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SOX and Technology: Transferring the Burden of Compliance
The advantages of software on demand extend beyond ease of implementation and operational efficiency. The vendor owns the complexity of managing the environment, applying upgrades, and handling support. You effectively transfer the burden of Sarbanes-Oxley compliance from your firm to the vendor who provides software on demand. Technology compliance can be expensive, but shifting the burden reduces costs. By taking advantage of economies of scale, vendors can develop the controls needed by all their clients. They implicitly sell compliance as a service – as they do with their software. Service providers can provide compliance with a much lower price tag, making software on demand a viable alternative for small companies with technology needs. This article will demonstrate explicitly the compliance benefits of implementing software on demand and provide a roadmap for finding software on demand vendors that have sufficiently controlled their respective solutions. The advantages of software on demand extend beyond ease of implementation and operational efficiency. Through the use of the “on demand” model, compliance in technology environments becomes significantly easier to manage. Software on demand has had a profound impact on small cap operations. Based on the ASP/MSP1 business model of the dotcom days, companies are now offering software as a service, reducing the costly maintenance and resource challenges involved with maintaining a solution in house. Software can be turned on and off as needed. The vendor owns the complexity of managing the environment, applying upgrades, and handling support. The traditional notion of software involves purchase, environment and system preparation, implementation, and ongoing management. For software on demand, the model is to subscribe to the solution, train employees, and go live. Instead of having to develop an extensive technology control framework for the entire technology environment, you only have to control business processes. You effectively transfer the burden of compliance from your firm to the vendor who provides software on demand. The outcome is that the small cap purchasing technology is responsible for due diligence on the extent to which the vendor is compliant. Additionally, small companies need to develop controls for business practices that involve the software to which the vendor subscribed. Consequently, Sarbanes-Oxley compliance is easier for companies that subscribe to the software on demand model. Technology compliance can be expensive, but shifting the burden reduces costs. By taking advantage of economies of scale, vendors can develop the controls needed by all their clients. They implicitly sell compliance as a service – as they do with their software. Service providers can provide compliance with a much lower price tag, making software on demand a viable alternative for small companies with technology needs. This article will demonstrate explicitly the compliance benefits of implementing software on demand and provide a roadmap for finding software on demand vendors that have sufficiently controlled their respective solutions. Controlling a Traditional Technology Environment Complying with Section 404 requires the development of controls to for the reduction of fraud risk in your technology environment. Specifically, Section 404 compliance becomes an issue of access. Technology fraud can be prevented by limiting the access of employees and outsiders to technology, including:
[continued...] Want to know more? Download the White Paper "SOX and Technology: Transferring the Burden of Compliance" for just $39.95. |
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