In the year 2002, the US Congress passed the Sarbanes-Oxley Act to safeguard people’s interests against fraudulent activities conducted by big firms and organizations. The SOX Compliance or the Sarbanes-Oxley Act was implemented to encourage transparency and check the financial activities of the companies and businesses by tracking their financial reports.
SOX compliance is not just a legal obligation, but it is a strict business practice that motivates organizations to conduct an honest trade and operate fairly by decreasing access to internal financial systems. Moreover, the advantage of incorporating the SOX control and financial security practices is that it also protects your business against many cybercrimes such as internal data thefts.
To understand the requirement and importance of SOX compliance, you must first know the answer to this simple question, what is SOX compliance?
Senator Paul Sarbanes, along with Representative Michael G. Oxley, came up with this bill due to a significant increase in high profile corporate frauds at that time. This SOX compliance or bill aimed to protect the investors from being misguided or misled by corporates and firms. Thus, the SOX audit was one way to improve and enhance the reliability of the firms by providing transparent and well audited financial reports. In addition, the bill established several important duties and obligations for top executives and board members to follow while imposing criminal penalties if they failed to obey or abide by the responsibilities mentioned.
Now that you’ve understood the meaning and importance of SOX compliance, you need to understand the requirements under this bill. Thus, the SOX compliance requires:
The SOX Act has made it compulsory for companies and organizations to execute their yearly SOX audits and make those results easily available to stakeholders and potential investors. You can partner with TRC Corporate Consulting to hire efficient auditors, who can perform the complete SOX audit for your company. This audit is essential as it approves and verifies your company’s financial statements. In addition, our external auditors will also interview and discuss with your personnel to verify that the compliance controls are adequate to meet the SOX compliance benchmarks or not.
There are four controls that you need to keep in mind while preparing for SOX audit. The auditor will scrutinize these four internal controls as a part of the yearly audit. Demonstrate your company’s capability in these following controls to be SOX compliant:
A SOX compliance checklist helps you prepare well in advance for SOX audits. With the help of this quick checklist, you can ensure that you’re not missing on any essential requirement to be SOX compliant:
If you follow this SOX compliance checklist, you won’t face any last-minute contingency.
By understanding the significance of being compliant with SOX Act and the disadvantages of being non-compliant, you can now very well address the importance of staying proactive in this area. However, it is always beneficial to seek expert insights and specialized help to ensure everything is up to the mark.
The professional consultants at TRC Corporate Consulting have years of on-field experience in this industry and are equipped with vital bits of information to provide professional help for SOX compliance related concerns. From every SOX audit to other SOX requirements, partnering with TRC Corporate Consulting will only assist your business to prosper and flourish.
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