Is software the solution for Sarbanes-Oxyley.

• Author: Heffes, Ellen M.
• Position: FinancialReporting

With Sarbanes-Oxley becoming ingrained in the process of financial reporting, most companies are well-beyond the initial stages and deep into finding the best--and most efficient ways--to get the job done. Many software firms have jumped in with what they deem "the solution" for Sarbanes-Oxley woes.

With many choices of programs and numerous "bells and whistles," in the big picture the software does the main job of centralizing, systematizing, organizing, check-listing, tracking and keeping current with what needs to be done, by whom and on what date. Systems also have a myriad of elements and features to prevent or limit process failures. Bottom line, many are saying that in the long run, even the high up-front costs will eventually pay off for companies as they see the improvement to process related to governance and compliance, and, importantly, to minimizing risk.

"At the heart of Sarbanes-Oxley compliance is solid business processes and control, and efficiency around measuring that," says Steven Miranda, vice president of development of Oracle Corp. "We try to tell people how they can go beyond just the reporting function and bootstrap their efforts towards consolidating information--similar to the newest corporate management solutions now gaining in popularity."

So what questions are customers asking, and what are they doing? While some are comparing Sarbanes-Oxley Section 404 implementation to Y2K, Miranda disagrees: "Y2K was a one-time event; 404 is an ongoing effort--you have to certify your numbers every quarter of every year." The correct question to ask, he says, is: "How can we incorporate this into an ongoing process?"

Also, he says he hears a lot of, "We have Oracle," or "We have an XYZ enterprise transition system, and now have to document our procedures and controls within that system, and have it on an ongoing basis." Another concern, from a senior finance executive's perspective, is reducing risk. So, many questions relate to: "How can you assure me that this will lower my risk?"

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Still another issue relates to executives being asked to do more with less, while still under budget constraints that are now often greater than pre-SarbanesOxley. "So, they have to think creatively and not think of it as an added set of work," says Miranda. Certainly, he argues, every organization of size will have some process change to go though to mitigate some of the risk that comes out in the early audits. "If you...