SOX 302 Requirements

Answer

SOX 302 Requirements

Section 302 of the Sarbanes Oxley Act guides firms to uphold a corporate responsibility when dealing with financial reporting. Notably, the CFO and the CEO of organization have a direct responsibility of guaranteeing the accuracy of the financial reports while ensuring that they are properly documented and submitted. Rhone and Berry (2006) reveals that a compliance officer should establish an effective program which guides the members of the workforce in behaving ethically in order to comply with the set SOX standards.

Action plan

Initiation

                The initiation phase requires the establishment of the business need which constitutes the vision of the organization. In this case, the business need revolves around the establishment of accurately developed financial reports. In line with the requirements of SOX 302, firms should have a vision of submitting accurately documented financial reports. To achieve this vision, education is imperative. Teaching the members of the workforce about the importance of commitment to accurate financial reporting results to a compliance culture which is vital in the attainment of the vision (Anand, 2007).

Planning

                Effective planning is necessary for accurate reporting. Compliance officers should consider having requisite safeguards in place to prevent rogue employees and third parties from tampering with the financial information already included in a system. Additionally, this can include safeguards which establish the timelines which allows the members of the workforce to provide details about when they access critical financial information associated with the firm. This increasing the accountability rates which proves to be effective in preventing tampering. According to Rhone and Berry (2006), the members of the staff should be held accountable for their actions in instances when their behavior contributes to drastic concerns for the firm. Despite this, the management should also communicate to the compliance managers to guarantee the members of the workforce that if they choose to report negative peer behaviors, they will face any form of retaliation.

                Education is one of the important activities to consider during planning. With effective education, the staff members are informed of what the management expects when it comes to effective financial reports documentation which enhances the effectiveness of reporting. When the activities relayed in the planning phase are effectively executed, the chance of accurate financial reporting is enhanced.

Execution

                During the execution phase, the members of the team and organized in a way that they achieve al the set safeguards and standards requisite in the execution. Asking questions is an important strategy for consideration at this phase. The management has a duty to include the members of the workforce in the process of accurate financial reporting. This can be achieved if the compliance officers allows the staff members to ask questions to ensure that they understand what is expected of them when it comes to accurate reporting. Therefore, in case of error development, a blame-free environment will be fostered as the members of the workforce will be held accountable for their actions (Rhone & Berry, 2006). Section 302.5.A/B is an important part of the SOX Act which encourages the compliance officers to have systems in place which aids in the detection of security breaches (Anand, 2007). Having a high level alert system in place is important in updating the management system in case of any alterations made on the financial reports which promote effective reporting.

Closure

                During closure, the success of the project should be established. If the management manages to effectively document its financial reports as required by the SOX Act while abiding by all the standard’s requirements, then the project is considered a success.