1. Sarbanes-Oxley: where Information-Technology, Finance and Ethics Meet
BY Margaret Muturi

2. Contents Brief History Objectives of Sarbanes Oxley
Test book questions
Current information
References
Question & Answers

3. Sarbanes Oxley History
Came in to force mainly due to financial scandals committed by cooperate giants like Enron, WorldCom, etc
Created by U.S senator Paul Sarbanes
(D-Maryland) and US congressman Michael Oxley
(R-Ohio)
It was signed into law July 30,2002 to become Sarbanes Oxley act of 2002 (Sox)

4. Objectives of Sarbanes Oxley
In response to companies like Arthur Anderson, Enron WorldCom scandal the SOX Act seeks to :
Restore the public confidence in both public accounting and publicly traded securities
Assure ethical business practices through heightened levels of executive awareness and accountability
Creating of the public accounting oversight Board
(PCAOB)
All audits report or related materials must be kept by the auditor at least 5 years
Make sure there are financial controls in place

5. Case study question
Define the relationship between Ethics and Sarbanes Oxley Act
Code of ethics structure for finance personnel in respect to conflict of interests –control environment
Whistle-blower protections
Cheques and balances
CEO and CFOs must certify in any periodic report the truthfulness and accurateness of the report-creates liability

6. Case Study Question
2. Why is record management an area of concern to the entire organizations
Information and communication: making sure the right people have the right information,
making sure no alteration of falsifying of records
Who has access to the information - Internal controls section 404
Management controls
Section 802 of Sarbanes Oxley: _requires public and their public accounting firms to retain records, including electronic records that impact the company’s asset or performance.

7. Case Study Question
3. What are two policies an organization can implement to achieve Sarbanes Oxley compliance
Internal controls: Who has authorization and access to information
Management oversight: This one of the key area of SOX. Making sure that the management knows who has the right authorization to the information.

8. Case Study Question
4. Identify the biggest road block for organizations that are attempting to achieve Sarbanes-Oxley compliance.
Training
Very expensive to implement
Challenging on segregation of duties
Creating oversight in different systems

9. Case Study Question
5. What type of information systems might facilitate SOX compliance
System controls: where there is limited access of information which is only available to authorized personnel.
Change management controls: whenever there is change in the management the organization can change the software or information of the software codes.

10. Case Study Question
6. How will electronic monitoring affect the morale and performance of employees workplace?
Employees may not be motivated
Invasion of privacy
Employees trust at work place compromised
Unethical employees trying to beat the system

11. Case Study Question
7. what do you think an unethical accountant or manger at Enron thought were the rewards and responsibilities associated with the job
Most of them must have thought as long as we keep getting paid, and our retirement accounts keep growing, we will keep our mouths shut
Whistle blowers afraid of loosing their job
Huge bonuses as long as the books reflected profits

12. Current Information
Since SOX was enacted in 2002 a lot of things have been changed to make sure the system work.
Updated software have been put in place example IT general controls (ITCG), control objectives for in information technology (COBIT)
Securities and Exchange commission (SEC) has imposed unprecented penalties enforcement of 10 million or more aganaist 115 parties
The whistle blower protection under occupation safety and health Administration( OSHA)

13. Current Information Anti -Sarbanes Oxley mood arises in Europe
Other laws have emerged example HIPAA
Cases of Fraud still being experienced for example current case of Bernard Maddoff In the US and his trading operation in London
The whistle blowers can make a difference and feel protected for example Harry Markopolos, the Boston based investor who was a whistle blower for Maddoff fraud.

14. Work cited Business Driven technology by Haag Baltzan Phillips
columnists/322
Ezinearticles .com/?The-History-of Sarbanes Oxley &id=143573&opt=print
The Wall Street Journal

15. END
QUESTION & ANSWERS