What Outcome Should You Expect From Your SOX Audit?

The ultimate goal you want for your company, besides compliance, is to reach Internal Control Over Financial Reporting or ICFR. According to the SEC, the definition is this:

“A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.”

Not being in line with U.S. Securities and Exchange Commission definition of restoring confidence in the Financial Services sector along with full disclosure and financial reporting, your company’s status is deemed non-compliant.

Do You Know If Your Company Is In Compliance With The Sarbanes-Oxley Act?

With the SOX law heavily enforced and profoundly penalizing executives who approve poor or inaccurate documentation; noncompliance on your part, no certification of internal auditing, and increased financial disclosure errors could subject you to jail time of up to 20 years and your business hammered by nearly 5 million dollars in penalties.

If you are not familiar with the four significant compliance section regulations, that make up a substantial part of the Sarbanes-Oxley Act, here is a brief overview list and your IT Team’s responsibilities under the law:

TITLE III—CORPORATE RESPONSIBILITY:

Sec. 302. Corporate responsibility for financial reports.

According to SOX compliance, the IT team will deliver real-time reporting on their internal controls. That does require automating tasks like evidence-gathering, reporting on remediation efforts, and testing. When it’s time to send the team’s reporting, make sure it is in executive-friendly and auditor-friendly language.

TITLE IV—ENHANCED FINANCIAL DISCLOSURES:

Sec. 404. Management assessment of internal controls.

The IT team’s responsibilities are to identify your critical IT systems. Along with identifying those systems, there is the use of processes involved in initiating, authorizing, processing, and summarizing financial information. The material found will require automated process testing, application testing, the verification of software integrations, and security. The three requirements of your IT team must:

• 1) Ensure all procedures support the accurate transmission of financial data
• 2) Ensure all processes support the complete transfer of economic data
• 3) Keep asset-bearing accounts secure from unauthorized access

Sec. 409. Real time issuer disclosures.

The IT team will support SOX compliance software. Part of the software’s programming uses alert mechanisms. These mechanisms trigger on-time disclosure requirements. The tools are in place to quickly inform shareholders and regulators of any changes in the company financial statement.

TITLE VIII— CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY:

Sec. 802. Criminal penalties for altering documents.

SOX compliance requires your Information Technology team maintain all records with internal automated backup processes and procedures. Anyone who knowingly alters, conceals, covers up, destroys, falsifies, mutilates, or makes a false entry in any document, record, or tangible object, with the intent to impede, obstruct, or influence the investigation or proper administration of matters before the SEC get fined, imprisoned for no more than 20 years, or both.

How Does Nexus IT Consultants Make Your Life Easier And Your Business SOX Compliant?

A big concern for companies, like yours, is the need to stay compliant with all U.S. Securities and Exchange Commission regulations, such as the Sarbanes-Oxley Act.

We know you don’t have extra hours to dedicate an entire week, stuck in front of a computer monitor, trying to figure out and understand – how to stay compliant. For that reason, Nexus IT Consultants remain on top of all compliance regulations and requirements.

Our IT team’s focus:

• 1) Diligently keep your business technology in compliance.
• 2) Keep your business prepared for when your SOX audit comes around.
• 3) Answer any questions or concerns you have.