Supply Chain Sarbanes Oxley Supply Chain SarBox Supply Chain SOX Supply Chain Corporate Governance Supply Chain Integrity

After everything is in place - the control environment is established, the risk assessments have been performed, the control activities are documentation, and information is being communicated accurately and timely - there must be monitoring to ensure that everything is working as it should.

Monitoring is external, independent oversight of internal controls to assess the coverage and effectiveness of the control. The "external" and "independent" characteristics of monitoring can be accomplished to some extent by internal staff if your organization has an monitoring or audit department. However, you must take great care to avoid a situation where the fox may be guarding the henhouse, which certainly would qualify as a necessary risk to identify and assess:

Can you be absolutely sure that the perpetration of a fraud - either internal or external - will not involve collusion with your internal monitoring or audit staff?
Can you be sure of complete independence by your internal monitoring or audit staff versus possible personal relationship with the rest of your organization's employees and suppliers?

Further considerations include:

Is it fair to your monitoring or audit staff to make them be ostracized from the rest of your organization because of their job function?
Do the personnel in your monitoring or audit department have the necessary experiences and skills to effectively provide oversight of all of your internal and external supply chain operations and technologies?

Effective monitoring is a team effort involving internal staff and external expertise working together to ensure the necessary experienced independent oversight is given to your internal controls. To do any less would likely increase the risk of failure and reduce supply chain integrity.

Good governance requires constant monitoring to ensure no gaps in internal controls.