While there are several components to SOX compliance, such as CEO/CFO responsibilities, real-time disclosure requirements and whistleblower protection, the most notable is Section 404 or Management Assessment of Internal Controls. Publicly traded companies are required to institute internal controls and procedures around financial reporting. Those controls must be documented, maintained and tested to ensure their effectiveness. Auditors must then go and perform an independent assessment over the controls. The challenge companies face is the cost and time associated with documenting and testing these financial controls. As a result, companies are encouraged to centralize and automate their financial reporting systems as much as possible.
BlackLine’s Financial Close Suite provides a number of controls around the financial close process, making it easier and more cost effective for SOX compliance. Features included in the Financial Close Suite’s six modules provide controls around the accuracy of the numbers (even if they change throughout the close cycle), segregation of duties, timeliness in performing close activities, appropriate levels of review and an online document repository to store and protect supporting documentation—all within one integrated application. This is extremely beneficial for management, and it also provides auditors with an efficient means for assessing the controls around financial close processes, such as account reconciliations, journal entries and variance analysis.
Learn more about BlackLine’s Financial Close Suite and their SOX compliance software.