The Sarbanes-Oxley Act
Recently, RBR/TVBR talked with the industry about how has the Sarbanes-Oxley Act affected their accounting routine. By the end of last year, publicly held companies had to be in compliance (billing systems).
Leslie Hartmann, VP/Finance, Controller, Radio One:
Sarbanes-Oxley 404 has certainly been an onerous piece of legislation, for almost every department in all of our radio stations. I think that most of us initially thought the entire burden of 404 was going to fall on the accounting department, and although the accounting department is responsible for putting the actual numbers in the ledger, the responsibility of providing accurate information falls on everyone.
Radio One has always had very strong formalized controls, policies and procedures in place for all of the business functions. However, one of the processes that we had to refine and document was the log reconciliation process. One of our Traffic Directors commented that she never thought that Enron would have such an impact on her life. We also had to refine and formalize some of our monitoring systems to ensure that the Company's policies were being adhered to. An example was just documenting that the procedures were being carried out. "Sign and date" was a continuous mantra among the ranks. One of my Market Controllers eloquently described in his 2005 budget narrative "It's gotten to the point at home where I sign and date the mail as I open it! I must say that the importance of everything we do that leads to the bottom line of our financial statements is now magnified."
To improve internal controls by further segregating duties for more of the Business functions, we also had to review our staffing in the markets. In some cases we found that we had to add more bodies, in others, we had to redistribute some of the work.
As an end result, I think we have seen some significant benefits come out of the process. Department managers have become smarter about their business. Managers are certainly more astute about business and how their roles directly impact the business and profitability of the station. SOX has changed the way they think and the way they operate. They have become more efficient, working smarter to accommodate their new responsibilities in their current work schedules. They have had the opportunity to observe and share best practices across different markets within the Company. Another indirect benefit has been improved communication between departments. The stations just cannot pass the rigorous scrutiny of Sarbanes-Oxley unless they operate as a team.
Are you reading this from a forwarded email?
