New SOX Survey: COVID-19 Environment Further Drives Need for Greater Automation and Technology Adoption for Compliance Processes

Only 46% of audit teams are utilizing advanced technologies to optimize compliance processes – a decrease from last year, according to a just-released Sarbanes-Oxley survey by Protiviti. The longstanding challenges associated with compliance with the Sarbanes-Oxley Act, such as cost and reliance on time-consuming manual tasks, are being exacerbated by the COVID-19 pandemic, as finance and audit teams are required to perform audit tasks remotely. 

The new survey revealed that the number of hours devoted to the SOX compliance process continues to rise, despite regulatory requirements remaining the same. Among companies that saw an increase in their SOX compliance hours, 67% reported the number of hours went up by more than 10% over the prior year, highlighting their lack of automation for simple functions. This finding can also be attributed to the increasingly more complex operations of modern companies. Yet SOX teams that rely solely on spreadsheet and word processing applications, or legacy GRC (governance, risk and compliance) systems to manage their control environments, spend extensive time dealing with version control issues, manually making individual control changes across a dozen or so documents, and preparing status reports. 

While robotic process automation (RPA), GRC, data analytics and advanced technology tools would better enable SOX work to be performed more efficiently and effectively, many companies surveyed expressed reluctance about embracing centralized control testing and increasing their use of automation. However, companies are starting to take notice, with a quarter of those who do not currently utilize technology tools in their organization’s SOX compliance process responding that they plan to do so in the next fiscal year, and nearly half (48%) responding that they plan to do so within two years. 

Among survey respondents already leveraging technology in their organization’s SOX compliance process, it is most frequently applied in testing the accounts payable process (48%), financial reporting process (43%) and account reconciliations process (43%). 

Keith Kawashima, Protiviti Managing Director, on Embracing Technology Tools in SOX Work

The survey report, which contains a special section on strategies for conducting proper audits during the pandemic, is available for complimentary download here. A free 75-minute webinar will be conducted on June 4 to discuss implications for SOX compliance and internal audit functions amid COVID-19. To attend the webinar, please register here.

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