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CareNetWest (CNW) is a large healthcare company that has grown almost exponentially in the past two years. In addition to dealing with issues of rapid growth, they are now facing required adherence to the Sarbanes-Oxley Act of 2002. Publicly owned companies are compelled to disclose all matters related to financial activities within the organization to minimize any possibility of dishonest financial disclosures to the public. Section 404 of the Sarbanes-Oxley Act requires public companies to include a report about the effectiveness of controls in their annual form 10-k. Internal controls consist of procedures used by management to ensure accuracy and reliability in performing certain business functions such as financial reporting. Along with the rest of corporate America, at the end of 2002 CNW headed into its first period of Sarbanes-Oxley Act compliance. The company will begin by developing an internal control and corporate governance system. This would call for utilizing systems and organizations for compliance techniques.










Corporate Compliance Benchmarking
In today’s post Enron business environment, it is imperative that upper management and boards of directors make informed and ethical decisions geared toward compliance with Sarbanes Oxley (SOX). Compliance is more than just how the information is reported, but the way the organization is structured to provide oversight and governance. CareNetWest Companies, Inc. is currently in a crisis created by CEO, Tad Smith who chose to form a non-traditional management structure with a lack of aggressive and comprehensive control management. The resignation of Jane Michaels, Chief Risk Officer began an awakening for Tad and the apparent discovery of Sarbanes Oxley Section 404. Jane Michaels was the only executive in Tad’s organization that had prior knowledge and expertise in SOX. The lack of Tad’s knowledge is a strong...