Im hoping someone can help 2672
simpleton last edited by
I work for a transportation company. The company has made a decision to take a portion of my job away from me and give to someone else. I guess my question is the reason they give for taking it away is the Sarbane Oxley Act. So I want to see if there is some merit to this. I do not work in a revenue portion of the company. I work in the maintenance portion of the company. I was in charge of creating repair orders to have parts refurbished by a vendor. The vendor would pickup the part repair it and deliver it back to me. I would then recieve the now repaired part into my inventory and all was fine. The repair order for the vendor is what he submitted to the company to get paid on. Now the company is telling me the SOX act forbids someone in the company to be allowed to create invoices for the repair orders and also be allowed to recieve those invoices in as well. The problem I have is maintenance is in no way related to revenue. Any help in finding if this is true or not would be greatly appriciated.
kymike last edited by
SOX does not dictate right or wrong in these matters. My guess is that there was an increased focus on segregation of duties related to internal controls. Where somone has the ability to create a repair order, send out and receive back equipment and then approve a bill for payment, there is a potential for fraud. Good internal controls (the focus of SOX) help mitigate the potential for fraud. Segregating some of your former responsibilities between you and another person is one way to address this.
gmerkl last edited by
Whether you have got anything to do with revenue (i.e. the goods and services that are delivered to your company’s customers) is irrelevant.
Your company may be concerned about the risk of fraud. If I understand your description correctly, you can create a purchase order to purchase refurbishment (i.e. repair) services for parts in your inventory from an outside refurbishment vendor. You can then create a goods issue when the vendor picks up the parts to take them out of your inventory. One they are repaired and returned, you can then create a goods receipt for the refurbished parts that closes the purchase order and increases your inventory of parts. There is a risk that you could collude with the vendor to repair parts that are perfectly OK to increase his repair revenues and get a kickback payment from the vendor and if no independent person counts the parts inventory, you would not even have to physically send the parts to him and could only make fictitious goods issues and goods receipts in the system. If you can also create a new vendor or change the details of an existing one, you could set up your own vendor with a bank account that you control, create a fictitous repair order and send a fake invoice that you created at home in Word to accounts payable so that they pay the invoice and you receive the money in your bank account.
I know it sounds a bit paranoid and hypothetical, but not everybody is as honest as you are and such things happen. Segregating the tasks and IT system access rights to create purchase orders, create goods receipts and post invoices among different persons makes it more difficult to commit fraud because the fraudster would neet to collude with (i.e. involve) more people in order to commit fraud.
One more thought, if no second person checks whether a part is really defect before it is sent to the vendor for refurbishment, even if you only have access to create purchase orders for refurbishments, you could still collude with the vendor to provide unnecessary repairs against kickback payments to you. Let’s hope you are honest What is the total annual amount spent for refurbishments and how is it as a percentage of the consolidated total expenses for your company. Maybe the cost of the additional control (and decrease in efficiency) does not justify the risk. In addition, the likelihood of a fraud that requires collusion with a vendor or second person is lower than the one for a fraud that you can commit without any help. So there is still room for you to argue whether it is all worthwhile. The Sarbanes-Oxley Act is mostly concerned that the consolidated financial statements are fee from material (i.e. large amounts) misstatements due to errors or fraud.
simpleton last edited by
First I would like to thank both of you for your replys to this situation. I was very vague with my information and would like to discuss this exact situation a little more. I guess private messages are disabled so if either of you could take the time to email me at dedonrage at gmail dot com. It would be greatly appriciated.