SOX compliance teams adjust to pandemic

October 14, 2021

First reported in Accounting Today, by Michael Cohn.


The COVID-19 pandemic has complicated life for Sarbanes-Oxley compliance teams, forcing accountants and auditors to work remotely, but most SOX compliance teams have managed to adjust to working remotely over the past year and a half.

A new survey, released Thursday by the SOX & Internal Controls Professionals Group, KPMG US and the financial technology company Workiva, found that 53% of the 464 SOX professionals polled said their companies moved to a fully remote work policy when the pandemic hit, while 43% adopted a partially remote policy. Meanwhile, 48% said their businesses enacted layoffs or furloughs, but 62% indicated their SOX compliance teams didn’t lose any headcount.

The pandemic forced many changes in the way auditors and accountants do their work, but for the most part firms and companies managed to make the transition successfully.

Survey respondents reported having more controls in place this year compared to last year. On average, respondents had 300 key controls, with the majority reporting 250 to 300. In contrast, nearly half of respondents to a similar survey last year had less than 250 key controls. Company revenue was a big driver behind the increased controls. The average number of key controls among respondents at companies with less than $700 million in average revenue was 242. For companies with $5 billion or more in average revenue, the average cited by respondents was 536.

SOX work arrangements changed during the pandemic

Fragmented or inefficient technology continues to be a sore spot for SOX professionals, with 75% indicating they use multiple systems for their SOX processes, which could lead to unnecessary inefficiencies and an increased risk of mishandling data.

Data analytics isn’t being widely used yet for SOX compliance. Most survey respondents said their use of data analytics in their SOX programs was still at basic levels for sample selection, scoping and evaluating the severity of control failures, but two-thirds of respondents said they don’t use bots or automated routines at all.

“It’s possible that companies are hesitant to embrace automation because they don’t know where to start,” said Lauren Uyeno, director of the SOX & Internal Controls Professionals Group, in a statement. “But the proper implementation of technology can strengthen the control environment, alleviate staffing challenges, embed compliance processes into first-line activities, improve reporting, cut costs.”

While SOX compliance may not be the most thrilling job in the world, the majority of respondents said they enjoy their profession, with nearly 40% saying they’re “extremely satisfied,” pointing to the rewards of working on teams, handling complex projects, and the overall sense of helping their organization reduce risk.

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