governance risk compliance

Governance and Risk Management of Companies is highly influenced by the Sarbanes Oxley Compliance. It has been some time now since the Sarbanes-Oxley Act was enacted. Most of the companies have understood that this is not something like a one-off event; rather it is more in a form of process improvement activity, which can be enforced by the government regulations.

One such comparable process can be the Software Engineering Institute’s Capability Maturity Model, which presides over the IT companies’ organizational processes and governance. This act has already influenced greatly the risk management, risk analysis, risk assessment, security management, internal audit, IT functions and several other functions within public companies. This is why, it has been very important for each and every company to become aware of the institute implementation systems, compliance requirements and risk management of their processes. The management team of the company must be aware of entire ramifications of this Act, as compliance failure can flood the troubles for company executives. One of the major problems for any company in following the rules and regulation of this Act is that it is too ambiguous to understand easily. This Act is sometimes also referred as the SOX. However, it is in the interest of the companies itself to clearly understand the Act and then create the required policies for risk management and mission-critical systems. Some aspects related to this Act that must be monitored effectively and efficiently are:

All the roles as well as responsibilities for compliance initiatives must be defined clearly by eliminating all the possibilities for ambiguity. It is wise to go for a pro-active approach, instead of waiting for any back-up log to indicate troubles.

A company should constantly review all historical data and records in order to get the first-hand indication of any trouble.

It is good to transform, if not all, most of the business processes into automated ones and this approach should be pursued continuously. In this aspect, all the data administration factors, like storage requirements and capacity management assume mush significance.

Companies should have a complete foolproof policy for e-mail processing. Saving all emails can benefit a lot in the long run.

Infrastructure for the detection of user access and intrusion should also be functional.

It is also imperative to regularly communicate with the auditors of the company and to make the internal audit a continuous process.

Access to reliable and absolutely accurate information about the company must be available all the time.

There may also be a need to continuously review all processes of the companies that are linked to the financial aspects, which is necessary for adequate control over the organization.

All the new as well as older supplier and vendor contract terms should be reviewed that concern to various SOX requirements.

All the employees of the company must be educated towards the security standards and objectives as well as to the compliance and control issues.

The entire systems including various processes must be tested and examined regularly to ensure their adherence to the compliance issues. All organizations can make use of the opportunities provided by the Sarbanes-Oxley Act to improve their operational and risk management controls.