Sarbanes Oxley Compliance

Owning and running a large financial institution involves a lot of responsibility. Customers, the government and the financial community as a whole want to know that your company is being run well and honestly. There are regulations and audit and other reports that must be filed on an ongoing basis.

In 2002, because of the Enron and Worldcom failures, Senator Paul Sarbanes and US Representative Michael Oxley sponsored the Sarbanes Oxley Compliance legislation which is a major change in the federal security laws. This is a complicated set of regulations and reporting requirements designed to keep public companies and financial institutions accountable to society.

Since this legislation became law, financial companies and organizations have been struggling to correctly meet the federal financial reporting requirements introduced by the Sarbanes Oxley Compliance (SOX or SARBOX). Though most institutions have managed to complete their SOX compliance work each year, the cost in time and effort has been daunting, with errors a potential problem. Manually compiling the reports and required documentation leaves much to be desired. It often fails to keep top management abreast of their company's state of compliance. 

There are many new software programs with the technology and capabilities to make it easier and more efficient for financial institutions to meet Sarbanes Oxley Compliance. There have been seven steps suggested in planning the best program for meeting the requirements.
Step #1 is to have a single system to store both financial and non-financial information to provide a complete picture.
Step #2: Put the information on a secure web based system available to all pertinent people in the institution.
Step #3: Information needs to be available in real time, visible immediately as needed to meet SOX Compliance requirements.
Step #4: The financial institution needs to pick software that will collect  indicators from all sides of the company, compiling it in needed form for compliance.

The last steps are:
#5: Any successful program needs flexible projection capabilities. Companies need to be able to predict what will happen if there are changes in the company or business climate around them.
#6: Financial institutions need a web based system providing collaboration and continuous flow of information. All parts of a company need to be involved in collecting, reporting, cleansing and signing off on company data.
And finally #7: Web based programs need to have language support in place to address the complex reporting requirements of the European Union as well as the Sarbanes Oxley Compliance.

According to a survey by Korn/Ferry International, Fortune 500 companies are spending on average $5.1 million a year in compliance expenses. This 2004 information shows the need to be as efficient and cost effective as possible in meeting the Sarbanes Oxley Compliance requirements. Having a system and proceedures in one place for easy access for authorized officers to get information needed to meet SOX requirements is the key to success in compliance.

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