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CEOs Survival: SOX Strategies over the Long Term

CEOs Survival: SOX Strategies over the Long Term
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Author(s): Parviz Partow-Navid (California State University, USA) and Brad Cikra (California State University, USA)
Copyright: 2007
Pages: 2
Source title: Managing Worldwide Operations and Communications with Information Technology
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-59904-929-8.ch244
ISBN13: 9781599049298
EISBN13: 9781466665378

Abstract

The Sarbanes Oxley (SOX) Act has renewed business attention to details and financial reporting. The nature of the Act is governance and the scope of it is widespread throughout the company. Not only do CEO’s sign off on the financials with stiff felony jail sentences attached for any wrongdoing or simple non-malicious errors, but extraneous costs for waste disposal or multi-year vacation accruing require documented procedures for compliance. The SOX Act intent is information protection and securing information, not just from outside intruders but also from hackers informing traders prior to public announcements. Securing all information within a company is an improbable task, although many steps are specified and suggested in the Act itself and supporting committees (Coe, 2005). Ways of benefiting from the SOX Act exist. Build a better company with a controlled environment (Deloitte, 2004). A company must register with the Act’s governing board and initiate an audit committee to report to a member of the company’s board of directors. Section 404 of the Act requires all business activities that materially effect the financial statement to be procedurally documented and followed. Extraneous business activities require considerably more attention and often are unnoticed. These operations are controlled through documented procedures with audit when materially effecting financials. Strategic goals and guidelines are described in this paper to assist the CEO in benefiting from the SOX Act. Although this paper is broad based, it is neither a comprehensive nor exhaustive coverage of the compliance issues of the Act. The Act is open ended with Section 404. Each company has areas of uniqueness that open new avenues of compliance interpretation. Embracing the Act completely is like sailing the great oceans. In this paper remedies for the CEO are offered to sail this ocean.

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