How to Comply With Sarbanes-Oxley Section 404: Assessing the Effectiveness of Internal Control

5.5. SARBANES-OXLEY AUTOMATED COMPLIANCE TOOLS

5.5.1. Functions of an Automated Sarbanes-Oxley Tool

Since the passage of the Sarbanes-Oxley Act, many companies with a wide variety of expertise have developed computer software products that aid in complying with the internal control provisions of the act. These software tools typically center on helping companies automate the documentation of internal control policies and procedures, although some products automate other processes as well. In general, automated SOX compliance tools are designed to facilitate either or both of these areas:

Figure 5.9. Example Matrix No. 3

• Warehouse internal control documentation. The program provides a repository for all of the entity's documentation relating to the design of internal control. In those instances in which the documentation of the control or the control itself either does not exist or otherwise is deficient, the software allows the company to efficiently document existing policies or design and document new ones.

• Automate business processes. Many software programs are designed to automate business processes. Within the context of SOX, this automation can occur on two different levels:

  1. Testing and evaluation of internal controls. In order to support its assessment of internal control, management must test both its design and operating effectiveness. Software tools can help manage this ...