Dave Richards CIA CPA Director Internal Auditing First

Disclosure Controls & Procedures The Internal Audit Department’s Role The Institute of Internal Auditors

The Webcast Series on Sarbanes -Oxley’s Impact on Internal Auditing • January 28 -

Agenda 1: 00 - 1: 10 Introduction & Overview of Disclosure Controls - Dave

Disclosure Controls ? ? ? “Controls and other procedures of an issuer that are

Disclosure Controls ? ? ? “Disclosure controls and procedures include, without limitation, controls and

Certification Requirement (302) • Sign-off by CEO & CFO for each annual or quarterly

Certification Requirement (302) • The financial statements and other financial information … fairly present

Responsibilities of Signing Officer Regarding Disclosure Controls 1. Establishing and maintaining disclosure controls and

Responsibilities of Signing Officer Regarding Disclosure Controls 5. Signing officers have disclosed to the

Responsibilities of Signing Officer Regarding Disclosure Controls 6. Indicate whether or not there were

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Dave Richards, CIA, CPA Director, Internal Auditing First. Energy Corporation

Disclosure Controls & Procedures The Internal Audit Department’s Role The Institute of Internal Auditors Webcast Series on Sarbanes-Oxley Session #1 - January 28, 2003

The Webcast Series on Sarbanes -Oxley’s Impact on Internal Auditing • January 28 - Disclosure Controls • February 18 - Annual Certification of Internal Controls • April 1 - Coordination of Internal & External Audit Work • April 15 - Looking Ahead to Future Changes Impacting Internal Auditing • Tuesdays from 1: 00 - 2: 30 p. m. EST

Agenda 1: 00 - 1: 10 Introduction & Overview of Disclosure Controls - Dave Richards 1: 10 - 1: 20 Disclosure Committee - Pat Scipio 1: 20 - 1: 30 The Certification Process - Norman Marks 1: 30 - 1: 40 Internal Auditing’s Role in Disclosure Control Verification - Wayne Moore 1: 40 - 1: 45 Break 1: 45 - 2: 25 Questions & Answers - Panel 2: 25 - 2: 30 Concluding Remarks - Dave Richards

Disclosure Controls ? ? ? “Controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s (SEC) rules and forms. ” Source: SEC Certification Rule

Disclosure Controls ? ? ? “Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in its Exchange Act reports is -- accumulated and -- communicated to an issuer’s management … as appropriate to allow timely decisions regarding required disclosure. ” Source: SEC Certification Rule

Certification Requirement (302) • Sign-off by CEO & CFO for each annual or quarterly report filed or submitted to the SEC • Signing officer has reviewed the report • Based on the officer’s knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact

Certification Requirement (302) • The financial statements and other financial information … fairly present in all material respects the financial condition and results of operations … for the periods presented. . .

Responsibilities of Signing Officer Regarding Disclosure Controls 1. Establishing and maintaining disclosure controls and procedures 2. Have designed such controls to ensure that material information…is made known to such officers by others within those entities… 3. Have evaluated the effectiveness of the issuer’s disclosure controls & procedures as of a date within 90 days prior to the report 4. Have presented in the report their conclusions about the effectiveness of their disclosure controls

Responsibilities of Signing Officer Regarding Disclosure Controls 5. Signing officers have disclosed to the issuer’s auditors and the audit committee of the board: – All significant deficiencies in the design or operation of internal controls…and have identified for the issuer’s auditors any material weaknesses in internal control – Any fraud, whether or not material, that involves management or other employees who have significant role in the issuer’s internal controls

Responsibilities of Signing Officer Regarding Disclosure Controls 6. Indicate whether or not there were significant changes in internal controls that could impact internal controls subsequent to date of evaluation

Agenda 1: 00 - 1: 10 Introduction & overview of Disclosure Controls - Dave Richards 1: 10 - 1: 20 Disclosure Committee - Pat Scipio 1: 20 - 1: 30 The Certification Process - Norman Marks 1: 30 - 1: 40 Internal Auditing’s Role in Disclosure Control Verification - Wayne Moore 1: 40 - 1: 45 Break 1: 45 - 2: 25 Questions & Answers - Panel 2: 25 - 2: 30 Concluding Remarks - Dave Richards