With the new guidance from the PCAOB around SOX testing standards and audit evidence, there is an increased level of scrutiny; as a result of this, compliance workloads continue to rise.
As outlined in the latest news from CFO.com “SOX Compliance is Getting More Costly,” overall, there has been an increase in the number of hours Internal Audit and Accounting departments are spending to comply with SOX every year. Here are the top 3 ways to reverse the trend and reduce your SOX Compliance costs:
Eliminate Admin Time
On average, companies spend 6,000 – 10,000 hours on SOX Compliance of which 30% is spent on non-value added activities: dealing with version control issues, manually compiling status reports, creating spreadsheet templates, and tracking document requests lists from owners. That amounts to at least 1,800 hours spent on manual administrative activities. If you’re on the higher scale, you’re allocating over 3,000 hours on non-value add SOX activities. In dollars, this can amount to $300,000 spent on admin time even in a fully in-sourced environment. Enforcing a stringent testing timeline and adopting best practices could be the best way to reduce this non-value add time.
Rationalize Your Controls
With guidance continuing to change from the PCAOB, SOX requirements and landscape continue to change. It might be time to reassess your control environment to ensure you have processes and controls that are truly mitigating the right risks and your mix of controls is optimal. Seek guidance from leading experts that are at the forefront of the continuing regulation changes to ensure you are well prepared. Working with the right partners can save you time, money and energy and help you navigate efficiently through the murky waters.
Last but most important to reducing cost is to streamline your SOX program with great technology. The fastest way to eliminate admin time, transfer knowledge, reduce errors and make your resources more productive is to automate your SOX Controls program using a best-of-breed platform built specifically for SOX Compliance. Thousands of companies have tried large, clunky, over-engineered GRC packages only to realize it’s extremely difficult to use. However, there are new cloud based platforms that are built to make SOX management simple, effective and easy to use. If you are looking for a solution, you can learn more about the best SOX compliance software solution companies are using today.
Sarbanes-Oxley Compliance is one of the few areas enterprises have yet to streamline with a software solution that is effective. Choosing the right solution that is built on newer technology can really change how SOX is managed and help reduce costs dramatically, all while increasing the quality and accuracy of your environment.
Daniel Kim, CPA, is co-founder of AuditBoard. Formerly global head of audit for two multibillion-dollar public companies, Daniel leverages his 15+ years of audit, risk, compliance, and SOX program consulting with hundreds of pre-IPO and public companies to deliver modern solutions for today’s corporate audit needs.