Abstract
Sarbanes Oxley Act of 2002 was enacted by the US Congress to put forth a set of new system of checks and balances on the financial reporting requirements of companies. This was enacted after a spate of corporate reporting scandals struck the United States leading to erosion of investor confidence in financial reporting and management disclosures. The Sarbanes Oxley Act (referred to as SOX), is designed to increase the accuracy and reliability of corporate disclosures by requiring broader standards than the Generally Accepted Accounting Practices (GAAP).

The focus of this paper is to illustrate how the wider compliance initiative embarked upon by organizations can be used to identify and improve the process loopholes that exist today. In fact, one of the key gains that are being factored into all ROI calculations for SOA compliance takes into account the long term benefits of process standardizations and improvements. The paper illustrates the meeting points between various transaction controls with the financial reporting elements. The objective is not to interpret or “value judge” a particular method of accounting business transactions or evaluate alternate methods, in a pure accounting sense.

Author Satish Panchapakesan

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