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Roundtable
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What is the single most challenging Sarbanes-Oxley issue today?
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Illka Sihvo
CEO
BasWare
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Its not enough for companies to develop Sarbanes-Oxley compliance policies they must ensure that these policies are being followed. Despite all the work they have undertaken to develop new, more stringent financial controls, many organizations still lack ways to properly document and substantiate these internal controls. Unfortunately, this continues to be a major issue some three years after SOX has been instituted.
In accounts payable, for example, many companies are still unable to verify the internal controls they have put in place. They need to make sure they have visibility into each invoice to see who touched it and what was done with it. Organizations have to find ways to ensure that all purchases are captured 30 days into the system so there are no unrecognized liabilities or commitments made without a purchase order. By capturing each invoice the day it arrives, finance departments can have real-time visibility into accruals and avoid the problem of restating financials. When companies have a complete record of each invoice, they can easily uncover fraud or overpayment and can ensure that checks are approved correctly and assigned to the right cost centers. If they dont, if non-purchase order-based invoices dont get routed to AP in 30 days, companies cannot accurately record or track expenses for the period; in some large companies that generate 250,000-400,000 invoices a year, non-PO invoices could add up to millions of dollars of unexpected liabilities each quarter, and the risk of having to restate results.
Policy-making and technology solutions work synergistically to address these compliance issues. Policies that establish necessary rules to meet SOX guidelines arent enough if companies cant ensure controls are being followed. Technology enables companies to track, measure, analyze and report in real time. By combining policies with technology, companies can establish and implement the internal controls needed to provide the visibility, timeliness, and accuracy in financial reporting.
lkka Sihvo, CEO of BasWare Corp. since Jan. 2005, has overall responsibility for both the company�s day to day operations and providing strategic leadership. Sihvo also serves as chairman of BasWare�s Executive Team. From 1994 through 2004, he served as Chairman of the Board, and during that BasWare experienced considerable growth, with the compound average growth rate standing at an impressive 40 percent. He has worked for BasWare in consulting and management positions since 1989. Sihvo holds a Master�s degree in Economics and Business Administration from the Helsinki School of Economics and a Master�s degree in Technology from the Helsinki University of Technology in Finland. |
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