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Will Your Company Pass SEC Compliance?Will Your Company Pass SEC Compliance?
If ignorance is bliss, then some IT managers may be in a state of nirvana. In a survey of 175 business-technology managers, 41% of 83 IT executives aren't concerned with potential SEC regulations
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If ignorance is bliss, then some IT managers may be in a state of nirvana. In a survey of 175 business-technology managers, 41% of 83 IT executives aren't concerned that potential Securities and Exchange Commission regulations or Congressional legislation regarding accounting disclosures will affect their business. More than half of those surveyed by information Research last week say they expect no bottlenecks to prevent them from reporting data faster and more efficiently.
These are bold statements, yet somewhat suspect when one considers that nearly half of the IT managers surveyed concede that they're not very informed or are uninformed about SEC proposals to make businesses provide more timely and comprehensible financial reports.
In researching "Fast-Track Financials," associate editor Eileen Colkin and senior editor Rick Whiting discovered that lack of integration among financial-reporting tools, legacy systems, nonautomated consolidation processes, and outdated business processes may make it difficult for many companies to provide more detailed financial filings more often and faster (Feb. 18, p. 55). Larger companies are particularly pressed to consolidate financial data from multiple divisions and business units, says Gartner analyst Lee Geishecker, who specializes in accounting-software practices, financial-management systems, and advanced finance and accounting technologies. Kevin Duffy, formerly an attorney with the SEC, agrees. "Problems may occur as businesses have more intricate corporate structures," he says. For example, "a company loaded with affiliates will always have to take time to account for everything," he says.
A sizable number of small companies haven't yet bought the high-end financial consolidation, budgeting, reporting, planning, and analysis tools that could give them a boost to help meet the proposed changes. "Most people are used to the tools they're using--spreadsheets--and they don't realize the value proposition of using the software," says Robert Mule, a senior manager at American Express Co. who consults on financial planning systems for mid-market companies.
Has your company looked into how well prepared it is to meet potential new accounting regulations or laws? Let us know at the address below.
Jennifer Zaino
Senior News Editor
[email protected]
Possible IT HiccupLack of expertise, shortage of manpower, and the existence of legacy systems are common issues that surface when IT divisions are confronted with infrastructure changes. And in the pursuit of providing faster and more-efficient financial reporting, some IT executives are concerned about their own ability to respond quickly and effectively to higher expectations. Of the 87 IT managers who took part in a recent information Research survey of 175 business-technology managers, 20% question whether their IT units will be able to perform adequately. Among their concerns is that IT could become the bottleneck that prevents quicker and more-efficient implementation of financial-reporting reforms. An almost equal number of IT executives say business units such as accounting could present obstacles in response time. |
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Minor Impact?Like a pebble tossed into a pond, business decisions can create interesting ripples throughout a company. Even if a decision is business-process centric, it's more than likely that somewhere down the line, IT infrastructure or operations will experience some kind of hit. Pending changes due to potential SEC regulations or Congressional legislation regarding rules on financial disclosure and reporting procedures, 41% of IT executives believe the impact on business processes and IT operations will be minor and express no concern about related changes to procedures or operations. |
No Fallout ExpectedToday's economic climate is tough enough without additional stimuli that further erode investor confidence. But just as the events of Sept. 11 have contributed to slowing economic recovery, the Enron debacle and its alleged accounting misconduct have raised concerns about financial-reporting and investment practices. Yet, despite these worries, IT executives report that company concern about plummeting investor confidence due to the recent account scandals is minimal. Of the 87 IT executives surveyed in information Research's SEC study last week, one-third say their company is either not very or totally unconcerned about investor backlash. |
Some Might FalterMany companies have already made both the necessary technology investment and procedural arrangements that enable electronic delivery of quarterly 10Q and annual 10K SEC reports, according to the IT executives interviewed in information Research's SEC survey. Fifty-one percent of the study's 87 IT managers report that the necessary technology is already in place and that financial reporting is already being delivered electronically to the SEC. Another 17% say they could be prepared in six months or less should the need arise. Yet almost one third of IT executives aren't so confident about a fast turnaround, reporting that they aren't sure when their company will be capable of delivering their financial reports electronically. |
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