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Sarbanes-Oxley presents both problems and opportunities for
those who approach compliance with the appropriate end goal in
mind – to increase shareholder value. The challenge is
finding the time, expertise, and resources to implement a
meaningful compliance program. The opportunity is to increase
your financial performance by increasing customer and employee
loyalty, improving operational effectiveness and excellence.
The
complexity of the Act coupled with the immediate nature of the
compliance requirements will prohibit most companies from
tackling Sarbanes-Oxley alone. It is highly recommended that
you seek help from:
-
Counsel
– To interpret the laws
-
External
auditors – To interpret changes in audit and accounting
rules
-
Independent operations and subject-matter experts – To
assess overall compliance and assist in determining the
program requirements appropriate for your business based on
demonstrated best practices.
The first step in compliance is to form a Sarbanes-Oxley
steering committee or task force to assess the impact of the
act on your company. It is recommended that you seek advice
from the groups listed above to aid in your assessment.
Next, set goals and objectives for your compliance program
keeping in mind that this is an opportunity to improve
corporate performance.
Once your goals are set you can begin the actual program
design. Your compliance program should include the following
elements:
-
Compliance assessment and rating pre- and post- completion
-
Project planning and documentation
-
Formal reviews with Audit Committee and external auditors
If you are not sure how to test your compliance, see our
Sarbanes-Oxley Checklist.
The total project will consume time and money. The amount of
resources required will be determined by:
-
The
goals and objectives of your program
-
The size
and complexity of your company
-
The
state of your current compliance
-
Program
design and management
It should be expected that the bulk of your resources will be
focused on the evaluation, testing and documentation of your
internal procedures and controls as required by Sections 302
and 404 of the Act.
We recommend that you set out to improve the quality and
documentation of internal procedures and controls as a means
to increase revenue, and reduce operating expense.
Furthermore, if you compile a comprehensive Sarbanes-Oxley
compliance documentation package and you can demonstrate the
effectiveness of your programs, you may find an opportunity
to mitigate some of the additional legal and accounting fees
associated with Sarbanes-Oxley compliance.
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