Is Your Financial Accounting System Compliant?

Over the last 15 years, changes to legislation have altered the healthcare and financial sector’s IT requirements. Legislation like HIPAA and HITECH introduced the need for more secure management of patients’ electronic records and increased documentation for any practices that involve electronic patient records.  These changes impacted IT system requirements for the financial services industries in similar ways.

complianceStricter regulation of the financial services sector was enacted as the electronic transfer and storage of information permeated the industry and the wider world in the early 2000s. While retail customers have always had an expectation that businesses accepting credit cards would keep their data secure, corporate accounting departments and financial services companies never really had to tangle with data security IT issues. But economic crises and scandals over the past 15 years have pushed lawmakers to require better records management standards of financial services companies and have called for more transparent disclosure and reporting, and more oversight of the auditing process.

The Sarbanes-Oxley Act of 2002 was passed in response to corporate scandals like Enron, WorldCom and Tyco.  SOX, as it is known familiarly, was meant to discourage auditing malfeasance and to make it more difficult for businesses to misrepresent their financial health to the public. Under SOX, companies must preserve five years’ worth of financial records and maintain a stable records management system.  They must also restrict access of financial data to designated employees or contractors.

The Wall Street Reform and Consumer Protection Act of 2010, known as Dodd-Frank for its two sponsoring legislators, extended the reporting and disclosures requirements of formerly unregulated financial institutions. Like SOX, Dodd-Frank didn’t address financial services IT directly. However, it did require that these institutions satisfy the new reporting requirements around compensation, investments, sources of funding, etc. That meant that many IT system needed to be adjusted to make sure the way they create, store, and transfer company documents is in compliance.

Sarbanes-Oxley and Dodd-Frank require that companies provide more access to regulators, more honest communication with the public, and increased financial transparency. Many small and medium sized financial services companies lack sufficient IT resources and knowledge to build and maintain an IT infrastructure with the right combination of security and openness.  Accountnet works with SMBs in the health and financial industries to ensure their financial accounting systems’ compliance with all government regulations.  Contact us for a free Needs Assessment – let us help you determine the right solution for your unique business needs.