Oracle app helps with financial compliance

Oracle will release an application in the coming weeks to help companies comply with the Sarbanes-Oxley Act of 2002, a set of...

Oracle will release an application in the coming weeks to help companies comply with the Sarbanes-Oxley Act of 2002, a set of corporate disclosure and financial reporting rules for publicly traded companies in the US.

Sarbanes-Oxley was signed into law last year by president George W Bush. The goal is to cut down on fraud by making corporate finances more transparent, and to make top executives more accountable for the financial reports issued by their companies.

Oracle's application, Internal Controls Manager, is designed to help with Section 404 of the act, which deals with the "certification of financial reporting processes and controls".

It requires companies to identify risks to internal business processes that could affect their financial results and to document the controls in place to reduce those risks. Outside auditors must evaluate those controls and report any problems.

The types of risks can be many and varied. For a manufacturing company, for example, one risk might be receiving faulty components from a supplier that end up being shipped in finished goods, said Steve Miranda, an Oracle vice president for applications development. Internal Controls Manager can be used to create a library of such risks that can then be linked to each business process in an organisation.

Oracle consulted with Pricewaterhouse Coopers and other audit firms to develop the application, which is due for release in June or July, Miranda said. The application will be sold separately from Oracle's E-Business Suite, and pricing was still being finalised this week.

Internal Controls Manager works with E-Business Suite 11i, the latest version of Oracle's suite of business applications. It links to other Oracle applications including Oracle Tutor and Oracle Workflow. Businesses can also outsource the application from Oracle.

US companies with a market capitalisation of more than $75m will be required to comply with the rules for financial years ending on or after 15 June 2004. Smaller businesses and "foreign private issuers" have until 15 April 2005, to comply.

James Niccolai writes for IDG News Service

US extends deadline for financial compliance >>

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