Thanks to the Sox act, there have been a lot of positive changes in the way organizations run their business. They are more transparent, less likely to give out misleading information, and are smarter at solving internal problems.
Want to know how sox it compliance can help save your business? Well stick to this guide, and we’ll help you out!
Control Structure Strengthening
Section 404 and 302 requires complete documentation of the business operations. This includes manuals, recorded control processes, and personnel policies. With this documentation, some businesses might find it overwhelming.
However large companies like PepsiCo has benefitted from this documentation process. The company realized that some steps that supposed to be taken weren’t actually used. By using sox it compliance, they were able to find issues within their control structure and help the company stay transparent in their documentation.
While having better audits might sound vague, it’s a huge benefit towards your IT business. In the 2016 Sarbanes Oxley Compliance Survey, it was noted that:
- Internal auditors supporting and performing testing efforts aren’t surprising. This is because its suited towards their skill sets and can enable external audit reliance.
- For about 85% of public companies, either the executive management or the audit committee acts as the main sponsor for the SOX compliance efforts. The Audit committee needs to be responsible for the organization’s risk management and ensure that it complies with the SOX act. And the executive management is responsible for completeness and accuracy of the business financial reporting. That’s why it makes sense that the executive sponsorship falls into one of these categories, especially with a public company.
- When it comes to testing, about two-thirds or 46% of companies rely on their internal audit groups. 21% uses their process owners or management.
When using sox it compliance, it helps with making auditing a more efficient process. It helps lower the auditing costs and help the company remain transparent and have better user experience when supporting auditors.
The SOX Act main goal is to make financial reporting more transparent. Despite the long process in the documentation, completing the process will provide better financial representation for ten years and beyond.
Having the organization’s control environment mapped means that the document does give the insight to track material changes. As your organization matures, it will make the financial reporting easier.
Builds Working Relationships and Team Collaboration
SOX compliance requires more collaboration amongst your organization’s stakeholders.
As the threat landscape and risks increase, companies have to accept sox IT compliance so that it can protect themselves from potential lawsuits and business failure. Audit committees, chief risk officers, general counsels, and board of directors need to work with information security and IT leaders to approach and create a plan that helps minimize risk in the business.
As an organization, you shouldn’t see the SOX act as a penalty, but as a way to help your business appear transparent to the public. By doing this, you’ll protect your business and increase your company’s chance for long-term survival. So make sure to tell your auditing team to make sure that their reports comply with the SOX act!