1. Kenneth A. Griggs, Rosemary Wild Orfalea College of Business, California Polytechnic State University, San Luis Obispo, CA, U.S.A.

2. A Brief Outline Background & Motivation The Sarbanes-Oxley Act (SOX) The software vendor response to SOX Private versus public What worked, what failed Areas for potential convergence in eGoverment Conclusion

3. Background Employees of large accounting/consulting firms report problems in risk management and SOX compliance efforts SOX and related software tools publicly criticized as being ineffective Increasing interest by governments in risk management, security and SOX-like efforts

4. Motivation for the Work Increasing importance of security and accountability SOX & Euro SOX Software tool failure Can software tools be migrated from private to public?

5. What is Sarbanes-Oxley (SOX)? Sponsored by Senator Paul Sarbanes (Democrat- Maryland) and Representative Michael G. Oxley (Republican-Ohio) in 2002 Response to the Enron scandal 30,000 words and nearly seventy requirements designed to reform the governance, auditing, and reporting practices of American businesses.

6. Highlights of SOX Section 302 (Corporate Responsibility for Financial Reports) Section 401 (Disclosures in Periodic Reports) Section 404 (Management Assessment of Internal Controls) Section 409 (Real Time Disclosures) Section 802 (Record Retention Procedures and Violation Penalties)

7. Essential Elements of SOX The Control and Monitoring Environment Risk Assessment Accountability Audit

8. Software Tools in Internal Control The Sarbanes-Act stimulated the creation of an array of new software tools to assist in internal control, auditing, and SOX compliance.

9. Software Functional Areas

10. Risk Assessment Feedback Loop

11. Government & Private Sector Differences

12. Progression of SOX Compliance Activities

13. Government vs. Private Sector

14. SOX Software Failure Inflexibility Lack of integration capability Excessive complexity Fixed Workflow Process Narrative/Process Mapping problems

15. Characteristics of Software that Worked General purpose Team oriented Templatized Visual Narrow within a domain Handled unstructured data

16. Some Thoughts on the Differences Between Europe and the U.S. Differences in fraud – Enron vs. Parmalat –will the differences carry over? Variability among European states The role of the EU IT environment issues

17. Conclusion Software is immature SOX specific tools generally performed poorly SOX-specific tools need major modifications to be of use in government More unstructured data tools needed Team oriented tools are essential to success Government implementation could be a much harder problem to address