Making Use of SOX as a Regulatory Intervention

Sarbanes Oxley (SOX) is among the regulatory intervention controls, which raucously promotes the finance internal control functions. SOX also makes such finance controls very transparent. The connection between risk management and internal audit is stressed and the controls are known to be liable for provision of required guarantee that the management is practically justifying and identifying all the possible risks that may come up from the internal systems, business operations, as well as organisational structure. SOX is the force behind management readiness and evaluation of controls in an organisation. That is why Sarbanes Oxley is among most reorganised interventions used in an organisation.

Due to the benefits of SOX in an organisation, industries that act in accordance with the terms put in more efforts to find out risks involved in their organisation and completely check the associated risks. Very little or no human intervention is required, as the entire processes and internal controls are known to be automated. There are lots of things involved in the process starting from documentation, evaluation as well as standardisation of controls in the entire enterprise for overall enhancement and effectiveness. There is establishment of automated control measures which help to determine the overall continuous improvement and effectiveness.

Nevertheless, the unique lack of regulatory guidance associated with SOX has been often raised by many organisations that have utilised the system. For that reason, there is a limitation in the use of purpose-driven applications, making information to always be soiled, fragmented as well as scattered in the entire organisations. These have led to deficiencies in controls as only about 20-50% of controls are automated. On the other hand, the manual controls have turned to show themselves as being expensive and more labour intensive. There is also a problem in the workflows, which are often seen to be uncoordinated, as well as deficiencies in the coordination existing in the midst of external auditors and the internal compliance teams leading to more expensive consulting costs.

So, for enablement and reliability purposes, there is recommendation for automated system that is content based. The ability of an enterprise to standardise controls, document contents, and effectively manage compliance process is said to be the most important for a complete enhancement of controls. The critical sources for SOX compliance are, therefore, said to be the collaborative content and document management systems. The rule-based security models and workflow management, which monitor or sign off on the assigned tasks in the entire organisation, are said to be enabled by these systems. There is also improvement in the preventive controls, and the enforcement of segmentation of duties by user management systems. These help to guarantee sustainability, integrity, and persistency of the generated, used and stored data by the enterprise for compliance of SOX.

Therefore, it is important for you to know that pulling off SOX is complicated and can only be achieved through technology integration to function in one accord, so as to manage risk effectively. What is required for this to be possible is just hard work, and nothing less than that.

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