Bill 198 - Canada Legislates Corporate and IT Governance
Bill 198, "Keeping the Promise for a Strong Economy Act (Budget Measures), 2002, was introduced in December 2002 by the Provincial Government of Ontario, Canada. Bill 198 covers different aspects of the governments operations, as well as provisions on taxes, auto insurance and corporate disclosure. Bill 198 is similar to the Sarbanes Oxley Act in the United States, its purpose being to to protect investors by improving the accuracy and reliability of corporate disclosures.
TrackerSuite.Net is an integrated suite of 100% Web based business applications that automate workflow and streamline processes. It can facilitate the internal controls aspect Bill 198 requires by rapidly establishing a comprehensive, structured environment for financial reporting, an environment with clear transparency and powerful reporting capabilities.
TrackerSuite.Net offers applications for purchasing, check requests and expense reporting (Purchase Tracker.Net, Payment Tracker.Net and Expense Tracker.Net, respectively), that establish and enforce legitimate approval processes, as well as generating audit trails for all financials. These applications integrate with Project Tracker.Net, allowing purchases and expenses to be tied directly to projects, tasks, account codes and cost centers, improving the accuracy of reporting as well.
TrackerSuite.Net provides end to end control for Bill 198 compliance through:
- Electronic Forms - TrackerSuite.Net eliminates one of the largest inefficiencies in financial reporting paper based processes. Paper based systems are inherently unsecure, vulnerable to document loss, delays, misprocessing, and document error. TrackerSuite.Net provides forms for purchase orders, payment requests and expense reports that simplify and secure reporting.
- Automated Approval Routing - Using TrackerSuite.Net, organizations can establish automated approval workflows for purchase orders, payment requests and expense reports. TrackerSuite.Net supports multiple approval workflows (including proxy approvers) depending on the user's role, department and spending limits. Expense reports where line items exceed their configured limits are highlighted as exceptions. As well as approving these items within TrackerSuite.Net, these forms can also be routed for approval via email.
- Electronic Signatures and Activity Logs Every step of a financial items life is recorded in the document, from its creation, through approvals and final processing, establishing both a timeline and a trail of responsibility for every item. In conjunction with automated approval routing, these features greatly simplfy organizational compliance with the internal controls required by Bill 198.
- Comprehensive Reporting Simply by utilizing electronic workflows for purchasing, time and expense reporting, organizations greatly accelerate the timeliness (as well as accuracy and security) of reporting, compared to paper based systems or basic spreadsheet routines. The Tracker Data Warehouse, a Web based reporting engine, receives data from all the TrackerSuite.Net modules as well as legacy Accounting and HR databases, to generate up-to-date, comprehensive reports on the financial condition of the company, including balance sheets, income statements and capital expenditures. The Tracker Data Warehouse provides a single point of access to all financial reports for the organization seeking to comply with Bill 198.
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The IT and Information Security conditions required by Bill 198 for corporate disclosure and financial reporting are almost identical to the Sarbanes Oxley Act passed in the United States, so much so that Canadas Bill 198 is also known by a nickname, CSOX, even though the legislation on corporate disclosure is only one aspect of it. Two instruments have been created to help implement Bill 198, MI-52-109 (Certification of Disclosure in Issuers Annual and Interim Filings) and MI-52-111 (Reporting on Internal Controls Over Financial Reporting).
For IT and IS areas of the organization, Bill 198 and its instruments require:
- Like SOX, this legislation calls for the establishment of internal controls for financial reporting. However, it also requires controls and procedures for financial disclosure as well.
- On an ongoing basis, the effectiveness of the internal controls must be reviewed and reported on, with trustworthy and reliable evidence provided in annual reports to securities regulators.
- Organizations are required to officially disclose the effectiveness of their internal controls, both on an interim and an annual basis.
This legislation and its instruments place the ultimate responsibility of compliance on the shoulders of the executives. CEOs and CFOs are required to regularly provide signed certifications that address the establishment and maintenance of internal controls, the design of the controls and their own evaluations of the effectiveness of those controls. These documents are filed with Canadas securities regulators. Any misrepresentation or falsehood in these documents can result in serious penalties under Canadas securities laws, including fines up to $5,000,000 Canadian.