| When Sarbanes-Oxley regulations were created, | | | | coming's and going's is vital to any business, in the |
| their sole purpose was to restore the integrity | | | | end it costs a company millions of dollars to |
| and faith back with corporations and executives | | | | implement each year. Consultants who ensure |
| that were caught up in the many fraud scandals | | | | these companies are in compliance with |
| brought on by Tyco, Enron, and such. Yet, | | | | Sarbanes-Oxley are busier than ever, raking in the |
| surprisingly to learn, many companies have done | | | | money from overseeing the regulations being |
| little to change their prevention and monitoring of | | | | carried out; but will corporate stakeholders ever |
| fraudulent acts. This makes many wonder, "Is | | | | see any value in its purpose? |
| Sarbanes-Oxley an effective tool where fraud | | | | It is not being said that Sarbanes-Oxley is a |
| prevention is concerned?" | | | | completely worthless exercise; it does have some |
| One of the policies under Sarbanes-Oxley is to | | | | value and worth. Many companies who wish to be |
| create a paper-trail illustrating how and what a | | | | proactive in complying with Sarbanes-Oxley see |
| company does in regards to financial operations | | | | the benefits from doing so and have enhanced |
| and data. This costly and time consuming exercise | | | | their standard internal controls in reconciliations, |
| is efficient with tracking data; however, it does | | | | securing digital data better, and generating a larger |
| little to prevent fraud itself. | | | | segregation of duties. You will even find some |
| It may be said that Sarbanes-Oxley was in short | | | | companies that have improved period-end closing |
| immediate gratification to a problem whose | | | | procedures voluntarily, and some that have made |
| answer is more long-term. This legislation allowed | | | | related accounting processes more formal. In all, |
| for investors and common folks to feel better | | | | the requirement of documentation that |
| about their financial statements after the many | | | | Sarbanes-Oxley insists upon helped some |
| corporate fraud scandals became apparent. Our | | | | companies see that they needed a more |
| government tried to put a band-aid on the panic | | | | standardized set of procedures in place. The key |
| that would inevitably cause severe damage to our | | | | here is to specifically design internal controls to |
| economy by insisting that public companies | | | | eliminate or deter any further fraudulent acts. This |
| become more vigilant in the fight against fraud. | | | | will allow companies to have a better chance of |
| And although the concept of Sarbanes-Oxley is | | | | winning against fraud, than by complying with |
| successful on legislature paper, it does little to | | | | regulations. By incorporating company, and |
| deter fraud as it actually only requires a detailed | | | | government policies and procedures while |
| account of procedures taken by a company. | | | | becoming a more ethical corporate culture, fraud |
| While documentation of a company's financial | | | | doesn't stand a chance. |