Letter: Get your life back under Sarbanes-Oxley
To the editor:
U.S. companies have gained a year’s grace before they need to change from a period of 75 days to 60 to report annual results. Big deal. It’s about time we got something back from Sarbanes-Oxley Rule 404, but an extension to a deadline is about all most companies have seen so far.
The problem is that Rule 404 is focused on ensuring that processes are mindlessly documented and followed to the nth degree, but it does nothing to ensure that they are the right processes in the first place. The focus of a huge effort by Corporate America is wrong. Rather than detailing processes, finance departments should be improving processes through automation, and thus make Sarbanes-Oxley work for them. Instead it has become a huge chore.
So how to take advantage of our one-year SarbOx present? Most companies will by now have completed their process recording, needed for that part of compliance. Why not use this next year to automate as many processes as possible?
The CFO and his staff are being excluded from adding value to the business by the mind-numbing, repetitive recording tasks that could be so much better done by machine. This doesn’t benefit the shareholder, and it won’t stop criminal “off-balance” accounting and fraud. If anything, it will make it easier to hide fraud, because accountants and auditors alike will have to focus on recording and checking processes – not on the analysis that will uncover malpractice, mistakes and performance failures.
My advice is to look at your processes and automate everything you can. The less time you spend on repetitive, mechanical chores the more time will be available for you to do what Sarbanes-Oxley and the SEC originally intended – add shareholder value and prevent executive larceny. Oh, and you might just get your life back.
CODA Financials Inc., Manchester