How Compliance Assistants Impact Business

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As the 20th century came to an end, the American economy had started shrinking, but some public companies took extreme liberties to preserve the delusion of high growth. The utility giant Enron was the first large corporation to be indicted and held accountable for its fraudulent practices and attempted cover-ups. As investors trust in the capital markets dwindled, who was to be held accountable — corporate management, auditing firms, or the credit rating agencies?

The 1990s saw the world's economy booming, and massive growth in the information technology sector further fuelled spending. But as many companies were realizing explosive, even somewhat uncontrolled, growth, what few could imagine was the level of deception and mismanagement of expectations that the investing community was being fed by public companies. In the wake of accounting scandals at Enron and other major companies, the US Congress passed the Sarbanes-Oxley Act (SOX) in 2002 to prevent such frauds from reoccurring and to restore investors’ faith in corporate America's financial reporting.

The SOX Act makes senior management criminally liable for misrepresenting financial information. Jon Van Decker, a vice president with the Meta Group, describes the act by saying, ''What makes SOX different is the heightened level of security around non-compliance. CIOs (chief information officers), as well as other officers of a company, can be liable for inaccurate information or insufficient controls, with the possibility of fines or prison sentences.''

Not surprisingly, corporate executives are keen to avoid such punishments, and among the employees they rely on to make sure that financial statements are complete and accurate are compliance assistants. A compliance assistant manages a large number of tools, from expensive, robust enterprise solutions that fully incorporate many components of SOX compliance to economical solutions that are not specially designed for SOX but are well adapted to address certain aspects of compliance, such as document management.

A compliance assistant’s job can be as straightforward as ensuring that the necessary paperwork required for regulatory compliance purposes is properly filed and sent in or as intricate as implementing corporate compliance programs to keep track of legal requirements while developing solid internal controls to ensure that the IT infrastructure is properly designed to meet the company's size and needs.

The compliance assistant leverages SOX compliance as a marketing tool by highlighting credentials that are crucial in securing contracts with larger firms or governmental entities and also helps reduce operating costs by establishing more efficient systems for managing files, databases, and other forms of information.

Commitment to SOX best practices can also pay rich dividends by strengthening a company's relationship with professional advisors such as bankers, insurance vendors, and legal counselors. For instance, banks and financial institutions gauge the risk profile of a business in terms of the quality of its SOX compliance. Companies that adhere closely to SOX requirements are much better placed to negotiate favorable interest rates and lending terms. Businesses that have taken proactive measures to integrate SOX compliance and implement best practices are thought to be better risks.


Smaller, privately held companies may avoid complying with SOX, but none is immune to the consequences of failing to do so. Demonstrating your ability to integrate SOX compliance requirements can bolster confidence in your company's integrity and transparency and position your firm as an attractive vendor.
On the net:Five Steps for SOX Compliance

Sarbanes-Oxley: The Act and Strategies for Compliance

The Long and Grueling Road to SOX Compliance If this article has helped you in some way, will you say thanks by sharing it through a share, like, a link, or an email to someone you think would appreciate the reference.

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 expectations  US Congress  Sarbanes-Oxley Act  Enron  corporate executives  public companies  managers  investments  vice president  SOX Act

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