August 16, 2002

Now that companies have had their first experiences with the Section 906 certifications, they should turn their attention to the Section 302 certification which will be required for the next round of 10-Qs.

The Section 302 certification requires extensive representations as to the CEO’s and CFO’s responsibility for the issuer’s internal reporting controls – both financial and non-financial – including a representation that they have evaluated the effectiveness of those controls on a quarterly basis.

These representations are new and are not part of the Section 906 certification – so companies should start examining whether their CEOs and CFOs will be able to comfortably make these representations (and if not, begin to implement procedures so they can). As many practitioners recommended for the last round of certifications, companies may want to document their processes and procedures – so that there is tangible evidence underlying the certifications when they are made in mid-November.

Broc will be on vacation next week – without access to the Web – so my blogging will be limited. Enjoy the silence!