No Jail Time: Timesheets in Compliance with SOX
The criminalization of corporate fraud has America's corporate community scrambling to find Web-based enterprise solutions that are SOX compliant. Accounting for financial reporting can only be facilitated with a suitable time and expense solution.
Executive and financial officers are marching to the militant beat of The Sarbanes-Oxley Act (SOX). The "delegation of responsibility" rings a prudent tune in America's corporate community. Since its implementation by the United States federal government in 2002, all publicly-traded companies are responsible and accountable for corporate accounting oversight and disclosure.
Material misstatements due to error or fraud result in severe criminal and civil penalties. The price to pay is demonstrably steep fines or jail time-ten years to be exact.
The need for accurate recordkeeping is now pushed to its limits. America's corporate community is scrambling to find applications that will help simply their financial reporting processes. Web-based time and expense solutions are a prime and novel option.
Web-based time and expense solutions provide exact summaries to help financial officers generate accurate audit trails. By eliminating error-prone paper trails and manual tracking processes, executives are able to accurately track liabilities.
The following table outlines how automated time and expense solution vendors have customized their applications to comply with key sections of SOX.
| Sarbanes-Oxley Act |
How Timesheet Applications Make Compliance Easy |
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Section 302 - Production of Accurate financial reports to be reviewed by certified officers
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Ensures that your company is aware of its liability obligations. Time off is categorized as a liability and must therefore be accurately tracked and reported on.
- Timesheet applications automate time and expense tracking processes, resulting in accurate recordkeeping.
- Timesheet applications provide detailed audit trails contributing to organizational success. No opportunity for fraudulent behavior.
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Section 404 - Ensure ethical financial reporting practices and strength of internal control structure
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A high level of security is maintained through accessibility restrictions.
- Security controls are integrated into timesheet applications, with the intent of providing the ability to enforce user authorization and establish powerful permission configurations and settings.
- Historical records of all time and expense transactions are recorded for auditing purposes and can be reported at any time.
- By automating time and expense tracking, abuses and errors are reduced, creating significant savings for organizations.
- Timesheet applications include a complete approval process and workflow.
- E-mail notifications hold managers and employees accountable.
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Section 409 - Report changes to financial conditions or operations to the public without delay
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Facilitates rapid reporting.
- Timesheet applications can be queried for accurate real-time information.
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| Section 802 - Destruction, alteration, and falsification of records |
- Timesheet applications provide historical records of all time and expense transactions for auditing purposes. Details of historical transactions can be reported upon at any time.
- Approved transactions are locked down to protect data integrity. The transaction can only be re-opened by the system's Administrator or a manager who has been designated that particular permission.
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| Section 906 - Corporate responsibility for financial reports |
Your company's executives can report on the company's liability obligations at any time.
- Managers and executives can generate time and expense balance reports for any individual employee, group(s), or the entire company.
- Status reporting can generate detailed audit logs of time and expense information from submission to the final status of each entry.
- Through the utilization of Summary Reports, management is able to analyze the most complex business dealings pertaining to time and expense.
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Application compliance with SOX is mission critical. Responsibility and accountability is in your hands.
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About the Author
Raj Narayanaswamy is the co-founder and co-CEO of Replicon, Inc. (www.replicon.com), the Web-based time and expense management vendor of choice that enables companies to maximize profitability and productivity. With more than 15 years of software development and senior management experience, Raj is widely recognized for his visionary approach in developing innovative software applications that meet the needs of leading organizations.
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