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Article

Are SOX managed services right for you?

Outsourcing can dramatically reduce risk and preserve precious internal resources

April 26, 2024
#
Risk consulting Business risk consulting

As businesses look for ways to simplify processes, boost compliance and improve reporting, a growing number are turning to managed services to alleviate complexity and optimize internal resources.

SOX as a service is a turnkey managed service for companies looking to outsource some or all of their entire SOX function, both technology and processes. With SOX outsourcing, your business can address the increasing rigors of SOX compliance and risk mitigation due to the changing business environment and ensure your business is leveraging the latest processes and strategies. Quick to stand up and deploy, SOX as a service also allows for more budget certainty and a better employee experience.

This checklist can help you determine if outsourcing SOX compliance is the right choice for your company.

Define your weaknesses

One of the more formidable challenges related to SOX compliance is understanding where current tools and software fall short. No two organizations face the same set of compliance issues and internal reporting requirements. Over time, gaps and vulnerabilities may appear because your tools aren’t tailored to your company’s specific needs, preventing you from adapting and scaling as conditions change.

This challenge is especially true in the internal audit space, which has been burdened by the ever-changing regulatory landscape. SOX outsourcing allows you to introduce improved insight, auditing, data analytics and reporting to your SOX structure. In fact, SOX as a service can supercharge the entire regulatory framework and deliver real-time visibility through process automation and third-party oversight by industry professionals.

Key question: Are we confident that we can identify all SOX gaps or vulnerabilities?

Understand your footprint

Beyond knowing your technology and process restrictions, it’s vital to understand how your organization’s risk exposure measures up geographically as well as across different segments of the business. Developing a framework that encompasses your technology, resources and risk exposure requires in-depth analysis of the regulatory environment and your business’s strategic goals.

Many SOX as a service providers have specialized knowledge built-in, making it easy to tailor your SOX framework to the specific needs of your organization. Everything from the initial assessment of your framework design to the operating effectiveness of your controls is considered while deploying SOX as a service. Additionally, automation tools that come with SOX as a service solutions can streamline complex information flows and reduce the risk of errors.

Key question: Do we have a good handle on how to address the complexities and intricacies of SOX across departments, regions and countries?

Get a handle on your data

Fully understanding data and how it affects business events and regulatory risks is nothing short of mission critical. Yet many organizations wind up mired in inefficiency because—although the data exists—they can’t tap into it precisely when and where it matters. Addressing data analytics and risk management through a SOX as a service platform can help tame the chaos.

Integration with a governance, risk and compliance solution saves time, significantly reduces manual errors and produces the data that can be used for process improvement and strategic planning. When your organization adds automated audit and other data aggregation tools to SOX as a service, it’s possible to spot vulnerabilities, gaps and deficiencies. You can also see what’s working well and replicate it. Through effective risk analytics, your organization can establish highly effective controls.

Key question: Do we have state-of-the-art data analytics that support automated audits and other advanced functionality?

Focus on modernization

With the regulatory environment continuing to evolve and introduce new requirements, it’s remarkably easy for the gap between best practices and what your organization actually does to widen. This is especially true when relying on legacy systems that weren’t designed for today’s operating environment.

Bringing in external people, processes and technology can dramatically reduce overhead, technical debt and costs. Subscription-based services and automation can prove transformative. Through SOX as a service, your organization can lift the burden from your SOX team and leadership and access to just-in-time skilled support can keep your teams up to date and ensure a best-practice approach is in place. Additionally, SOX as a service can be deployed within your business quickly and easily, scaling to meet your business needs as you grow and keeping you in compliance with industry best practices.

Key question: Does our software and IT framework have what it takes to handle SOX now and in the future?

Mind the gaps

Even if your organization already has a tool or a reasonably mature SOX framework in place, it doesn’t mean that there aren’t opportunities to significantly improve processes and results. For instance, finance teams and others within your organization may struggle to stay up to date on the latest nuances of SOX compliance, which could lead to elevated business risks.

The upshot? It’s possible to co-source and strategically augment staff through a SOX outsourcing framework. Among the benefits, co-sourcing enables your company to offload complex and low-value tasks or outsource aspects of data management or cyber-protection to a qualified team that proactively monitors the industry and changing regulations. If you are unsure about what makes the most sense for your company or want to maintain an internal SOX function but take advantage of the latest best practices and technology, an experienced SOX advisor is there to help.

Key question: Even if we can identify our SOX-related risks, are we equipped to fix the problem?

Build value where others don’t

Practical improvements that revolve around performance and costs have convinced many organizations to embrace SOX outsourcing services. Yet the benefits don’t stop there. Another plus is that managed services can free teams to engage in higher-value work. Outsourcing some or all roles that touch regulatory compliance can boost retention—as employees break free of the shackles of manual tasks and evolve to more meaningful work.

SOX as a service also alleviates many of the challenges related to recruiting and retaining people with the right skills to handle highly complex compliance tasks. The good news? When your organization gets all the pieces of the puzzle in place, SOX is no longer merely a compliance function; it’s a tool for optimizing performance across finance and even the entire organization—and even gaining a competitive advantage.

Key question: Can we use SOX data to create a competitive advantage?

A path to progress

The complexities of SOX aren’t likely to subside in the years ahead. But amid changing business conditions, an evolving regulatory environment and emerging technology requirements, the ability to optimize compliance through SOX as a service represents an opportunity. Your team can evolve beyond fractured, manual processes and adopt a highly automated framework backed by an effective third-party team that can deliver greater budget certainty, more accurate reporting and higher job satisfaction.

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