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Why You’ll Get SOX’d Sooner or Later

For the lucky few who have been laughing at you – the SOX practitioner or control owner – their time is coming. Sure, they’ve been smiling and waving a hearty goodbye each evening, wishing you well even as they roll out of the office at a quarter to 5.

But here’s the sweet justice – SOXing is coming to a process nearer to them. Now, I don’t mean to suggest that the law or interpretation will necessarily be changed to engulf every last aspect of a business. (That would be disheartening for those that have done such a masterful job of defining and arguing scope with their auditors.)

No, my point is that all the good work that has been done around financial transactions and processes – while painful, expensive, and time consuming – has been good work. I’ve yet to talk to or hear from an excecutive that hasn’t found this educational. And there is no doubt that processes and confidence in financial numbers has improved – as much to increased scrutiny and awareness of the process as the new level of transparency.

An unanticipated consequence of all this however is that businesses are demonstrating their ability to implement improved processes and controls. Oops. If a business can do it in these key core processes – and in a short period of time – there is no reason this same rigor can’t be applied to all facets of the business. And the real rub for those snickering fools is that everyone else is now up on the lingo, up to speed on how process controls, measuring and monitor work. And management knows it works – just look at how many control improvements and remediation tasks have been resolved during the last 18 months. And no one knew/admitted those processes (core to financial reporting) were broken, now did they?

Your pity, and a wee bit of sympathy may be in order. The Finance and Accounting folks were at least used to having auditors rifling through their notebooks, and snooping through their process. When was the last time that Internal Audit crawled inside your Marketing machine? When did they last opine on your budget process? Your compensation and retention plans? Your recruitment process?

Be sure, when and if your Business Process Management folks get ahold of this, those snickering fools are going to be on one wild ride.