Something to Consider February 2018 3
The Comeback of SOX – Are You Ready for the Challenges?
SOX has become ‘Business as Usual’ for most US quoted companies since its introduction in 2002. However, despite great progress in reducing the egregious cost of compliance over the last decade, we are beginning to see a new trend of rising costs and effort for SOX compliance – a recent report showing that hours spent on SOX has increased by 10% since 2016. Why is this?
It appears that there has been increasing pressure on auditors to focus on the financial control implications of spreadsheet use across core business processes.
Whilst we have observed and reported on the risky impact of spreadsheets in critical financial processes for some time, this malaise is not confined to the processes being audited. The very SOX management and reporting process, from risk assessment, controls testing, to management review and attestation is also blighted by a global spreadsheet nightmare in many companies.
The use of spreadsheets is seductively powerful in their ease and flexibility but their use is crippling at scale, riddled with issues of error, loss of control and lack of transparency, traceability and accountability. Maybe we have been unaware of quite how engrained and crucial spreadsheet enabled processes have become and how reliant we are on them.
It’s time to switch to a more structured, automated, auditable approach, to significantly reduce the occurrence and cost of error and to drive efficiency. We have access to more sophisticated IT components that can replicate the power of spreadsheets, without the pain of large scale co-ordination.
There are a number of solutions including RPA, flexible workflow and business process management solutions to fill in these gaps as point to point application integrations for these irritating repetitive tasks. It is time to bite the bullet!
Once again, simplification, standardisation and automation stand to improve effectiveness and efficiency significantly when it comes to SOX processes as well as compliance management.
This article gives some practical, helpful further detail and advice on the need to migrate away from our reliance on spreadsheets, to a more sophisticated, transparent and auditable approach. You can find it here.
Our ‘Something To Consider’ snippets are framed as small, digestible, ‘dashes of insight’ around the pillars of what we define as “World Class Finance” – Process Optimization, Financial Control and Compliance, and Risk Assurance, all underpinned by technology enablement and integration.