context
Global organisations are facing increasingly demanding reporting obligations from central banks, financial services authorities and other regulators. Inaccurate or incomplete reporting can undermine any company's compliance program.
The Sarbanes-Oxley Act (SOX) of 2002 is considered being the most dramatic change to federal securities laws since the 1930s, as it radically re-shapes federal regulation of public company corporate governance and reporting obligations. It also significantly tightens accountability standards for directors and officers, auditors, securities analysts and legal counsel. The processes and documentation required for compliance are rigorous and companies must implement adequate procedures to meet their reporting obligations.
This new law is not merely a financial issue. It has completely changed the rules of business and affects all departments of the organisation. As a consequence, Sarbanes-Oxley nowadays greatly affects companies' approach to business intelligence and corporate performance management, as successful compliance efforts require the implementation of new corporate policies and transparent processes together with proficient supporting IT systems. In this area, multiple domains including architecture, information modelling, data management, ETL implementation, operations and reporting are affected.
key considerations
Business intelligence and corporate performance management solutions must be able to address Sarbanes-Oxley requirements. The major criteria to be considered include:
- internal controls & procedures: public companies need to establish adequate and effective internal controls that conform to standards and ensure consistent and accurate data analysis. The effectiveness of the company's internal control over financial reporting needs to be re-assessed every year.
- increasing transparency: public companies must construct an internal control system for tracking and auditing of financial processes to obtain greater transparency; the companies' executives and external auditors must testify to its effectiveness.
- corporate responsibility & certification: public companies are required to validate the accuracy and integrity of their financial management. For this purpose, it is essential to have a system that generates truthful and up-to-date reports on internal controls and financial statements that the company's CEOs and CFOs can truthfully certify with confidence.
- timely reporting and disclosures: public companies must create and optimise a near real-time reporting system to meet shorter deadlines for report filing. Any additional information concerning material changes in the financial condition or operations of the company must be disclosed well in time.
Keyrus and SOX
The requirements issued through the Sarbanes-Oxley regulatory framework have an immense impact on solution implementation and must be considered with the necessary care. Any implementation following the market's best practices though will be compliant to a large extent. Keyrus delivers SOX-compliant solutions in any implementation, and methodically guides companies who must demonstrate compliancy.
