Compliance and the implications of sarbanes-oxleyby Udit Jain on June 13, 2007
The introduction of the Sarbannes-Oxley legislation in the US has placed significant demands on Chief Financial Officers. CFO’s must now ensure that their reported financial statements are a true reflection of the state of the business. While this has always been the assumed case, and auditors might sign the accounts, declaring that they are a trued and fair view, in many highly publicized cases it has later been proven otherwise. This new legislation requires the CEO and CFO to both sign the accounts and risk jail sentences for false declarations. With this in mind, achieving true reporting compliance has become much more important to the CFO.
One way that many companies are addressing this issue is to upgrade their financial systems, desiring comprehensive, fully integrated and readily auditable systems as their new solution to ensure better reporting. Additionally some larger companies are appointing compliance officers. Smaller businesses with less complexity do not need to go as far as appointing compliance officers. For them, having an effective, up to date financial software solution and a robust auditing process will address the majority of the problem posed by the new legislation.