IT Caught Up In Enron AftermathIT Caught Up In Enron Aftermath

Accounting questions erupting along a fault line opened by the Enron Corp. debacle have prompted the federal government to propose stricter reporting rules that are likely to impact IT departments at public companies.

The Securities and Exchange Commission is recommending, among other things, that annual reports be filed within 30 days of the end of the fiscal year rather than the current 90 days. Quarterly reports would have to arrive within 30 days of a quarter's close instead of 45. Insider trades also would have to be reported sooner. The SEC wants to dramatically shorten the reporting deadline. One bill, proposed by U.S. Sen. Jean Carnahan, D-Mo., would require execs to report their company-stock transactions within 24 hours. The SEC also wants to expand the kinds of significant events that must be reported.

Meta Group analyst John Van Decker gives companies overall a "B-" in terms of having the right financial-consolidation software--which can help companies gather financial data from multiple units quickly--and other tools. "Companies have a lot of legacy processes, including old client-server versions of consolidation software, and there's typically a lot of manual intervention during the consolidation process," which causes delays, he says. Those problems are exacerbated when they have disparate enterprise resource planning systems, he says.

Lanier Worldwide Inc. is one company that has benefited from automated financial reporting. For several years, the company has been using Hyperion Solutions Corp. software for consolidation, CIO Sean Magee says. He says Lanier closes each month in two business days. Lanier no longer files with the SEC, though--it was acquired last year by Ricoh Co. Ltd. and is no longer a standalone publicly traded company.