Sunday, October 17, 2004

Preparing the Marketing Department for Sarbanes-Oxley Compliance

As companies work to meet the regulatory standards of the Sarbanes-Oxley Act, they are experiencing the legislation's effects well beyond their finance department, compelling internal marketing professionals to focus on how regulation extends to marketing and customer-related functions.

CRM-related processes like marketing discretionary spending, sales revenue recognition, service credits and product returns each have a direct effect on financial reporting. An integrated CRM system can help companies establish controls for the financial reporting related to these processes to easily support compliance with the legislation.

Sarbanes-Oxley requires companies to establish and maintain an adequate set of internal controls for accurate financial reporting that can be audited by a third party [Section 404]. The CRM-related processes outlined above all affect a corporation's financial reporting -- and may not be top-of-mind when planning the overall strategy for Sarbanes-Oxley compliance.

Several other sections of the legislation [302 and 401(b)] have implications for customer-facing activities, including the requirements that sales figures reported for the prior year are correct. Section 409 requires companies to report material changes to financial conditions, such as the loss of a strategic customer or significant customer claims about product quality.

Preparing the Marketing Department for Sarbanes-Oxley Compliance

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1 Comments:

: It would be nice to see Marketing get off their crystal-ball pedestal and start contributing to bottomline efforts.; October 19, 2004