Although the Sarbanes-Oxley Act (SOX) has primarily been the concern of finance officers, new requirements scheduled to take effect later this year could mean changes for meeting planners as well, including closer scrutiny of expense reporting and more stringent documentation requirements.
Introduced by Sen. Paul Sarbanes (D-Md.) and Rep. Michael Oxley (R-Ohio), the bill was enacted in 2002 to increase corporate responsibility and curtail accounting scandals. The area of concern is section 404 of the Act, which becomes law Aug. 15 for large corporations and June 15, 2005, for smaller, publicly traded companies. The legislation does not affect private companies, except those planning to go public.
Section 404 requires each public company to include an "internal control report" in its annual report. Companies must document financial reporting procedures in the annual report and have independent auditors sign off on it.
The onus of the changes will fall most directly on purchasing and procurement departments--those who control the purse strings. However, because of the annual audits, planners will face tighter controls in the way they purchase items, such as meeting space, hotel rooms, airline tickets, food and beverage, and other services.
"From the meeting planner's perspective, it's going to have a filter-down effect," says Joshua Grimes, attorney with Grimes Law Offices, Philadelphia.
There are several steps that planners can take to comply with Sarbanes-Oxley, says Scott Green, director of audit and compliance at Weil Gotshal & Manges LLP, New York, and author of the new book Manager's Guide to the Sarbanes-Oxley Act: Improving Internal Controls to Prevent Fraud.
Special Events Magazine’s sister publication, Corporate Meetings and Incentives, will carry a full article on this topic in its May issue.
By David Kovaleski, senior writer, Primedia Meetings Group