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Brand Protection is Important to Sarbanes-Oxley Compliance Writes S. G. Hart & Associates

Brand Protection is Important to Sarbanes-Oxley Compliance Writes S. G. Hart & Associates

by Rick Turoczy on April 4, 2005

S. G. Hart & Associates, LLC, The Brand Equity Protection CompanyTM, writes about brand protection as an important element of compliance for public companies who must comply with The Sarbanes-Oxley Act of 2002 (SOX) in its April 2005 issue of BrandEyeTM. The current issue highlights the need for boards of directors and senior mangers to gauge the threat level of counterfeiting and product diversion to determine if damages require disclosure under Section 302 and whether proper disclosure controls are in place in this assessment. S. G. Hart & Associates also discuss Section 404 and its implication that the protection of corporate assets from fraud includes protection from the threat of counterfeiting and product diversion. Section 404 requires public companies to report on the effectiveness of internal controls designed to safeguard assets from fraud and have independent auditors attest to the effectiveness these controls.

Stanley G. Hart, President & CEO of S. G. Hart & Associates, explains the importance of highlighting Sarbanes-Oxley in the firm’s BrandEyeTM newsletter, “the SEC’s definition for internal controls makes it clear that safeguarding assets is an element of the internal control process. The implication for boards of directors and senior managers therefore goes beyond customary financial controls but includes the firm’s ability to prevent, identify and detect fraud in all its forms, including fraud from embezzlement, payroll, external theft, procurement, counterfeiting and product diversion.” Hart continues, “the difficultly of assessing damages from counterfeiting and product diversion make complying with SOX more of a challenge. Many companies are aware of the problem but have difficulty calculating the loss and damages. This lack of quantifiable data leads to organizational paralysis or to implementation of point solution(s) which fail to meet required business objectives because the program did not uncover root causes. The result is a poor return on investment, loss of confidence with protective measures and, more importantly, a loss of shareholder value.”

Hart concluded his remarks by saying, “The opportunity to implement a sound brand equity protection program in light of SOX may be unfamiliar, but represents an opportunity for our clients to gain a competitive advantage while complying with the law. The regulatory mandate of SOX will undoubtedly identify outmoded or impractical brand protection practices and, in turn, allow clients to improve existing polices, procedures and systems. Yet, the real benefit is derived not from being in compliance but from the organizational knowledge obtained throughout the process of becoming compliant and using that knowledge for the greatest brand protection competitive advantage.”

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Anonymous April 22, 2005 at 8:03 am

I found that this company is offering webcasts on Sarbanes-Oxley and the role of brand protection. You can sign up at http://www.sghartassociates.com. They also have a complementary publication called BrandEye which you can sign up for at the website. The April edition is devoted to this topic.

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