Sarbanes-Oxley Act: Advantages and Disadvantages

Sarbanes-Oxley Act: Advantages and Disadvantages Discuss the strengths and weaknesses of the Sarbanes-Oxley (SOX) Act and describe how an IT department can meet the challenge of implementing SOX compliance Over the past ten years we have been exposed to a series of financial scandals. The effect has been catastrophic and society has required regulation to restrain corruption. In 2002, the USA senator Paul Sarbanes and Representative Mike Oxley sponsored the Public Company Accounting Reform and Investor Protection Act. It is generally called the Sarbanes-Oxley (SOX) Act and was put in place in order to regulate the accountability of financial reports and prevent risks occurrence However, the deployment of SOX compliance costs a lot of money, resources and efforts. It not only affects the finance department, but also the information technology (IT) department. The risk prevention and cost concern of SOX Act will be described in the first paragraph; the pros and cons of process control, documentation and responsibility will be discussed in the next; the strengths and drawbacks of security control will be indicated after that; then the challenge of an IT department for SOX compliance will be examined. Finally, a case study on the Enron scandal will be introduced. This essay will help prove that the SOX system is worth the price despite certain drawbacks and discuss how an IT department meets the compliance. It is worth preventing potential risks by effectively performing the SOX regulation in spite of extra costs and workload. To begin with, SOX Act provides a guideline of internal control for financial statement to prevent any potential risk, all the financial events and accounting activities will be managing by this mechanism. Thus, the financial statements would be more accurate and reliable (Anand 2006: 2). In addition, through regular internal and external auditing to ensure there has no unscrupulous behaviors in the financial operations. Consequently, the potential risks can be minimized and unethical behaviors can be prevented and deterred. However, the finance and IT departments must budget the expenditure of SOX implementation at the beginning and also need to pay external accounting firms for regular examinations every year. The estimation of its cost was around USD 91,000 with an extra 383 man hours in 2003, and the cost is still increasing every year (Jahmani and Dowling 200 8: 59). Staffs have an increased workload by collaborate with consultants for the auditing. Those employees not only have to document routine activities, but also need to prepare a lot of evidences for auditors investigation. Although employees may suffer through these additional tasks, some unexpected benefits will be gained from them as well. The transparency of documentation gives a company more integrity even though some process changes are required. The standard operating procedure (SOP) of each department must be documented, especially for those operations involve to financial activities and SOX compliance. Namely, the internal or external auditors will investigate any potential risk of process control according to the documentation. It is thought that the establishment of SOP and documentation would be an advantage to companies, because it demonstrates the system of a company and employees are easy to follow, and it also improves the effectiveness and efficiency of business process. In addition, the segregation of duties is also a critical control point to the SOX compliance for the risk prevention (Anand 2006: 53). Employees are required to request accounts to the system administrator according to their responsibility, and other colleagues are disallowed to process information systems through other peoples system ac counts. Thus, every single detail is filed into the information system with regular backup solutions. It provides the traceability for auditors investigating any suspected issues. Conversely, companies may need to change business process flow and modify related system flow in order to align with SOX Act guideline. They must pay extra costs of business process re-engineering and IT staffs must enhance information system to meet those requirements as well. The regulation of security control will avoid inappropriate behaviors happening although employees may feel frustration. The IT department performs a very important role to assist and reduce the effort of manual jobs. However, they usually have more authorities in system to support user needs. For this reason, IT members are also divided into different roles, and those roles are usually separately assigned into server, database, security and application systems. Every change and modification must be approved and documented into the system. Moreover, those changes must be regularly reviewed by the management team in the change management meeting (Sentt and Gallegos 2009: 408). Thus, it will be more safety and the risk of system change can be diminished. In sum, employees have clear understanding of their roles and their performance can be easily traced from the information system. Potential risks can be also minimized by the restriction of system design and security control. Despite t his benefit, more staffs may need to be hired to prevent the conflicts of job duties, because employees cannot validate the rule of segregation of duties. Finally, owing to those complicated restrictions of SOX compliance regulation, employees may feel frustrate of against rules. They may prefer focusing on their routine tasks rather than extending their capability to involve another area because of risks taken. IT department often plays an important role of implementing SOX compliance for the information system perspective. There are some approaches suggested for an IT department to cope with the challenge of SOX compliance. To begin with, a sophisticated information system is fundamental in implementing SOX compliance. The Enterprise Resource Planning (ERP) system automatically calculates financial reports and its operations usually can meet Sarbanes-Oxley Act requirements (Pathak 2005: 72). Next, the system change and program version control are also mandated. Therefore, the introduction of a change management system would be helpful for executing these changes. In addition, cross check of those changes would help companies prevent any unexpected disaster as well as some frauds in purpose. Furthermore, system logs, backup solutions and security controls are also critical for an IT department meeting the criteria of SOX implementation. Ultimately, documentation is a basic element for the s uccess of SOX compliance implementation. Therefore, system manuals, user manuals, transaction logs, security control sheets, schedule jobs and change request logs must be archived and categorized in the file system. In short, as long as IT department follows above guidelines, then it will not be difficult to meet the challenge of implementing the SOX compliance. Let us now look at the Enron scandal, a crucial example not least because of its impact on the USA government and society. The aftershocks were felt globally. Enron was an energy company which supplied electricity and gas in the USA. This company was also providing bandwidth service, paper and metal commodities. However, those investments seemed not successful and profitable. Enron therefore had created a lot of overseas special purpose entities for hiding Enrons losses on their financial reports, and it had also created the illusion of profitability which was actually losing money. Besides, Enrons audit firm Arthur Andersen had a long term relationship and it assisted Enron to hide losses by destroying related documents. Eventually, their conspiracy was exposed to society due to revelation of a huge amount of undisclosed losses USD 586 million. The stock price had a dramatic fall from approximately USD 90 dollars to 30 cents. Finally, Enron was filed bankruptcy in 2002 (Welytok 200 6: 26). People should learn the harmful from this incident, particularly the US government and the entire corporate must prevent such kind of scandal occurring again. Therefore, the implementation of SOX Act would be a good approach to curb corruption. The evidence shows that implementing and sustaining SOX compliance could minimize fraud or crime risk up to 95 per cent of a company, if that company performs it appropriately and effectively(Anand 2006: 196). It demonstrates the significance and effectiveness of SOX compliance. In conclusion, there are several advantages and disadvantages for implementing SOX compliance in companies. First, financial reports would be more transparent and reliable through auditing controls, and potential risks will be reduced. Next, both companies and employees will benefit from the creation of documentation. Because it meets SOX compliance and helps employees understand the business processes. After that, it is more safety for the restrictions of system account and authority, and those possible swindles would be minimized. Conversely, there are some disadvantages of SOX compliance to companies. First, SOX compliance implementation will cost a lot of expense, and companies have to budget for SOX auditing every year. In addition, the processes change of a company is inevitable to conform to the guideline. Furthermore, employees may lose their enthusiasm for job due to the limitations of SOX Act, employees would become frustrated of involving the other areas. Finally, some str ategies are advisable for IT department implementing the SOX compliance. For instance, a sophisticated ERP system can be easier to adapt the change of SOX compliance implementation; change management and version control must be under controlled; preparing all documentations as possible as you can. Above all are basic elements for the success of SOX compliance implementation. Reference list: Anand, S. (2006) Sarbanes-Oxley guide for finance and information technology professionals. New Jersey: John Wiley Jahmani, Y. and Dowling, W. (2008) The impact of Sarbanes-Oxley Act Cluteinstitute-Onlinejournal [online] 6(10), 57-66. Available from [26 August 2010] Pathak, J. (2005) Information Technology Auditing An Evolving Agenda. New York: Springer Sentt,S. and Gallegos, F. (2009) Information technology control and audit(3dn). Florida: Taylor Francis Welytok, G. (2006) Sarbanes-Oxley For Dummies. Indiana: Wiley

Cons of Obamacare

Patient Protection and Affordable Care Act The Patient Protection and Affordable Care Act of 2010 is the first major healthcare act passed since the 1967's Medicare and Medicade act. Obamacare is the name given by critics, because of the power that is given to the federal government to regulate healthcare prices. The reason given that this act was passed is that it willl save billions of federal dollars each year. Many people against the act believe it should be repealed ,and the reason for this is, because it gives away healthcare to people who don't pay for it.The act also takes away from seniors who really need the medi,cade benefits, and also makes doctors increase how much people pay them. The Patient Protection and Affordable Care Act of 2010 is an extreme set of laws that give the federal government too much power over health care, lets government choose the price of health care, takes away health benefits from senior citizens, takes away more care from people who work for it truly deserve the care, and in addition it is already costing three times more than what it was expected to cost.The Patient Protection and Affordable Care Act is an act that generally lets everyone have health care, and is supposed to make health care cheaper. The idea of this plan is to reduce the cost of health care over a decade by 1. 2 trillion dollars making everyone get health care. Overall studies have shown that in the first decade it actually cost 3. 2 trillion dollars to insure everyone, and that is not good at all.There are many good parts of medicare like how it benfits small business, and it allows for parents to let their kids stay on their own insuramce plan until they are 26 which actually earns health insuracne companies for money in the long term. However the Obamacare will actually hurt the middle class, and more than likely increase health insurance cost for everyone. This wiill ultimately hurt our budget deficit recovery plan which is the whole reason the PPAC was initially made. Obamacare was a dishonest plan to begin with, and if Romney gets in office hopefully he will repeal the horrible act that is Obamacare.Many people think The Patient Protection and Affordable Care Act of 2010 is socialism. There are many reasons for this, one is that it lets the federal government mandate what the price of health care is which in effect can cause the prices of healthcare to go up dramatically within the next four years. This also makes everyone get health care even if that set family cant afford it which is a form of Socialism. If you refuse to get the new health care, like in the case of small businesses with over 50 employees they will drop existing businesses medicade plan that you have, and you wont have the extra care at all.In all technicallity there has been no limit in which the federal government can tax Americans for health care. In the long run that will put a bigger dent in Americas economy and our debt to China. Senior citizens across the country who cant afford regular health care prices use medicade to lower their price, and The Patient Protection and Affordable Care Act of 2010 is making it more difficult for seniors to recieve Medicade help practically taking all the relief given to senior citizens with obamacare. The effects on senior citizens will be catastrophic there will be a shortage of 95,000 doctors due to pay cuts.Which will make it to where less and less people can be seen by a doctor each day. Seniors, in fact, will have to pay at least ten percent more than their usual medicare plan due to tax cuts, and price increases. Another bad fact is that due to Obama's irresponsible tax cuts that fifteen percent of medicare or medicaid plans will be cut from the system, directly affecting the amount of care that seniors will be able to recieve no matter what. One elderly woman from Massachusetts who is fighting parkinson's says that she has already stopped recieving cheap care because doctors are already p reparing for Obamacare in 2013.In 2010 president Barack Obama ensured us that in the first decade of his healthcare plan it will save us 1. 2 trillion dollars. However that was false, and The Patient Protection and Affordable Care Act of 2010 will cost three times more than what was originally projected. Republican senators have shown this estimate everytime they calculate the plan, and many say that Obama just plain out lied to Americans who had given him support. Also it will put Americans in an extra two trillion dollar deficit in which the total deficit will add up to 5 trillion dollars.The senate is already pushing to ammend the bill to where maybe we can correct his mistakes, but also save us money in the first three decades which was originally projected. Obama held a joint session in 2010 where he practically said this is the plan, and it will cost 900 billion dollars however its already made us spent three more times the usual amount for any health care plan in America. Man y people who some say don't deserve healthcare are getting healthcare while middle class families are giving more than ever to support these bums.Obamacare is practically ripping care out of the hands of people who work hard for care, yet supports the poor people who cant afford it. Now we must understand that there are special circumstances for people, but most people have the energy to get off the couch so they should be able to find a job. In most circumstances if they got laid off or whatever the other circumstances are, but it doesnt mean Obama should just give special care to these people because there to lazy to go out and work every day like normal Americans. The conclusion to my thoughts about The Patient Protection and Affordable Care Act of 2010 is simple.One, it lets the government choose the price of healthcare and medicade, and also is a form of socialism. Two, war veterans, and senior citizens who worked hard everyday for our country are steadily being taken from. Thr ee, the act grants them the power to tax more from medicade. Next, The Patient Protection and Affordable Care Act of 2010 is starting to cost three times more than president Barack Obama originally projected it to cost. In conclusion the Patient Protection and Affordable Care Act of 2010 could've been a great act, but many others think it will be a economic disaster that sets off another depression.

Management Case Studies

Ans 1:- Rollerblade, the popular skate manufacturer based in Minnetonka, Minnesota. Rollerblade has been one of the leading firms in the fast growing high performance roller skate marketplace. Rollerblade was in a bind. The product literally could not be shipped out the door. The managers found that workers were not able to ship products because, as a result of poor storage structures, they could not find the products. Once they were found, overcrowded aisles, in addition to other space constraints, still prevented efficient shipping because the workers could barely manage to get the products out the door. We were out of control because we didn’t know how to use space and didn’t have enough of it,† said Ian Ellis, director for facilities and safety. â€Å"Basically, there was no more useable space left in the warehouse, a severe backlog of customer orders, and picking errors were clearly in the unacceptable range,† added Ram Krishnan, Principal of NRM Syste ms, based in St. Paul, Minnesota. With retailers as their primary customers, the customer competitive imperatives that are being affected by Rollerblade’s inventory problems are mainly of services i. . delay in deliveries, as stated above they were facing problems in making deliveries on time, no shipment was reaching on time. These delays will effect a lot on their customers as the retailers want to sell them and if the products were delayed the retailers will also have to suffer in loosing their customers which will in deed result in backing off from the Rollerblade’s only. Rollerblades were lacking behind in technology so as to meet their customer demands they need to improve their technology. Ans 2:- JIT, or just in time, inventory is a inventory management strategy that is aimed at monitoring the inventory process in such a manner as to minimize the costs associated with inventory control and maintenance. To a great degree, a just-in-time inventory process relies on the efficient monitoring of the usage of materials in the production of goods and ordering replacement goods that arrive shortly before they are needed. This simple strategy helps to prevent incurring the costs associated with carrying large inventories of raw materials at any given point in time. For a product like Roller skates, a just in time inventory system might not be that useful as the problem with roller skates isn’t associated with production means whereas it is with the time of delivery. The problem arises after the product is manufactured and is dispatched for the delivery. The main problem with them was for the storage and then reallocating it as there was no systematic way of storage and finding it and sending it for the delivery on time. To solve this problem technology was required rather than just in time inventory system. Ans 3:-

The Three Core Philosophies Of The Black Nationalism Movement

On April 12, 1964 Malcolm X, born Malcom Little, delivered his famous Ballot or the Bullet speech before of crowd in Detroit, Michigan. The speech, was Malcom’s way of appealing to the black community to come to self-realization and uplift themselves. In his speech, the noted civil rights leader presents the three core philosophies of Black Nationalism: political, economic and social. This essay will provide an in-depth analysis of the three core philosophies of the Black Nationalism Movement and assess how these same issues affect us today. Malcolm delivered his Ballot to the Bullet speech on the heels of Martin Luther King Jr’s famous I have a dream speech and the Supreme Court’s ratification of the 24th Amendment. This constitutional†¦show more content†¦In addition, like in Malcom’s and Dr. King’s day clear attempts have been made to suppress black votes in several southern states. South Carolina, for example, ahead of the recent election passed some laws including, outlawing same day voter registration and the usual full week of voting. The state also reduced voting hours and limit the number of polling stations in predominantly black communities. South Carolina went as far as to redraw political boundaries which was later overturned by the courts. Similarly, in Florida, anyone with a previous felony were disenfranchised. Remember now, African-Americans and Latinos form the most incarcerated group in the country. It is abundantly clear lawmakers had carefully studied the voting p atterns of African-Americans and Latinos and outlawed the practices that favored them. Come to think of it, a certain presidential candidate was known for saying that the election was ‘rigged.’ I am inclined to think the then candidate knew a little more than we did. Additionally, key to Black Nationalism is the subject of economics and the role it plays in shaping society and stratifying races and classes. Malcom presented in his speech a ‘common sense’ economic model to steer African-Americans to self-sufficiency. He charged, â€Å"We should own and operate and control the economy of our community.† He believed by controlling the local economy, blacks would be able to alleviate some ofShow MoreRelatedEssay about 1968: A Year Of American Transformation1649 Words   |  7 Pagesthe profound panic evoked by the assassination of John Kennedy, the general public seemed to be gaining a restored optimism, and even the regularly protested Vietnam War still possessed the semblance of success (Farber and Bailey 34-54). However, three short weeks following the eve of ‘68, Americans abruptly obtained a radically different outlook. 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