Home » Products

Sarbanes Oxley 404

Sarbanes Oxley Act came into existence in 2002. According to this act every publicly traded company is required to file for compliance with Securities and Exchange Commission. Section 404 of the Act requires each annual report of a public company to include a report by management on the company's internal control over financial reporting. This report should contain:

» A statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company » A statement identifying the framework used by management to evaluate the effectiveness of internal control » Management's assessment of the effectiveness of internal control as of the end of the company's most recent fiscal year » Disclosure of material weaknesses (A material weakness is a significant deficiency or combination of significant deficiencies that result in more than a remote likelihood that a material misstatement will not be prevented or detected.)  » A statement that its auditor has issued an attestation report on management's assessment

The various steps involved for being complaint are as follows

» Documentation: Once the company management identifies the process within scope of SOX 404, a team of documentation specialist documents the whole process from initial step to final authorization. Documentation steps involves meeting with SME’s and Business Process Leads to understand the process and document it accordingly. » Contols: Once a document is ready, and reviewed by the SME’s and Business Process Leads, the documentation team works with control specialists to identify whether proper controls (in accordance with COBIT or COSO framework) are in place for the process. » Internal Audit: This document is sent to Internal Audit team which performs a walk through of the process based on the process narrative. If further classification is required, they contact the SME’s. » External Audit: Once the document clears the internal audit phase, its sent to external auditors who perform walk through and testing before declaring the company compliant.