Sarbanes-Oxley: How Will It Affect You?

  • by Taylor Erickson, Manager, BearingPoint, Inc.
  • October 15, 2003
The Sarbanes-Oxley Act of 2002 (SOA) was enacted by the United States Congress to prevent accounting scandals and reporting problems from recurring, and to rebuild public trust in business practices. This article is a quick guide that outlines provisions of the Act that are of particular interest to HR organizations tasked with helping their companies achieve compliance.

The Sarbanes-Oxley Act of 2002 (SOA) was enacted by the United States Congress to prevent accounting scandals and reporting problems from recurring and to rebuild public trust in business practices and reporting activities across companies. The Act applies to companies traded on U.S. stock exchanges. Provisions of particular interest to HR organizations tasked with helping their companies to achieve compliance with the Act are listed below:

Internal Controls

One of the most far-reaching implications of SOA is contained in Section 404. This section outlines the responsibility of management for establishing and maintaining an adequate internal control structure for financial reporting. Your CEO and CFO are now required to sign off on the accuracy of financial reports. The first step many companies are taking is to document existing processes with the goal of assessing the effectiveness of internal controls. Vulnerabilities can then be pinpointed and appropriate authorizations and controls put in place. HR may play a key role in documenting and assessing authorization profiles and practices.

Taylor Erickson

Taylor Erickson has more than 12 years of experience with ERP systems. He has worked with SAP for eight years, specializing in SD/SCM, reporting, and compliance. Taylor is a member of the Institute of Internal Auditors and has facilitated global SAP system implementations and trained numerous SAP customers. He is currently a manager at BearingPoint. Prior to that, he was a consultant for SAP America, and later, practice director of corporate compliance and security for Virtuoso, LLC, an SAP FI/CO consultancy. His latest research is on the effects that Sarbanes-Oxley will have on IT departments running SAP, and leveraging existing R/3 functionality to achieve compliance.

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