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Sarbanes-Oxley Act – Compliance Issues

Sarbanes-Oxley Act compliance is not a one time affair but a life long partnership which has to be now carried on for eternity. It is not comply and forget type of project but has to be built in your company’s work environment and processes followed by your company for preparation of financial reports. SOX compliance must be deeply rooted in your work methodology and your executive must be trained properly to ensure compliance and the cost of non-compliance is very very high.
Compliances require a lot issues to be resolved before you can achieve SOX compliances. These could be;

Mindset: The mind set of the executive require dramatic improvement it is not going to help. The must make up their mind that they have to live with the law whether they like it or not. It has become the question of their own survival unless they fall in line with the requirements of the law.
Manpower: Initially you may require employing extra manpower to ensure compliance but as the compliances take their roots in the business methodology the manpower needs reductions.
User Roles: User roles must be clearly defined and documented other with the result will be chaos and pointing of fingers at each other in case of any problem.
Approach: Proper planning and systematic approach to Sarbanes-Oxley Act compliance is required. Unless you plan and document each of your steps, you are not going to succeed in achieving your goal of Sarbanes-Oxley Act compliance.
ImpAct of technology: Unless you use technology to your advantage, implementing the provision of the Sarbanes-Oxley Act would take you a few years. You need to make significant investments in upgrading your Information technology setup to make it SOX compliant. Your accounting package or the financial reporting package should be upgraded to SOX compliant ones.
Risk Assessment: Inadequate risk assessment leading to serious errors in your financial statement should land you behind bars with a million dollar penalty on your head.
All these issues must be sorted out before you jump into the SOX compliance bandwagon and burn your fingers.

Article Source: http://www.e-learnet.org

Will Hughs work can also be found on System Disc on topics such as How do I resolve Error 678 and Technology Source Effect: Information Visit Sarbanes-Oxley Act – Compliance Issues.

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