Sarbanes-Oxley: What’s All the Excitement About?

Interested in increasing shareholder value, decreasing risk, improving product quality, decreasing product costs and improving customer satisfaction?

K. A Parker & Associates’ KAPA Non-Audit Services Provide Practical Business Process Engineering that offers these winning combinations.

1. A comprehensive plan to achieve compliance with Section 404 of Sarbanes-Oxley.
2. Staff productivity improvements, possibly leading to headcount reductions.
3. Improvement in the quality of administrative and financial outputs, possibly shortening the number of days a receivable is outstanding.
4. Overhead reductions in the costs associated with regulatory financial reporting.
5. Creation of a basis for ISO 9000 certification.
6. Evaluation and improvement of return on investment and enhancement of potential of Information Technology projects.

Specifically, here’s how our KAPA Non-Audit Services Can Help You Achieve Compliance, and in the "Process" reap the other five benefits mentioned above:

• S-O, Section 404: Management Assessment of Internal Control.
  We define the process of internal control and develop procedures for financial reporting. In addition, we monitor the effectiveness of control and procedures, and provide a simple, easy to understand process model that can be reviewed quarterly or whenever required.
• S-O, Section 401: Financial Reports in Accordance with GAAP.
  We define the reporting process for financial reports, and by doing so, K.A Parker & Associates, Inc. can help you shorten delivery time necessary for compliance with Section 402. We can also help manage the delivery of I.T. software, hardware, networks and projects to accomplish process goals.
• NYSE Proposed Guidelines on Risk Management.
  With your company’s management and your audit committee, we define, in simple yet precise terms, the process that your company will use to avoid and mitigate major financial risks, including the costs of I.T. projects.
• S-O, Section 302: CEO/CFO Certifications.
  We define the process of financial reporting according to management’s requirements and assure the veracity of annual and quarterly reports.
• S-O, Section 409: Specifies Real-Time Disclosures.
  Using our unique Parker Process Method, K.A Parker & Associates can assure an IT and workflow process that will be as "rapid" and "current" as is technologically and humanly possible. It will also define in simple terms the process for review and improvement.
• S-O, Section 103: New Internal Control Auditing Standards.
  This section of the law mandates that the auditing accounting firm must define the process of auditing. As an external, non-audit service provider we work with your accounting firm to help them define their process so that there is a consistent model for reporting and describing internal controls.
• SEC Final Rule: Financial Information System Design and Implementation.
  We can assure the independence of Enterprise Resource Planning because we are a third party independent. In short, we can design and implement financial reporting systems to help you achieve complete Sarbanes-Oxley compliance.
• ISO 9000 Certification Compliance
  ISO 9001 requires a process model of your business. If you have not created one, our process engineering will get you started toward this certification.

Who We Are

K. A Parker & Associates, Inc. is not a law or accounting firm. We don't do audits and we don't sit on boards of directors. We see our raison d'etre as being pathfinders; an organization comprising highly experienced associates who can escort you to compliance with any government or legal initiative. We've carefully designed KAPA Non-Audit Compliance Services, our products and services, to fit any corporate culture without causing major business disruptions.

A Brief Perspective on Sarbanes-Oxley

• December, 2001, backlash fall-out political spin to show politicians are sympathetic to the plight of the common man being taken by big business and big business shysters.
• July 2002, Congress passes Sarbanes-Oxley bill giving it to the President to sign.
• President Bush sees this as an opportunity to bolster stock market and send message to economy.
• SEC gets on board and issues Final Draft of regulations echoing much of SarbOx law. Special sections of the law mandate SEC to issue regulations.
• SEC gives stock exchanges and those companies that are trading time to comply (one year) or else.
• Teeth SEC imposes a $100,000 fine per incident and two-year jail time for CEO’s and/or CFO’s that are caught between the middle of their non-compliant organization and the SEC.
• Executives can be tried for fraud and grand larceny.
• Stock exchanges warn of stock de-listings.
• Four companies, Enron, Global Crossing, WorldCom and Tyco are used as examples.
• SOX imposes “take back” policy that allows SEC to confiscate any gains that they determine are a result of the illicit activity.
• Most law and accounting firms that specialized in business law and auditing are now providing SarbOx products.
• Many product-oriented and software companies are now re-aligning their products to address the compliance issues.
• Banks will be required to enforce SarbOx with corporations that have banking relationships (everyone) because of the FDIC.
• In some cases the SEC made the law more restrictive and other cases, less.

What It All Means

• Financials:
• Immediate changes to financial software to reflect stricter time constraints on reporting.
• Process-oriented canned software may not be able to comply.
• Strict quality control on financials with upper management oversight and responsibility means new software to provide visibility of data and process.
• Enterprise rollups mean necessity to combine purchased companies quickly. Cost of software revamps may no longer be the issue. Time constraints to declare intentions and merge financials adds internal I.T. and Network pressures.
• Reliance on software or just one financial system may not be the norm. Extensive backup plans will be needed to insure cross-functional and high reporting quality demanded by the top management and regulatory agencies.
• Processes/procedures must be produced in order to be in compliance.
• Audit and outside audit processes must be produced for compliance.
• Human Resources:
• Rules regarding “independence” and “financial expert” imply extensive background checks of all financial, management, board of directors, information technology, legal, inside human resource, non-audit consultants and outside audit resources.
• Extensive publishing and presentations to entire staff regarding compliance issues. Much like the “sensitivity” issues of the past.
• Whistleblower procedures that will allow for anonymity. This may or may not include an I.T. capability. Must not hold employees liable.
• New class of departure: “For compliance reasons.” Employee worked for an audit firm within the last five years which is the audit group of current record.
• Enforcement of “code of ethics”.
• Reconstitution of the term “ethics” as it applies to foreign interests.
• Training
• Massive training efforts relating to all of the above changes in I.T. programs.
• Financial training regarding process and quality.
• Human resource training for all management and financial staff regarding terminating offenses and information shuffling.
• Entire staff training on new whistleblower initiatives.
• Entire staff training on ethics.
• Entire staff training on terminating offenses.
• Human Resource staff training on above and handling of enforcement agents on premises, privacy rights of offending party.

K. A Parker & Associates, Inc. is proud to offer its KAPA Non-Audit Compliance Services to help you assess, plan and implement compliance initiatives quickly, correctly and without business disruption. Contact us today by calling (919) 369-2373 or sending e-mail to kparker@kaparkerassoc.com to see how we can help you. You'll be glad you did.