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Sarbanes-Oxley $10 Billion Word?

Sarbanes-Oxley $10 Billion Word?

by Rick Turoczy on June 26, 2006

Instead, as a reaction, we enacted the Sarbanes-Oxley (SarbOx) Act in 2002. Section 404 of SarbOx is only 168 words long; but its impact has been dramatic. It makes executives responsible for maintaining an “adequate internal control structure and procedures for financial reporting.” This is in addition to the checks and balances to company management that we have auditors and the SEC for in the first place. SarbOx has escalated compliance to top priority in every boardroom. It dwarfs previous industry-specific compliance requirements such as FDA Validation in pharmaceuticals and HIPAA in health care. Three years ago, very few companies outside of banking had senior IT-compliance managers. Now just about every company has one, it seems.

Several technology vendors and systems-integration firms (and, of course, audit firms) have enjoyed a bonanza from this focus on compliance. Companies are investing in storage and content-management software to handle more stringent document security and retention policies. They are investing in systems-management tools and business-intelligence software to catch non-conforming system events and suspicious trends. SAP recently announced its large Governance, Risk and Compliance initiative after it bought a compliance software vendor, Virsa. Global service providers are re-positioning their quality and process-improvement practices to help in compliance initiatives.

Sarbanes-Oxley $10 Billion Word?

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