RESEARCH PAPER

Research Paper

The Sarbanes-Oxley Act

The Sarbanes-Oxley Act of 2002 is mandatory. ALL organizations, large and small, MUST comply. The legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance.

The Sarbanes-Oxley Act is arranged into eleven titles. As far as compliance is concerned, the most important sections within these are often considered to be 302, 401, 404, 409, 802 and 906.

An over-arching public company accounting board was also established by the act, which was introduced amidst a host of publicity.

Sarbanes-Oxley Compliance

Compliance with the legislation need not be a daunting task. Like every other regulatory requirement, it should be addressed methodically, via proper analysis and study.

Also like other regulatory requirements, some sections of the act are more pertinent to compliance than others.

ERP Systems to Gain a Competitive Advantage

ERP is an enterprise wide system that integrates primary business applications, including all areas and levels of an organization. Each application within an ERP suite shares a common set of data that is stored in a central database. This central database serves as a backbone for the organization, integrating key business and management processes. This allows you to see more accurately and completely what is going on within the company. A typical ERP system includes applications for accounting and controlling, production and materials management, quality management, sales and distribution, project management, and human resources. (Alan 2005)

Within the past decade, most major companies recognized the significance of information technology and implemented ERP systems. However, many businesses found ERP difficult to implement and use properly and effectively. Many businesses tried to adapt their business process to the ERP system, rather than the other way around. To be done correctly, the process must be done the other way with the system being customized and adapted to your existing business processes. Moreover, ERP systems only address the needs of part of the enterprise, creating islands of automation and a need for integration that requires considerable effort. A typical ERP system gives you an 80% solution. You must still customize the remaining 20% to fit your enterprise needs. In the end, you will pay more for customizing this last 20% than for the entire ERP application. It is not unusual for companies to spend millions of dollars to implement an ERP system. ERP requires the re-engineering of a company's process and culture. With solutions like SAP you must change your operations and processes to match the logic of the ERP package. The package must be integrated with the rest of the IS environment. They must build the infrastructure that ties their new ERP package to their existing mainframes, DBMS's, data warehouses, Web servers, and email systems. (Donaldson, 2007)

Thus a proper implementation of the system will provide a competitive advantage, based on the company integrating the system with its own processes. The cost and time put in will be offset ...