SAP AG announced its newest innovations to help companies align their business processes and IT systems more easily and effectively for corporate governance compliance with the U.S. Sarbanes-Oxley Act (SOA). Working in close collaboration with leading consulting and auditing firms, SAP has tailored financial compliance capabilities to comprehensively address companies' SOA needs and reduce the complexity of meeting today's most pressing business challenge.

Building on the inherent control principles and existing capabilities for

SOA compliance in mySAP Financials and mySAP ERP, SAP has added new functionality for the management of internal controls and "whistle blowing," and enhanced the solution's Audit Information System, offering companies a straightforward, closed-loop solution for SOA-compliant accounting, reporting and performance management. With SAP Compliance Management for Sarbanes-Oxley Act, SAP combines its new and existing financial compliance functionality, leveraging the integration capabilities of mySAP Financials, a solution used today by more than 18,000 companies to create a sound internal control environment; produce accurate and timely financial statements; mitigate and monitor risk across the enterprise; and help ensure public trust. Due to SOA's broad impact across business operations, the financial compliance offerings in mySAP Financials, as well as SAP's comprehensive enterprise resource planning solution mySAP ERP, are designed to integrate with further mySAP Business Suite solutions such as mySAP Customer Relationship Management (mySAP CRM) and mySAP Human Resources (mySAP HR) to deliver timely and accurate business insight on all key indicators of company performance.

"Some companies are using process control and compliance as the rationale for consolidating ERP instances," said John Hagerty in the AMR Research Alert, CFOs Say It's All About Process and Internal Controls, March 21, 2003. "Standardized process and common controls will reduce exposure to diverging business practices between divisions and geographies."

SAP engaged PricewaterhouseCoopers LLP to assist with the development of tailored functionality to help address certain provisions of SOA such as those in Section 404, which requires that management annually assess and report on the effectiveness of internal controls for financial reporting, to which external auditors must then attest.

"We worked with SAP to assist them in their efforts to align the underlying business processes and fully embed internal control management capabilities necessary to help effectively comply with today's, and expand with tomorrow's, SOA requirements," said Bill Shipley, partner, PricewaterhouseCoopers.

The functionality for management of internal controls delivers scoping, documentation, assessment, remediation, and sign-off tools, enabling the CEO and CFO to verify the soundness of internal control methodologies with confidence. Due to the open infrastructure of SAP® solutions, management of internal controls goes beyond the mere documentation of processes and is open to other audit firms' best practices content and control libraries.

New functionality for whistle blowing enables employees to send anonymous complaints regarding questionable business practices via a company portal, in fulfillment of Section 301. The functionality can be integrated with the portal-based manager self-services (MSS) and employee self-services (ESS) in mySAP HR.

SOA Section 302 requires that the chief executive and chief financial officers must certify quarterly and annually that their SEC report does not contain any untrue statements or omit any material facts that would make the filed statement misleading. The enhanced Audit Information System (AIS) in mySAP Financials delves deep into business processes across the enterprise and individual documents, providing a solid auditing workbench that enables internal and external auditors to streamline and enhance the auditing process.

In addition to increasing the speed of closing the books and reporting financial information for SOA, mySAP Financials offers globally operating companies comprehensive coverage of further corporate governance regulations around the world, including the Basel Capital Accord (Basel II) and International Accounting Standards (IAS).

mySAP Financials and mySAP ERP, including existing functionality for SOA compliance, are available today for customers on a global basis. The enhanced Audit Information System will be available in October 2003. The new functionality for management of internal controls and whistle blowing will be shipped to first customers during Q4 2003.

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