Assessing Annual Compliance

Matt Shelly
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Ensuring financial compliance with all relevant laws has always been a top priority for federal regulators. Accountants can assess the strength and profitability of a firm to ensure there aren't any unpleasant surprises down the road. The 2002 passage of Sarbanes-Oxley (SOX) put in place new disclosure and accountability rules as a way of protecting investors and guaranteeing regulatory compliance by making every officer of a publicly traded company sign off on its disclosures. This makes the work of an accountant even more important. Any one of those officers has a right to examine your work before signing and, if the company turns out to be out of financial compliance, to refuse to certify your work. Here are a few ideas to make abiding by regulatory compliance requirements as smooth as possible.

If you're going to be effective as an auditor, you have to earn the trust of your client. If you're employed directly by the firm, this can mean reaching out to company officers and involving them in your daily work as much as possible. While you might not need an executive vice president to help you track expenses, recruiting allies among senior managers makes it easier to approach them at audit time and ask for the documents you need. A friendly relationship like this will also make them more likely to take you into their confidence and share details about the company, such as its intention to settle a lawsuit, that can make a difference in your final report..

While ensuring financial compliance is made easier with a friendly relationship between executives and accountants, you don't want to get too close. Remember that your job is to audit the company. You are the first line of defense against irregularities that can sink a firm. Making a conscious effort to remain objective about the financial compliance of your employer will help you maintain your professional distance and do the job you've been hired for.

Depending on the industry you're working with, financial compliance statements have to be filed either annually or quarterly. For a large business, this can be a huge undertaking. For firms in the financial services sector, such as banks and hedge funds, a single large audit might call for an army of accounting experts with the skills of detectives. You can make this process go smoothly by conducting monthly, or even weekly, mini-audits. By picking out a single division, auditing it thoroughly a few months before the disclosures are due, and repeating the process when you're done, you'll arrive at disclosure time with the report nearly finished and in need of nothing more than a brief update.

Financial compliance disclosures are sometimes seen as a burden the government places on large firms. While it's certainly true that demonstrating compliance is expensive and time consuming, the alternative is large, publicly traded companies operating in the dark with every bankruptcy coming as a surprise to wiped-out investors. Your role in ensuring financial compliance standards builds bridges between executives, investors, and regulators, keeping your client afloat and in the black.


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