After scandals like Enron, the government had no choice but to establish regulations like the Sarbanes-Oxley Act (SOX).
Regulatory audits have been put in place for two reasons:
- To insure asset accountability
- To insure safety of information
Regulations like SOX require organizations to demonstrate that they have control over their asset management processes for both internal and external audit purposes. Further, organizations need to attest to what they own, where it is, and who has it. The end goal of these regulations is to avoid having organizations overstate their fixed assets by showing on their books assets that have been disposed of or lost, or that are no longer under their control.
Regarding privacy of information, health organizations are facing some very strict regulations. The Health Information Portability and Accountability Act (HIPAA) requires organizations to maintain information like user, location and other details, to be able to prove that the health information of patients is secure. Other similar regulations are being put in place to insure that an organization's financial information is secure. Failure to comply with those audits can result in penalties for the organization and for its executives.
A solid asset management strategy can help alleviate those risks. By setting up processes and a system to help track assets throughout their entire lifecycle, from the time they are received in the organization to the time they are disposed of, organizations can assess the location and the custodian of an asset at any time.