While many companies "are just starting to figure out what hit them," says IBM's Schweppe, many otherseven some companies that have overhauled their financial reporting systems in recent yearsare pressing ahead with new spending for upgrades to respond to the new requirements. Novell's Anderson, for one, says her company is going to "rethink this as a chance to have more real-time reporting systems in place," such as a more extensive set of digital dashboards.
Allstate Corp., the nation's largest publicly held personal insurer, began to overhaul its financial reporting process a few years ago by collecting data from "more than a handful" of different legacy systems that track data from the company's various administrative and claims processes with an enterprise resource planning system from SAP.
After Bush signed the reforms into law, the company decided it needed more. So it set about retooling its financial reporting system so that it could meet the new deadlines. Moreover, it started compiling company performance and operational metrics into real-time electronic "scorecards," to meet new rules calling for companies to write a special report in their year-end filings that describes the extent and quality of their internal auditing controlsand the effectiveness of the information systems they use to keep the top brass up to date on the numbers. "It not only requires the use of technology but it requires your leadership team to understand how the data is processed through it, and what changes are being made to it so we can say that this truly represents our financial position at a certain point in time," says Kathleen Swain, Allstate's assistant vice president of enterprise financial solutions. Longer-term, Swain says, the new regulations may add to the "business case" being made by IT officials inside the company for more IT spending.
At Richardson, Tex.-based Fossil Inc., it's a similar story. According to Randy Kercho, Fossil's executive vice president, the fashion watch company is in the process of implementing various business intelligence applications from Cognos, some in response to the new deadlines. In addition, the company is moving forward with new Web-based applications and a new enterprise system from SAP. "These systems, implemented or in the process of implementation by our IT department, will help us have the tools we need to better analyze our financial results, in addition to reducing the time it takes to obtain financial and operational data," Kercho says.
The company is also asking 18 people to sign off on the integrity of the numbers and financial reporting systems used to obtain them, including the country managers and top financial officers of each of Fossil's eight foreign subsidiaries. "We then also obtain a verbal affirmation from our division presidents, legal and operations group," Kercho says, "and we're considering obtaining a sign-off from our CIO. It would certainly be an additional measure of comfort if the CIO would verify that no known breaches of the system have been identified and that no breakdowns of controls were identified or changed during the quarter."
Even before the new rules were put in place, collating the information needed for quarterly reports, for some companies, was a huge task involving business units that might be spread across the globe. Fossil's Kercho, for one, says the need to assimilate information from disparate systems around the world "is really where a lot of the time comes in" that's needed to meet filing deadlines. Adds Sandra Kinsey, partner at Hogan & Hartson and former SEC senior counsel from 1990 to 2000: "Getting these financial reports filed earlier is going to be challenging for companies, especially big multinationals with diverse operations spread over different countries. But it will be hardest on small public companies that don't necessarily have the teams of in-house compliance people in place."
This article was originally published on 12-13-2002
IT Solutions Builder TOP IT RESOURCES TO MOVE YOUR BUSINESS FORWARD
Which topic are you interested in?
What is your company size?
What is your job title?
What is your job function?
Searching our resource database to find your matches...