Shifting Responsibility to the Internal Audit Function
Year-over-year findings about which area within an organization is responsible for overseeing SOX compliance showed a sizeable shift toward the internal audit function and away from project management. In 2012, the survey found that 30 percent of organizations housed this responsibility with the internal audit function, while 25 percent handled SOX compliance through their project management office. However, in this year's survey, 45 percent of respondents said internal auditing managed SOX compliance (up 15 percent), while only 10 percent said it was handled by project management (down 15 percent).
One reason for this shift is the willingness of external auditors to rely on the work of internal audit departments rather than other functions. In 2013, only 25 percent of respondents said there was an increase in external auditors' reliance on documentation, walkthroughs and testing performed outside of the internal audit function, while 39 percent said there was an increase from external auditors in having the same work done by internal audit departments.
Additional Survey FindingsOther key findings from Protiviti's 2013 Sarbanes Oxley Compliance Survey include:
- Eighty percent of respondents indicating they have seen improvements in internal control over financial reporting structure since Sarbanes-Oxley Section 404(b) was first required for large accelerated and accelerated filers in 2004. This is especially true for large accelerated filers, with 87 percent saying there have been improvements.
- More than one-third of companies (38 percent) reporting a year-over-year increase (from 2011 to 2012) in SOX costs. Nearly half of the companies surveyed (47 percent) also reported a year-over-year increase in external audit fees during the same period. That said, on average the costs for SOX compliance are not extraordinarily high relative to the objective of quality financial reporting to investors through improved internal controls. For most organizations, the cost of SOX compliance remains at a manageable level.
- Automation of controls continues to be an area of increased focus, with 90 percent of companies surveyed this year indicating that they have plans to automate IT processes and controls for SOX compliance, up from 83 percent in 2012.