortunately, it is true that many supplements are more hype than anything.

So, you've got unproven claims, an unregulated market, and a confusing array of products from which to choose (most, of which are not necessary). Oh yeah, and a dog that would rather have his anal glands cleaned than swallow one of those horse-sized pills. It's enough to make you want to want to stop reading and let Fido's body do its own thing, right?

Don't!

Despite all of the negatives surrounding pet supplements, I have seen some absolutely amazing results for dogs who take quality pet supplements for specific reasons. In fact, it is the main reason I decided to get into the business. If your dog is in need of certain nutrients and you can provide him with a high quality supplement, it could change both your life and his. You just need to be armed with a good understanding of when and why to use a product.

Here are some points to help you get started:

1. Know the points in your dog's life when he/she is most vulnerable – Like people, there are a few times in a dog's life when supplements are more important – growing puppies, pregnant females, injured, and senior dogs. In my research, I have found that supplements can make the most noticeable differences for dogs suffering with inflammation and pain – typically injured, aging, or arthritic dogs.

2. As in most cases, “you get what you pay for” – Many companies believe that there is a cap on the amount of money an owner is willing to spend on his/her dog. This belief, coupled with an unregulated market, has led to poor quality supplements that are at such low standards they likely add no benefit at all.
And, do not be fooled by big brands and manufacturers. A recent human vitamin study found that over 80% of vitamins sold in mass market retailers were inadequate. I have not seen a study for pet supplements, but my guess would be that this number could be even higher. So, whether you are faced with a major brand or a small independent manufacturer, your risks are similar. Stay away from the cheap products and look for companies who put an emphasis on quality – not price. If you use a quality, more expensive supplement, you will likely save money in the long run because it should result in fewer vet visits or more costly pharmaceutical drugs.

3. Look for supplements with proven ingredients for your dog's particular problem – Some companies, in an attempt to have a more robust ingredient list, will add cheaper ingredients that add no value for the specific problem the product is supposed to address. The internet is a powerful tool in this arena. Ingredients that have been proven to work for a particular condition rise to the top. For senior supplement or joint-related information, I suggest going to http://www.caninespinehipjoint.com for more information.

4. Ensure the product has been made in a GMP-certified, FDA approved manufacturing facility. – “GMP-certified” means that the manufacturer has passed a third party audit to ensure their products have the purest ingredients in the proper amounts. FDA-approved does not mean that the products themselves are FDA approved (this is an unregulated industry). However, it can give you piece of mind that the facility is meeting FDA standards. Manufacturers that meet these requirements are often very proud and will list this on their website and/or the package.

5. Look for powder or liquid supplements – Obviously, if your dog does not take pills, there is a huge benefit to this because the powder/liquid can be mixed in dog food. However, there is a more important reason for this. Research has proven that powders and liquids are absorbed faster into the body than tablets. So, that means the benefits are typically seen faster. For dogs taking supplements with anti-inflammatory benefits, this can lead to faster pain relief.

6. Talk to your Vet – If your dog has any allergies or suffers from any other medical issues you should share the ingredients with your vet to ensure that there will be no adverse reactions.

So, there you have it. I hope this provides some insight on how and when to give your dog supplements.

I wish you and your dog the best.

As you are preparing your 2006 income tax return, you need to be aware of areas that you could be using that may cause the IRS to stand up and take notice. These topics are of concern to the IRS since they provide many misreporting opportunities by taxpayers, unknowingly or otherwise. In technical terms, they are known as IRS Audit Red Flags.

Home office deductions. If you are claiming a home office deduction, be sure you meet the qualifying criteria, guidelines, and requirements set out by the IRS in order to properly claim this category. Many taxpayers claim this deduction without meeting the requirements. Hence, if you claim a large amount of deductions for your home office, you may be scrutinized by the IRS. You may receive an IRS audit red flag.

History. If you have a history of having IRS problems in the past (including audits), your tax return will be scrutinized more closely.

Preparer. If you are paying someone to prepare your tax return and they are on the list of 'susceptible tax preparers' that the IRS has, your tax return may be questioned. These individuals are known as problem preparers since they have violated the IRS laws and regulations. They have a predisposing IRS audit red flag.

Underreporting income. If you underreport income (small or large), the IRS will take notice and probably question it. The IRS has a complex system put into place that matches the information on your tax return with that received from third parties. And, whenever you receive income from a source (from a 1099, for instance) a copy of the form is sent to the IRS. Know this and save yourself some heartache.

Questionable deductions. Whenever you claim business deductions that have the IRS question it, you will be contacted. They will need to clarify what is going on.

Itemized deductions. Whenever your itemized deductions are much larger than what the IRS considers within a reasonable range, your tax return will stand out.

No backup information. If you are claiming many income or deduction items without also sending a reasonable explanation, the IRS will notice this. By including a reasonable explanation along with your tax return, you can avoid this further scrutinizing and audit red flag.

Filing status. If you are married and filing separately, this can cause discrepancies between the tax returns of the spouses. The IRS may question this.

Charitable deductions. Whenever you claim an amount for charitable contributions that is not in sync with your income level, the IRS will notice this. This is another area in which they may question you and put up an audit red flag.

Cash. The IRS will question you whenever they notice that you and/or your business receives a large amount of cash from transactions. Receiving cash in business transactions is an area that has a history of tax avoidance.

Shareholder. With all the hoopla in recent years about unscrupulous corporations, the IRS may question you if you are a shareholder of a corporation with an IRS problem history.

The best way to protect yourself from any IRS concern (and potential audit) is to, first of all, know the IRS tax laws. And, keep proper records. Explain any questionable transaction. Document everything.

This is an interview with Paul Tustain of BullionVault.com His company is one of the Internet's premiere web sites for buying, storing, and selling gold online. Its popular with both experienced traders, new buyers and long term investors. The fees are extremely reasonable and the services they offer are second to none. BullionVault, which is based in London, offers an extraordinary product for the online purchase and direct ownership of gold bullion. Accounts range in size from $2000 to $10 million and you can tell from this interview that Paul created his business to satisfy all customers both large and small.

We have found BullionVault to be a very easy and safe way to participate in the direct ownership of gold bullion without the expense or worry of shipping or storage. Using BullionVault.com account holders can take full advantage of their online trading options including bid and ask pricing which are some of the most competitive anywhere in the world. Paul Tustain trained in computers and worked for six years as an equity analyst in London. Four of those years were spent working in systems for financial risk measurement, regulation, and settlement.

In 1990 he founded a software business which developed systems for administering electronic equity and bond trading. The company's main product was widely used in Europe to communicate with and instruct CREST, which is the biggest of Europe's central depositories for equities, similar to America's DTC. Today in 2008, Paul still retains about 20% of that business, but these days has little day-to-day involvement. Want to learn more about gold and money? Paul is also editor and contributor on the www.GalMarley.com web site. I highly recommend you spend some time there, its loaded with clear, easy to understand information.

(Q) What is your position with BullionVault and how long have you been with them?

I'm BullionVault's founder and Director. The business was incorporated in 2003 although prior to that I had been planning it for about 2 years.

(Q) Who do you consider to be your target market?

Gold investors from anywhere in the world seeking between $2,000 and $10,000,000 in gold.

(Q) How many account holders do you currently have?

About 36,000

(Q) When I am using BullionVault to buy gold online, will I get the actual delivery of what I buy?

Yes. All BullionVault gold is delivered. But this word 'delivery' is not synonymous with 'possession' and the subtle difference is very important – especially for gold. With BullionVault you take delivery at the instant of trade. From that point the gold is your property, even though it continues to be looked after by your professional bullion custodian.

The huge majority of gold transactions in the world are undelivered. This includes unallocated gold, i.e. most pool accounts, most of the popular certificate schemes, and almost all gold bought through banks. Undelivered gold exposes buyers to default because the gold is not theirs in law. So BullionVault is exceptional in that every trade is delivered at the instant of trade. BullionVault gold includes the right to take possession. But on BullionVault you choose not to take immediate possession: you leave that decision pending some future crisis, because postponing possession will almost certainly save you a lot of money and inconvenience.

You'll have noticed the professional markets trade bullion on very competitive prices not usually available to private individuals. The settlement condition for a professional market bullion trade is that the seller makes available a Good Delivery Bar at the door of an accredited bullion vault.

The Good Delivery Bar usually weighs 400 oz (this varies across markets) and has been continually stored in these accredited vaults since it was manufactured by an accredited refiner. Unlisted manufacturers, under-sized bars, and also previous private possession of full size bars deny the gold 'good delivery' status. This prevents professional buyers accepting them when you sell because of the integrity rules of the bullion market. The result is that for gold in private possession – typically small bars – when you sell you will only get a discounted price from a trader outside the main bullion market, the prices are much less competitive and you will lose probably 4-6% of your gold's value the instant you take possession.

There are other problems with taking immediate possession. In most instances where people think possession would be useful it turns out to be both expensive and inconvenient. In a real crisis bullion gold in your hand is surprisingly difficult to make use of.

• Firstly, should you try to sell it people will doubt its integrity and you'll usually have to accept a poor price.
• Secondly it's difficult to acquire things directly with fairly priced bullion because people are unfamiliar with it.
• Thirdly it is likely to be very difficult to transport out of your country, as you might wish if – for example – exchange controls were re-introduced.
• Fourthly insurance is very expensive. These problems are easily avoided if you store your gold in an offshore location where it continues to be legal, and – still in its high integrity form – easy to sell.

I think these are good reasons for delaying possession until no other good alternatives exist. On BullionVault all our users have the right to take possession subject to a modest fee, but generally users have found it more attractive to use BullionVault to sell their gold, rather than destroy its Good Delivery status and damage its marketability through taking possession.

(Q) What is the number one advantage of buying gold through BullionVault?

It varies for different people. Some say price – because we are consistently the cheapest source of gold for the private investor. Some say it's our multiple choices of storage jurisdiction – especially as it includes Switzerland. Some like the transparency of our Daily Audit, which most people agree provides watertight proof that our business is properly segregating all owners' gold in professional vaults.

(Q) Do you offer the option to users of storing their gold in multiple jurisdictions?

Yes – London, Zurich and New York.

(Q) At today's gold price, which is hovering at about $900 per ounce, what price would you value your total gold company holdings?

Approximately $195 million. The rate of increase is now very rapid. We have more than doubled in size in the last 6 months.

(Q) Should we consider BullionVault to be a digital gold currency like e-gold or GoldMoney?

Not really. The founders of DGCs tend to believe in gold as both a store of value and a medium of exchange. I agree with them wholeheartedly that gold is peerless as a store of value, but I think the evidence is that gold is at best a temporary medium of exchange. It gets beaten back by Gresham's law :- “Bad money drives good money out of circulation”.

There are currently no freely circulating gold currencies in the world; so, right or wrong, as a medium of exchange it is clearly prone to failure. Why? Because it is so good at storing value that presented with a choice of spending pesos or gold people repeatedly spend pesos and save gold – which means the gold gravitates to savers, not spenders, and stops circulating as currency.

DGCs are designed to enable you to spend gold. I want it to act as a store of your wealth, so at BullionVault, instead of encouraging merchants to accept gold, we eliminate them from the equation altogether, which gives us a safety feature which DGCs can't offer. In complete contrast to a DGC your BullionVault gold can only return to you, which is, I think, why the average holding of gold in BullionVault is very much higher than the average holding of a DGC.

(Q) Can users leverage their purchases by paying less than the total purchase price? Are there any credit options like Futures trading?

None whatsoever. If you introduce credit in this way you introduce the prospect of default. There are plenty of alternate mechanisms for buying gold with leverage and credit, but in the interest of absolute financial safety we choose to be different.

(Q) When I compare the spot price of gold to the BullionVault price, sometimes BV is a bit higher than spot. Why is that?

BullionVault gold is fully allocated, and collected by our vault operators for separate storage exclusively for BullionVault clients before we offer it for sale. Normally for an allocated spot gold trade the buyer still has to pay for collection. With BullionVault your gold is already in the vault where you want it, so you don't have that extra cost. The difference is fairly minimal, like about 20 cents an ounce, but it means BullionVault gold tends to hold a small premium over the spot price. I guess you can say BullionVault gold is spot gold inclusive of the cost of collection.

(Q) When I make a purchase online of gold bullion, am I actually buying from the BullionVault trading account or another user?

It might be either, whichever is offering you the cheaper gold. BullionVault lets all owners of gold offer it to new buyers on BullionVault's public order board at the price of their choice, and you get the cheapest available – automatically. We are competing with 36,000 users to offer you gold at the best possible gold. So you might be buying from anyone, but whoever owns the gold they have never touched it. Only Good Delivery gold bought originally from professional dealers on the London market, and held permanently in accredited vaults, is allowed into BullionVault.

As well as participating on our own order board ourselves we allow free competition on it for all users. This ability for users to quote to each other means $0.20 spreads are not uncommon.

Free competition on a public order board between all users is by far the best way of ensuring a healthy (i.e. narrow) spread, and deep liquidity. I'm fairly certain there are no other marketplaces in gold where 36,000 users are free to bid and offer high integrity gold bullion to each other.

To earn the spread you simply act like a market maker. Offering the cheapest gold – just, and bidding the highest to sellers – again just. If you manage to buy and sell and take the small spread, you're making the market, just like the professionals although probably with smaller deal sizes. BullionVault is absolutely unique in offering this to the private investor, and don't think for a moment that private buyers can't cope. They love it.

(Q) When actively trading gold bullion at BV, what is the 'spread' and how do customers have the option to 'earn the spread.”

The spread is set by users according to market conditions.

We love it too. When one customer sells direct to another none of BullionVault's working capital is tied up in the transaction, and since all our back-office processing on this trade is automated and instantaneous the (small) commission we make is all profit.

It's a deal which is in everyone's interest.

(Q) Do active traders who buy and sell often make up the bulk of your customers?

No. The huge majority of our customers buy gold to own it for the medium to long term, and choose BullionVault as the safest store of wealth they can find. Active traders are the minority who like watching for opportunities on the market.

(Q) Do you have any tax reporting requirements on a customers sale of gold….if tomorrow I sell a million dollars worth of BV gold, is that sale reported to the tax services?

No. Gold raises no taxable income which is what is ordinarily reportable at source. All users are responsible for reporting gains appropriately to their own tax authorities.

(Q) I understand that BullionVault is obliged by law to establish the identity of its customers. This is the standard for everybody in today's world. What jurisdiction's rules does BV adhere to, also do you have an active AML policy and who created that for you?

That's a couple of questions rolled into one. First – money laundering. Yes – we must establish the identity of our customers. This is not too onerous for customers or for us. We take deposits only through the banking system direct from the customer's bank – which should be trusted internationally (which includes just about every major Western bank). We require our users to submit scans of a photographic id (usually a passport or driving licence) and a scanned bank statement which we check to the source of funds. It's that easy.

Remember we are not under pressure on money laundering. Because we always pay money back to an account in the same name as the money was deposited from (and almost always to the originating bank account) we are not a useful service for money launderers. In operational complexity this is a major advantage over DGCs.

Now jurisdiction…

We are a British Company so of course we are under British jurisdiction. Our customers own gold either in London, Zurich or New York, which places their property under one of those jurisdictions. The two are not the same thing. Once you have bought gold in Switzerland we are simply an agent for arranging the payment of your custody fee for your Swiss held property. That means a US customer with Swiss held gold is not exposed to British jurisdiction.

This is tangible property, and it is held directly by you, so it is not abstracted under some complex trust deed drawn up under British law (another advantage of the way we're set up). So whatever a British government might wish to do to gold held by BullionVault customers in Zurich they cannot easily do much, any more than a British government could take possession of Swiss houses bought through a British real-estate agent.

In reality only domestically held gold places the owner's gold under the power of the domestic government. That is why domestic gold ownership is widely considered more risky than – for example – Swiss gold ownership.

I don't want to revisit the possession issue I talked about earlier, but arms length ownership has proven again and again the smarter route for private gold ownership. For example in America in 1933 it prevented its owners being fined and imprisoned. In Germany in 1932 it prevented its owners being incarcerated and eventually gassed. In Russia in 1917 it prevented its owners being shot. In France in 1720 and Argentina in 2001 it prevented the entrapment of gold behind exchange control barriers. These are just a few famous occasions. Wealthy people are usually relaxed about remote ownership in the right place provided they can see how ownership is structured, and we are exceptionally transparent.

(Q) When paying for a gold purchase, can I have a friend who owes me money send it directly to you from a third party European bank account?

No. We'll send it back. It would break anti-money-laundering policies.

(Q) How secure do you consider BullionVault to be? Is it risk free ownership?

I never believe any investment is risk free. There is no such thing – and that includes bank notes, Treasury Bills, cash deposits, 'guaranteed' capital bonds, and gold – in any form. But I do think the risks on BullionVault are exceptionally small and transparent – and I think offshore stored gold is, right now, very much safer than the benchmark of safety – the Treasury Bill – primarily because of inflation risks.

There is a small risk of loss to theft and damage – both incredibly rare in a vault. Both these risks are insured, so the owner's real risk is if these events occur simultaneously with the bankruptcy of the insurer, and that is a very small risk indeed. There is also the risk of invasion, or nuclear war, both excluded under all bullion insurance policies.

But overall if anyone can find many savings mechanisms which are less risky I'll be surprised. We've eliminated credit risk because there is no margining in BullionVault. We've eliminated counterparty default because we operate instantaneous settlement. We've eliminated shipment risk because the gold is already in the vault when it is bought. We've eliminated the risk of litigation arising from bad legal drafting of Trust documents, because this gold belongs to you, not a trust. We guarantee against faulty bars, and operate in the most secure professional bullion vaults in the world. And we've got three vaults in separate locations, so although we can't eliminate geopolitical risk we've at least given our customers a uniquely broad choice, and – through instantaneous 24/7 settlement (which is unique to BullionVault) we've provided them with the ability to trade within minutes out of a deteriorating jurisdiction and into a different and safer one. This is very much easier and faster than trying to arrange a shipment in a time of crisis.

Customers also get peace of mind from the Burglar Alarm, which sounds your cell phone every time someone – including you – logs into your account. They also like the fact that we only allow money to be sent back to the original funder. Above all they like the transparency of our Daily Audit, which eliminates record-keeping risk. I think this is one of the most underestimated of all risks in modern securities markets.

(Q) Can I transfer funds from my BV account to friends like I can with PayPal?

Absolutely not. If you could, then anyone who used a clever keyboard logger to find out your password could move your savings away from you. On BullionVault you have a permanently linked bank account which can only be changed by duplicated requests from yourself and your new bankers. It cannot be changed on-line. This is what I mean about BullionVault storing value. When you want to pay people use a payments system. DGC's are pretty good, so are checks, and cash, and credit cards, and PayPal. We don't compete in the payments system space.

(Q) When I sell gold, how quickly can I receive my funds at a US bank?

Your sale settles cash to your BV account instantaneously. You can enter a withdrawal request immediately, and we transmit funds by the end of the following business day. In the US you will usually receive same day cleared funds on the day of transmission.

(Q) If gold is fluctuating wildly in price I don't want my new buy order to be held up with some sign up procedures. If one of our readers wants to open an account at BullionVault, how long does your sign up, fund and buy process usually take?

Signing up takes 2 minutes – really – and you get a free gram of gold when you do it.

Sending money can be same day. It depends on how well your bank knows you. Larger sums with less well known bank customers usually mean the bank wants you to visit, prove your identity and sign a bank-wire request form. Your money will usually arrive in London the next day – but if you are up early enough (i.e. while London banks are still open) we get US East Coast money within about two hours. You can pay by check or on-line billpay too, but that takes a few days to arrive. The details are on our Help System.

Buying the gold takes a matter of seconds. Many users contact us when they're ready to buy and we tell them on the 'phone which buttons to press.

(Q) What is your goal in operating BullionVault, how would your mission statement read?

I can tell you that verbatim. It's on the website…BullionVault's objective is to create the world's most cost-effective, secure and accessible market in professional grade gold bullion.

We want to do this because :-

• We believe there is a deficit of financial responsibility in many modern governments and financial institutions.

• We believe that modern currencies and other paper based value systems will inhibit savers from retaining their domestic and worldwide purchasing power.

• We believe that using gold to provide protection from this problem is a strategy which has become inaccessible to individuals.

• We believe that we are uniquely well qualified to re-build that accessibility and to manage the service in a way which maximizes security, accessibility and value for our customers.

(Q) I know you are in the UK and your main account there is with Lloyd's TSB. Are US buyers in for a big time 'overseas' wire fees and waits when they send funds from the US?

US wires are sent domestically to our US collections account at Bank of America in New York. Depending on your bank it costs about $30 for same day funds. The international wire is done automatically from Bank of America to us in London, and at our expense, so US users don't have to concern themselves with it. They are paying for a normal domestic wire transfer. If they choose checks or billpay the transfer is free, but it takes longer to arrive.

(Q) How fast do buys and sells settle on BV?

Settlement is instantaneous. A seller must have vaulted gold in the offered vault to be allowed to offer gold on BullionVault's Order Board. A buyer must have cleared cash in the currency of the bid. Since all the resources are on-hand we have immediate settlement.

(Q) If I send BV a million US dollars tomorrow and buy gold and a month through some act of God, your company fails, where does my gold ownership stand? Is there a permanent record located with a audited third party where I could claim my proper ownership?

If any or all of BullionVault, Lloyds TSB Bank, and Via Mat fail your gold is perfectly safe. The reality is there would be a delay in getting your hands on it, but it is your property, and no liquidator can do anything other than return it to you. BullionVault is run more cautiously than any other business I have ever known. Shareholders funds are all held as gold and cash (no liquidity problems here) and currently amount to about 6 times annual running costs.

Unlike a bank we do not lend. All gold and cash in BullionVault is immediately available, so there is no “borrow short and lend long” liquidity problem. A 'run' on BullionVault would be profitable for us and increase our financial strength, as we earn commissions from customer sales. Permanent records of ownership are produced daily and stored daily in at least two locations. The 'alias' list is in the public domain. You can use your RSS Newsreader to download it daily.

(Q) Do you allow corporate funds, both short term and long term to be used for the purchase of bullion? If IBM came along and said, we want to invest a portion of our pension fund…?

Yes – but I expect IBM's pension fund might buy an amount above $10 million, and at these levels direct vaulting may be a cost effective option. Even then I'm fairly certain we can get the deal done faster and cheaper than anyone else, so it may be the case that we would be used temporarily, to buy and store bullion, while IBM's trustees set about negotiating their own direct storage contract.

(Q) I'd like to see the use of digital gold (DGC) become more mainstream, and gold used more for daily business and money transactions. Do you agree that Internet business could be expanded in this direction or should we only be using gold as a store of value, a trading and investment vehicle and a 'better' savings account?

I think I've answered this before. Yes – gold is honest money. But honest money is not popular with politicians in the long term, so they tend to arrange for its eventual failure, usually accidentally. In my opinion DGCs are fighting an uphill battle against Gresham's law, although their hearts are in the right place.

(Q) What does BullionVault offer the regular monthly investor who wants to buy a couple of ounces each month for his long term investments….what advantages does BV offer over the one ounce Krugerrands found at a local coin shop?

You can set up a standing order easily enough. We'll email you when your money clears, and then you can buy your gold at the moment you choose.

As for coins, the problem is that they are bought on very large premiums to the spot price, they are sold at substantial discounts to the spot price, and they leave you with all the domestic storage problems which wealthy people try to avoid. I keep six gold coins, three Sovereigns and three Liberties (I like the feel of the Liberty “Buffalo” best). I expect they'll eventually be lost or stolen or I'll have to leave them to someone when I die. But there's a tiny chance they'll be useful before then!

(Q) Will my fees get lower if I begin spending more each month?

Purchase commissions start at 0.8% and rapidly diminish rapidly above $30,000, down to a minimum of 0.02%. We aggregate your investment over the year, so you don't have to buy all at once to get down to the lower commission rates. So – yes – your fees steadily reduce.

(Q) What's goes on at your news and analysis web, over at http://goldnews.bullionvault.com/ this seems like a fantastic place to learn more about gold and trading…

We try to keep the content high quality. We don't give free access to all comers, but post only what we rate highly. Adrian Ash is the editor, and his own writing is very well known in the gold market. I think he writes more original and sharp comment on the gold market than just about anyone. There's a large archive all on line. Lots of this stuff is – as you say – excellent.

(Q) I've spent weeks reading Galmarley.com it is an EXCELLENT resource for anyone wanting to learn more about gold and money. Who runs that web and do you contribute?

Galmarley's name is a tribute to three writers. Professor John Kenneth Galbraith, Alexander Del Mar, and Robert Smitley, all sadly now dead. Between them they taught me enough about economics, gold and investing to set me on the road to creating BullionVault. I wrote most of the Galmarley site myself. I hope the information helps people get to grips with the whole gold picture.

(Q) Is BullionVault regulated by the FSA there in the UK?

No. It's regulated by straightforward property law, which is far more reliable at finding and prosecuting wrongdoers than complex securities law seems to be. Because our users are buying physical gold, not some complex gold security, and because they are exchanging their money for physical bullion at the instant of trade, they are deemed in British law to be competent to understand the nature of the transaction.

The entire physical bullion industry in London is regulated by ordinary property law in this way, and it has not suffered from some of the imaginative scams that have materialized elsewhere in the securities markets. This is – in part – why London remains the biggest and most trusted physical bullion market in the world. We buy all our gold through London dealers.

(Q) Who handles the vaulting of your gold bars and in what jurisdiction or locations?

Via Mat handles all our vaulting. It is Switzerland's main vaulting business. It operates in all three of London, Zurich and New York.

(Q) What can you tell me about the vault services from ViaMat? Why do you use them?

The vault operators need to operate in each of London, New York and Zurich. There are only 2 practical choices – which are Via Mat (Swiss owned) and Brinks (US owned). We used to vault at Brinks, but we switched to Via Mat in April 2007. Our customers seem to be happier with Via Mat because of its Swiss ownership.

(Q) Do you currently have a referral policy if I decide to promote and send visitors and customers to your web site? Can I earn gold?

Certainly. Where new customers are referred to us by inbound links off other peoples' websites we share 25% commission with the referrer. They get it credited automatically to their own BullionVault account at the instant the client trades.

(Q) Do you charge a monthly service fee like a bank or is there a storage fee based on how much bullion is in the account?

We charge a monthly fee. It is 0.12% per annum charged monthly in arrears, and it is subject to a $4 per month minimum. You will pay $4 a month if your holding is less than $40,000. $100,000 stored will cost you $10 per month. You can use all three vaults if you wish, as this doesn't escalate your storage bill. Those fees includes insurance. Gold is very easy to store because there are no complex stock splits, dividends, rights issues etc to administer. It simply sits quietly in a highly secure vault. That's why our storage rate at 0.12% per annum (less than 1% after 8 years) comes in at less than a tenth of share portfolios which I read recently charge an average of 1.31% per annum in management fees.

(Q) Has BullionVault experienced any fraudulent transactions or accounts since it has been open?

We are not aware of any at all. I hope that does not suggest complacency. We reconcile all our cash statements and bar lists every day, and publish the result on-line. We send statements to all customers monthly. We provide extensive feedback to registered email addresses when things happen on their accounts, and we notify log in to cellphones via our Burglar alarm. There is a subtlety about the Burglar alarm and the mandatory return of cash to a customer's own bank account which is worth sharing. If a criminal logs into an account the account owner will probably contact us immediately – if their cellphone is switched on.

The criminal will not know. We will trace the connection, and inform the local police. The point is that an immediate response like the Burglar Alarm greatly increases the risk of being caught, while the inability of moving funds to anywhere other than the rightful owner's bank account greatly reduces the motivation for trying to hack.

(Q) What excites you about gold bullion?

I'm not very excitable. I think gold – particularly held overseas – is necessary for effective wealth storage in the modern era, and it will for some years be an extremely important component of private savings. What I do get a kick out of is providing something which is so important, and so fairly priced, that customers go to the effort of writing thank you letters. We publish many of them on our Customer Comments.

(Q) What is a 'London Good Delivery Bar'?

A London Good Delivery bar is a big 'James Bond' style bar of gold. It weighs about 400 oz and is worth about $350,000

Thank you, ubetchaiam.

Because of your comments (here and elsewhere), I finally took a look at Ron Paul’s original legislation in H.R. 1207 (with 319 cosponsors), and also at S. 604, the Sanders bill introduced last year.

Revelation: They’re both very simple, short bills, and neither was the same as the original Sanders Audit the Fed amendment to this pending legislation.

Here’s Ron Paul’s H.R. 1207 [I haven't checked to see if this is how the legislation is worded as included by amendment in the House version of the financial reform legislation - though it won't be exact because there has since been added, by other legislation, a new subsection "(e)" in Section 714 of Title 31; so this is probably now offered instead as a new subsection "(f)"]:

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Federal Reserve Transparency Act of 2009″.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) In General- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after `shall audit an agency’ and inserting a period.

(b) Audit- Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

(e) Audit and Report of the Federal Reserve System-

(1) IN GENERAL- The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

(2) REPORT-

(A) REQUIRED- A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

(B) CONTENTS- The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.

And here’s the Bernie Sanders version in S. 604 (with 32 co-sponsors):

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Federal Reserve Sunshine Act of 2009″.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) In General- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after `shall audit an agency’ and inserting a period.

(b) Audit- Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

(e) Audit and Report of the Federal Reserve System-

(1) IN GENERAL- The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

(2) REPORT-

(A) REQUIRED- A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

(B) CONTENTS- The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.

If you go up to the very beginning of my diary, you can compare how these two bills would edit the existing language of the law in Title 31, Section 714 (b).

As indicated there, the original Sanders Audit the Fed amendment would’ve edited the language to read:

(b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only if the appropriate agency has consented in writing. Audits of the Federal Reserve Board and Federal reserve banks shall not include unreleased transcripts or minutes of meetings of the Board of Governors or of the Federal Open Market Committee. To the extent that an audit deals with individual market actions, records related to such actions shall only be released by the Comptroller General after 180 days have elapsed following the effective date of such actions.

The modified Sanders amendment doesn’t edit Section 714(b) at all (it provides for an audit “notwithstanding” that language).

Whereas both H.R. 1207 and S. 604 would have reworded Title 31, Section 714(b) [which governs the GAO] to read…:

(b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency.

…and then added a new subsection specifying how “the audit” of the Federal Reserve should be completed by the end of 2010.

Except for their short titles, the bills are identical. And yet, the original amendment that Bernie Sanders offered on this pending financial reform legislation did not match the language in his own S. 604, although perhaps it matched the language that was adopted as an amendment by the House based on H.R. 1207 (I haven’t looked at the language that the House actually passed).

No politician has been more closely associated with the populist assault on the Fed over the last few decades than Dr. Ron Paul, the libertarian-leaning Republican congressman from Texas. So when Paul came out hard on Thursday night against a compromise amendment negotiated by Sen. Sen. Bernie Sanders (I-Vt.), proponents of Fed transparency had good reason to worry that the Fed had gutted the effort. It didn't look any better when the compromise was backed by Banking Committee Chairman Chris Dodd (D-Conn.) and the Treasury Department — both well known to be active opponents of Paul's audit amendment.

“Any time you find out Senator Chris Dodd is in support of something — watch out,” read a hastily prepared action alert blasted out by Paul's organization, Campaign for Liberty, as word of the compromise got out. “According to our sources on the Hill, Senator Bernie Sanders caved to pressure from the White House and Chris Dodd and stripped out the Paul-Grayson language from his Fed transparency amendment.”

Paul himself piled on. “I'm not a bit surprised that the Federal Reserve got to the Senate. I had expected Bernie Sanders to offer S 604, which was the same as HR 1207, which is the Audit the Fed Bill, and at the last minute he switched it and watered it down, and really, it adds nothing. There's a possibility that it even makes the current conditions worse,” he said. “This is essentially the bill plus more of the bill we beat in the House Financial Services Committee; the Mel Watt bill. But this is so disappointing to me that this happened, especially since for months now I've worked with Bernie on this and he introduced the bill in our language, which was HR 1207.”

Now that Paul has had time to digest the compromise, it's sitting a little bit better. “The new language of the Sanders amendment requires a one-time disclosure from the Fed of 13(3) facilities, foreign currency swaps and mortgage-backed securities. Basically, their sins of the past would be revealed and Americans would know more about who got bailed out by the Fed and under what terms,” he said in a video message to supporters. “This would be good, but it's not nearly enough.”

What the compromise offers, however, is not really an audit, Paul concluded. “In fact, rather than still calling the Sanders amendment an audit, maybe it should instead be called more of a disclosure at this point,” he said. “If we cannot take away the Fed's ability to waste trillions of taxpayer dollars on failing companies and failing countries, at the very least, we can take away their ability to do this with no transparency or accountability to the American people. While the Sanders Amendment no longer contains a full audit, Senator David Vitter has introduced an amendment which contains the Audit the Fed language that passed the House last fall. The Senate must pass both of these amendments in order to achieve full disclosure of the past and full accountability in the future.”

Indeed, the amendment would require the one-time disclosure of who received trillions of dollars in Fed money doled out since December 1, 2007. The hope among backers of a broader audit is that the exposure of that information would create the political conditions that could allow for a deeper look, which would be followed by reform of the way the Fed does business.

Meanwhile, an ally of Sanders' original amendment is fighting on: Sen. David Vitter (R-La.) will introduce the original Paul amendment, cosponsored by Rep. Alan Grayson (D-Fla.), as an amendment to Wall Street reform. Vitter, however, is perhaps the last champion that any amendment would want. Unpopular within his own party for both personal and political reasons, he also has little pull with Democrats, since it's doubtful at best that he'll vote for the final Wall Street reform package regardless of whether it includes his amendment. A spokeswoman for Dodd didn't immediately respond to a request for comment, though it's a long shot that he'll get a vote.

In 2002 the auditing world was in for a drastic change. Three major corporations Enron, Tyco International and WorldCom deceived the public with inflated financial statements and fraud. As a result, the public was left in distrust of all and any corporation. This display of dishonesty had to be corrected. So, Senator Paul Sarbanes and Representative Michael G. Oxley proposed a bill to be passed to negate any further misbehavior of corporations. The bill passed in 2002 called Sarbanes-Oxley Act (SOA) which changed how audit were to be performed for a public entity.

The SOA has changed the way many companies have internal controls and the process of financial reporting. Because it has had such a profound impact in the public eyes, even non-profit organization and institutions had or decided to restructure their auditing departments. In this report the discussion of Sarbanes-Oxley Act will consist of:

Ø How Sarbanes Oxley impacted the auditing environment in general.

Ø SOA at Cleveland State University Auditing department.

Ø SOA at Case Western Reserve (private university) Auditing department.

Ø Comparison of the compliance efforts of Cleveland State and Case Western Reserve University

Ø Implementation advice for Cleveland State Universities Auditing departments to comply with the guidelines of SOA

Ø SOA and the Internal Auditor

How the Sarbanes-Oxley Act Impacted the Auditing Environment in General

The Sarbanes-Oxley Act of 2002, titled the, “Public Accounting Reform and Investor Protection Act,” marks a dramatic change for external and internal auditors implementing it. Publicly traded companies and accounting firms registered with the Securities and Exchange Commission (SEC) are legally responsible for implementing SOA while some not for profit organizations are implementing SOA rules as a best practice. In the article, “What Works Best,” James K. Seaman, Vice President of Internal Audit at Drexel, relates Drexel University's experience with SOA implementation. Drexel focused primarily on Title I, Section 404 and Title III section 301. Drexel's voluntary efforts at complying with the spirit of SOA may be fortuitous since congress has held at least two hearings on SOA including not for profit organizations.

The SOA legislation creates new rules for internal audit beyond section 404 and 301. Section 407 of SOA sets a rule that at least one member of an audit committee has to be a financial expert. A financial expert on the audit committee, though the requirement has been softened since it's inception, would contribute to management at the director level being more accountable for the content of audits. The presence of a financial expert on an audit committee could strengthen the relationship between the audit committee and the Chief Audit Executive (CAE) thus bringing internal controls under more high level scrutiny even though the PCAOB doesn't directly regulate internal auditors. Coupled with the strengthened CAE audit committee role is Section 404, prohibition on outsourcing internal audit functions to the same external audit firms doing reviews for a given institution. SOA states that the audit committee must approve any non audit functions in advance making it more difficult for external auditors to preempt the efforts of internal auditors on even a piece meal basis. SOA has changed the relationship between internal and external audit in a way that makes internal audit more involved and influential.

Section 103 further strengthens internal audit in three areas;

Ø The AICPA's SAS 78 will likely be replaced by PCAOB Statements of Standards for Accounting Reviews (SSAR),

Ø Expanded internal control testing

Ø Concurring partner approval.

SOA doesn't require that a CAE have another auditor counter sign on their work but this would be good. An internal audit department may be too small to support a second person sign off on an audit but an auditor from another institution could serve in this capacity. Internal audit test samples are usually larger than those of external auditors so internal audit might contribute to more robust external audit testing in the spirit of section 103. Last the SSAR's that are authored by the PCAOB may be based on COSO and external auditors are now required to vouch or attest to how well internal controls work. External auditors signing off on work based on Section 103 SSAR's will be approving the internal controls put in place and documented by internal audit and management of the audited institution.

Title II has a series of sections that establish the independence of the auditor from the organization being audited. Title II, Section 201 emphasizes not providing other services that could cause a conflict of interest. Title II, Section 203 makes external audit partner rotation a requirement. Rotation of partners in combination with mandatory in house internal audit speaks to the intention that internal audit, external audit and management relationships not be too incestuous in nature. The independence of auditors and impedance of their duties addressed by Title II were precipitated the intimate relationship between Andersen internal and external audit and management at Enron to avoid any semblance of impropriety in the era of SOA internal audit will want to maintain the level of independence even though a CAE, per title II, can come from an external audit firm that recently engaged the CAE's institution as a client.

Title III addresses the auditors themselves rather than the institutions such as external audit firms, audit committees and auditees. Title III places the CAE in a position where they may need to report non-rotation of a lead external auditor to management or the PCAOB. A not for profit institution should consider rotation of external auditors if possible to maintain independence and objectivity in the spirit of title III. Title III speaks to individual responsibilities such as the requirement that the CEO sign off on a document that says they assert internal controls are functioning well or not. The commitment this signature implies in the area of internal controls is significant. A university president voluntarily signing off would be taking responsibility for internal controls, their design, materiality and accuracy

According to title III materiality will no longer be determined by the external audit firm or it's negotiation with a firm being audited. Materiality is determined by the guidelines; 1. What would a reasonable investor consider important and 2. Is it likely the investor would think the information significant enough to change their mind (Moeller p. 39). A university's equivalent of the reasonable investor are those who make contribution to endowment funds or, in the case of a state university, the investor counterpart is the tax payer. The diagnostic sensitivity of auditors is raised by this new standard of materiality. An institution that voluntarily implemented the new SOA Title III standard for materiality would be less likely to run into situations where external audit ignores something internal audit recently reported to management because at an aggregate level it wasn't important.

Section 404, referenced earlier, stipulates that each final annual report contain an internal controls report. The internal auditors have to monitor and judge the quality of internal controls but the external auditor has to review their work and attest to it in the yearly report. This marks a major change in the internal control review process that will give it more importance and visibility. In conjunction with the disclosure requirements regarding internal controls is the need to disclose, per section 407, the qualifications of the newly designated financial expert on the audit committee. Having a person as qualified would make any audit committee stronger. Title IV addresses financials and internal controls in a way that a tax exempt institution could benefit from.

Titles V through VII of SOA aren't as applicable to tax exempt institutions like universities. The final parts of SOA, Titles VIII through X, deal with topics such as corporate fraud accountability and rules and penalties regarding destruction of records.

SOA and the Internal Auditor

SOA has changed the relationship and responsibilities of management, external auditors, audit committees and professional organizations. The professional organization American Institute of Certified Public Accountants (AICPA) has had it's audit standard setting responsibilities removed and put in the hands of the recently formed Public Company/Corporation Accounting Oversight Board (PCAOB) which falls under the SEC. The AICPA changes indicate a major change in the external audit auditee relationship. The Institute of Internal Auditors (IIA) and Information Systems Audit and Control Association (ISACA) have changed their standards in the wake of SOA which further emphasizes the changing roles of internal auditors, external auditors and government regulatory bodies such as the SEC and PCAOB.

The changing internal audit standards of the IIA which are forming in reaction to SOA should be reviewed to make sure they are consistent with an institution's internal audit standards. IIA performance standards in the area of risk management should be of particular interest for an organization making an effort to conform to SOA. IIA risk management standards converge with SOA :

2110.A3 The internal audit activity should evaluate risk exposures relating to the organization's governance, operations, and information systems regarding COSO standards and internal control.

Those organizations who conform to the COSO framework are thought to be more likely to comply with Section 404 of SOA.

In the information technology arena compliance with SOA might be achieved by embracing the Control Objectives for Information and Related Technologies (COBIT) which is a framework from the ISACA.

Title I through for IV of SOA provides ample opportunity for improving the audit function even in tax exempt organizations not obligated to conform to SOA. Drexel University is an example of a school that has tackled the SOA challenged with a degree of success

SOA at ClevelandStateUniversity Auditing department

Cleveland State University was founded in 1929 as a private institution in the former name of Fenn Tower, holding about 2,500 students. In 1964, CSU established itself as a public university and because of that it had to adhere to certain rules and procedures. So, in 1981 the Department of Audits was created by the Cleveland State Board of Trustees. The internal auditing department was designed to be an independent appraisal function. Its job was to evaluate and examine the Universities business and administrative activities, which served management and the Board of Trustees. This department reports directly to the Vice President of Business Affairs and Finance (Cleveland State University, Department of Audits Homepage)

One of the departments job is to assess risk, which goes hand in hand with priorities and procedures that help the universities internal controls be effective. This can be done in many ways but Section 404 of SOA states, “the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting (AICPA, “Summary of the Provisions of the Sarbanes-Oxley Act of 2002″). When internal controls are in place they:

Ø Keep assets safe.

Ø Verify financial and other data for accuracy and soundness.

Ø Help operations run efficiently.

Ø Encourage cooperation with universities and governmental policies and procedures.

The CSU auditing department is mainly used as a source for management when consultation is needed to come in guidelines with the university policies. After the department has been consulted management can rest assured that:

Ø Operational plans and budgets are carried out efficiently and effectively.

Ø Polices and procedures are observed.

Ø Standards of performance are effective, and

Ø Records and reports are reliable (data integrity).

Along with management being assured, there must be other procedures in place to guide the departments and with the help of the SOA act the Code of Ethics and the Action Hotline was put into place (Cleveland State University, Controller's Office Homepage). This Action Line was put in place to reinforce the commitment to compliance and integrity of the university to the community. And the Code of Ethics speaks of the high standards the school has set in conducting its business with employees and students. This code ties directly to Section 406 of SOA that states, “The Securities Exchange Commission shall issue rules that require each issuer to disclose whether or not, and if not, the reasons therefore, such issuer has adopted a code of ethics for senior financial officer.” (AICPA, “Summary of the Provisions of the Sarbanes-Oxley Act of 2002)

SOA at Case Western Reserve Auditing department

Section 203 of the Sarbanes-Oxley Act tells us that the lead audit or coordinating partner and the reviewing partner must rotate off of the audit every 5 years. Case complied with this by stating in their Audit Committee Charter, adopted on May 13, 2005, that the Audit Committee shall ensure proper rotation of the lead and concurring audit partners on the University's engagement. Section 204 of the Sarbanes-Oxley Act tells us that the accounting firm must report to the audit committee all “critical accounting policies and practices to be used; all alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred” by the firm. Case complied with this section by stating in the Audit Committee Charter that the Audit Committee members have the responsibility to review with management, the independent auditors, and the internal auditors their judgments about: the quality — not just the acceptability — of the University's accounting principles, the consistency in the application of accounting policies, the reasonableness of significant judgments, the degree of aggressiveness or conservatism in applying the accounting principles, and the clarity and completeness of the financial statements and related disclosures.

Section 301 of the Sarbanes-Oxley Act states that each member of the audit committee shall be a member of the board of directors of the issuer, and shall otherwise be independent. Also, it also tells us that the audit committee shall establish procedures for the “receipt, retention, and treatment of complaints” received by the issuer regarding accounting, internal controls, and auditing. Case Western Reserve University has complied with Section 301. Case has membership guidelines in the Audit Committee Charter, which describe that the Audit Committee shall consist of members who are independent of management and the University in fact and appearance. It says that members of the Audit Committee shall be considered independent as long as they do not accept any consulting, advisory, or other compensatory fee from the Case Western University and are not affiliated persons of the University, its subsidiaries, or management. Section 301 also states that the audit committee of an issuer shall be directly responsible for the appointment, compensation, and oversight of the work of any registered public accounting firm employed by that issuer. Case employed PricewaterhouseCoopers as its external auditor. The Audit Committee Charter explains that the members of the Audit Committee are directly responsible for the appointment, compensation, and retention of the University's independent auditor. They annually evaluate the qualifications and performance of the independent auditors. They ensure that the independent auditor assigns the appropriate industry experts to the audit engagement. The independent auditor has direct access to the Committee. The Audit Committee approves procedures for the receipt, retention, and treatment of complaints received by the University regarding accounting, internal accounting controls or auditing matters that include procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

Section 401 of the Sarbanes-Oxley Act tells us that the SEC shall study off-balance sheet disclosures. Case Western Reserve University was in compliance with Section 401. In the Audit Committee Charter, it states that members shall confirm with management and the independent auditor that the annual financial statements disclose all material off-balance sheet transactions, arrangements, obligations, and other relationships of the University with unconsolidated entities or other persons that may have a material current or future effect on: financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Section 404 of the Sarbanes-Oxley act discussed the management assessment of internal controls. It is unknown whether or not Case Western Reserve University complied with this section. Access to the annual internal reports was restricted to Case faculty and staff only.

Section 406 of the Sarbanes-Oxley Act discusses the code of ethics for senior financial officers. Case again complied with this part of the act and it's own Case Code of Conduct on the Audit Department home page. The Case Code of Conduct, started in May of 2005, reflects Case's commitment to respect, honesty, and integrity and provides a framework for how they deliver education and services to their constituents. The management of Case is responsible for the preparation, presentation, and integrity of University's financial statements and for the appropriateness of the accounting principles and reporting policies used by the University. It is the policy of Case Western Reserve University that all members of the University community adhere to the highest ethical standards of professional conduct and integrity. All members are expected to understand and comply fully with all state and federal laws, regulations, and interpretations thereof that are related to their particular duties. To help achieve that end, Case Western Reserve University has created a policy manual that describes Case's policies concerning certain laws affecting many of our business operations. The Case Code of Conduct lays down the ethical principles for senior financial officers as well as all other members of the University.

Section 407of the Sarbanes-Oxley Act states that the SEC shall issue rules to require issuers to disclose whether at least one member of its audit committee is a “financial expert.” Case complies with this by declaring in their Audit Committee Charter that a majority of Committee members shall be “financially literate,” and at least one member shall be a “financial expert.” Case defines a financial expert as a person who has: an understanding of generally accepted accounting principles and financial statements, experience applying such principles, experience preparing, auditing, analyzing or evaluating financial statements, experience with internal controls, and an understanding of audit committee functions.

After reviewing and analyzing the Audit Department home page of Case Western Reserve University, it is clear that they made adjustments to voluntarily comply with the Sarbanes-Oxley Act.

Comparison of the compliance efforts at ClevelandStateUniversity and CaseWesternUniversity

The information contained in this report was obtained at the Internal Audit departments web pages for both Case Western Reserve University (CWRU) and Cleveland State University (CSU). While each University may have made additional strides toward compliance with SOA we will only compare the information that was available though the WebPages. Based on the information presented above CWRU has made more strides toward compliance of Sarbanes Oxley than CSU. A short synopsis will follow of the compliance efforts at each university. CWRU requires that:

Ø Proper rotation of audit partners is achieved (Section 203 complaint)

Ø Quality and consistency of the application of accounting principals must be reviewed by management (Section 204 complaint)

Ø Membership guidelines for members of the audit committee and supervision of the external auditors (Section 301 complaint)

Ø Disclosure of all off-balance sheet transactions (Section 401 complaint)

Ø Code of ethics for senior financial officers (Section 406 complaint)

Ø Majority of committee members shall be “financially literate” (Section 406 complaint)

Cleveland State requires that:

Ø Management assurance (Section 204 complaint)

Ø Code of Ethics (Section 406 complaint)

Ø Action Hotline (Section 406 complaint)

CSU should follow in the foot steps of CWRU and Drexel University to become more SOA complaint, some of the efforts that CWRU could easily be accomplished at CSU. Some of the efforts that CWRU can be made at CSU by revising some of its guidelines and adding an audit committee (see Suggested Implementation as Cleveland State University Auditing department to comply with SOA below). Both university's do not appear to be making efforts to become complaint with Section 404 regarding the documentation of internal controls. This provision should be considered for both universities. Through documentation of internal controls and testing of the controls a university can better understand how well its procedures are working and the level of safety its assets hold. The internal audit department can be indefinitely useful in the implementation of Section 404. Because of the nature of structure of the internal audit department, the department is a prime candidate to perform the tests of internal controls. The testing of internal controls will give the University the added assurance that it has procedures in place to protect its assets.

The additional work necessary to become SOA complaint will help CSU in the long run, as the value added for the effort to become SOA complaint (even only portions of it) can far exceed the addition costs association with the documentation process. According to the article what works best:

Organizations that implement Sarbanes Oxley – its requirements, or its spirit – accumulate a great deal of information on there financial processes, polices and procedures. The exercise provides management an opportunity to review extensive information on company operation, determine whether processes are function as efficiently as possible, and achieve added value as a results of documentation efforts. For example Drexel's documentation of critical business process and subsequent re-engineering efforts enabled the organization to report a significant and sustainable value to its stake holders.

Suggested Implementation at Cleveland State University Auditing department to comply with the guidelines of SOA

Because of the possibility that the Sarbanes-Oxley Act will be expanded to include not-for-profit organizations and public institutions, Cleveland State University must consider pro-active steps to prepare for additional future compliance. There are a few provisions in SOA that can be interpreted for higher education of which CSU has not implemented. One notable area is the importance of an audit committee. Title II (all sections) and Title III (section 301 and 302) deal with the establishment and various duties of the audit committee.

CSU will need to establish an audit committee or at the very least assign the audit function to another committee of the Board of Trustees (i.e. the finance committee.) Then add “audit” to the wording of the existing committee title that will be taking on this function, for example, “finance and audit” committee.

It is crucial that the audit committee be completely independent. Management representatives should not be voting members of the committee. The committee should include at least one financial expert who understands the accounting standards for higher education. The definition of a financial expert per SOA is familiarity with estimates, accruals, and reserves as well as an understanding of generally accepted accounting principles and financial statements. Cleveland State should also consider rotating the financial expert and begin planning for the process of recruiting, training, and retaining financial expertise. It's important to note that the recruitment and retention of a financial expert might be limited by Board appointments.

Per SOA, the audit committee should have all necessary authority contained in its charter. The charter should also specify that appropriate funding be available for the audit committee. The purpose of Cleveland State's audit committee should be stated in the charter, for example,

The primary function of the Audit Committee is to assist the Board of Trustees in fulfilling its oversight responsibilities relating to: the integrity of the University's financial statements, the systems of internal control, the performance of the University's independent auditors and internal audit function, the independent auditors' qualifications and independence, and the University's compliance with legal and regulatory requirements. In so doing, it is the responsibility of the Committee to maintain free and open communication among the Committee members, independent auditors, the internal auditors, and management of the University. The Committee shall take all appropriate actions to set the overall University tone for quality financial reporting, sound business risk practices, and ethical behavior. Committee will guide the University in achieving the best financial operations as compared to peer institutions or organizations of similar size.

Contained in SOA are guidelines an organization must follow with respect to its external auditor. Selection of the auditor is not an issue; the State audits CSU. However, CSU should require of the State a rotation of the senior staff in charge and other higher positions every five years. Public accounting firms must report to the audit committee all accounting policies that have been discussed with management and alternate treatments of financial information. A best practice would have the Audit Committee request that the State Auditor report directly to the Committee on these topics. Board policy should also discourage the hiring of a senior official (e.g. president, CFO, controller, chief accounting officer) of the university's external auditors, unless one year has passed since the individual was involved in the university's audit. If the university believes it is necessary to forgo the one-year waiting period, the administration should document the benefits and risks and seek Board approval prior to extending an offer of employment.

SOA section 302 requires that the CEO and CFO of public companies certify the annual report based on six assertions. The University President and Chief Financial Officer can and should certify the annual financial reports for the following three assertions:

Ø They have reviewed the report;

Ø Based on their knowledge, the report does not contain any untrue statement of a material fact or omission of a material fact that makes the statements misleading;

Ø Based on their knowledge, the financial statements present in all material respects the financial condition and results of operations;

The other three assertions that deal with effective internal controls would be more difficult for CSU to address appropriately until it satisfies section 404. But it could start by considering the degree of decentralization of its financial operations.
References

AICPA, “Summary of the Provision of the Sarbanes-Oxley Act of 2002; available from http://cpcaf.aicpa.org/Resources/Sarbanes+Oxley/Summary

Case Western Reserve, Office of Audit Services, Homepage available from http://www.case.edu/president/audit

Cleveland State University, Controller's Office Homepage, available from http://www.csuohio.edu/controllers/action_line.html

Cleveland State University, Department of Audits Homepage, available from http://www.csuohio.edu/internalaudit/index.html; (Viewed November 14, 2006)

Information Systems Audit and control Association, COBIT Overview, website www.isaca.org (viewed November 28, 2006)

Institute of Internal Audit Standards, www.theiia.org/index.cfm?bhcp=1, IIA website (viewed November 28, 2006)

“Public Accounting Reform and Investor Protection Act,” U.S. Securities and Exchange Commission, http://www.sec.gov/about/laws/soa2002.pdf, SEC website, (viewed December 1, 2006)

“Requirements of Sarbanes-Oxley” National Association of College and University Business Officers 03 Dec. 2006. http://www.nacubo.org/documents/buxiness_topics?SOXChecklist3.7112003.doc

“Sarbanes-Oxley Act of 2002 – SOX” Wikipedia, 2005. Answers.com December 3, 2006/ http://www.answers.com/topic/sarbenes-oxley-act-of-2002-sox

Sarbanes-Oxley and the New Internal Auditing Rule,Robert R. Moeller, John Wiley and Sons, Inc., Hoboken, New Jersey, 2004.

It's pretty pathetic that the job market has been pathetic for so long that authors and publishers have had time to address the issue in books, but such is the case, which is why Ford R. Meyers, has penned Get the Job You Want Even When No One's Hiring. Here are some of his tips for landing a summer job, which is really crucial for those who haven't had spring, summer or fall jobs:

1.Create and Control Your Internet Image. Whether it's LinkedIn, YouTube or Facebook, every professional should have an online presence. Many employers research job candidates on the Internet before making hiring decisions. Therefore, it is vitally important that you take control of your online identity and carefully monitor the “personal brand” you're building on the Internet.

2. Invest in Career Coaching. It might seem that career coaching would be a luxury in this difficult economic climate. Actually, this might be the best time to get some career coaching. A qualified career coach can help you get totally clear on your objective, differentiate you from the competition, market you effectively, get the offer, and negotiate the best compensation.

3.Tune Into the Network. Summer is one of the best times of the year to make new connections and find new opportunities. Contrary to popular belief, there are many summer networking events, planning meetings and social activities going on.

4. Perform an Internal Career Audit. Summer is a perfect time to take an honest look at your career — where you've been, where you are today, and where you'd like to go. Identify new goals based on your own definition of career success and then take action.

5. Update Your Career “Tool Kit.” Most job seekers use only their resume as the cornerstone of their search because their other “tools” are weak or nonexistent. But there are many other documents you should have in your “career tool kit” — accomplishment stories, positioning statement, a one-page biography, target company list, contact list, professional references, letters of recommendation, and more. These items are important not just to land the next job — but also to maximize your long-term career success.

6. Solidify Relationships. During the summer, most people are naturally more relaxed, convivial and generous in spirit. There is simply no better time to solidify existing relationships and forge new ones.

7. Volunteer. There are myriad volunteer opportunities available during the summer. This is a good way to help people, to feel good when you need a boost, to have a renewed sense of purpose during your search, and to meet other professionals who may be able to help you.

8. Call People. Make new connections through your network and follow up with people you've already met. In many cases, people who are at work during the heat of the summer will not only be available for conversation, but will be grateful just to speak to someone.

9. It is Better to Give Than to Receive. The fastest and most effective strategy for getting help is to offer help to others. Ask the people in your network who they might like an introduction to or if there is any way that you can be of assistance to them.

10. Become and Opportunity Magnet. Always think and speak positively and never say anything negative. This will help you to become an opportunity magnet — poised to attract, interview and “hire” your next employer.

It seems like pretty solid advice, save for the part about investing in career coaching, which happens to be the author's trade. If you're unemployed it's just silly to throw money at an adviser.

Get the Job You Want Even When No One's Hiring

(Thanks, Ilyse!)

It's pretty pathetic that the job market has been pathetic for so long that authors and publishers have had time to address the issue in books, but such is the case, which is why Ford R. Meyers, has penned Get the Job You Want Even When No One's Hiring. Here are some of his tips for landing a summer job, which is really crucial for those who haven't had spring, summer or fall jobs:

1.Create and Control Your Internet Image. Whether it's LinkedIn, YouTube or Facebook, every professional should have an online presence. Many employers research job candidates on the Internet before making hiring decisions. Therefore, it is vitally important that you take control of your online identity and carefully monitor the “personal brand” you're building on the Internet.

2. Invest in Career Coaching. It might seem that career coaching would be a luxury in this difficult economic climate. Actually, this might be the best time to get some career coaching. A qualified career coach can help you get totally clear on your objective, differentiate you from the competition, market you effectively, get the offer, and negotiate the best compensation.

3.Tune Into the Network. Summer is one of the best times of the year to make new connections and find new opportunities. Contrary to popular belief, there are many summer networking events, planning meetings and social activities going on.

4. Perform an Internal Career Audit. Summer is a perfect time to take an honest look at your career — where you've been, where you are today, and where you'd like to go. Identify new goals based on your own definition of career success and then take action.

5. Update Your Career “Tool Kit.” Most job seekers use only their resume as the cornerstone of their search because their other “tools” are weak or nonexistent. But there are many other documents you should have in your “career tool kit” — accomplishment stories, positioning statement, a one-page biography, target company list, contact list, professional references, letters of recommendation, and more. These items are important not just to land the next job — but also to maximize your long-term career success.

6. Solidify Relationships. During the summer, most people are naturally more relaxed, convivial and generous in spirit. There is simply no better time to solidify existing relationships and forge new ones.

7. Volunteer. There are myriad volunteer opportunities available during the summer. This is a good way to help people, to feel good when you need a boost, to have a renewed sense of purpose during your search, and to meet other professionals who may be able to help you.

8. Call People. Make new connections through your network and follow up with people you've already met. In many cases, people who are at work during the heat of the summer will not only be available for conversation, but will be grateful just to speak to someone.

9. It is Better to Give Than to Receive. The fastest and most effective strategy for getting help is to offer help to others. Ask the people in your network who they might like an introduction to or if there is any way that you can be of assistance to them.

10. Become and Opportunity Magnet. Always think and speak positively and never say anything negative. This will help you to become an opportunity magnet — poised to attract, interview and “hire” your next employer.

It seems like pretty solid advice, save for the part about investing in career coaching, which happens to be the author's trade. If you're unemployed it's just silly to throw money at an adviser.

Get the Job You Want Even When No One's Hiring

(Thanks, Ilyse!)