Recent Engagements

Medrad gets InTune with Sarbanes-Oxley

When companies’ budgets preclude additional full-time staff and the role of external auditors is constrained by independence requirements, clients look to InTune Business Advisors to help navigate the complexities of Sarbanes-Oxley, the most significant financial legislation in nearly 70 years.

Section 404 of Sarbanes-Oxley, or SOX, requires CEOs and other executives of public companies to report annually on and take personal responsibility for their companies’ internal controls. Noncompliance can have far-reaching adverse consequences: SEC fines and potential de-listing of the company’s stock; loss in investor confidence; damaged customer and supplier relationships; decline in employee morale; and the inability to attract talented people.

Over 75% of respondents to a recent PriceWaterhouseCoopers survey of financial services executives believe that the overall effort of complying with Sarbanes-Oxley Section 404 is significantly greater than anticipated. The SEC estimates the aggregate annual cost of Sarbanes-Oxley Section 404 compliance to be about $1.24 billion (Source: SEC final rule, release number 33-8238).

MEDRAD, Inc. is a $300 million world leader in medical imaging devices. The recipient of the 2003 Malcolm Baldridge National Quality Award, MEDRAD employs over 1,300 people in 15 locations around the globe, with its World Headquarters in Indianola, PA, just outside of Pittsburgh.

A subsidiary of Schering AG, MEDRAD was faced with the task of complying with SOX 404 requirements in a very compressed timeframe. In order to assist in meeting those requirements, MEDRAD engaged the services of InTune Business Advisors LLC. Like MEDRAD employees, who consistently go above and beyond to deliver quality, dependability and trust, InTune met this challenge head-on. Working with a diverse group of nearly 30 stakeholders for more than two months, InTune helped MEDRAD achieve its objective by assisting in the documentation, testing, risk assessment and gap analysis of four key business processes.

InTune Principal James A. Loeffler, CPA, provided technical expertise, advice and project management through timely, clear and concise communication. His knowledge of Section 404, years of “Big Four” accounting and auditing experience and his ability to work effectively with cross-functional teams helped drive the project, the results of which would cross the CEO’s desk for signature.

The engagement resulted in MEDRAD’s CEO and CFO delivering their sign-off of internal controls to Schering AG on time. With so many companies underestimating the time and effort associated with SOX 404 requirements, the ability of MEDRAD to meet the sign-off deadline is a testament the dedication of its employees. This doesn’t surprise Loeffler. “Prior to this engagement, I’d heard nothing but great things about MEDRAD: its people, consistent market leadership and financial performance. This engagement only served to reinforce that view, and I’m proud that InTune was able to help them achieve yet another goal.”