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Using ISO 9001 to Help Manage the Sarbanes-Oxley Risks
Sandford Liebesman, Senior Consultant
Sandford Quality Consulting
69 Pippins Way, Morristown, NJ 07950
sandfordl@msn.com
The U.S. Sarbanes-Oxley Act of 2002 requires the chief executive officers (CEOs)
and chief financial officers CFOs) to certify the effectiveness of their company’s
internal controls or risk civil and criminal penalties for signing off on ineffective
controls. However, focusing too narrowly on financial reporting controls may be
a risk in itself. Operational failures — particularly in the quality and environmental
areas — can lead to material financial misstatements.
Effective internal controls and quality initiatives work closely to manage such
risks, according to the Internal Control–Integrated Framework developed by The Committee
of Sponsoring Organizations of the Treadway Commission (COSO). “The quest for quality
is directly linked to how businesses are run, and how they are controlled,” the
framework states. “Quality initiatives become part of the operating fabric of an
enterprise. These quality factors parallel those in effective internal control systems.
In fact, internal control not only is integrated with quality programs, it usually
is critical to their success.”
In 2003 four quality management professional formed the SOX-Q/E Team to identify
how quality and environmental management systems (QMS/EMS) can be used to help reduce
risk related to Sarbanes-Oxley. The team’s review of Sarbanes-Oxley found that senior
management needs to obtain better information about the effectiveness of its organizations.
Team members concluded that a good QMS/EMS can help top management maintain effective
corporate governance and satisfy the Sarbanes-Oxley requirements. Comparing clauses
of ISO 9001 and ISO 14001 with the COSO components suggests ways these quality standards
can help reduce Sarbanes-Oxley risks.
Presenter:
Dr. Sandford Liebesmanhad over 30 years experience in quality at Bell Laboratories,
Lucent Technologies and Bellcore (Telcordia). He is an ISO 9000 subject matter expert
and is author of the books TL 9000, Release 3.0: A Guide to Measuring Excellence
in Telecommunications, 2nd Edition and Using ISO 9000 to Improve Business Processes.
He is a member of ISO Technical Committee 176 and the ANSI Z-1 Committee on Quality
Assurance, is certified by the ASQ Registrar Accreditation Board as an ISO 9000
Lead auditor, has performed over 90 ISO 9000 and TL 9000 audits and helped many
Lucent organizations obtain ISO 9000 and TL 9000 certifications. He currently is
a quality management system consultant with Sandford Quality Consulting LLC and
the Kohl Group and an auditor with KEMA Registered Quality. He is leading the SOX_Q/E
Team in support of the Sarbanes-Oxley Law.
Dr. Liebesman has presented seminars on the Sarbanes-Oxley Law, ISO 9000, TL 9000,
total quality management and the MBNQA at ASQ, IEEE Conferences and at Rutgers University.
He taught statistics, quality control and quality management courses at Rutgers
University. He was a member of the QuEST Forum from October 1997 to July 2001, was
on the QuEST Forum Liaison Team to ISO/TC 176, completed the TL 9000 Auditor Training,
and was a major developer of the QuEST Forum Business Excellence Acceleration Model
(BEAM). He has recently published articles and given presentations on TL 9000, ISO
9000:2000, the Sarbanes-Oxley Law and process focused auditing.
Dr. Liebesman has an engineering degree from the United States Naval Academy and
MSEE and Ph.D. (Operations Research) degrees from New York University. His is Vice-Chairman
of the ASQ Electronics and Communications Division.
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