How can 42 Solutions help?

The 42 Solutions Business Process Analysis (BPA) product assists with compliance with the requirements of Sarbanes Oxley by providing a means of centrally documenting financial control processes and recording the compliance with the controls around production of financial statements. BPA allows a wealth of information concerning processes to be captured, dynamically analysed and reported. Templates are available to assist with SOX certification.

Overview of Requirement
The Sarbanes-Oxley Act of 2002, sponsored by US Senator Paul Sarbanes and US Representative Michael Oxley, represents the biggest change to federal securities laws in a long time. It came as a result of the large corporate financial scandals involving Enron, WorldCom, Global Crossing and Arthur Andersen. Effective in 2004, all publicly-traded companies are required to submit an annual report of the effectiveness of their internal accounting controls to the Securities and Exchange Commission (SEC).

The major provisions of the Sarbanes Oxley Act (SOX) include criminal and civil penalties for noncompliance violations, certification of internal auditing by external auditors, and increased disclosure regarding all financial statements. It affects many public U.S. companies as well as non-U.S. companies with a presence in the U.S. SOX is all about corporate governance.

SOX Section 302 - Corporate Responsibility for Financial Reports

a) CEO and CFO must review all financial reports.
b) Financial report does not contain any misrepresentations.
c) Information in the financial report is "fairly presented".
d) CEO and CFO are responsible for the internal accounting controls.
e) CEO and CFO must report any deficiencies in internal accounting controls, or any fraud involving the management of the audit committee.
f) CEO and CFO must indicate any material changes in internal accounting controls.

SOX Section 404: Management Assessment of Internal Controls

All annual financial reports must include an Internal Control Report stating that management is responsible for an "adequate" internal control structure, and an assessment by management of the effectiveness of the control structure. Any shortcomings in these controls must also be reported. In addition, registered external auditors must attest to the accuracy of the company management’s assertion that internal accounting controls are in place, operational and effective.