APPLYING RESERVING AND DISCLOSURE RULES TO LITIGATION

• Jurisdiction: United States

Strategic Risk Management for Natural Resources Companies
(May 2008)
CHAPTER 6C
APPLYING RESERVING AND DISCLOSURE RULES TO LITIGATION
Carla Herron
Group Counsel - Litigation
The Shell Group
Denver, Colorado

Internal Controls

SOX 404 requires internal control reporting in a company's annual reports. The internal control report must describe management's responsibility for establishing and maintaining an adequate internal control structure and procedures for financial reporting, and must contain an assessment of the effectiveness of such control structure and procedures. The company's external auditors must attest to and report on the assessment.

[Page 6C-2]

Typical CEO certification:

• Designed disclosure controls and procedures...to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities...,

• Designed internal control over financial reporting,..., to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting...