Beginning with the passage of the Sarbanes-Oxley Act (SOA), management and auditors alike have struggled with defining the scope of business continuity as an internal control related to financial reporting. Whereas business continuity as "good business practice" would not have been affected by the passage of SOA, the potential requirement to publicly report on aspects of a company's business continuity planning would certainly raise the level of attention to BC in a public company.

The Disaster Resource GUIDE published in its 8th annual edition an article reviewing the potential impact of SOA on business continuity efforts. The article can be reviewed at:

http://www.disaster-resource.com/articles/03p_029.shtml

Last week, the Public Company Accounting Oversight Board (PCAOB) released its report regarding the implications of SOA and internal audit and control. Page A-135 of the report states the following:

"Furthermore, management's plans that could potentially affect financial reporting in future periods are not controls. For example, a company's business continuity or contingency planning has no effect on the company's current abilities to initiate, authorize, record, process, or report financial data. Therefore, a company's business continuity or contingency planning is not part of internal control over financial reporting."

The statement seems to imply that business continuity planning has no affect on the processing of financial data! This is very difficult to understand in that all processing of data would come to a screeching halt in the event of a disaster or major disruption apart from an effective disaster recovery or business continuity strategy.

Because of this seeming contradiction and the confusion around this issue, the publisher of the annual Disaster Resource GUIDE and the Continuity e-GUIDE weekly newsletter has requested an expert in this arena, Mr. Brian Zawada, to review in depth the implications of this report as it relates to business continuity planning. Mr. Zawada, with the worldwide risk consulting and internal audit firm Protiviti, will survey industry professionals and provide our readers with his analysis in the upcoming, 9th annual Disaster Resource GUIDE. The GUIDE is available free to those involved with business continuity and disaster recovery, and can be requested from our home page:

www.disaster-resource.com

The PCAOB report in its entirety can be located at the following link:

http://www.pcaobus.org/rules/release-20040308-1.pdf

Protiviti consulting's website is available at:

www.protiviti.com