The original outcry that greeted the passage of the corporate accountability law has muted to a low hum of conformity.
The fraudulent accounting practices of entities like WorldCom and Enron devastated shareholder investments and public confidence in corporations. Congress responded by passing the Sarbanes-Oxley Act; President Bush signed that act into law on July 30, 2002.
Among many changes and updates to existing audit requirements came one that called for independent auditors of corporate accounting. Businesses had engaged in the practice of having the same accounting firm prepare their financial reports, and then audit those same reports. With millions of dollars in service fees at stake, few firms were willing to antagonize their clients.
Now, SOX requires a separation of accounting and auditing. According to an Approva survey of 200 financial executives, the vast majority of those responding noted SOX compliance as a top priority for their businesses.
The law has created some ripples for technology businesses and related fields. With more stringent requirements for data retention, corporate administrators have had to invest more in data storage devices, as well as media like AIT tapes.
Some software firms like Approva and Minnesota-based Paisley Consulting have developed compliance solutions to help corporations avoid legal entanglements. Paisley has added Air France, Heinz, and Proctor & Gamble to its client roster within just the past few weeks.
Going forward, IT professionals have moved to a more prominent role in compliance. With email, VoIP, instant messaging, and computer-based productivity tools so integral to businesses, the retention and safeguarding of information becomes paramount for any firm covered by SOX.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
