AFT Aces Sarbanes-Oxley
Fraudulent accounting by several corporations prompted a series of investigations by the U.S. Securities and Exchange Commission. One of the most significant outcomes was the Sarbanes-Oxley Act, officially titled the Public Company Accounting Reform and Investor Protection Act of 2002), which is named after its sponsors, Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH).
Signed into law in July 2002, Sarbanes-Oxley (commonly called SOX or Sarbox) changed the corporate landscape in the United States in regard to financial reporting and auditing for publicly traded companies. By establishing stringent financial reporting requirements for companies doing business in the United States, the legislation is considered the most significant change to federal securities laws since the New Deal in the 1930s.
Adapting to Sarbanes-Oxley has not been difficult for Advanced Forming Technology (AFT). According to Karen Lehigh, who was hired as the company's SOX Coordinator in January, 2005: "AFT already had many controls in place, so SOX laws didn't change a lot of what we were already doing. The biggest change is for us to document what we are doing, and then prove that we are doing it by testing. My job is to ensure all testing is completed and correct."
AFT's documentation includes a separate document for a series of business cycles determined by the company's corporate offices. Included are documents for:
- Capital Expenditures and Fixed Asset Management
- General Ledger and Financial Reporting
- Human Resources and Payroll
- Manufacturing and Inventory Management
- IT Management
- Purchase to Accounts Payable to Cash Disbursements
- Sales Order to Accounts Receivable to Cash
- Treasury and Cash Management
- Tax Reporting
- Budgeting and Forecasting
- COSO Elements and Anti-Fraud Program
AFT runs 73 tests each quarter to ensure its documents are backed by actual performance. Documentation is then updated accordingly. No test failures have occurred since testing began in the fourth quarter of fiscal year 2004.
To learn more about Advanced Forming Technology, visit www.pcc-aft.com. |
