Hi guys, my company needs to be SOX compliant and: 1. I don't know what it means; 2. What it would implicate in terms of ERP/Financial Processes; 3. Is it really possible to implement those rules on Emerging countries like Latams, Africa and Asia. The ones you need to ship with cigarets assortment to make sure your shipment is not stuck in toll transit.
SOX compliance is due to the Sarbannes-Oxley Act that was in response to Enron, WorldCom, etc. It is a very large process to start, because you need to document every item that flows to the financial statements. Which is everything you do.
SOx is the bane of modern business. It stands for Sarbanes-Oxley, which is a law that was passed in the US that was originally designed to "clean up" businesses. Section 404 requires a management assessment of internal controls, which is the most expensive and worst piece of this legislation (although there are many areas to choose from). The most recent study that I have seen performed a cost-benefit analysis that shows the Sarbanes-Oxley Act will cost public corporations a net of $1.4 trillion (total cost - total benefit). As to your questions: 1. Above. 2. All financial processes that contribute to the financial statements have to be process flowed documented to insure proper controls. 3. Not sure about the possibility, however, any process that contributes to a public US corporation will be required to be fully SOx compliance. (As an aside, I would not document illegal/unethical behavior, even if it is a part of the process)
Thanks, I need to find all sources. We need to be SOX complaint in June 2007, knowing that you need to have at least 1 year of history in the system.
SOX didn't create anything new, other than executive approval and signing (known as 302 certification). All the controls (known as 404) were already law (see 'Treadway Commission', and COSO), but people had simply stopped following them. To become compliant with what they had stopped doing, they had to spend additional millions (only in the largest companies). Questions: 1. see above 2. Financial processes (from payroll to A/P to financial reporting) will all be mapped and documented. Reporting standards will also increase. 3. Any company that registers in the USA will need to be compliant. I just worked with an interational firm where I did all this stuff. It was a pain and they considered de-listing from the US Exchange. It was a Dutch company, and we had to implement their controls in the Netherlands, which they hated. It is an intensive process, one that will require big initial start-up costs.