Fannie Mae 2005 Annual Report Download - page 194

• Policies and Procedures
We have developed and communicated corporate-wide standards for policies and procedures for use
throughout our business to support a uniform approach to the documentation of current policies,
procedures and delegated authority in most areas of the company. Concurrent with our corporate policy
and procedures initiative, each of our business units has identified and corrected deficient policies and
procedures documentation for processes relevant to internal control over financial reporting. As noted
above, we have also completed a comprehensive corporate review of delegations of authority and
developed and communicated a corporate-wide policy.
Application of GAAP
For each misapplication of GAAP, we have assessed the applicable accounting policy and implemented new
processes and technology designed to ensure the appropriate application of GAAP. In addition, as described
above in our discussion of remediation activities relating to our accounting policy function under “Control
Environment—Accounting Policy,” we have completed a full assessment of all of our accounting policies and
have revised these accounting policies in an effort designed to ensure their compliance with GAAP. We now
maintain a written set of GAAP-compliant financial accounting policies. All of these accounting policies have
been communicated to the appropriate accounting functions. Staff in the accounting policy function work
closely with each of the business units and financial reporting in an effort designed to ensure accurate
accounting policy interpretation and to address new or emerging accounting policy issues. Accounting
standard-setting developments are actively monitored, with implementation impacts researched in coordination
with the Controller’s department, business unit personnel and other divisions that would be impacted.
Additionally, accounting policy is actively engaged in new product and process approval designed to ensure
that the correct accounting policy decisions are reached and implemented.
Further, as described above in our discussion of remediation activities relating to our accounting/finance
staffing levels under “Control Environment—Accounting/Finance Staffing Levels,” we have increased the
number of full time employees in our accounting function. This staffing increase and the related separation of
duties have improved the controls relating to our process for determining, monitoring, disseminating,
implementing and updating GAAP. We have also enhanced our technology processes in an effort designed to
ensure that our systems are operating in a manner consistent with our accounting policies. Additionally, we
have designed and implemented new systems which have resulted in generating the consolidated financial
statements included in this Annual Report on Form 10-K.
Financial Reporting Process
•General Ledger Controls
We have implemented review and approval controls to manage the addition and deletion of general ledger
accounts. We have strengthened supervisory review controls over account management and the periodic
close process.
Information Technology Applications and Infrastructure
•Change Management
We have designed and implemented procedures to control changes to all of the applications that are
material to our financial reporting process. Such procedures include standard request, approval and review
controls over any system or data change. Significant changes are managed through a governance
committee of corporate representatives from technology and business unit management. In addition, we
have implemented reconciliation or user controls designed to ensure that the desired change was
implemented as intended.
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