Sarbanes-Oxley Act (SOX) is legislation that protects shareholders and the public from errors in accounting and wrongful conduct from organizations and improves the thoroughness of corporate disclosures. The act has deadlines for compliance and maintains rules on requirements. It is critical to understand that all public companies must comply with SOX compliance regulations, both on the financial and IT side. Failure to comply with SOX compliance can result in fines, imprisonment, or both.
SOX Compliance Requirements
SOX compliance is important to uphold transparent accountability in financial reporting as well as checks and balances. Having SOX compliance controls also protects a company’s data security from cyberattacks and data theft. It also benefits internal communication and cooperation within an organization.
There are several aspects of SOX Compliance that include electronic records, compliance & security, data protection & compliance, and compliance & audits. Some of the essential SOX compliance requirements that we assist with:
- CFOs and CEOs have direct responsibility for the accuracy, documentation, and submission of all financial reports and the internal control structure to the U.S. Securities and Exchange Commission (SEC). Intentional or not, officers risk consequences with the law and monetary penalties for compliance failures.
- An Internal Control Report is a SOX requirement that declares management responsible for an internal control structure for their financial records. Any inconsistencies should be reported as quickly as possible to uphold transparency.
- SOX requirements include standard data security policies, adequate communication of data security policies, and consistent adherence of data security policies. A comprehensive data security strategy should be developed and implemented to protect all stored financial data utilized during operations.
- SOX requires companies maintain and provide documentation proving they are compliant and continuously monitoring and measuring SOX compliance objectives.
Moreover, as part of our internal controls investigation and to meet your SOX compliant requirements, it is vital to establish proficiency in the following controls:
- Access: Maintaining physical controls and electronic controls with a permissive access model so that each user only has access necessary to do their jobs and meet SOX compliance.
- Security: Demonstrate data security protections against data breaches.
- Data Backup: Financial records have SOX compliant off-site backups.
- Change Management: Well-defined standards and processes to add and maintain users, install software, and make any changes to databases or applications that administer company financials.
Meeting SOX Compliance Goals with Arbour
At Arbour Group, we can help you meet your goals of SOX Compliance with the following:
- IT SOX Readiness & Risk Assessments
- Internal Audit Support & Issue Remediation
- IT Application controls support
- IT SOX Controls Testing & Automation
- SOX Third-Party & SSAE/ SOC Report Testing
- ACL for Audit, Data Analysis & Visualization
For more information on Arbour Group’s SOX Compliance Services, contact us today!