Since the Sarbanes Oxley Act (SOX) was signed into law in 2003, publicly-traded companies have faced a major challenge in complying with its complex requirements. Larger companies have incurred higher-than-expected costs, and non-accelerated filers are bracing for their upcoming compliance deadline. Regardless of size, these companies are seeking the same basic goal – a streamlined, cost-effective approach to compliance.

OBJECTIVE OF SOX
The Sarbanes Oxley Act was developed in response to the corporate frauds and business failures that tested investor confidence in the accuracy of financial information.  It sought to restore the public confidence by improving transparency of financial reporting and increasing auditor and management accountability.  One of the most significant components of the Act, Section 404 imposes requirements for compliance with standards of internal controls over financial reporting.

EVOLUTION OF SOX
Out of the search for opportunities to improve the efficiency of SOX compliance, several trends have developed, and abundant guidance has been released. The emergent theme has been to shift from a project-based approach to a process-based approach. In doing so, the effort becomes more of a corporate culture and less of a cumbersome compliance initiative. Other specific initiatives have been designed to deploy resources based on risk and to streamline testing by relying on embedded procedures and automated controls. 

VALUE CONSIDERATIONS
The Stambaugh Ness approach to Section 404 implementation consists of multiple phases that have been refined as we continually evaluate trends and seek opportunities to streamline processes. These process improvements have produced significant reductions in the cost of SOX compliance, in terms of both internal and external resources.

EXPERIENCE
Our diverse experience in assisting clients with SOX compliance allows us to offer a high-level of expertise and valuable ideas for process improvement. Whether you’re a non-accelerated filer who needs help getting started, an accelerated filer looking to improve your existing SOX processes, or a privately-held company interested in applying the principles of SOX to your business, we have a team of experienced professionals who can assist you, contact a member of the Stambaugh Ness Risk Management team today.