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Financial Compliance through Section 404 of the Sarbanes-Oxley Act

Section 404 of the Sarbanes-Oxley Act is perhaps the most litigious portion of the SOX compliance law with a focus on financial compliance. The section obligates an organizational management and peripheral auditors to submit reports on monetary reporting along with domestic control.

This section of the law is labeled as “Assessment of Internal Control”. Being a rather expensive process, it forces businesses to execute the law by filing and examining pecuniary manual and mechanized controls.

According to Section 404 of the Sarbanes-Oxley Act, organizations and businesses are entitled a chance to evaluate their assets, transactions and company performance every year. The final reports are submitted to federal authorities for checking.

Key Aspects

Basically, the SOX compliance obliges an administration to

  • Carry out an evaluation for any possibilities of any kind of fraud taking place within the organization.
  • Assess the internal controls of an administration that can affect its annual fiscal reports and the process of reporting.
  • Make sure that the internal controls established in an organization are effectively in-use and reducing the risk of financial or material losses.
  • Fully understand the flow of cash and transactions made on an international and national level to prevent the business from possible losses.
  • Assess the internal controls and make sure that the COSO (Committee of Sponsoring Organizations) outline is being followed throughout the company.
  • Affirm that the evaluation should be based in accordance to the structure and complexity of the organization.
  • Confide in the administration for the work rested on factors like proficiency, risk and neutrality.

The SOX compliance features tax costs that are based on a company’s inefficiency to perform. Thus, these rules tend to encourage an administration to work harder and produce better results in the future. This eventually leads to a prosperous economy.

War Crimes Against Children

The war against Iraq and Afghanistan brought America a lot of bad publicity. Many people made war crimes a major issue, especially due to how children were handled by the American soldiers.

Reports indicate that children were jailed with adults where they were victims of rapes and poor treatment. Reports like these sent shockwaves to everyone as this behavior is against generally acceptable laws. Additionally, reports also indicate that the parents of several children were never notified of their child’s arrest.

A book by Michael Haas highlights the crime on children in Afghanistan. The book titled “George W. Bush, War Criminal? severely criticized the former president for his handling of the subject matter. The book says that American soldiers recorded Iraqi prisoners raping children and did not try to intervene. The book also states that children were terrified by dogs in Abu Ghraib highlighting how brutally they were treated.

In addition to these children were the victims of several other crimes. Haas in the same book reports that in 2002 alone more than 800 children (aged 10-15) were captured. He adds that a great number of children were sent to Guantanamo as well, even though the 1977 Geneva Convention says, “No Party to the conflict shall arrange for the evacuation of children, other than its own nationals, to a foreign country” unless written consent of the parents is obtained.

Other crimes identified include not providing children with healthcare facilities and food. Additionally, many children were not allowed to call or write to their home for as long as four to five years. Many parents were barred from paying a visit to their children, which is something completely unacceptable.

As per the numbers given by the US, it has detained around 2,400 children in Iraq since 2002. However, many argue that the numbers are much higher in reality. Additionally, almost two dozen children have been incarcerated in Guantanamo.

CRC says that children should have the right to freedom. Additionally, article number 13 of the CRC says that children should be allowed to seek, receive and impart information of all kinds through writing or orally. Yet, they are barred from such facilities in prison.

Many writers are writing about the mistreatment of children in Afghanistan, Iraq, Guantanamo and other regions. There is a dire need for international organizations to wake up and take notice of the injustice.

Even to this day it is believed that several children as war prisoners are jailed in different parts of the world for no mistake of their own. Activists are asking for children to be passed off as war victims and not war criminals because they do not really take part in war and simply fall victim to it.

It is important that everyone joins hands to stop the mistreatment and abuse of children and make sure that those found guilty are properly prosecuted. Additionally, parents should be allowed to meet their children and their crimes should be clearly communicated to them so that they can defend their cases. Plus, children should be provided with speedy trials so that their precious years are not wasted.

The world will be a much better place if best practices like these are implemented.

Using Antivirus – Best Practice to Follow

It is a well known fact that one should use an antivirus program to be able to guard his or her computer against viruses and other such attacks that may harm a computer. A great number of people already use antivirus tools for this purpose; however, many of them still suffer from data loss thanks to virus attacks.

So, why does this happen? Why does an antivirus program fail to perform its duty? The main reason for this is the fact that many people do not really know how to properly use such a program. There are several best practices in this regard that need to be followed so that all the benefits from an antivirus program are derived.

Some such best practices include:

Have it Active All the Time

Many a times people end up deactivating their antivirus programs, albeit temporarily, and end up getting infected. One main reason for this is that several programs and applications request antivirus to be disabled before they begin.

In order to get the application rolling, many users end up disabling the software opening their computer to risks. This is a move that should never be attempted as it may end up causing big damage. The best practice is to keep the software activated at all times, even if disabling it is suggested by other applications.

Scan Your Computer Regularly

Most software have an auto scan feature that can be set to scan the computer or specific drives/files automatically. This feature is of much help as using this you can easily automatically find and quarantine viruses in your computer.

However, if you do not like the auto scan feature, make sure you manually scan your computer for viruses. This is very important in order to identify and remove viruses because they may spread and cause irreversible damage.

Update the Software Time to Time

One of the biggest dangers a computer faces is the release of new and improved viruses. Many antivirus programs do not have the right tools to fight against new viruses; hence, they fail to keep the computer guarded. Nevertheless, the good news is that updates are regularly released for antivirus tools that are prepared to keep computers guarded against new and expected attacks.

This is why it is important that you update your software regularly. Most antivirus tools have an auto update option that allows the software to automatically connect to the internet and download the update patches when they release. It is recommended that you have this option enabled so that you do not have to worry about manually updating the software.

Do Not Neglect Warnings

It is important not to neglect the warnings your antivirus gives you. These applications are programmed to quarantine most files; however, at times they fail to remove certain viruses. In such cases they often give warnings about an infected file.

It is important to pay attention to such warnings and to stay away from infected files as opening an infected file may end up infecting the whole computer. In such a scenario one should look for tools or updates that can quarantine such files or delete them altogether.

Getting To Know the Chinese Wall

There have been recent discussions concerning the protection of investors and the key focus here has been on the fundamental issue known to us as “conflict of interest”, this issue has substantially affected practitioners in the financial service industry. The incorporation of the Chinese Wall could be seen as an approach to avoid any form of conflict.

However, sometimes in the ambiguous world of investment management, professionals will often lead investors to question whether or not these multi-service organizations could be free of conflict.

As a result, many firms are now expected to institute a “Chinese Wall” in their organization to prevent any sensitive information that could leak between divisions or departments allowing access to confidential information.

A “Chinese Wall” is basically a virtual barrier designed to prevent information from moving within the departments or divisions in the financial firm that could either benefit or jeopardize the trader.

Let’s make this simple, for instance, ABC asset manager purchases a considerable amount of shares in SABMiller at R165 per share. The asset manager then begins to negotiate the buy out with the securities arm. The securities arm then spreads the information around to its clients that there will be buyers coming in soon to make a purchase that can support the price.

Soon after the word has been spread, the asset manager then buys the SAB shares. An analyst at the ABC research proposes in a report that the share is worth R200, the price then rockets.

A series of such events obviously raises some question about ‘conflict’, since the firm would have clearly benefited from various sides.

The JSE advises investors in its guidelines for insider trading, “Many organizations that trade in shares, for instance investment banks, are also involved as advisers to companies during corporate actions.’Chinese walls’ should be imposed to avoid the possibility that price-sensitive information becomes available to the trading divisions.”

Organizations are usually required to have a physical barrier between the staff and the documents/information that can cause one party to gain an advantage over the other parties that are involved.

Should employees be moved from one department to another, they are then expected to sign a confidentiality agreement that prevents them from ever disclosing any information they may come across, while being in the other department.

Firms also need to employ the use of compliance officers, who need to keep a track of all the trading activities of both the fund managers and the brokers, thus to ensure that the firm’s own traders will not be benefiting from any information.

To ensure transparency in the process, traders working in a stock brokerage need to obtain permission from their compliance officer before trading on their accounts.

Although most financial regulatory bodies and exchanges around the world have opted for establishing the use of “Chinese walls” within their organizations, many outsiders believe that it hasn’t proved to be effective enough to control share-price manipulation and insider trading.

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