Improving Your SOX Compliance Program

November 2, 2021

Improving Your SOX Compliance Program

For publicly traded companies, complying with the Sarbanes-Oxley Act of 2002 is one of the stickiest parts of their financial reporting requirements. SOX requires that companies develop internal controls that prevent (and also detect) fraud and financial reporting issues, but doing so isn’t simple.

Often, your team needs help making sure you’re compliant with section 404 of the SOX Act (Management Assessment of Internal Controls). Maybe your current staff is already at capacity, and/or perhaps there’s nobody internally with the expertise needed to take on this important effort. The TGRP Solutions team can assist with SOX compliance at an affordable price. Many companies without outsource SOX compliance work to our firm, reducing the burden on their staff and making sure the work is done correctly and in a timely manner.

Let’s go over the three main steps involved in becoming SOX compliant:

Step 1: Create a control environment. The control environment sets the tone for your organization and establishes the best practices for control processes and standards within your company. Our team will help you develop or mature your existing control environment or rationalize the environment you have in place.

Step 2: Do a risk assessment. This is where you look for blind spots in your control environment by identifying risks or gaps in your controls. SOX requires you to test your internal controls using a top-down risk assessment, which involves determining material profit and loss balances and identifying potential financial reporting risks for those material accounts.

Step 3: Document control activities. If you’re not documenting your significant processes and key internal controls over them, you’re not SOX compliant. We’ll help you do so, so that your auditors can trust that your internal controls are effective and that the duties performed by different parties are appropriately segregated and have oversight.

Of course, inherent in this process is not just pointing out what is wrong with your internal control environment, but helping you rethink and fix processes that need it. Some mistakes are common and have simple fixes, while others might be more complex. We can help you avoid and mitigate common internal control mistakes and fix your risk assessment strategies if needed. Most importantly, we’ll help you understand what your auditors’ expectations are from a regulatory requirements perspective.

Maybe you were advised by your external auditors to tune up your SOX internal controls in anticipation of going public in the next 18 months. Maybe you’re already public and your most recent audit was chaos (and you were advised to improve your internal controls to be SOX 404 compliant). Either way, the team at TGRP Solutions can assist.

Many publicly traded firms in Denver turn to us for SOX 404 compliance support because…

  • We can move quickly. We’re able to be simple and flexible in a way that some larger CPA firms cannot due to their commitments to year-end audit and quarter-end audit prep work. We have full-time consultants experienced in both public accounting and private industry who are available for deployment around the scheduling needs of our clients. We can also deploy the same staff to work with your company throughout the year if needed, which leads to familiarity and ongoing efficiency.
  • Our services are personalized to your unique needs. There is no one-size-fits-all approach when it comes to SOX 404, and we treat each project and company individually. Our approach is personalized yet efficient. If you’re an accounting department of eight people, we recognize that your risk factors—and the controls you have in place—will not be the same as a large firm with 35 people in the accounting department.
  • We work with companies that have mature control environments as well as those just getting started. We recognize that for many companies, SOX 404 compliance is new and unfamiliar. For others, it is an ongoing requirement they are accustomed to, but they need help getting things cleaned up (and keeping them in good shape). We are familiar with both arrangements—and many others in between. We’ll work with you and your staff to understand your needs and your current situation, and help you achieve your goals efficiently.
  • Our team is experienced. The consulting team at TGRP Solutions has deep experience working with and for publicly traded companies, most bringing at least 15 years of experience. Most members of the consulting team have worked on both the public accounting audit side and as internal team members (from senior accountants up to controllers/CFOs). You won’t need to worry about hand-holding. Our job is to make yours easier. As a result, we end up saving your time and money on your external audit and freeing up your internal audit and/or other staff to do their jobs.

As you approach year end, it’s a good time to start thinking about how you’ll make this year’s audit more streamlined and less stressful—especially amid the pandemic, while some members of your team might still be working remotely and taking on more than they normally would. Let’s talk about your SOX 404 compliance needs and how we can help. Contact us to learn more!

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