Sarbanes Oxley
Prior to the Sarbanes-Oxley ("SOX") legislation of July 2002, recording, tracking and disposing of corporate assets was a necessary evil within the corporate governance frame work. Since Sarbanes-Oxley, accurately accounting for corporate assets is a requirement with substantial penalties facing upper management for inaccuracy. FASB 143 and Fin 47 have provided regulatory incentives and impetus for the timely disposition of non-working facilities as an off set to the retirement liability that must be booked for all facilities. Corporations had the luxury of generally ignoring excess plants and equipment and Risk Management's interest was limited to mitigating environmental liability.
A professionally managed in-house or outsourced Investment Recovery initiative can be a significant internal control process for insuring accurate recording, cataloging and reporting of capital assets, expense items and inventories. The lack of a business process to categorize non-working assets and facilitate the reuse or timely disposal of those assets in a responsible and value optimizing fashion exposes the corporation to a "material violation" under section 307 of Sarbanes-Oxley and reduces the ROI on those assets.
Regarding the new SOX guidelines (Section 307), the ABA position is that corporate attorneys are held to a standard of conduct as follows in regards to material violations: The ABA's position on Section 307 is that corporate attorneys are held to a standard of conduct that requires them to act if a reasonable person would believe that a material violation has occurred, is occurring or will occur. This covers the actions and behavior of corporate attorneys, so you can bet the attorneys or prosecutors will apply this same standard of due diligence to corporate officers and managers.
Contracting with an experienced surplus asset Investment Recovery management firm facilitates the identification, cataloging and disposition of non-revenue producing assets. The implementation of proactive dedicated effort to locate, identify, and catalog and disposition assets will manage the risks associated with asset management and SOX and FASB compliance. Establishing an integrated surplus asset management process which includes inventorying, cataloging, reporting, and tracking, while facilitating asset reuse or disposition outside the corporation, demonstrates a proactive corporate internal control in regard to asset management.
CIRi provides a process for ensuring accurate reporting and corporate valuation by creating cost savings through right offs, reduced warehouse capacity (cost of a square foot of corporate space) lower insurance base, and reduced tax burden from selling assets that are underutilized as well as identifying assets that no longer exist.
CIRi is a professional Investment Recovery Service provided, not a broker, dealer or auctioneer. We provide the experience to assist with ensuring compliance with SOX and FASB 147. We work as an extension of your existing Investment Recovery department to ensure compliance and optimization of revenue.
