Preserving Key Business Information

After several years of soaring revenues, lots of available capital and the "dot.com bubble," many companies loosened their corporate controls. The Sarbanes-Oxley Act (SOX) was enacted in response to several business failures brought on by corporate recklessness and corruption. It is an attempt to restore investor confidence and to improve accountability and accuracy in corporate governance and financial management.

The Sarbanes-Oxley Act was signed into law on July 30, 2002, and introduced significant legislative changes to financial practice and corporate governance regulation. Stringent new rules were established with the objective of protecting investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws.

The act is named after its main architects, Senator Paul Sarbanes and Representative Michael Oxley, and follows a series of very high profile scandals such as Enron. The act is intended to "deter and punish corporate and accounting fraud and corruption, ensure justice for wrongdoers, and protect the interests of workers and shareholders."—President George W. Bush

Facts about Sarbanes-Oxley

The following data must be monitored, including but not limited to:

• Corporate board minutes and notes;
• Investor relations materials (news releases, newspaper clippings, market reports, etc.);
• Contracts;
• Due diligence documents, especially those related to merger and acquisition activity;
• Corporate counsel activity;
• Records management processes;
• Internal and external audit activity;
• Corporate security;
• Internal fraud investigations;
• Analysis of data on confiscated PCs and paperwork from ex-employees; and
• Analysis of email and faxes, storage (bulk processing).

SOX rules are evolving. They are not always easy to understand. As of September 2004, the Sarbanes-Oxley Forum reported that almost half of US businesses had not created plans or taken actions to meet the new compliance standards.

What are the financial reporting and corporate governance challenges posed to companies by Sarbanes-Oxley legislation?

1. CEOs are now directly accountable for misrepresentations of financial or corporate information. The need to archive key financial and business transaction information has become a priority for many companies. Many companies need to tighten corporate controls and increase vigilance to detect fraud, which escalates the pressure on internal audit resources. Outsourced services for archiving, indexing and retrieving information for immediate access can save time and money in monitoring activities and in delivering information in an accurate and timely manner.

2. The inability to produce documents (whether misfiled, lost, destroyed, altered, covered up, falsified, etc.) may result in steep fines or imprisonment of up to 20 years or both. It is up to the company to prove that documents requested but not produced were not deliberately destroyed. By preserving your documents in digital format, only authorized users may access the documents. Your documents are safe from deletion before a specified time period determined by your staff. Modification is controlled by privileged user access with earlier document revisions and original versions of the document always accessible for the entire document retention period.

3. Technology can improve compliance ROI by streamlining business and compliance processes. Loading original information from disparate sources and in various formats, while being able to analyze, filter and summarize financial information across any user-specified time period (without additional programming) is key to successful compliance. Data capture, report mining, document and record retention, monitoring and audit reporting capabilities reduce the time personnel spend on searching for, retrieving and using information.

4. SOX requirements are evolving. Your vendor should invest in upgrading and replacing systems to keep pace with the changing control and reporting requirements so you won't have to.

5. Audit fees have risen rapidly with the need for tighter controls and more regulations. Solutions are available to save hours or days of research time to produce data and documents requested by the auditors. Load the data once and access it anywhere, using your corporate intranet or the Internet. Corey Meitchik has spent his 20-plus-year business career in a variety of industries, including photographic film manufacturing, software development, commercial printing, digital imaging equipment manufacturing and specialty digital imaging. His experience covers domestic and international sales and marketing in public and private companies as well as with domestic and foreign governments.

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docHarbor, a leader in the capture and preservation of key business information, cost-effectively helps your company meet current and future Sarbanes-Oxley requirements. By outsourcing your document management, your company can save money on personnel, systems and processes needed to maintain a higher standard of corporate governance and financial accountability.

For almost 40 years, docHarbor has been focused on capturing and preserving documents for thousands of organizations, including most of the Fortune 100. docHarbor's hosted suite of document management solutions has a proven track record for rapid implementation, predictable price and performance, and powerful return on investment. For additional information please visit www.docharbor.com or call 800-364-9870.