Custody Transfer in the Sarbanes-Oxley Era

by | Aug 8, 2006 | Chemical, Downstream Hydrocarbons, Industry, Measurement Instrumentation, Oil & Gas


Many process manufacturers have flow metering stations where ownership of incoming raw materials, intermediates, and/or outgoing products change. This custody transfer process is common with oil and gas producers, refiners, and chemical/petrochemical manufacturers.

Accuracy is critical since these measurements impact the bottom lines for both the seller and buyer. And, with the introduction in the U. S. of the Sarbanes-Oxley (SOX) Act of 2002, companies are required to put the controls in place to prove the accuracy of these measurements. Other countries have similar regulations requiring these documented proof-of-accuracy processes.

Robert Fallwell, a regional manager in Emerson’s Metco Services business, has written an excellent article, Sarbanes-Oxley audits: coming soon in the July issue of Control Engineering magazine.

Robert shares his expertise on how process manufacturers need to prepare for the SOX auditors. He boils it down to:

…they ask for proof that flow measurements are accurate, that you have procedures to ensure measurement accuracy, and that the plant’s operators, engineers, and production accountants have been trained in the correct procedures for the measurement control process.

The article is filled with advice on how to get ready, where to start in your process, and even 9 steps on how to comply with SOX. In addition to the expertise Robert and the METCO team bring to SOX compliance planning, Emerson has well-established flow technology and calibration management software help assure accuracy over time.

If your business is impacted by SOX or similar regulations, you’ll want to incorporate some of the ideas presented in this article.

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