The Sarbanes Oxley ( Sox ) Act Of 2002 Essay

The Sarbanes Oxley ( Sox ) Act Of 2002 Essay

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The large accounting scandals at Enron, Tyco, and WorldCom amongst others prompted the U.S. government to take action. That action happened in the form of the Sarbanes-Oxley (SOX) Act of 2002. Dubbed after U.S. Senator Paul Sarbanes and Representative Michael Oxley, it ordered a number of reformations to improve corporate liability, improve financial disclosures and fight corporate and accounting scams, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to supervise the actions of the auditing profession. (, 2014) With eight years under SOX are we adequately equipped to meet all the requirements laid out, or is there still work to be done? As an IT professional, we are at the heart of businesses progress with meeting SOX directives. There are eleven titles within SOX, but two of these are regarded to be the core that IT managers must focus; section 302 and Section 404. Section 302 deals with the requirement for companies to file periodic reports of financial dealings. (Soxlaw, 2003) Section 404 is management’s evaluation of internal controls; issuers are required to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. (Soxlaw, 2003) Both of these sections are best handled using IT systems and controls.
With the obligation to produce financial reports as needed, it only makes sense to have that data accessible electronically. More companies are turning to technology in their Sarbanes-Oxley Act compliance efforts in order to automate internal controls or streamline their activities. (Hoffman, 2005) As a possible IT manager, it is our job to assure the company’s financial systems are r...

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...w dynamic that requires careful considerations from all parties involved, and the IT manager needs to know all those parties well.
The last unresolved area of concern is the need to work with the other departments and managers. The IT department has to build a lasting relationship with the accounting section. Just being told to create a system that handles the company’s finances isn’t good enough. The departments have to communicate requirements to each other, so they understand what can be provided from IT and what needs to be reported from accounting. There must also be a relationship with the Human Resources (HR) Department so that we can communicate personnel requirements to executive leadership. Communication is paramount in any organization but is especially important amongst the Chief Information Officer, Chief Financial Officer and the HR Department.

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