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Be Prepared For A Government Audit With Online Document Management

As daunting as income tax season is for individuals every year, an equally pressing and year round concern for businesses is compliance with the Sarbanes-Oxley (SOX) Act.  SOX legislation was enacted in 2002 in order to mandate accountancy regulations for publicly traded companies.  The Bill was passed in response to several high profile corporate accounting scandals which cost investors billions of dollars and weakened public confidence in American securities markets.

Every year businesses large and small are subject to a mandatory government audit of financial practices in order to certify SOX compliance.  Every financial document related to corporate governance is highly scrutinized, including purchase orders, balance sheets, P&L statements, general ledger reports, and even Annual Reports.

When you conceptualize the government audit, you probably seeDocument Management for Compliance scary men in dark suits sweeping into your office with unrestrained aptitude to overturn every desk, file, and employee in the place in search of compliance violations.  Picture the agents from “The Matrix” movies!

SOX auditors look for inconsistencies in document management practices that could suggest manipulation or omission of financial information.  It’s hard to prove data validity when multiple users have access to multiple versions of the same document stored in multiple locations.

While redundancy used to be viewed as a preventative security measure (I have 2 copies of this document in case I lose one), today it is considered a liability due to the ability of individual users to make changes or copies without the knowledge of other employees, especially upper management.

Put simply, the practice of document redundancy is outdated and dangerous. This opens up your business to the possibility of data theft, which is a huge embarrassment for your company and a big red flag for government auditors.

The really scary part of SOX legislation is the penalties that can be imposed if an organization is found to be non-compliant.  Not only are companies held responsible, but individuals can be punished as well.  Companies can be fined millions of dollars and individuals can be sentenced to a maximum of 20 years in prison for any tampering or obstruction of documents.

If you are concerned about meeting your SOX obligations, consider moving your financial documents and processes to an online document management system.

With online document management all business critical financial information is stored in a central repository, which is secure and available 24/7.  Documents are indexed based on content and easily retrievable.

User permissions are created for all documents in order to control who may access or edit certain files. Temporary permissions can be created for the auditors, allowing them controlled visibility to only those financial documents necessary for the audit.

SOX compliance doesn’t have to be a daunting task.  With secure document management tools at your disposal it won’t be and you can send the men in dark suits home empty handed.

Download your FREE copy of our Document Management Best Practices Whitepaper in order to learn more about how we can help you optimize your business processes and maintain SOX compliance.

Topics: Records Management, Document Management for Financial Services, Compliance, SaaS