Travel and entertainment (T&E) is typically a company's second largest controllable expense (after payroll); often-representing millions of dollars in annual spend. Unlike other expenses listed on a company's income statement, T&E expenses are often subject to a greater degree of personal discretion. The process is one that all too often is fraught with inconsistencies, mistakes, and outright fraud.
The 2002 Sarbanes-Oxley Act ensures corporate governance by requiring companies to certify that internal controls and process are in place to ensure that:
- Transactions are properly authorized;
- Assets are safeguarded against unauthorized or improper use; and
- Transactions are properly recorded and reported
Which begs the question: how can any corporate officer certify in good faith that appropriate internal controls and processes exist for controlling spend and fraud when those processes are paper-bound, difficult to track, and tough to audit?