Maintaining oversight of IT General Controls (ITGC) for SOX compliance requires careful balancing of critical remits and control-owner responsibilities spread across departments. One such department is your IT team. Without them, other SOX compliance stakeholders and priorities would lack the right financial data, system access, security and assurances required for SOX readiness.
How SOX and ITGC Affect Your IT Team
The problem, though, is that your IT team performs numerous other business-critical functions. Their time is both precious and expensive. But the Sarbanes-Oxley Act is the law—one that commands certain duties that only the IT team are positioned to fulfill.
What demands does the SOX act place on IT departments? And how can senior managers innovate new approaches to ITGC to reduce disruptive SOX requirements that pull IT teams away from key daily priorities?
Here we’ll highlight key sections from the Sarbanes-Oxley Act of 2002 to discover the stresses and strains of duty that each places on your IT department.
We’ll also explore powerful time and cost-saving efficiencies for reducing the manual-process risk, cost and complexity of granular IT department interventions.
SOX Act Section 302: Providing Visibility
Section 302 of the SOX Act requires CEOs and CFOs to validate the accuracy of a company’s financial statements—they’re personally, legally liable. No pressure.
Your IT department’s role here is to mitigate senior managers’ liability by delivering methods for reliable, real-time reporting of financial data, ensuring that reports are produced in a compliance-friendly format that auditors will both recognize and sign-off on.
SOX Act Section 404: Establishing Controls to Support Accurate Financial Reporting
Section 404 of the SOX Act states that the integrity of company financial reporting must be moderated by a set of carefully designed, implemented and monitored internal controls.
In this context, the IT department must play a crucial role in identifying key IT systems and processes for initiating, authorizing, processing and summarizing financial report data. This will typically also involve application testing, security, verification of software integrations and so on.
SOX Act Section 409: Delivering Timely Disclosure of Critical Financial Data
Section 409 of the SOX Act addresses the need for senior management to monitor, declare and disclose in a timely way and information that may affect the company’s compliance and financial performance. For example, mergers and acquisitions, bankruptcy, the dissolution of a major supplier or a crippling data breach.
For this to happen effectively, your IT department must provide the tools for alerting managers, shareholders and regulators of any changes in the company financial statement, or any other event that may trigger the need for timely disclosures.
SOX Act Section 802: Ensuring Comprehensive Financial Records Retention
Even for digitally-savvy companies and organizations, financial record keeping can still involve a combination of paper and electronic copies of financially-sensitive information. Section 802 of the SOX Act requires that these be preserved and made available to auditors for a minimum of five years.
To achieve this, the IT team’s role is to ensure paper and digital records are both preserved and backed up while ensuring the correct functioning of document management systems. On top of all this, IT professionals must also keep these records available in the event of data and systems migrations.
The Compliance Risk and Cost of Complex IT Department SOX Interventions
As we’ve learned, SOX places important but also complex demands on IT teams that are a critical pillar of maintaining the ITGC environment for SOX compliance.
Each SOX Act section requires complex, granular work with countless moving parts that consume IT-department bandwidth—this is time that could be invested on other business-critical tasks.
The negative impact is business growth frustrated by conflicting IT-team priorities. Not to mention increased (rather than reduced) compliance risk thanks to the countless manual tasks involved in fulfilling SOX duties, plus the likelihood for human error.
How ITGC Automation Reduces Risk and Frees Your IT Team From Complex, Manual SOX Workflows
End-to-end TGC automation is a powerful way of shielding IT departments from the granular, expensive and time-consuming demands of SOX compliance, without compromising on diligence or duty.
By empowering other SOX compliance stakeholders to configure, implement and monitor ITGC with greater independence, AudITech simplifies and streamlines the route to SOX compliance readiness, eliminating the complexity and risk of manual process and human error..
Join our team for an AudITech demo and we’ll show you how your CFO, CISO and SOX compliance officer can implement and monitor ITGC for all cloud and IT assets from a single browser—without the delay and cost of IT department SOX interventions.