Where Sarbanes is used:
Sarbanes-Oxley tools have been widely used in all industries and some examples are financial services, technology, retail, manufacturing, telecommunications etc.
Advantages of Sarbanes-Oxley:
- To reduce disclosure process cost, enhance internal controls management productivity, and increase investor confidence.
- Investors are able to evaluate the process and performance of the Management stewardship responsibilities and the reliability of a company’s financial statements.
- Increases the responsibility of the management for the company’s financial statement.
Improved disclosure helps company to detect fraudulent financial reporting earlier and minimizes its adverse effects. As the quality and accountability of the financial reporting increases investor confidence, which ultimately results in increased efficiency and competitiveness of the capital markets.
- Establishes and maintains the internal control structure.
- To develop and manage the overall process of compliance and permit faster reaction to problematic compliance areas.
- Decreases the risk of financial fraud, decreases errors and improves the accuracy of financial reports.
- Ensures the accountability of individuals involved in financial reports and operations.
- Creates a process for report certification.
- Automate corporate financial reporting and disclosure requirements of sections 404 and 302.
- Provide a foundation architecture that merges collaboration, workflow, document management and publishing to create compliance processes to manage business processes efficiently and effectively.
- Provide powerful document and process management with flexible reporting capabilities.
- To monitor and provide Portals, Dashboards and Scorecards to help the managers to sustain compliance.
- Can reduce the cost of SOX compliance by avoiding manual, people intensive process, (internal employees and external consultants) and reduce external audit costs.
- Avoids higher penalties to be paid to the Federal Government.
- Provides opportunities to Registered Accounting firms, Information technologists, and other persons in the field of accounts.