{"id":41,"date":"2006-08-06T05:55:34","date_gmt":"2006-08-06T13:55:34","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=41"},"modified":"2006-08-06T05:55:34","modified_gmt":"2006-08-06T13:55:34","slug":"what-will-be-the-future-of-sox-compliance","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/what-will-be-the-future-of-sox-compliance\/","title":{"rendered":"What will be the future of SOX compliance?"},"content":{"rendered":"\n\n
\u00a0\"SEC<\/td>\nIt has been one year since Christopher Cox<\/a> has succeeded William Donaldson<\/a> and become the 28th chairman of the Securities and Exchange Commission<\/a> (SEC).\u00a0 He was sworn in on August 3, 2005, and during the past\u00a0year we have seen much more vigorous enforcement of securities laws and business regulation.<\/font><\/td>\n<\/tr>\n<\/table>\n

Christopher Cox came to the SEC after 17 years as a California congressman.\u00a0 He is a Harvard-trained lawyer and previously had served as an advisor to Ronald Reagan.\u00a0 Cox is different\u00a0from his predecessors at the SEC.\u00a0 While his roots stem from politics,\u00a0SEC chairmen\u00a0prior to COX typically came to the office with very strong business or SEC bureaucratic\u00a0background.<\/p>\n

In a recent self-assessment that Cox gave of both himself and the agency, he gave himself very high marks towards making good progress on improving the implementation of Sarbanes-Oxley<\/a> section 404.\u00a0\u00a0Section 404\u00a0has been the main area of controversy with SOX.\u00a0 This is one area that businesses not only in the US are closely monitoring, but businesses worldwide.<\/p>\n

Partly because of its brevity, at just 168 words, SOX 404 compliance is the section most feared in the Sarbanes-Oxley act.\u00a0 Its broad language has led many auditing firms to err on the side of safeness, and in doing so have made SOX notorious for being burdensome.\u00a0 SOX 404 requires that top company executives personally check and swear to the adequacy <\/span>of the company’s financial controls.<\/p>\n

Executives have complained of the lack of guidance from both the SEC and the Public Company Accounting Oversight Board<\/a> (PCAOB). Without guidelines, auditors insist that executives be on top of even the most mundane accounting line items in the company, including even the company stationary supplies.<\/p>\n

It’s sometime the case where a law is on the books but\u00a0it sometimes is willfully overlooked or unenforced.\u00a0 This hasn’t been the case so far with SOX.\u00a0 And there is an international worry now that SOX regulation may go global.\u00a0 The New York Stock Exchange’s<\/a> plan to merge with Euronext<\/a> is only fueling the speculation of what might happen and whether the US\/SEC may export US-style regulation globally.<\/p>\n

This past week I’ve been in Tokyo.\u00a0 Japan typically follows the lead of the US and adopts US regulations as-is, sometimes even assuming the section number of the US law, like the US Internal Revenue Code section 401(K) retirement savings account.\u00a0\u00a0So it wasn’t that surprising that\u00a0with a\u00a0trip to\u00a0some bookstores\u00a0in Tokyo\u00a0I found\u00a0row upon row of books sporting SOX and Sarbanes-Oxley titles.<\/p>\n

I can remember 10 years ago being in Tokyo and visiting the bookstores.\u00a0 Then the hot topic was CALS<\/a> (Commerce At Light Speed), the US government’s\/miltary’s failed attempt to set standards around eCommerce and the business and military exchange of information via the Internet.\u00a0 In the US, outside the defense industry most people could not tell you what CALS was.\u00a0 But in Japan, CALS led a different life, with books taking up a lot of prized bookstore real estate as you entered the stores.<\/p>\n

On this current trip to Japan I also stopped by some used bookstores.\u00a0 CALS books are totally gone from the new bookshops, but\u00a0in the used\u00a0bookstores\u00a0CALS lives on.\u00a0 In the back of the store on the bottom shelf I accidently came across a row of CALS books, most of them priced at 105 yen, about 90 cents.<\/p>\n

It makes you think.\u00a0 We’re so often caught up in the hot topic of the moment that it’s hard to imagine a world without it.\u00a0 10 years from now what will SOX be like?\u00a0 While SOX is probably not going away soon,\u00a0it is likely that it is going to morph over the coming years.\u00a0<\/p>\n

There will be pressures coming\u00a0from many directions.\u00a0 The SEC\u00a0will likely try\u00a0to push SOX compliance onto companies outside the US that do any business within the US.\u00a0 There will be push back from global companies in adopting SOX-style regulations.\u00a0 There will also be pressure from US companies to refine the language of SOX to be more clear and more straight-forward in defining how compliance can be met.\u00a0 So it is likely that SOX will change, but exactly how is not clear.<\/p>\n

At its core, SOX defines a recipe for\u00a0good and honest corporate accounting procedures. It’s good business.\u00a0 Document and Content management systems like that of Formtek’s<\/a> can help organizations meet the core values of SOX and other compliance regulations by getting a grip on the management of corporate documents and their lifecycle.\u00a0\u00a0Systems like those from Formtek\u00a0help assist in meeting regulatory compliance.\u00a0 No matter how the fine print of regulations like SOX may change, management of the document lifecycle is sure to remain an important part of good business.<\/p>\n

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\u00a0 It has been one year since Christopher Cox has succeeded William Donaldson and become the 28th chairman of the Securities and Exchange Commission (SEC).\u00a0 He was sworn in on August 3, 2005, and during the past\u00a0year we have seen…<\/span><\/p>\n

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