Expertise: Regulatory reporting solutions > SOX
Get ready for SOX compliance with VantagePoint
The requirements of UK SOX will apply to December 2023 financial year end or after.
The government’s proposed audit reforms emphasise the need for strong internal controls that could include:
- Identification of key risks over financial reporting faced by the business, and implementation of sufficient internal controls to mitigate the risk of misstatement
- Company director’s explicit statement concerning the effectiveness of their internal controls and risk management system
- External auditor’s formal opinion on the director’s annual attestation
- A phased audit reform approach which will see the UK SOX proposal realised towards the end of 2023.
While initially only applicable to listed companies, UK SOX is likely to extend to public interest companies after two years. All businesses should act now and start considering how to improve internal controls over finance reporting.
You don’t have to wait for the UK SOX to be finalised to prepare for audit reform.
How it works
It’s never too early to be thinking about how to tighten internal controls over financial reporting. Whatever the outcome of SOX, improving the control framework for auditing will only bring benefits to your organisation. We recommend four key steps to take now:
Conduct initial internal assessments and documentation.
Scope a comprehensive compliance programme.
Step 1: Conduct initial internal assessments and documentation
- Review all internal reporting systems
- Check and assess your data-storage procedures
- Evaluate current accounting processes
- Assess fraud threats and potential risks
- Compare internal and external records
- Examine all reports, records and tax returns.
Step 2: Scope out an explicit compliance programme
It is essential that enough time is built in to the process to implement a trial run in order to identify issues and fix errors. The advice is to start now, allowing one year for scoping, planning, implementation and training, then a further year for trialling.
Your compliance programme plan should detail how your company expects to implement UK SOX and should contain:
- Plans for continuous monitoring of the control framework
- The year-end assessment process
- The process your company plans to use to ensure continuous monitoring of controls
- Information regarding whether you plan to implement a compliance software solution
- How you will address the gaps you have identified
- Project timelines and milestones
- A plan of action.
Step 3: Centralise controls
Ensure a single source of truth using a central platform to guarantee everyone is accessing the same data, and that the data is linked and consistent.
Act now to consider where improvements can be made to internal controls over financial reporting.
Strengthening internal controls around finance reporting has significant benefits across a company including:
- Increased credibility for financial reporting. Improved quality and reliability of finance reports increases shareholder and investor trust and confidence in your company’s financial reports.
- Better safeguarding of shareholder value. A strong internal reporting framework drives high-quality standards through improved accountability and organisation.
- Improved fraud prevention and detection. Helps highlight where a firm's potential key fraud risks are, and whether control measures are in place to mitigate risk.
- Better management information to aid better decision making. Real-time management reporting and insights to drive improved decisions
- Streamlined and improved operations. Effective controls and improved reporting increase accountability and trust, both within the company and externally.
Arachas - CFO
"VantagePoint partnered with us to transform our budgeting, planning and forecasting process. With their help we’ve improved our reporting, have great access to real insight and a far more automated process than our previous Excel heavy world. The team’s attention to detail and problem solving abilities made them very easy to work with."