Chart of Financial Authority Procedures & Guidelines · Chart of Financial Authority . Procedures &...

Sony Pictures Entertainment

Chart of Financial Authority

Procedures & Guidelines

SPE Corporate Compliance March 2012

SPE Chart of Financial Authority Guidelines & Procedures

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1.0 Introduction The Chart of Financial Authority (“COFA”) Guidelines & Procedures document has been developed to improve the efficiency of financial processing across all lines of business at Sony Pictures Entertainment (SPE), ensure consistent standards and adherence to SPE internal controls and Sarbanes-Oxley (SOX) requirements, and assist users in compliance with SPE’s COFA. The guidelines apply to transactions, commitments, disbursements, and related activities for all domestic and international SPE divisions and departments. Questions or comments regarding COFA may be directed to SPE Corporate Compliance at [email protected]. Questions or comments regarding SAP or ARIBA may be directed to the SAP Global Support Team at [email protected]. 2.0 Background COFA summarizes the required approvals for specific transactions and activities. In addition, COFA approval levels must be followed when making a commitment on behalf of SPE. SPE’s COFA is based on the Sony Group Delegation of Authority (“DOA”). COFA must always adhere to the DOA, which details the minimum approvals necessary for specific SPE activities. Practices that are more restrictive than proposed in COFA are allowable. COFA approval limits are evaluated annually or upon request of a business unit. 2.1 Why was COFA developed? COFA was developed to ensure that SPE commitments and transactions receive the appropriate oversight and are approved by the correct personnel. COFA has been designed to:

• Govern commitment and transaction approval levels • Standardize SPE internal controls • Mitigate SPE financial risk • Standardize approval processes • Provide more visibility on commitments and expenditures

mailto:[email protected]


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2.2 Who must comply with COFA? All SPE business units and employees must comply with COFA. Approval levels vary by Line of Business, Region, and Territory. COFA is a SOX, Company-level control, and is evaluated annually by Corporate Compliance and external auditors for compliance. Questions regarding joint venture COFA guidelines may be directed to SPE Corporate Compliance at [email protected]. Section 1 of the SPE Code of Business Conduct, states that, ‘Sony Pictures is committed to complying with all applicable laws, rules, and regulations of the countries and regions in which it operates and to conducting its business activities in an honest and ethical manner. You are expected to comply with all applicable laws, rules, and regulations in addition to all internal Sony Pictures rules and policies relating to your business activities. It is your responsibility to know and understand the legal, regulatory, and internal policies and requirements that apply to your job.’ If you are unsure about the application of such policies, or have any other questions, contact your manager or People & Organization representative. Contact the Legal department with questions regarding legal requirements or compliance with applicable laws for specific job responsibilities. 2.3 SPE Anti-Bribery Policy (See Sections 9.2 and 9.3 for additional information.) To further SPE’s strong commitment to business integrity, SPE has established an Anti-Bribery Policy that all Sony Pictures Group Personnel must follow. The Anti-Bribery Policy has specific procedures that must followed when giving gifts or making political or charitable contributions to government officials or entities on behalf of SPE. It is the responsibility of all Requestors (see Section 5.7) and Approvers (see Sections 5.8-5.10) to comply with the SPE Anti-Bribery Policy. For more information click on “Anti-Bribery Policy” on the DOC tab on mySPE. For questions or clarifications contact the SPE Compliance Counsel ([email protected])




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3.0 What does COFA Cover? COFA applies to every disbursement, transaction, activity or commitment made on behalf of SPE. COFA covers the following:

• Purchase orders (POs) • Invoice payments • Intercompany transactions • Long-term contracts • All other transactions, including mergers and acquisitions, future guarantee

payments, employee hiring decisions, fixed asset purchases, write-offs of uncollectible accounts, commitments to talent, greenlighting, product acquisitions, licensing agreements, etc.

The above transactions may be approved manually or through automated systems The method of obtaining approvals differs depending upon whether the transaction occurs within an ARIBA workflow, SAP, other systems (OASYS/Gold/IMSM), or manually. Evidence of approvals may be obtained through a hard copy form (i.e. “Request for Approval Document” (RAD) or electronically (i.e. e-mail or ARIBA/other system workflow/SAP). All documents, whether in manual or electronic format, should adhere to SPE’s ‘Record Retention Policy’, which is available on mySPE. ‘Record Retention Schedule’ also available in mySPE can provide further guidance for the required retention time for specific records. Throughout this document, ARIBA references are intended to include all other approval workflow systems (PO Systems) – OASYS, GOLD and IMSM. Note: Refer to the SPE Global Travel & Entertainment (T&E) Policy for any travel or entertainment entitlements, and the SPE Entitlement Policy for all other entitlements. Entitlements are defined as business resources provided by, or paid for, by SPE that support or accommodate the fulfillment of employee job activities and accountabilities. In various international territories, employee T&E Expenses will continue to be paid through Accounts Payable until the Concur Expense Management System is operational. Home Office approvals are required for the following activities:

• Joint Ventures, Mergers and Acquisitions • Divestitures and Business transfers • Start-up of business • Borrowings, financings • Capital increase/decrease and securities investments • Any legal proceeding • Future rights sales for a period longer than 7 years


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• Opening of any bank account • Opening of new lines of credit • Accounting Policies • P&O hires, additions, replacements, employment contracts • Budgets and Mid Range Plans • Use of Sony brand or trademark • New or changes to patents that are related to format or copyright protection

and technologies associated with electronics subsidiaries • Tax planning strategy must always be coordinated with Home Office and

Global Tax Office • Changes to pensions (Sony Corporation is currently working on new policies)

The following table lists examples of some of the transactions/commitments and required forms to document approvals for compliance with COFA: Transaction Form or Reference Joint Ventures, Mergers/Acquisitions, Divestitures, Business Transfers & Start-up of Business

Request for Approval Document (RAD)

Capital Increases/Decreases and Securities Investments

RAD

Intercompany Loans Follow SGTS and SPE Treasury Policies Long-Term Contracts or Purchase Agreements Modified RAD and Procurement

Guidelines (Refer to SPE Global Purchasing Policy for Supplier Contract Approval Form in Appendix 1)

Non-IT Capital Projects (Assets over $5,000 with useful lives of more than a year)

Capital Project FAR

IT Capital Projects CPR Write-Off or Reserves for Uncollectible Accounts/Notes Receivables

Modified RAD (To be distributed at a later date)

Travel & Expense Concur (Online) & T&E Excel Form Insurance Settlements Contact Risk Management & SPE

General Counsel Tax Approval from SCA Tax Dept. Residuals/Participations Payments SAP/ARIBA Greenlight Greenlight Memo Development Commitment Approval Form (Division

Specific) Acquisition/Distribution Deal Commitment Approval Form (Division

Specific) Commitments to Talent (Term and Individual Deals)

Commitment Approval Form (Division Specific)


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Pay or Play Commitments Commitment Approval Form (Division

Specific) Pre-Production Commitments (Prior to signed Greenlight memo)

Commitment Approval Form (Division Specific)

Future Rights Sales Commitment Approval Form (Division Specific)

Guarantees Commitment Approval Form (Division Specific)

Human Resources Decisions Follow Human Resources Guidelines and contract your P&O Business Partner

Corporate Accounts Payable has designed forms similar to RAD form to facilitate the manual approval process and assist the user in determining the required signatures prior to committing SPE to a transaction or expenditure. Blanket Purchase Orders Blanket Purchase Orders are utilized to expedite the approval process for recurring monthly non-marketing payments by reducing the number of required approvals for ongoing projects or services. Blanket POs may be used for monthly contract payments like rent, utilities, or specific projects with pre-determined contractual milestones. Blanket POs should not be used for marketing expenses or to cover anticipated spending for different items with a vendor. Blanket POs are not used domestically since all domestic POs are created in ARIBA and the system does not currently have this functionality. Contact Corporate Accounts Payable to establish a customized PO within ARIBA. Internationally, Blanket POs may be processed utilizing SAP. For more information on the creation and use of a Blanket PO, contact your local Finance representative. Each business unit’s Finance Department should monitor all Blanket PO activity for appropriateness. Corporate Procurement has been established as a ‘Watcher’ (see Section 5.6) for all domestic PO activity but may not have oversight for PO activity in all international territories. 4.0 General COFA Guidelines

SPE’s ARIBA and SAP systems have been designed to ensure that approval workflows for particular transactions adhere to SPE’s COFA requirements. Additional approvers may be added at the discretion of management. To assist users in identifying the COFA requirements for various transactions and activities that occur outside of electronic disbursement systems, the Compliance Team has created Excel workbooks referred to as the “COFA Sheets.”


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4.1 COFA Worksheet Guidelines The COFA Sheets, segmented by line of business, activity, and territory, detail the approvals necessary for the categories of activities pertaining to each line of business. Designed to provide assistance in determining the approvers required for specific transactions, the COFA sheets are provided to key Finance & Operations personnel. SPE Corporate Compliance reviews all COFA Sheets annually for exchange rate variance. Please contact Corporate Compliance at [email protected] with any questions or comments regarding your COFA sheets. 4.2 How to use the COFA Sheets Many of the General Spend tables of the COFA sheets are built into SAP/ARIBA. To comply with COFA for non-General Spend transactions requiring manual approvals, please follow the steps below:

a. Identify the type of transaction needing approval b. Determine the line of business and territory performing the activity c. Select the correct COFA sheet for line of business and territory d. Find the applicable chart or guidance in the COFA sheet for the type of

transaction e. Obtain the approvals designated in the COFA chart f. Maintain evidence of the approvals [manual or electronic (e-mail/ARIBA

workflow)] Note: The COFA sheets provide the minimum approval levels required for a particular activity or transaction. Approval processes may be more stringent than the minimum COFA guidelines. 4.3 COFA Bands (International Territories) The approval levels for transactions are determined by each international territory’s banding. There are three banding levels - High, Medium, and Low - which are based on revenue and spend volume, as well as other considerations, including where the office does business (i.e., multiple countries vs. one location). Approval bands indicate the level of Home Office oversight required, with high band territories requiring oversight at a higher dollar amount and low band territories requiring Home Office approval at a lower dollar amount. Banding will be adjusted as necessary for changes in business volume or other factors. 4.4 COFA Exchange Rates COFA Sheet approval amounts are converted annually from US Dollars to local currencies using the previous December 31st exchange rates provided by SPE Treasury. Amounts have been rounded after conversion for ease of use. The appropriateness of each currency exchange rate is evaluated and updated annually at December 31, or more frequently, as needed.



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What else should I know?

• Required approvals are based on the entire dollar amount of a transaction, regardless of whether the commitment is split into numerous transactions. Splitting transactions (dividing items into several transactions) to circumvent approvals is prohibited.

• Changes in excess of 10% (plus/minus) in the financial impact of the approved matters, or any other material changes in the terms, must be re-submitted for approval.

• Investments in new businesses or activities outside the scope of currently existing businesses or activities, regardless of the amount involved, must be specifically approved by Sony Corporation.

For additional guidance or clarification about a particular transaction or overall COFA requirements, contact Corporate Compliance at [email protected]. 4.6 New COFA Table A new COFA workflow table may be requested if a line of business has a new type of transaction or activity that is not covered in an existing COFA workflow table. Contact Corporate Compliance if a new COFA table needs to be created. To request a new workflow (COFA Table), send an e-mail to the COFA mailbox with the following information:

• A description of the transaction • Rationale supporting why the creation of a new COFA table • A proposal of the approval levels and approvers • Requestor’s name • The lines of business for the newly proposed table • Home Office approval, if applicable

Please note that the creation of new purchasing groups or company codes must go through the SAP master data governance rules. (See SAP Section in mySPE for Guidance.) All new Purchasing groups or company codes must also be approved by Compliance.



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4.7 New ARIBA Workflow ARIBA is a web-based system used to authorize cash disbursement from SAP. ARIBA allows for complex approval flow structures. ARIBA allows multiple approvers to approve the workflow and automatically routes the approvals to the next step in the existing flow. In addition, ARIBA allows a ‘Watcher’ to be added to the workflow for notification purposes. A Watcher does not have to approve a transaction. Every ARIBA workflow has a COFA Table but not every COFA table has an ARIBA workflow. ARIBA sends email notification to the approvers informing that their approval is pending. Contact SAP Global Support for the creation of a new ARIBA Workflow. 4.8 COFA Modifications - Changes & Exception Requests COFA modifications, including changes and exceptions, may be initiated by a territory office, Home Office, SPE Compliance Group, SPE management, SCA management, or the SPE Board. All COFA changes and exceptions must be approved by SPE Compliance Department. The following guidelines are outlined to facilitate the processing of COFA modifications: 4.9 ARIBA Maintenance Requests Domestically, approval level modifications are requested in ARIBA. Once a particular approval level is authorized, the approval level applies to all the domestic workflows in ARIBA. Please refer to the ARIBA guidelines for information regarding the procedure to submit a request for an ARIBA level modification. Internationally, ARIBA approval levels are on a workflow-by-workflow basis. Modifications to existing workflows are submitted through the ARIBA Maintenance Form. Contact SAP Global Support for assistance in modifying an existing ARIBA workflow. Employee Authority Level Exceptions These are requests for an individual to be granted an approval level that exceeds the COFA guidelines for their specific authority level as determined by the employee’s title. A business justification is required for any exception to an employee’s approval level. All requests for employee authority level changes must be approved by SPE Corporate Compliance. The most common ARIBA changes requested include the following:

• Creating a new workflow • Modifying the approval level of an existing approver • Adding or removing a person from a workflow • Replacing a person in a workflow


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ARIBA changes may be requested due to: • An employee’s promotion • An employee’s change in daily responsibilities • An employee’s changes in reporting structure • Personnel changes

a. New hires b. Employees leave the company c. Employees transfer to other departments

• Delegations for leaves of absence (i.e., maternity or paternity leaves) are considered temporary. (Please see Delegation of Authority section in this document for further guidance on temporary delegations of authority.)

4.10 User Submission Requirements All requests for COFA Approval Flows should be reviewed by the requestor’s department or division management prior to the review and approval of Compliance. When using the ARIBA Maintenance Form (International workflows only), the Form requires Home Office approval before it automatically routes to Compliance. 4.11 User Submission Requirements for COFA Changes Domestically, submit all requests to [email protected]. Internationally, if the ARIBA Maintenance Form is used, the workflow will automatically route to SPE Compliance upon receipt of Home Office approval. If an international territory is not using ARIBA, submit all requests to [email protected]. All requests for COFA Approval Flow additions, changes, and/or deletions must contain the following:

• Name, title, and contact information of the person making the request • Line of Business, Territory, Company Code and Currency applicable for the

request • Detailed description of the request (i.e. employee change, workflow change,

new transaction, etc.) Most of this information will automatically be included in the ARIBA Maintenance Form. Please utilize the Comments section of the ARIBA Maintenance Form and include any information relevant to the request that would assist approvers. For domestic SAP & ARIBA workflow modifications and international territories not using the ARIBA Maintenance Form, a spreadsheet containing the existing and proposed release strategies for all affected areas must be included. The spreadsheet must include:

• Territory, Line of Business, SAP Company Code(s), Currency, and Name(s) of the person(s) to be changed (IN THE EXACT ORDER OF APPROVAL FLOW.)

• When submitting the name(s) of the person(s) to be changed, please use the person’s name of record. A request may be delayed if a person’s nickname or a maiden name is used as it may be difficult to verify the employee’s status.




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Home Office approval(s) • Individuals and territory offices must first obtain Home Office approval before

submitting a change request to SPE Compliance • Home Office approval is from an SPE employee with approval and

supervisory authority for the workflow or table being modified Requests must be submitted to [email protected]. 5.0 Roles and Responsibilities

5.1 Accounts Payable Invoice Review Accounts Payable Department’s Review of PO and Non-PO Invoices The Accounts Payable Department (AP) conducts a preliminary high-level review of invoices submitted through SAP to properly forward invoices to Requestors. This review includes the validation that the invoice relates to an SPE expense and supporting documentation, such as a valid invoice or delivery receipt exists and accompanies the request. Requests for goods and services should be initiated using an ARIBA Purchase Order as follows (Purchase Order Policy):

• Requisition is created in ARIBA. Once approved, the PO is generated in ARIBA/SAP.

• When goods are received or services completed, the requisitioner performs a goods receipt in ARIBA

• AP receives the invoice and processes the invoice in SAP. If the invoice amount matches the PO amount and a goods receipt has been performed, the supplier is paid.

Certain purchases and payment types are allowed exceptions to the above Purchase Order Policy. Payment exceptions will be paid through one of the following alternate processes:

a. Non-PO Invoice Process (SAP) • Invoice is sent to AP and is scanned and routed through SAP workflow for

coding and approval • Used for: Utilities, Leases, Taxes, and other items for which POs are not

traditionally created b. Payment Request Process (ARIBA)

• Electronic Payment Request form is initiated in ARIBA and routed for Approval. Once approved, the request is systematically posted in SAP and AP generates the payment.

• Used for: Items for which no invoice is received (Contracts, Participations Statements, etc.)

c. Purchasing Card (SPE currently uses American Express’s ProCard.)



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• Used for: Specialty retail purchases (Catering, Florist etc.) Note: For comprehensive list of approved exceptions to the Purchase Order Policy by Purchase/Payment Type, refer to the ‘Procure to Pay’ – Policy & Exception document. SAP is used to process all of the invoices (PO and Non-PO), ARIBA payment requests, and manual payment requests sent to the SPE Corporate Accounts Payable group. Designated Accounts Payable clerks will be able to run reconciliation reports in both SPiDR and SAP to determine the quantity of invoices received in SPiDR and the quantity delivered in SAP. The Xerox Center will also provide daily reports of physical mail received in their office and processed for collection by SPiDR to identified representatives in each territory office. Invoice numbers between SPiDR and SAP should match. If they are not, the discrepancy should be reported to the scanning manager or researched by AP clerks in territory. 5.2 Invoice Scanning Vendor invoices sent to SPE are scanned into SPiDR and downloaded into SAP. A link is created in SAP to a digital copy of the invoice. In large territories, upon receipt of the vendor invoice, an AP clerk could package and send invoices (physical mail) to Xerox Scanning center which would perform the scanning as mentioned above. In all other territory offices, an AP clerk scans invoices locally and emails to Xerox Scanning center. Xerox uploads scanned invoice documents in SAP. If an invoice must be rushed through the process (processed in less than 24 hours), it should be processed as a ‘Scan after Post’ exception in SPiDR. Each office will have a ‘Resubmission’ clerk, who has access to the document storage system SPiDR. Responsibility/Role Vendor Line of

Business (Req.)

Mail Sorting Rep.

Finance or SSC

Xerox

Addressing the invoice based on SPE guidelines

X

Advising the vendor how to address the invoice

X X

Sorting, opening Mail

X

Recovering VAT X


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Raising / approving a Purchase Order

X

Date stamping the mail

X

Researching unidentified mail/invoices

X

Researching voided or returned checks

X X

Statement review X Research invoices paid via PCard

X

5.3 Mail Sorting The mail sorting representative opens and sorts the invoices, statement of accounts, returned checks, and check payments. Statements and returned checks (after researching reason for the return) are sent to the Finance representative. Any new remittance address notices, change of address notices etc. are sent to the Business Unit contact so that a vendor change request can be created in ARIBA. Invoices that are received by inter-office mail follow the same procedures as above; however, the vendor should be contacted and given the correct address information in order to expedite the scanning process. All invoices that are paid are also sent to the appropriate Finance representative. All invoices should include the SPE Requisitioner, Legal Entity Name, Territory, PO Number (if applicable) and VAT Registration Number (if applicable). Once scanned and transferred from Xerox, a non-PO Invoice or a PO Invoice transaction is initiated in SAP. A mail sorting representative will also verify if a returned check is voided and reissued. If a check is already voided in the system, the face of the check should be marked ‘Void’ and sent to the Finance representative. 5.4 Non-PO Invoice processing The scanned non-PO Invoices create an entry in SAP and are processed through an invoice workflow in SAP. The AP Clerk initiates the workflow by coding (entering vendor number, invoice date, amount and basis of invoice) and sending the non-PO Invoice to the business unit (operations) coder. The business unit receives an email notification of a work item that needs his/her attention. The business unit coder enters the line items, purchasing group and posts the invoice in SAP. It is suggested that the ‘Description’ of the basis the Invoice is completed. If there is any discrepancy or error, the business unit coder may reject it.


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5.5 PO Invoice processing PO Invoices are items requisitioned through ARIBA with a purchase order or created directly in SAP. After the requisitioner/requestor performs a goods receipt, SAP performs an automatic 3-way match of the PO, Invoice and Goods Receipt. 5.6 Pro-forma invoices Invoices sent directly to Accounts Payable (e.g. Senior Executive office furnishings) When an invoice is waiting to be approved and coded, an email will be generated from SAP to the Requisitoner/Coder/Requestor alerting him or her that an invoice is awaiting his or her action. Prior to the Requestor initiating a payment request for non-PO related purchases AP should review and verify the following:

• Company code • GL account • Vendor name • Vendor number • Vendor address • Vendor exists in SAP • Invoice date • Invoice amount • Invoice number • Payment method (if default is not correct) • Alternative vendor number (if applicable) • Validity of the payment request/invoice and/or credit memo • SPE-related expense • Budget availability • Validity of charges

After the requestor finishes the review, the workflow will await the COFA approver(s). The requestor can add additional approvers/watchers to the transaction. Please refer to ‘Work Instructions’ – Non-PO Invoices Processing in SAP (8 Steps) available from Corporate Accounts Payable Dept. 5.7 Requestor (Requisitioner) The ‘Requestor’ is defined as the employee who places the order for the goods or services and/or the person who is responsible for the initial coding and approval of an invoice or requisition in the system. The Requestor may be in an Operations or Finance Department in a SPE business unit. A payment request is initiated by a business unit in ARIBA, attaching all scanned supporting documents to the request.


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Payments requests for transactions such as Business Affairs contracts or rent are initiated in ARIBA. Payment requests can be lump sum payments with a specific due date or fixed recurring payments, i.e., weekly, bi-weekly, monthly, quarterly, etc. The Requestor should use his/her best judgment to determine the validity of a vendor. At a minimum, the Requestor should review the vendor’s contact information (name, address, and telephone number.) The Requestor should verify that the invoice is from a pre-approved vendor and not a blocked vendor. If the invoice is from a new vendor, adding a new vendor to the system must be requested through ARIBA by completing the Vendor Maintenance Request Form. The Requestor should verify (for new or existing vendors) that the vendor appears valid and the vendor’s address is not a PO Box or in an unfamiliar location and there is a valid telephone number should billing questions arise. The Requestor plays a very important role since the Requestor may be the only person to view, review, and handle the original invoice as subsequent reviewers will likely only see scanned images of the invoice. It is the responsibility of the Requestor to question unusual looking invoices that he/she may be entering into the system. It is the responsibility of all Requestors and Approvers to comply with the SPE Anti-Bribery Policy located in the DOC tab on mySPE. Once the validity of the invoice has been determined, the Requestor performs the following:

• Verification of compliance with the SPE Anti-Bribery Policy • Verification of charges for SPE-related expenses only • Review of appropriate approval workflow, verifying inclusion of the correct

approvers (additional watchers and/or approvers may be added at this time) • Enters the payment details, coding and conducts a review of company code,

purchasing code/release strategy GL code, and other codes for accuracy. • Review of payment amount and invoice or requisition amount for agreement

and, if practical, a review of the amount invoiced for agreement with the contract terms

• Verify that the invoice amount does not exceed the amount on the Purchase Order

• Verification of payment amount, method of payment, and suggested date of payment

• Perform necessary recalculation and review of invoice for mathematically accuracy, if practicable

• Verification of receipt of goods or services. If the goods or services are to be received prior to payment disbursement, the requestor verifies goods or services have been received by checking for the Good Receipt in SAP or reviewing backup documentation.


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• Retention of relevant documents or verification that the documents have been stored in the system in accordance with the SPE Record Retention Policy

5.8 First Approver For invoice and requisition approval, the ‘First Approver’ is defined as the first person to review and verify a Purchase Order or payment request after it has been coded by the Requestor. A First Approver may be an Operations personnel or a Finance Approver. A Finance approval is required for all transactions exceeding $1,000 USD. In instances where there is only one approver, the duties of the First Approver and Final Approver apply. It is the responsibility of all Requestors and Approvers to comply with the SPE Anti-Bribery Policy. For more information click on “Anti-Bribery Policy” on the DOC tab on mySPE. The First Approver is responsible for verifying the accuracy and completeness of the following:

• Verification of compliance with the SPE Anti-Bribery Policy • Vendor information and coding • Invoice amount inclusive of applicable discounts is in agreement with

purchase order, contract terms contact amount, payment request, and is for appropriate SPE-related business expenses only

• Payment date and method of payment are correct • If the vendor has a contract or the payment is for a Purchase Order

Requisition, the Approver should verify the goods or services have been received by checking for the Goods Receipt in SAP / reviewing backup documentation

• Verification of services performed/goods received (Non-Po-Invoice only) • Verifies frequency of invoices from the vendor • Perform necessary recalculation (VAT or Taxes) and review of invoice for

mathematically accuracy, if practicable • Review the PO in ARIBA if SAP access is not available • Verify that the invoice amount does not exceed the amount on the Purchase

Order. • Reviews the approval workflow, verifying the correct approvers have been

included in the workflow and the list of approvers selected is complete. Any additional watchers or approvers should be added to the workflow at this time.

• Retention of relevant documents or verification that the documents have been stored in the system in accordance with the SPE Record Retention Policy


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5.9 Second and Subsequent Approver(s) The ‘Second Approver’ or any ‘Subsequent Approver’ is defined as the person who confirms the approvals made by the First Approver by performing a second review and verification of the request for payment. In some instances, the Second Approver may be the Final Approver and the duties of both will apply. It is the responsibility of all Requestors and Approvers to comply with the SPE Anti-Bribery Policy. For more information click on “Anti-Bribery Policy” on the DOC tab on mySPE. The Second Approver is responsible for confirming the accuracy and completeness of the following:

• Verification of compliance with the SPE Anti-Bribery Policy • Review expenditure for representation of a legitimate business expense and

for reasonableness in amount. • Confirmation of an anticipated or reasonable business expense • Inquiry of unknown or unfamiliar vendor • Confirmation of approval flow for subsequent approvers and watcher, if

necessary • Verification for payment in line with budget, if applicable • Verification of account coding; at a minimum by the first Finance approver • Verification for the correct designation of a Blanket PO • Confirmation that appropriate release strategy was chosen

5.10 Home Office/Final Approver The Final Approver is the last person to review the request prior to the payment being made. The Final Approver confirms the approval process, verifies the correct people approved the transaction, confirms the vendor name is correct, verifies the payment amount and payment date, and maintains relevant documents, as necessary. A PO can be paid by either American Express Corporate Purchasing Card (Pro-Card) or Accounts Payable, based on the predefined payment method information of the vendor in master file. Please refer to PO and Good Receipts section for details. All Invoices are reconciled to supporting documentation and checked for completeness and accuracy by the business unit prior to posting in SAP. If there is any missing information, Accounts Payable will reject the payment and the requestor is automatically notified to research the issue. It is the responsibility of all Requestors and Approvers to comply with the SPE Anti-Bribery Policy. For more information click on “Anti-Bribery Policy” on the DOC tab on mySPE.


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5.11 Watcher A ‘Watcher’ is defined as a person in the workflow and notified of the transaction. The requestor or any of the approvers may insert a Watcher into any point in the workflow, including at the end (for notification that the transaction has completed the approval process.) A Watcher is not required for the approval nor does he or she inhibit the approval flow. A Watcher could be inserted to simply keep him/her aware of the transaction. A Watcher should contact the next approver in the workflow with any question or concern. If the transaction has already reached final approval, AP should be contacted to hold payment until the issue has been resolved. ARIBA allows a person to create a requisition on behalf of someone else. The person who initiated the requisition will be added to the approval listing as a watcher. 5.12 When Operations and Finance Approvers have a dual Role A person with dual responsibilities may at times be Operations approver and other times a Finance approver. When this occurs, the approver is accountable for performing the responsibilities of both the operational and financial review. 5.13 Manual Check Transactions Manual payment transactions are highly discouraged. Should an urgent need for a check arise, the payment must follow COFA guidelines and approvals should be obtained. In addition to required COFA approvals, manual checks must contain at least two signatories in accordance with the Disbursement Signature Authorization Policy. Signature plates/stamps may be used for signing the checks in countries where their use is customary. All manual check transactions should be recorded in the general ledger immediately and included in the monthly bank reconciliation process. Bank account reconciliations should not be performed by the same employees that sign checks. Specific requirements and exceptions for manual checks are contained in the following documents within SPE Treasury Policy and Procedures located in mySPE: Sony Pictures Entertainment Inc. Domestic Check Payments Policy & Procedure and Bank Account Policy & Procedure International Territories. Manual transactions follow the guidelines as stated above and all documents should be retained for review. In addition, manual transactions are subject to SPE Compliance and Internal Audit monitoring or testing.


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5.14 Voided Checks All voided check transactions should be recorded in the general ledger and the voided check defaced (i.e., marked “void.”) The original voided check should be safeguarded to avoid fraudulent use and retained in accordance with record retention requirements. 5.15 Wire Transfers Wire transfers may be used to facilitate third party payments, production funding and inter-company settlements; however SPE Corporate Treasury encourages the use of lower cost ACH (Automated Clearing House) or direct SAP-to-bank payments where available. Wire transfers are required for foreign exchange transactions. Wire transfer requests should be processed through SAP or ARIBA and approved in compliance with COFA guidelines. In addition, all electronic fund transfers must have a minimum of two persons executing each transaction. Refer to Treasury Policies and Procedures for detail guidelines on wire transfers in both domestic and international territories. Treasury Policies and Procedures also cover Bank system access and security procedures for both domestic and in international territories. 5.16 Other Transactions/Commitments Requiring COFA Approval SPE has established approval requirements for all disbursement, transactions, activities, or commitments made on behalf of the Company. This includes manual transactions or commitments that may not be processed immediately through ARIBA, e.g., future guarantee payments, mergers and acquisitions, employee hiring decisions, green lighting, fixed asset purchases etc. Documentation and evidence of approvals may vary depending upon the type of transaction. Evidence of approvals may be obtained electronically or by the use of a hard copy form, e.g., Request for Approval Document (RAD.) Document retention is a Company-wide requirement and all documentation should be easily accessible upon request. 5.17 Use of Technology SPE is committed to provide its employees with instantaneous communication tools like Blackberry and Email to expedite flow of business transactions from any place at any time. It is a cost effective way to accelerate business communication and break barriers of physical separations among SPE employees. Accessibility of such tools is only limited by an employee’s role/title and approval from a supervisor or manager. 5.18 Approvals By E-mail Approval requests performed by the use of e-mail may not include all transaction-related documentation; therefore when approving requests by email, all related emails should be retained as supporting documentation. In addition, retention and filing processes should be established in accordance with SPE’s Record Retention Policy to enable a quick retrieval of the email for review. SPE’s Record Retention Policy covers all records (paper and electronic format).


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Approving by the use of email does not reduce or eliminate the need for thorough review of the transaction and related content, i.e., email-thread, goods receipt, invoice, etc., and does not absolve the approver of the responsibilities outlined above. 5.19 Blackberry Approvals When approving transactions outside of the ARIBA/SAP systems, the ability to view required attachments may be reduced and may not allow an effective review or confirmation of payments or supporting documentation. Some ARIBA transactions can be approved via use of a Blackberry. Electing to approve a transaction outside of the ARIBA or SAP applications or via Blackberry does not reduce or eliminate the need for a thorough review of the transactions and does not absolve the approver of the responsibilities outlined above. 5.20 Simultaneous Multiple Approvals (Select All Feature) The ‘Select All’ feature allows for the simultaneous approval of all invoices in an approver’s e-mail inbox. Approvers utilizing this function are not excused from the requirement for a thorough review of the individual invoices/transactions as detailed above. This feature should be used for highly repetitive small dollar invoices from longer-term trusted vendors with large volumes of similar transactions. E.g. FedEx/UPS Freight costs. Detective audit procedures should be considered to verify on a test basis the appropriateness of the charges for vendors that are regularly approved via this method. 5.21 Materials Buyer Approval Items selected in the ARIBA Catalog are designated as Catalog Items and Items not available in the ARIBA Catalog are designated as Non-Catalog Items. A requestor must enter an appropriate description of goods or services and a Material Group code. If the material groups already established in ARIBA do not adequately address the type of product / service to be purchased, a new material group can be added. All new Material Group (major or sub-material groups) set-up requests should be forwarded to Corporate Procurement for review and approval. A requestor selects from a list of vendors and has the ability to select preferred vendor based on the Material Group chosen. The only vendors that can be selected are contained in the Vendor Master File in ARIBA. If the requestor wants to use a vendor not in the Vendor Master File, the requestor fills out a Vendor Maintenance Request Form in ARIBA, which gets routed for approvals prior to being added as a vendor. (See Vendor Maintenance section below) If the requestor does not assign a vendor, a Corporate Procurement Buyer is automatically added to the end of the approval flow and the Buyer assigns a vendor to the requisition. The requisition is then submitted for COFA approval. Part of the approval process.


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5.22 ARIBA Delegation of Authority (Delegator & Delegatee) Employees are permitted for valid business reasons to temporarily delegate their approval authority to another employee at their discretion. Approval delegation is set up in an employee’s User Profile in ARIBA. The responsibility and accountability for delegated approvals remains with the Delegator of the authority. It is the responsibility of each employee to delegate their approval as needed. No approval is necessary. It is strongly recommended that employees delegate their authority to an employee with similar authority whenever possible. Employees are strongly discouraged from delegating their approval authority to an employee with a lower authorization level. Delegations are monitored by the SPE Compliance Department. 5.23 SAP Delegation of Authority (Delegator & Delegatee) An employee may delegate his/her SAP Inbox access to another SAP user to process work items on his/her behalf. Delegating access in SAP is called substitution. There are two types of substitution in SAP: Active where the delegator will receive email notices and Passive wherein a delegator will not receive email notices. For further guidance, please refer to ‘SAP Workflow Inbox Delegation.doc’ on mySPE. 5.24 Standard Delegations (performed by Users) Employees are encouraged to delegate their authority for a specific period of time (no more than thirty days) when they will be unable to access the SPE network, such as when an employee is on vacation, maternity/paternity leave or business travel where ARIBA access is limited. For delegations of more than 30 days a policy exception will need to be obtained. Whenever possible, delegations should be to an employee with a similar or higher level of authority. Downward delegation (delegation of approval authority to an employee with a lower authorization level) is discouraged. Upon expiration of a delegation, the delegator should review all approvals performed in his/her absence. Note: For instructions on how to delegate in ARIBA and SAP, please see the Corporate Accounts Payable documents on mySPE. 5.25 Forced Delegation (performed by ARIBA System Administrators) An employee who is unable to access the network may have their approval authority delegated through a “Forced Delegation of Authority.” Forced Delegations may be submitted by anyone who has access to ARIBA using the e-form. It is recommended that the user’s direct supervisor or direct report makes this request and forced delegations are only used for emergency situations.


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A Forced Delegation of Authority requires the following approvals:

• “Delegate From” Supervisor • “Delegate To” ARIBA User

“Delegate From” and ASA (ARIBA System Administrator) are Watchers on the request 5.26 Purchase Orders and Goods Receipt SPE has established relationships with authorized vendors to provide goods or services. Wherever possible, contracts have been negotiated with key suppliers to ensure that SPE receives high quality service at favorable terms. Please refer to SPE Global Purchasing Policy issued by SPE Corporate Procurement. ARIBA is the primary purchase requisition system used to initiate requests and order goods or services. A proper COFA approval must be confirmed for the system to release a Purchase Order. COFA approval authority limits are tied to an employee’s P&O level and title. • Creation of PO • Review of Open Purchase Orders • Creation of Goods Receipt • Review of Goods Receipt/Invoice Receipt (GRIR) • Pro Card Reconciliation 5.27 Creation of Purchase Order SPE does not have a no P.O.-No Pay mandate, it does however strongly encourage that PO when conveyed to suppliers, should include P.O. terms and conditions, unless a negotiated contract exists. Also disaggregation of PO’s for the purpose of circumventing approval requirements is against policy. A purchase order is created when a vendor requires such document to initiate goods or services. The employee’s role in the process is to submit a requisition via ARIBA to create a purchase order. The following information will be required to create/submit a requisition:

• A valid vendor exists in the system (See Vendor Maintenance section above) • Amount of purchase • Quantity of goods or services • Description of goods or services • General Ledger (GL) account coding information

Once the requisition is submitted and approved via ARIBA workflow, a PO is created and a PO number in ARIBA and SAP.


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5.28 Review Open Purchase Orders Based on the business needs or on a case by case basis, the Requestor will need to monitor whether the goods and services are received. The Requestor should go into ARIBA and acknowledge receipt of goods or services when rendered or received. In addition, inactive PO’s should be identified. Some examples are listed below:

• Never received goods or services and don’t expect to • Order cancellation • PO created in error (i.e. wrong amount, wrong vendor, purchase group,

duplicate PO) • Invoice was paid through alternative process

5.29 Good Receipts Creation For each requisitioned item with a PO, the Requestor will need to monitor whether the goods and services are received. Once the goods are received, the Requestor should go into ARIBA and acknowledge receipt of goods or services before the invoice is paid. This review should be conducted in a timely manner. If the goods receipt is not performed before the PO invoice is processed, SAP automatically e-mails a notification to the Requisitioner and the invoice is blocked for payment until the goods receipt is performed. 5.30 Review of Goods Receipt/Invoice Receipt (GRIR) The Corporate AP Department and SPE Business Units are responsible for monitoring the GRIR account, with the objective of keeping the aging of SPE’s GRIR balances to be within 90 days. 5.31 GRIR Report Discrepancy A GRIR balance exists when there is missing information or a discrepancy in the automatic 3-way match of the PO, Goods Receipt, and/or Invoice. The GRIR account will have a balance if any of the following occur:

• The Goods Receipt was created, but an invoice has not been posted against the PO in SAP.

• The Goods Receipt has not been created, but an invoice has been posted against the PO in SAP.

• The Goods Receipt is complete and an invoice has been posted, but the two balances do not match within established tolerances of $100 or 10% (quantity or amount)

AP will be sending out a monthly Goods Receipt/Invoice Receipt, commonly known as the GRIR Report to notify key business owners of discrepancies between good receipt and invoice receipt. It is the business owner’s responsibilities to follow-up and resolve such discrepancies in a timely manner. AP recommends weekly or at least monthly review of the GRIR report.


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The requestor should contact its assigned AP business partner to remediate any discrepancies. Common resolutions include but are NOT limited to the following:

• Modifying original PO (start the process all over) • Create new PO for the “difference” of the discrepancy • Vendor re-submits corrected invoices • Un-resolved discrepancies for more than 90 days may be escalated for immediate resolution

5.32 Purchase Card Orders (SPE currently uses American Express’s Pro-Card) The American Express Pro-Card is a merchant credit card that is specified in the vendor’s master file. When a purchase (goods or services) is approved in ARIBA from a Pro-Card vendor, the requisition is automatically send to the vendor by the system. Each vendor has a unique Pro-Card account with SPE. A weekly Pro-Card statement of charges for all vendors is reconciled with the requisitions in ARIBA. A payment request is then generated in ARIBA. 5.33 Pro-Card Reconciliation The weekly statement from American Express of Pro-Card charges for all vendors is loaded into ARIBA to reconcile it with the requisitions in ARIBA. The system generates an exception for price overages greater than $100 and automatically notifies the Requestor. The requestor must reconcile the overage and attribute it to an appropriate category. A Procurement Systems Administrator handles non-overcharge exceptions generated by the reconciliation. The reconciled Pro-card file is pushed out to ARIBA and then pulled into SAP. SPE Pro-Card manager initiates a payment request in ARIBA to pay the Pro-Card bill. The payment request in ARIBA is approved in accordance with COFA. 6.0 Roles and Responsibilities for Administering and Monitoring Adherence with COFA Requests are initiated in the territory, at the Home Office, or from SAP Global Support and are approved by Compliance. 6.1 Home Office Responsibilities A Director-level or above Home Office SPE employee is responsible for reviewing requested changes prior to the request being submitted to Compliance. 6.2 Compliance Responsibilities Compliance shall review all requests for completeness. Requests without the required information shall be delayed until the omitted information is provided.


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Requests that contain each of the required components shall be reviewed for the following:

• Conformity of the release strategy to the Compliance-approved COFA spend levels

• Validation of P&O confirmed employees and titles for approved spend levels Compliance will approve all requests where employees and titles can be confirmed and that conform to COFA limits. 7.0 User Profile Maintenance 7.1 ARIBA Guidelines for the Creation of a New Approval Flow Requisitioning authority is available to all SPE employees and is limited only by an employee’s access to ARIBA for requisition creation. However, some departments may choose to limit or restrict requisitioning activities to selected employees. Lists of approvers for an item are determined by conversion amounts from US dollars and a purchasing group/company code combination. Contact your department Controller or Corporate Procurement for additional guidance. 7.2 ARIBA Guidelines for the Editing of an Approval flow (Domestic Only) New employee’s direct reports are not automatically linked to the new employee in ARIBA. Employees are responsible for ensuring that their approval chain is updated in ARIBA. In the event an employee’s supervisor changes, it is the responsibility of the employee to update his/her User Profile in ARIBA to reflect his/her new supervisor. Before ARIBA supervisory changes go into effect, the former and new supervisor must approve the change request. If approval is unable to be obtained from the former supervisor, the approval change should be escalated to the former supervisor’s supervisor. Contact the ARIBA System Administrator (ASA) for assistance.


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8.0 Vendor Maintenance The SAP Vendor Master File contains vendor information, such as remittance address, payment terms, contact names, phone numbers, and information required for 1099 reporting (e.g. Tax ID Number, legal name, entity type.) The creation of a new supplier or payee entity requires approvals before the supplier can be incorporated into SPE’s vendor master file. Corporate Procurement is a ‘Watcher’ for the Vendor Maintenance workflow. Vendors set up in non-US territories or Shared Service Center (SSC) will be performed by the SAP Global Support group, using the ARIBA Vendor Maintenance Form. Please refer to mySPE for additional ARIBA guidance. New vendor approvals in the SSC and all international territories (Europe, Latin America, and Asia Pacific) should be performed by the authorized persons only and must be approved by either an SPE Corporate Accounts Payable Manager or Director. Vendor Maintenance includes the following:

• Confirmation with vendor (new and existing) of changes made to the vendor master file

• Verify that the new vendor is a legitimate business. Additional scrutiny of new vendors where the only given address is a PO Box - Request the non-PO Box address from the vendor - Verify Tax ID, legal registration, perform reference and existence checks of the vendor through other 3rd Parties (e.g. Dun & Bradstreet, Experian, and Equifax) - Is the vendor a government entity, member of government, or any employee, manager or Board of Director/Member of government? If so, please contact SPE Legal Compliance Counsel

• Periodic reviews of vendor master file - Cross-reference vendor address to employee addresses - Identify duplicate vendor or vendors with missing or incomplete information

• Related Party review - Cross-reference list of related parties with vendor master file - Verification of any Conflicts of interest

• Retain evidence of the requestor, approver, department head and finance director for setting up a new vendor. - Documentation of other suppliers contacted before awarding the contract to the selected supplier - If the supplier does not offer lowest price or if the quotation was not possible, inquire the reasons for choosing the selected supplier

• Appropriate information should be input into the General Ledger system (i.e. SAP) and reviewed for accuracy by another individual.

• An Add/Change/Delete report should be run from the General Ledger system at least quarterly and each new vendor listed should have a corresponding


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New Vendor Request Form. This quarterly report needs to be reviewed and approved by the Finance Director.

Any purchases of products from Sony-related entities that are available for consumers in the open market must adhere to SPE’s Procurement Policy. Sony related entity transactions are considered arms-length transactions; payments are settled through accounts payable. Refer to mySPE for more information about Corporate Reporting requirements for purchases and reporting for intercompany vendors. 8.1 New Vendor Set-up Minimum Documentation Requirements All vendors must complete required forms prior to entry into the vendor master file. At a minimum, in the U.S., a W-8 or W-9 form is required along with a CA 590 (if applicable). Vendors are also encouraged to complete an ACH form to allow for the electronic settlement of funds. All required forms can be found in the U.S. New Vendor Set-up packet. Validation of Vendor Vendor information is validated by AP prior to vendor setup in the system. AP performs a quarterly data cleansing to remove inactive, duplicate, or no longer valid (e.g., W-8/9 is expired) vendors. Reporting Related Party Arrangements When setting up a vendor or utilizing an existing vendor, any relationships external to SPE (e.g., family members) should be disclosed to a supervisor. Non-disclosure may be grounds for disciplinary action. 8.2 Requesting Changes to Existing Vendors Minimum requirements for documentation When requesting a change to an existing vendor record, supporting documentation may be required. In most cases, a letter from the vendor or an updated invoice is sufficient. If a change involves sensitive information (i.e., name, tax id, banking information) new tax or banking forms are required. Any additions or changes to the vendor master file must be requested through ARIBA using the Vendor Maintenance Request Form (except for Production Funding vendor master file requests, which are emailed directly to the Master Data Coordinator.)


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8.3 Vendor Approval Roles & Responsibilities Requestor Prior to requesting a new vendor set-up, the requestor confirms the vendor does not already exist in the system and the requested goods or services cannot be purchased from an existing vendor. Approver(s) When reviewing and approving a vendor, the approver confirms the requestor has submitted the required vendor set-up documentation, the vendor does not currently exist in the system, and goods or services cannot be purchased from an existing vendor. 8.4 Blocking and Unblocking Vendors Blocking: To block a vendor, a user selects ‘block’ on the Vendor Maintenance Request Form in ARIBA and their supervisor must approve the request. AP receives the block request and forwards it to the Master Data Coordinator (MDC). MDC then processes the request and notes in the ‘comments’ section of the ARIBA request form. On a Quarterly basis, AP performs a data cleansing to remove inactive, duplicate or no longer valid (e.g. W-8/9 is expired) vendors. Therefore, these vendors will be blocked or restricted from usage. However, vendor history will be maintained. Unblocking: To unblock a vendor, updated copies of all statutory or compliance forms are required.


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9.0 Sony Ethics Hotline (800) 376-3839 (Use appropriate prefix number for USA when dialing internationally) Any employee who becomes aware of an insider malfeasance may report the matter to the Sony Ethics Hotline. Employees may use the Sony Ethics Hotline to report concerns about possible violations of the law or company policies 24 hours a day, seven days a week, toll free. The hotline is staffed by operators who are specially trained, third-party representatives. Calls to the hotline are not recorded or traced, and caller may choose to remain anonymous. 9.1 When to use Sony Ethics Hotline Employees should report any concerns about unlawful, unethical, or dishonest behavior. Some examples are as follows:

• The inappropriate exchange of gifts or entertainment • Conflicts of interests • Fraudulent conduct • Stealing or misuse of Sony property • Improper use of confidential information • Questionable accounting and auditing practices • Environmental, health, or workplace safety issues • Other violations of laws or company policies

Employees may also reach out to their immediate manager, department or division head, human resources representative, SPE’s Compliance Counsel, or SPE’s General Counsel. 9.2 Gifts and Entertainment - Private Sector The giving or receiving of gifts to or from business associates raises important questions of potential conflicts of interests. The Code of Business Conduct contains general rules relating to gifts. In addition to the general standards contained in this Code of Business Conduct, you must observe local laws and regulations as well as all applicable SPE rules and policies in your territory with respect to gifts and entertainment. In order to avoid potential issues you are encouraged to consult with your manager for the proper course of action in connection with giving or receiving a gift. The acceptance of any gift, which does not meet general criteria set forth in SPE’s Code of Business Conduct, requires the prior written approval of your manager, the head of your business unit and Company’s General Counsel. 9.3 Gifts and Entertainment - Public Sector Great care must be taken in dealing with government officials. In many countries, gifts or payments to public officials and public servants are specifically prohibited by law. Some countries assert extraterritorial jurisdiction of such laws. Under the U.S. Foreign Corrupt Practices Act of 1977, it is a federal crime for any United


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States corporation to offer a gift, payment, or bribe, directly or indirectly to any foreign official for the purpose of influencing an official decision or action or seeking influence in order to obtain business. The payment or giving of any gift, entertainment, or other benefit to government officials, directly or indirectly, for the purpose of, or that appears to be for the purpose of, seeking favorable action or arrangements by such officials is prohibited. Please consult SPE’s External Affairs Department and the Anti-Bribery Policy before giving any gift to a public servant or government official or entity. Approval must be secured from SPE’s External Affairs Department before any contribution is made on behalf of SPE or before any corporate funds are used to benefit a political party, an office holder, or office seeker. 10.0 Corporate Procurement Selected categories of purchases have been deemed “Controlled” and are restricted from direct purchase by employees. Controlled commodities may be purchased only through designated departments. Controlled commodities will vary across regions and territory offices. Local finance management should be consulted for guidance on regarding controlled commodities. Any purchases of $100,000 equivalent or higher must be competitively bid unless the selected supplier is an SPE Preferred Provider. Please refer to SPE Global Purchasing Policy issued by SPE Corporate Procurement. 10.1 Fair Procurement/Supply Chain Ethics The selection or recommendation of the suppliers of goods and services must be based on competitive price, quality, delivery, and other objective standards. Purchasing decisions, including the selection of suppliers, must be based upon the business benefit to SPE and its customers, and no trace of favoritism should be part of the buying process. This requirement applies not only to employees in charge of procurement, but also to any other employees who influence the buying process. SPE expects its suppliers and contractors to uphold the policies concerning compliance with applicable laws, respect for human rights, environmental conservation, and safety. All supplier contracts must be reviewed by the SPE Legal Department prior to any binding commitments being made, and must be approved per COFA guidelines before the contract is executed. Supplier contracts should be retained in accordance with the SPE’s Retention Policy and SPE Global Purchasing Policy.


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Supplier/Third Party Information Security Sony Global Information Security Standard (GISS) policies have been established to ensure the protection of sensitive and confidential SPE information. The policy covers the exchange of, or access to, sensitive information with suppliers and other third parties. Any information deemed sensitive must be protected by a non-disclosure agreement and a data security risk assessment must be conducted for any evaluation of a supplier for IT or software services. 11.0 Treasury Policies & Procedures 11.1 Opening and Closing Bank Accounts Only SPE Corporate Treasury is authorized to open, close, or modify bank accounts. On a semi-annual basis, SPE Corporate Treasury will request that Division CFOs, Production, and Territory Finance certify to the status of bank accounts opened, closed, and modified. Specific requirements for establishing and terminating banking relationships and accounts are contained in the SPE Treasury documents and procedures available on mySPE. 11.2 Bank Account Signatories The Treasurer and Assistant Treasurer shall be signatories on all bank accounts and the total number of signatories shall not exceed six, unless pre-approved by SPE Corporate Treasury. It is the responsibility of the Division CFOs, Production, and Territory Finance to notify SPE Corporate Treasury on a timely basis when terminated employees should be removed as an authorized bank signatory. On a semi-annual basis, SPE Corporate Treasury will request certification from Division CFOs, to confirm the signatories of active bank accounts. Specific requirements for bank signatories are contained in the SPE Treasury documents and procedures available on mySPE. 11.3 Petty Cash Petty cash accounts may only be used if pre-approved by SPE Corporate Treasury. Petty cash funds should be kept in locked cabinets or vaults to ensure limited access. Each petty cash account should have designated person(s) who are responsible for custody of the funds and receipts. The petty cash account should be reconciled at least once every thirty (30) days by a person who does not have physical access to the petty cash and receipts. 11.4 Wire Transfers See section 5.8 of this guideline document for discussion on payments by use of Wire Transfers.


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11.5 Direct Debits Reverse wires and ACH direct debits to SPE bank accounts (e.g., the vendor deducts directly from an SPE account) are strongly discouraged and must be pre-approved by SPE Corporate Treasury. Specific requirements are contained in the SPE Treasury documents and procedures available on mySPE. 11.6 Manual Checks: See section 5.13 of this guideline document for discussion on Urgent (Manual) Check request/payment process. 11.7 Voided Checks See Section 5.14 of this guideline document for discussion on safeguarding Voided Checks. 12.0 Reporting & Reconciliations 12.1 Information of transactions with an Equity Company Territories should report and disclose any SPE related party transactions in their Internal Controls Checklist. 12.2 Definition of Related Parties Related parties include:

• Affiliates of the entity • Entities for which investments in their equity securities would be required to

be accounted for by the equity method by the investing entity • Trusts for the benefit of employees, such as pension and profit-sharing trusts

that are managed by, or under the trusteeship of management • Principal owners of the entity and members of their immediate families • Management of the entity and members of their immediate families • Other parties with which the entity may deal if one party controls or can

significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests

• Other parties that can significantly influence the management of operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.


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12.3 Definition of Affiliate A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. 12.4 Reconciliation of Accounts The following disbursements-related accounts should be reconciled on a recurring basis as indicated. The reconciliations should have evidence of review by appropriate management and be retained in accordance to the SPE’s Record Retention Policy located on mySPE. 12.5 Bank Accounts All bank accounts should be reconciled at least monthly. All reconciling items should be documented and investigated. Outstanding reconciling items should be resolved on a timely basis. They should generally not be outstanding or unresolved for more than 60 days. 12.6 Petty Cash Accounts Petty cash should be reconciled to receipts and authorization documents each time the funds are replenished and at least monthly to the general ledger. 12.7 Goods Receipt / Invoice Receipt (GRIR) Account The GRIR account should be reviewed at least monthly. See sections 5.1. 5.5, and 5.7 of this document for further details regarding review and reconciliation of the Goods Receipt/Good Invoice Account. 12.8 Suspense Accounts Disbursement-related suspense accounts should be reconciled on a monthly basis to ensure items are clearing the account properly and timely. Suspense accounts may include those for cash and accounts payable, as well as for interface files from other sub-ledger systems (e.g., procurement POs) or inventory management systems (e.g., goods receipts, invoices). Items in the suspense accounts should generally not be outstanding or unresolved for more than sixty days. 12.9 Intercompany Intercompany accounts, both with other SPE entities and with Sony sister-companies (i.e., Affiliates) should be reconciled on a monthly basis so that a proper and timely elimination of intercompany is performed during the consolidation process.


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13.0 Mass Data (Invoice) Uploads Mass data uploads are used only when the end user needs to post a high volume of multiple line entries for a vendor in SAP. This process is outside the non-PO and PO procedures because the end user imports data from an excel sheet into SAP and creates one journal entry transaction. Domestically, this process is not commonly used and is restricted to users previously approved by AP. Prior to setting up mass data uploads, AP should be informed of the specific business justification. Mass data entries will result in a single disbursement to the associated vendor. For example in the U.S., mass data uploads are used for liens, garnishments, and freight data uploads. When these entries are parked in SAP, approvals are required and routed according to the designed hierarchy. Once the approval process is completed, parked entries will be posted in SAP. 14.0 Definitions/Notes SSC – Shared Service Center (located in Poland) Xerox Share Service Center – Scans invoices SPiDR – Front-end for review of actual scanned documents Stellant – Database/Program (Back-end) that holds the documents i.e., invoices ARIBA – PO System SAP – GL System 15.0 FAQs / Support

• International ARIBA Overview and Frequently Asked Questions - are available on mySPE

• SAP technical issues - call (310) 244-2188 • SAP European Support Help Desk can be reached by e-mail • COFA training materials – on mySPE, type “SAP Global Support”

16.0 Appendix RAD forms The following documents may be found on mySPE

• ARIBA International Guide and FAQ – Vendor Maintenance Request • ARIBA Approval Flow Interim Change Process.xls • International ARIBA Overview and FAQ.doc • Vendor Maintenance Request Translation List • Company Code QRG.doc • Scanning

o 1.0 EMEA Invoice Receipt Mail Sorting.doc o 2.0 EMEA Invoice Batching and Imaging.doc


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• Italy – All other Scanned Documents type list.xls • Accounts Payable Invoice Batch Cover Sheet.xls • Accounts Payable Expense Report Cover Sheet.xls • SPIDR_ICF_UAT_guide.pdf • Stellant (SPiDR) to SAP Reconciliation Guide.doc • SPiDR Troubleshooting Guides

Non-PO Invoice Process Flow

o O o ce Cod g/ out g

Sca ed S o O o ce o o

Ter

ritor

y F

D/C

oder

AP

Cle

rk

Scanned Invoices Received

Coding Known?

Complete Coding & Post

InvoiceFV60

Enter Vender Line &

Park InvoiceFV60

Coder Complete &

Post as BlockedFBV0

No

Yes

CoderAccept/Reject SBWP/FBV0

Process Rejected InvoiceSBWP

No

Yes

Enter Coder’s SAP-id

Page2

Start

Enter Reject Reason Text

YesAccept/Reject SBWP/FV60

No


End

End

Approval Workflow is Triggered

(Background)

Page2

No

Reject & Cancel

Workflow

Cancel Workflow & Re-Submit

Yes

Re-Submit From Stellent YesEnd


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PO Scanning Process Flow

O o ces

Sca ed S O o ce o oA

P C

lerk

SAP Invoice Entry – PO Matching

MIRO

Post InvoiceYes

No

StartScanned Invoices Received

Accept/Reject


End

No

Yes

Yes EndCancel

Workflow & Re-Submit

End

Re-Submit From Stellent

Reject & Cancel

Workflow

Note – A PO invoice can be posted into SAP even if the Goods Receipts step has not been completed,

but the invoice will be automatically blocked from payment (R block) by SAP

since the 3-way match cannot be completed.

SAP will also automatically block a PO invoice from payment if the amount

differs from the PO amount by more than the

allowed tolerance.


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ICD – Vendor Master Maintenance Process

SAP

ARIB

A

Business Unit Prepares VMRCreate/Change/Block/Unblock/close request

Vend Master MA Review

and Approval

Supervisor Approval

Approved ?

Interface Creates/Changes Vendor

BU notified and Ariba

data update

VMDMA Reviews Master

Data and Confirms Vendor

FD Approval

Check if vendor Exists Yes/No

Yes

No

Yes

Vendor Verification

Process

Update Ariba and inform requestor.

Approved ?

No

Yes

Is Form Complete ?

No

Yes

EndRequest for Bank Master to

MDMA if required.

Complete Form

Start

Prevalidate Form for

Authorization/Tax numbers

PrevalidateErrors - Yes/No

Yes

Chart of Financial Authority Procedures & Guidelines · Chart of Financial Authority . Procedures &...

Documents

Transcript of Chart of Financial Authority Procedures & Guidelines · Chart of Financial Authority . Procedures &...