Parson Consulting and APQC Identify Best Practices In Ongoing Sarbanes-Oxley Compliance


	Advertise with Sarbanes Oxley Compliance Journal

News

< Back

Sarbanes Oxley : Governance : Survey

Parson Consulting and APQC Identify Best Practices In Ongoing Sarbanes-Oxley Compliance

Parson Consulting and APQC Identify Best Practices in Ongoing Sarbanes-Oxley Compliance

Rick Fumo
CEO
Parson Consulting

The federal Sarbanes-Oxley Act on financial and accounting disclosure is in its third year and companies still are struggling with their programs to comply with it. A benchmarking study sponsored by Parson Consulting, a leading financial-management consultancy and the APQC, an international non-profit research organization, finds that despite robust internal-control practices, many organizations are having difficulty keeping their ongoing compliance costs at a reasonable level. Smart companies, however, are keeping costs down and maintaining top-notch compliance programs.

Parson Consulting and APQC launched the groundbreaking benchmarking initiative as part of the Open Standards Benchmarking CollaborativeSM (OSBC) research to assist financial executives in evaluating their internal controls, specifically relating to Sarbanes-Oxley compliance. Since the passage of the financial-disclosure legislation in July 2002, the strength of internal controls has become a key issue for organizations across the country. Organizations completed this comprehensive benchmarking research that enabled them to compare their performance and practices in the internal controls process against those from other global companies.

?While not even on the horizon 10 years ago, internal controls has become an integral part of an organization?s financial and business policies and procedures,? said Lisa Higgins, chief operating officer for APQC. ?What this study reveals is that organizations with highly effective internal controls systems and processes in place don?t necessarily spend the most to achieve top performance. To that end, organizations that have both cost effective and efficient systems are clearly going to be the winners.?

The research revealed a significant discrepancy in the compliance-management costs incurred by the top-and bottom-performing organizations. Most participating organizations cited the use of some type of compliance technology. The research suggests that organizations with a higher level of automated controls exhibit lower overall cost and greater efficiency.

?Sustaining effective internal controls has fast become a business imperative,? said Rick Fumo, Parson Consulting?s chief executive officer. ?Parson maintains a commitment to providing organizations with tools and practices to strengthen the overall control environment and to improve operational processes.?

The benchmarking research and consultative experience have identified five success factors as key enablers of success in the internal controls process.

? Executive Support ?Senior-level support is seen as critical to delivering an internal controls compliance process and infrastructure.

? Communication ? Ongoing compliance communication plans in the overall compliance process is beneficial.

? Process Owner Accountability ? Reinforcing control ownership and accountability at the control owner level aids in strengthening the value of compliance within an organization?s culture.

? Risk Assessment ? Conducting risk assessment supports a more efficient compliance program by potentially reducing the frequency of external control tests.

? Software Tools ? Over 75% of the participating organizations employ a software tool within their compliance program. In addition, top performers employ a compliance management or other software tool potentially as a means to streamline the compliance process and reduce costs.

?The OSBC research further supports the notion that the strategic use of technology can reduce costs significantly while also improving overall efficiencies,? said Anne Marchetti, global service line lead at Parson Consulting. ?The knowledge gained from this research will help organizations identify the ways that they can best incorporate compliance automation tools into their internal controls programs.?

For purposes of this research ?top performing? organizations are defined as those with overall top quartile performance across five metrics related to the internal controls process in the areas of cost, efficiency, and cycle time. For more information about the measures used or access to the survey finding please refer to the above contacts at Parson Consulting and APQC.

An internationally recognized resource for process and performance improvement, APQC helps organizations adapt to rapidly changing environments, build new and better ways to work, and succeed in a competitive marketplace. With a global focus on productivity, knowledge management, benchmarking, and quality improvement initiatives, APQC works with its member organizations to identify best practices, discover effective methods of improvement, broadly disseminate findings, and connect individuals with one another and the knowledge, training, and tools they need to succeed. Founded in 1977, APQC is a member-based nonprofit serving approximately 500 organizations worldwide in all sectors of business, education, and government. APQC has trained more than 16,000 people in 36 nations, conducted more than 625 benchmarking and improvement projects, and fulfilled over 12,000 information requests and built a corresponding database with more than 5,000 best practices.

Learn more about APQC by visiting www.apqc.org or calling 800-776-9676 or 1-713-681-4020.

Parson Consulting's extensive client list covers the Fortune 500, FTSE 350, SBF 120 and ASX 200 and similar sized private companies. We work with clients across the finance function, including strategy, operations and systems, and our technical expertise spans all industries. Our client satisfaction level of 93% is twice the industry average, based on independent research by Gantz Wiley.

About Us

Editorial