QSO 420 ( week 8)

Peer 1 :

Jared Powell

Hi Classmates & Instructor,

As we have studied EVM, we have learned that EVM operates best and most efficiently when it is provided with the most accurate and detailed information.

SOX was drawn up and passed into law to protect shareholders and the public from accounting errors and fraudulent practices in enterprises and to improve the accuracy of corporate disclosures. As it reinforces the contention that there is a fiduciary duty placed on corporate executives to tell the whole truth when reporting the financial condition of their companies.

This duty would include an accurate assessment of the true most current status and the final required costs to finish all multi-year projects. Employing a simple form of earned value management can help corporate executives meet this obligation.

This is where CPI would be introduced and best to handle such duties.

The CPI represents the relationship between the earned value accomplished divided by the actual costs spent to accomplish this value. The cumulative CPI has been demonstrated to be a stable predictor of performance at completion, even as early as the 15- to 20-percent point of the project. The CPI can thus be used to accurately predict the final cost position of any project, even those spanning multiple years in performance.

Using EVM to manage long-term capital projects is essential to meet corporate executives’ fiduciary duty to the shareholders.

Fleming, Q. W., & Koppelman, J. M. (2004, April). Sarbanes-Oxley: Sarbanes-Oxley:

Does Compliance Require Earned Value Management on Projects? Humphreys

Association.

https://www.humphreys-assoc.com/uploads/commerce/images/pdf/FlemingKopplem

anSarbanes-Oxley.pdf

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Peer 2 :

James Farren

The Sarbanes-Oxley Act of 2002 mandates corporations to uphold reliable documentation and disclosure procedures as a crucial requirement. The primary purpose is to guarantee transparency in financial transactions and protect investors against fraudulent corporate behaviors. Proper documentation and filing of finances play a significant role in safeguarding the interests of all stakeholders concerned. The earned value concept is the first thought that arises when contemplating the connection between EVM and SOX. This principle stands out as one of the most conspicuous, yet its significance often supersedes other principles. As demonstrated, establishing a budget is essential; however, expenditures must be meticulously monitored precisely. Misrepresenting a company's expenses may result in various consequences, ranging from the need to rectify documentation to the possibility of facing fraud charges.