The Sarbanes Oxley Act

What Is It?

In summary Sarbanes Oxley is a USA legislative Act which requires any SEC (Securities and Exchange Commission) listed company to comply with the Act.  Following the financial scandals around Enron and WorldCom, the US Government drafted legislation to ensure that the reports and accounts that public US companies issued were based on data that was accurate and could be shown to be traceable and accurate.  This was done to reassure investors world-wide that they could trust the data released by US listed companies.

What Does Non-Compliance with Sarbanes Oxley Mean?

Non compliance with the Act could mean a punitative fine (in millions of dollars) and long-term prison sentences for the directors involved – make no mistake The Sarbanes Oxley Act has real teeth!

How are Spreadsheets Involved?

Sarbanes Oxley is a large piece of legislation, but the key area that affects spreadsheets is Section 404 of The Sarbanes Oxley Act.  In summary it says that it requires the management of SEC registered companies to report on the effectiveness of internal controls over financial reporting. Section 404 also requires the companies external auditors to attest to and report on the managements assessment of the effectiveness of these internal controls.

But we use an ERP System – so we’re OK – right?

Maybe not.  Whilst ERP systems such as Microsoft Navision or SAP provide control and traceability for finance dept’s, most users still use spreadsheets for budgeting or management reporting because they are familiar, easy to use and offer great functionality.  But the spreadsheets just can’t offer the same degree of control and traceability that an ERP system can.

That’s where Qtier-Rapor comes in because it puts a controlled framework around spreadsheets giving companies the control and auditability over spreadsheets that they enjoy with their ERP systems whilst allowing users to carry on using spreadsheets.