SOX: Why is it useful and how to avoid pitfalls?
In the first two episodes about SOX of the podcast “Übernahme als Chance” – “Takeover as a chance”, Janet Winkler, CEO of FAE Consulting GmbH, and Judith Geiß, owner of the Bridge ∙ Consulting & Training e.K., talked about the beginnings and goals of SOX and gave us recommendations for its implementation. In the third episode, Janet Winkler and Judith Geiß will explain why the implementation of SOX is useful for your company and how to avoid certain pitfalls.
You might make mistakes in every stage of the implementation process. To avoid them, you can bring in somebody with expertise from the start. It could be an experienced colleague from the parent company or an external advisor. Experience will speed up the conceptual and implementation phases and will reduce the workload and pressure on your employees. Experienced project managers make the implementation less overwhelming and help to avoid the pitfall of large amount of paperwork.
Good preparation should be your priority as it conveys the message that SOX is useful. Training and involving the management contribute to the better understanding and acceptance of SOX and controls in general. We recommend that you make sure that the management supports the process optimization.
Plan for bilingual process
For a successful SOX implementation, it is crucial to understand cultural differences and to not neglect communication inside your company and with your parent company. Observing and understanding cultural differences will help you manage expectations.
To avoid misunderstandings and even demotivation, make sure that the employees and the management of your company really understand and can communicate in English. You can do this by offering trainings in detail regarding to the tasks relevant to your employees. Mistakes due to misinterpretation of documents and conversations can be costly to your company.
Documentation stage and the benefits from implementing SOX
When documenting and assessing your processes, we recommend you ask and talk to everybody involved in each process. All departments may be involved in the processes falling under the SOX requirements. The SOX implementation offers an opportunity to make your processes leaner and optimize them.
Our tip is to ensure that different departments talk to each other to avoid hidden conflicts and to identify problems at an early stage to avoid wearing out the employees due to shortage of communication. Through communication, you and your employees learn to understand and speak out problems. As a result, you get loyal and highly motivated employees who can identify and solve any conflict and are open to learn new ways to do their tasks. Small details can bring big changes.
In summary, SOX is very useful in:
- increasing the transparency of your company and its processes
- making your audit lean and efficient
- optimizing your business processes
- solving hidden problems
- increasing the quality of the information for decision making
When you are faced with the prospect of implementing SOX, you should explore the possibilities you have in finding assistance. Advisory firms can create the right concept for your company and take the role of intermediary between your company in Germany and the parent company in the U.S. Strong background and proven experience in SOX can save you and your company a lot of time and effort.
For a strategic consultation contact us at firstname.lastname@example.org. FAE Consulting GmbH is specialized in optimization of business processes and offers advisory services on financial structuring, cost efficiency, and compliance. The Bridge ∙ Consulting & Training e.K. offers specialized consultancy services for companies which are acquired by an American group or integrated in an existing company structure as well as mentoring and training for the employees and management of these companies.
Both companies cooperate in assisting you with the SOX implementation and with the optimization of your processes. Contact us for a strategy meeting at email@example.com.
the Bridge ⋅ Consulting & Training e.K.: SOX-Compliance: Warum Sie das jetzt brauchen – und es sogar gut für Sie ist
Haufe-Lexware GmbH & Co. KG: SOX Compliance: Das sind die Anforderungen
Wikimedia Foundation Inc.: Sarbanes-Oxley Act