Fannie Mae 2005 Annual Report Download - page 196

redesigned process also includes requirements for appropriate review and approval of the consolidated
financial statements by qualified accounting personnel.
To further enhance our internal control over financial reporting relating to financial statement preparation
and reporting, we created a new financial controls and systems group within our Controller’s department
which is focused solely on improving our accounting systems and internal control framework in an effort
designed to ensure that our accounting function properly supports our internal control over financial
reporting. The financial controls and systems group has responsibility for designing, implementing and
monitoring controls within the Controller’s department. Additionally, the group is responsible for
managing the development, testing and deployment of new accounting systems and ensuring those
systems have adequate controls and documentation.
Further, we continue to enhance the financial statement preparation and reporting process by identifying
and communicating requirements earlier, providing detailed training on cash flow statement preparation,
and improving data sourcing processes. These process and system design changes should enable us to
develop a sustainable, repeatable financial reporting process. We continue to implement additional
analytics to facilitate a more thorough and timely review of the results of operations.
•Journal Entry Controls
Although we have not yet remediated this material weakness, as of the date of this filing, we have
redesigned our journal entry creation and approval process. The new process includes additional training
on the creation of journal entries, required journal entry support and the requirements for the review and
approval of journal entries. Additional controls were added to specify thresholds for journal entry
approval and ongoing monitoring of journal entry generation and compliance. However, we continue to
refine and enhance these processes.
•Reconciliation Controls
Although we have not yet remediated this material weakness, as of the date of this filing, we have
implemented a redesigned process to ensure that all of our general ledger accounts are reconciled on a
timely basis. We have assigned primary and supervisory account management responsibility for all of our
general ledger accounts. We have also provided detailed training on account reconciliations. Reconcilia-
tion completion, review and issue management is monitored each month to ensure compliance with our
policies. However, we continue to refine and enhance these processes.
•Disclosure Controls and Procedures
While we have made progress in improving our disclosure controls and procedures, as discussed under
“Evaluation of Disclosure Controls and Procedures” above, management believes that this material
weakness will not be remediated until we are able to file required reports with the SEC and the NYSE on
a timely basis.
Access Controls for Information Technology Applications and Infrastructure
Although we have not yet remediated this material weakness, as of the date of this filing, we have designed
and implemented procedures and technology to control access to all of the applications that are within all
significant financial reporting processes. Such procedures include standard request, review and approval
controls over any addition or deletion to system access. In addition, we perform regular, periodic monitoring
of authorized users designed to ensure that only authorized users have access to systems and that such access
is commensurate with current job responsibilities.
To remediate this material weakness, we are further standardizing and automating the process to add or
remove a user’s access to applications that are material to our financial reporting process. In addition, we are
improving automation of the workflow for requesting, approving, granting, revoking and reviewing access
privileges on technology platforms that support applications that are material to our financial reporting
process.
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