ArticleMap.com

How to Comply with Sarbanes Oxley and Protect the Interests of Your Employees, Vendors and Investors

Following numerous accounting scandals including Enron, WorldCom and Tyco International, the U.S. Federal government passed the Sarbanes-Oxley Act of 2002. Sarbanes-Oxley, otherwise known as SOX, regulates financial accountability and information accessibility. It enhances standards for both public companies and public accounting firms. The Sarbanes-Oxley Act is designed to protect the interests of employees, vendors and investors. Any corporation failing to meet minimum compliance requirements, and any executive held accountable under its provisions, can now face criminal charges including, but not limited to, incarceration.

For those that do not know, SOX outlines several organizational and operational compliance mandates management must fulfill to demonstrate its control over financial reporting. These include external auditor affirmation as to whether or not the company and its management team has effective internal financial reporting controls in place and affirmation of the level of accuracy reflected in the company's financial statements. Extensive, and quite costly, regulations mean external auditors must clearly understand transaction flow. They also require routine fraud risk assessments, accurately evaluate and assess the effectiveness of internal, company-wide fraud detection and financial reporting controls.

Why IT Controls is So Important When Complying with Sarbanes Oxley

Just as significant as organizational and operational controls, if not more, so are the information technology mandates SOX introduces. Under the Act, ultimate responsibility for data management, security, reliability, integrity and accuracy reside collectively with the Chief Information Officer (CIO), the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO). Pursuant to Sarbanes-Oxley, the CIO is accountable for the systems that control and report financial data, while the CEO and CFO are accountable for actual financial reporting.

Electronic document archive and retention play a key role in SOX compliance, with everything from Word, Excel and PowerPoint files to instant messages and email communications in question. It's not enough anymore to simply store these documents. Public corporations must have an effective data management solution in place guaranteeing retrieval in a timely fashion. This means full lifecycle management, from document creation and retention to auditing and destruction. Under the Act, wrongful business record deletion can result in serious legal ramifications.

Here Are My Top Tips to Help You Comply with Sarbanes Oxley

While there are broad-reaching measures corporations could take to ensure compliance, the Act boils down to three core issues:
1. Documentation
2. Control
3.Accountability.

All corporations should take the following steps toward Sarbanes-Oxley compliance:

Develop a corporate accountability structure ensuring proper oversight and ownership
Implement a solid technological structure promoting effective and efficient compliance processes
Invest in one, united, web-based financial and non-financial information source offering real-time, or immediate, access to applicable stakeholders
Expand information flow and collaboration
Document accurate and timely financial reconciliations using Excel, Access or other customized technology solutions
Encourage employee evolvement and concern escalation
Document IT systems' usage rules and develop a financial information audit trail
Introduce in-house auditing procedures
Implement risk-rating processes for all financial accounts
Understand and map financial reporting process, IT systems and internal controls
Identify financial reporting, IT and internal control risks
Adopt a continuous improvement process
Document and test controls
Perform and update controls assessments corresponding with any financial reporting process changes

When corporations thoroughly understand Sarbanes-Oxley and implement strategic processes within both the IT and finance departments, they not only ensure compliance, but they also promote fairer, more uniform disclosure practices and clearer accountability lines.

Article Source: http://www.articlemap.com

About the Author:
Data Protection Expert, Tim Rhodes has helped hundreds of companies just like yours protect their most valuable asset online. Now, you can discover if you’re doing everything you can to prevent information loss with Tim’s Free Risk Assessment Quiz. Take the FREE QUIZ now at: www.webargos.com/quiz and see if your company is at risk!

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Management Articles Via RSS!

Additional Articles From - Home | Business | Management

Conflict Between the ER and HRM - By : Robert II Smith
Computerization of Modern Management - By : Robert II Smith
Effective Management of Budget - By : Robert II Smith
Basics About Asset and Liability - By : K Singh
Interim Management – The Dynamic Demographic - By : Daniel Day-11606
Definition of Management Development - By : Robert II Smith
Post-modern Theories of Management - By : Robert II Smith
Business Budget Management - By : Robert II Smith
International Human Resource Management - By : Robert II Smith
Performance Management - Five Factors for Success - By : Russ Silva

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Submit Articles
Member Login
i Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds

Press Release
About Us
Link To Us
Contact Us
Privacy Policy
Terms of Service

Highly Recommended:

Sponsored Ads:

Recommended Hosting

Related Sister Site:
Submit Health Articles Now