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Sarbanes-Oxley Act
In 2002, the Sarbanes-Oxley Act of 2002 was
signed. The Act mandates a number of reforms to enhance corporate
responsibility, enhance financial disclosures and combat corporate and
accounting fraud, and created the "Public Company Accounting Oversight
Board," also known as the PCAOB, to oversee the activities of the auditing
profession.
Financial organizations
who haven't taken advantage of real-time analytics before Sarbanes-Oxley,
now are saddled with the responsibility of complying with federal
regulations by providing real-time reporting.
CarpeDatum can help organizations meet requirements outlined in Section
409 as shown below.
Impact of Section 409*:
The most difficult aspect of
Sarbanes-Oxley compliance, say analysts and observers, is yet to come.
Section 409 -- as yet without a final deadline -- calls for
real-time reporting of material events
that could affect a company's financial performance. The time-sensitive
aspect of this regulation will likely put significant pressure on existing
data infrastructures, requiring deeper system integration and more
intelligent analytics tools.
"Analytics will be a big one for some of
the later sections [of Sarbanes-Oxley] like 409, requiring real-time
disclosure of significant events that affect financials," says Lindsey
Sodano, research analyst at AMR.
Enterprises will need a souped-up
analytics infrastructure to report wide-ranging events within 48 hours,
which is the current interpretation of this regulation. "There are all
kinds of events that occur outside your ERP backbone that you will need to
drawn on," Sodano says.
Sections 404 and 409 will require a
significant amount of system integration investments as well as
implementation of real-time notification and event-driven alerts, says
Alex Veytsel, research analyst at Aberdeen Group in Boston.
*Excerpt From Cathleen Moore, InfoWorld
July 11, 2003 -
Parsing Sarbanes-Oxley- From 404 to 802, this federal legislation has more
to it than meets the eye.
Section 409 States:
Real Time Issuer Disclosures
Section 13 of the Securities Exchange
Act of 1934 (15 U.S.C. 78m), as amended by this Act, is amended by
adding at the end the following:
‘‘(l) REAL TIME ISSUER
DISCLOSURES.—Each issuer reporting under section 13(a) or 15(d) shall
disclose to the public on a rapid and current basis such additional
information concerning material changes in the financial condition or
operations of the issuer, in plain English, which may include trend
and qualitative information and graphic presentations, as the
Commission determines, by rule, is necessary or useful for the
protection of investors and in the public interest.’’
To learn more about the Sarbanes-Oxley we
have provided some additional links below:
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