How to Develop a SOX Compliance Checklist

Public companies must have a streamlined process to comply with Sarbanes-Oxley financial regulations. A compliance checklist serves as an invaluable tool to track and document internal controls.

Here are some tips on creating a useful SOX compliance checklist:

Involve key players – Draw input from managers overseeing financial reporting, IT, operations, legal, and compliance to get their area-specific concerns. Their insights will highlight priority risks.

Leverage existing documents – Review current processes and systems related to internal controls, audits, risk assessments, and sub-certifications. Identify what can carry over into the checklist.

Classify by relevance – Organize checklist contents according to relevance to SOX compliance. Group-related controls and designate owners.

Establish timeline – Determine what tasks should be performed daily, monthly, quarterly, and annually to satisfy SOX guidelines.

Simplify language – Use clear, concise wording easily understood by those executing the tasks. Avoid ambiguous or vague phrasing.

Allow customization – Build flexibility into the checklist format to add or modify sections as needed. It should align with evolving business processes.

Include verification – Have sign-off boxes to document that controls are completed and reviewed. This verifies accountability.

Automate where possible – Automated controls and reminders integrated into the checklist improve efficiency in completing tasks.

Review and update – Evaluate the checklist against deficiencies found in audits or process changes. Update as necessary to close gaps.

A SOX compliance checklist allows you to proactively address risk areas and demonstrate the execution of internal controls. While requiring diligence in creating initially, a well-designed checklist saves significant time and effort in the long run.