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The Sarbanes-Oxley Act of 2002 is imposing new financial reporting rules that have public companies turning to business intelligence software for more specialized financial analytics and reporting.
Even as companies work to comply with the initial requirements of Sarbanes-Oxley, the Securities and Exchange Commission last week voted to implement another clause of the act requiring companies to report their earnings according to generally accepted accounting principles rather than pro forma earnings.
SAS Institute Inc., Cognos Inc., Hyperion Solutions Corp. and Brio Software Inc. are responding with new releases of applications that provide a more detailed picture of financial data and more speed and flexibility in reporting.
“The level of detail required in our disclosures is much more significant,” said Todd Naughton, vice president and controller of Zebra Technologies Corp., of Vernon Hills, Ill., which implemented Hyperions Financial Management application in August to handle its financial reporting.
“You have to account for more trend information, whats causing changes in your business, whats expected in the future, are your current numbers indicative of your future performance? If not, why not?” said Naughton. “If your revenues are up, why are they up—did one particular deal drive them up?”
SAS is planning to address these issues in Version 4.0 of its SAS Financial Management Solutions, planned for release early next year. The release will support what officials at the Cary, N.C., company describe as “instant consolidation,” or the ability to generate new reports on consolidated financial data the instant that data is updated.
Officials said SAS is working with two major accounting companies to have its reporting technology certified as conforming with accounting practices. That certification is expected by the release of Version 4.0.
Separately, Cognos CPM, or Corporate Performance Management, for Finance, which will be announced this week, is an integrated solution of existing Cognos applications for forecasting, budgeting, planning, consolidations and reporting. It provides analytic applications for accounts payable and receivable and general ledger, plus a new application for metrics management that consists of role-based score cards. The integrated solution is designed to give companies more visibility into their financials, more accountability and a shared framework of data for more reliable information, said Cognos officials, in Ottawa.
Meanwhile, Hyperion will release Version 3.0 of its Hyperion Financial Management application, which is part of its Business Performance Management suite, this month. Version 3.0 offers users more granularity and flexibility in their financial reporting with support for line-item details in the budgeting database and more user-defined fields so that customers can tailor the reporting to their needs, said officials, in Sunnyvale, Calif.
Finally, Brio is getting into the act this week by releasing Brio Performance Suite 8.0, which combines the companys reporting and analytics technologies into a single product. Though not targeted to financial management, the new Brio product can be applied in that area to generate more accurate reports, said officials, in Santa Clara, Calif.
John Imperato, vice president of finance at Viasys Healthcare Inc., said he expects to meet the Sarbanes-Oxley provisions, as well as improve corporate performance, by deploying Cartesis Corp.s Magnitude financial intelligence software.
“Speed is a huge issue,” said Imperato, in Conshohocken, Pa. “Not only do we need to get the information out a lot faster [because of Sarbanes-Oxley requirements], but our people can spend less time on the closing numbers and more time on the business.”
Zebras Naughton said the Hyperion upgrade gives his company enough flexibility to comply with the shorter filing times for 10-K forms that the SEC will require within two years.
“A lot of companies [are] still relying on [Microsoft Corp.] Excel spreadsheets for their consolidations,” Naughton said. “Excels a great tool, but if you need to consolidate multiple general-ledger systems spread out around the world, it just wont cut it.”