The Use of an ERP System to Facilitate Regulatory Compliance

Abstract

This article reports the findings of a case study conducted in a multinational organization that aims to investigate how an enterprise resource planning system (ERP) can facilitate control over reporting processes and thus ensure compliance with regulatory requirements. The findings demonstrate how the use of an ERP to comply with financial regulation can impact organizational roles. In particular, IT managers must ensure that the ERP addresses regulatory requirements for internal control over financial reporting.

Keywords:

• ERP
• regulation
• compliance
• internal control
• financial reporting
• Sarbanes-Oxley Act

Acknowledgments

*“Omega” is a pseudonym for the organization at which the study was conducted and at which the second-named author is employed on a full-time basis.

Notes

1. Penalties range from SEC sanctions, adverse market reactions, class-action lawsuits, and management and auditor turnover (Rice et al., 2012; Zhang, 2007).

2. The name of the organization has been changed for reasons of confidentiality.

3. Access to transaction codes in the system that an employee needs in order to fulfil duties described in their job description.