Many times SAP users lack the internal resources and tools needed to automate workflow processes, enhance process controls, mitigate conflicts with segregation of duties, and more.
But, luckily for companies like you, SAP provides a comprehensive suite of business solutions and tools that enable organizations to increase productivity and reduce costs while staying compliant with industry regulations such as the Sarbanes-Oxley Act (SOX).
This article discusses the importance of SAP SOX Compliance, what it entails, potential access risks and challenges associated with compliance and best practices for achieving it. Read on to learn more about the solution, as well as how our SAP consulting solutions can help.
What is SAP SOX?
SAP SOX outlines a set of standards designed to ensure that companies keep accurate financial records, adhere to ethical business practices, and protect their assets from fraud.
The Sarbanes-Oxley Act was passed in 2002 as a response to corporate scandals such as Enron and WorldCom. The SOX act requires publicly traded companies to establish internal controls for financial reporting, auditing procedures, and management oversight of operations. These companies must also maintain accurate books and document all transactions related to their finances.
SOX regulations help reduce risks for your company, including accounting errors, data manipulation and other SAP Security issues, which could lead to financial losses or legal penalties in the future. SAP has created software solutions specifically tailored for meeting these requirements so organizations can stay compliant with SOX regulations while still having access to reliable data about their finances.
Maintaining Compliance with SAP SOX
SOX Compliance applies to public companies in the United States and requires them to have adequate internal controls, and is also applicable to non-US companies listed on US stock exchanges. Maintaining such compliance plays an important role in building the foundation for a complete, balanced, and adequate SAP landscape, regardless of changing regulations and requirements.
It involves ensuring a company meets reporting and control objectives as required by the Sarbanes-Oxley Act (SOX), maintains secure data access, and leverages real-time analytics to improve and optimize process efficiency.
SAP SOX Compliance Checklist
SAP SOX compliance is an important process for organizations to ensure that they are adhering to the regulations outlined in the Sarbanes-Oxley Act. To effectively meet these requirements, it is necessary to develop a comprehensive checklist that can be used to assess the organization’s current compliance status. This checklist should include..
#1: Maintenance of Internal Controls
SAP Internal Controls are a set of policies, procedures, and processes designed to help ensure that financial information is accurate, complete, and reliable.
Internal control structure plays an important role in helping companies achieve SOX compliance and prevents errors in SAP data, eliminates SoD conflicts, reduces fraud risk, and ensures accurate financial reporting.
The internal control structure is based on generally accepted accounting principles (GAAP), and it plays an important role in building the foundation for proper risk management.
#2: Streamlined Auditing Processes
Auditing procedures in SAP are designed to help organizations meet their Sarbanes-Oxley Act (SOX) requirements and ensure that their financial information is accurate, complete, and reliable. This process involves examining, evaluating, and verifying the accuracy of a company’s internal controls, processes, and data.
These policies serve as the foundation for an effective and efficient internal audit process. They provide the necessary guidance for internal and external auditors to ensure that all aspects of the organization’s financial operations are properly reviewed and monitored.
Auditing controls should be regularly evaluated to ensure that they remain effective, and any changes or modifications should be documented within your SAP system.
#3: Management Oversight of SAP Operations
Without proper oversight, companies are at greater risk of data errors, conflicts with segregation of duties (SoD), reduced security for sensitive data, and inaccurate financial reports.
Management oversight of operations is an essential component of SAP SOX compliance. It requires organizations to ensure that their operational processes are well-documented and appropriate controls are in place to monitor them.
Operation management within your SAP environment also plays an important role in ensuring compliance with the Sarbanes-Oxley Act (SOX). This involves proactively managing operational risk and implementing measures to identify and address any potential problems before they pose major risks to your SAP systems.
#4: Documentation for all Financial Transactions
Financial transaction documentation is an important aspect of compliance maintenance, and it ensures that financial data is recorded accurately and completely in SAP.
It involves documenting all financial transactions within the organization’s SAP systems, including sales and purchases, invoices, payments, payroll records, accounts receivable and payable, and more.
Wrapping Up
SOX controls help companies establish and maintain internal procedures, document and test controls, offer independent auditing functions for financial statements, ensure management takes responsibility for the company’s financial reporting.
By following the checklist above and ensuring each control is properly implemented in your organization’s SAP environment, SAP customers like you can rest assured knowing your company will maintain SOX compliance both now and into the future.
Getting Started with Us
Whether you need help understanding SOX regulations, assessing SoD risks, controlling user roles within your SAP system, or anything in between, Surety Systems is here to help.
Our team of senior-level SAP consultants have the skills, experience, and technical expertise needed to lead your team to success…the first time. Your company. Your project. Our expertise.
Contact us today to learn more or get started with one of our expert SAP consultants.
