Taking a Risk-Based Approach to SOX Compliance

September 18th, 2007

Five years after the Sarbanes-Oxley Act became law, many companies are still struggling to meet regulatory compliance requirements. Indeed, SOX and other regulations are time-consuming, costly, and, for some, a stressful reality of doing business in a post-Enron world.Public companies have spent billions of dollars in efforts to comply with new government regulations over the past five years. This year alone, according to AMR Research, companies will spend $6 billion on technology products for compliance.

There is at least some relief in sight, though. Thanks to the recent changes to SOX, companies and auditors alike now have more flexibility to reassess and even redesign existing compliance practices. It’s an opportunity to ease the burden, according to compliance gurus, by taking a risk-based approach.

Taking a risk-based approach involves determining which aspects of a business need to be included in an audit versus just trying to find everything that could possibly go wrong and including it in SOX controls.

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