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Making the Most of Sarbanes Oxley

Managing the Financial Organization at Key Transition Points

From time to time, we at Mahler encounter a firm that seems to provide a valuable service to the organizations we deal with.  We have seen many of our clients go through enormous pain around Sarbanes –Oxley (SOX) compliance.  Keen CFOs ( is a consultancy that provides interim Chief Financial Officer level assistance to organizations which require this skill.  They understand SOX compliance and specialize in providing sophisticated advice, counsel, and hands-on implementation of policies and procedures to ensure best practices and compliance with generally accepted accounting principles and securities laws to insure there is no shortfall or lack of continuity with this key organizational process.

Keeping It Simple

Underlying Keen CFO’s value is the recognition that today’s leadership challenges are remarkably different from those of only a few short years ago.  Today’s modern, complex organizations are leaner, flatter, more global, and involve more complex and sophisticated webs of influence than yesterday. This is particularly true for the financial activity within the organization specifically given the reporting requirements for both a public company and a private company looking to go public.  Interestingly though - the key components of getting the right information at the right time have not changed. To illustrate this point in one recent Keen CFO engagement:

Keen CFOS’ client had engaged both a big 4 firm handling the audit and a second tier firm handling the Sarbanes work. In numerous instances, the resolution as to how to solve a SOX deficiency met with impasse as company personnel and outsiders struggled to come up with rational and more importantly workable solutions that would satisfy all parties.

More time was spent documenting the problem than fixing it!

Simple communication to the intended responsible personnel while keeping Senior Management informed and a part of the solution solved the problem. The solution was simply to understand the proper channels of communication, develop a plan of communication, and then document the delegation of responsibility.  Problem solved.

Caring and Sharing - Increased Importance of Financial Reporting Process across the Organization 

Sarbanes Oxley poses significant challenges regarding the critical need for proper process around the capture and reporting of financial data. Organizations stand to gain from solid financial processes by using them as components of a strategic information system. 

The strategic information system properly designed, installed and maintained with the proper communication and sense of empowerment from the company’s top officers, can add overall strategic and intrinsic value. Implementing these processes will minimize the organization from experiencing debilitating reporting failures, restatements and fraud and also handle the inevitable ad hoc events that can prove disruptive such as acquisitions, divestitures and new accounting pronouncements.

This process can only be implemented and maintained through a blend of financial acumen and experience, on the one hand, and creative thinking on the other.  Creativity is particularly crucial in thinking through and selling the strategic financial vision internally. We find that in organizations that have gone thorough the SOX compliance process, it is the soft, change management issues that are often neglected and that account for much of the pain.

Know the Business - Crucial Importance of Process Continuity

Regardless of how well financial processes are designed, established and maintained, there will always be key transition points due to staff departures or organizational failure to acquire or retain the proper personnel.

It is at these key transition points that external assistance is not only needed but required.  It is absolutely essential for a company to recognize the need and address it appropriately. This is accomplished through interim assistance which:

  • Quickly gains a thorough understanding of the strategic direction of the company
  • Uses a systems perspective to understand company culture
  • Assesses the gap between stated goals and current status by getting below the surface to the source of problems
  • Ensures systems are in place for effective internal control by productive management
  • Aligns company resources to set and effectively achieve stated goals
  • Work and collaborate with management and staff to implement tactical strategies to proactively meet milestones
  • Addresses internal barriers with a frankness that empowers management to take their organizations to the next level.

Maintaining the Process through Proper Assistance

It is critical for a company with this need to recognize and seek the proper assistance to mitigate the risk with disruptions of process continuity. If you are suffering through SOX, then you might think about talking to Keen CFOS. 

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