Outsourcing SOX compliance reduces costs and provides access to specialized expertise.
Key takeaways
SOX managed services offer scalable solutions and value-added technology for efficient compliance.
Transform your SOX program by streamlining processes and improving risk management.
Could your organization spur growth and gain efficiency by outsourcing Sarbanes-Oxley Act (SOX) compliance? For many public companies operating in the United States, the answer is yes.
Ensuring SOX compliance is a time- and resource-consuming process, and noncompliance has significant ramifications. While in-house teams once could manage compliance processes, conduct internal audits and ensure adherence to regulatory requirements, many companies now require more consultative support from technical resources—even as they struggle against the rising cost of their SOX programs.
Several factors are prompting discussions around outsourcing some or all SOX compliance efforts. Common challenges include:
- Greater external auditor scrutiny
As regulator expectations have increased, many companies are finding themselves in difficult discussions with their external auditors. What was good enough several years ago may no longer be adequate. - High operational costs
Maintaining an in-house SOX compliance team entails significant expenditures on salaries, training, infrastructure and software licenses. - Resource constraints
Growing enterprises often lack the resources and knowledge required to establish robust compliance frameworks internally. - Complexity and risk
SOX compliance demands meticulous attention to detail and ongoing monitoring, leaving room for errors and oversights that can lead to costly penalties and reputational damage.
Addressing these realities can be expensive, especially if your organization lacks a comprehensive governance, risk and compliance (GRC) platform—a costly proposition in and of itself.
The value of SOX managed services
SOX managed services is a subscription solution that replaces some or all of your organization’s SOX compliance auditors with predictably priced access to extensive knowledge and technology—without requiring capital investment in IT infrastructure or staffing. The service is quick to deploy, scalable to any size organization and designed to reduce administrative burden while improving employee experience.
Five considerations when evaluating SOX managed services
1. Specialized skill set
With the evolution of both the Public Company Accounting Oversight Board and the Securities and Exchange Commission guidance, SOX outsourcing can be a vital resource for navigating complex regulations, compliance requirements and industry standards. A trusted third party allows you to tap into the knowledge and skills of advisors who monitor the evolving regulatory and risk landscape. These professionals help enhance your risk management framework, mitigate the risk of material misstatements, and improve governance and transparency.
The service also includes objective assessments of internal control design and operating effectiveness, strengthening confidence in your program.
2. Lower and more predictable employee costs
Maintaining an in-house compliance team can be expensive, particularly when you consider the costs associated with hiring, training and retaining qualified professionals.
SOX outsourcing allows you to access the necessary compliance services without the overhead associated with a full-time internal team.
This model also offers budget certainty, helping your organization better manage costs and avoid large capital investments.
3. Business flexibility
Companies that outsource SOX can scale their compliance efforts up or down as needed. This flexibility allows you to adapt quickly to regulatory changes or fluctuations in workload.
If your internal audit function is managing your SOX program today, you can pivot those resources to more operational audits that allow for process optimization.
The service is quick to implement and designed to scale with your business.
4. Access to value-add services
Top-tier SOX consulting firms often deliver additional services such as internal training and real-time reporting. For example, RSM’s SOX managed services offering includes access to the RSM Risk Monitor, a proprietary platform that streamlines SOX program management.
Features include:
- Real-time reporting on issues, requests and project status
- Custom views by business role
- Excel file integration (e.g., risk and control matrices)
- High-level dashboards with drill-down capabilities
- Centralized platform for risk monitoring and control testing
- Collaborative tool for internal audit and external auditors
These additional solutions can streamline and optimize your SOX compliance efforts.
5. SOX transformation
Getting the most out of your SOX program means going beyond compliance and toward transformation. A skilled SOX compliance team can identify inefficiencies, streamline processes, and reduce the risk of fraud or errors. Investing in a robust GRC tech stack is essential—but costly. SOX managed services models allow your staff and systems to connect to a proven, scalable technology platform that serves as a single source of truth.
This strategy creates opportunities to save time, facilitate document requests and provide multiple levels of reporting on demand.
The takeaway
In an era characterized by regulatory scrutiny and fiscal prudence, your organization will need to embrace innovative strategies to optimize compliance processes while minimizing costs. Managed service models for SOX compliance represent a paradigm shift that empowers businesses to achieve regulatory excellence, operational efficiency and sustainable growth.
It should be mentioned that outsourcing SOX does not absolve your company’s responsibility for compliance. Management remains ultimately accountable, so it’s essential to carefully select a reputable and reliable firm for SOX managed services.
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