The law requires financial institutions to comply to the SOX standard, which dictates that every bank must establish financial reporting policies that will help prevent fraud. Failure to do so can result in massive fines and a long trip to prison. To avoid any of that from ever occurring, here are six of the best ways to handle SOX compliance at your firm.

Reduce the Number of Moving Parts

Companies that have difficulty obtaining sufficient, appropriate audit evidence have similar issues. They believe they have the correct evidence, but it is too disorganized and scattered to use effectively. Companies often have too many moving parts to the process which can jam the gears of progress. Disconnected files, inconsistencies in facts, too many manual steps to follow. Putting proper documentation, testing, and performance controls in place saves time, control, and quality for when the information is presented to auditors and managers.


Focus on the risk inherent to the environment. Risks and threats are evolving daily, so you need to stay ahead of the trends. Mitigate risks by having risk assessment as an integrated process, not just a once a year deal. Map and flowchart trends to make things clear and to show what current and potential future risks are or could be present.


Prevention can be as simple as reminding employees of their obligations, but with proper education to back it up. Studies have shown that the more you remind employees the risks of fraud, the less likely it is to occur. Control and process owners periodically to confirm that they have performed their duties truthfully. Give them opportunities where they can attach specific evidence along with signatures to protect your company from potential fraud.

Red Flags

Set up controls designed around fraud detection or material misstatements. Periodically perform risk assessment for key processes to identify weak links that could be shored up, or simply to detect potential breach points. If you pick up on something, take action as soon as possible.


Control efforts fail without proper documentation. Document anything and everything and make sure information provided is understood by all employees. In the past, a signature was all that was needed to show management had reviewed a process or control. However, this is no longer enough. Convincing evidence is needed to meet the rising expectations in the work place.

Align Stakeholders

It isn’t unusual for multiple audits to be performed at the same time, and it also isn’t uncommon for different groups to operate in seclusion, auditing autonomously with minimal communication and coordination with others. Ensure that every party communicates and coordinates throughout the year to align on the project plan, timeline, etc. This ensures that duplicate work isn’t being performed and audits are being executed as efficiently as possible.