Companies have struggled in executing the internal control provisions of the U.S. Sarbanes-Oxley Act of 2002 due to its complex subject matter and associated costs. Since its implementation, it has been a cause of debate over the costs and benefits of the changes in corporate practice recommended by the Sarbanes-Oxley Act. But the SOX compliances offer numerous benefits to the organizations.
Despite of high initial costs of the internal control obligations, there are evidences to show that this act has been beneficial for organizations in many ways. Let us discuss few of those benefits below.
Risk Assessment –
Not all risks are the same! SOX compliance provides benefits to the companies by providing a start point for asset analysis. Performing risk assessments to stay SOX section 404 compliant helps businesses analysis their current security status and identify any vulnerabilities. This assessment presents an opportunity to keep your risk and controls measures up-to-date.
Strengthens the Control Structure
SOX Section 404 requires the documentation of control structure including operations manuals, personnel policies, and recorded control processes. Requirement of so many documents overwhelms many organizations. SOX compliance helps in understanding the benefits of the controls by control owners so that you get an insight of how and why controls are essential! When the auditors and management focus upon the internal controls through SOX assessment, the control owners become aware of the importance of their activities towards financial success of their organization. Also, an additional scrutiny is provided by SOX assessments, direct the organizations to ensure that the activities necessary for financial reporting as executed and controlled well.
The term better audits cover different aspects of the audit process. For many public companies, the executive sponsor of the SOX compliance efforts is either the audit committee or the executive management. The audit committee is responsible for the broad overview of the risk management section of an organization under which SOX compliance falls. And the executive management is responsible for the accuracy and completeness of the internal control over financial reporting of the organization which is another key component of SOX requirements. SOX compliance benefits the audit process by specifying that it creates better audit evidence collection which further leads to better user experience supporting auditors.
Besides these points, there is efficient financial reporting, better team collaboration and building of better working relationships and more that make SOX compliances beneficial for organizations.
CompCiti security auditors helps businesses to comply with SOX requirements to avoid the risks and penalties by reviewing IT security policies, access controls, data backups and change management process. So if you want to know more about the SOX Section 404 and its benefits for your organization then visit https://compciti.com/sox-404/