Executives rely on internal controls to provide a reasonable level of assurance that supply chain processes and financial transactions function as designed. As a result, executives should adopt a back-to-basics approach to understanding and prioritizing supply chain risks, capabilities, measures and controls, beginning with but expanding beyond their material impact on the company's financial statements.

This booklet details how the Sarbanes-Oxley Act (SOX) has a complementary impact on supply chain risks in infrastructure design, transaction integrity and reporting measures. It also focuses on corporate governance requirements such as executive certification and internal controls over financial reporting. The scenarios we highlight, demonstrate how the failure of supply chain “operational controls” can strain an organization’s ability to produce reliable and fairly presented financial statements.