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Sarbanes Oxley Act of 2002 (Sox)

The Sarbanes-Oxley Act of 2002 was enacted to improve corporate governance, restore investor confidence and promote ethical business practices.

Senior executives of any publicly-traded company must now attest to their company’s internal controls and certify the accuracy of their financial statements. Information security has become a critical element in complying with this legislation and without proper security measures in place, it is virtually impossible for CEOs and CFOs to sign off on their books with confidence.

Specific sections of SOX are especially pertinent to securing an IT infrastructure such as: §302 – requires strong data controls to prevent unauthorized modification of data using integrity controls, §404 – calls for effective access control software and policies to disable employees and other individuals from gaining unauthorized access to data not intended for them, §409 – requirements are tied to data quality, such as timeliness and accessibility.

Sarbanes-Oxley was motived by the never-ending waves of corporate financial scandals (Enron, Arthur Andersen, WorldCom, etc) and is named after the two sponsoring congressmen, Senator Paul Sarbanes and Representative Michael Oxley.

The most important provisions of Sarbanes-Oxley include:

• Accelerated reporting of trades by insiders
• Public reporting of CEO and CFO compensation and profits
• Auditor independence and a prohibition on audit firms offering value-added (read "conflict of interest") services
• Companies are now required to have an internal audit function, which must be certified by external auditors
• Certification of financial reports by CEOs and CFOs

Converting Financial Controls into Calculated Gains

BII Compliance services are designed to address enterprise-wide Sarbanes-Oxley compliance requirements and transform them into competitive advantage.

Companies can better manage risks and create a solid financial management environment with SOX compliance to strengthen their internal controls structure.

BII Methodology for Sarbanes-Oxley Compliance:

Internal Controls Analysis – An initial study of the existing internal controls that documents financial controls activities throughout the compliance cycle.

Strategy – A step-by-step action plan that addresses the key challenges of on-going compliance, resource planning, project schedules and cost estimates.

Internal Controls Documentation – An important activity that details the business processes and reviews the overall effectiveness of the financial control environment and defines risk management procedures.

Testing – Enabling organisations to test run all possible identified controls to ensure effectiveness of controls and enable management to take corrective measures.

Implementation – A comprehensive process of implementing tested internal controls and systems.

Tools for Remediation – If any omissions or flaws are discovered while testing financial controls, BII will introduce patch solutions/applications such as alert management tools.

Reporting and Management – Recording a complete scenario of compliance evidence on internal controls application. Seek consent across the enterprise on approach, methodology and implementation of the project

Please contact us for more information on Sarbanes Oxley Consultancy, Solutions and training