Saturday, September 03, 2005

Staying up to date with the Sarbanes-Oxley Act

All eleven sections of the Sarbanes-Oxley Act, also known as SOX, are now in effect. Thus, affected companies are obliged to submit an annual assessment of the effectiveness of their internal financial controls to the SEC. In turn, an external auditor is expected to audit and report on each company’s internal financial controls in addition to their financial statements. SOX compliance also ensures that financial reports are easily traceable back to source data, and that any changes to source data have been documented properly as to what was added, changed or deleted, by whom, at what date and time, and for what reason. It’s this traceability requirement that has the greatest implication for managing your maintenance function and how you use your CMMS.

It has been little more than three years since the Sarbanes-Oxley Act was signed into law following the scandals at several high-profile companies such as Enron, Global Crossings, WorldCom, Tyco and Arthur Anderson. The Act was designed to provide a proper accounting framework and rules around corporate governance for any public company, wholly-owned subsidiary or private company preparing to go public that is doing business in the United States. The legislation’s stated objective is "to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws."

Staying up to date with the Sarbanes-Oxley Act

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