Reasons to Love Sarbanes Oxley Compliance?
• IPO Fraud is less likely with Sarbox
• Drop in accounting fraud since 2002
• Sarbanes Oxley boosts investor confidence
• Sarbox holds CEOs accountable
• Sarbanes reduces cost of financial controls
• increases understanding of internal controls to figure out where money can be saved
Amper has developed an integrated risk-based approach to Sarbanes-Oxley compliance that is designed to support the internal control and financial statement assertion requirements mandated by the Sarbanes-Oxley act.
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top-down risk-based approach
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approach founded on COSO
• provide cost effective solutions
While Sarbanes Oxley Compliance is critically important, it is just one element of an effective approach to corporate governance.
Sarbanes-Oxley is intertwined with an organization's broader enterprise risk management (ERM) considerations.
Resources within public companies and private companies are being re-directed to ensure successful compliance due to increasing sensitivity to regulatory compliance such as Sarbanes-Oxley, the PATRIOT Act and FDICIA.
Compliance Services:
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Sarbanes-Oxley
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PATRIOT Act
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FDICIA
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BSA
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GLBA
 Articles
International
Financial Reporting Standards —
Is the World Ready for Convergence?
Giving International Financial Reporting Standards One Voice
Accounting Standard 5:
A Kinder, Gentler Compliance Standard
What Private Companies Need to Know About Internal Controls
Who Audits America?
The Reality of the CPA's Role
SEC Update Spring 2006
Relief From Section 404 Compliance For Smaller Public Companies
White Paper on Stock Option Backdating
When it comes to Participant Deferrals - Fiduciaries Beware - Don't Be Late
The Changing Audit, Practical Accountant Magazine
Staying in Control
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Four Reasons to Love Sarbox
Conventional wisdom holds that Sarbanes-Oxley compliance is a nightmare for companies and their executives. That attitude was tempered a bit last year when the SEC relaxed some of the guidelines used by external auditing firms. But for those who are still doubtful, we asked executives, bankers, VCs, and auditors what they like about Sarbox. Many argued that the regulation is a great tool for companies,
managers, and investors. Here’s why:
#1: It Bursts the IPO Bubble
The dot-com boom and subsequent bust a decade ago was largely the result of companies going
public when they weren’t financially viable; that kind of fraud is far less likely under Sarbox. Thomas Martin, a partner at law firm Dorsey & Whitney, says Sarbox encourages small and growing companies to become profitable and have a strong revenue stream before they make their public debut. "Companies are intelligently attempting to acquire and build enough bulk to justify the expense of Sarbanes-Oxley," Martin says. According to Doug Brockway, managing director at investment bank Innovation Advisors, a number of smaller public companies are making the decision to go private. "The burden of Sarbanes Oxley convinces them that they’re not getting enough benefit from being publicly held," he says.
#2: It Increases Investor Confidence
There has been a noticeable drop in the number of major cases of accounting fraud since 2002.
PriceWaterhouseCoopers found that federal class-action suits were down 36 percent in 2006
compared to the year before, and cases overall were at a 10-year low. "The law did exactly what
it was intended to do: reestablish investor confidence after a series of large financial scams," says Sanjay Narain, a partner at Ernst & Young. "Investors want their money to be safe, and Sarbox gives them that sense of safety." J.R. Reagan, managing director of the public sector security group at BearingPoint, adds that strong financial controls provide protection from employee theft and other PR disasters that influence investors. "When TJ Maxx had its customers’ credit card data stolen," he says, "the company learned the hard way that the perception that you have weak financial controls can have a serious adverse effect on your stock price."
#3: It Holds CEOs Accountable
It’s not unreasonable to expect CEOs and CFOs to know whether or not their companies are
financially sound, says John Hagerty, vice president and research fellow at AMR Research. "The
bottom line is that the quarterly statements must be signed by the CFO and the CEO — the exact
people that any sane investor would expect to know what’s going on inside the company." If Kenneth Lay had been forced to sign Enron’s financial reports, his "I was in the dark" defense would have seemed laughable.
#4: It Really Does Reduce the Cost of Financial Controls
Rolling financial controls into one report can reveal expensive redundancies. "Once a company
has achieved compliance, it typically has sufficient documentation and understanding of internal
controls to figure out where money can be saved," says Daniel Schroeder, an officer at accounting firm Amper, Politziner and Mattia. Ernst & Young partner Narain agrees, citing the example of a client who had delayed implementing automated controls in order to meet a software installation deadline. Instead, the company used paper-based methods to ensure that a manager approved every change to a financial record. While this was easier to implement in the short term, the paperwork took extra manpower and was prone to errors — a red flag for external auditors. A Sarbox audit strongly recommended that the company go back and implement the automated controls, which not only made the controls easier to audit, it significantly reduced manpower costs.
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