The Complicated World Of Finance

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 procedures in one place for easy access for authorized officers to get information needed to meet SOX requirements is the key to success in compliance.

Sarbanes Oxley Compliance Articles

Sarbanes Oxley Act

by Ross Bainbridge
The Sarbanes-Oxley Act is an act passed by the U.S. House of Representatives in 2002. The act covers issues such as auditor independence, corporate responsibility and establishes new or enhanced standards for all U.S. public company boards, management and public accounting firms. It is considered as one of the most significant changes in United States securities laws. The act was designed to review all legislative audit requirements. The act gives additional powers and responsibilities to the U. S. Securities and Exchange Commission.
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Centralizing Project Data = Streamlined Governance Auditing

By Ty Kiisel
Thanks to legislation like Sarbanes-Oxley, the terms "audit" and "headache" have become synonymous for many organizations. Most companies are forced to track disparate software (that is function specific) with email and spreadsheets to create an audit trail that verifies compliance to an established process. Just describing it sounds like a convoluted mess to me. I can only imagine the hassle associated with trying to keep email strings and different software logs updated-no wonder compliance audits are so expensive.
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Is Sarbanes-Oxley Really Having an Effect on Fraud?

By Ashley Ricks
When Sarbanes-Oxley regulations were created, their sole purpose was to restore the integrity and faith back with corporations and executives that were caught up in the many fraud scandals brought on by Tyco, Enron, and such. Yet, surprisingly to learn, many companies have done little to change their prevention and monitoring of fraudulent acts. This makes many wonder, "Is Sarbanes-Oxley an effective tool where fraud prevention is concerned?"
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Is Your Business Compliant With Sarbanes Oxley Standards?

By John Morris
This methodology allows you to define in a quantifiable manner the compliance tasks involved in your company. All of the companies which use a type of Sarbanes Oxley software have the same financial data collection and their reporting needs are not really one and the same...
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Serbanes Oxley and Other Compliance Training Bugaboos

By KK Arora
Compliance training gets no respect. Training managers view it as something of a bugaboo. Most trainees greet it with about as much enthusiasm as they would a parallel parking contest. So what is it, why do we need it, and how can we best go about it?
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Enabling Sarbanes Oxley Compliance

by Earl Powers
Sarbanes Oxley compliance is not a one-day, a one-month, or even a one-year project - instead, Sarbanes Oxley compliance should be built into your corporate infrastructure as early as possible when you begin making changes. The more quickly you transition your business into long-term strategy change, the better you're going to be able to control Sarbanes Oxley compliance issues.
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Sarbanes Oxley Act 404 - An Auditor's Nightmare

by Betty Hope
In the midst of corporate scandals that took the U.S. government by storm, Sarbanes Oxley Act was passed by the U.S. Congress and signed by President George W. Bush into a law on July 30, 2002. The act was passed to ensure transparency and accountability in the working procedures of the corporate world in order to restore the investor's confidence in the shaken market. Simply put, the Sarbanes Oxley Act 404 is an auditors nightmare.
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More Sarbanes Oxley Compliance Articles