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SOX 404 compliance checklist

SOX 404 compliance checklist

This checklist template supports you in documenting, testing, and monitoring SOX 404 financial controls.

Use this template
or download pdf
SOX 404 compliance checklist

This checklist template supports you in documenting, testing, and monitoring SOX 404 financial controls.

Use this template
or download pdf

About the SOX 404 compliance checklist

Our SOX 404 compliance checklist template helps you systematically document, assess, and monitor your company’s internal controls over financial reporting. This ensures you meet the rigorous requirements of Section 404. With this template, you can streamline evidence collection, assign responsibilities, and keep audit trails organized, all in one place. This is especially crucial as the Association of Certified Fraud Examiners reports that companies lose 5% of revenue to fraud each year on average, often because of weak controls.

Unlike general SOX or HR-focused checklists, this template zeroes in on the unique documentation and testing processes required for Section 404. This makes it ideal for compliance managers and internal auditors preparing for external audits. If you need broader compliance coverage, look through our SOX compliance checklist or SOX audit checklist templates for a more comprehensive approach.

Related categories

Preview of the template
Page 1
Control Environment
1. Is there a written code of conduct that is communicated to all employees?
2. Are there clear lines of reporting and accountability within the organization?
3. What is the frequency of internal audit reviews?
4. Are there formal processes for addressing control deficiencies?
Risk Assessment
5. Has the organization identified and assessed all relevant business risks?
6. Are there processes in place to monitor changes in the business environment?
7. What is the frequency of the organization's risk assessment activities?
Control Activities
8. Are there written policies and procedures for all key business processes?
9. Are there appropriate segregation of duties for critical functions?
10. What is the organization's approach to physical security and access controls?
Information and Communication
11. Are there effective channels for communicating financial and operational information?
12. Are there mechanisms in place to ensure the reliability of information used in decision-making?
13. What is the organization's process for addressing employee complaints or concerns?
Monitoring
14. Are there ongoing monitoring activities to assess the effectiveness of internal controls?
15. What is the organization's approach to addressing control deficiencies identified through monitoring?
16. Are there independent reviews of the organization's internal control system?

Frequently asked questions

What is SOX 404 compliance?

SOX 404 compliance refers to the requirement for public companies to document and test internal controls over financial reporting. It’s crucial because it helps prevent fraud, ensures accurate financial statements, and builds investor trust by holding organizations accountable for their financial processes.

How does SOX 404 compliance help prevent financial fraud?

SOX 404 compliance requires companies to establish, document, and regularly test internal controls. This process aids in detecting weaknesses or gaps in financial reporting, making it harder for fraud or errors to go unnoticed and reducing the risk of financial misstatements.

What are the main steps involved in achieving SOX 404 compliance?

The main steps include identifying key financial processes, documenting internal controls, testing those controls for effectiveness, remediating any deficiencies, and maintaining detailed records for audit purposes. Ongoing monitoring and regular updates are also essential.

Why do companies struggle with sox 404 compliance?

Many companies face challenges like unclear processes, manual documentation, lack of real-time oversight, and resource constraints. These issues can lead to inconsistent reporting, audit failures, and increased compliance costs, especially in organizations with complex or distributed operations.

This template, developed by Lumiform employees, serves as a starting point for businesses using the Lumiform platform and is intended as a hypothetical example only. It does not replace professional advice. Companies should consult qualified professionals to assess the suitability and legality of using this template in their specific workplace or jurisdiction. Lumiform is not liable for any errors or omissions in this template or for any actions taken based on its content.