Modernizing your SOX compliance program with advanced technology

By Lindsay Rosenfeld, Audit & Assurance Partner, Deloitte & Touche LLP and Laura Wong, Audit & Assurance Senior Manager, Deloitte & Touche LLP

Talking points

• Keeping up with the latest Sarbanes-Oxley (SOX) compliance technology can provide strategic advantages to your SOX compliance program.
• The benefits are numerous but generally fall into three buckets: efficiency and cost savings, accuracy and quality, and faster insights for better decision-making.
• This blog discusses technology-driven SOX compliance and the impact it can have on your SOX compliance program.

Is your SOX compliance program keeping up with the latest available SOX technology? Rapid advances in technology, including automation; data analytics; governance, risk, and controls (GRC) platforms; and Generative Artificial Intelligence (GenAI), could mean that compliance programs implemented just a few years ago may be missing out on important enhancements. Programs implemented even farther back, that have rarely been revisited, may be forgoing even larger gains—from increased efficiency to enhanced quality to reduced costs.

Let’s look at the latest SOX technology and how it can modernize your SOX compliance program.

GRC platforms

Modern GRC platforms have moved the needle extensively for SOX compliance programs in recent years. These specialized platforms are designed to consolidate and streamline control and compliance management, including documentation requests, related control testing, and workflow around issues and deficiencies.

GRC platforms can increase SOX program efficiency by centralizing requests and responses, providing real-time status of testing and issue remediation progress, enhancing visibility and reporting with visualization dashboards, and increasing accountability through better assignment of roles and responsibilities.

Analytics

Data analytics can also play a leading role in modernizing SOX compliance. Analytics tools process large volumes of data to identify patterns, visualize trends, and improve insights for better decision-making. These capabilities allow financial professionals to continuously monitor SOX controls and transactions to detect risks and other issues in real time. This continuous approach is more effective than traditional sample-based testing, because it can identify relevant risks more efficiently and carefully, resulting in timely and accurate risk management.

Automation

Many companies that have fallen behind the technology curve may still be relying on a largely manual controls environment built on high volumes of repetitive tasks. One way to remedy this situation is through automation and modernization of manual compliance processes. Automating repetitive, resource-intensive tasks not only transforms efficiency, but it can also free up accounting, finance, SOX, and internal audit professionals to focus on higher-value strategic initiatives.

In addition to automating business processes, today’s automated control testing tools can simplify these efforts by effectively integrating with GRC platforms, data analytics, and GenAI technology. This creates a unified data environment that provides a single source of truth. This level of automation also helps detect potential risks and control deficiencies early, leading to increased efficiency, fewer errors, and better risk management.

GenAI

More SOX automation platforms are incorporating AI, particularly GenAI, to revolutionize SOX compliance. GenAI has the potential to be a SOX game-changer by harnessing large language model technology and natural language processing capabilities. Deloitte leverages GenAI to provide guidance to an organization’s risk and controls agenda through:

• Risk and control identification, mapping, and modernization.
• Development of process flows from walkthrough transcripts.
• Audit and accounting research.
• Insights and reporting.

GenAI also has the power to automate, accelerate, and generally improve many other aspects of the SOX compliance life cycle—from risk assessment and controls design to monitoring, remediation, reporting, and testing. The technology can bring speed and efficiency to a SOX ecosystem and improve the strategic focus of SOX and internal audit professionals (see our recent Pulse blog “Leveraging Generative AI for modernized SOX compliance”) for more information on how GenAI is modernizing SOX compliance programs).

What SOX modernization technology can do for your company

Leveraging modern technology can transform your SOX program in a variety of ways and lead to important long-term benefits, including:

• Enhanced program quality - Modern technology such as data analytics and GenAI can improve the accuracy and reliability of SOX compliance, reducing deficiencies and errors in financial statements.
• Increased efficiency and reduced cost of compliance - Automation and streamlined processes reduce the need for manual effort and improve resource allocation, which, in turn, can provide considerable time and cost efficiencies. Resources can now focus on more strategic tasks as well.
• Deeper insights - Better risk identification and management through advanced analytics can enhance decision-making capabilities.
• Shorter time to value - Modern technology provides more timely information on risks and issues, enabling management to react faster and resolve them more effectively.

What role can Deloitte play?

Deloitte has a long history of delivering SOX and internal controls over financial reporting services to a wide range of clients. We have the experience and professional oversight to effectively integrate and adapt advanced technology to meet the requirements of a rapidly changing business landscape as well as specific business circumstances. For more information, visit our SOX and internal control over financial reporting services page, and feel free to reach out to us with questions.

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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