SOX Audit & Compliance

Q: What is SOX and who does it apply to?

The Sarbanes-Oxley Act is a United States law that sets strict requirements for internal control over financial reporting. It applies to US-listed companies and extends to their subsidiaries, which is why many companies operating in India as subsidiaries of US-listed parents need to comply.

Q: What is Section 404 of SOX?

Section 404 requires management to establish, assess, and report on the effectiveness of internal control over financial reporting, with related auditor involvement, effectively requiring robust controls that are documented and tested regularly - the core of a SOX compliance programme.

Q: What does SOX compliance involve in practice?

It involves identifying key financial reporting risks, designing controls, documenting processes and controls, testing design and operating effectiveness, remediating gaps, and supporting management's assessment and reporting - an ongoing programme we support end to end.

Meeting Sarbanes-Oxley Requirements for Internal Control Over Financial Reporting

The Sarbanes-Oxley Act (SOX) sets stringent requirements for internal control over financial reporting, most notably under Section 404, which requires management to assess and report on the effectiveness of these controls. SOX applies to companies listed in the United States and, importantly, to their subsidiaries — including many operating in India. Meeting SOX requirements demands well-designed controls, rigorous documentation, and regular testing, and lapses can have serious consequences for the group.

Our SOX audit and compliance services help companies and their subsidiaries establish, document, test, and maintain the internal controls over financial reporting that SOX requires. We bring structure and rigour to your controls environment. This service closely relates to our de-risking business and forensic accounting work, and connects with our implementation and review of accounting systems service, since strong systems underpin strong controls.

Our SOX Audit & Compliance Services

Controls Design

Designing internal controls over financial reporting to meet SOX requirements.

Documentation

Documenting processes, risks, and controls to the required standard.

Controls Testing

Testing the design and operating effectiveness of controls.

Gap Remediation

Identifying control gaps and deficiencies and helping remediate them.

Section 404 Support

Support for management's assessment and reporting on controls.

Ongoing Compliance

Maintaining SOX compliance on a continuing basis.

Benefits of Professional SOX Compliance

Well-designed controls over financial reporting
Documentation and testing that meet SOX standards
Early identification and remediation of control gaps
Support for management's Section 404 assessment
Reduced risk of control failures and deficiencies
Confidence for the parent company and auditors

Frequently Asked Questions

What is SOX and who does it apply to?

The Sarbanes-Oxley Act (SOX) is a United States law that, among other things, sets strict requirements for internal control over financial reporting. It applies to companies listed in the US and extends to their subsidiaries, which is why many companies operating in India — as subsidiaries of US-listed parents — need to comply with SOX requirements.

What is Section 404 of SOX?

Section 404 is a key provision requiring management to establish, assess, and report on the effectiveness of internal control over financial reporting, with related auditor involvement. It effectively requires companies to design robust controls, document them, and test them regularly — the core of a SOX compliance programme, which we help you build and maintain.

How does SOX relate to Indian internal financial controls?

India has its own requirements for internal financial controls over financial reporting under the Companies Act, which share the same underlying goal as SOX — reliable financial reporting supported by effective controls. Companies subject to both can often align their efforts. We help you meet SOX requirements and can coordinate with the Indian controls framework.

What does SOX compliance involve in practice?

In practice it involves identifying key financial reporting risks, designing controls to address them, documenting the processes and controls, testing whether controls are designed and operating effectively, remediating any gaps, and supporting management's assessment and reporting. It is an ongoing programme rather than a one-time exercise, which we support end to end.

What happens if SOX controls are deficient?

Control deficiencies, particularly significant ones, can affect the group's financial reporting and its assurance, and may need to be disclosed and remediated, with reputational and regulatory implications for the listed parent. Identifying and fixing deficiencies promptly is important, which is why regular testing and remediation are central to our SOX services.

Strengthen Your Financial Reporting Controls

SOX audit and compliance services to design, test, and maintain robust internal controls.