SOX Control-Management and Attestation: Step-by-Step Guide of Sarbanes-Oxley Act (SOX) compliance requirements. Embarking on the journey of Sarbanes-Oxley Act (SOX) compliance demands a thorough understanding of its core provisions, particularly Sections 302 and 404.

The following video by KPMG focuses on the process excellence lessons learned after 20 years of SOX. Focus on Continuous Improvement, Data Analytics, data enabled process to identify where process deviations exist.

These sections lay out the stringent requirements for financial reporting, internal controls, and management assessment. As a dedicated SOX compliance manager, your role is pivotal in ensuring strict adherence to these regulatory mandates. This step-by-step guide is designed to equip you with the knowledge and tools needed to effectively manage and attest to SOX controls, safeguarding your organization’s financial integrity and regulatory compliance.

Understand SOX Control-Management and Attestation Requirements

Deloitte offers a great overview Sarbanes-Oxley Sections 302, 404, and 906 requirements in: ” SOX compliance: Are you ready?“ As a SOX compliance manager, it’s crucial to be well-versed in key Sarbanes-Oxley Act provisions, particularly Sections 302 and 404. These sections delineate requirements for financial reporting, internal controls, and management assessment.

Identify Applicable Controls

Collaborate with stakeholders such as process owners, finance, internal audit, and IT teams to pinpoint relevant controls for financial reporting. These controls should target risks associated with accurate financial reporting, data integrity, and fraud prevention.

ServiceNow offers how to effectively manage internal controls to comply with SOX Regulations

Document SOX Control-Management and Attestation Activities

Provide detailed documentation of control activities, including purpose, objective, description, and risk mitigation. Include the control owner’s information, execution frequency, and any required supporting evidence.

Control Attestation is a survey that is conducted to validate a control is working as expected. A question bank, attestation types let you use the questions to build questions, attestation designer can create and edit attestation.

Following is the ServiceNow Control Attestation Activities

Test SOX Control-Management and Attestation Effectiveness

Devise a testing plan to evaluate the effectiveness of each control. This may involve sample testing, walkthroughs, data analysis, or independent evaluation by qualified individuals like internal or external auditors.

ServiceNow explains Integrated Risk Management Test Control Attestations, Indicators, and Control Test, and how they are used. As a result of not understanding how they were designed, many organizations make more work for themselves. In this video, ServiceNow explains the common mistakes, and how to make the most of your Early-Stage usage best practices.

Remediate Control Deficiencies

In case of identified deficiencies, collaborate with control owners and stakeholders to create remediation plans. This may encompass process enhancements, system improvements, additional training, or control redesign. Ensure timely implementation of remediation actions.

Perform Management Assessment

For Section 404 compliance, coordinate with management to assess the effectiveness of internal controls over financial reporting. This typically entails evaluating design and operating effectiveness of identified controls.

Obtain External Audit Assistance

Engage external auditors for an independent audit of internal controls. Provide necessary documentation, including control descriptions, testing results, remediation plans, and management’s assessment.

Issue Control Attestation Report

Based on external audit findings, prepare a control attestation report summarizing compliance with SOX requirements. Include assessment scope, testing results, identified deficiencies, and an overall conclusion on internal control effectiveness.

Thirdera has produced a demonstration on how to use ServiceNow Integrated Risk Management to manage Control Attestations.

Communicate to Stakeholders

Share the control attestation report with relevant stakeholders, including executive management, the board of directors, and the audit committee. Discuss identified deficiencies, potential impact, and remediation plans. Address any questions or concerns raised.

Monitor and Update SOX Control-Management and Attestation Controls

Establish a process for ongoing control monitoring and periodic documentation updates. This includes assessing changes in processes, systems, regulations, or risks that could impact control effectiveness. Regularly review testing results, address new deficiencies, and ensure timely remediation.

Note: Remember, this process is a general guideline. Specific implementation may vary based on organizational size, industry, and internal control framework. Consult with your legal, compliance, and audit professionals to ensure full regulatory compliance.

Resources

• Application Impact Analysis Risk Based Approach to Business Continuity and Disaster Recovery
• GRC Framework CIO Insight