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Sarbanes-Oxley legislation's effect on IT Companies
Public Company Accounting Reform and Investor Protection Act of 2002 (the Sarbanes-Oxley Act) was an attempt by regulators to increase transparency and accountability in business processes and corporate accounting to restore confidence in public markets. (Logan and Mogull, 2003) One optimistic article published in the wake of the 2002 Sarbanes-Oxley legislation stated that "new personal responsibility" for companies' financial accountability could benefit chief executive and financial officers by increasing trust and thus increasing revenue for corporate America in the long-term. (PR Newswire, 2002) But James O'Brien notes in his 2002 textbook on Management Information Systems, that the act was passed in the wake of the Enron scandal, not to help corporate...
The act was not specifically passed to regulate oil, IT or any specific companies in any specific industry. However, technology often defines and executes business processes or parts of business processes more specifically in IT firms. (Logan and Mogull, 2003) Furthermore, in IT companies, "the technology and business process regulated by Sarbanes-Oxley are so entwined that it's impossible to separate them," from the functions the company serves, unlike other industries. (Logan and Mogull, 2003) Thus, the costs incurred by the additional needed protocols to increase accountability may be greater for IT firms.
All of a firm's IT systems must be compliant with Sarbanes-Oxley,…
Works Cited
Logan, Debra and Mogull, Rich. (October 2003) "Sarbanes-Oxley: Technology." Retrieved on October 7, 2004 at http://www3.gartner.com/DisplayDocument-doc_cd=117875
PR Newswire (2002) "Sarbanes-Oxley legislation can boot efficiency" Retrieved on October 7, 2004 at http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-30-2004/0002240594&EDATE=
O'Brien, James. (2004) Management information Systems: Managing Information Technology. Sixth Edition. New York: McGraw Hill.
Zrismick, Brian, et al. (2002) "Sarbanes-Oxley Affecting ERO/Financial Applications." Retrieved on October 7, 2004 at http://www3.gartner.com/DisplayDocument-doc_cd=117415
Sarbanes-Oxley Legislation: Pros and Cons Positive effects According to some analysts, despite its costs, Sarbanes-Oxley legislation had some potential benefits for organizations: the additional documentation has amounted to a kind of enforced 'best practices' analysis. It "allows for complete documentation of processes identifying any gaps in a desired 'Best Practices' state" and offers an "opportunity to rethink old processes -- you may be using 10-year-old processes that don't offer your department maximum
Literature on the Sarbanes-Oxley Act of 2002 The field of specialized literary reviews on the Sarbanes-Oxley Act is a widely spread one presenting numerous issues form various standpoints. Reviewers' opinions vary based on their position towards the bill and their prior professional expertise on white-collar crimes. Among the mostly appreciated and close to reality works are: The Impact of Regulatory Information Disclosure on Information Security Investments, Competition and Social Welfare by
In the company it has ushered in a better accounting and the management with upgrades in technology and competence, there will be a requirement for training and upgrading managers and staff to meet the contingencies of the proposed systems and controls. The Sarbanes-Oxley section will help the companies on the other hand gain a lot of investment and support from the investors by providing a quality and timely information,
Sarbanes-Oxley Act (SOA) was put into law in 2002 following the revelations that Enron (and Enron's accountancy Arthur Anderson), WorldCom, and other corporations were using blatantly corrupt practices in accounting and causing huge losses for stakeholders in those firms. Moreover, the U.S. Congress could not simply stand by and allow companies to use unethical and illegal practices to scam huge sums of money for corporate executives while stripping the IRAs
Sarbanes-Oxley Act The objective of this study is to read the guide to the Sarbanes-Oxley Act and to: (1) Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over minimizing the corporate fraud and protecting investors make one suggestion for improvement; (2) Given the oversight of the accounting profession by the PCAOB as a result of the Sarbanes-Oxley Act, assess the impact on auditing firms and the public accounting professions; (3)
The integrity of the financial sector of these organizations controlled by state agencies and related services, would improve. The provisions offered by the act would serve as models based on which standards for other non-profit organizations can be developed in the future. It will create a better understanding of the limitations placed on auditors and a deeper scrutiny of the financial and transaction statements presented by the auditors. While