Section 404 of the Act requires that executives must publicly state their responsibility for establishing and maintaining an adequate internal control structure and procedures for financial reporting. This Act, created following recent corporate accounting scandals, places accountability for financial reports at the very highest levels of an organization. Non-compliance could result in jail sentences, hefty fines, not to mention bad publicity. Even with these consequences and companies spending thousands on compliance issues, executives are still overlooking a major area for compliance – corporate purchasing. The corporate purchasing department may well be the one area where Sarbanes-Oxley will snare your company. Why?
TSA has worked in the purchasing arena for more than twenty years and have seen the innards of hundreds of companies’ operations. Two things have always amazed us: First, the lack of process around indirect purchasing in otherwise highly institutionalized companies. Second, the lack of executive interest in improving the purchasing process. (Yes, the latter is usually responsible for the former.) Sarbanes-Oxley changes both the purchasing process and the level of executive interest in purchasing. Companies must now review every area impacting the numbers going into financial reports, and executives must sign off on their accuracy. Your company has probably spent time scrutinizing revenue tracking, accounting practices and executive perks. How closely have you looked at purchasing? Ask yourself:
What controls do you have in place to detect kickbacks and other purchasing-related fraud?
How detailed is your audit trail?
How often do purchase orders get changed?
Who approved purchase requests and then deleted them?
How often does someone make a purchase and then get the PO?
Can’t say for sure? Then sound the alarms. It’s time to play catch-up before the SEC catches you.
Puridiom's intuitive design separates, documents and controls the Requisition, Requisition Approval and Purchase Order Process so that your company complies with Sarabanes-0xley legislation. With our powerful reporting tools, your company complies with this legislation. On top of that, Puridiom provides additional SEC reporting of all procurement activity to meet all federal legislative standards.
