{"id":155,"date":"2005-03-26T01:44:00","date_gmt":"2005-03-26T09:44:00","guid":{"rendered":"https:\/\/systematichr.com\/?p=155"},"modified":"2005-12-02T21:12:07","modified_gmt":"2005-12-02T21:12:07","slug":"sarbanes-oxley-and-a-case-for-outsourcing","status":"publish","type":"post","link":"https:\/\/systematichr.com\/?p=155","title":{"rendered":"Sarbanes Oxley and a case for Outsourcing"},"content":{"rendered":"<div style=\"clear:both;\"><\/div>\n<p class=\"MsoNormal\">Thought I\u2019d take a minute to comment on Deloitte\u2019s top 10 problems for financial reporting in 2005.<span style=\"\">  <\/span><a href=\"http:\/\/www.fei.org\/download\/deloitte_top10_3_10_05.pdf\">See it here<\/a>  <span style=\"\"><\/span>Note that the top 2 items are very HR oriented (number 2 because it hits everyone).<span style=\"\">  <\/span>The first item is the whole problem with stock options, and since I know relatively little about stock option reporting, that\u2019s not the focus of my commentary.<\/p>\n<p class=\"MsoNormal\">Instead, I wanted to talk about item #2 which is about Sarbanes Oxley.<span style=\"\">  <\/span>Sox expenditures are sometimes double what companies initially projected.<span style=\"\">  <\/span>As organizations get better about auditing these processes and certifying them, the costs should go down, but these are costs that must be recurred on an annual basis.<span style=\"\">  <\/span>Considering the number of systems that impact the financial systems, the costs can become staggering.<span style=\"\">  <\/span>As an HR organization, those who outsource benefits or payroll seem to have a \u201cleg up\u201d in these costs.<span style=\"\">  <\/span>That\u2019s because a decent vendor should provide many of the SAS 70 type 2 audits already done.<span style=\"\">  <\/span>If they have, an organization would be able to take this documentation to their own auditors and be done with it.<\/p>\n<p class=\"MsoNormal\">Let\u2019s also say that you only host your systems with a vendor (ASP, or application service provider).<span style=\"\">  <\/span>They should also have some of the technical SAS 70 reports done, although I think you\u2019d still be on your own for the functional processing of your data.<\/p>\n<p class=\"MsoNormal\">This is one huge area where an outsourcing philosophy has a pretty decent advantage.<span style=\"\">  <\/span>If your entire HRMS, PR processing, and benefits administration process is outsourced, it could get your organization out of doing as many as 10 SAS 70 reports.<span style=\"\">  <\/span>At a cost of $50-100K each, this is a major item to add into the ROI whenever you\u2019re making a decision to outsource, or auditing your vendor.<\/p>\n<p class=\"MsoNormal\">Smaller organizations tend to outsource more readily, and the entire debate regarding Sox and company size may push more comapnies to outsource. (<a href=\"http:\/\/www.cfo.com\/article.cfm\/3764856?f=home_featured\">CFO Magazine<\/a> and an article about Sox and small public companies going private)<\/p>\n<div style=\"clear:both; padding-bottom: 0.25em;\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Thought I\u2019d take a minute to comment on Deloitte\u2019s top 10 problems for financial reporting in 2005. See it here Note that the top 2 items are very HR oriented (number 2 because it hits everyone). The first item is&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[27,33,17,31],"tags":[],"class_list":["post-155","post","type-post","status-publish","format-standard","hentry","category-data-metrics","category-finance","category-hro","category-outsourcing"],"_links":{"self":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=155"}],"version-history":[{"count":0,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/155\/revisions"}],"wp:attachment":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}