The 4-1-1 on 404

If someone asked you what Boeing President and CEO Harry Stonecipher, the Boeing Board of Directors and Chief Financial Officer James Bell consider to be the most critical Finance initiatives under way right now at Boeing, what would you say?

Maximizing stock valuation? More accurately forecasting cash flow? Achieving better returns on our investments? Clearly, Boeing is committed to driving improvements in each of these areas, among others.

But chances are the company's most important Finance priority for 2004-achieving compliance with new federal regulations governing the effectiveness of public companies' internal financial controls-is one you've never even heard of. But the stakes couldn't be higher.

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Sarbanes-Oxley provision puts employees in control

Sarbanes-Oxley Section 404 focuses on a company's "internal controls." What are they and how do employees contribute to protecting them? Internal Controls are a system of planned actions built into processes and executed to provide reasonable assurance of the effectiveness of operations, the reliability of financial reporting, and compliance with applicable regulations.

The control environment is the environment in which people conduct business activities and fulfill their control obligations. It includes both intangible and tangible elements, such as integrity and ethical values, governance and organization structure and management philosophy and operating style. An effective control environment exists when employees understand their responsibilities and authority, and are committed to acting ethically.