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What Should You Do Now About Sarbanes-Oxley?

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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