Inventory _and_amp; SOX 136



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  • I agree with you. I can’t see why the public company (seller) would need to have financials from the buyer unless they were trying to assess A/R collectibility or unless they have an investment in the buyer for which they need to assess carrying value of their investment.
    Unless this causes business issues, I would decline to provide without a better reason from the seller.



  • I agree with you. My Client has alway paid their bills on time and have no relations to the Company other than purchasing their product for resell. Thanks for confirming.
    Robin



  • IT management ensures that, before selection, potential third parties are properly qualified through an assessment of their capability to deliver the required service and their financial viability.’
    Cobit DS2 Manage Third Party Services
    As you can see from the Cobit Objective checking financial viablility of 3rd party vendors is required. Not only that it is good business practise.
    CompanyA probably has you listed as a major supplier and has set as one of their SOX compliance issues to get finanacials from all major suppliers.
    That is NOT to say that you can’t do business with ONLY financially stable companies, but you must know about and limit the risk.
    I hope this helps.



  • Alan - I think that you misread the above note. The lady asking the question is on the purchasing side, not the selling side of the transaction. I agree that it is prudent to check the financial strength of any large vendor who you are going to pay a large sum for services - especially if you are paying in advnace for software development or support.
    A regular timely-paying customer should not have to provide its financial statements to a vendor unless he is buying on extended credit terms.



  • Your right Kymike x 2%0AI did misread the quest AND your quote below is 100% accurate (at least in my opinion :lol: )%0A’A regular timely-paying customer should not have to provide its financial statements to a vendor unless he is buying on extended credit terms.’%0AToo many long long long days trying to get everything done. These 60 hour plus weeks are getting old. 😛



  • Even if client were a supplier, SOX would not require financial documentation from the supplier. Only vendors whose services have an impact on the financial reporting of a company are specifically covered by SOX.



  • What COULD be happening is that CompanyA has a control gap in their credit process, and either they or their externals have decided that getting financials from all companies is the way to close that gap.
    A faulty credit process would certainly qualify as an issue under SOX, and I could see this as a one-size-fits-all solution.
    I’d still tell them no, if I were your client.
    Ben



  • What COULD be happening is that CompanyA has a control gap in their credit process, and either they or their externals have decided that getting financials from all companies is the way to close that gap.
    Ben
    Although management of credit control is not a financial statements issue - rather it is a business/operational issue. Provided that a company adequately provisions its bad debt it doesn’t really matter how bad their credit control is 😮



  • It could also be part of a FIN46 analysis…???


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