Solving Sarbanes Oxley document

7/28/2019 Solving Sarbanes Oxley document

http://slidepdf.com/reader/full/solving-sarbanes-oxley-document 1/5

Business Intelligence

Solving Sarbanes Oxley:A Business Intelligence Perspective

SETLabsTechnology Analysis and Product Evaluation Group

Infosys Technologies LimitedBangalore, India



SETLabs Solving Sarbanes-Oxley: A Business Intelligence Perspective

October 2003 Page 2 of 5

Acknowledgements

The author would like to acknowledge the contribution of Sreekumar S in the preparation of thisdocument.

Disclaimer

© SETLabs 2003, Infosys Technologies Limited.Infosys acknowledges the proprietary rights of the trademarks and product names of other

companies mentioned in this document. The information provided in this document is intended forthe sole use of the recipient and for educational purposes only. Infosys makes no express orimplied warranties relating to the information contained in this document or to any derived resultsobtained by the recipient from the use of the information in this document. Infosys further doesnot guarantee the sequence, timeliness, accuracy or completeness of the information and will notbe liable in any way to the recipient for any delays, inaccuracies, errors in, or omissions of, any ofthe information or in the transmission thereof, or for any damages arising there from. Opinionsand forecasts constitute our judgment at the time of release and are subject to change withoutnotice. This document does not contain information provided to us in confidence by our clients.

For More Information

Please contact Anoop Nambiar [email protected] or visit http://www.infosys.com formore details.





Solving Sarbanes-Oxley: A Business Intelligence Perspective

By Anoop Nambiar Software Engineering and Technology Labs

Infosys Technologies Ltd.http://www.infosys.com

Executive SummaryIn the wake of accounting irregularities and financial scandals that rocked corporate America, theSarbanes-Oxley Act was introduced in 2002. The scandals that drove corporations intobankruptcies and wiped out life-savings of thousands of employees have eroded the faith of thepublic in the financial market. The Sarbanes-Oxley is aimed at restoring this faith and introducingmore transparency and accountability into the financial management process. The chief officersare now personally responsible for certifying the financial numbers as well as under pressure todo so under tighter deadlines.

During the past decade, Business Intelligence (BI) has been widely adopted by smart companiesfor a consolidated view of enterprise data. It builds a single version of the truth by integrating datafrom disparate systems to a common repository. BI enables organizations to capitalize on new

opportunities, improve operational efficiencies and provide superior customer service. With theadvent of active warehouses these systems also provide real-time visibility into the data. BI hasalready proved to be a powerful tool for analyzing information critical to corporate strategy.

Financial managers are turning to technology solutions to comply with the new Sarbanes-Oxleyregulations. There is a need to deliver corporate results more quickly than ever and with thehighest level of accuracy. Organizations that have already taken a strategic approach to financialreporting and analysis will find that with modifications to key processes, current systems can takecare of most of the stringent regulations. BI can provide the framework for implementing thecontrols and processes to easily and efficiently manage and report on financial data.

Sarbanes-Oxley RegulationsWhile provisions such as Insider Accountability and Corporate Governance have a profoundeffect on how corporations fundamentally behave and operate, technology has a major impact onother provisions. Specifically:

- Section 302 requires management certification that financial statements reflect accuratelyin all material respects the company’s financial condition and that disclosure controls andprocedures are in place.

- Section 404 requires management certification that financial report preparation processeshave effective internal controls and procedures.

- Section 409 requires companies to provide timely reports to investors, the SEC, andother involved parties on material changes in financial conditions and operations.

Organizations must now take a greater responsibility for the accuracy of the financial statementsand ensure that the controls, processes and systems are in place for financial reporting.

Business Intelligence SystemsForward-looking organizations have realized the importance of having a BI framework in place fora complete view of enterprise data. BI systems turn data into actionable information. At the centerof a BI solution is a data warehouse that standardizes and integrates data from multiple systems.BI tools ensure timely dissemination of data for reporting and analysis across the enterprise. Inaddition, the tools that consolidate, manage and distribute data also maintain an audit trail of thedata – where it came from, what happened to it, and who receives it.





Single Version of the TruthWith each department having its own reporting solution, it becomes difficult to reconcile numbersor agree upon standard definitions for even simple terms. Organizations typically have 20-30sources of data that range from Excel to Mainframes to pull information from. An enterprise datawarehouse integrates information from various systems to a single repository – applying commonrules in the process.

The ability to consolidate all financial and related data – for a single version of the truth - isfundamental to reporting accuracy. An enterprise data warehouse provides a consistent view ofdata for all users across the enterprise. End users do not have to worry about merging multiple

formats from a variety of sources. While it is critical to ensure data accuracy, doing so in a timelymanner is also important. ETL tools ensure that the data warehouse is updated with current data.BI tools enable the users to rapidly analyze the transactional data stored in the warehouse and toidentify any trends that may lead to a material event.

The enterprise warehouse lays the foundation for complying with sections 302, 404 and 409 ofthe Sarbanes-Oxley Act by consolidating financial information in a single place, thus ensuringdata integrity. Departments do not operate in silos anymore; changes in a single department canbe communicated to the rest of the organization resulting in increased transparency. The entireorganization benefits by having a single reporting environment across the enterprise.

Checks and BalancesTo sign-off on the numbers, the financial management team must have faith in the numbers and

the process used to arrive at those numbers. Sections 302 and 404 require that managementtake responsibility for the accuracy of the financial statements.

An effective data management process can ensure data control, quality, traceability andauditability. ETL tools play a major role in implementing an enterprise wide data integrationstrategy. The tools can answer how the data was collected, what changes were applied to thedata and by whom. Metadata – data about data – plays a major role in making this happen.Metadata allows you to see the lineage of the content.

Enterprise Data Warehouse- Consolidate multiple data sources- Workflow- Data integration- Data quality

MetadataManagement

- Definition- Controls- Reports

Query and Reporting Tools- Standardize reports across enterprise - Detailed analysis- Collaborative environment - Drill down to transactions- Role based access

Dashboard of Financial Metrics- Consolidated view - Alerts on variances- Real-time visibility

General Ledger Accounts PayableOther Transactional

DataBilling

Source: Infosys Research

A Compliance Framework Using BI





BI tools store metadata on reports and report catalogs. This together with ETL metadata gives acomplete history of enterprise data. End-users can easily understand the data and trace itsorigins. Reports can be generated from the metadata and gives management the confidence toattest the numbers.

Real-Time Visibility

To monitor and effectively manage corporate performance, real-time visibility to data is needed.Business users are increasingly relying on the data warehouse for up-to-date information to makeoperational decisions on an ongoing basis. The new generation of ETL tools are capable ofloading data to the warehouse in real-time. BI tools also provide real-time reporting capabilities.

BI tools serve as a single point of access to secure data. Roles can be set up and individuals canview data based on their roles. The tools also allow the creation of dashboards to define andactively monitor financial control metrics in real-time. Rules can be set up to automatically detectvariances and to alert when thresholds are crossed. If required, the user can drill into detail datain the warehouse for further analysis.

The real-time features of BI tools help in complying with section 409 by providing real-timemonitoring and alerting of variances. This enables rapid disclosure to shareholders of anymaterial events. Availability of integrated data in a collaborative environment along with real-timevisibility ensures certification of financial results under tighter deadlines.

ConclusionWith CFOs now personally accountable for the accuracy of financial statements, the market isflooded with companies that offer overnight Sarbanes-Oxley solutions. Rather than reacting to theAct with quick-fix solutions, progressive organizations are taking a more strategic approach. Theyare realizing that IT can play a vital role in measuring and managing corporate performance.Organizations that already have an enterprise reporting strategy in place are finding that amajority of the regulations can be met with existing BI tools and systems. From integrating andstoring financial data to providing real-time visibility to information in a collaborative environment,BI solutions provide the overall framework to ensure regulatory compliance.

Companies that want to have a greater visibility and control over financial performance will benefitfrom having an enterprise strategy for BI. If your company doesn’t already have one, Sarbanes-Oxley may be the perfect reason to lay that foundation.

About the author : Anoop Nambiar is a Data Warehousing Architect with Infosys and is associated with the Software Engineering and Technology Labs. He has several years of experience in business intelligence and has successfully implemented large data warehouses. He may be reached at [email protected].

Documents

Solving Sarbanes Oxley document