Companies Asking Financial Professionals to 'Subcertify' Financial Data

July 29, 2003 ( - Approximately a third of corporate financial professionals are now being asked to "subcertify" data used in Securities and Exchange Commission (SEC) reports, as senior financial executives look for added Sarbanes-Oxley reporting assurances.

This additional compliance step – viewed only as an extra measure of protection – raises the spotlight on financial professionals and their role in supplying accurate financial reporting. It requires the employees responsible for a company’s financial information to certify the data they provide that is later included in public financial reports, even though such measures are not required under Sarbanes-Oxley provisions, according to a new survey by the Association for Financial Professionals.

>However, the majority does not feel entirely comfortable with this new level of responsibility. Nearly 80% of financial professionals asked to sign an affidavit expressed a “high” or “moderate” level of concern about their liability, with 23% seeking counsel from an attorney, either from the company’s lawyer (21%) or their own personal legal representative (2%).

Among the documents financial professionals – job titles that ranged from treasurers to cash managers – were asked to subcertify:

  • specific disclosures in Management’s Discussion and Analysis or footnotes
  • specific account balances
  • compliance with company policies and procedures
  • adequacy of internal controls in their department/area
  • compliance with company code of conduct.

“I believe the prevalence of subcertification, while a direct result of Sarbanes-Oxley, reflects the increased level of importance that financial professionals hold within their companies,” said Jim Kaitz, AFP’s president and CEO, in a statement. “Greater accuracy in financial reporting and increased accountability will ensure that most companies are honest and report earnings accurately. This knowledge will ultimately lead to a more stable economic environment.”

The report of survey results and a white paper on subcertification are available on AFP’s Web site at .