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Does SOX mandate timely receiving on PO's?

I have been told not to receive on some service purchase orders in an attempt to help us hit a budget at the end of June. Is this against SOX compliance? Can someone show me some reference to back up my argument?

Answers

Anonymous
(Consultant) |

The link is your financial assertions of accuracy and completeness that your processes are supposed to ensure. If a purchase has been physically received then it needs to be recorded as received on the books. Regardless if the purchase order has been placed an obligation has been created and a liability should be accrued for. Therefore not recording these transactions to hit budget is just incorrect accounting and therefore a violation of the SOX internal control framework.

Anonymous
(Independent Consultant) |

The wording of your question is somewhat confusing to me. If your question is can you as a business defer some service be performed? Then that answer is yes. If during the quarter, management asks everyone to tighten their belt, and you are responsible for managing the vendor responsible for mowing the lawn, as an example, and you tell them to only mow the lawn every other week as opposed to every week (assuming the contract with the vendor allows this), then that is just you managing your business. You are putting the brakes on your spending.

If you've already received the service, and you "top drawer" manage an invoice received from the vendor, then that is obviously not allowed (fraud).

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Forget SOX, with or without SOX mandates, items/goods received should be recorded. Delaying receipt of goods/POs just for hitting budget numbers is just bad accounting practice and runs contrary to presenting accurate financials.

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