Marketing Department 408



  • Our marketing department is responsible for dissemination of all types of information to customers, employees and partners. We are not public but one of our major equity partners is and has now told us we must be SOX compliant too. We outsource our newsletters and customer surveys (for example) to an external company and I have been told that we must now bring this in-house. I have no problem with this since some of the info pertains to our partner and anyway I would rather have this within our four walls but is it true or just more vendor hype? They told me to look at the Sarbanes Oxley compliance journal for more info but could not find anything there that convices me or my boss to spend more money. IT.



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  • To me it sounds more like a operational than a financial misstatement risk. Therefore it wouldn’t be required to be covered by sox. It looks like that sox is used as a excuse to insource that function.



  • There are a couple of issues here.%0A1. Major equity partner? Does this mean they hold more than 50% of your equity? If so then they will require you to be compliant becuase your results are consolidated into theirs. In this case you will have to be considering processes in relation to your financial statements not hte information you disseminate.%0A2. If it is the publications of your marketing department that are thought to be in scope I would question that. Unless, of course, we are talking about SEC filings and annual reports.%0AYour first step woiuld be to clarify:%0A1. Why do they think you should comply with SOX - make them be really specific.%0A2. To what extent they think you should comply - which particular processes and what financial statements risks do they expect you to cover.



  • I doubt that a outsourced marketing division would be so significant that it would impact the materiality of a groups financial statement.
    _at_iti114: It would be helpful if you could be more specific/detailed…



  • This is an excerpt from s-ox.com
    reported by Terry Coulter in the Sarbanes-Oxley Compliance Journal
    ‘While this is a broad and far-reaching issue, it has a direct impact on marketing departments. With virtually all revenue managed and reported by the marketing department, the investor community and the C- suite have a new level of concern and interest. Not only is there a need to assure the efficiency and effectiveness of marketing activity, but also it has become extremely important to assure the effectiveness, accuracy and documentation of internal controls.’
    Their take seems to be that we fall under the ‘Internal controls’ remit of SOX and that regulators can ask to see ANY email communication, and they will decide if it is germane, not us.



  • In parts I would say that marketing could be a sox topic if they are doing investor relations or are responsible in preparing the prints of the financial statements. Than you want to make sure that there weren’t numbers mixed up while printing etc.
    But that’s still not a real sox issue. Because by that time the financial statements have already be testified by the ext. auditors. And that includes their opinoin about the effectivness of your sox controls.



  • I see this as more of an SEC reporting issue than a SOX 404 issue. From an SEC perspective, there have been concerns around dissemination of material information to the public that is not made available to all shareholders at the same time. This could include marketing information that goes to select groups. There has been a tighter requirement over filings of 8-k’s after disclosure of new information to the public for a couple of years, now. If you are consolidated into the financial records of a public company then any company information that you disseminate would likely fall under their requirements related to new information being made public.


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