Posts Tagged ‘asset managemet’
Do You Understand the Sarbanes Oxley Act?
If you are an American company, then you might be required to know about the Sarbanes Oxley act. If you are a American company and have never have heard of the act, then you have already learnt something new. It’s a United States act.
The Sarbanes Oxley act is an act that was signed into US law in 2002. The act was designed to try and stop companies doing what Enron and Worldcom did. Both of these companies announced that they had been running on fraudulent deals for several years. At that time it was not required for the companies to show their books to the government.
What it does is it makes sure that the companies are run safely and lawfully, if it’s found that they are not, the owners are help resonsible for any wrong doing.
The act forces the Chief Executive Officers and the Chief Financial Officers to sign the books for the business. They are required to sign the records to say they don’t contain anything that’s false and that they match the companies earnings.
If the act is not abided by or the records are found to be false, the Chief Officers can be punished by the government.
Like I said at the beginning, you may not have to abide by the act. You only need to abide by the act if your company is based in either the US, UK or Europe and they have listings on the US stock exchange. You should also be required to follow the act if your company is based in Europe and it;s a subsidiary of a US company.
Some companies find the Sarbanes Oxley act to be a real pain. Because the company must report every transaction that has been made, even the sale and purchase of assets is required. This is where people have the problem because all the company’s fixed assets must before recorded.
The process of fixed asset accounting can be expensive and take time. If you do it yourself within the company it can take several months and can often result in errors. The easiest way to ensure you have recorded all your assets is by outsourcing the process to an asset management company.
Unfortunately, it’s still not a cheap process to do. However, a large number of asset tracking companies will give you different deals to help asset auditing alot simpler in the future. Many of the companies also offer Sarbanes Oxley compliance software which will make the job even easier for you.
Hopefully you will have learnt what the Sarbanes Oxley act it, whether you need to abide by it, and how you do it if you are required to. No doubt you won’t like the sound of the act, but you can blame Enron.