Internal audit and finance leaders need to modernize their SOX compliance approaches to reduce costs and retain talent
MENLO PARK, Calif., June 9, 2022 /PRNewswire/ — The thirteenth annual Sarbanes-Oxley (SOX) compliance survey, conducted by global consultancy Protiviti, finds hours spent on SOX compliance increased for 53% of companies across most industries, company sizes and report types. Coinciding with the 20e anniversary of the passage of the U.S. Sarbanes-Oxley (SOX) Act, the 2022 survey results illustrate the need for companies to explore alternative delivery models and SOX compliance automation in order to put put in place a more effective and efficient execution strategy in the face of continued cost pressures, increased scrutiny from external auditors (due to advice from the US PCAOB), labor shortages, remote and hybrid working models and other challenges.
The annual Protiviti SOX Compliance Survey assesses costs, hours, processes and compliance improvements.
The survey found that for companies that have passed their second year of SOX compliance, average annual SOX compliance costs have increased by 18% from 2021 to 2022. Thirty percent of companies surveyed beyond their second year of SOX compliance spent more than $2 million in their last fiscal year, compared to 24% the previous year. As companies increasingly use automation and external resources, there is still significant opportunity to moderate cost increases for SOX compliance.
“Today, internal audit and finance leaders have a menu of options to innovate and streamline their SOX compliance programs and reduce internal burdens, technology tools that support automation, deliver workflow capabilities and document management support, to alternative delivery models, such as centers of excellence managed internally or by an external outsourcing partner,” said Andrew Struthers-Kennedy, chief executive of Protiviti and global leader of the firm’s internal audit and financial advisory practice. “The ongoing talent war underscores the urgency for CAEs to explore the staffing and retention benefits that alternative service delivery models can bring. Delivery center organizational structures offer internal audit teams the ability to focus on strategic contributions and avoid burnout and turnover associated with certain repetitive and routine activities of the SOX program.
To demonstrate the savings potential of automation, for an organization with 200 controls, a reduction of, say, one hour of operational control effectiveness testing can save 200 man-hours and provide benefits significant in terms of effectiveness and population coverage.
In addition to increasing their investment in automation support, survey respondents reported growing interest in leveraging internal shared services models and partnerships with third parties that operate centers of excellence. external for control testing. On average, 41% of surveyed organizations’ SOX compliance costs relate to outsourced, onshore or offshore resources, up from 37% in 2021. Fifty-four percent of surveyed organizations leverage audit management and GRC platforms; two out of five organizations use data analytics and visualization platforms; and one in three uses segregation of duties analysis tools and ongoing monitoring. However, companies use technology tools on average for 25% of their overall SOX compliance program activities, which leaves significant room for improvement.
The Protiviti report, titled “SOX Compliance Amid Rising Costs, Labor Shortages and Other Post-Pandemic Challenges,” is based on a survey of more than 560 audit, compliance and finance managers and professionals representing a wide range of industries. The survey was conducted with the support of AuditBoard, a cloud-based audit, risk and security compliance management platform, in March and April 2022.
Investigative resources available
The annual Protiviti SOX Compliance Survey assesses costs, hours, processes and compliance improvements, including how these areas are affected by current business conditions. The investigation report is available for free download here. Plus, an infographic and podcast featuring Protiviti Managing Directors Clint McPherson and Seth Schrank discussing the benefits of alternative delivery models are available on the webpage. Protiviti and AuditBoard will host a free one-hour webinar on June 16 at 10:00 a.m. PDT with Struthers-Kennedy and Scott Madenburgmarket advisor, AuditBoard, with Protiviti’s Keith Kawashimageneral manager and Kristen Kelly, Director, to explore the findings and implications of the study. To attend the webinar, please register here.
Protiviti (www.protiviti.com) is a global consulting firm that offers deep expertise, objective insights, a tailored approach and unparalleled collaboration to help leaders face the future with confidence. Protiviti and its independent and local member firms provide their clients with advisory and management solutions in the areas of finance, technology, operations, data, digital, legal, governance, risk and internal audit through its network of more than 85 offices in more than 25 countries.
Named to the Fortune 100 list of the best companies to work for in 2022® list, Protiviti has served more than 80% of Fortune 100 companies and nearly 80% of Fortune 500 companies. The company also works with smaller and growing companies, including those looking to go public, as well only with government agencies. Protiviti is a 100% subsidiary of Robert Demi (NYSE: RHI). Founded in 1948, Robert Demi is part of the S&P 500 index.
AuditBoard is the leading cloud-based platform that transforms audit, risk and security compliance management. More than 30% of Fortune 500 companies rely on AuditBoard to drive their business forward with greater clarity and agility. AuditBoard is top rated by customers on G2, Capterra, and Gartner Peer Insights. To learn more, visit: AuditBoard.com.
Protiviti is not licensed or registered as an accounting firm and does not issue an opinion on the financial statements or provide attestation services.
Editor’s note: photos available on request.
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