Sarbanes-Oxley (SOX) Compliance Services

The Sarbanes-Oxley Act (SOX) is designed to ensure the reliability and accuracy of financial reporting, and ensures that internal controls are free of any major misstatements. Compliance requires the certification of financial statements and reports by the CEO and CFO of the organization, maintaining strong internal controls around data, protecting whistleblowers, and conducting regular audits by independent auditors.

Services for SOX compliance include risk assessment, and the development of the internal controls, documentation, and monitoring to prevent misstatements on financial reports. Help with internal audit preparation is also part of the services, assisting in gathering evidence and answering questions.

Our SOX Compliance Process

SOX compliance is required for financial reporting that’s shared by publicly traded companies. It’s a multi-step process that ensures its accuracy and security. Part of the process is in establishing an internal control framework to protect financial data; these controls need to be regularly tested. An annual audit is required to assess those controls and related statements, and those documents need to go to the SEC to validate their accuracy.

Continuum GRC assists in the SOX compliance process, providing risk assessment and helping to implement the robust internal controls required to meet SEC standards.

FAQ

What are the SOX key controls?

The key internal controls for SOX compliance include overall risk assessment around the accuracy and reliability of the financial reporting, who has access to the financial information, the segregation of duties, the controls around the IT infrastructure, and the proper documentation/reporting of all processes and transactions.

What are SOX non-compliance penalties?

SOX is regulatory compliance designed to prevent financial fraud. If your organization is not in compliance with these financial reporting standards and internal controls, you could find yourself facing in significant fines for an individual or company. More serious penalties may include imprisonment or even being delisted from public stock exchanges.

What is the difference between SOC and SOX?

The SOC (Service Organization Control) and SOX (Sarbanes-Oxley Act) are frameworks relating to security compliance. SOC applies to service organizations that work with other companies which handle sensitive information. These security standards are voluntary. SOX compliance is mandatory for public companies in the financial space. They require stringent internal controls and practices.

How often should SOX controls be tested and reviewed?

SOX internal control testing should be conducted annually to maintain compliance. However, certain events or changes may dictate more frequent tests. If the organization has undergone major changes in personnel, systems, or processes, testing may need to be conducted to ensure compliance. These tests may be daily, weekly, or monthly.

What is Section 404 of the Sarbanes-Oxley Act?

Section 404 requires the organization to assess and report on their specific internal controls around financial reporting and related corporate disclosures. This is designed to ensure that their financial statements are accurate, transparent, and above all, reliable. By demonstrating strong financial practices, they prevent fraud and increase investor trust.

How does SOX compliance improve corporate governance?

The standards and requirements for SOX compliance improves corporate governance by manding practices that promote transparency, integrity, and accountability in financial reporting. Besides stronger internal controls, SOX compliance requires executives to personally certify the accuracy of their company’s financial reporting, making them accountable and helping to prevent fraud.

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Securities Exchange Commission (SEC)