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Control, monitoring and Auditing ofSarbanes Oxley Software SystemsThe Sarbanes Oxley Act represents one of the most far reaching changes in U.S. securities law since the Great Depression. It's implementation and enforcement take place in a technological environment that has changed in ways not thinkable even a few decades ago. Enterprise Resource Planning, ERP systems, and enterprise application systems in general, often have automated manual processes spanning individual departments, locations and even whole companies. While the automation of these systems has increased employee productivity and enabled far reaching strategic initiatives, the process has resulted in intricate systems that can be difficult to control, monitor, and audit. The Sarbanes Oxley act has regulations to ensure that these systems are controlled, audited and monitored so that they are less liable to abuse. Potential problems can occur if, for example, employee X is transfered from the purchasing department to accounting. What if his system security rights were not removed for his purchasing operations. Potentially, he may have rights to raise a purchase order and to also authorise it. He could effectively raise an invoice and pay himself. Sarbanes Oxley requires that these rights are controlled and procedures are in place to avoid such actions. Executives report that directors at their company are expected to have more input on a variety of issues, particularly risk identification and risk management. The Reporting module of one Sarbanes Oxley Software Atlas Planning Suite allows customers to project revenues, costs, discounts and allowances to ensure that corporate projections are developed in a consistent manner. 72 percent of companies say their company has established a whistleblower complaint process, as required by Sarbanes Oxley, even though this provision is not yet effective. A technology group was established for Sarbanes Oxley Software and the group includes Hewlett Packard, Hitachi Data Systems, Network Appliance, Open Text, Oracle, Plasmon, Sun Microsystems, and Veritas Software. For many companies Self-assessments by audit committees and boards have proven very effective in uncovering potential problem areas in Sarbanes Oxley Software.Several further initiatives are also in place in many companies. 28 percent of companies have appointed or plan to appoint a lead director or non-executive chairman, since passage of Sarbanes Oxley. Areas to Receive Increased Board Attention. Most senior executives expect their board will have more to say in five critical areas. The greatest increase in board attention in the areas of corporate risk, financial reporting, ethical issues, and regulation. Only five percent report an increase in the number of complaints received and addressed by the audit committee. Larger companies can afford to spend millions of dollars to implement control system monitoring tools, managers of small to mid sized companies can be unsure of how to move forward if their budgets cant accommodate expensive advisors and systems. Suggested BookThe book, Managers Guide to the Sarbanes Oxley Act, provides a highly accessible, simple, and practical approach to help you assess your internal control structure at the transaction level. Designed to bea cure for the Sarbanes Oxley Software headache and common fraud,Managers Guide to the Sarbanes Oxley Act introduces the groundbreaking and practicalControl Smartapproach that not only meets the requirements of Sarbanes Oxley, but also alerts you if operational controls stop working or are otherwise compromised.The book, Control Smart Framework, detailed advice on identifying threats and vulnerabilities, and how to protect you are invaluable to anyone directly or indirectly involved in Sarbanes Oxley compliance. In addition to the rich information and clear explanations of key elements of Sarbanes Oxley, the appendices also provide useful information especially appendices B,Key Performance Indicator Reporting , C - Examples of Key Performance Indicatorsand D,Control Activities . How to Comply with Sarbanes Oxley Section 404.Assessing the Effectiveness of Internal ControlISBN 0471653667 . Sarbox will cost UK corporates 120m. LSE predicts regulatory burden will prompt a dash to de list from US markets to avoid burden of compliance. 122mbill for implementing stringent rules on internal controls under section 404 of the US Sarbanes Oxley Act. London Stock Exchange revealed it was anticipating a surge in de listings by companies fleeing the increasing burden of regulatory compliance on US markets. One of the heaviest blows came in the form of section 404, which will force UK companies with a dual US listing to document and annually test key controls. There are many problems companies are encountering with Sabanes Oxley Section 404. One CFO quoted in the report complains about armies of auditors in their mid twenties who know nothing about business and whose judgmentis confined to whether or not they can check off a box on some list. Big Four firms are reporting a doubling of auditing revenues, thanks to Sarbanes Oxley. Internal controls that will provide strong assurance that financial information are accurate. But many companies are in the position of just trying to comply with the rules. The effect of rising costs of Sarbanes Oxley on the fees companies are paying to external auditors is on the rise. Deloitte published a really useful, short whitepaper titledUnder ControlSustaining Compliance with Sarbanes Oxley in Year Two and beyond. Meeting first year SOX 404 compliance requirements was a real fire drill for many companies. China Construction Bank, one of ChinasBig Fourstate lenders, is considering shelving its plans for listing its shares on the New York Stock Exchange. Presumably, the reason for skipping the NYSE listing is the expense and trouble of compliance with Sarbanes Oxley. There could also be another side to the story, according to the FT article. It is also possible that Sarbanes Oxley would shed light in dark corners that the bank might like to keep dark. Chinese banks have had large amounts of assets tied up in non-performing loans and have run into obvious problems with corporate governance Sarbanes Oxley sure seemed like a good idea right after Enron, butnow that companies are facing the effort and costs of implementationthere is backlash leading to an effort to get Congress to change the law. The title of a good book is, Beyond COSO,Internal Control to Enhance Corporate Governance, by Steven J. RootWiley, 1998. Sarbanes Oxley Act, demand planning, demand management, inventory management, sales forecasting and solutions are also essential. The Sarbanes Oxley Act demands that businesses develop processes and procedures so that corporate leaders can certify the forward
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