SOX

Sarbanes-Oxley (SOX), a US law adopted in 2002 to strengthen governance and restore investor confidence following a series of major accounting scandals, mandates:

• The CEO and CFO of a public company must certify, and thereby take personal responsibility, for the accuracy of financial statements.
• Public companies must establish a system of internal controls to ensure the transparency and traceability of financial information. In addition, they must also identify a framework for assessing this system.
• Management must analyze the effectiveness of the lines of control and report any indentified weaknesses.
• External auditing firms must issue a statement with regards to the management’s assessment of the system of internal controls.

Basel II

Basel II is an international agreement outlining risk and capital management requirements for banks and financial institutions. Under Basel II, these institutions are required to build capital reserves in relation to the risk of its lending and investment policies. In order to obtain business capital at the lowest possible interest rates, companies now need to pursue policies to demonstrate their financial reliability and ensure a good credit rating.

The New Basel Accord is based on three pillars:

1. Minimum capital requirements

   Basel II assesses the individual market, operational (ranging from fraud to system failure) and credit risks for a particular company. Banks may use different methodologies for calculating credit risks. The most advanced methodologies use internal rating systems which are highly risk-sensitive without raising or lowering the total requirement.Control of central banks

2. Central banks may impose mandatory asset coverage that exceeds the minimum requirements.Discipline and market transparency

3. Banks and financial institutions must publicly disclose information on their capital levels, risks and management.

   
   

Why Tagetik CPM?

By unifying the processes of budgeting, financial closing, consolidation, intercompany reconciliations, allocation, cash flow and financial reporting into a single solution, Tagetik CPM helps companies comply with new and changing regulations.

Discover the Tagetik difference:

• Improve traceability and transparency through double-entry accounting

• Control processes through built-in workflow management at all levels

• Generate consolidated reports in line with Basel II rating requirements

• Use standard models to compile information as required in Basel II

• Fulfill public disclosure obligations (based on the 263/2006 circular)

FIND OUT MORE

• Request a live web demo
• Contact Tagetik