Because of recent legislation (e.g. Sarbanes–Oxley and Tabaksblad), it is required that the management assesses and reports on internal control with regard to financial reporting. Furthermore, management has to provide disclosure on verifications and procedures. For the management of companies quoted on the American stock exchange, irregularities in financial reporting may lead to significant fines and even to imprisonment. Furthermore, internal (ethical) standards as well as the strive for good standing and a good reputation influences the operational management. Consequently, companies are currently reviewing all processes and introduce systems guaranteeing the correctness of the processes and internal reporting. An important issue in this respect is correct application of tax legislation, including customs legislation.
In our experience, customs legislation and processes are often overlooked, whereas the financial and reputational interests in the application of customs regulations usually are considerable. Incorrect application of the customs legislation may have consequences for financial reporting but also for the reputation of a company if e.g. trade has taken place with restricted countries. Furthermore, internal standards will generally prescribe that processes should be in line with legislation. Therefore, it is of great importance to verify whether company processes are in line with customs legislations. Due to the specialist matter, companies’ management will often experience difficulties obtaining a complete and clear overview of the different company processes in relation to customs legislation. Therefore, Deloitte has developed a solution (“Deloitte Customs Digiscan”) which is an automated risk analysis tool, which will enable management to identify risks and weak spots in the customs functionality within a company. Furthermore this tool will enable management to determine the measures to minimize the risks in this area.
|
|
|
|
|
Page Last Updated: April 12, 2006
|
|
Source: Deloitte Touche Tohmatsu (English)
|