Aug
11
2009
If you are an American company, then you might be required to know about the Sarbanes Oxley act. If you’re an American company and haven’t heard of it previously, you have already learned something about the act. It’s a United States law.
The Sarbanes Oxley is an act that was signed into US in 2002. The act was designed to try and stop companies doing what Enron and Worldcom did. Both of these companies were found to have been running on fraud for many years. At that current time, the companies weren’t required to show their records to the US government.
What the act does is it ensures that how businesses are run is legitimate and if they are not, it holds the key players responsible for the problems.
The act means that Chief Executive Officers and Chief Financial Officers are required to sign the records for the business. They are required to sign the records to say they don’t contain anything that’s false and that they match the companies earnings.
If the act is not abided by or the records are found to be false, the Chief Officers can be punished by the government.
Like I said at the beginning, you may not have to abide by the act. Only companyies within the US, UK or Europe and have listings in the US stock exchange are required to follow the act. You would also have to abide by the act if the company is based in the UK or Europe by it’s a subsidiary of an US company.
The Sarbanes Oxley act can be a pain for some companies. Because the company is required to report every single business transaction, even the sale and purchase of company assets. This is where people have the problem because all the company’s fixed assets must before recorded.
The process of fixed asset accounting can be expensive and take time. If you attempt to do the job yourself, based on the size of your company, it can take a number of months and just cause more problems. The cheapest and quickest way to get the list of assets would be to outsource the job to an asset management company.
Unfortunately, it can still be expensive to do. However, a large number of asset tracking companies will give you different deals to help asset auditing alot simpler in the future. Many of the companies also offer Sarbanes Oxley compliance software which will make the job even easier for you.
Hopefully you have found this useful and now have a understanding og the Sarbanes Oxley act, whether you have to follow it or not. No doubt you won’t like the sound of the act, but you can blame Enron.
Tags: asset managemet, asset tracking, assets, Business, sarbanes oxley
