Financial Security and IT Security

Just Like the Sarbanes-Oxley Act in the US, the French Financial Security Act (“Loi de Sécurité Financière”, or “LSF”) was passed in July 2003 and aims, inter alia, to limit financial disasters resulting from mismanagement or manipulative accounting revealed by the Enron and Parmalat scandals.

Its three objectives are outlined below:

• to strengthen directors’ liability
• to strengthen the company’s internal control
• to reduce conflicts of interests.

This act requires the Chairman of the Board or the Chairman of the Supervisory Board of publicly traded companies to report on the conditions surrounding the preparation and organization of the Board’s work in an appendix which is included in the Board of Directors’ report, as well as on internal control procedures and risk prevention mechanisms implemented by the company.

The wording of the internal control report requires an analysis of the company’s risk management framework at all levels, and is not confined to its financial aspects, unlike the approach that has been adopted in the Sarbanes-Oxley Act. It is for this reason that IT Departments are particularly concerned with financial security issues as it contributes to prevent and limit possibilities for errors or fraud and helps ensure the integrity of the company’s accounting and financial information’s, stored in the system.

Our Financial Security business offer involves taking steps in the Governance and IT Control procedures of our clients. Our specialization and track record in the Banking and Insurance sectors allow us offer comprehensive and optimized solutions as opposed to “silo-based” approaches, which, again, are usually unsuited to our clients’ business issues.