🖳 Author: P.J. Yates | 📅 Date: 11.30.22 |⏱️Read Time: 8-Minutes
As the world’s largest economy, the US has always been a driving force behind global financial markets. The Sarbanes-Oxley Act of 2002 (SOX) is a fundamental piece of US legislation that introduces enhanced financial disclosure for publicly traded companies. Failures to achieve SOX compliance lead to heavy penalties and even criminal liability for C-level corporate management.
Public companies submit quarterly and annual financial reports to the US Securities and Exchange Commission (SEC). Financial statements are required to be prepared in accordance with the generally accepted accounting principles (GAAP). CEOs and CFOs certify with their signature that the information disclosed to investors and the general public is accurate and reveals all material circumstances.
In order for senior management to carry personal responsibility for the company’s reporting standards and practices, SOX mandates that internal controls are established and maintained. That involves a clear chain of responsibilities and streamlined reporting processes. Undoubtedly, the question of process and data auditability and the capacity to swiftly identify and correct compliance breaches is central.
The overall integrity of input data about balance sheet transactions and reliability of reported account balances. Companies should follow recordkeeping practices and policies that safeguard against falsification.
Streamlined and audit-proof balance sheet attestation
The financial reporting process should be uniform, predictable, transparent, and time-bound. Management and auditors are required to adhere to well-defined standards, methods, and procedures for balance sheet account attestation. It should be evident at any time who, what, when, and how should do in every step of the financial reporting. A sound and the audit-proof period-end process can produce trustworthy reporting outputs and take internal or internal validation tests of its consistency.
In order for the process to be effective, it is critical that there is a clear understanding of what it means to report on a company’s balance sheet. This will help ensure that all parties involved in this process work together in harmony so that each party understands exactly what they are responsible for doing at each step along the way.
The segregation of roles in preparing, reviewing, approving, and auditing the balance sheet accounts is an important way to ensure that reporting quality is high. The separation of duties within an organization should guarantee instant visibility of risk situations and clear escalation paths. Reporting quality heavily depends on multiple levels of checks and controls within the organization to prevent errors and inaccuracies, deliberate or accidental.
Financial teams face a number of challenges when it comes to reconciling their balance sheets. One of the main struggles, though, is the error-prone manual processing that’s so common in this space. With Rynoh, balance sheet account data is delivered directly from the source into the reconciliation platform. Data imports are automated and scheduled with the preferred frequency. As a result, trial balance updates speed up to near real-time without human intervention and reset the approval cycle without delays.
Rynoh follows strict best practice guidelines and implements the latest technologies to make sure client data is safeguarded against all eventualities. Unlike analog processing and storage, our digital environments provide multiple guarantees for your access control, disaster recovery, and protection of data integrity.
Don’t let your Accountants, auditors, and corporate officers struggle with the increasing regulatory burden! Instead, work with Rynoh and provide your team with flexible solutions.