dcsimg
 
 

Tempur-Pedic: The Sox Treatment

By Elizabeth Bennett  |  Posted 2005-09-07 Print this article Print
 
 
 
 
 

Following its much anticipated IPO, the mattress maker had barely a year to document its policies and procedures for a SOX audit.

Tempur-Pedic: The Sox Treatment

The Sarbanes-Oxley Act of 2002 put a demand on publicly held companies to bolster business processes related to financial reporting. The example below describes how a mattress maker like Tempur-Pedic reworked its purchase process to meet the strict new standards.

BEFORE SOX

1 Technology staffer orders desktop computers via phone or Internet. Uses a vendor he's worked with in the past.

2 PCs received by staffer who placed order.

3 He files paper invoice in filing cabinet.*

4 Tech staff tests new machines.

5 If the machines work as expected, staffer who ordered them signs invoice.

6 Approved invoice sent to accounts-payable department.

7 If process takes more than 30 days, a quick-pay discount may be lost.**

8 Accounts-payable clerk approves purchase.

9 Clerk cuts check, mails to vendor.
AFTER SOX

1 When new PCs are needed, the head of the technology department notifies a purchasing manager, via e-mail.

2 Purchasing manager contacts three or four vendors.

3 Purchasing manager selects the best vendor, based on price and value.

4 Manager generates an electronic purchase order, sends copies to accounts-payable and technology departments, and keeps one copy for his records.

5 Tech department head receives computers and matches what arrives against the purchase order.

6 If everything matches up, the receiving documents are sent on to accounts-payable department.

7 The vendor sends invoice to accounts-payable.

8 Accounts-payable clerk compares invoice with original purchase order and the receiving documents.

9 If all materials are present, correct and approved, clerk confirms this in an electronic record of the pending transaction.

10 An accounts-payable manager reviews confirmation and supporting documents.

11 That manager approves payment and signs off, in the electronic system.

12 A different clerk cuts the check and mails it to the vendor.

* None of the receiving information—date of delivery, person who received the machines—is entered into a computer system
** Typically, a vendor discounts the cost of the goods by 2% if the invoice is paid within 10 to 15 days of the invoice date

SOURCE: Protiviti



<12345
 
 
 
 
Senior Writer
Elizabeth has been writing and reporting at Baselinesince its inaugural issue. Most recently, Liz helped Fortune 500 companies with their online strategies as a customer experience analyst at Creative Good. Prior to that, she worked in the organization practice at McKinsey & Co. She holds a B.A. from Vassar College.
 
 
 
 
 
 
 
 
 
 
 

Submit a Comment

Loading Comments...
eWeek eWeek

Have the latest technology news and resources emailed to you everyday.

By submitting your information, you agree that baselinemag.com may send you Baselinemag offers via email, phone and text message, as well as email offers about other products and services that Baselinemag believes may be of interest to you. Baselinemag will process your information in accordance with the Quinstreet Privacy Policy.

Click for a full list of Newsletterssubmit