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Thursday, May 26, 2005

SOX Compliance Can Set A Better Organization In Motion

Although SOX has a broad mandate and is implementation-agnostic, many of the strategies to meet its requirements can be drawn from best practices that will also improve the overall operations of the organization.

Yet like the proverbial Newtonian object flying through space, many of these same organizations would, given a choice, allow momentum to dictate their direction rather than expend the energy necessary to change course - even if headed for a collision with a larger object. As a result, many organizations are doing the minimum required for SOX compliance. They are creating additional layers of bureaucracy and approvals for audit purposes and the results are entirely predictable: increased costs, more inefficiencies, and frustrated employees. These haphazard, reactionary compliance strategies not only cause stress, they may cause the organization to miss a tremendous opportunity to create real competitive advantage.

Instead of complying reluctantly, smart organizations will take this opportunity to re-evaluate their processes and make changes, including the occasional wide sweeping but painful ones that improve business operations. They will use SOX as a means to streamline their processes and auditing procedures through workflow automation, with compliance a natural byproduct.

Still, that's not quite an apple-dropping-on-your-head revelation. Truly enlightened organizations will take it a step further by embedding their auditing procedures right within those automated processes. With embedded auditing, the mere act of performing an action provides instant accountability and transparency. Auditing, therefore, becomes not an afterthought dependent on the good intentions of the person performing an act, but an integral part of the act itself.

Having an automatically generated, real-time audit trail not only makes it easier to assure SOX compliance, but also creates a body of metrics that could lead to additional process improvements, lowered costs, and

posted by Brian Moran @ 9:39 AM   3 comments

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