The Only SOX Compliance Checklist You’ll Ever Need


Too Much Compliance? What are The Standards Of Conduct? How can you prepare to meet the standards? Are you confused about when to change the business compliance process? 

Today’s organizations know that as a company grows, it must also increase its compliance efforts. So, let’s understand more about SOX Compliance and its benefits.

This article provides a user-friendly checklist on SOX or the Sarbanes-Oxley Act. It includes information on the standards and how to prepare to meet the standards while growing your business.

What is SOX Compliance?

The Sarbanes-Oxley Act (SOX) was signed in 2002 to improve public trust in the U.S. securities markets by strengthening their financial reporting and corporate governance practices. 

This act mandates companies to have a certain amount of transparency. In addition, the company must demonstrate they have controls in place to prevent fraud or protect the company from any illegal activity.

All public corporations based in the United States and overseas companies with registered stocks or securities with the SEC should adopt the regulation. The law is also applicable to accounting or auditing firms that provide services to such companies. 

The Benefits of SOX Compliance

The law was enacted to assist businesses in avoiding unlawful or fraudulent practices. Here’s how companies today have benefited from the SOX Act:

Assists businesses with the documentation process 

SOX has made it easier for new employees to understand what the company does and how it is safe to be a part of a financially stable organization.

Sections 302 and 404 focus on control documentation, including operations handbooks, organization policies, and recorded control processes. While sometimes documentation can be hectic, the process has proven beneficial to the organization by maintaining trust with the employees.

Improves communication within and outside the company

Everyone today is working on improving the communication process with the Board committee and the auditors. Since your documentation is on-point, it is easier to have transparency and communicate what a company aims to deliver to its customers.

Increases the efficiency of audits

The implementation of SOX compliance has improved the efficiency of audits. It has made audits more independent, allowing them to help assess the effectiveness of a company’s control, governance, and risk management.

Enhances Financial Reporting

Companies today are adopting an automated, consolidated, and efficient financial solution since SOX mandates them to give openness in their financial reporting. It also supports businesses in improving the accuracy of their financial reporting, empowering them to make better financial decisions.

These benefits must have helped you understand how important it is for an organization to adopt SOX Compliance. To meet the SOX Compliance standards, here are a few steps you need to follow.

SOX Compliance Checklist You’ll Ever Need

The SOX compliance IT checklist that follows will assist you in securing your system and better aligning it with the record-keeping standards:

  • Prevent data manipulation in the system

Businesses need to prevent their ecosystem from fraudulent activities. One way of achieving this is to install systems that can track logins and identify suspicious login attempts to financial data systems.

  • Keep track of critical activities’ timelines

Companies today are developing systems that help in tracking all financial and other data relevant to SOX provisions. To prevent data tampering, you can save such data in a remote or secure location following the encryption process.

  • Create reliable controls

To protect the data and the system, design a system capable of receiving online data from multiple sources. In addition, the system must track who and at what time the data, such as files and databases, were last modified. 

  • Communicate safeguards to auditors

Develop your system, which will notify the officials about the organization daily. The notification will inform the concerned auditors that all SOX controls are functioning effectively. 

If any auditor wants to view the report, assign access to auditors to check and view the required information. The system should prompt for access in case any unauthorized person tries to access the file.

  • Identify security breaches in the system

An organization must focus on providing security solutions. A system that can identify data, detect signs of a security breach and provide warnings to an incident management team will help deal with security issues.

  • Highlight the effectiveness of protection methods to auditors

A reporting mechanism of how data flows in the system, how crucial messages, alarms, and security issues were detected and handled will ensure the auditor that the company is free from unlawful activities and maintain trust within the market.

How to Become SOX Ready?

One of the most important factors is how to maintain SOX compliance concerning data security. And Pulse is there to help you with your inspection and audit process. 

You can consider Pulse as your tool for automating your site’s safety, compliance, and adherence audits. A user-friendly tool with various templates and the workflow management feature reduces your load of hiring a resource for your inspection and audit process.

Book a free demo to experience our services, or call us at 1800-266-988 to help you in the process.