KateTutor revision

I need the following attached papers revised to the requirements set by the professor I must Label the sections in the deliverable to the grading rubric  *e.g. Sox related expenses: Chief insights) Criterion. There are 14 criteria so there should be 14 section headings.

Attached below are the papers and the Rubrics for each

Running head: TRINITY INDUSTRIES 1

TRINITY INDUSTRIES 16

Trinity Industries

Robert Shulzinsky

Southern New Hampshire University

Introduction

Trinity Industries Inc. is a diversified industrial company which owns several diverse product-based businesses. The industries are segmented into several units with each segment dealing with a specific product. The unique segmentation accounts for its diversity as this allows the company to produce different products thus satisfying the needs of many customers (Pippins, 2015).The paper serves to provide a detail view of the concept of SOX compliance in relation to the industries, the issues that affected its implementation and the factors that eventually made it a success.

Since inception, the company has continued to register rapid growth and expansion that has contributed to the increasing fame. Initially, the company was known as Trinity Steel. However, the pioneers of the company had a great feeling that they needed to expand their operation. To cater for the expanded nature of the company after some years, the name was changed to Trinity Industries with several branches widely distributed. Like other industries, Trinity Industries Inc. is bound to the SOX compliance. The SOX compliance is a guiding Act that was passed by the United States to protect companies, industries, business enterprises and even the general public from accounting errors and fraudulent practices. The U.S government thought that with the alarming cases of frauds, there was a need to come up with such tool. Since the establishment of the Act, all companies in the United States were expected to oblige and subscribe. The Trinity Industries Inc. faced a lot of challenges in their first year of adoption due to some issues specific to the company (Sande, 2015).

In 2002, the Sarbanes-Oxley Act (SOX) was passed by the United States Congress. The purpose of the Act was to provide patent protection to the general public, stakeholders and business enterprises that existed in America. Patent protection is a legal provision that serves to safeguard an inventors or owner of an item or invention from interference by third parties. The chief aim of this initiative was to improve accuracy and minimize accounting errors that were rapidly increasing. The accuracy of corporate disclosures is sensitive to minimizing accounting errors and combating the alarming rate of fraud in the business sector. The SOX Act has detailed rules and guidelines that support its operation. The pioneers argued that the legal protection and restrictions are equally important in meeting the goal of the Act. It is the corporate responsibility of every interested company to ensure that they adhere to published guidelines to enhance effective implementation. As a result, most companies changed their operation laws to suit the SOX Act. Trinity Industries Inc. was equally bound by this Act. Nevertheless, we must appreciate the challenges that the company underwent on their verge to implement this initiative. Most of the challenges and weaknesses were specific to the company (Bryan & Peek, 2016).

The introduction of such an Act comes with certain legal restrictions. In this sense, every person should adhere outlined and published guidelines to meet the needs of the initiative. In the management of records, for instance, the SOX guidelines provide details of how the guidelines should be stored and the way they should be stored. This includes the conditions and length of time of storage. Department responsible for managing and controlling corporate records were expected to learn and conform to these guiding principles. Trinity Industries Inc. should be appreciated for their efforts that they made in the first year of initiation. The management led by the Vice President and the Chief Auditor played a key role in fighting with the internal constraints that tried to derail the process. As a matter of fact, the company ended adopting the strategy (Li, Raman, Sun & Wu, 2015).

In an interview and through formal writing, the Vice President and the Chief executive described the company as a likely candidate for material weakness. Especially during the first year of adopting the SOX strategy. This was due to some underlying specific factor that grossly affected the implementation process by the company. There are certain factors that gauge the compatibility of this legal provision. Before adopting, one must understand that the legal privileges come in handy with attached challenges. In the case of SOX compliance, there were some overall challenges that affected the implementation process. However, these were variant depending on the enterprise administration and operations. This answers the question why some companies smoothly adopted the strategy while others like The Trinity Industries Inc. struggled throughout their first year to achieve the success. Internal factors are the common culprits to this unique specificity. The internal operational factors may contribute to the weakness in the process of implementation. In this regard, the corporation may face several challenges before adjusting and conforming to the binding laws(Bryan & Peek, 2016).

Material weakness for Trinity Industry

The SOX compliance defines the notion of a material weakness. According to the company’s Vice President and the Chief Audit Executive, the company met the definition of material weakness. The company over the years has registered successful track. However, it is worth appreciating that success does not mean that everything is in order. In analyzing the case of Trinity Industries, understanding the concept of material weaknesses is important. Analytically, it was evident that Trinity faced similar challenges compared to other companies. However, there were some internally restricted specifications that affected the adoption of the set guidelines. The specificity of the problem is a factor in addressing the challenge(Tham & Madni, 2017).

A material weakness is one of the challenges that can be associated with the implementation process of the initiative. It entails an instance that there is some defect internal control. Material weakness occurs when the checks or internal control measures put in place predispose the company to material errors that may interfere with the accuracy of financial statements. The case of Trinity Industries Inc., was not robust or significant enough prevent operational irregularities. In most cases, the operational irregularities are mainly attached to financial issues. The material weakness of a company increases the vulnerability of the company to fraudulent issues. The aim of the SOX compliance guidelines ensures that companies set up robust financial security systems that protect it from the impact of frauds and data manipulation (Li, Raman, Sun & Wu, 2015).

Specific weaknesses

Lack of centralized information system

A centralized information system is sensitive for every organization. The management should ensure that a clear and effective information system is established to facilitate its operation. Information storage and exchange is essential in minimizing these errors that were seen in the case of Trinity. A central channel of communication facilitates unity of command. This ensures that the information is delivered to the intended audience in the best mode and channel. Errors in communication usually stem from the various stages of communication. According to an analytical view of the case Trinity, the industries never invested in a unifying communication system. This made mobilization of the workforce, stakeholders and the overall employee difficult. Unlike many other companies that use a decentralized system of communication. Trinity majorly relied on the central and restricted information system (Christensen, 2015).

The organization failed to incorporate an integrated information system. The availability of an integrated system ensures that there is effective communication. The effectiveness of communication depends on timely, relevance and the clarity of information. The centralized information system came out as a major challenge to the company. The SOX compliance guidelines advocate for a robust infrastructure that seeks to protect the system information. The information management system should ensure that its operations confined to the set standards. Companies have sensitive financial details that should be protected. The storage of these documents should be secured from damage which can lead to massive data loss. A fragmented information system increases the vulnerability of companies to most of the security issues (Bryan & Peek, 2016).

Internal control plays a key role in as far material weakness is concerned. Looking at the structure of the company it was evident that the internal control was inefficient. Despite the good performance, the chief auditor of the company and the president accepted that the company had issues. Trinity Industries Inc. faced the challenges due to it big capacity. Lack of efficient financial management for such huge organizations is likely to lead to errors are very costly. Availability of efficient internal control a vital role in meeting the SOX compliance. The workforce should be up to the task to facilitate the achievement of the set rules. The disciplined and responsible workforce is essential meeting the desired goals of the new regulations. Weighing the success factors and failure factors associated with the implementation of these laws is very important. Despite the presence of adequate workforce and resourceful working environment, there were some internal issues that led to inefficient financial management(Li, Raman, Sun & Wu, 2015).

Fragmented operations

Despite the fact that Trinity Company was one of the most successful industries there were some gaps in operations. Fragmented procedures, certification and control, were some of the issues that contributed to most of the operational challenges. It was noticed that the management of Trinity companies was not in the position of identifying these challenges. Before the detection survey, the company normally operated with no alarming of such existing issues. The annual financial reports that were been delivered had a lot of issues that led huge financial losses. Other companies had well-defined operations that this contributed to their quick adjustment to the SOX guidelines. In the first year, Trinity struggled to put most of structures, guidelines, procedures and control system in place to respond the challenge. According to the company’s Vice President, this was the toughest year that the country had faced since inception (Bryan & Peek, 2016).

Major Challenges that led to material weakness in Trinity Industries Inc.

According to the internal and external survey, it was evident that the successful company faced certain challenges that derailed the process of adopting the desired laws. The implementation of SOX laws called for a robust internal control system that ensures that the operational, system and other physical assets are protected. This protection serves to ensure that data and other assets are well handled minimizing the numerous irregularities usually associated with ineffective handling approaches. Some of the major challenges that Trinity Industries faced in the process of implementing the SOX guidelines include;

General lack process

Analytically it was evident that Trinity Company had issues to do with the general process of operation. Nevertheless, we must appreciate the good time and successful seasons that the company reported. Until the SOX guidelines were put in place, the company never recognized some of the major losses that were attributed to financial errors. The challenge of the general process was broad and diverse. Procedures, management and information structures were silently affected. Ineffective detection mechanism led to the continuous financial errors in most of the financial documents. This was the major cause of misstatement. Other companies that invested in efficient general process faced few challenges as they were able to adjust quickly to the compliance regulation. The Trinity management took rather long to settle and re-organize the whole system structures essential in ensuring efficient process (Christensen, 2015).

The success of ever company depends on the ability to manage its operations. Every step is very important in meeting the effectiveness of the overall process. The material weakness of Trinity Company was highly associated with lack of well-defined general process. Ignorance of the management was another promoting factor. With the successful operations, the company never realized that they were losing critical financial information. The company management was not keen on the annual financial reports. The management only called for the annual reports but never went ahead to carry out sufficient scrutiny of the written report. This ignorance led to the loss of crucial financial information that should be secured when such process is in situ (Fernandez & Corchado, 2013).

Ineffective controls for documentation

The SOX compliance guidelines advocates for efficient documentation process. Every company is expected to confine to these documentation guidelines to achieve success in information management. The Trinity Industries Inc. had a weak documentation control system. Most of the financial records were missing, not updates and not clear thus making the evaluation process difficult. Handling financial documents call for extreme caution as far as documentation is concerned. Carrying out effective documentation ensures that the risk of financial errors is avoided as much as possible. The management plays a key role in facilitating the process of effective documentation. A well-established controlled system carries out additional checks to the record affirming their authenticity and accuracy. Companies that have infective control systems are likely to face major challenges in adjusting to the SOX guidelines. The specific challenge derailed the process of adjustment of the Trinity Company in the first year of implementing the SOX guidelines (Fernandez & Corchado, 2013).

Insufficient evident control mechanisms

The SOX guidelines call for evidence-based operations. The need to establish an effective control mechanisms is important in the process. As a company, Trinity has a big role to play as far as evident control mechanisms are concerned. The evidence of these control mechanisms is essential especially for the purpose of verification. The SOX compliance rules carry out routine inspection s for these companies to gauge the compliance. In view of the case scenario of Trinity, the routine inspections revealed that the company never has efficient evidence of control mechanisms. Control mechanisms protect the company financial resources from fraudulence and breach by internal and external users. The information management team should communicate with the general management and advocate for such changes. Lack of communication is one of the factors that derailed establishment of these control mechanisms(Fernandez & Corchado, 2013).

The success of Trinity Industries Inc.

Trinity Industries Inc. administered an impressive progress after the first year on initiation of SOX compliance. The first year was marred by several challenges that derailed the general operation of the company. It was evident that lack of efficient system infrastructure and investment in robust management of financial data led contributed to the observed challenges. The SOX restrictions called a quick adjustment. The disclosure of the financial loses that resulted from previous ignorance about management of the financial resources also the fast adoption of the compliance guidelines. Nevertheless, it was important to appreciate the fact that company responded positively to the clarion call.

The success factors

Trinity adopted several changes that served to improve its general operations and management of its resources. The identified material weaknesses acted as guidelines for making the changes. One of the first approaches that the management used in promoting the change was changing management strategy. Like any other institution, change usually faces resistance by the people who are directly associated with the change or the change implementer themselves. People may resist change especially when they see that there is no need for change. In the case of Trinity Company, the process of change was not smooth. However, the management was able to quickly mobilize the workforce adopt the SOX guidelines(Fernandez & Corchado, 2013).

The management began by the general reshaping of the overall system. After the challenges faced in the first ear, it was evident that there were several changes that needed to be made to improve system operation. Some of the changes were mainly pinned on the administrative issues. The management of carried out reshuffling and recruitment of extra employees that were well equipped with the managerial services to facilitate the implementation process. Planning for changes and establishment of a reliable of effective infrastructure were put in place. The executive members were actively involved in the process of ensuring that the administrative changes were implemented. Bench-marking and external knowledge sourcing enabled the company to push for the changes within one year.

Trinity Industries Inc. thought it was wise to put up security control checks. The establishment of such checks is essential in data protection. Every company should put data protection as a priority to prevent the increased cases of data breaches. Appropriate security control ensures that financial data is always protected. The installation of tamper-proof security features ensures that the data is protected from loss. The information tools were encrypted with authentication and access limited to minimize potential cases of data breach. Automated security checks were installed to promote automatic data checks. According to SOX compliance guidelines, every company should install a security system that ensures that financial data is always protected. Physical security is also essential in ensuring that physical data is equally protected at all times (Fernandez & Corchado, 2013).

The process of data control and compliance was also enhanced. The management directly enforced the compliance laws ensuring that the members of implementation team were devoted towards meeting the compliance guidelines. Encryption and compression techniques were adopted to facilitate huge storage of data. Previously, the company never had an efficient information storage system. This led to the mass loss of customer information, transaction details and numerous transaction details that deserve to be secured. The company adopted internal and external data access. The internal data access regulation provided the administrative access to data access. This ensured that not every employee is capable of accessing the data. The external protection ensured that the data is protected from external data breaches that remain alarming even in the current era. Routine and comprehensive auditing facilitated the success (Gerard & Weber, 2015).

DIAGRAM OF SOX TRINITY FLOW CHART (ABOVE)

Key elements

ID Bus reporting and control procedures

Consolidate control reporting processes

Implement ASC and Oracle financial

Complete and evaluate pilot projects

External audit

Internal audit and test new reporting and control measures

Document control and reporting procedures and gaps

Close reporting and control

SOX compliance committee and evaluation

The PCAOB is a board that functions under the SOX compliance regulators. The main aim is to supervise and evaluate the public audits by the companies. The board played a key role in promoting compliance of Trinity to the set compliance guidelines. Body investigates registered accounting firms playing an oversight on how they are implementing the set operational guidelines. Monitoring Trinity, the body investigated the audits, data management, securities, audit deficiencies and the financial reporting. PCAOB has outlined requirements that the company adhere to. These include auditing standards, quality control and attestation standards. In the success of Trinity, the board played an essential role in evaluating the measures for these standards. This serves to meet the SOX (Hunger, Hoffman & Bamford, 2015).

Conclusion

Trinity Industries Inc. is bound to the SOX compliance. The SOX compliance is a guiding Act that was passed by the United States to protect companies, industries, business enterprises and even the general public from accounting errors and fraudulent practices. The U.S government thought that with the alarming cases of frauds, there was a need to come up with such tool. Planning for changes and establishment of a reliable of effective infrastructure were put in place. The executive members were actively involved in the process of ensuring that the administrative changes were implemented. Nevertheless, the company registered success following the first year of challenges.

References

Bryan, C., & Peek, A. (2016). U.S. Patent Application No. 15/241,794.

Christensen, B. (2015). Keeping Pace with SOX Compliance: COSO, Costs, and the PCAOB. EDPACS, 51(3), 11-12.

Fernandez, J. A., Martín Martín, Q., & Corchado Rodríguez, J. M. (2013). Business intelligence expert system on SOX compliance over the purchase orders creation process.

Gerard, J. A., & Weber, C. M. (2015). Compliance and Corporate Governance: Theoretical analysis of the effectiveness of compliance based on locus of functional responsibility. International Journal of Global Business, 8(1).

Li, C., Raman, K. K., Sun, L., & Wu, D. (2015). The SOX 404 internal control audit: Key regulatory events. Research in Accounting Regulation, 27(2), 160-164.

Pippins, S. K. (2015). U.S. Patent No. 8,938,895. Washington, DC: U.S. Patent and Trademark Office.

Sande, J. W. V. (2015). U.S. Patent No. 9,145,150. Washington, DC: U.S. Patent and Trademark Office.

Tham, K. D., & Madni, A. M. (2017). SOX compliance with OEE, enterprise modeling and temporal-ABC. Intelligent Automation & Soft Computing, 1-9.

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2015). Concepts in Strategic Management and Business Policy. Pearson.

Complete and evaluate pilot projects
External audit

ID Bus reporting and control procedures

Implement ASC and oracle financial

Implement ASC and oracle financial

Consolidate control reporting processes

External audit

Internal audit and test new reporting and control measure

SOX compliance committee and evaluation

Close reporting and control

ACC 675 Milestone Two Guidelines and Rubric

As an auditor, the ability to transcribe formalized or narrative processes into functional workflows allows you to identify potential gaps in accounting systems.
These gaps can result in material audit findings necessitating changes in the company control structure.

For Milestone Two, prepare an analysis of Trinity Industries’ first year of Sarbanes–Oxley (SOX) compliance. The vice president (VP) and chief audit executive
described the company as a likely candidate for a material weakness in the first year of SOX compliance. What were the elements critical to the company’s
decisive success in its first year of compliance? Define a material weakness and explain the material weaknesses that are specific to Trinity. Describe the factors
that made Trinity a success by illustrating the flow processes of the organization both in a narrative and process flowchart. This flowchart will be used to identify
gaps and other threats to potential audit weaknesses.

Prompt: Formulate your processes into a comprehensive flowchart that will be used to identify gaps in processes and other threats to potential audit
weaknesses.

Specifically, the following critical elements must be addressed:

II. First Year of SOX Compliance
a) The VP and chief audit executive described the company as a likely candidate for a material weakness in the first year of SOX compliance. What

were the elements critical to the company’s decisive success in its first year of compliance?
b) What internal controls are important for preparing accurate and reliable financial reports? Support your response using both examples provided

in the case study, as well as research into accounting standards (i.e., Public Company Accounting Oversight Board [PCAOB]).
c) Define, using support from accounting standards or other empirical evidence, what a material weakness is in terms of SOX compliance.
d) Assess, through reflection on the case study as well as the comparable industries identified in the overview, what material weaknesses are

specific to Trinity.
e) Articulate standards addressed in PCAOB regarding the concept of material weaknesses in development of internal control compliance. Ensure

that you demonstrate the requirements of SOX from inception in 2002.
f) Describe the factors that made Trinity successful by illustrating the flow processes of the organization both in a narrative and process flowchart.

Rubric
Guidelines for Submission: Your analysis must be submitted as a 2–3-page Word document with double spacing, 12-point Times New Roman font, one-inch
margins, and at least three sources cited in APA format.

Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value

First Year of SOX
Compliance: Success

Accurately determines elements critical
to the company’s success in its first
year of compliance

Determines elements critical to the
company’s success in its first year of
compliance but determination contains
inaccuracies

Does not determine elements critical to
the company’s success in its first year
of compliance

16

First Year of SOX
Compliance: Internal

Controls

Discusses which internal controls are
important for preparing financial
reports and supports response with
examples from the case study and
research into PCAOB

Discusses which internal controls are
important for preparing financial
reports and supports response with
examples from the case study and
research into PCAOB but support is
weak or illogical or does not use
further research

Does not discuss which internal
controls are important for preparing
financial reports

16

First Year of SOX
Compliance: Material

Weakness

Defines what a material weakness is in
terms of SOX compliance using support
from accounting standards or other
empirical evidence

Defines what a material weakness is in
terms of SOX compliance using support
from accounting standards or other
empirical evidence but support is weak

Does not define what a material
weakness is in terms of SOX
compliance using support

16

First Year of SOX
Compliance: Specific

Assesses which material weaknesses
are specific to the company through a
reflection on the case study and
comparable industries identified in the
overview

Assesses which material weaknesses
are specific to the company through a
reflection on the case study and
comparable industries identified in the
overview but assessment is cursory or
contains inaccuracies

Does not assess which material
weaknesses are specific to the
company

16

First Year of SOX
Compliance: PCAOB

Articulates standards addressed in
PCAOB regarding the concept of
material weaknesses in development of
internal control compliance and
ensures demonstration of the
requirements of SOX from inception in
2002

Articulates standards addressed in
PCAOB regarding the concept of
material weaknesses in development of
internal control compliance but does
not ensure demonstration of the
requirements of SOX from inception in
2002

Does not articulate standards
addressed in PCAOB regarding the
concept of material weaknesses in
development of internal control
compliance

16

First Year of SOX
Compliance: Factors

Describes the factors that made Trinity
successful by illustrating the flow
processes of the organization both in a
narrative and process flowchart

Describes the factors that made Trinity
successful by illustrating the flow
processes of the organization both in a
narrative and process flowchart but
one or both lack detail or contain
inaccuracies

Does not describe the factors that
made Trinity successful

16

Articulation of
Response

Submission has no major errors related
to citations, grammar, spelling, syntax,
or organization

Submission has major errors related to
citations, grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main
ideas

Submission has critical errors related to
citations, grammar, spelling, syntax, or
organization that prevent
understanding of ideas

4

Earned Total 100%

Running head: TRINITY INDUSTRIES 1

TRINITY INDUSTRIES
9

Trinity Industries

Robert Shulzinsky

Southern New Hampshire University

Introduction

Risk assessment remains crucial in management of huge companies like the Trinity Industries

.

Trinity Industries Inc. is a recognized dealer in diversified industrial products with several product-based businesses. As a means of risk management and handling, the overall management has always used the bottom-up approach of risk management. Analytically, there are several weaknesses associated with this method of risk management. Nevertheless, the method also has noticeable strengths. There are certain recommendations for the top-down method of risk assessment which serves as the best alternative in this case. The alternative seems better than the other current one as it complies with most of the Sarbanes-Oxley Act (SOX) regulations that were passed in 2002 (Turner, 2014). The paper seeks to address the bottom-up approach in details touching on the strengths, weaknesses and a comparison with the top-down approach of risk assessment. The essay will also dwell on the SOX related expenses.

The bottom up approach is among some of the most important investment strategies. The strategy depends on selection of individual stocks. Unlike other approaches, it does not observe general economic trends but rather the management and performance of industries. This method uses mathematical model in analyzing risks hence data-intensive. Most users report that the use of this method is tedious due to the numerous mathematical formulations associated with it. As some point, it turns technical hence poses a lot difficulties among users. The approach dies not use historical data. This makes it more of a forward-looking approach rather than backward-looking approach as in the case of top-down approach. Trinity Industries Inc. has used the risk assessment approach for some time and thus there are evident strengths and weaknesses attributed top this method (Ammons, 2014).

Strengths and weaknesses

There various strengths that can be attributed to the bottom-up risk assessment approach. These positive factors are some of the reasons why Trinity Industries have used the method over the years. Bottom-up approach gives more details on the procedures and controls been used in company operation. The use of mathematical model ensures that finer details of the data are revealed hence the data-intensive nature of the approach. This is essential as it enables the organizations to achieve substantive data. The model provides extra data making the process comprehensive. This provides an extensive follow-up essential for effective internal control (Turner, 2014).

Despite the fact that feature is great, there are certain weaknesses associated with the bottom-up approach. In line with the control and standards, the approach does not apply the standard SOX regulations. The mathematical model makes the method tedious and time-consuming. The data-intensive features make the assessment approach prone to errors. The management of Trinity Industries Inc. participates in tedious data gathering and investigations to provide substantive data that is fed on the arithmetic model. Above all, it has associated unreasonable labor and capital costs. Nevertheless, the approach has been effective except for the weaknesses listed above. A recommendation that the industries should have done in the first year include identification of the internal control gaps. As matters stand, there is need to set robust controls for documentation of procedures. In the last report, the Trinity Industries had achieved about 1249 control exercise and grouping levels, this was recommendable. Implementing the top-down approach that is consistent with the SOX guidelines would have created a material impact in the control process (Ammons, 2014).

Comparison between bottom-up and top-down risk approach

Ideally, the two methods have significant impact in internal control and management for companies. The bottom-up approach has a great impact on organizational returns and investments whereas the top-down risk assessment approach delays the investment. The top-down approach is less data-intensive hence less tedious. Analytically, it has reasonable capital cost and labor costs. The bottom-up approach is time consuming with high labor demands hence associated capital and labor costs. Additionally, the top-down approach conforms to most of the SOX compliance laws hence one of the best approaches that should be adopted in the current market place. It view of these interplay of strength and weaknesses, the most appropriate approach is the top-down approach. Though this approach is associated with delayed returns, it will eventually materialize. The conformation to set management standards will improves the various aspects of material weakness for the Trinity Industries Inc. (Turner, 2014).

It is worth appreciating that both the two approaches have some impacts in company internal control structure. The bottom-up approach is tedious but provides comprehensive details of company data and information. This however contributes to the noticed material weakness. Trinity Industries has issues with documentation procedures which as lead to loss of financial data over the years. Using this approach puts the already vulnerable internal structure of the company at greater risk of data loss. This negatively impacts the overall operational process. The top-down approach has some positive impacts on the internal control structure. With the compliance to the SOX guidelines, the risk of data and financial loss is minimized. The method builds up a responsible workforce that will ensure effectiveness in operational management (Ammons, 2014).

.

In the pilot project, there were some critical insights that were noted down. It was realized that several processes should be changed to meet the internal control desires. A steering committee was formed and the process conducted in compliance to SOX guidelines. The pilot project assessed the individual databases with reference the SOX guidelines. After the pilot project, the team was trained on the documentation procedures with appropriate templates to be used given. A final control catalog for each process was then developed. While doing these analysis and substantive tests, an action plan for gap closure was then developed. The propose closure would minimize the operational gaps identified throughout the project (Turner, 2014).

Memo

Trinity Industries

To: All Staff Members

From: Project Coordinator

Subject: SOX results in year 1

Date: 1st January 2018

The comprehensive test in the first year was aimed at testing the set policies. The project management team which composed of Oracle Financials and the steering committee decided to do the below tests; risk assessment on the bottom-ups and database application for central repository of SOX controls. A final control catalog was made to communicate the results for the specific processes.

Analytically, the results indicated that there was an issue with documentation procedures and data management gaps. With these gaps, there is need for careful analysis of financial processes and data management to evade complying with the SOX guidelines. The gaps identified led to training of workforce on the proposed new risk assessment approach to facilitate change management. The external audit revealed some deficiencies in operation and general material weakness that affected the internal structure (Schultze, 2011).

SOX related expenses

Trinity Industries has accrued and continue to face the burden of SOX related expenses. The company should adopt measures that will reduce these expenses. One of the best approaches is centralizing the IT system infrastructure. The decentralized IT system is difficult to manage and thus prone to various technological errors and breaches. Another approach is investing in automatic SOX controls. An automated operational control app will ensure that the documentation procedures and other system procedures comply with the set guidelines. The automatic controls ensure automatic rejection of non-complying details and programs hence minimizing the fraudulent transactions. Keeping back-up checks is essential to cover up whenever the normal control checks fails. Additionally, applying Electron Record Programs (ERP) is also important in improving the performance efficiency. There recommendations are likely to reduce the SOX related expenses (Schultze, 2011).

The major sources of cost in Trinity Compliance maintenance and testing are revenues and profits acquired from company’s sales. The revenues and profits are used to procure the necessary materials and equipment used by the organization. In ranking the sources, it is important to understand that they are all important as they help to keep the organization functional. However, the income made from sales come first followed by the profits and revenues achieved through sales. The choice of Oracle as a software was essential in overall management. The software was proven to be very effective than other programs in the marketplace. Generally, it offers the best sales solutions. Other software programs that can be compared to Oracle include Sales Force Software and Rimini Street Software. Unlike the Oracle, Sales Force Software does not offer customer management platform this makes it less efficient. The Rimini Streets Software is very effective though less advantageous compared to the famous Oracle which provides predictive analytics. The predictive analytics creates good sales workforce hence beneficial. These sounding differences make Oracle software the best compared to other available options (Schultze, 2011).

References

Ammons, D. (2014). Municipal Benchmarks: Assessing Local Performance and Establishing Community Standards. Routledge

Schultze, U. (2011). The SOX compliance journey at Trinity Industries. Journal of Information Technology Teaching Cases.

Turner, J.R (2014). The Handbook of Project-based Management (Vol. 92) New York, NY: McGraw-Hill

ACC 675 Milestone Three Guidelines and Rubric

For Milestone Three, prepare a draft of a comparative systems report. Compare and contrast electronic data processing (EDP) systems used by Trinity Industries
with those in the marketplace. Using substantive testing, audit the transaction flow and determine whether financial information is accurately reflected in the
system transactions. This will allow for an assessment and recommendation as to the effectiveness of the company’s internal control processes, including
changes in transaction processing if necessary. Compose a short memorandum that communicates the results of the first year of testing along with
recommendations as to what Trinity should do differently in subsequent years, including recommendations for reducing SOX-related expenses.

Prompt: Assess the compliance approach implemented by Trinity Industries in order to recommend a cost efficient software system.

Specifically, the following critical elements must be addressed:

III. Bottom-Up Approach
a) What were the strengths and weaknesses of Trinity’s practice-based bottom-up approach? How effective was it?
b) What would you recommend it should have done differently in Year 1? Defend your response.
c) Compare and contrast the strengths and weaknesses of a bottom-up versus a top-down risk approach to compliance.
d) Which approach is more appropriate in completing a compliance project successfully for Trinity’s first year?
e) How does each approach affect a company’s internal control structure?
f) Identify the chief insights from the pilot project. How does the pilot project for the EDP system compare to SOX requirements?
g) Identify the testing processes Trinity performed and whether Trinity took the appropriate approach in designing their controls.
h) Based on the substantive tests, which testing process proved to be most useful in assessing Trinity’s accounting system?
i) Compose a short memorandum that communicates the results of the first year of testing along with recommendations as to what Trinity should

do differently in subsequent years.

IV. SOX-Related Expenses
a) Formulate recommendations for how Trinity could further reduce SOX-related expenses in 2008. Be sure to consider the barriers the company

may encounter with each of your recommendations.
b) What are the major sources of cost in Trinity’s compliance maintenance and testing?
c) Rank each of the major sources of cost in terms of value.
d) Compare the choice of Oracle as the selected software system against two other systems of comparable size and scope. Evaluate each software

system’s advantages and disadvantages.
e) If you determine that another software system would have been a better choice through your analysis, defend the decision. If Oracle is the

choice after analysis, defend that decision.

Rubric
Guidelines for Submission: Your comparative systems report must be submitted as a 4–5-page Word document with double spacing, 12-point Times New Roman
font, one-inch margins, and at least three sources cited in APA format.

Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value

Bottom-Up Approach:
Strengths and
Weaknesses

Determines the strengths and
weaknesses of the bottom-up
approach and its effectiveness

Determines the strengths and
weaknesses of the bottom-up
approach and its effectiveness but
determination is cursory or contains
inaccuracies

Does not determine the strengths and
weaknesses of the bottom-up
approach

7

Bottom-Up Approach:
Recommend

Formulates a recommendation
concerning what the company should
have done differently in Year 1 and
defends response

Formulates a recommendation
concerning what the company should
have done differently in Year 1 but
does not defend response or defense is
weak or illogical

Does not formulate a recommendation
concerning what the company should
have done differently in Year 1

7

Bottom-Up Approach:
Top-Down

Compares and contrasts the strengths
and weaknesses of a bottom-up versus
a top-down risk approach to
compliance

Compares and contrasts the strengths
and weaknesses of a bottom-up versus
a top-down risk approach to
compliance but with gaps in accuracy
or detail

Does not compare and contrast the
strengths and weaknesses of a bottom-
up versus a top-down risk approach to
compliance

7

Bottom-Up Approach:
Compliance Project

Accurately determines which approach
is more appropriate in completing a
compliance project successfully for
Trinity’s first year

Determines which approach is more
appropriate in completing a
compliance project successfully for
Trinity’s first year but is inaccurate in
determination

Does not determine which approach is
more appropriate in completing a
compliance project successfully for
Trinity’s first year

7

Bottom-Up Approach:
Internal Control

Structure

Accurately assesses how each approach
affects a company’s internal control
structure

Assesses how each approach affects a
company’s internal control structure
but assessment is cursory or contains
inaccuracies

Does not assess how each approach
affects a company’s internal control
structure

7

Bottom-Up Approach:
Chief Insights

Identifies the chief insights from the
EDP system’s pilot project and how the
project compares to SOX requirements

Identifies the chief insights from the
EDP system’s pilot project but does not
identify how the project compares to
SOX requirements or identification is
incorrect

Does not identify the chief insights
from the pilot project

7

Bottom-Up Approach:
Testing Processes

Identifies the testing processes Trinity
performed and whether Trinity took
the appropriate approach in designing
their controls

Identifies the testing processes Trinity
performed but does not identify
whether Trinity took the appropriate
approach in designing their controls or
testing processes identified are
inaccurate

Does not identify the testing processes
Trinity performed

7

Bottom-Up Approach:
Most Useful

Determines the most useful testing
process based on the substantive tests

Determines the most useful testing
process but does not base
determination on the substantive tests

Does not determine the most useful
testing process

7

Bottom-Up Approach:
Results and

Recommendations

Composes a memo that communicates
the results for the first year and
includes recommendations

Composes a memo that communicates
the results for the first year and
includes recommendations but memo
is cursory or lacks detail

Does not compose a memo 7

SOX-Related Expenses:
Further Reduce

Formulates recommendations for how
Trinity could further reduce SOX-
related expenses in 2008 and considers
the barriers they may encounter

Formulates recommendations for how
Trinity could further reduce SOX-
related expenses in 2008 but does not
consider the barriers they may
encounter or recommendations are
illogical

Does not formulate recommendations
for how Trinity could further reduce
SOX-related expenses in 2008

7

SOX-Related Expenses:
Major Sources of Cost

Determines the major sources of cost
in Trinity’s compliance maintenance
and testing

Determines the major sources of cost
in Trinity’s compliance maintenance
and testing but determination contains
inaccuracies

Does not determine the major sources
of cost in Trinity’s compliance
maintenance and testing

7

SOX-Related Expenses:
Rank

Accurately ranks each of the major
sources of cost in terms of value

Ranks each of the major sources of cost
in terms of value but contains
inaccuracies

Does not rank each of the major
sources of cost in terms of value

7

SOX-Related Expenses:
Software System

Compares Oracle as the selected
software system against two other
systems by evaluating each system’s
advantages and disadvantages

Compares Oracle as the selected
software system against two other
systems by evaluating each system’s
advantages and disadvantages but
evaluation is cursory or contains
inaccuracies

Does not compare Oracle as the
selected software system against two
other systems

7

SOX-Related Expenses:
Defense

Defends the decision of the software
choice based on the analysis

Defends the decision of the software
choice but does not base defense on
the analysis

Does not defend the decision of the
software choice

7

Articulation of Response Submission has no major errors related
to citations, grammar, spelling, syntax,
or organization

Submission has major errors related to
citations, grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main
ideas

Submission has critical errors related to
citations, grammar, spelling, syntax, or
organization that prevent
understanding of ideas

2

Earned Total 100%

Running head: DRAFT OF IFRS REPORT FOR TRINITY INDUSTRIES 1

DRAFT OF IFRS REPORT FOR TRINITY INDUSTRIES
4

Draft of IFRS Report for Trinity Industries

Robert Shulzinsky

Southern New Hampshire University

Draft of IFRS Report for Trinity Industries

Trinity Industries Inc. has become certain advancement as far as internal control structure is concerned. The main aim of the structural and operational changes is to improve the functionality while addressing the alarming issue of material weakness. One of the main issues that have affected the company is the compliance to SOX guidelines. In the first year, the management and the general workforce face hectic time trying to conform to the standard guidelines. Currently, the company celebrates many achievements despite some evident drawbacks in the operational process. The use of bottom-up method of risk assessment is comprehensive though still creates alt of cost and capital gaps. This reduces the efficiency of the method. This method is tedious and time-consuming hence less effective compared to other available methods (Ammons, 2014).

The interest to adopt the top-down approach of risk assessment will enable Trinity Industries meet the set SOX standards. The standards ensure efficient documentation procedures, checking of data, storage and retrieval. In implementing the strategy, the company will have general control of the processes which reflects to effective internal data control. Appropriate data management requires the use of best software tools. The proposed Oracle Software is beneficial compared to other available market software like the Riminis Streets Software. The software offer predictive data analytics, diverse customer management platforms and better sales solutions. This makes the future of the company bright. Nevertheless, shifting from bottom-up approach to top-down approach of risk assessment is essential. Other than the many strengths of top-down approach of risk assessment, it ensures SOX Compliance hence a standard technique.

Currently, the company has tried to meet the compliance standards but there is a lot to be done. The effective implementation of the SOX Compliance will ensure that the industries operate at its optimal which substantial security for data and efficient record management. The workforce force is a sensitive pillar of the internal control structure. Initiation of training of workforce with change management campaigns will propel the management towards achieving efficiency and effectiveness in control. According to the current audit, the operational gaps and breaches still exist though relatively fewer compared to the prior years. The general assumption is that with a robust managerial structure the company will improve drastically (Schultze, 2011).

Ideally, the company is still battling with the SOX compliance threshold. Like other industries, a strong internal control will facilitate the process of system changes. A detailed action plan with well-defined implementation team should be built to spear-head the process. Meeting these compliance demands will minimize the SOX related expenses that the company has accrued over the years. Above all, it will minimize the errors in financial records, data compiling and overall breach in data handling that may result from non-compliance to the set guidelines.

References

Ammons, D. (2014). Municipal Benchmarks: Assessing Local Performance and Establishing Community Standards. Routledge

Schultze, U. (2011). The SOX compliance journey at Trinity Industries. Journal of Information Technology Teaching Cases.

ACC 675 Milestone Four Guidelines and Rubric

For Milestone Four, you will submit a draft of your International Financial Reporting Standards (IFRS) report. You will determine whether Trinity Industries is in
compliance within the industry standards and aligned functionally with both efficiency and effectiveness of controls through the use of current audit and internal
control standards. State all assumptions and conclusions.

Prompt: Prepare a report on Trinity’s compliance with industry standards.

Specifically, the following critical elements must be addressed:

V. IFRS
a) What are the implications of a change in accounting standards? For example, what kinds of changes to data calculation and information reporting

are likely to occur with a transition to a new standard?
b) What changes will be required for Trinity to improve internal control compliance?
c) What standards will affect Trinity as a result of IFRS?
d) Discuss each infrastructure’s role in supporting a compliance project like IFRS:

1. What constitutes Trinity’s governance infrastructure?
2. What constitutes Trinity’s IT infrastructure?
3. What constitutes Trinity’s process infrastructure?

Guidelines for Submission: Your IFRS report must be submitted as a 1–2-page Word document with double spacing, 12-point Times New Roman font, one-inch
margins, and at least three sources cited in APA format.

Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value

IFRS: Change Discusses the implications of a change in
accounting standards

Discusses the implications of a change in
accounting standards but discussion is
cursory or contains inaccuracies

Does not discuss the implications of a
change in accounting standards

24

IFRS: Improve Determines changes required to improve
internal control compliance

Determines changes required to improve
internal control compliance but
determination is cursory or contains
inaccuracies

Does not determine changes required to
improve internal control compliance

2

4

IFRS: Standards Determines which standards will affect
Trinity as a result of IFRS

Determines which standards will affect
Trinity as a result of IFRS but
determination is cursory or contains
inaccuracies

Does not determine which standards will
affect Trinity as a result of IFRS

24

IFRS: Role Discusses the role of the three groups in
supporting a compliance project like IFRS

Discusses the role of the three groups in
supporting a compliance project like IFRS
but discussion is cursory, contains
inaccuracies, or does not discuss all
three groups

Does not discuss the role of the three
groups in supporting a compliance
project like IFRS

24

Articulation of Response Submission has no major errors related
to citations, grammar, spelling, syntax, or
organization

Submission has major errors related to
citations, grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main ideas

Submission has critical errors related to
citations, grammar, spelling, syntax, or
organization that prevent understanding
of ideas

4

Earned Total 100%