Sarbanes Oxley Act, also called Public Company Accounting Reform and Investor Protection Act, SOX or SarbOx, is a United States federal law. It was introduced in 2002 at the back of a series of high-profile management and accounting scandals involving companies as Tyco International, Enron and WorldCom.

Sarbanes Oxley Act serves two purposes, first reduces treachery and inaccuracies in corporate reporting, accounting and auditing practices by establishing corporate and accounting credibility, accountability and responsibility, and second, restores the trust of investors in public markets by enhancing the timeliness, transparency and truthfulness of financial disclosures.

Sarbanes Oxley Act implements a new level of scrutiny into the books of publicly held companies by enforcing the establishment of public company accounting oversight board and encouraging auditor independence. It also provides the U.S. Securities and Exchange Commission the power to prosecute the violators.

Thus, with the implementation of Sarbanes Oxley Act, it is important for the publicly quoted company to have confidence in their financial reporting and forecasting. As in today’s business environment, financial reporting processing is usually performed by Information Systems therefore the significance of Sarbanes Oxley software has increased dramatically.

Sarbanes Oxley software can be divided into three categories depending upon the functions they perform

• Software for All-Inclusive Management 
• Software for Enterprise Content Management
• Software providing Focused Solutions

Sarbanes Oxley software for all-inclusive management can help the publicly held company in the following manner:

1. Help the company define the following compliance management processes:

·         Clearly define the role of each individual in a particular process.

·         Enlist all the duties that the individual must perform in a specific process.

·         Create a flowchart to map out the order in which the various steps should be executed to complete the process.

·         Report the status as well as the result of the process.

·         Confirm whether the compliance has been achieved on the completion of the process, and if the process fails, then suggest some remedial action to achieve the compliance.

1. Automate the entire process of compliance management.
2. Perform tests at various levels to ensure that the system is functioning properly.
3. Generate the necessary documentation.

Sarbanes Oxley Act requires the companies to unmistakably document all the necessary tasks that they have performed. To fulfill this requirement, the company must have appropriate facilities to archive and retrieve records as long as it is necessary under law. In addition to this, there must be an audit trail facility to help the management track down how a particular process was actually performed.

Sarbanes Oxley software for enterprise content management has the power to accomplish the above requirement efficiently. It automates and monitors business processes, and helps the management to define and ensure consistent execution of best practices needed for regulatory compliance. In so doing, the Sarbanes Oxley software for enterprise content management increases the speed and efficiency of the process, and reduces the risk of non-compliance.   

The last category of Sarbanes Oxley Software provides focused solutions that protect the company from frauds by rooting out the concealed weaknesses, which can be brought about by changes in the business processes and the IT system. Some of them not only help in conforming to the Sarbanes Oxley Act, but also provide aid in refining process execution efficiency and reducing errors.

No doubt, Sarbanes Oxley software provides a cost-effective mechanism to follow the SOX Act efficiently, but it is also necessary for the companies to screw up the other sections for proper compliance. The following simple steps can help them to ensure this.

• To automate and integrate the processes, and reduce the manual steps, the company should enhance their ERP system.  
• Standalone spreadsheets should be replaced by consolidated software.
• For transparency, reporting systems are critical.
• The IT systems should be accurate and secure.
• The IT department of the company should carry out all the processes consistently.

In addition to these, the Sarbanes Oxley software should be coupled with software that sustains effective governance and promotes security.