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Updated:03/05/2009

Copyright © 1996-2009 Management Systems Consulting, Inc.

On July 30, 2002 , President Bush signed into law the Sarbanes-Oxley Act (SOX) of 2002. The Act, which applies in general to publicly held companies and their audit firms, dramatically affects the accounting profession and impacts not just the largest accounting firms, but any CPA actively working as an auditor of, or for, a publicly traded company. The basic implications of the Act for accountants are summarized below.

The Sarbanes-Oxley Act introduced highly significant legislative changes to financial practice and corporate governance regulation. It introduced stringent new rules with the stated objective: "to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws".

It also introduced a number of deadlines, the prime ones being:  

•  Most public companies must meet the financial reporting and certification mandates for any end of year financial statements filed after November 15th 2004.
•  Smaller companies and foreign companies must meet these mandates for any statements filed after 15th July 2005.

The act is actually named after its main architects, Senator Paul Sarbanes and Representative Michael Oxley, and of course followed a series of very high profile scandals, such as Enron. It is also intended to "deter and punish corporate and accounting fraud and corruption, ensure justice for wrongdoers, and protect the interests of workers and shareholders" (Quote: President Bush).

The Sarbanes-Oxley Act itself is organized into eleven titles, although sections 302, 404, 401, 409, 802 and 906 are the most significant with respect to compliance and internal control. 

In order to assist our clients with their Sarbanes-Oxley compliance tasks, Management Systems Consulting, Inc. is offering its highly trained Information Systems Auditors to work towards meeting the internal control requirements.  As with any internal controls or audit documentation project, a background in accounting, systems and technology is a requirement. Our unique experience provides that across a multitude of technology platforms and industries. 

We have extracted titles 302 and 404 for easy reading.  The full legislative act is also available:

• SEC. 302. CORPORATE RESPONSIBILITY FOR FINANCIAL REPORTS.
• SEC. 404. MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS.
• Full Sarbanes-Oxley text.

Please refer to our basic IT-Audit Guidelines for additional information on developing proper Information Technology Standards and proper internal controls.

See the following sample documents regarding Change Control Methodology and Sample Procedure Documents:

• IS Change Control Methodology

• Information Systems Change Management and Control  

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Copyright © 1996-2009  Management Systems Consulting, Inc.
Last modified: March 05, 2009