4 Key “China SOX” Technologies

When the Basic Standard for Enterprise Internal Control (aka “China SOX” or “C-SOX”) comes into effect in 2010, it will have a radical impact on the Chinese business environment.  The Standard will require a new approach to risk management, internal control, and communication with company stakeholders.  One of the areas where the impact of C-SOX will be felt the most is in the IT department, who will be key enablers and supporters of the compliance process.

There are a great variety of IT systems that support an enterprise, from email to ERP to financial systems.  We will look at four high-impact technologies that are not currently widely deployed in China.  These include:

• Document and knowledge management. Hundreds of internal control documents are created during a C-SOX implementation project.  These documents cover the processes, procedures and policies of all areas of the company and become the foundation for the internal control system.   Therefore, it is critical to have a document management system in place that allows for the centralized creation and management of this information.  The document management system includes authoring, review, approval, publishing, editing, version control and retiring documents.

• Performance management systems. China SOX requires that company management set specific internal control goals and manage them throughout the year.  Therefore, a performance management system will be needed to record, manage and report on the goals and objectives that are set by the company.  There are three main parts to a performance management system: defining, managing and reporting on the goals.

• Testing and Assessment systems. The process of C-SOX compliance involves aligning operations to be predictable, consistent and validated. By implementing and maintaining an assessment management system, an organization can accurately track and report the state of compliance and respond promptly to requests for C-SOX compliance audits.

• Learning technology (e-learning). Online training represents a significant opportunity for companies to save time and money in their C-SOX implementations.  E-learning courses are high-quality, interactive tools that can provide multiple business benefits to companies who are use these tools.

These tools are “high impact” because they are generally deployed widely across the organization and are used frequently by employees.  They tend to be not as complicated or as costly to implement as other enterprise systems.  Finally, they can be used together as a suite to give a real boost to C-SOX compliance.