If you are an American company, then you might be required to know about the Sarbanes Oxley act. If you’re an American company and haven’t heard of it previously, you have already learned something about the act. It’s a law in the US.
The Sarbanes Oxley act is an act that was signed into US law in 2002. The act was designed to try and stop companies doing what Enron and Worldcom did. Both companies announced before bankrupty that they had been surviving on fraud deals for several years. At that time it was not required for the companies to show their books to the government.
The act simply makes sure that businesses are run correctly, if they are not being run legitimately, the act holds the bosses of the company responsible.
The act means that CEO’s and CFO’s are required to sign the books for the company. They must sign the books before handing them over to ensure that the information is true and it represents the earnings of the company.
If the act is not abided by or the records are found to be false, the Chief Officers can be punished by the government.
Like what I said towards the top of the post, you might not be required to abide by the act. Only companyies within the US, UK or Europe and have listings in the US stock exchange are required to follow the act. You would also have to abide by the act if the company is based in the UK or Europe by it’s a subsidiary of an US company.
The act can be very annoying for some companies. Because the company must report every transaction that has been made, even the sale and purchase of assets is required. This is where people have the problem because all the company’s fixed assets must before recorded.
The process of fixed asset accounting can be expensive and take time. If you do it yourself within the company it can take several months and can often result in errors. The best way to make sure you have listed all your assets is by hiring an external company to do the job for you.
Unfortunately, it’s definately not a cheap act to abide by. However, a number of asset management companies offer features to make the next time you do an asset audit alot easier and cheaper. Many of the companies also offer Sarbanes Oxley compliance software which will make the job even easier for you.
Hopefully you will have learnt what the Sarbanes Oxley act it, whether you need to abide by it, and how you do it if you are required to. You probably won’t like the idea of the act, but you can blame it on Worldcom and Enron.
Filed under Uncategorized by on Oct 5th, 2009. Comment. 
As corporate purse strings get increasingly tightened in this period of downturn, the need for organisations to perform IT fixed asset tracking is becoming more of a priority. The onus is on IT departments to manage this process. Following up a number of contacts in IT departments of various organizations, I looked at some of the methods different companies are using to fulfil their IT asset tracking requirements.
Spreadsheets
A surprisingly large number of organizations still seem to be relying on the manual method of listing all of their fixed asset data in in an enormous spreadsheet. The basic idea is as follows. At first the spreadsheet is created from an initial asset audit, recording all the hardware and software being used.The most commonly recorded information includes location, name of staff member using the item, purchase date, model and serial numbers and warranty details.The spreadsheet then needs to be manually updated whenever new purchases of hardware or software are made. As with many manual business functions, the spreadsheet’s downfall is that it doesn’t scale well at all.You can imagine how such a spreadsheet would grow to unmanageable proportions as an organization gets bigger.Organizations using the spreadsheet technique also tend not to be able to react effectively to changes in the state of IT assets, such as repairs, depreciation, licenses and getting rid of equipment.The entire sytem stands or falls on usually one person being fastidious with its upkeep.
Barcode Labels & RFID
The tagging of assets with barcodes has become the norm in many organizations I have dealt with, wherein each piece of hardware is tagged with a scannable barcode which refers to an exact record in the asset register. These barcodes can be scanned using barcode scanners during regular asset audits and for helpdesk support purposes. Radio Frequency Idenfitication, or RFID, is a step up because it allows hardware audits to be perfomed remotely. More importantly, RFID tracking allows greater flexibility for increasingly mobile equipment such as laptops and PDAs.
Fixed Asset Management Software
A number of software solutions exist to automate and streamline the whole process of asset management. The most basic Access or SQL databases which are fed into the intranet, allowing multiple users to update or check the asset inventory. At the other end of the scale there is specialist asset management software which covers all the fixed assets of the organisation, including things such as vehicles, containers, property and machinery as well as IT assets. There are also specially designed solutions to meet the growing plethora of asset accounting and tax regulations that companies need to meet – such as Sarbanes Oxley compliance software. The beauty of this integrated approach is it combines the needs of several departments including IT, accounting and management, to allow for a larger budget and amore robust solution.
If you have any other solutions your company uses for asset tracking, I’d be interested to read your comments.
Filed under Accounting, Bookkeeping by on Jul 1st, 2009. Comment.
The deeper we get into this recession the more businesses and organizations are having to be clever with their finances to avoid going bust. Something that’s not often considered is holes in the way your business does its accounts which can lead to asset leakage. By making sure you have a good handle on the fixed assets your organization owns you can identify these leaks, put a stop to them, and save a surprising amount at the end of the tax year.
What are fixed assets?
For starters, let us define the meaning of fixed assets. Businesses have two kinds of assets. Fixed assets, also known as tangible assets, include things like land, buildings, machinery, equipment and computers. Essentially they are physical objects that have value. The assets you can’t touch are called, unsurprisingly, intangible assets – such as trademarks or patents. It is tangible assets that I’m writing about in this piece.
Why do you need to know about fixed assets?
Well, for starters, recording your fixed assets is a legal requirement on your accounting records. If you don’t know about them you could get in trouble. More to the point, the more you know about them, the more money you could save. That means knowing where they are, how much they’re worth, and how much their value is depreciating. In a sense asset tracking is a way for a business faced with financial hardship to pull cost savings ‘out of thin air’.
How do you track these pesky assets?
Step One is simply auditing your fixed assets and recording them in an asset register. Now this part is probably something you’ve taken care of already, seeing as it’s a legal requirement and all. Most commonly this is recorded on a humble spreadsheet, but increasingly savvy organisations are using more sophisticated asset management software. The reason is that you really need to go much further than just recording assets – you need to be able to keep track of them as your organization grows and develops. That means where it moves to, how much it’s worth, how often it breaks down, and so on. Now when you’re a mom and pop business working out of your living room that’s a case of glancing round the room and scribbling on a Post-It note.However this task becomes more difficult when you’re talking about medium to large organizations. And this is where dedicated asset management software really comes into its own. It makes the auditing, tracking, maintenance, communication and accounting bits of asset management come together beautifully. Crucially, a well made package will be able to pinpoint where the largest cost savings in your organization can be made. For my money, as an investment, it’s a no-brainer.
Filed under Accounting, Bookkeeping by on Mar 11th, 2009. Comment.
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