Use Earned Value to Comply with Sarbanes-Oxley

After several corporate accounting scandals became public, Congress passed a law, referred to as the Sarbanes-Oxley Act of 2002 (SOX), which holds CEOs and CFOs of publicly traded companies criminally liable for relating fraud to shareholders. Companies are aggressively taking action to meet the requirements dictated by the Sarbanes-Oxley Act. In fact, it has been reported that nearly 77 percent of companies will spend more on IT, business process change, corporate governance, and/or consulting this year as a direct result of SOX compliance.

If your company manages projects, then financial mismanagement of those projects could leave your senior management legally exposed. Consider the many stories in the press about large projects with huge cost overruns. If this kind of cost overrun is not foreseen and anticipated in the financial forecasts of the company, the effects could seriously impact the projected profit for a given period.

The SOX goes much deeper than just the accuracy of financial projections; it touches on many areas that affect project management within an organization.