How Account Payables Control Processes by Meeting SOX Act Requirementsby James Hadley Business Articles for Business People
There are numerous aspects that need to be considered with any business in order to keep it up and running and to ensure that there are as few problems as possible. Among those different aspects is the accounting process, something that can either work in your favor or maybe one of the biggest problems that your company faces. This is especially true when you are talking about account payables. These processes need to be looked after carefully in order to ensure that your company does not have too many outstanding liabilities. It is also important for you to consider the Sarbanes-Oxley (SOX) requirements and what they may mean for your company. How can your accounts payables control section meet those requirements had on?
Before you consider the impact that SOX requirements have come to bear on your accounts payable control systems, it’s first important for you to understand those requirements. SOX requirements are very complex, but on its most basic level, they have to do with the internal controls that are going to regulate the financial reporting of information within your company. Although it may not be necessary for everyone in your company to be completely up to speed on the details of SOX compliance, it is important for them to have a basic understanding. After all, SOX is going to impact your accounting department, regardless of whether you're talking about doing an internal audit or handling the general financial processes that take place within your company daily.
If you have not yet put these requirements into place, it may be necessary for you to bring in an IT team that will help you to meet the compliance deadlines. Without the right controls in place, individual users within the business may unintentionally cause conflicts with SOX requirements during the time that they are taking care of their routine job responsibility. It may also be possible for unauthorized transactions to take place or for financial data to be corrupted. Lack of compliance also makes it easier for unscrupulous individuals within your accounting department to cover up any fraudulent activities that may be taking place.
The IT team that you hire is going to identify any high risk processes that may exist within your system. Once they are identified, they are going to make any changes that are necessary to completely remediate those issues. Once the existing issues have been cleared up in such a way, there will be additional controls that are put into place that will help to keep you in compliance with SOX requirements. It’s important to note that compliance evaluation is not a one-time job, it is going to be an ongoing process that requires constant evaluation in order to determine whether you are still compliant.
Being out of compliance with SOX requirements puts you and your company at risk. Make sure that your account payables control systems are established in such a way that your business will remain in compliance. In doing so, you will find that things are running much more smoothly in your company and that large issues, including employee fraud, are much less likely to occur.
Created on Jun 10th 2013 17:40. Viewed 374 times.