The Bottom Line: Ducks in a Row, the Real Meaning of Subcertification
August 7, 2006
Elizabeth Johns

This article originally appeared in AFP Exchange magazine. Earn CTP Recert Credits Now you can take the AFP Exchange CTP Quiz online! RECENT NEWS ARTICLES BY TOPIC Bank Relationship Management Corporate Finance Financial Accounting & Reporting Payment Resources for Treasury Risk Management Sarbanes-Oxley Treasury Management Career Services

From the 'Bottom Line' column in the July/August 2006 issue of Exchange magazine

Being a Web mistress has its advantages, not least of which is understanding what people are searching for on the AFP Web site.

Scanning compliance-related queries, I can tell you there has been a resurgence in searches for keywords like "personal liability" and "subcertification," the process by which employees throughout a company's financial supply chain have to attest to the accuracy of information. The increase in searches coincides roughly with the recent Enron verdicts, which occurred some five years after the company filed for Chapter 11 bankruptcy protection.

On that fateful day in 2001 when Enron sent employees packing, I received a panicked call from an acquaintance in Houston who said, "This is it. I'll have a long, dry spell without work." From that statement, you might think this man was involved in the financial dealings of the energy giant, or perhaps with a different company. In truth he was a reasonably well-known journalist covering Enron. His job —and he was highly paid— was to sit across the street from the corporate headquarters and watch who was going in and out, often conducting interviews. So emblematic of corporate malfeasance had the company become that careers were made simply reporting on it.

Reporting continues: If you haven't seen the documentary The Smartest Guys in the Room, based on the book by Fortune reporters Bethany McLean and Peter Elkind, it's now available on DVD. There is a great moment where an audiotape is played of an analyst asking the late Kenneth Lay to see a corporate balance sheet, an innocuous enough statement and one that we all might expect. Yet Lay flies into a rage and begins cursing the analyst.

Hard to imagine a time when financial reporting for such a huge company was concentrated in the hands of so few people. These days, many financial professionals have a role in financial reporting, with about 59% saying they are required to sign-off on the accuracy of financial documents, according to an AFP survey. That's one of the reasons AFP decided to include an ethics component in the CTP designation.

So why are people looking for the definition of subcertification on the Web site? I'd like to think that the recent Enron verdicts and the drama of Lay's subsequent death are causing people to remember the events that triggered Sarbanes-Oxley, nothing more. I'd like to think that good corporate governance and internal controls are thriving in most U.S. corporations, that subcertification really isn't an issue. I'd like to think that, for the most part, we all have our ducks in a row.

Incidentally, that old business saying about "having one's ducks in a row" reminds me of a story my father used to tell about an old duck hunter who had many theories about the sport, about shooting straight and aiming right: "Squeeze, don't pull the trigger, always lead the duck." As I recall, he had another rule that applies to each of us who is entrusted with any amount of financial reporting responsibility for our companies – something I thought about when I heard the Enron verdicts. His number one rule of duck hunting was this: Don't shoot yourself.

Elizabeth Johns has Web oversight at AFP. Send comments to exchange@afponline.org.

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