November 16, 2004 (Computerworld) --
An internal financial audit at SunTrust Banks Inc. has confirmed an accounting problem with its loan loss reserves that could prevent the bank from completing its Sarbanes-Oxley Act reporting requirements by a Dec. 31 deadline. In an announcement last Wednesday, Atlanta-based SunTrust said that its internal audit found "numerous errors in the loan loss allowance calculations for the first and second quarters, including data, model and formulaic errors," that were not immediately investigated and corrected. Also found were problems with the implementation of a new accounting allowance framework in the first quarter, which resulted in inadequate internal control procedures, insufficient validation and testing, and a failure to detect errors in the allowance calculation. The bank has since had to restate its first- and second-quarter 2004 financial results because of the problems, according to SunTrust. Three employees in the bank's credit administration division, including its chief credit officer, were fired in connection with the problems, which weren't properly investigated and pursued by the Allowance Committee, according to the bank. Barry Koling, a spokesman for SunTrust, said that under the Sarbanes-Oxley Act of 2002, the bank has to attest to the accuracy of its financial statements, which includes the loan loss reserves. The internal audit found that the loan loss reserves were the only problem in the financial statements, he said. "We are working to correct the flaws in the implementation of the loan loss methodology, and we are working to get that done as quickly as we can," Koling said. "If we can get that done by the end of the year, we will. If it slips over a little, then it slips over a little." The loan loss reserve is money set aside to cover any potential losses from loans that are not paid back during the year. The Sarbanes-Oxley Act aims to improve and reform the financial accounting of public companies and to protect investors in the wake of myriad corporate accounting scandals since the late 1990s. It requires most large companies to attest to the financial and IT controls they have in place for fiscal years ending on or after Nov. 15, 2004, in their annual reports. In October, SunTrust completed a merger with National Commerce Financial Corp.
Computerworld Executive Briefing: The Compliance Era
Get this briefing free (a $195 value), for a limited time, courtesy of VeriSign. The new Computerworld report, The Compliance Era, explains why regulatory compliance has zoomed to the top of the IT agenda and shows how real-world IT executives are dealing with the storage, security and privacy challenges. Get this briefing free (a $195 value), for a limited time, courtesy of VeriSign. Download this executive briefing
Dynamic Data Center and Virtualization Drives Operational Excellence at Emory Healthcare
Dynamic Data Center and Virtualization Drives Operational Excellence at Emory Healthcare View this on demand webcast, compliments of Egenera, for a limited time! Go to the webcast
Next-Gen Load Balancing: 3 Keys to Successful Delivery of Advanced Web Apps
Download this white paper, free, compliments of Citrix! (Source: Citrix) Does your company rely on remote and mobile access for employees in the field or branch offices? If so, then you understand the importance of uninterrupted and secure, high performance access to network-based business applications. Learn how to save your network from slowing to a crawl while still providing all employees with the quality connection necessary to ensure optimal results. Download this white paper
White Papers
Read up on the latest ideas and technologies from companies that sell hardware, software and services.
Eliminate SPAM, Gain Productivity Learn all about the dangers and the costs of spam in all its forms – from stock-touting to spreadsheet. Also, understand the drawbacks of traditional hardware- and software-based defenses – and the unique benefits of MessageLabs multi-layered, managed Anti-Spam solution; as illustrated by a real-world case study where MessageLabs stopped spam cold.
Download this white paper now! See more Whitepapers
The Spy Files For Congress to do anything that helps protect consumers and the critical Internet infrastructure as a whole, it must pass laws that require proactive processes to protect computers, not that tell people how to deal with the resulting mess, says Ira Winkler.
See your link here
Subscribe to
Computerworld 
or
Other Legislation/Regulation Stories
Get this briefing free (a $195 value), for a limited time, courtesy of VeriSign. 
Dynamic Data Center and Virtualization Drives Operational Excellence at Emory Healthcare
Download this white paper, free, compliments of Citrix!
Read up on the latest ideas and technologies from companies that sell hardware, software and services. 
Since You Asked
Learn all about the dangers and the costs of spam in all its forms – from stock-touting to spreadsheet. Also, understand the drawbacks of traditional hardware- and software-based defenses – and the unique benefits of MessageLabs multi-layered, managed Anti-Spam solution; as illustrated by a real-world case study where MessageLabs stopped spam cold.
Download this white paper now! 
The Spy Files
Computerworld