New Microsoft Offering to Help Address Sarbanes-Oxley Compliance Requirements
Dec. 17, 2003
Q&A: The Microsoft Office Solution Accelerator for Sarbanes-Oxley will enable companies to meet new U.S. government requirements mandating that public companies provide documentation on the effectiveness of internal controls over financial reporting.

EDITORS' UPDATE, Dec. 3, 2004 -- Microsoft is evolving the Office Solution Accelerators program with the Solution Showcase for the Microsoft Office System. For additional information, see Microsoft Showcases More Solutions Developed On the Microsoft Office System or the Microsoft Office System Solutions Web site .

REDMOND, Wash., Dec. 17, 2003 — The recent multi-billion-dollar scandals at companies such as Enron and Worldcom, among other incidents, were catalysts for major change. While the accounting industry and many companies reviewed and tightened their own documenting and reporting processes in response, the U.S. Congress got really serious about protecting shareholder interests, passing the Sarbanes-Oxley Act of 2002. This legislation provides specific reporting requirements for public companies, and created the Public Company Accounting Oversight Board (PCAOB), a private-sector, non-profit corporation that oversees the auditors of public companies to help ensure the preparation of informative, fair, and independent audit reports.

The act radically changes corporate governance and reporting obligations for all publicly traded companies, and significantly increases personal accountability for the organizations officers, auditors, securities analysts and legal counsel. New compliance requirements mandate that CEOs and CFOs personally certify financial statements and affirm they are responsible for disclosure controls and procedures at all levels of their corporation. Plus, the act requires an annual evaluation by the companys independent auditor of internal controls and procedures for financial reporting, to be published in the companys annual report.

The Microsoft Office Solution Accelerator for Sarbanes-Oxley, planned for release in March 2004, will provide technology automation that enables management to more easily meet the new government requirements mandated by Sarbanes-Oxley Act. The accelerator is built on Microsoft Windows SharePoint Services and Microsoft Office InfoPath 2003, and is the first deliverable under a larger compliance initiative from Microsoft. This is the latest in a series of accelerators aimed at helping companies address key business issues.

To learn more about the Office Solution Accelerator for Sarbanes-Oxley, PressPass spoke with Rob Bernard , director of program management in the Information Worker New Markets Group at Microsoft.

PressPass: Why is there a Microsoft Office Solution Accelerator for Sarbanes-Oxley?

Bernard: The Office Solution Accelerator for Sarbanes-Oxley was developed to address a key pain point for many Microsoft customers, and to do so in an extremely cost-effective way. Current regulations under the new Sarbanes-Oxley law mandate that all publicly traded companies file certain reports and statements before December 31, 2004. Many of our customers are publicly traded, so we saw a huge need. Microsofts goal is to meet customer needs in a low-cost, high-quality way, and we saw that we could help meet compliance needs by building a new tool on a foundation of existing products that many of our customers have already licensed -- or will want to license for multiple reasons. Its a very compelling value proposition.

PressPass: What is the Office Solution Accelerator for Sarbanes-Oxley?

Bernard: The Office Solution Accelerator for Sarbanes-Oxley is a foundation on which companies or partners can build their compliance infrastructure. Its a software package built on top of the Office System platform, specifically Windows SharePoint Services and Office InfoPath 2003, that lets our customers meet compliance needs while working within the familiar environment of Office.

By using and extending a lot of functionality that already exists in Office and Windows SharePoint Services, we created an accelerator that very effectively addresses many of a public companys Sarbanes-Oxley needs, including managing controls and libraries of documentation, status, roll-up reporting and more. Weve received positive feedback from customers and partners that the accelerator helps solve the most pressing needs.

PressPass: How does it help address needs created by the Sarbanes-Oxley Act?

Bernard: The Sarbanes-Oxley Act gives top executives a mandate to closely scrutinize and monitor the assembly of financial data across the enterprise. The Microsoft Office Solution Accelerator for Sarbanes-Oxley enables executives to check and manage those processes and documents over the entire process lifecycle. The accelerator provides four primary points of value in Sarbanes-Oxley compliance initiatives:

Document and Information Management . The accelerator streamlines work, includes built-in audit trail features, and enables executives to easily store, access, and manage compliance data.

Process Automation and Workflow . Executives can dynamically add users and tasks to the workflow, define roles and manage system access accordingly, and electronically approve documents. The accelerator prompts users for action with e-mail alerts.

Collaboration and Communication . Users get current information, and are alerted when documents have been changed. Executives can monitor document status, and audit data and processes, through controlled access.

Monitoring and Reporting . Executive dashboards display project status and enable executives to spot and correct process issues before they become real problems. The accelerator provides a printed summary, along with detailed reports, on compliance results and company readiness.

The Microsoft Office Solution Accelerator for Sarbanes-Oxley is easy to deploy, is optimized around the most common control methodologies and has flexibility to allow corporations to adapt it to their special needs. It allows a partner, such as an accounting firm that may be assisted by a systems integrator, to readily create a custom solution that makes it easy on an individual, division, and corporate level to get at and manage the information a company will need to comply with the Act.

PressPass: Will this work for international companies that are listed on U.S. stock exchanges?

Bernard: Yes, we built this so that companies in many difference geographic locations can take advantage of the accelerator. We support languages, such as Japanese, that require double-byte support.

PressPass: Is Microsoft using the accelerator to meet its own compliance needs?

Bernard: Yes, the product team is working very closely with Microsofts internal finance and audit teams to make sure that the accelerator meets both our own needs and those of the world...

PressPass: Are you working with Big Four accounting firms?

Bernard: Yes. Were working with several of the Big Four accounting firms, in different ways. Because each of the Big Four has large numbers of clients for whom using the Microsoft Office Solution Accelerator for Sarbanes-Oxley will make enormous sense, we are committed to ensuring that the accelerator is appropriately compatible with the methodologies and control libraries of each of the Big Four. The Office Solution Accelerator for Sarbanes-Oxley is designed to accommodate audit methodologies regardless of source, and also provide the means to adjust methodologies as required. We are not limiting ourselves to involvement with just one of the Big Four, because our customers use many firms, and many firms have good approaches and ideas that we want to support. Compatibility with various methodologies and control libraries will increase with subsequent versions of the accelerator -- and we expect there to be new versions well into the future, because compliance will remain a major and evolving need of corporations. We cant cooperate directly with Deloitte Touche because it is Microsoft's auditor. But all of the Big Four can help deploy the accelerator for their customers, and thats our expectation.

PressPass: What if compliance regulations or needs change?

Bernard: A prime objective of the Office Solution Accelerator for Sarbanes-Oxley is to provide a sustainable compliance tool one that provides powerful long-term value. The accelerator was architected to evolve as regulatory and methodological requirements evolve. The accelerator will continue to meet ongoing, changing needs. Compliance is an activity undertaken by a company, in concert with its advisors, and the Microsoft Office Solution Accelerator for Sarbanes-Oxley simply automates the management of compliance rules and behaviors for the company.

PressPass: Will a company require any external vendors or partners to deploy the Office Solution Accelerator for Sarbanes-Oxley?

Bernard: Microsoft does not promise to solve any companys compliance problems. Rather, we provide a tool which, if appropriately used, can very much help a company meet its compliance requirements. Using the tool appropriately will involve guidance from a qualified accounting firm. Like many compliance systems, the Office Solution Accelerator for Sarbanes-Oxley will require some configuration and customization, and that work will likely be done by a systems integrator -- although much of the integration work could be done by a customers internal IT staff. Once a company decides what its general approach is to Sarbanes-Oxley, it will need tools to implement and manage compliance. We believe the accelerator is the best tool on the market, because of its current and future features, because of the strength and commitment of the company behind it, and because of the value proposition it offers.

A systems integrator can get the solution up and running and configured to the individual companys needs in a very short timeframe. The accelerator can accommodate various approaches, including many unique approaches a company might take. Our systems integrator partners will be well-trained to handle those needs that training is made still simpler by the accelerators foundation of core Microsoft products that the integrators know well.

PressPass: What are Microsofts plans for future compliance technology?

Bernard: Microsoft is committed to providing compliance tools and features for the long term. The Microsoft Solution Accelerator for Sarbanes-Oxley is the first deliverable under a larger compliance initiative from Microsoft. In addition to investing in building tools that facilitate compliance, we are working across product lines to provide the best possible functionality to meet our customers compliance needs. Customers can look forward to seeing more and more compliance functionality in Microsoft products.

We believe that corporate governance will change as a result of Sarbanes-Oxley and similar regulations around the world. For a company to comply with a regulation, and to accurately attest that it has complied, it must know its actual condition. Corporate leaders must be able to look into the company and see it as it really is. We say the company must have "transparency." A company that is transparent can more readily comply with government requirements, but it also enjoys other advantages. When leaders know whats really going on, it cant help but lead to better decision-making in most cases.

Our products and services will help make companies more transparent, leading both to less-burdensome compliance activities and, we believe, ROI in its own right. Its a compelling combination.

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